Economic Activity of Public Bodies (Overseas Matters) Bill

Lord Palmer of Childs Hill Excerpts

Committee stage
Wednesday 20th March 2024 Lords Chamber

[Lord Wallace of Saltaire (LD)]

My Lords, as we are starting Committee, I will say a few things about how we should handle the Bill from now on. After Second Reading and the Commons stages, during which there were a large number of sharp criticisms from Conservatives, as well as others, about the quality of the drafting and the coverage of the Bill, I would have expected the Government, between Second Reading and Committee, to have produced a number of government amendments to clarify some of the many imprecisions in the Bill and perhaps to have arranged to meet some of us who had spoken at Second Reading. I am sorry that that has not happened, and I very much hope that, between Committee and Report, the Government will respond to some of the criticisms by bringing forward clarifying amendments, and that the Minister and the Bill team will be willing to meet with us to discuss some of the arrangements.

The lack of engagement is troubling, and the absence of government amendments at this stage is extremely worrying. I recognise that this is very much a Michael Gove Bill and that he, as Secretary of State, probably wishes to get it through, if possible, without amendment. But here we are in the amending House, and the Minister also has a duty, as a Lords Minister, to listen to and engage with the reasoned criticisms made of the many highly imprecise elements in this Bill, and to respond.

I have two amendments in this group. One raises the question of what is meant by “political or moral disapproval”, and whether the word “influenced” in the phrase

“influenced by political and moral disapproval”

is sufficient. The second, Amendment 6, refers to

“any person seeking to persuade the decision-maker”,

as well as the decision-maker.

As the Minister will know, environmental, social and corporate governance has a long history. It goes back to the Sullivan principles from the United States, which I am sure she will remember. They were formulated by Mr Sullivan, a director of General Motors, in the context of apartheid South Africa and set out a number of principles that companies and others should follow when dealing with investments and procurement. Those principles have since expanded into the whole ESG dimension, which we see actively discussed in Britain, the United States and a number of other market economy countries. The right wing in the United States is busily attacking them in favour of what one has to describe as an amoral capitalism, in which profit is the only thing you are ever allowed to think about. I recall that the first person who started attacking the Sullivan principles was Professor Milton Friedman, who strongly believed that companies have no other duties than to pursue the greatest profit possible for their shareholders.

We need to know what is meant by

“influenced by moral or political disapproval”.

My Amendment 1 suggests that it has to be very considerable in order to be a primary cause of the decision, not simply something that comes in as, or can be argued under Clause 5 to have been—we will get to that later in terms of judicial review—part of the reasons why the decision was taken.

One of our many worries about the Bill is the extent to which it opens the door to litigation through a great many of its imprecise terms. The question, therefore, is whether or not any indication of political or moral disapproval begins to get captured under the Bill, or whether this has to be the major reason why such a decision is taken.

I was very struck as I went through the impact assessment and the Explanatory Memorandum by the sheer lack of evidence that much of this has happened. We find a reference to a council that in 2014 discussed whether or not to, and that another council in 2016 discussed whether or not to. Neither of them actually did it, but they discussed it. “That is wrong and we should stop them doing things like that” seems to be a pretty thin basis on which to mount a Bill that has the sorts of penalties which this Bill begins to set out. That is very much part of our concerns.

Amendment 6 raises the question of whether it is not only the decision-maker who is going to be liable but

“any person seeking to persuade the decision-maker”.

Does that mean that the Guardian journalist who writes an editorial suggesting that this should be done is going to be caught by it? Does it mean that the lobby group that sends things to the decision-maker is going to be caught by it? Does it have to be a more direct approach? How do we identify that “any person”? This is the sort of drafting that should not appear in a Bill before this House. It has to be clarified or we shall do our utmost to remove it. I beg to move.

[Lord Palmer of Childs Hill (LD)]

I speak to exactly the same issue as did my noble friend. Mine is a simpler amendment. I work on the basis that the Bill will pass in some form or another and if one does a modest, sensible tweak to a Bill, it has a chance of being incorporated into the final version. My Amendment 2 —purely adds one word: “materially”. This would raise the threshold that needs to be met before a decision is deemed to be in breach of this prohibition. If it is not “materially”, things could be prohibited for something very minor. Having “materially” improves the Bill and makes it more logical—we are looking at things of substance, not things that are minor.

[Lord Deben (Con)]

My Lords, I rise merely to ask my noble friend the Minister to be very careful about her responses to this. I have a huge problem in that I cannot think of a speech that I have made in this House in which there has not been some moral content, because that is the way I think. I cannot help that. I am very concerned about the clarity with which the Bill is written. My noble friend and I go back a very long way. I have to say to her that when she was a civil servant working with me, she would not have produced a Bill like this. She would have been very angry if I had suggested that it should be as loose as all this. I am sorry to remind her of that fact. All I am interested in is that we do not unhappily and by accident cause a whole lot of legal cases that are unnecessary and which we never meant to.

I have some fundamental problems, not least with the specifics of this. I may wish at some later point to discuss the speech that was made at Second Reading by my noble friend Lord Wolfson, but the first point I want to make has nothing to do with the nature of the Bill itself or what it seeks to do. It is about precision. This is an imprecise Bill and it needs to be precise if it is not to be extremely malignant. All I ask is for my noble friend to try to understand that we need precision here, even those of us who in general do not come here with an antagonistic view. We just want to know what it is about, and you do not understand that if you merely read the Bill. I do not want this constantly to be in the courts. It would be much better to get it right now.

--- Later in debate ---

Tabled by

[Lord Palmer of Childs Hill]

2: Clause 1, page 1, line 7, after “was” insert “materially”
Member's explanatory statement
The inclusion of the word “materially” would raise the threshold that would need to be met before a decision was deemed to be in breach of this prohibition.

[Lord Palmer of Childs Hill (LD)]

My amendment was of a probing nature. I am grateful to the Minister for giving more detail. As we go forward with the Bill, I shall be particularly interested to see how “materially”—the word that I tried to add—is looked at in terms of local authority pension funds. That worries me, because they make their investment decisions. There needs to be a material point, otherwise those investment decisions can be upset very easily by the Bill.

Amendment 2 not moved.