Covid-19: Supply Chains

Lord Stevenson of Balmacara Excerpts

Monday 22nd June 2020 Lords Chamber

[Baroness Bloomfield of Hinton Waldrist]

The Government have been engaging with a wide range of stakeholders about safety in the workplace during this crisis. This includes Amazon, with which we have had many conversations, and I know that the DHSC is grateful to it for its support. In answer to the noble Baroness, I cannot talk in specific terms about what those conversations have held. However, our approach has been split not by specific business types but by the type of working environment. We think that the risk of Covid-19 can be best addressed through personal hygiene and social distancing, and not necessarily through the use of PPE, except of course in clinical settings.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, following up the question from the noble Baroness, Lady Burt, the Minister will be aware that EU directive 2014/24 on public procurement enables a public authority to pay a subcontractor for work completed in cases of insolvency, instead of the main contractor. This would help cash flow considerably in the supply chain, particularly for small construction companies. Will the Government consider it?

[Baroness Bloomfield of Hinton Waldrist]

I am grateful to the noble Lord for his question and for giving me advance sight of it, since I do not think that I would have heard of that measure had he not done so. The Government have announced unprecedented support for businesses and workers. These measures include an uncapped package to help firms keep people in employment, deferred tax payments, business rate holidays, small business grants and commercial property mortgage holidays. In any situation where a main contractor becomes insolvent, the immediate focus will be on continuity of service, including by the incumbent contractor or its supply chain. Contracting authorities would first look to the terms of their contracts; they may have step-in rights, direct agreements or collateral agreements which allow them to engage directly with the supply chain behind the insolvent contractor. There are also provisions in UK procurement law—specifically, Regulation 72 of the Public Contracts Regulations 2015 —to allow replacement of an insolvent contractor.