Economic Activity of Public Bodies (Overseas Matters) Bill

Debate between Lord Verdirame and Lord Leigh of Hurley

Committee stage
Wednesday 20th March 2024 Lords Chamber

[Lord Leigh of Hurley (Con)]

My Lords—

[Lord Verdirame (Non-Afl)]

My Lords, Amendments 3 to 5 are in my name. All the amendments in this group have the same objective, which is to find some ways of mitigating the rather unusual and perhaps slightly sinister language of

“political or moral disapproval of foreign state conduct”—

the language that gives the provision its title. Amendments 1 and 2 seek to achieve that objective by retaining that concept but raising the bar for its application. I agree that this approach may be sensible, and it is one that I encourage the Government to consider very seriously.

My amendments go a little further. I tried to think of ways in which the main provision of the Bill—Clause 1 —could operate without the novel concept of a prohibition on

“being influenced by political or moral disapproval of foreign state conduct”.

I note that this is not an attempt to frustrate the Bill. As the Minister will recall, I spoke in support of the Bill at Second Reading and I support the Government’s intentions. I am suggesting this different way forward because I am not really persuaded that the policy objectives require us to introduce this concept in our legislation. I urge the Government to test more proportionate and more focused ways to achieve those objectives.

As I understand those objectives, the core purpose is to ensure that public bodies, when taking procurement or investment decisions, do not impose a de facto sanctions regime or a de facto ban or boycott on a foreign state on the basis of their own judgments about a territorial dispute, the status of a foreign territory or the presence of a foreign Government in a particular territory. It seems to me that that objective can be achieved equally effectively by focusing the duty in Clause 1 on not having regard to territorial considerations, rather than in the current formulation of a duty not to be influenced by political or moral disapproval of foreign state conduct. Subject to the exceptions, it would still be the case that if a public authority were to have regard to a territorial consideration, it would probably do so because of disapproval of a moral or political kind of the foreign state’s conduct in the territory. But it would be better if we can get to the result that the Government are pursuing without that language of political or moral disapproval of foreign state conduct.

I accept that a criticism of the proposals may be that if we remove that expression “moral or political disapproval” from Clause 1, as my amendments would do, and focus instead on territorial considerations, the main provision of the Bill would not substantially improve on Section 17 of the Local Government Act 1988.

The Bill would supersede the Local Government Act in the part where it prohibits local authorities from considering non-commercial matters in relation to decisions about public supply or works contracts, including

“the country or territory of origin of supplies to, or the location in any country or territory of the business activities or interests of, contractors”.

This part of Section 17 of the Local Government Act would be omitted by the effect of a separate clause in the Bill. But Clause 1, even with the amendment I propose, would still go further than Section 17. In particular, the duty not to have regard to foreign state conduct in relation to territorial considerations, such as the existence of a territorial dispute, would still be able to capture indirect bans or boycotts, which I understand is the Government’s main concern.

I look forward to what the Government have to say. Again, I stress that my main concern is to encourage them to think of ways of tightening the language in Clause 1, and mitigating or perhaps altogether removing this notion of

“political or moral disapproval of foreign state conduct”.

[Lord Leigh of Hurley (Con)]

My Lords, I apologise for my not being able to speak at Second Reading, although if I had, I would have agreed with my noble friend Lord Wolfson on much of what he had to say. I also apologise for slightly jumping the gun on the noble Lord, Lord Verdirame, particularly as what he said was so interesting and informative.

I just wanted to question Amendment 1. If one is seeking clarity and certainty, introducing the idea of having a

“primary or sole factor in the decision”

seems extremely difficult to prove, whereas showing that the decision was “influenced” is much easier and, as I understand it, a recognised legal term.