Ministerial Appointments: Vetting and Managing Conflicts of Interest

Lord Wallace of Saltaire Excerpts

Tuesday 24th January 2023 Lords Chamber

[Baroness Neville-Rolfe (Con)]

The independent adviser, as my noble friend suggests, is appointed by the Prime Minister and it his constitutional position to be the ultimate arbiter of the Ministerial Code, and to decide whether a breach of the code has occurred upon the advice of the independent adviser. So it makes sense for the Prime Minister to be the ultimate decision-maker, but, of course, we have appointed Sir Laurie Magnus to take on this role and to look extremely carefully at the issues that have arisen and been reported on this week.

[Lord Wallace of Saltaire (LD)]

My Lords, the last Prime Minister but three made great play of the distinction between “people from somewhere” and “people from anywhere”. I thought, at the time, that the real people from anywhere were those who try to avoid paying their taxes and arrange their financial affairs somewhere else—in offshore financial centres and elsewhere. Could the Minister assure us that part of the questioning of the suitability of people for ministerial appointments should significantly include questions about offshore financial arrangements and tax avoidance?

[Baroness Neville-Rolfe (Con)]

There is an established procedure that anyone who is fortunate enough to be appointed a Minister goes through, and that includes a number of questions. Indeed, when candidates are put forward to HOLAC for the House of Lords, that is also the case. Tax is one of the areas of questioning but, in relation to today’s debate, clearly the independent adviser will be looking into these matters. It is clear that the Prime Minister became aware of media reports, but when the Minister without Portfolio was appointed, he was told that there were no outstanding issues. Obviously, the details of an individual’s tax affairs are confidential, but this is an important area of inquiry.

Civil Contingencies Act 2004 (Amendment of List of Responders) Order 2023

Lord Wallace of Saltaire Excerpts

Monday 23rd January 2023 Grand Committee

[Lord Wallace of Saltaire (LD)]

My Lords, I too thank the Minister for this. This comes in the midst of strong negative comments across the House about the way in which Ministers are now handling too many SIs and too much delegated legislation. This seems to be a model of how it should work, and I compliment the Minister.

I am most acutely interested in the flood prevention area. As the “Saltaire” in my title suggests, we live on—happily, above—the River Aire. Indeed, the weekend before last, we walked down to see just how high the river had got. We well remember when, four winters ago, it was higher than it had been for over a century. All of us in Yorkshire who live below the Pennines are now conscious of the increasing flood risk which we all face and how much of a problem this becomes in terms of the multiagency response when floods happen. Happily, we are not in the Yorkshire coal-mining area, and lead mining is more of a legacy problem in the Dales, but I am conscious that in the acute wet weather last summer, there were potholes in the limestone region which filled up with water for the first time in nearly a century. Clearly, we are in exceptional circumstances and the potential for danger, loss of life and loss of property is now higher than it has been.

I have a few brief questions. In the consultation, were other agencies considered for addition to the list of category 2 responders? How good are the links between Defra as responsible for the countryside, the Environment Agency as responsible for drainage and the various LRFs and others concerned with flood risk? We are all aware, particularly those of us who live in the shadow of the hills, that how you look after catchment areas relates very clearly to the degree of flood risk that is involved. As the climate changes, that is something that needs broader attention at local, regional and national level. Are the Government happy that local resilience forums work well? The Minister will also have noticed the growing chorus of unease about the overcentralisation of England and the weakening power and finances of local authorities and local agencies. Local resilience forums are very important in areas such as this—these are people who know the ground; they know where the coal mines were and where the other local hazards are—and I hope that they work well.

Finally, my noble friend Lady Brinton raised electricity supply as one of the factors in dealing with disasters. I am conscious that we are moving in a direction in which electricity will increasingly become the only source of power supply for a growing number of homes. As it happens, at present my wife is in dispute with BT, which is trying to remove our landline and give us phone access only by broadband. That means that when and if there is an electricity problem, we are likely to run out of juice with which to make phone calls fairly rapidly. That is an extra hazard that we are moving into because one of the utilities wants to get rid of the costs of maintaining landlines. I hope that the Cabinet Office has also considered this as an important risk factor in case of emergency.

Having said all that, I welcome this order and I repeat: this is a model SI in the way it is being scrutinised—unlike many others.

[Lord Collins of Highbury (Lab)]

My Lords, I too welcome the Minister’s introduction to the SI. Certainly, it is one of the least controversial ones that I have ever dealt with, so I will not labour the point too much.

I would like the Minister to comment on how well the CCA five-yearly review works. Bearing in mind that, on Radio 4, the Environment Agency’s comments on the risk of river flooding were so closely aligned to the Meteorological Office’s warnings, I wonder what difference this statutory obligation will make. Will it have added value? The two things here that have come out of the review are so logical that one wonders why this was not done before. Will the department add other elements of the review? Are there elements that will still require action?

Certainly, there can be no reason for not adding these two bodies as category 2 responders; I am sure that both are currently working to provide information and support. The Minister said that they will not perform additional duties; they are already performing the duties, so there will be no additional cost, but I would like to know how this statutory responsibility will add to the benefit of their work.

With those few comments, I support the order and wish it well.

Public Service Ombudsman for England

Lord Wallace of Saltaire Excerpts

Tuesday 10th January 2023 Lords Chamber

[Baroness Neville-Rolfe (Con)]

The trouble is that combining the existing public services ombudsmen—there are several, as the noble Lord explained—would be a complex and substantial undertaking. It could lead to a reduction in the quality of service for people relying on that service during the transition period, and staff would worry about their futures. I am not sure quite what just putting them together would achieve. The key thing is to have expertise and effective ombudsman decisions, which we have increasingly seen in recent years.

[Lord Wallace of Saltaire (LD)]

My Lords, I had not realised until I went into the background of this Question that we have 20 different ombudsmen in the United Kingdom. Nor had I realised that one ombudsman deals with the health service and another one deals with social care, which seems to be not very well organised. Nor had I realised, furthermore, that you have to go through your MP if you want to go to the Parliamentary and Health Service Ombudsman. Does the Minister not think that there are a number of problems within the existing set-up that the Government ought at least to look at again?

[Baroness Neville-Rolfe (Con)]

As I said in my opening remarks, some changes we are able to look at, and we have made improvements. On the MP filter, which the noble Lord refers to, it is designed to help complainants. MPs are able to make confidential inquiries with officials or Ministers and resolve issues quickly. In addition to referring individual cases to be investigated by the ombudsman, they can raise issues publicly in the House of Commons. The ombudsman has a democratic element. It is a parliamentary creature and I think it helps to hold the Executive to account. Of course, the PACAC takes a great deal of interest and is responsible for the appointment of the ombudsman, who is a parliamentary officer.

House of Lords: Party Balance

Lord Wallace of Saltaire Excerpts

Monday 9th January 2023 Lords Chamber

[Baroness Neville-Rolfe (Con)]

I have a simple answer to that: yes.

[Lord Wallace of Saltaire (LD)]

My Lords, does the government briefing the Minister has make references to the White Paper of January 1999 on the transitional House? It said:

“the Government will ensure that no one political party commands a majority in the Lords. The Government presently plans to seek only broad parity with the Conservatives.”

Does her briefing also include what the Leader of the House said in introducing that White Paper? She said:

“The Government intend that the principles of a broad parity and proportionate creations for the other political parties and the Cross-Benches should be maintained throughout the period of the transitional House.”—[Official Report, 20/1/1999; col. 584]


If the Minister is now announcing that the Government has abandoned that policy which was agreed with all parties in the House—I was partly involved in some of the discussions, so I remember it—can she persuade the Leader of the House to come back and tell us what the Government’s new declared policy is going to be?

[Baroness Neville-Rolfe (Con)]

I am not familiar with the precise terms of the 1999 White Paper to which the noble Lord is referring. I do not think we have ever suggested that the proportion should be at a specific level. I come back to the point I was trying to make, which is that you need to have a House that can do the different things that the House needs to do. Noble Lords should also bear in mind that there are a lot more government defeats than there used to be: we need to be wary of too easily blocking the needs and views of the democratically elected House. We also need to scrutinise and revise, which is the role that we all participate in every day, but we need to respect the primacy of the other House and respect the results of the last general election.

Cross-government Cost-cutting

Lord Wallace of Saltaire Excerpts

Wednesday 21st December 2022 Lords Chamber

[Lord Wallace of Saltaire (LD)]

My Lords, I am glad to be able to welcome the noble Lord, Lord Watson, who has returned after his three-year leave of absence from Westminster. He will find returning a little difficult. I expect that he has already picked up that we are much more polite in this House. If we really want to be insulting, we will probably say something such as, “I am not entirely sure that I followed what the noble Lord said”.

I am very glad to see that he spent his three years very well by publishing books, getting involved with the charitable sector and, most of all, through his involvement with UK music. We have a good group of Peers who are actively concerned about music. I will tell him a little story about that. Most of the time, none of us expect anything we have said in the Chamber to be reported or heard anywhere else, but, after our debate on the national music plan in the week before last, I went to a memorial service at the abbey just across the road for a former organist and discovered that absolutely everyone in the congregation had watched the debate, heard everything we said and wished to continue discussing it with us. So we welcome the noble Lord and look forward to his continuing to campaign for music in the widest sense and to the many more speeches he will make.

We are all in favour of enterprises regularly checking their costs and where they prioritise their spending. Any enterprise, private or public, should be doing that on a regular basis. However, the calls for the Government to have a cost-cutting exercise often—too often, sadly—have a different basis. I noted that, last week, Conservative Way Forward, the Thatcherite grouping that Steve Baker chaired before he entered the Government, published a paper suggesting that, if they were to make major spending cuts on equality and diversity measures within the Civil Service, there would be room for tax cuts. That seems to be yet another example of the belief on the hard right of the Conservative Party that somehow the public sector is inherently inefficient and filled with pen-pushers and people looking after their own interests, and that there must always be more money to be squeezed out of it. The idea that the public sector is disproportionately prone to waste and therefore can be squeezed all the time to save money without damaging outputs is nonsense. Unfortunately, that nonsense is promoted by the Institute of Economic Affairs, the TaxPayers’ Alliance and various others, including Jacob Rees-Mogg, whose demand that there should be a 15% cut in the size of the Civil Service has, I think, now been dropped. Perhaps the Minister could confirm that.

There have been many examples of non-cost-effective cuts. The demand in 2010 that the police force should cut 20,000 members—which I deeply regret the Liberal Democrats in the coalition Government did not manage to stop—has clearly led to an increase in crime, to a decrease in prosecutions and to a desperate attempt to regain the numbers that have been lost. Another example is the fund spent on outside consultants by the Civil Service because it does not have enough personnel to deal with particular crises. Millions and millions of pounds were spent on consultants, such as KPMG and others, when good civil servants could have done the work themselves.

Other examples include cuts in the Home Office leading to long delays and additional costs in the asylum system; cuts in the courts and justice system leading to overcrowding in prisons and a rising number of people in prison on remand; and privatisation and cuts in the probation service leading to a rise in reoffending. I recall a conversation I had two years ago with a head teacher who remarked that cuts in children’s social services had increased the demands on schools to provide services for their students that they simply had not had to deal with before. My noble friend Lady Brinton will provide a number of examples from the National Health Service.

I end by simply saying that the pursuit of tax cuts at all costs, regardless of their impact on the services provided, is irrational and ideological, and it ought to end.

Boardman Report

Lord Wallace of Saltaire Excerpts

Tuesday 20th December 2022 Lords Chamber

Asked by

[Lord Wallace of Saltaire]

To ask His Majesty’s Government what actions they have taken in response to the recommendation of the Boardman Report into the Development and Use of Supply Chain Finance (and Associated Schemes) in Government, published in September 2021, that they should consult on (1) whether think tanks, research institutes and lobbying academics should be required to disclose their sources of funding, and (2) whether there are circumstances when they ought to be required to register as consultant lobbyists.

[Lord Wallace of Saltaire (LD)]

My Lords, I declare an interest as someone who worked at a think tank for 12 years and at universities for rather longer, and as the Minister who took the transparency of lobbying Bill through this House. Does the Minister agree with the Boardman—

[Noble Lords]

No!

[Lord Wallace of Saltaire (LD)]

I apologise. Does the Minister agree with the recommendations—

[Noble Lords]

No!

[The Minister of State, Cabinet Office (Baroness Neville-Rolfe) (Con)]

I think we all need to calm down.

The Government are currently considering the recommendations of the Boardman review and will update noble Lords on such work in due course. The register of consultant lobbyists, which complements the existing mechanism of ministerial transparency returns, has increased transparency around the work of consultant lobbyists by providing accessible online information about those undertaking consultant lobbying and their clients. Any changes to that framework will build on that foundation.

[Lord Wallace of Saltaire (LD)]

My Lords, I recognise that the Boardman review had a large number of recommendations that will take some time to work through, but does the Minister recognise the point that think tanks that act as lobbyists, which are extremely non-transparent in not publishing any of the donations that they receive, and which in many ways have been very close to the Government, are in effect lobbying and therefore should be made to be much more transparent? Policy Exchange announced that, in effect, the Higher Education (Freedom of Speech) Bill had almost been written in Policy Exchange, and the Minister will recall that when Liz Truss became Prime Minister a large number of people from those think tanks entered government. This is a very close relationship that needs to be much more transparent.

Public Services: Workforce (Public Services Committee Report)

Lord Wallace of Saltaire Excerpts

Friday 16th December 2022 Lords Chamber

[Lord Wallace of Saltaire (LD)]

My Lords, I thoroughly enjoyed reading this report and I hope that the Government are taking it seriously. It describes both the workforce crisis in our public services and the demographic crisis; they are clearly interconnected.

However, there are other things about which we should be concerned. I am certainly concerned by those elements within the Conservative Party—which one has to call the “Republican right” of the Conservative Party—who denigrate public service as such and want to privatise as much as they possibly can and shrink the state. I see that Conservative Way Forward, formerly chaired by Steve Baker and now chaired by Greg Smith, has just published a new pamphlet that says that if only all the diversity and equality aspects of public services were cut, it would save a huge amount of money and there would be room for more tax cuts.

As the report makes quite clear, at paragraph 27,

“Changes in the needs of the UK population will mean long-term growth in demand for public services”.


Since the core Conservative vote is the elderly, it seems contradictory for the Conservative Party to support cuts in public services which benefit people of my age above all, rather than people of my children’s, let alone my grandchildren’s, age.

We need a change in the attitude of the Government and their supporters to public services. I know that this does not apply to the Minister, who has worked in public services and entirely understands their value. However, the sorts of right-wing think tanks which denigrate—for example—teachers for being entirely left-wing and indoctrinating their students, according to the Sunday Telegraph, demoralise public servants. Teachers, nurses, doctors and probation officers need to feel that they are valued. They also need to be paid well. The reduction in their real pay has highlighted the issue of how much they are paid. This applies not only to teachers and nurses, but to university teachers. Last week, I had a conversation with my son, who runs a 12-person biology laboratory at Edinburgh University. He has been approached by commercial companies that have offered him over twice the salary he gets as a senior university researcher. If that gap grows, the quality of our universities—one of the things that makes this country stand high in the world—will begin to decline. Pay is a matter all the way across public services, and so is pressure.

Pressure comes in partly because cuts to some aspects of public services affect others. The splendid head teacher who taught my children mathematics as a junior teacher told me some time ago that, in the leafy part of Oxfordshire where she has her school, the disappearance of children’s officers, truancy officers and other social services means that her teachers have to take on extra roles in their students’ catchment area. That is part of the pressure that makes teachers feel underpaid and undervalued. We need an overall change in the attitude of the Government.

We also need much stronger emphasis on local provision of public services, because far too much has been centralised. The budgets of local councils have been cut and we all know that personal social services are best provided, and recruited, at local level.

Beyond that, we also know that education is important. In Saltaire, we have a further education college that does its best with remarkably little funding and low pay. Apprenticeships in Bradford are underrecruited and underpromoted. One or two superb schemes attract huge numbers of applicants, but apprenticeships have not been fully exploited and I support everything said about all that. Further education colleges have to be part of the way in which people are encouraged to move into public services.

I also flag that, as we move towards an older society, with a retirement age closer to 70 than 65, and people often working for 40 to 45 years of their lives—as I have—the question of moving from one career to another or retraining becomes all the more vital. It was interesting to hear from the noble Lord, Lord Hogan-Howe, about how the police force has adapted to that and is taking on people all the way through. I joked to my son-in-law that, when his bank finally sacks him, he will be a splendid physics teacher, as he has all the skills. The excellent new charity Now Teach has begun to catch people in their mid-40s and early 50s who will become very good teachers as second careers. That sort of thing needs to be stressed and encouraged at a national and even more at a local level.

Childcare facilities are very important. We all know that the proportion of women in the public service workforce has been rising. Again, the noble Lord, Lord Hogan-Howe, remarked on that in the police. If there are not decent, affordable childcare facilities then women cannot work when they have small children. That is another part of the package that needs to be supplied.

The role of the non-profit sector is extremely important. I did not entirely recognise the portrayal of the Procurement Bill in the Government’s response, which attempted to suggest that that Bill emphasises and values partnerships in procurement with the voluntary and social enterprise sectors. I must have missed that somehow in our consideration of the Bill. Non-profits are important, but I suspect that—as my generation, which has benefited enormously from good pensions, disappears, and those who follow me will not have such good pensions—it will be harder to find the voluntary workers in their 60s and early 70s who now sustain so many of our voluntary activities.

There are many things to learn from the report. I welcome it. I hope that those in the Government who are real Conservatives rather than libertarian right-wingers will take it seriously, and that both they and the successor Government who we all hope we will have after the next election will begin to take many of these lessons on board.

[Lord Collins of Highbury (Lab)]

My Lords, I too thank the committee for its excellent report. It and its recommendations show the value of cross-party working. I also thank my noble friend Lady Armstrong for her excellent introduction, despite her suffering from a cold. She made all the key arguments extremely well and I am grateful for that introduction.

To emphasise cross-party consensus, I must start by saying that I really enjoyed my noble friend Lord Liddle’s contribution. Like him, I increasingly become more like an old-fashioned new Labour person.

[Lord Wallace of Saltaire (LD)]

More?

[Lord Collins of Highbury (Lab)]

Well, how could I change? I will continue that theme as I go through my contribution.

This report on the future of the public services workforce highlights something that we have all experienced, as I am sure everyone has, whether in failing to get a GP appointment or when visiting a relative in a care home: the “vicious circle” that the committee described of increased demand, an ageing population, staff shortages, low morale, and recruitment issues. The Government’s response is, as the committee puts it,

“at far too small a scale.”

The committee argues that its recommendations would

“make a substantial difference, and secure a more sustainable … workforce for the future.”

There is cross-party consensus on that, which is reflected in the Government’s response to the report. Unlike with many of the reports that I read from this House, the Government accepted all the recommendations. As my noble friend highlighted, there is a lack of any sense of urgency and, perhaps more importantly, of a cross-cutting strategy. I repeat the point made by my noble friend Lady Pitkeathley: as well as the Government accepting the recommendations, we need a clear plan for implementation. The Government mention in their response their commitment to

“engagement with service users and people with lived experience”.

That is absolutely vital.

The Government also stated, in terms of the committee’s recommendations, that it recognised the importance of having efficient and effective technology in the delivery of high-quality public services. The interesting thing, which I will come back to, is that it is not only technology to deliver at the front end of those services, it is how the Government should use technology to make plans for that delivery. One of the things to stress, and I am sure all noble Lords in the debate have had difficulty trying, is that no one action will resolve these issues. That is why the emphasis needs to be put on co-ordination and cross-cutting proposals.

Perhaps even more importantly, I suggest to the Minister that there should be a cross-cutting department with powers to intervene and that can set strategy. I assume that the Cabinet Office currently fulfils that role, but I am not sure that it has sufficient powers within all government departments. The committee did recognise that the Government do not have reliable data on the public service workforce and projections for future demand. It is really important in her response that the Minister is clear about how the Cabinet Office highlights not only best practice—which it did in its response—but how it can promote best practice on developing and sharing workforce data at all levels, both locally and nationally.

Many noble Lords have focused on the area of developing training programmes in partnership with service users so that they reflect service users’ needs and ensure that the workforce is better prepared. One of the things that came out of the debate, which the Minister could reflect on, is, as the noble Lord, Lord Kamall, said, the issue of civil society. I did notice there was a slight change in tone in his voice when the noble Lord mentioned the words “trade unions”, as if they were a shocking part of civil society. Historically, though, they have been the key providers of services, particularly before the establishment of the National Health Service and national insurance. When I first started in the trade union movement, many of the people I worked with had been part of the support in providing national insurance benefits. Certainly, Ernest Bevin was very keen on developing health services for his members prior to the NHS.

The role of civil society is very important in terms of the preparation for work, and also in that changing world we now live in where work is no longer a career and a job is no longer for life. It is that lifelong learning that I think this Government have failed to properly address. It was an absolute shame that the Government withdrew support for TUC unionlearn and the ability of unions to encourage people to retrain and work with employers. That is something that could be better addressed.

I also know, from having met the Minister in her previous incarnation, that she knows the benefit of unions working in partnership with employers. One of the best examples of a partnership agreement was of course at Tesco, where both sides, instead of negotiating over differences, were part of a partnership agreement that focused on the success of the enterprise for the benefit of employees and employers. One of the key elements of that partnership agreement was handling that position of massive turnover but also looking at how you can help people train within the company and also for careers outside the company. There are many other examples of where that has been really important. I hope the Minister can address those issues.

One of the things that struck me in the report highlighted the Prison and Probation Service. We are now facing a situation in which there is huge demand in the Prison Service but also a huge turnover. I declare an interest: my father was a prison officer for many years before he died. I remember very clearly the sense of vocation within that service. Most of the prison officers I met as a child were extremely concerned about the welfare of prisoners. They were involved in training prisoners and supporting them as they came out of prison. I do not see that any more. There is a lack of investment in training in prisons, which has affected the sense of vocation that many prison officers had.

I had a large number of questions about the implementation of some of these recommendations, but I think the thrust of contributions from across the Floor stressed the importance of a co-ordinated approach and planning. Let us see that strategy and have a debate about a clear strategy. I welcome the report of the committee.

Independent Adviser on Ministerial Interests

Lord Wallace of Saltaire Excerpts

Wednesday 30th November 2022 Lords Chamber

[Baroness Neville-Rolfe (Con)]

It is an important role, so we need to take time. The new Prime Minister has been with us for only 31 days—I hope he will be there for many years. The post needs to be filled by a person of integrity and credibility with the experience and judgment to win the confidence of Ministers, Members of Parliament and the public. I believe that this is right in order to find the right person; we are determined that the appointments process being conducted should do that. I would not want to comment on speculation or specifics—noble Lords are always trying to encourage me to do this. They should be assured that it is a priority. An independent adviser will be appointed and we are getting on with it.

[Lord Wallace of Saltaire (LD)]

My Lords, is the problem not that the title “independent adviser” is an oxymoron? It is very clear from the experience of the last two advisers that the role is that of a “dependent adviser”—dependent on the Prime Minister taking any notice of what they recommend. Does the Minister recognise that the key element of the Ministerial Code here is the chapter on relations between Ministers and civil servants, and that the current problem we have in Whitehall is partly that a large number of senior civil servants are beginning to lose confidence in the Ministers with whom they work? That is partly because the turnover is far too fast; there have been five Ministers in various posts in the last year—the Secretary of State for Education, for example. If Ministers lose the confidence of their civil servants, the quality of government will go down further. What are the Government going to do to reassure Whitehall that Ministers will continue to treat civil servants with respect, listen to reasoned arguments and evidence, and on that basis, take decisions that can carry their civil servants with them?

[Baroness Neville-Rolfe (Con)]

I have two points. First, it is right that, under the British system, the Prime Minister appoints the independent ethics adviser. He is accountable to Parliament for that appointment. If parliamentarians do not like the appointment, they can raise it in Parliament. I used to be a civil servant, as the noble Lord knows. I think the Civil Service has worked magnificently to deal with the changes of ministerial office that we have seen in recent months. Those of us who are now fortunate enough to be Ministers are working hard and respectfully with the Civil Service.

Procurement Bill [HL]

Lord Wallace of Saltaire Excerpts

Report stage
Wednesday 30th November 2022 Lords Chamber

[Lord Scriven (LD)]

My Lords, I will also support Amendment 113 in this group in the name of my noble friend Lord Fox, which I have put my name to.

Imagine this House’s response to a public sector procurement Bill or statutory instrument that came before your Lordships’ House with the following provisions. The Government could, without reference to anyone, set up a new procurement channel that was mainly for people who knew Members of the Houses of Parliament, and particularly government Ministers. The companies offering the items would not have to be trading, or could just have a few weeks’ incorporation, and would still be included in the special channel. Normal scrutiny and due diligence would not be required of such contacts. These contacts would have preferential treatment over existing and trusted suppliers. They would be 10 times more likely to get a contract, many running into multi-millions of pounds, than other companies not in that special channel, many of which would have had a trading history of years of supplying relevant, safe and reliable goods and services. In addition, those on the special channel would be able to make three times the normal profit margin before the usual and rigorous value-for-money checks were carried out.

Quite rightly, we would be outraged and would see that as unethical and an unacceptable way to spend billions of pounds of taxpayers’ money. I hope that a fatal Motion would be put so that such provisions were stopped in their tracks. However, that is exactly what happened with the VIP channel set up for PPE in 2020. The findings of the National Audit Office and other reports that have been investigating the VIP channel paint a picture that is not acceptable and should never be part of an ethical public sector procurement process. The National Audit Office reported that companies referred to the VIP channel lane by Ministers, senior MPs and Peers had a success rate for gaining PPE contracts 10 times greater than other companies, many of which had a history of supplying reliable PPE in the other procurement routes. Parliamentary Questions show that 41 out of 111 contracts awarded through the high-priority lane by May 2020 had not gone through the formal eight-stage due diligence process.

If speed is required in public sector procurement, the normal rules of probity and ethical standards cannot and must not be ditched. We know that it leads to some with access to government Ministers’ personal WhatsApp contacts, telephone numbers or email addresses ending up making many billions of pounds for nothing more than having those contacts, and the door is open to the public sector market with the ability to supply goods and services. It is reported that some individuals have made over £29 million in personal gain from a company that was not even incorporated when they were lobbying government Ministers to get in the VIP lane, and indeed, when they eventually landed a multi-million-pound contract, they provided some goods and services that were not fit for purpose and could have put our NHS staff at risk had they been used.

Amendment 72 prevents another VIP lane from being set up that creates special and lucrative routes to market for those with privileged access to Members of the Houses of Parliament, and particularly to those in the Government. It will still allow the Government to procure in an emergency but would ensure that one route to getting to market exists—one doorway, with the same due diligence and rules applied regardless of who made the recommendation of the individual or company, rather than a fast-track and light-touch scheme for those who have a contact who is a senior politician or government Minister.

Without this simple amendment, there is nothing in the Bill to prevent another unethical procurement scandal that could set up a VIP lane and become another get-rich-quick scheme for some who have personal access to government Ministers and senior politicians. As the National Audit Office said, contracts awarded by the department through the parallel channel made up only 3.6% of all contracts awarded but accounted for 52% of expected contract value.

With this in mind, I ask the Minister: what in this Bill would prevent another VIP channel from being set up that is predominantly populated on contracts from senior politicians and government Ministers? I look forward, as I am sure many noble Lords do, to hearing what the Minister has to say to reassure the House that the Bill has provisions that will prevent the kind of scandal that the country saw with the VIP lane set up. It was mainly populated by those who had contact with senior politicians and government Ministers, who made millions of pounds in personal gain for those contracts while going through a regime of much lighter touch than that for those not in the VIP lane. If the Minister cannot convince the House that provisions in this Bill will prevent this from happening again, I am minded to test the opinion of the House.

As a matter of objective, Clause 11 is meant to ensure that, in carrying out public sector procurement, bodies are

“acting, and being seen to act, with integrity”.

Amendment 72 will do exactly that, and ensure probity and integrity, so that never again will taxpayers see their money used in such a cavalier and unethical way as they did with the PPE VIP channel. I beg to move.

[Lord Wallace of Saltaire (LD)]

My Lords, I have tabled Amendment 97 for two reasons. First, it is to ask for an assurance from the Minister that the procurement review unit will be set up, and secondly, it is to put down a strong marker on the reasons that the Minister’s department presented for attempting to exclude my amendment as constitutionally improper.

The Minister will recall that, in the responses to the Green Paper, there was a warm and widespread welcome to the proposal that an autonomous unit should be set up within the Cabinet Office to oversee contracting authority compliance with the new procurement rules and so help to realise the benefits intended from the transformation of public procurement legislation. In turn, the Government’s response gave a clear commitment to set up what it now labelled the procurement review unit. This is not in the Bill, however. Therefore, will the Minister Pepper v Hart that commitment, so to speak, by stating in the House that this remains the Government’s clear intention, and that during the passage of the Bill an effective PRU will be established, along the lines indicated by the Government’s response to the consultation?

On the second issue, the slide presentation to the briefing given to Peers on the PRU between Committee and Report, which I was unfortunately unable to attend, stated that the principle of indivisibility of the Crown means providing statutory powers to Ministers whereby they can direct action to be taken by central government departments—in other words, another part of the Crown—and is not usually provided for in legislation. To do so also risks fettering the non-statutory powers Ministers already hold.

I had not previously heard the principle of the indivisibility of the Crown, nor that this principle inhibited Parliament from including specific instructions to Ministers in legislation. It is, after all, an assertion of prerogative—executive sovereignty against parliamentary sovereignty—although oddly qualified by including the adjective “usually” in its attempted exclusion of legislation.

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[Lord Coaker (Lab)]

My Lords, I say from the outset that this is a probing amendment to give us the opportunity once again to talk about defence equipment, and I am pleased to see the noble Baroness, Lady Goldie, here. I was minded when I saw her rushing in to do what somebody did to me once. They moved the amendment formally so I had to start responding when I did not have the breath to do it, but I will not do that, partly because I respect her too much.

I am grateful for the support for the amendment from my noble friend Lady Hayman and the noble Baroness, Lady Smith of Newnham. As I say, it is a probing amendment to once again ask about defence procurement. We all have an interest in ensuring that defence equipment is procured efficiently and effectively, because that contributes to the defence of our nation, which is important to each and every one of us.

In particular, I just wanted to ask the noble Baroness a couple of general points and then a couple of specifics. We could have a debate for hours on this, but I do not think that is appropriate at the moment, given that it is a probing amendment. She will know that, in November 2021, the Public Accounts Committee published a report which had significant challenges for the Government. It talked about delays in the Government’s defence equipment procurement programme and a net delay of 21 years across the programme. The committee’s report also said that:

“the Department failed to assure us it is taking these matters sufficiently seriously”.

They are the Public Accounts Committee’s words, not mine. The committee called for more transparency and openness, and said that an urgent rethink was needed and that there was waste running into billions of pounds.

As a starting point, can the noble Baroness update us all on the progress the Government have made in the year since the Public Accounts Committee’s report into defence equipment spending in the other place in November 2021 and where we are now with that? That is particularly opportune because yesterday the Government published the Defence Equipment Plan 2022 to 2032, which I read with interest. While staying on the generalities, I ask: what did the Ministry of Defence mean when it said in the plan’s executive summary:

“The publication of this report comes at a decisive point for Defence and a period of rising inflation for the country. Although these pressures will have an eventual and significant effect on Defence spending, their full likely impact is not contained in this report”?


The report starts by saying that it does not include the impact of the current inflation level, even while saying that it will have a decisive impact. Frankly, I found that quite bemusing. I would be grateful for clarification from the Minister on what inflation figure was used. If I have read the report right, it was the inflation figure for March 2022. I might be wrong, so I stand to be corrected on that. We know that the current inflation figure is 11.1% and it is not clear whether that is going to go up or down—we hope that it will go down—but how can anyone publish a defence equipment plan, laying out the cost of equipment they hope to purchase, if they do not know what the monetary impact is going to be but they state that it will have a decisive impact? Clarity on that would be extremely helpful for your Lordships’ House.

As I say, those are some of the generalities that I wanted to raise. The whole point of an audit, as we have laid out, is to try to get some clarity and understanding of what is going on. The point of my amendment is that it looks at the next five years. The equipment plan looks at the next 10 years, so the Government’s projected assumptions about inflation are pretty important regarding what they can and cannot afford during that time.

Since we are looking into the future, what is the future of Ajax? The Ajax programme began in March 2010, intended to transform the Army’s surveillance and reconnaissance capability. To say it has gone badly wrong does not really do it justice. The department has a £5.5 billion fixed-price contract with General Dynamics, which was supposed to be for an initial 589 Ajax armoured vehicles. Those Ajaxes were supposed to come into service in 2017. They subsequently missed the revised target of 2021. By December 2021, the department had paid General Dynamics £3.2 billion but had received only 26 out of the 589 vehicles, none of which it can use on the battlefield, so the programme is in absolute turmoil. What is the current situation, and what now is the projection for the numbers of Ajaxes that are finally going to be operational? When will that happen? Given that the Government have put a ceiling on the project of £5.5 billion and have already spent £3.5 billion or so but received only 29 vehicles, what is the future of that programme? What is happening?

Will the Minister take this opportunity to update the Chamber on the important question of the current situation with regard to the “Prince of Wales” aircraft carrier? We are all very proud of our two aircraft carriers and want them to be successful. The “Queen Elizabeth” is performing majestically and fantastically for us and we are very proud of that, but obviously there have been problems with the “Prince of Wales”, which has only recently been completed. What is the projection for when it will be fixed and engineered back? What will the cost of that be, and is it factored into the various budgets?

You can see the difficulty with equipment; just the other day, the Defence Secretary said that the Royal Navy’s new submarine-hunting frigate would be hit by a year’s delay costing £233 million. There are numerous examples that we could look at beyond the couple I have used but, on the general point of my amendment, I want to know from the Minister where the Government are on their response to the Public Accounts Committee report from the other place, published a year ago, and what on earth that sentence in the executive summary of the equipment plan for 2022 to 2032 means, in which the Government say, astonishingly, that inflation is not costed in even though it will have a decisive impact on that plan. We would like some answers to that.

This is said from a position of wanting the defence equipment plan to work and deliver all the requirements of our fantastic, brilliant Armed Forces. To do that, we need certainty. I know the Minister will say, quite rightly, that there are fantastic examples of equipment that has been produced for our Armed Forces. That is true, but budgets continually overrun by billions of pounds and delays happen. Most importantly, have the Government responded—and if not, how will they respond—to the Public Accounts Committee report from a year ago?

[Lord Wallace of Saltaire (LD)]

My Lords, I had to be absent for two and a half weeks in late October and early November and my noble friend Lady Smith of Newnham kindly and generously substituted for me. I now find myself in the same position, as unfortunately she is unwell.

Listening to the noble Lord, Lord Coaker, I remembered that I used to work on defence procurement when I was at Chatham House in the 1980s. It is depressing how few of the issues have fundamentally changed since then. It is part of the culture of our Armed Forces, and one or two former members of the Armed Forces who sit on the Labour Benches, that they like their toys to be of the best US complexity standard and as big and expensive as possible, and they want to change the specification several times while they are being developed. That is how one ends up with two very large aircraft carriers that we are not at all sure we ever wanted.

I sympathise with the MoD on the difficulties of procurement, but I suggest to the Minister that, as we absorb the very considerable implications of the Ukraine conflict for the sort of kit one needs and the sort of wars we may be fighting, it would be very helpful if the MoD took into account those in both Houses who are interested and briefed us as it went along. We are now discovering that a lot of cheap weapons, sometimes commercially acquired, can be as effective—or sometimes more effective—than very expensive ones. The last time I spoke to a group of former members of the Armed Forces, I asked a former colonel of an armoured regiment what he thought about the future of tank warfare. He replied: “You’d never get me inside one of those things again”. Our assumptions about the nature of warfare are changing.

This raises large questions for the MoD. We know that there are always tremendous problems with how much you need in reserve, and we are now discovering that we are running short of resupplies for Ukraine. I discovered the other year that the Liberal Government of 1895 fell on the issue of inadequate supplies of cordite for the Armed Forces, so here again, things are not entirely new. I see that the Clerk of the Parliaments remembers that occasion very well.

Procurement Bill [HL]

Lord Wallace of Saltaire Excerpts

Report stage
Monday 28th November 2022 Lords Chamber

[Lord Maude of Horsham (Con)]

My Lords, I have a very specific point to raise by way of reassurance. It is clear from the debate so far that these are complex areas that are particularly complicated because of the interaction between this Bill and the previous Health and Social Care Act; I wish my noble friend the Minister well in disentangling that and making it all clear to your Lordships.

My concern is around the provisions as they affect public service mutuals. This programme has always had cross-party support. It began under the Labour Government in the Tony Blair years, specifically in the NHS. It was then taken up enthusiastically by the coalition Government. I led the programme with the support of Liberal Democrat colleagues, in particular the noble Lord, Lord Wallace of Saltaire. This was a programme where, in particular services right across the public sector, groups of public sector workers were able to spin themselves out of the public sector and form themselves into employee-owned and employee-led entities. They then provided that service, whatever it was, to what was in effect the contracting authority under a negotiated contract.

Technically, this is procurement and, in good practice, should be subjected to a competitive tender. Indeed, we had some difficulty with the then EU public procurement regime that made it legally impossible to do this. I was able to negotiate with Commissioner Barnier a change to the EU procurement directives, which enabled a mutual to spin itself out without a competitive process for a relatively limited period before being subjected to a retendering process.

This was a very benign programme. Mutuals that spun themselves out demonstrated almost overnight a dramatic improvement in productivity—something close to 4% annually. More than 100 of them spun out. The largest number came from the health and social care sector. They did not have to do this but nearly all of them—certainly all the ones from the health and social care sector—chose to be a not-for-profit, social enterprise.

They brought together four powerful elements. The first was entrepreneurial leadership. The second was an empowered and liberated workforce. The third was commercial discipline, in the sense that they would all talk about themselves as a business even if they were a not-for-profit; that commercial discipline was crucial. The fourth element was the public service ethos. Bringing all that together created a powerful alchemy that delivered improvements in efficiency. Costs were able to be reduced, there was a reduced fee basis through the life of a contract and quality improved.

Staff satisfaction also improved enormously. Whenever I visited these mutuals, I always asked people whether they would go back and work for the NHS, the council, the Government or wherever they had come from. I never heard anyone say anything other than an immediate “No”. When asked why, they would all say something like, “Because now we can do things. We’re freed from bureaucracy. We’re freed from constraints. We can make things happen quickly”.

So my question for my noble friend the Minister, to be answered whenever she is able to do so, is whether she can provide some reassurance that the arrangements in the complex interaction between this excellent Procurement Bill and the Health and Social Care Act will, if the Government wish to accelerate this programme again, allow such arrangements to be negotiated directly between the contracting authority and the emerging spun-out entity without the need to go through a competitive process.

[Lord Wallace of Saltaire (LD)]

My Lords, we will return to the question of not-for-profits, mutuals and social enterprises in group 6, when we have Amendments 41 and 123 in my name and the name of my noble friend Lord Fox. I very much hope that we will have the support of the noble Lord, Lord Maude, on that. There was, in the Green Paper where we started this process, a very strong emphasis on the useful role that non-profits and social enterprises would have. That has disappeared from the face of the Bill. We wish to make sure that it reappears.

[Lord Coaker (Lab)]

My Lords, I thank the Minister and her predecessor for their engagement with us and other noble Lords on this Bill as it made its progress through your Lordships’ House. I join with other noble Lords in saying to the Minister that we all believe, from where I am speaking, that this is a great improvement, and the Bill will make a big difference; we are generally very supportive of it. It is important, as other noble Lords have done, to start with those remarks to set the context for this discussion and those which will follow.

I do not want to speak for very long, but I will start with Amendment 3, in the name of the noble Baroness, Lady Brinton. I very much support the amendment, which seeks to put on the face of the Bill—for the avoidance of doubt, for the avoidance of the sort of discussion that we are having here this evening and for the avoidance of the sort of discussions that will go on, as to which set of regulations procurement for the NHS comes under—that procurement includes the NHS in Clause 1. The important point, following the excellent speech by the noble Baroness, Lady Brinton, was set out in my noble friend Lord Hunt’s question to the Minister, which encapsulated the problem that we are going to have under two sets of regulations.

I thought that my noble friend put the argument very well in his question—and I am going to repeat it—about the sort of thing that will happen without clarification of where we are with respect to procurement. What happens if a procurement contains both clinical and non-clinical parts and services? Which Act and which regulations regime would apply? That encapsulates the problem in one, because the answer is that it will not be clear at all if we carry on with the current two-system regulatory regimes that will operate for the NHS. I am always very practical about these things and, of course, noble Lords will have seen as well that there is actually a clause—Clause 111—that makes it perfectly clear that there is a power for Ministers to disapply, through regulations, this Act in relation to procurement by the NHS in England. Therefore, on the one hand we have the health Act of 2022; on the other hand, we have a Bill going through that, in some sense, is supposed to include the NHS but, in other senses, is not supposed to do so. We do not know where the boundary is going to come between clinical services and goods and services, so there is a whole realm of difficulty and problems.

I said at the beginning of my speech that all of us are supportive of the Bill, but we need to resolve these difficulties. We cannot just say, “Well, the regulations will sort it out”, or “Good sense or common sense will deal with it.” There is a real legislative problem that we should try to resolve before we pass the legislation. The noble Baroness, Lady Noakes, pointed this out in a couple of important technical amendments. As always, we are thankful to the noble Baroness for trying to improve the Bill and to make suggestions, one of which, I understand, the Government have accepted. That is the sort of spirit in which we take the Bill forward.

Therefore, I hope that the Minister is listening carefully to what the noble Baroness, Lady Brinton, my noble friend Lord Hunt, and the noble Lord, Lord Alton, have said. We all noticed that the noble Baroness, Lady Bennett, was not a supporter of Amendment 2. We say that loudly and clearly so that her future in the Green Party is assured, but Amendment 3 is what the noble Baroness put in, and for some reason it appeared under Amendment 2. We are all very clear which amendment the noble Baroness supports.

The comments made in the short speech by the noble Lord, Lord Lansley, on government Amendment 34, are extremely important, showing how one word here or there can fundamentally change the Bill. He is quite right to point out that Clause 11 refers not to thresholds but to objectives. What is procurement trying to achieve? As the noble Lord outlined, by inserting “covered”, the Government imply that it is only covered procurement that takes account of the various points that are listed in the Bill. The noble Lord read out four, but I choose just one, to show how important it is that the Government listen to what he has said and think again about moving their Amendment 34. It is acting and being seen to act with integrity. The one thing that you would expect any procurement process to act under, whatever the threshold, whatever the regulations, whatever law it comes under, whether it is for £10 or £10 million, is integrity. Yet as it reads now, the only procurement that this clause will relate to as an objective, if the government amendment is agreed to, is covered procurement. That was the crucial point that the noble Lord made—as an objective. It is not an objective. It is closer to being law, that you are supposed to act openly, honestly and transparently. However, leaving that aside, it is an extremely important point that the noble Lord has made. In full support of what he has said, I hope that the Government have listened to his very well-made points, particularly when he went on to relate them to Clause 12, which seems to be the opposite of that. That point was well made.

The government amendments before us in many ways improve the Bill. I thank the Minister for listening to what was said to her and for trying extremely hard to table amendments that have improved many parts of the Bill. There are important tweaks that the noble Baroness, Lady Noakes, has pointed out. There is a fundamental point that was raised by the noble Lord, Lord Lansley. However, the points raised by the noble Baroness, Lady Brinton, and supported by many noble Lords, point to a fundamental choice for us. We must resolve this issue about procurement and the NHS. The noble Lord, Lord Alton, pointed out some of the difficulties that have arisen, but for all of us, clarity, certainty and clearness in legislation is crucial, particularly when it comes to procurement. We have the opportunity to sort this out. I hope that noble Lords will support the amendment tabled by the noble Baroness, Lady Brinton, should she put it to the vote.

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[Noble Lords]

Oh!

[Lord Wallace of Saltaire (LD)]

My Lords, it would be perfectly acceptable to come back to that at Third Reading. I think that the House would accept that.

[Baroness Neville-Rolfe (Con)]

I am a little rusty, so I was just trying to understand what the possibilities were. I thank noble Lords for clarifying that we have some time to reflect on this; it is extremely helpful. I respectfully ask noble Lords not to press their amendments. I will move the government amendments in my name when we reach them, other than Amendment 34.

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[Baroness Neville-Rolfe (Con)]

My Lords, it may aid the House if I set out the government amendments in this group. I thank my noble friend Lady McIntosh of Pickering, and will respond to her when I have heard other contributions. I share her tribute to Lord Plumb, whom I dealt with in all the stages of my career—at Defra, in Europe and in this House—and I am only sorry that government business prevented me from celebrating with others his wonderful life and success today.

There are a number of amendments in my name relating to SMEs. They are important government amendments to help SMEs to win a bigger share of the £300 billion procurement pie. I know that this issue is close to the hearts of noble Lords from across the House. Throughout Committee, noble Lords questioned whether the Bill had gone far enough in removing barriers to SMEs accessing public procurement. It has certainly been a top priority for me since I was lucky enough to become a Cabinet Office Minister. It is right that we support this vital sector of our economy. At the start of 2022, there were 5.5 million small businesses, accounting for 99% of all businesses in the UK, with over 16 million employees and a turnover of over £2 trillion. We must do more to champion these entrepreneurs.

The new measures that I am announcing today complement the existing provisions in the Bill, which make it easier for businesses to enter public sector supply chains and benefit SMEs. They include greater visibility of upcoming public sector opportunities and preliminary market engagement; developing a supplier registration system, meaning that suppliers need to submit their credentials only once; improvements to commercial tools, such as the introduction of dynamic markets and open frameworks; and, crucially, requiring that 30-day payment terms will apply throughout the public sector supply chain.

I am glad to be moving amendments in three areas to add to this momentum. First, we have introduced a new duty for contracting authorities to have regard to the participation of SMEs. It sends a very clear signal that the Government are open for business to this sector. For the first time, SMEs will be on the face of the Bill, which means that authorities have a responsibility to consider them and the barriers they face. To put this in practical terms, contracting authorities will, for example, need to specifically consider through an SME lens whether the requirements they are asking for are proportionate to the contract. Are the bidding times realistic when some businesses do not have a dedicated bidding team? Have they provided clear pipelines of opportunity? Is there a diverse representation of businesses in pre-market engagement?

Secondly, we have further stripped out unnecessary barriers which SMEs face. I thank my noble friend Lady Noakes and the noble Lord, Lord Scriven, for highlighting ideas in Committee. I particularly appreciated the point that he raised, that we need to

“release some of the normal procedures and bureaucracy”.—[Official Report, 11/7/22; col. GC 385.]

As a result, we have banned authorities requiring the provision of audited accounts to test the financial standing of bidders to bid in procurements, to compete for contracts under frameworks and to join dynamic markets, except in so far as that is required under the Companies Act. This ensures that start-ups and SMEs which are not legally required to file audited accounts due to their size or age will not be shut out of procurements, provided that they can demonstrate their financial capacity by another reliable means.

Thirdly, we are going further to reduce unnecessary costs on businesses by preventing contracting authorities from requiring insurance relating to the performance of the contract, to be in place prior to the award. We know from feedback that this acts as an obstacle to participation.

Following Committee, I have reflected on the points raised by noble Lords during the debates and would like to thank many of them for follow-up discussions on this topic. I have also met trade associations such as the Federation of Small Businesses and the Business Services Association at a recent round table. We hope that the amendments will give SMEs a better chance of winning public sector contracts and allow the public sector wider access to the first-class skills, innovation and ideas that many agile, creative smaller firms offer. In turn, this will allow us to improve and enable the transformation of procurement services. These are all captured in Amendments 40, 122, 57, 70 and 74. Amendments 75, 76, 134, 140, 179, 183, 186, 188, 192 and 203 are consequential amendments, including splitting Clause 43 into two to avoid it becoming unwieldy.

I have also tabled Amendment 55, which requires a contracting authority to provide sufficient information in the tender notice or associated documents to enable suppliers to prepare tenders. It facilitates a clear trigger for the start of the tendering period identified in Clause 51. As the time available for bid preparation is so important, we consider that small suppliers will welcome this practical clarification. Amendments 40 and 122 in my name create new obligations on contracting authorities to consider the removal or reduction of barriers in procurement to small and medium-sized enterprises. We need to make sure that small and medium-sized companies do better in the procurement world.

[Lord Wallace of Saltaire (LD)]

I rise to speak to Amendments 41 and 123, which are amendments to government amendments. We welcome Amendment 40 but, as the noble Lords, Lord Maude and Lord Lansley, have said, we need in the Bill to make sure that, as well as SMEs, social enterprises, mutuals and non-profits are eased and get around some of the barriers otherwise placed in their way. I hope that the Minister will be able to give a sufficiently strong assurance that this is what is intended for it not to be necessary to divide the House on this issue, and perhaps even to come back at Third Reading with an adjustment to the current Amendment 40.

In the Green Paper that started this process, the importance of social enterprise, mutuals and non-profits was clearly marked; it has now disappeared altogether. Many of us are conscious that there are those on the libertarian right who think that every form of economic activity should be in the pursuit of profit and that the idea that you can do anything without wanting to make a profit is absurd and against free market principles. The libertarian right in the United States, which clings to such theological doctrines, has begun to infiltrate parts of the Conservative Party and, I am told, was a visible presence at the Conservative Party conference—but I am confident that real Conservatives do not share that absurd theological view. They recognise that there are many areas, particularly in personal services and care, where the different approach that comes from mutuals and non-profits makes a considerable amount of difference. There have been a number of scandals in care homes run for profit in recent years. I speak with passion on this subject because I have had a relative in a charitable care home who was wonderfully well treated in the last few years of her life.

I hope that the Minister will be prepared to recognise that the importance of social enterprise and non-profits needs to be here, and that she will give absolute assurance that this is what the Government intend, and that they do not intend to leave them with the barriers that the Government intend to remove for SMEs.

[Lord Aberdare (CB)]

My Lords, my principal interest in the Bill has been whether it would achieve its stated objective of giving small and medium-sized enterprises a better chance to compete for and win public contracts, including SMEs providing specialist services in the construction sector, such as those represented by the Actuate UK engineering services alliance. So I very much support the government amendments in this group that seek to reinforce that objective, notably Amendment 40, explicitly requiring contracting authorities to take account of barriers faced by small firms and Amendments 57, 73 and 74, preventing unreasonable requirements for participation, such as providing audited annual accounts even for firms that do not otherwise need to produce them, or having insurance already in place before the award of a contract.

Other issues of importance to SMEs covered in Committee related to improving payment practices for public contracts and resolving payment disputes. However, since these are not specifically addressed in the amendments in this group, it might be more appropriate to raise them when we discuss the procurement review unit on Wednesday. However, I add my support to Amendment 41 in the names of the noble Lords, Lord Wallace and Lord Fox, adding social enterprises and not-for-profit companies to the beneficiaries of Amendment 40.

On that subject, I also thank the Minister for her recent letter confirming the Government’s commitment to resolving a concern I raised in Committee about whether the drafting of Clause 31, concerning reserved contracts to supported employment providers, actually delivers the Government’s intention to implement an approach fully equivalent to that currently in place. I know that community enterprises that use such reserved contracts are much reassured by the commitment given by the Minister and I look forward to the letter she has promised to confirm that the issue has been resolved, and how.