Procurement Bill [HL]

Lord Wigley Excerpts

2nd reading
Wednesday 25th May 2022 Lords Chamber

[Lord Wigley (PC)]

My Lords, it is a pleasure to follow the noble Lord, Lord Strasburger, and to identify totally with the important points he raised. I hope very much that his questions—on supplies at the time of the Covid outbreak and on whether this Bill will in fact be able to tighten up on the sort of happenings during that period that we just heard most alarmingly about—have been heard by the Government. I hope his speech does not get lost in the sands of time and that there will be answers to those questions.

Touching on the comments the noble Lord, Lord Strasburger, made a moment ago, there is the question of the capacity we have within these islands to manufacture these things ourselves. That feeds through to the important speech made by my noble friend Lord Alton with regard to the policies of the Chinese regime towards its own citizens and the fact that we depend so much on Chinese manufacturing capacity to meet our needs. We have an overdependence on it, which surely leaves us immensely vulnerable to China in the general context as well as in the context we heard about from the noble Lord, Lord Strasburger, a moment ago.

I also identify with the points made by the noble Baroness, Lady Brinton, on the disability issues, and the important points made by my friend, the noble Lord, Lord Aberdare, on the needs of small businesses, particularly those in the construction sector.

During the last Session, I was very much involved in debating the subsidy Bill, which the noble and learned Lord, Lord Thomas, implied is a first cousin of the Bill that we have today. At that time, I described the way in which successive Welsh Governments had succeeded in using public sector procurement as a tool to stimulate the Welsh economy, within the framework of the European single market. So successful was that policy that, over two decades, the proportion of goods and services secured by the Welsh Government in Wales increased from 35% to 55%. This meant that we were securing work for employees, more trade for businesses in Wales and, often, far lower product miles, which helps our carbon footprint.

This is surely all to the good, provided that it is done in a manner that does not deliver inferior goods or services, does not significantly increase the price of procurement, does not lead to appreciable market distortion and does not prevent companies from outside Wales setting up in Wales to tender for such work. It is worth noting that, after this policy had reached a stable level, it contributed to a significant fall in unemployment levels in Wales, which, before the impact of Covid, had dropped to a level below the UK average for the first time in three generations. What this Welsh policy did not achieve was to raise significantly the average GDP per head in Wales; that is another issue that might be worthy of debate on another day. These factors are relevant background to our consideration of the Bill.

I welcome the fact that the Government have acknowledged, in Clause 13, that Welsh Ministers may publish their own strategic priorities in relation to procurement. In relation to the fact that Scotland is not in this agreement, I say to the noble and learned Lord, Lord Thomas of Cwmgiedd, that uniformity of regulation across the nations is valid only if circumstances and aspiration are similar in each. We will need a mechanism that allows for flexibility between the nations of these islands as well as the advantages that come from having markets that are as open as they can be.

I understand that the wording of Clause 13 has been agreed with the Welsh Government, as the Minister suggested. Assuming that to be the case, it is a much-needed positive step forward in the relationship between Westminster and Cardiff Bay—I welcome this. However, it is far from clear how the application of a different approach to procurement in Wales will be rolled out in practice within this new regime. The Bill is silent on that key question, perhaps understandably, because I believe that discussions are ongoing on that matter.

If procurement policy in Wales, as underpinned in law, is identical to the provisions of the Bill—in which case the provisions of Clause 13 are purely declaratory—in practice, the provisions of the Bill will apply in their entirety to Wales, whether or not they chime in with the procurement policy of the Welsh Government. If that is the case, Clause 13 will be little more than window dressing. Alternatively—and I believe that this is more likely—Clause 13 is a vehicle whereby different procurement laws may be implemented in Wales, and the Welsh Government have been planning to bring forward their own Bill within their devolved legislative competence. I certainly hope that that is the case. I assume that the Senedd has devolved competence in all the relevant areas within the Bill. But, if it is not so, some legislative mechanism should be built into the Bill to give the Senedd the power to fine-tune legislation in these matters. Equally, there must be a lever whereby the provisions of parts of the Bill are disapplied in Wales, if circumstances dictate that. This can be agreed by the UK and Welsh Governments.

The Minister touched on these matters when opening the debate, and I hope that he can further clarify in the wind-up. It is, after all, totally inappropriate that statements are written into the UK statute book which could transpire to be meaningless. The Welsh Government have essentially used their procurement policy, working within the European framework which applied to these matters, to support disadvantaged communities by helping to maximise job opportunities in Wales. The EU allowed us to do this. It appears, however, depending on the interpretation of Clause 13, that in some circumstances the UK Government could in practice debar the Welsh Government from doing so. This goes to the heart of the approach that we take to disadvantaged people and the duty of government to safeguard them.

Against that background, it is revealing to consider the wording used in Clause 32 of this Bill, which, rightly, makes provision for contracts to support disadvantaged individuals. However, it does nothing to provide for disadvantaged communities, which is essentially the policy followed by the Welsh Government and which was endorsed by the EU. It is here that we see the reality of Brexit staring us in the face. If that is acknowledged by the UK Government, and if they wish to address the adverse implications for Wales, they should either give real teeth to Clause 13 and allow Wales to develop its own policy, underpinned in law, or, if they maintain that this distorts the UK single market, they should amend the Bill to ensure that public procurement policy throughout the UK can help address disadvantaged communities wherever they may be.

I know that the Welsh Government have greater ambitions in this field which they wish to progress. We shall look forward, in due course, to a Welsh legislative measure being introduced in the Senedd to facilitate this. One such ambition may be to help start-ups in Wales and help micro-companies to grow. Enabling them to bid for public sector contracts is one way of facilitating that growth. For a small business, the bureaucracy of bidding for such contracts can be daunting, and I know that a report on this will be published next week by the Coalition for a Digital Economy, or Coadec. I hope that the UK and Welsh Governments will pay attention to its analysis and representations. In the meantime, if the Welsh Government wanted to change their procurement rules in order to assist such small companies, can the Government give an assurance that they will be free to do so, either through Clause 13, suitably stiffened up to be fit for purpose, or by other legislative means?

Clause 11 of the Bill spells out what the Government see as their four procurement objectives: value for money, public benefit, transparent procurement policies, and acting with integrity. No one would argue with these four, though one might quibble about the order in which they are placed. To my mind, public benefit and value for money should be regarded as equally significant and worthy of equal weight when assessed for any contract. In other words, if government pays a penny more for a widget but by doing so helps secure a dozen jobs in an area of high unemployment, then it is a compromise which earns its place.

Perhaps I may raise a question in relation to the definition of “a devolved Welsh authority”, which arises in several places in the Bill. It is a term which constrains the powers exercised by the Welsh Ministers, as specified in Clause 99. That defines devolved Welsh authorities as ones falling into the definition of Section 157A of the Government of Wales Act 2006. That section relates to powers exercisable only in relation to Wales. Where does that leave Welsh Water, a not-for-profit utility some of whose responsibilities straddle the Wales- England border?

There are other aspects of this Bill which we undoubtedly will need to examine in Committee. Those include the need for transparency and for the public sector to appreciate the challenges facing small businesses when they try to secure public sector tenders. There is, in particular, a need for the public, and especially businesses which find the challenges of tendering successfully to be daunting, to be assured that the allocation of public sector contracts is totally fair and above board and that there is no room for the “old pals act” to secure business for companies that happen to be well connected.

I think that I have flagged up enough issues to which we should apply ourselves in Committee. I look forward to following these up at that time, and to hearing tonight the Minister’s response to the points which I have raised.

Procurement Bill [HL]

Lord Wigley Excerpts

Committee stage
Monday 4th July 2022 Grand Committee

[The Minister of State, Cabinet Office (Lord True) (Con)]

My Lords, in moving Amendment 1 I will speak to the first group of amendments. Before so doing, I give notice to the Committee that Amendment 528—which I discovered only this morning had been grouped with this group, but which refers to matters relating to the health service—has been degrouped, because it is logical and to the benefit of the Committee that we discuss issues relating to the NHS part of the Bill together. I will address all the other amendments in this group.

I start by acknowledging and sincerely apologising for the number of government amendments. At Second Reading, in what I thought was all candour at the time, I said that I recognised there were areas of the Bill that would need refinement in Committee. However, the volume of amendments is still regrettable. I assure noble Lords that many of the amendments in this group and others are narrowly focused and technical in nature. We are putting them forward now only to ensure that the Bill functions properly and effectively.

We have issued a Keeling schedule setting out where the range of government amendments will fit in if your Lordships are pleased, eventually, to accept them. The bulk of the amendments in this group and others do not change the general policy intent of the Bill. Indeed, some of them serve to reflect more fully the original policy objectives as set out in the Government’s Green Paper and subsequent responses to it. I know from discussions at Second Reading and in the engagement I have already had with many of your Lordships—which I undertake to continue, not only between Committee and Report but, in the light of concerns that have been expressed, during Committee to clarify anything that is concerning noble Lords—that many noble Lords wish to get closer to the original policy objectives. That is evident from the number of non-government amendments that have been proposed, which we will be discussing. That is not an indication necessarily that we will have a meeting of minds on those, but some of them flow from that.

In many cases the need for amendments has been highlighted by external organisations. We are grateful for their scrutiny and input into improving the Bill. The interconnected nature of the Bill inevitably means that a single small amendment to a definition in one clause leads to multiple amendments to reflect the same definition where it features in later clauses to ensure coherence and consistency. Obviously, that frequently happens in the passage of legislation.

I repeat that I accept with all sincerity that the number of government amendments is not welcome and is undesirable. However, their end effect, when your Lordships have had the opportunity to reflect on them fully, of providing greater legal clarity will be beneficial to the Bill as a whole and to the large procurement community that will use it for many years to come.

The first group contains some of the Government’s amendments with the most general effect on provisions in the Bill, though these remain technical in focus. Amendments in this group relate to the introduction of the concept of “covered procurement” and to the devolved Administrations.

The proposed new clause before Clause 1 includes technical amendments to the definition of procurement and, as I just said, the introduction of the term “covered procurement” to distinguish between the categories of contract subject to different obligations under the Bill. “Covered procurement” refers to those contracts fully regulated by the Bill’s provisions; “procurement” refers to those contracts that are less regulated but none the less catered for to an extent, such as the below-threshold contracts and international organisation procurement. These changes recognise obligations under various trade agreements. The group also contains a number of consequential amendments to reflect this amended definition throughout the Bill.

Other amendments in this group did not originate from the Government but were requested by the devolved Administrations to amend how the legislation applies in Wales or Northern Ireland. As I said at Second Reading, we have been very grateful for discussions with and input from colleagues in Wales and Northern Ireland. These amendments include a small number of derogations from particular provisions in the Bill where they do not align with those Administrations’ policy goals. We have listened to the concerns of the devolved Administrations, and I hope noble Lords will agree that it is sensible to make these changes at an early stage to ensure that we have legislation that works for all contracting authorities in England, Wales and Northern Ireland.

[Lord Wigley (PC)]

I realise it is unusual to intervene on the opening speech, but it may be for the convenience of the Committee to understand the changes with regard to the devolved Administrations. Can the Minister confirm that these have all been agreed with the Welsh Government, in the case of Wales, and, where they relate to Northern Ireland, in Northern Ireland, or are there some here that, because of the time pressure, there has been no opportunity to discuss with the devolved Administrations?

[Lord True (Con)]

My Lords, I will have to be advised on that. I have been advised that they are the result of discussions. If that is not the case, I will set the position clearly and straightly when I come to wind up the debate. I have been led to believe, and know from my own involvement in the matter, that there has been a good deal of agreement between the United Kingdom Government and the Government of Wales. I will certainly confirm that in winding up.

The group also contains a number of technical amendments which are required to ensure that provisions relating to the Bill’s application in the devolved Administrations function properly.

To repeat what I said at Second Reading, I regret that the Scottish Government have opted not to join the Bill. They will retain their own procurement regulations in respect of devolved Scottish authorities. I am sure we would all welcome our Scottish friends if they wished to join the new system proposed by the Bill. Taxpayers and public services alike across the whole United Kingdom would benefit from that. However, at this juncture I am able to lay only those matters requested by the devolved Administrations in Wales and Northern Ireland. I beg to move.

--- Later in debate ---

[Lord Berkeley (Lab)]

I found the explanation of the noble Lord, Lord Lansley, quite interesting, but whether he is correct, we will have to wait for the Minister’s response to find out.

My problem, as has been mentioned by my noble friend and the noble Lord, Lord Fox, is that of definitions and the lack of reasons for change. For me, procurement is the process of awarding a contract. We need to know the definition of what is a public contract—perhaps the noble Lord is right; perhaps he is not—and what is not. In Amendment 1, the only difference between procurement and covered procurement is the word “public”, as he said. Where is the definition of uncovered procurement, if you like? We need that, and we also need an explanation of all these amendments, but I shall not go on, because my noble friend has delivered a massive argument. She said she spent all weekend on this, but she is just scratching the surface—which is even more frightening.

At the end of Amendment 1, we get something called the “centralised procurement authority”, which seems to be the top level—perhaps they are very large contracts. Can the Minister give some examples of what kind of contracts will be covered by that? It states that that is a

“contracting authority that is in the business of carrying out procurement for or on behalf of, or for the purpose of the supply of goods, services or works to, other contracting authorities.”

We can all give examples of those, and I am sure we will come to them later, but it is important that we have a definition of “public” and of “procurement”, and of how that is different from awarding a contract. Procurement, to me, is a process. It starts with tendering and ends up with, you hope, an award of contract. Why all these changes? There needs to be a definition and explanation against each one.

I will say just one more thing, because I am sure that everyone else will have spent the weekend going through each of these amendments. Amendment 440, which a noble Lord—I cannot remember who—just mentioned, refers to

“a supplier’s association with a state”.

“State” is an interesting word. What is a state? Is it Scotland or Wales? My noble friend next to me will have views on Wales but there needs to be a definition of “a state”. It suddenly pops up in Amendment 440. Presumably, if it means separate states, such as Wales and England, there will be frontiers between the two to make sure that goods go in the right direction.

I wanted to cover those two small issues, and want explanations from the Minister. I end by wishing the Minister well in taking the Bill forward. Noble Lords who have already spoken, in particular my noble friend Lady Hayman, have done a magnificent job but we are probably going to have several weeks of going through each of these amendments and asking the questions that she so rightly asked.

[Lord Wigley (PC)]

My Lords, I will speak briefly, as I intervened on the Minister’s opening speech. I want to reinforce the points that have been made and perhaps add a little to them.

I come to this from the viewpoint of the Welsh Government, who have worked closely with the UK Government on this matter over a period of time; designated civil servants from the Welsh Government have been co-operating on it. Therefore, this is not a matter of contention in that way; it is a question of making sure that there is an understanding and that the end product will work for both. Where it is necessary to have some fine-tuning for the sake of Wales or Northern Ireland, but not Scotland in this case—

[Lord Berkeley (Lab)]

Why not?

[Lord Wigley (PC)]

Scotland may come in but, at the moment, it is doing its own thing. This is a matter of getting a process where fine-tuning is possible.

It is not so much the content that concerns me—frankly, I was engaged in other things yesterday and did not have an opportunity to work through the amendments. As I said in the Chamber, the previous Sunday I worked through every one of the 80-odd amendments, so that I could have a coherent conversation with the Welsh Minister, civil servants in Cardiff and noble Lords who were involved, including the noble Baroness, Lady Humphreys, and the noble and learned Lord, Lord Thomas of Cwmgiedd. I did so in order to get their understanding. To be fair, they were constructive about this Bill—as the Bill stood, relatively few points were of contention to them. But as I indicated earlier, I am concerned that they have an opportunity to see whether any of the changes that are now being made through this large number of amendments might have an effect on their understanding of its slightly different application in Wales than in England.

That is the general intention: to get a system of procurement that can work for the Welsh Government in delivering their economic targets, which they have using successfully over the past few years, and to do so in a way that does not disrupt the UK market. A balance must be struck there. It is essential that both ends of the M4 understand each other on this. I am sure that the noble Baroness who opened for the Opposition will have had conversations with Welsh Ministers and will know about their concerns.

This is not about undermining or opposing the Bill. It is about making sure that it works properly, as intended, for both sides. That is what I hope for. If it is necessary to step back at this point, check and make sure that that is the case, it would be far better for us to do that now rather than pass into law things that become challengeable in the courts, at which point we will end up with all sorts of mess.

[Lord Purvis of Tweed (LD)]

My Lords, I regret I was unable to participate in Second Reading. However, I followed that debate and have read the Minister’s letter to those who took part. I also have amendments that we will be discussing later in Committee.

The noble Lords, Lord Fox and Lord Lansley, the noble Baroness, Lady Noakes, and I are now veterans of legislation that the Government have sought to change quite radically. There were at least two iterations of the Trade Bill, and then there was the Professional Qualifications Bill. That has raised a wry smile on the noble Baroness’s face, and it has brought back significant memories.

The difference, however, is that, for those Bills, the Minister was able to recognise not only the mood of the House but the practical consequences of bringing forward significant changes without there being a degree of consensus—as the noble Baroness, Lady Hayman, has said—at least on understanding what the Government were intending to do before they brought forward the changes. The passage of the Professional Qualifications Bill was paused. The Government recognised that their case had not been made, preparations had not been in place and that the materials were not available for Parliament to do its constitutional duty to scrutinise. I hear the Minister repeat time and again in the Chamber how much he values this Parliament, and this House in particular, doing our job. However, on this Bill, which he is responsible for, he is denying us the very tools to carry out this proper scrutiny work.

There is a precedent of other Ministers and other departments recognising that a pause is not a government defeat but will strengthen their case when they bring back their properly worked out amendments. Indeed, on the Professional Qualifications Bill and Trade Bill, there was consensus on the amendments brought forward at the end. It helped the Government carry out their job, as we were sincere in believing that they had faith in their proposals.

If we are to be soothsayers as far as understanding what the Government are seeking to do, then the noble Lord, Lord Lansley, made a reasonable fist of trying to interpret Amendment 1—the Minister chose not to do so. If the noble Lord is right or wrong, we should at least know what the Government intend when changing that proposal because, as my noble friend Lord Fox, and the noble Baroness, Lady Hayman, indicated, not a single government amendment has come with an explanatory statement.

I refer to the Cabinet Office Guide to Making Legislation from 2022, which the Minister is responsible for—I am certain the Minister has a copy; I can lend him mine if he wants. Section C is on “Essential Guidance for Bill Teams”; I think the Bill team is sitting behind him. In paragraph 22, on Amendments—this is from the Cabinet Office’s own guidance, not from me—it says:

“All government amendments require an explanatory statement, in plain English, setting what an amendment will do.”


So, why did the Minister refuse that on this Bill? It is a mockery of the guidance.

The Minister, after making his apology to the Grand Committee, chose not to outline any of the amendments. He did not explain whether Amendment 1 and the others will have significant policy implementation differences. If the noble Lord, Lord Lansley, is correct, then they will. That is how all of those who will be putting together procurement and replying to tenders will interpret the legislation, so of course it will have an implication on that. That is why we look at impact assessments to consider what level of consequence there will be.

The Government have not felt it necessary to bring any changes to the impact assessment—unlike for the Professional Qualifications Bill, I remind the Minister. However, this is also stated categorically in the Guide to Making Legislation in paragraph 13, on impact assessments:

“The … impact assessment … will need to be updated during parliamentary passage to reflect any changes made to the bill”.


I therefore ask the Minister: why has there been no update to the impact assessment to take into consideration any changes made to the Bill?

If the noble Lord, Lord Lansley, is correct, there will need to be some quite significant changes to the impact assessment, because the cost is all predicated on the streamlined approach that has been presented under the Bill before the Government sought to amend it. The Committee does not need to be reminded that the Government now want a far more competitive, flexible, streamlined procedure, moving from seven systems to three. If it is now the dance of the three and half veils, of “covered” or not covered, and organisations are having to work out which area they are going to fill in, of course there will be impacts that need to be outlined.

Procurement Bill [HL]

Lord Wigley Excerpts

Committee stage
Wednesday 6th July 2022 Grand Committee

[Lord Moylan (Con)]

My Lords, I rise to speak to Amendment 11 only. It carries over into our new domestic legislation what is referred to in the European Union legal context as the Teckal exemption. To that extent, it illustrates and gives force to the point made by my noble friend Lady Noakes that we are very much replicating European Union law here. The reason I rise to address it is that I wish to seek a point of clarification from my noble friend the Minister. It arises from my experience—this is an interest that I once declared but I think has now expired—of chairing Urban Design London, a body that benefited from the Teckal exemption. So I have some experience of how it works.

Urban Design London was—I mean “is”; it still exists and operates—an unincorporated association established between Transport for London, the Greater London Authority and London Councils, representing the London boroughs. Its purpose is to generate training for the benefit of local government officers, Transport for London officers and others in good practice in planning, urban design and transport design. I am very proud of it—it is a successful little body—but it was set up as an unincorporated association, meaning that it is not incorporated and not a company.

I am anxious because there are two versions of the legislation that I can look at: the one that was originally circulated and the one that has replaced it. I might say that the one that has replaced it is a great deal better than the original; it clearly shows the influence of the Local Government Association and people who understand these things. The version in the amendment is generally much better. However, I am concerned about the references to the Companies Act in sub-paragraph (2B), to be inserted by Amendment 11. The clarification I seek is that this is sufficiently broadly drawn that the controlled body that benefits from the Teckal exemption does not have to be incorporated and read in a Companies Act structure. I see my noble friend looking round; I will understand entirely if he is not able to give a firm direction to me on that point today. I simply reserve the right, depending on what he says, to bring something back on Report. I am not pressing him too far on that, but it is something that I would like to know.

I have one other point, which is that I am delighted to see that what was a provision in the originally circulated version of the Bill—whereby an appropriate authority may by regulation make provision about how to calculate the percentage of activities of the controlled body—has been dropped. The percentage of activities is relevant, because one of the qualifiers under the Teckal exemption is that 80% of your activities have to be carried out for the controlling party or parties, but “activities” is not defined. In the case of UDL, which was largely a body which employed staff who did things, we took the view as a board that the appropriate measure was staff time, but there might be bodies where “activities” should be measured by turnover, size of contracts or income and expenditure. I want my noble friend to confirm that the clause enabling an appropriate authority to make regulations on this topic has been dropped in the new amendment.

It should be, because these bodies need to be left to make their own responsible decisions about the best and appropriate means of deciding how to measure their own activities. I see no reason for the Secretary of State to be involved in making regulations about it, and if they behave perversely, they will of course be subject to potentially being sued by a contractor who had failed to achieve business that they might otherwise reasonably have thought they would have obtained.

At the risk of being a little tedious, I seek clarification from my noble friend on those two points, and if he is able to provide it not today but after the Committee, that would be more than welcome.

[Lord Wigley (PC)]

My Lords, I want to address the change in relation to Scottish law. Before doing that, I will pick up the point made a moment ago by the noble Baroness, Lady Noakes, with regard to the influence of European terminology. She will not be surprised to know that I have no problem with the influence of European terminology; if we are to hunt all European influences out of our legislation, it will take a very long time and leave quite a lot of uncertainty around the place. None the less, I take the point she makes with regard to the substance of the implications, and the question of a capacity to influence is a very important consideration. If a capacity to influence exists, that may have an ongoing impact without it being written in black and white. That has to be taken on board.

I want to ask the Minister about the change to get in line with Scottish law. If there is in future a change in Scottish law or a change in the ruling in the courts in Scotland, presumably that could have an implication for the way in which the Bill, when enacted, works out. Does that mean there will have to be a review every time there is a change in Scotland that might impact on this, because we are working within one market and we need to make sure there is consistency running through this? Perhaps I can park that question with the Minister, as it is a relevant one that arises from what he said.

[Lord Fox (LD)]

My Lords, at the beginning of the Committee the Minister had a teaser with his announcement. It is very clear that he is not going to resign, because no Minister would put himself through this process and then resign. We can be clear about his intentions.

The noble Baroness, Lady Noakes, said that she was interested in this and that perhaps some of us might not be. I am interested. Both the noble Baroness, Lady Noakes, and the noble Lord, Lord Moylan, have made important contributions to this group of amendments.

Since Monday, much industry has proceeded. We have new groups of amendments and, as the noble Baroness, Lady Noakes, pointed out, we have explanations for those amendments and what they seek to achieve. We thank the Bill team and the Government Whips’ Office for that hard work, which cannot have been easy. We also had a meeting with the Bill team this morning, which has helped us somewhat.

This is progress, although I always like to spoil praise by saying that we really should not have been starting from here in the first place. This is vital legislation that will set the scene for procurement right across our country, and the details need to be correct. We have started to hear that, in just one area, the details remain very much open to question.

Some of the amendments in this group are relatively small changes, including Amendments 10, 12, 16 and 17; others are trying to do a bit more. As we heard from the Minister, Amendment 11 rights a problem that was identified by both my noble friend Lord Wallace and the noble Lord, Lord Coaker, of groups of local authorities working in tandem.

I welcome that the Government have taken the advice of the LGA, but it seems slightly strange that it was sought or delivered after Second Reading rather than some time before it. One of the problems we sometimes have with the Government is that they forget the central role of local authorities, particularly in something like this. Local authorities should have been front and centre in the process of writing this legislation, but, far from it, it seems that they are something of an afterthought. That is where some difficulties are emerging, because, in a sense, we are trying to bend things back to fit local authorities when they should have been framed for local authorities in the first place. This amendment is welcome, with the caveat that we need clarity.

The noble Baroness, Lady Noakes, brought up the issue of clarity and the lack of definition. We heard the result of one of the legal cases that went to the European Union, the Teckal exemption, set out by the noble Lord. Most of the controversy of the European legislation has been hammered out in courts. As I said on Monday, we are spoiling for lots of legal fights in this legislation because of the loose definitions, absence of definitions and cross-definitions. I completely take the point made by the noble Baroness, Lady Noakes, that if we try to write across something using terms which do not appear in the UK lexicon of company law, we will be starting from first principles in the court in order to define them. That will not be in the interests of any government business or of local authorities. We need a clear and legally binding understanding of what all these terms mean. The Minister must use either the Dispatch Box or the legislation—preferably the latter—to clear up that ambiguity.

The second part of Amendment 13 is an example of what the Government giveth the Lords taketh away. Having cut across the public contracts regulation and removed exemptions for public undertaking and private utilities, as I understand it the Government are, with this amendment, replacing those exemptions and focusing this vertical exemption only on public utilities. As far as we are concerned, that is perfectly fine, but again, this is an example where the Bill has had to be corrected because of missing points that cut across. There are so many cross-cuts in this legislation.

Amendments 15 and 16 are another example. Here, as the Minister set out and as the noble Lord, Lord Wigley, requested, “legal activity” has meaning in Scotland and not the meaning that the Government intended for this Bill. We now have to choose something that has no meaning at all, which is “legal services”. In the words of the Government, there is a flexible definition for this. We are being asked to put a flexible definition into the centre of a Bill. I am not keen on this sort of flexibility of language, and this is another example of flexible or misunderstandable language being put into legislation. We are looking for clarity from the Minister. If it is not Pepper v Hart clarity, we need clarity written into what we have. On some of the issues mentioned by the noble Baroness, Lady Noakes, the noble Lord, Lord Wigley, and others, we need to remove that “flexibility” from our language in the Bill.

--- Later in debate ---

[Lord Wigley (PC)]

My Lords, I want to raise one narrow aspect; that of Dŵr Cymru, Welsh Water. The position of Welsh Water is somewhat different from that of the other water providers within England and Wales; I think the situation in Scotland is different again. Dŵr Cymru is a not-for-profit company, and the assumption and understanding is that nothing in the Bill undermines the capability of the Welsh Government to award the contract within the service area of Dŵr Cymru to a not-for-profit company of this sort. Quite clearly, that has a different impact than if that market was open for competition on a profit-making basis.

The performance of Dŵr Cymru is generally in most areas regarded as having been very satisfactory. There are ongoing arguments about quality of river water, et cetera, and noble Lords will be aware of those, but with regard to the provision of water, there is no wish—certainly at present, and I cannot foresee one in the near future—for there to be anything that disturbs that apple cart. I hope that the noble Baroness will be able to give an assurance on the record in this Committee that nothing in the Bill can, in any circumstances, undermine the ability of the Welsh Government to award the franchise for providing water in Wales to a not-for-profit company such as Dŵr Cymru.

[Lord Fox (LD)]

My Lords, very briefly, I thank the Minister for her clear statement. The subject of utilities has come up both on Monday and today, and we are beginning to get some clarity around how the whole utility story fits together, but anything more she can give us on that would be helpful. This is probably not helpful, but it seems to me to be an analysis of the issue. The majority of the trade deals to date are essentially rollover trade deals, and to paraphrase the noble Baroness, Lady Noakes, this legislation is essentially rollover legislation. However, trade deals such as the Australia deal are not rollover trade deals. We are in danger of trying to pour new wine into old skins here.

The issue that my noble friend highlighted here is an example where the new-style trade deal is not easily catered for in the old-style legislation, which is essentially rollover legislation. I am not sure what the solution to that is, other than “more work needed”, but I think—and this is a dispassionate and hopefully helpful observation —we are looking at a new trading position. The Government talk about that all the time, but we are essentially looking at legislation that was dealing with an existing set of trade deals which are, by their nature, different from the new ones. This is what is being thrown up, and we will start to see problems thrown up increasingly.

--- Later in debate ---

[Baroness Boycott (CB)]

My Lords, I am happy to support Amendments 85 and 87 in the name of the noble Baroness, Lady Worthington. As we have heard, procurement is an incredibly powerful tool and, if we do not use it in the right way, we will never get to our net-zero targets.

I thoroughly support the aim to shift the ambition of any new procurement regime to positively reward and incentivise suppliers who are innovating and providing climate-positive, sustainable products. As well as helping to achieve our climate and environmental goals, it will bring economic benefits. I would go further and say that we should not award any contracts to people who do not fulfil these categories from now on.

I note that the Government’s response to the consultation on the procurement Green Paper commented that many respondents had

“provided details of aspects that they would like contracting authorities to take greater account of, for example more focus on social and environmental impact.”

This amendment would help to ensure that contracting authorities always take this goal forward. The net-zero strategy, which many of us have referred to, clearly establishes the strategic importance of net zero at the project design stage. This amendment would make it much easier to draw this golden thread right through the procurement process to the end product.

With that in mind, I conclude that this amendment to incorporate the climate, environment and wider public benefits of procurement at preliminary market engagement when the authority’s procurement exercise is at the design stage is fully in line with policy. It needs only to be reflected in the Bill in the permissive way in which it is expressed in this amendment. I very much hope that the Minister will welcome it.

Before I sit down, I support Amendment 82 from the noble Lord, Lord Hunt of Kings Heath. As someone who has chaired many charities and tried to work with local authorities about picking up contracts that have lapsed, such as meals on wheels, I can say that you really need to know in advance what money might be available. No one should take the charities sector for granted in this respect.

[Lord Wigley (PC)]

My Lords, I am delighted to follow the noble Baroness. This group of amendments brings together three different but equally important threads that are material to this Bill, each of which deserves a place in these debates on the Bill in its own right.

First, there are the environmental points, which were mentioned a moment ago by the noble Baroness, Lady Worthington, and noble Lords subsequently added to them. They are fundamental. If it is government policy to aim at challenging targets to save our environment, that must be written into every aspect of public policy. It must be written into this aspect of public policy and others. We should not leave any opportunity going begging. This is an opportunity to have that in a Bill and to make sure that it is clearly understood by all those involved in the various diverse aspects of the procurement system.

Equally important is the question of how we regenerate the economy. Central to that must be the role of SMEs. They are a vital cog in the economy. They are the acorns from which the future will grow. They can also be very compatible with the environmental arguments to which we have referred. The points made by the noble Lord, Lord Lansley, the noble Baroness, Lady Verma, and my noble friend Lord Aberdare are important. I know that we will return to them on subsequent amendments, but we must not lose sight of them because these elements are vital to regenerating the economy in a sustainable way.

The third aspect, which I want to concentrate on for a moment, is disability. That agenda has been close to my heart for the past 40 or 50 years. The speech made by the noble Baroness, Lady Brinton, brought it home to us. As long ago as 1981, I had brought to my attention the social definition of disability: that a handicap is a relationship between a disabled person and his or her environment, be that the social environment, the physical environment or the psychological environment, and that we may or may not be able to do anything about the basic disability but we can almost always do something about the environment, be that the physical environment, the social environment or the psychological environment. Therefore, the extent to which a disability leads to a handicap rests with us in society in controlling those three elements. Clearly, that responsibility must run into all aspects of economic life and is therefore relevant to the Procurement Bill before us.

I very much hope that the amendments we have heard about—in particular, Amendment 141 in the name of the noble Lord, Lord Hunt, but others as well—are passed to ensure that this matter is written into the Bill and that we have no misunderstanding. These three elements—the environmental element, the small business and economic regeneration element and the disability element—are central to the procurement system.

[Baroness Parminter (LD)]

My Lords, it is a great privilege to follow the noble Lord, Lord Wigley. I echo all the comments he made. I want to make a brief remark in support of Amendments 85 and 87 in the name of the noble Baroness, Lady Worthington, which I and my colleagues have co-signed, and in support of the point made so powerfully by the noble Lord, Lord Wigley, about ensuring that there a commitment in the Bill to deliver the net-zero and environmental goals through a commitment to ensuring that “public goods” includes sustainability goals. That is fundamental.

I will add only one point that has not been covered by colleagues. It is that this is not happening at the moment. The National Audit Office and the Environmental Audit Committee in the House of Commons have looked into public procurement by government departments and found there to be a woeful lack of connection with consideration of net zero and our environmental goals, and that is when government departments already have a statement from the Cabinet Office that is meant to guide them towards it. It is not happening, but that is completely separate from the far wider issue of where it is absolutely not happening, which is in public services procurement, where there is no guidance. If we do not have a national public policy statement on that, it will not happen, so it is absolutely fundamental that we get this in the Bill.

Procurement Bill [HL]

Lord Wigley Excerpts

Committee stage
Monday 11th July 2022 Grand Committee

[Baroness Noakes (Con)]

My Lords, I have added my name to Amendments 38, 50, 97 and 100 in the name of my noble friend Lady Neville-Rolfe and, as she has already said, she has added her name to Amendment 534.

I will come to that in a moment, but I start with Amendment 86 in the name of my noble friend Lord Lansley. This returns to the question of preliminary market engagement and fostering the involvement of SMEs about which my noble friend spoke on our last Committee day in relation to his Amendment 88. Clause 15(1)(f) makes building capacity among suppliers a permitted purpose for preliminary market engagement. My noble friend’s amendment adds some words of emphasis so that capacity building should be particularly for small and medium-sized enterprises.

I know that noble Lords need no reminding of the importance of SMEs to the UK economy. They account for around 60% of employment and over half of turnover in the UK. Not all small businesses achieve scale and not all want to, but most large and successful businesses were small businesses once. We have a responsibility to ensure that SMEs are given every opportunity to thrive and grow. That is why we should be looking at this Bill on the important area of public procurement and its role in the economy and considering the way that can be used to foster SMEs.

SMEs find engaging with public procurement daunting. They simply do not have the time and resources to get involved in complex tenders, let alone things like dynamic markets. It has to be in the interests of both the individual contracting authorities and the economy as a whole to foster as much competition as possible and to assist SMEs in growing their businesses. Building capacity among SMEs is a good thing to do and this Bill should recognise that. It may occasionally be important to build capacity among larger businesses and my noble friend’s amendment does not preclude this. But large businesses have the kind of resources that make participating in public procurements pretty straightforward. SMEs, not large businesses, should be the focus of policy in this area.

My noble friend Lady Neville-Rolfe’s Amendments 97 and 100 also recognise that getting involved in public sector procurement is hard for SMEs. The complexity of procurement processes makes it quite likely that an SME might not satisfy all the participation criteria and even more likely that they will mess up on an aspect of the procedural requirements. They need to be cut some slack, which is what my noble friend’s amendments would do.

I am, as my noble friend knows, less convinced by her Amendments 290 and 295 because there are some serious issues in Schedules 6 and 7 which rightly debar businesses from public tenders. On the other hand, Schedules 6 and 7 are very heavy-handed and there may well be a case for further discretion to allow some of the matters in those schedules to be disregarded in the case of SMEs.

I now come to Amendment 534 to which the noble Baroness, Lady Brinton, spoke so eloquently earlier. It is rather different from the other amendments in this group because it requires a report every year. It is relevant to SMEs because the first area of the report is about how procurement rules have impacted the award of contracts to SMEs. I think we are agreed that we want to see awards of contracts to SMEs growing, and that means making it easier to include SMEs in the process and helping them to win.

There have been some changes to the previous EU rules on which this Bill is largely based which could make it easier for SMEs, but I suspect that the overwhelming effect of the procurement rules as we have them in this complex Bill and the secondary legislation that will follow will continue to deter SMEs from participating fully in public procurement. We really ought to be keeping this matter under review. The noble Baroness, Lady Brinton, raised the issue of whether the health procurement rules are covered. I drafted the amendment with the intention that it should cover health, but I recognise that this is a very complex area and will need to be teased out later in Committee.

A second area covered by my suggested report is whether there is scope to simplify the rules while remaining consistent with the procurement objectives set out in Clause 11. This will also be relevant to SMEs because I believe the complexity of the public procurement code is a major barrier to entry for small and medium-sized businesses. I am sure that large businesses, large tenderers, are quite comfortable with having barriers to entry for small and medium-sized entities, but government and Parliament should not be comfortable with that, and we should at least be striving for greater simplicity and keeping it under regular review.

[Lord Wigley (PC)]

My Lords, I am delighted to follow the noble Baroness. I support Amendment 38 moved by the noble Baroness, Lady Neville-Rolfe, and support very strongly the points that she and, more recently, the noble Baroness, Lady Noakes, have made. They relate to the pressing need to ensure that the burden on small businesses tendering for public contracts is addressed. This issue has arisen under other amendments, and I have no doubt that we need to get this nailed one way or another on Report. It is an important question.

We all draw on our experience. My experience, immediately before coming to the House of Lords after I had left elected politics, was when I chaired the board of Bangor University’s Bangor Business School. It related to the small business sector. These issues arose time after time. Some colleagues may be aware that way back, before entering full-time politics, I was involved in the manufacturing industry. I had two incarnations, the first of which was with large supernational companies, Ford, Mars and Hoover, when I was financial controller. Although those three corporations were not generally involved in public sector contracting, their approach to any question of contractual relationships was highly professional with relevant legal advice in-house and with the resources to buy in specialist advice when needed.

My second incarnation, which I undertook as a serving MP in the 1980s, was to chair a small company from its creation to when, after 11 years, it merged with a larger American-owned company to form a significant new entity employing 200 people at Llanberis in my constituency. We built—the hard way—the acorn from which that grew, raising our own capital locally and starting up by employing just one person full-time, an engineer to build automated diagnostic equipment for the medical sector.

In competing for contracts, we had to beat competitors that were much larger and with far greater resources and in-house expertise. A small company such as ours had a serious uphill struggle to compete on anything like a level playing field. We did so by being fleet of foot, resilient and flexible and by engaging proactively with potential customers. But it is unrealistic to expect SMEs to be in a position to compete on a level playing field with suppliers which have professional resources in depth. The danger is that such SMEs will be scared away from tendering for public sector contracts where the bureaucratic imposition is totally unreasonable for such small-scale operators.

In this context, the amendment is particularly relevant. If our company had not succeeded with the early contracts, we would not have grown to employ some 50 people, as we did at the point when the merger took place. Had we fallen by the wayside in that highly competitive situation, we would not now have the Siemens company that took over our successful company now employing more than 400 people at Llanberis, and with a further expansion a real possibility soon.

I support these amendments because I feel that there needs to be some mechanism written into the Bill to counterbalance the inevitable bureaucratic safety net which public sector bodies build with their procurement procedures. Providing some lower level of bureaucratic imposition on SMEs could make the difference between those companies, on the one hand, being suffocated out of the competitive arena by impositions that they cannot handle and, on the other hand, securing contracts which enable them, in the fullness of time, to grow, given the impact that that might have on our economy.

[Lord Aberdare (CB)]

My Lords, many of my amendments and those to which I have added my name relate to the issue of promoting greater access to public procurement for small businesses, but for whatever reason none of them has come up in this group, so I will just make two brief points.

First, I very much support all the amendments in this group. I wonder whether they will successfully address the large-supplier focus of procurement hitherto and whether they will be enough to bring in those much smaller suppliers, many of which could make a real impact on the provision of, for example, personal services at a local level but which are often excluded on the ground of having too small an income or no track record of delivering high-value contracts, even when the contracts that they want to deliver are far lower than that and they have delivered them at that level. So I suppose my question to the Minister is: how will the contracting authorities––local authorities or whatever—be dissuaded from imposing, or persuaded not to impose, thresholds and contract terms that actually deter or prevent some of those smaller enterprises from bidding? We have heard a lot about opening things up to small businesses, but unless you put restraints on the contracting authorities, those opportunities may not work.

Secondly, I very much welcome the amendment in the name of the noble Baroness, Lady Noakes, although it was spoken to first by the noble Baroness, Lady Brinton. It seems to me that one of the elements that is lacking from the Bill is any indication of how its provisions will be monitored and enforced. How will we know that it is working? I strongly support the review proposed in Amendment 534. Six years seems to be rather a long time to wait, but on the other hand this process will take time to work through.

Beyond that, I hope the Minister says something about how the Government intend to monitor the effect and impact of the Bill, specifically including whether it is actually succeeding in unleashing the energy, dynamism, innovation and entrepreneurship that come from smaller suppliers, and what mechanisms there might be to resolve the issue if it turns out that is not happening. I do not think we can rely on the courts, and certainly these small businesses do not have the will, resources or even time and energy to pursue issues such as this in court. So what mechanisms might the Government be able to use when the system does not seem to be working?

Procurement Bill [HL]

Lord Wigley Excerpts

Committee stage
Wednesday 13th July 2022 Grand Committee

[Baroness Worthington (CB)]

My Lords, I apologise for my late arrival. I will be brief. Amendment 65 in my name and the consequential Amendment 546 seek to put more detail in the Bill in relation to the national procurement policy statement. I shall not rehearse all the arguments that have been made but simply say that the issues highlighted by Amendment 65 are enduring and long-term goals of government. There is a need to see that they are continuously integrated into government policy-making, as the noble Lord who spoke before me just highlighted. We need to have clarity if we are going to make transitions happen in our economy that make it fit for the future. It is entirely appropriate that the Bill should set out specific guidance for the policy statement on these long-term, transitional issues. All procuring parties need to have clarity of purpose set out for them with no doubt. I agree that the continued resistance to this signals something that we should be very concerned about, because it indicates a degree of deviation from accepted policy in other parts of the Government and across all parties. We would like to see something in the Bill and would very much welcome discussions with the Minister on this topic as there is a strong degree of consensus on this issue.

I also strongly support the amendment in the name of the noble Lord, Lord Lansley, which would make it a requirement that the statement be published rather than there being merely a power. It seems entirely correct that that should be changed to make it a duty. I am also in favour of Amendment 66 in the name of the noble Baroness, Lady Boycott. Part of the reason I was late is that I was at a meeting discussing a response to the Government’s food strategy. There are some very important things in that strategy. We need levers with which they can be delivered. You cannot simply make policy statements and expect things to happen. If the Government are seeking greater reliance on British-grown, healthy, nutritious food, the procurement process is the way to do that, and we must see more clarity on that in the Bill. I fully support that amendment.

I also support the amendments in the name of the noble Baroness, Lady Parminter. We as a Parliament should be more included in the process through which the policy statement is derived, and I fully support her amendment that seek to improve the process by which we scrutinise and agree the statement.

[Lord Wigley (PC)]

My Lords, I have waited until the latter stages of this debate before intervening, for the simple reason that my Amendment 78A deals with totally different subjects from everything else that has been debated. I overwhelmingly agree with the comments made in the general debate, but I will not follow them through at this point.

I will speak briefly to my Amendment 78A, which is included in this rather diverse group. It relates to what I might call the “Welsh clause”—Clause 13. I was glad to hear the comments of the noble Earl a moment ago on the way that policy is being unfolded in Wales. That point has arisen on a number of occasions, in various debates.

We have already heard from the Minister that there has been close co-operation between the Welsh and UK Governments in reaching an agreed approach and wording, reflected in this Bill. That being so, it is surely of fundamental importance that this clause is not distorted or undermined by later legislative steps taken by this or any future UK Government. This amendment, if passed, would require agreement by Senedd Cymru to any proposed changes to this section. That is not an unreasonable proposition, given that the clause relates solely to Wales and is itself predicated on an approach of good will and co-operation. All that is needed by this amendment is a straight majority of Senedd Members present and voting.

In the spirit of co-operation in which Senedd Cymru, the Labour Government and Plaid Cymru have approached this matter, I invite the Minister to accept this amendment.

[Baroness Bennett of Manor Castle (GP)]

My Lords, it is a pleasure to follow the noble Lord, Lord Wigley. I agree with him, but I will take us back to the issues that have mostly been covered in this group. There are six amendments to which I have attached my name and I am sure the Committee will be relieved to know that I am not going to speak to them all.

I will speak chiefly to Amendment 61 from the noble Lord, Lord Lansley, to which I have attached my name. It was very kindly introduced by the noble Baroness, Lady Noakes, although it was not backed by her. I will now attempt to present the argument in its favour. I stress that the intellectual work on this has been done very much by the noble Lord, Lord Lansley, but, when I saw the amendment, I thought it was so important that it needed to be picked up.

The purpose of this amendment is linked to the description of the national procurement policy statement in Clause 12, which is

“setting out the Government’s strategic priorities in relation to procurement.”

Wrestling with all the government amendments and the complexity of this Bill has been challenging for the small Green group, but I understand that there are no government amendments to change “procurement” in Clause 12(1) to the technical term “covered procurement”. It is the Government’s intention that their strategic priorities should apply to all public procurement, including below-threshold procurement, light-touch procurement, international agreement procurement, and defence and security contracts.

As noble Lords have been talking about a lot in this group, the first part of this clause is the achievement of targets set out in the Climate Change Act 2008 and the Environment Act 2021. I posit that there are good reasons to put statutory obligations such as these in a list of strategic priorities; if they are not included, they are effectively deprioritised, which would be potentially damaging to the achievement of targets that have been mandated by Parliament, with very strong cross-party support. To pick up the points made by the noble Lord, Lord Wallace, these are things that have been agreed but need to be delivered on.

On that point about delivery, I refer to the report two weeks ago from the Committee on Climate Change. In what has to be called the strongest of language, it spoke about “major policy failures” and “scant evidence of delivery”. Through this procurement, we need to see this urgent delivery.

In introducing this group, the noble Baroness, Lady Noakes, suggested that this was a list of pet clauses, but the first elements here, on the climate targets and the Environment Act, are clearly not pet clauses. We have covered proposed new paragraph (b) about the Public Services (Social Value) Act 2012 at length, so I will not go back to that territory. I admit that proposed new paragraph (c) on innovation and competitiveness is not the wording I would have chosen and might perhaps fit in that category, but there is an important fourth point here with proposed new paragraph (d) on

“the minimisation of fraud, corruption, waste or the abuse of public money”.

--- Later in debate ---

[Lord True (Con)]

Well, I did try to get there but I had an intervention, then another intervention. It would be discourteous not to respond to—or be provoked by, as some may feel—the odd intervention. Is that not the give and take of debate, which is what our blessed Parliament is all about? If I have given the noble Lord incorrect advice, I will correct it, but what I have read out is the legal advice that I have been given.

Amendment 78A tabled by the noble Lord, Lord Wigley, provides that a Minister of the Crown may not introduce a Bill in either House of Parliament to amend or omit Clause 13, which relates to the Wales procurement policy statement, unless, as the noble Lord explained, Senedd Cymru has resolved by a majority of those present in voting to approve it. This is an uncongenial part for the noble Lord: the effect of this amendment would be to fetter the power of this and any future Parliament. The Government therefore cannot accept this amendment. However, as I mentioned earlier—he was kind enough to allude to this—we respect the devolution settlement and the competence of Wales on this matter. I have placed that and the degree of co-operation we have with the Welsh Government on the record in Hansard. That due respect for the devolution settlement is something that the Government aspire to see continue in this case, but we cannot accept the lock that he requests in the amendment.

[Lord Wigley (PC)]

I am grateful for and accept the integrity with which the Minister is putting that forward and the spirit in which he stated the difficulty that there would be with my amendment. None the less, he will be well aware that there are other forms of amendments that could be put forward, possibly on Report, to ensure that there is the necessary consultation and discussion before any changes in legislation take place. That form of words has appeared in other legislation. Could I invite him to consider that between now and Report? I think that that would be a good indication for those in Cardiff.

--- Later in debate ---

[Baroness Worthington (CB)]

My Lords, I rise to speak to two amendments in my name. I am grateful for the support of the noble Baronesses, Lady Verma, Lady Boycott and Lady Parminter. At this stage in Committee, we have had the debate about why we feel this Bill is lacking specificity, does not provide sufficient guidance and is a missed opportunity, so I do not propose to rehearse those arguments. I think that, if the Bill were different, we would not be seeking to amend Clause 22 on award criteria in this way. It is evident that we are trying to convey our concern that we need more guidance on these important long-term targets that need to be embedded in the procurement process.

I ask the Minister whether, under his interpretation of

“the subject-matter of the contract”

in Clause 22(2)(a), a contracting authority can set criteria that specifically relate to the public good that derives from environmental benefits that relate to the things we have put into our amendment. If that is the case, we have a workable solution. If it is not, we need something else in the Bill. To be clear, my question is: in setting award criteria under Clause 22, can a contracting authority put in specific, measurable criteria that relate to the wider public, environmental and social good?

[Lord Wigley (PC)]

My Lords, I will speak to Amendment 124A, which stands in the name of the noble Baroness, Lady McIntosh, who is involved in other parliamentary duties at this point. She asked whether I would speak to it on her behalf, and I am pleased to do so.

The amendment specifically relates to the need for all contracting authorities to be required to ensure that the award criteria include environmental impact considerations. This, of course, is a provision which stands in its own right in the general context but also specifically relating to Scotland. It is worth noting that the genesis of this amendment comes from the Law Society of Scotland and, as such, we should take very good note of it. The society emphasises that for Scotland, procurement legislation is devolved, as we know, and that the regulations applicable to Scotland—those which have been transferred into Scots law from EU directives—include the Public Contracts (Scotland) Regulations 2015, the Utilities Contracts (Scotland) Regulations 2016 and the Concessions Contracts (Scotland) Regulations 2016.

In fact, the Scottish devolution settlement specifies that all procurement matters that are not specifically reserved under Schedule 5 to the Scotland Act 1998 are devolved unless, as always, the UK Parliament tries to modify them, subject to the Sewel convention. As we all know, use of the Sewel powers can be extremely controversial at times. The Scottish Government have flagged up their opposition to such intervention by the UK Government in the context of the Bill.

As noble Lords will be aware, the Green Party is a partner in the Scottish Government, procurement regulations in Scotland have a number of environmental considerations built into them and the EU principles largely remain in force. It is not the case that UK contracting authorities with reserved functions will be subject to UK rules. For example, the Defence and Security Public Contracts Regulations 2011 are UK-wide, as I understand it, and that has a significance in this context.

This amendment seeks to make it a statutory responsibility for contracting authorities, in setting award criteria, to

“take account of the environmental impact of the award”.

This would place a parallel emphasis on environmental impact in the context of English or UK contracts, as is the case in Scotland. As the Law Society of Scotland has stated:

“It is important that the Bill does not lead to confusion in the UK for parties, given that different rules will apply in the UK market”.


Inevitably, given the devolution settlement, there will be occasions when legislation in Scotland and England differs for a variety of reasons relating to different values, circumstances or aspirations, but where there is largely agreement on public policy, as there surely is on the environmental impacts to be taken into account, common sense would dictate that words along the lines of Amendment 124A should be built into the Bill.

[Baroness Boycott (CB)]

My Lords, I support Amendments 124 and 127 in the name of the my noble friend Lady Worthington. As always, I return to the issue of food: the Committee on Climate Change reported last week that the public sector serves 1.9 billion meals a year. That is an unbelievably big responsibility and impacts on the environment, our health, how people co-operate socially, what we grow and agriculture. If we cannot have principles about the environment, public good and public health within this public procurement then it is really not fit for purpose because this is, I think, a massive area of concern to everyone in this Room.

Procurement Bill [HL]

Lord Wigley Excerpts

Committee stage
Wednesday 26th October 2022 Grand Committee

Moved by

[Lord Wigley]

491: Clause 99, page 62, line 41, after “wholly” insert “or mainly”

--- Later in debate ---

[Lord Wigley (PC)]

I congratulate the Deputy Chairman of Committees on that “Just a Minute” miracle. I will speak to Amendment 491 standing in my name and those of the noble Baroness, Lady Humphreys, and the noble and learned Lord, Lord Thomas of Cwmgiedd.

We return to the question of the relationship of Wales to the rest of the provisions of the Bill, which we touched on way back in May or June. It was certainly a very long time ago. A certain amount of water has gone down the river since then, but none the less, the representations made by the Welsh Government to the UK Government at that time, as well as to those of us serving on this Committee, are still matters that need to be finally aired before we move out of Committee.

I note, as it is relevant to Amendment 491, that the Government did not move Amendment 490. If I am right in my understanding of that, the content which Amendment 491 seeks to amend is not changed. Amendment 491 therefore stands in relation to the Bill as it was originally formulated. I am grateful for that clarification.

The Welsh and UK Governments have, by and large, worked very closely together on the Bill, and there has been quite a close meeting of minds and a considerable amount of harmony. However, there is one matter which the Welsh Government have raised with us. The Minister concerned is seeking an amendment to the definition of the WCAs, with a view to ensuring that the clauses work more fairly in relation to some cross-border procurements—single procurements which relate to both Wales and England. The Minister in Cardiff wrote to the Minister for Brexit Opportunities and Government Efficiency on 18 May, raising this question, and discussions thereafter took place. None the less, to the best of my knowledge, there has been no amendment to the Bill that has met the question about procurement relating solely to Wales or of whether it should read, in the words of Amendment 491, “wholly or mainly”.

We are talking about the awarding of

“a contract for the purpose of exercising a function wholly in relation to Wales”.

The question is whether we put in “wholly or mainly” relating to Wales. That amendment is needed for the Bill to work effectively. One only has to think of certain of the procurements that the Welsh Government, or an agency on their behalf, are making, which may be having an effect both in Wales and over the border. One thinks of procurement in relation to water and rivers, for example, where the river runs from Wales to England. Quite clearly, in making a procurement one cannot be absolutely certain whether the product or service that is being procured relates solely to Wales, or to Wales and England. One thinks of certain aspects of the health services along the borders where that again will arise.

It seems sensible to put in the words “or mainly” to ensure that the Welsh Government, or anyone else who is concerned with this, do not get caught in a tangle about what is covered by the Bill and what is not.

Given that there has been such a close working relationship between the Welsh and UK Governments on this matter, I am surprised that there has not been a meeting of minds. If there has been some non-legislative agreement that has covered this, that we may not know about in this Committee, I would be glad if that was pointed out. I am not speaking to the other amendments in this group because they do not seem to be dealing with the same point. I would be glad to have the Minister’s response in relation to Amendment 491. I beg to move.

[Lord Lansley (Con)]

My Lords, these are different subjects, and before we turn to how regulations are to be agreed, I will turn to Amendment 527. It might be helpful if colleagues, if they have a moment, look at Schedule 11. Clause 107 sets out in Schedule 11 the repeals of legislation resulting from this legislation. The third item under “Primary legislation” says:

“An Act of Parliament resulting from the Trade (Australia and New Zealand) Bill that was introduced into the House of Commons on 11 May 2022.”


My amendment relates to whether it would be appropriate for the whole of that piece of legislation to be repealed if it were amended in the other place or in this House. As it stands at the moment, the Bill implements the procurement chapters of the two agreements. They will be implemented by their being added to Schedule 9. That is absolutely fine—it is not the issue. The issue is if the Trade (Australia and New Zealand) Bill is amended. It was not amended in Committee in the other place, but there is an amendment down on Report in the other place in the name of Nick Thomas-Symonds, for the Official Opposition, which adds a clause that says:

“The Secretary of State must publish an assessment of the impact of the implementation of the procurement Chapters within twelve months of the coming into force of Regulations made under section 1 of this Act and every three years thereafter.”


It probably will not be passed, but let us say for the sake of argument that an impact assessment was passed here—or an impact assessment or report on the impact was required here in relation to the Australia and New Zealand trade agreements more generally—into the Trade (Australia and New Zealand) Act. I think either House would then expect it to happen. However, it would probably not happen because the Procurement Bill will become the Procurement Act, and when it comes into force it would repeal the Trade (Australia and New Zealand) Act and all that is in it, regardless of whether it has been amended.

The point of my Amendment 527 is to repeal the provisions of the Act resulting from the Trade (Australia and New Zealand) Bill in so far as they were included in the Bill at its introduction. Therefore, if there is an amendment, it would not be repealed by virtue of this provision. That is the question. We are at the stage of having further conversations, and I would be very happy to have further conversations with my noble friends about this matter before we get to Report.

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[Lord Wigley (PC)]

My Lords, I am very grateful to the Minister for her response to this debate. I am sure that my Liberal Democrat friends will be happy with the assurances that they have been given of further discussion on the other amendments. On the basis of the commitment given by the Minister to seek an agreement with the Welsh Government on this matter, and that discussions are still ongoing, I beg leave to withdraw Amendment 491.

Amendment 491 withdrawn.