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.