Procurement Bill [Lords]

Mary Robinson Excerpts

Report stage
Tuesday 13th June 2023 Commons Chamber

[Tim Loughton]

My hon. Friend poses a very good question. Whether it is on moral grounds, on the basis of what this House has voted for in the past or on the basis of legislation that is topical in many areas around modern day slavery at the moment, we should not be anywhere near that company or similar companies. Our Government, our public bodies and our procurement agencies need to take much more notice of what Governments do and say. Much more must be done, and urgently so.

It is incumbent on the House to call for a comprehensive investigation into Hikvision’s activities and its complicity in the suspected atrocities against the Uyghurs. We must work alongside our international partners to hold Hikvision and the Chinese Government accountable for their actions. Most importantly, we should use the purchasing power that we have as a Government and the interest we have in public bodies to disincentivise companies from behaving in the way Hikvision has towards the Uyghurs. At the moment, we are not merely failing to hold these companies to account; we are actually making them richer. The Government’s decision to remove Chinese state-owned surveillance at sensitive sites is welcome, but not sufficient. The widespread use of Hikvision equipment by police forces, hospitals and local councils risks providing malign states—

[Mary Robinson (Cheadle) (Con)]

I am grateful to my hon. Friend for giving way. He has set out an alarming set of issues around the extensive use of this surveillance equipment across various sectors. I know that the Government are listening, so if they were to go ahead as he suggests, should they not, in a parallel way, also ensure that the capacity to fill the gap is there and incentivise other companies to fill it?

[Tim Loughton]

I do not wish to alarm my hon. Friend, but I am afraid that what we have heard is alarming. The trouble is that it is true. It is based on evidence and the sources that I have given.

We have to achieve a balance here, but we need to show greater urgency to dispel the current installations that we have. We need to ensure that they are replaced with reliable equipment from trusted sources as a matter of urgency. It is that urgency that we are not seeing. My hon. Friend the Minister said that within six months the Government would produce this list—a limited list of action that they are going to take. They could come up with a timeline that is still several years away. That is not realistic or sending out the right messages, and we can and need to do far better.

The widespread use of Hikvision equipment by those different agencies risks providing malign states with a back entrance into UK security and imposing an unwanted reliance on those countries. By contrast, the White House has taken a strong stance on those companies by refusing to support Chinese companies that undermine the security or values of the United States and its allies. Embracing and reasoning would allow the UK Government to be consistent with their commitment to protecting core national security interests and democratic values. That is why this new clause is so important. I hope that the Minister will respond positively to that and give us a reassurance and an offer, if we are not taking the new clause to a vote today. My right hon. Friend the Member for Chingford and Woodford Green has rather let the cat out of the bag by saying that he will not press his new clause to a vote. If that is the case, more has to be done in the other place. We need much tougher measures than we have seen so far, because I am afraid that the Chinese are laughing at our failure to treat this with the seriousness and urgency that it requires.

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[John Penrose (Weston-super-Mare) (Con)]

I rise to speak to my amendment 68, which was tabled with not just my signature on it, but those of the Chairman and the deputy Chairman of the Public Accounts Committee.

The amendment is about value for money and evaluation. We have heard during the course of this debate that this excellent Bill, which covers an enormous amount of much-needed reform in this area, deals with about £300 billion-worth of taxpayers’ money every year. That is a vast amount of cash and it is vital that we spend it as effectively as we possibly can. It matters not just for the value for money that taxpayers get, but for the efficiency and effectiveness with which our public services are delivered. That ought to be a compelling dyad if there ever was one.

The aim of amendment 68 is to achieve that evaluation, which we have already heard about from the Chairman of the Public Accounts Committee. I stress that this is not just a cross-party amendment, with support from both Labour and Conservative Members and from the cross-party Public Accounts Committee. It also has a very unusual political coalition behind it, which includes not only the Centre for Policy Studies, the TaxPayers’ Alliance and the Adam Smith Institute—all good, solid free-market, centre-right think-tanks—but Transparency International, Spotlight on Corruption, the Campaign for Freedom of Information and the Centre for Public Data. In other words, it is a very unusual political coalition, backing something because it is right in principle and because it yields better value for taxpayers’ money.

I urge Ministers to give the amendment much closer attention. I appreciate that it is different from the equally important questions that we have also addressed during the course of this debate, about exploitation of workers, exploitation of Uyghurs and human rights abuses around the world. However, domestically, in the middle of a cost of living crisis, it really matters to everybody in our constituencies, the man and woman in the street and hard-working families up and down the country and it can make a prompt difference.

[Mary Robinson]

Value for money is, of course, at the heart of procurement, and we all want to see it. The Royal Institute of British Architects has recommended post-occupancy evaluation. That would be an effective tool for public buildings such as hospitals and schools. Could it form part of the evaluations that my hon. Friend is talking about?

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[Nigel Mills (Amber Valley) (Con)]

It is a pleasure to follow the hon. Member for Richmond Park (Sarah Olney). I rise to speak to amendments 61 to 67, which stand in the name of the right hon. Member for Barking (Dame Margaret Hodge)—sadly, she cannot be here today, so Members are stuck with me. I cannot do an impression of the energy she would have brought to this debate, but I can try to present the arguments that I think she would have made.

What we are trying to do with these amendments is strengthen the provisions in the Bill to help tackle economic crime. One would think, quite logically, that in a Bill on public sector procurement, the risks of economic crime would be quite a significant issue that we would be trying to deal with. I think it is quite right that we use the Bill to tackle issues of national security or modern-day slavery, but equally, I think it is wrong that we do not have the full protections we need for economic crime in the UK.

This is not just a theoretical problem. In a survey from about five years ago, about a quarter of councils said that they had been victims of corruption in their procurement processes. We estimate that the losses are around £876 million a year—the biggest cause of financial loss in local government—so there is clearly plenty of scope for improvement in our performance. We welcome the fact that under the new UK procurement regime, we have an exclusion and debarring regime that is much better, probably much tougher, and hopefully much easier to use. Those provisions do exist in the EU procurement regime, but they have been extraordinarily rarely used in the UK. I think we all hope that we will be much more effective at using the protections that we are putting in place through the Bill.

[Mary Robinson]

Exclusion and debarment could be a very effective way to incentivise good governance within suppliers, but also to enable local authorities to crack down on and get rid of corruption and fraud in procurement. Indeed, the United States goes a lot further to protect procurement by encouraging whistleblowers to come forward with information through the False Claims Act. In doing so, the US has recovered about £50 billion in respect of fraud in Government procurement and spending. Does my hon. Friend agree that a stronger whistleblowing framework and anonymous whistleblowing, perhaps through a hotline for procurement, could potentially save taxpayers millions of pounds?

[Nigel Mills]

I agree with my hon. Friend and commend her for the considerable amount of work she has done on whistleblowing—she truly is an expert. In general, the Americans have some good ideas on this. I was at a briefing last week where someone took me through those powers: if someone brings a private prosecution and the Government take it on halfway through, that person gets to keep 20% of the proceeds that are recovered, and if the Government do not take it on and that person is successful, they get to keep 40%. That creates a real incentive in the system for someone to take the huge risk to their personal wellbeing and career of exposing wrongdoing. I think we could learn a very great deal from the American position in that respect.

The amendments I want to speak to can be covered in three different groups. Amendment 67 would give contracting authorities the power to exclude suppliers when they have evidence of economic crime-related wrongdoing, not just a conviction for it. The Bill contains various measures by which authorities that are going through a procurement exercise do not actually have to see convictions—they can see credible evidence. We have ended up in the rather bizarre situation where I can exclude somebody from a procurement if I believe they have been part of a cartel in South America even though they have not been convicted, but I think they might well have been if they were in the UK; however, I cannot exclude somebody who I have real evidence has been committing economic crime in the UK, because there has not been a conviction for it yet.

The problem with that model is that convictions for crimes such as fraud have fallen by about two thirds in the past decade. We have not had a successful prosecution of a large corporate for fraud for a decade, I think, although we have had some deferred prosecution agreements. If we are relying on excluding dodgy companies from the process only where there has been a conviction, we are going to end up in the rather unfortunate position of there not being enough convictions to make the regime successful.

To me, it seems quite reasonable to allow an extension of the more wide-ranging rules in the Bill to apply to an authority that has credible evidence that an economic crime has been committed, especially if that prosecution process is ongoing when that authority is doing the procurement exercise, instead of it not being able to exclude that party from the exercise even though there is a real chance that they could be convicted quite soon. I just think that situation would be a real weakness. I am not saying that we would mandate exclusion in that situation, but empowering authorities to not go ahead with that party or bidder when they have credible evidence seems like quite a reasonable thing to do.

When this issue was raised in the House of Lords, the Government’s response was that it would impose an unreasonable burden on contracting authorities, but as I have just said, the Bill already imposes quite significant potential burdens to try to work out if somebody has been guilty of cartel-like behaviour. I suspect that would be harder than working out whether they have been guilty of actual fraud in the UK. We have the new unit being created that could support authorities in that process. That would not be mandatory. It would be an option that they could use in situations where they have that evidence, so there would not necessarily be any burden at all. I urge the Minister to give real consideration to whether a system that only allows successful prosecution of excluded companies that behave terribly in these areas of crime is the right balance to strike.