Procurement Bill [Lords]

Mick Whitley Excerpts

2nd reading
Monday 9th January 2023 Commons Chamber

[Mick Whitley (Birkenhead) (Lab)]

I commend my hon. Friend the Member for City of Chester (Samantha Dixon). I hope her nerves have settled after an excellent speech. I thank all my hon. Friends for their eloquent contributions to today’s debate. I hope the Minister recognises there is a real appetite on the Labour Benches to work constructively with the Government on this issue.

Colleagues have rightly drawn attention to the ways in which the Bill risks enshrining in law the kind of cronyism we saw run wild during the pandemic. In the short time available to me, however, I want to speak specifically to the issue of social value and how recent developments in my constituency illustrate the urgent need for reform of our broken procurement regime.

When metro Mayor Steve Rotheram announced that the Liverpool city region combined authority would be commissioning the first new Mersey ferry in over 60 years, there was a widespread belief that it could only be built at Cammell Laird shipyards in my constituency of Birkenhead. What could be more fitting than for such an iconic Merseyside institution to be built on the banks of the Mersey itself? And what a difference the multimillion -pound contract would have made to the lives of my constituents, securing high-skilled work for years to come and guaranteeing additional investment in skills and training.

But soon enough those hopes were sunk by the cold reality of today’s procurement landscape. Cammell Laird could not compete on price against the likes of multinational giants like Damen. No matter how much the metro Mayor might have wanted to see the Ferry built in its entirety on Merseyside, he found his hands tied by onerous procurement rules enforced by central Government. As a result, the construction of the ferry is now set to be split between Cammell Laird and a Damen shipyard in the Balkans, with much of the most high-value labour likely to be offshored abroad.

My constituents were badly let down by a failed procurement regime that failed to take wider social, economic and environmental considerations properly into account. The news, only a week later, that the Ministry of Defence had awarded the contract for the new fleet solid support ships to a Spanish-led consortium made the blow even harder to bear.

Ministers have stated time and again that they intend to reaffirm value for money as the foundational principle of their procurement strategy. No one in this House is arguing for anything other than delivering the highest value for taxpayers, but that must also mean recognising the extraordinary potential for public procurement—which accounts for £1 in every £3 that the Government spend—to promote British businesses, boost job creation and drive investment in communities such as Birkenhead. For too long, communities across the country have missed out on the benefits of billions of pounds of public spending: one in six procurement contracts are now awarded to companies with links to tax havens, while the number of SMEs winning Government contracts is falling year on year.

This Bill was an opportunity to put right the mistakes of the past. Ministers had the chance to strengthen the Public Services (Social Value) Act 2012, give contracting authorities the flexibility they need to do their best by the communities they serve, and enshrine social value at the very heart of a new, progressive procurement regime. But there is not a single mention of social value in the Bill. Instead, Ministers are promising to expand on their plans to maximise social value in a national procurement policy statement with no statutory footing. If the Government are as committed as they claim to be to supporting critical industries such as shipbuilding, why does the Bill not contain a social value strategy?

The simple truth is that when it comes to supporting British businesses, the Bill is desperately lacking in ambition. For all the talk from Government Members about seizing post-Brexit opportunities, all the Bill really has to offer is more of the same—more of the giant multinationals treating this country as a cash cow while forcing home-grown British businesses out of the competition, and more public money piling up in tax havens while domestic industry struggles to survive one of the bleakest economic outlooks in recent history.

I recognise the need for a major overhaul of our national procurement regime. In the hope of achieving meaningful improvements to the Bill, I will not vote against it this evening, but if the version that returns on Third Reading does as little for the communities and businesses that I represent, I will be forced to think again.