Draft Public Procurement (Amendment etc.) (EU Exit) Regulations 2019

Ranil Jayawardena Excerpts

Wednesday 13th February 2019 General Committees

[Oliver Dowden]

The best approach to identifying opportunities for reforming procurement laws is to look at those laws in totality once we have left the European Union so that, to the point made by my right hon. Friend the Member for East Yorkshire, we can consider their full scope rather than doing things in a piecemeal fashion. In that way, we will be able to reform EU procurement law in its totality and ensure that we address the range of concerns about how that law works. Since we will no longer be bound by it, we will have the opportunity to do that in a full-hearted way.

[Mr Ranil Jayawardena (North East Hampshire) (Con)]

Further to the point made by the hon. Member for Kilmarnock and Loudoun, may I make a suggestion? Does my hon. Friend agree that broadband is critical for the future of our country, but that too often public procurement rules have been used to stop the roll-out of broadband by setting artificially high barriers to the provision of state aid by the Government? The state aid rules have been used against local communities. Will he look at that as he takes this policy area forward?

[Oliver Dowden]

That is one example. There are many such examples. The Government are still working on the assumption that we will reach agreement on the withdrawal agreement, that it will be passed by Parliament and that we will have a transition period, which will allow us two years to consider this further. I would like to have a Green Paper first so that we can discuss all the ideas before formally bringing forward legislation, to make sure we capture all the related issues.

--- Later in debate ---

[Oliver Dowden]

The Opposition spokesperson raised a large number of issues and I shall seek to address them all. If I fail to do so, I will be more than happy to write to her.

The starting point is to remember that the regulations are not intended to change our procurement regime. The opportunity to do that will come afterwards, depending on the future relationship that we negotiate—or sooner, in a no-deal scenario. With the regulations, we seek to replicate existing procurement rules to give stability to companies engaged in procurement, so that they will know that the rules under which they currently bid will continue after we leave the European Union. Of course there are areas of procurement that we would like to reform, but the regulations are not the appropriate vehicle for doing so; it would be better for us to look subsequently at reforming procurement in the round.

Within the context of existing EU procurement rules, we have made significant progress. The hon. Member for Leigh mentioned SMEs. In the last Parliament, for the first time, this Government set a target of 25% of all Government business going to SMEs, and we met it. In this Parliament, we have set a target of 33% and we are making progress towards that. Indeed, I have announced further measures to help us reach that point. However, the regulations are separate from that; they are about ensuring continuity, which in my experience is what businesses are after.

I will try to address some of her specific points. The hon. Lady rightly said the e-notification scheme is due to come into force at the end of March. Ministers in the Cabinet Office take a close interest in that, and we continue to believe that it is on course to do so. I do not think that there is concern about that. A question was asked about what would happen if, as we hope to, we leave with a deal. In that instance, the measures will simply be deferred. They may have to be amended, depending on the nature of the future political framework that is agreed, and how we implement it through primary legislation.

The regulations do not provide for oversight by the CMA of the procurement regime. Agreed suppliers will, however, continue to be afforded remedies provided for in the regulations. In that way, contracting authorities and other entities will be held to account by the courts—again, essentially replicating the situation that we had before.

The hon. Lady rightly raised GPA membership. From listening to her, one could be forgiven for thinking that we were somehow desperately off-track on GPA membership. We have reached agreement in principle for the United Kingdom to join the WTO GPA. We are confident that we will very shortly be in a position to lay statutory instruments before Parliament to enable that to happen.

There is a small chance of a gap between the “in principle” accession to the GPA that is already agreed and the “in law” joining of the GPA, essentially because of the number of days required to lay the statutory instruments before Parliament. What we are trying to do with the regulations, and the subsequent SI that I highlighted, is to give certainty in that scenario to all contractors who are not based in the UK that they can continue to access the UK as if we remained members of the GPA.

Theoretically, in that small gap there is a chance that another country could decide that there was no basis for UK companies to access their market. However, there is a pretty small chance of that, first of all because we have moved unilaterally to say that we would allow them access. On the basis of reciprocity, we would expect it.

Furthermore, almost every country, I think bar South Korea, would require an Act to be passed by its Government to exclude UK companies, and it would have to apply to a situation where the procurement process had commenced, a UK company had applied for it, and the process had concluded. Given that we have already reached agreement in principle to join and we are progressing at a very good rate, the chances of that happening are exceptionally small. However, to provide clarity we have said that overseas actors can have access to our market.

[Mr Jayawardena]

Looking at the history, Moldova was the only country to object to our accession to the GPA. Following further discussion with our mission in Geneva, Moldova has now agreed to withdraw that opposition. Indeed, the members of the GPA committee have agreed to our accession.

[Oliver Dowden]

My hon. Friend is right. Essentially, political agreement has been reached for the United Kingdom to join the GPA; these are just the remaining technical stages. I would happily outline them in more detail, but I shall not bore the Committee. In essence, we have reached an agreement; these are just technical measures to ensure that it happens.

The hon. Member for Leigh set great store by the question of an impact assessment. She rightly highlighted the explanatory memorandum, which sets out the impact in broad terms. When impacts are assessed to be below an annual cost of £5 million, a full impact assessment is not required. Our initial analysis is that it falls below that threshold; therefore, such an assessment is not required.

I hope that I have addressed all the points that the hon. Lady raised. As I said, I will happily take up further points subsequently through correspondence. Again, I reassure the Committee that the regulations make provisions for the status quo. They take the existing EU procurement laws and replicate them so that there can be certainty. The only real change relates to notification. Clearly, we will not have access to the OJEU, so we are creating our own notification system. However, it will replicate the existing OJEU notification system.

There are, of course, questions surrounding how we can reform procurement. In the end, leaving the European Union provides the opportunity for us to look at it more flexibly. However, the proper way to do that is through full consultation, looking at a total process of reform. That will rightly be considered by Parliament through primary legislation, which is a much better vehicle for such reform than a statutory instrument. On that basis, I commend the regulations to the Committee.

Question put and agreed to.

Resolved,

That the Committee has considered the draft Public Procurement (Amendment etc.) (EU Exit) Regulations 2019.