Procurement Bill [Lords]

Baroness Winterton of Doncaster Excerpts

2nd reading
Monday 9th January 2023 Commons Chamber

[Jeremy Quin]

I thank my hon. Friend for a most ingenious comment. I had not considered the calendar of the two Bills. It is an interesting point. I will raise the matter with business managers.

We will continue to support UK businesses so that they can continue to be successful in competing for public contracts in other countries around the world by protecting reciprocal arrangements and guaranteeing market access, treating each other’s suppliers on an equal and fair footing.

Turning finally to territorial application, we have prepared the Bill in a spirit of co-operation between the nations of the United Kingdom. As part of the policy development process, we welcomed policy officials from Wales and Northern Ireland into our team so that they had a critical role in shaping this legislation from the very beginning. As a result, the general scope of the legislation applies to all contracting authorities in England, Wales and Northern Ireland. This will ensure that contracting authorities and suppliers can benefit from the efficiencies of having a broadly consistent regime operating across constituent parts of the UK.

I regret to say that the Scottish Government have opted not to join the UK Government Bill and will retain their own procurement regulations in respect of devolved Scottish authorities. Many in the House will regret that and would no doubt welcome our Scottish friends joining the new regime, which will benefit taxpayers and public services alike across Scotland and the whole of the UK.

There has never been a piece of UK procurement legislation as comprehensive as this. It is a large and technical Bill. I accept that there may be some areas that will merit further consideration, which we will debate in more detail in Committee, but I am confident that these significant reforms open up a new chapter for public procurement in this country and will boost business, spread opportunity and strengthen our Union. I urge all Members of this House to support the Bill.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Before I call the Opposition Front-Bench spokesperson, I wish to draw colleagues’ attention to the fact that, while we are not desperately pushed for time, there is quite a lot of interest in this debate, so my recommendation for Back-Bench speeches is about eight minutes. We also have a maiden speech. If Members follow my recommendation, I will not need to impose a time limit. I call the Deputy Leader of the Opposition.

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[Several hon. Members rose—]

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. I give a gentle reminder of my advice that speeches should last no longer than eight minutes.

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[Mr Rees-Mogg]

I got a cheer from the Opposition Front Bench! I rarely get those, but on this occasion I have. I think giving trade union rights is straightforward cronyism: it is giving money to your mates and ensuring that your mates, who then fund the Labour party, do better out of it. The Opposition like it, and I think it dangerous. No doubt they could think of examples of things I might be in favour of—say, putting into a contract free speech as a social value—that they think are not necessary.

Value for money is fundamental, and I am glad of clause 12(1)(a)—that heroic clause in this great Bill. The right hon. Lady called the Bill a sticking plaster—quite some sticking plaster, running to so many clauses over 120 pages. Elastoplast does not produce sticking plasters of that size, I do not think. The key to procurement must be value for money—it must always be that, because taxpayers’ money is being spent. It is not about “nice to do” things, worthy things or virtue signalling; it is spending other people’s money, which must be spent as well as it possibly can be.

Within that, there may be a case for supporting innovation. Perhaps the commercial decision will be to spend money to innovate and get future savings, so that may be an exception. But that is the only one I can think of, other than where the Bill is absolutely excellent: in excluding those who have behaved badly. They may be foreign actors—there are powers to exclude on national security grounds—or companies that have behaved badly. The issue is of fundamental importance.

I might touch on Bain, which has been excluded from Government contracts for its involvement in the most extraordinary state capture of the South African Revenue Service. Many of us will know about the scandals, fraud and corruption that there have been in South Africa. The Zondo commission looked carefully at what Bain had been doing and discovered that it had been instrumental in state capture. A company with a fine veneer of respectability was involved in facilitating corruption of the worst kind in South Africa. As the Zondo commission reports, more than 2,000 experienced people in the South African Revenue Service, including inspectors, were removed. The Zondo commission said that that facilitated organised crime.

It is only right that this country should be able to stop companies involved in bad behaviour abroad from applying for contracts here. That is made easier under the Bill. The response of Bain, when challenged on this, was particularly poor. It simply attacked the whistleblower, a brave man called Athol Williams, who had the courage to point out what was going wrong. That important benefit will help with national security as well as with probity in our system.

I am at your time limit, Madam Deputy Speaker. I even had an intervention, for which I probably got a bonus minute.

[Madam Deputy Speaker (Dame Rosie Winterton)]

indicated dissent.

[Mr Rees-Mogg]

Madam Deputy Speaker is a hard lady; she shakes her head.

Let me conclude by saying that this is a good Bill. It is a major step forward, it ensures value for money, it helps SMEs and it will make procurement better, more efficient and better for taxpayers. It is a Brexit bonus.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the SNP spokesperson.

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[Kirsty Blackman]

Yes, I am referring to the devolution settlement and how devolution works. Within the Scotland Act, there are matters that are the competence of the Scottish Government and ones that are the competence of the UK Government. In that regard, the implementation of international agreements in relation to how public procurement works is a matter for the devolved legislature, and we would prefer that the UK Government recognised that, rather than giving a power in this Bill that could overrule that.

The Bill includes a discretionary exclusion group for environmental misconduct, but I am not clear why that exclusion should be discretionary. The UK Government are failing time after time to embed environmental objectives in legislation. They refused to do so with the Subsidy Control Act 2022 or with the creation of the Advanced Research and Invention Agency, despite the Opposition pushing them to include it. It is as if they are keen to have big headlines on climate change targets, but not actually to embed them and do the actual work, and not to put those targets where it matters, which is explicitly in legislation that this place is putting forward, without exclusions and without discretionary rules. It should be embedded in every single thing we are doing, because it is the most important issue for this generation and for future generations. The Bill must explicitly commit to taking environmental considerations into account when awarding contracts, and that should be a core consideration, not a pointless box-ticking exercise.

We welcome the retention in the Bill of the principles that underpin EU procurement rules: transparency, equal treatment, non-discrimination and proportionality. However, having the principles included in the Bill is utterly meaningless if they are not upheld. It is vital that the principles are practised. As was mentioned by the right hon. Member for Ashton-under-Lyne (Angela Rayner), the UK Government’s shambolic handling of the covid contracts is a stark reminder of the danger of not upholding these principles. Transparency International’s report on the public contracts awarded during the pandemic noted that critical safeguards to prevent corruption were suspended “without adequate justification” during the pandemic procurement processes. It also found “systemic bias” towards those with connections to the UK Government. The rush to try to get more PPE has already been mentioned. It was vital that PPE was procured; the issue is how that was done, which explicitly favoured those who had close links to the UK Government. That is not how it should have been taken forward.

We need measures in the Bill to ensure that the UK Government cannot unilaterally decide to suspend the safeguards and principles that are in place. The horrendous nepotistic waste of taxpayers’ money should not have happened once, and we absolutely cannot allow it to happen again. The opportunity should have been taken to include the measures put forward by my hon. Friend the Member for Midlothian (Owen Thompson) in his Ministerial Interests (Emergency Powers) Bill.

Lastly, but no less importantly, the UK Government should take this opportunity to ban malicious actors and organisations involved in human rights abuses from the supply chain. During the Bill’s passage in the other place, several peers tabled amendments that sought to cut companies responsible for or complicit in slavery, genocide and crimes against humanity out of the supply chain. That is a noble principle and it should be adopted regardless of circumstances. It is unfortunately necessary that this needs to be explicitly included, as products from companies with horrific records are widespread through UK procurement chains.

The UK Government have shown that they can, after delaying, dithering and being publicly shamed, remove Huawei from the UK’s telecommunications infrastructure, and there is no reason why they cannot do the same with other companies, such as Hikvision, which is directly involved in the Chinese Government’s detention of Uyghur Muslims. More than a million cameras from Hikvision are present in the UK and they are used by as many as 61% of public bodies. The US Government blacklisted it in 2019; the UK Government have not yet taken comprehensive action against this company, despite making clear that they are aware of the issue. The SNP would like to commit to working with others across the House who seek to protect the supply chain from harmful actors and ensure that public procurement does not work to enrich those who profit from crimes against humanity.

I look forward to the Public Bill Committee—I really do—and I hope we can hear evidence from those who are expert in public procurement. I have no doubt that we will table amendments to ensure that the Bill respects devolution, that human rights are protected and that environmental priorities are actually prioritised.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. My guidance is creeping down more towards seven minutes.

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[Hywel Williams (Arfon) (PC)]

Procurement in Wales is very much a devolved matter. I would have preferred to see our Senedd introduce its own legislation on the matter, but in this case there is a great deal of co-operation. The Welsh Government have opted to allow the UK Government to legislate on their behalf when it comes to developing post-EU procurement frameworks. Despite this, the Welsh Government are yet to recommend that the Senedd grants consent to the Bill. That is due to outstanding issues with the Bill passed by the House of Lords.

In particular, the Bill provides for concurrent powers in relation to devolved areas; the Welsh Government would much prefer these powers to be amended to be concurrent-plus powers, which would put in place an important constitutional protection by requiring the UK Government to receive consent before exercising powers in devolved areas. The Welsh Government are also concerned about the Bill’s commencement powers. I understand that there was an initial commitment from the UK Government that Welsh Ministers would have commencement powers in the Bill, but, as it is, the Bill provides for Ministers of the Crown to have those powers. I would be grateful if the Minister updated the House as to what progress has been made on those matters.

Given the creeping devolution power grab, I should note that there seems to be a significant degree of co-operation between both Governments on the Bill. I also welcome the fact that some amendments have already been made in the Lords at the request of the Welsh Government. I place on record my support for other amendments made in the Lords, particularly those setting out that requirements on climate change and the environment will be strategic priorities in the national procurement policy statement. I also welcome the amendments that will allow contracting authorities to exclude suppliers from contract awards for their involvement in activities linked to forced organ harvesting or unethical activities relating to human tissue. Those are non-Government amendments, but I hope that the UK Government will commit to retaining these changes. It would be good to hear from the Minister on that as well.

As I said, procurement is devolved and although much of the Bill is relevant to Wales, the Welsh Government will develop its own Welsh procurement policy statement, which will be underpinned by legislation recently passed in the Senedd: the Social Partnership and Public Procurement (Wales) Bill. The aim of that legislation, with its emphasis on outcomes rather than regulation and inputs, is to ensure that the new Welsh procurement regime delivers social, environmental, economic and cultural results, including fair work.

Many years ago, I co-delivered a long sequence of training for charity workers and trustees on the then new Charities Act. As a freelance trainer, living on my wits in the private sector, I needed no persuasion to see the value of that training. In respect of this legislation, the training and development of procurement professionals to ensure that they have the necessary knowledge and understanding of the new regime will be key to successful delivery. Both Governments intend to produce materials to support the delivery of the new regimes. There may well be significant differences between England and Wales in respect of procurement, so I ask the Minister to ensure now that the UK Government are mindful of potential divergence when commissioning future training and information, not least in respect of Wales securing materials and the actual delivery of training in both Welsh and English when intended for use in Wales.

Returning to the Social Partnership and Public Procurement (Wales) Bill, my Plaid Cymru colleagues in the Senedd are pushing the Welsh Government to set out clear targets for the proportion of procurement spend spent in Wales and spent with specific types of suppliers, such as small and medium-sized enterprises or social enterprises—that point has been mentioned by hon. Members on both sides of the House.

In conclusion, I am pleased to report that this is already a priority for my Plaid Cymru-run local authority Cyngor Gwynedd, which spent 61% of its procurement budget last year locally.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the shadow Minister.