Procurement Bill [Lords]

Tim Loughton Excerpts

Report stage
Tuesday 13th June 2023 Commons Chamber

[Apsana Begum (Poplar and Limehouse) (Lab)]

I rise to speak in favour of a number of new clauses and amendments to improve transparency and accountability regarding public procurement and providing value for money for the taxpayer, including those tabled by Labour Front-Bench Members. The House will be aware that trade unions and others have long raised concerns that existing procurement policy pushes public authorities to privatise and marketise public services, including through private finance initiative contracts, which allow private consortiums to make high profits out of public assets—often far above the true value of the asset.

A particularly controversial element of procurement policy has been the use of private finance initiative regimes in NHS contracts. The evidence is clear that many of them have left NHS trusts heavily in debt owing to the need to repay private companies for capital assets, with high repayments meaning that some NHS trusts pay 12 times the initial sum borrowed, giving some investors profits of 40% to 70% in annual returns. Indeed, the poor performance of many of the private outsourcing and consulting companies brought in at significant cost to the taxpayer to provide parts of the covid-19 response stood in stark contrast to the consistently proven effectiveness of our publicly run NHS, for example, but that did not stop more and more contracts being awarded to those seeking to make money off the back of our country’s worst health crisis. Amendment 2, which would prevent VIP lanes by ensuring that any contract awarded under emergency provisions or direct awards should include transparency declarations, is therefore critical.

[Tim Loughton (East Worthing and Shoreham) (Con)]

The hon. Lady has just described PFI contracts in harsh terms, and she is now going on to procurement. Will she explain why the vast majority of those PFI contracts for hospitals, medical facilities and schools were awarded under the last Labour Government?

[Apsana Begum]

The problem has existed through successive Governments. However, I recognise it through my NHS trust, which is still paying sums that are much higher than the true value of the assets. It has been a problem under successive Governments, and the Tory Government have had years to sort it out if they had wanted to do so.

The Bill does not exclude private companies from getting contracts even where they are failing to abide by international labour law and other environmental standards. I therefore support amendment 4, which would ensure that no public contract would be let unless the supplier guaranteed payment of the real living wage, as calculated and overseen by the Living Wage Commission, to all employees, contracted staff and subcontractors. That is critical because about 4.8 million workers across the country are paid less than the real living wage.

There are a number of amendments and new clauses relating to national security. Indeed, we have heard a lot about national security in the debate. I want to mention briefly the victims of the brutal repression in Hong Kong, some of whose architects may shortly become suppliers to the Government, as mentioned by my right hon. Friend the Member for Hayes and Harlington (John McDonnell). Recent years have seen curbs on the work of trade unions, the jailing of protestors and arrests of independent media outlets. The Hong Kong Confederation of Trade Unions was persecuted until it was dissolved. Many of its affiliates had been involved in industrial action, including a successful 2013 dock strike for pay and conditions at Hongkong International Terminals, owned by the Hong Kong-based CK Group.

Hon. Members may wonder what relevance this has to a debate about Government procurement in this country, The Minister will no doubt be aware that Vodafone is a so-called strategic supplier to the Government and an approved supplier on two framework agreements, providing a range of telecoms services, including mobile voice and data services. As such, Vodafone has an official Crown representative, appointed by the Cabinet Office, who liaises with it on behalf of the Government.

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My 2019 Bill would have prevented both the losses experienced by Neil’s business and other small businesses, and the collapse of the 780 building firms. In addition, it would have prevented the late payment abuse that construction firms and others have experienced day to day since then. My new clause 12 would also protect those small businesses in their contracts with large companies, so I hope the Minister will consider it.

[Tim Loughton (East Worthing and Shoreham) (Con)]

I will speak primarily to new clause 1, in the name of my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith), my name and those of other right hon. and hon. Members.

I have a deal of sympathy with some of the points raised by other Members, not least those eloquently put by my hon. Friend the Member for Isle of Wight (Bob Seely) about trafficking and supply chain risks, as well as those to do with organ harvesting, which all feed back to the subject of China. I appreciate the good work of the Minister, who has listened to some of the representations made, particularly by those of us who have continued grave concerns about the influence of China and its insidious involvement in so many aspects of our society.

We appreciate and are grateful for what has happened so far, but it does not go far enough. That is why I want to speak to some of the themes raised by my right hon. Friend the Member for Chingford and Woodford Green and reinforce how this can only be a staging point and not the end result of what we need to achieve. We very much hope that these provisions will be greatly strengthened in another place.

The new clause that we propose is not extreme or prescriptive. It asks for a serious and realistic timeline, not a completely open-ended one. It passed with a comfortable majority in the House of Lords. It would require the Government to publish a timetable within six months of the Bill receiving Royal Assent for the removal from the UK procurement supply chain of Chinese technology camera companies that are subject to the national intelligence law of People’s Republic of China. It would catch Hikvision and Dahua Technology cameras that are currently in use across the UK public procurement supply, including in NHS trusts, schools, police forces, jobcentres, prisons, military bases and many local council buildings.

Human Rights Watch has found that Hikvision is one of the principle Chinese companies involved in the construction of the Chinese surveillance state and the camps that house over a million Uyghurs in Xinjiang, as we have heard. A recent report by Big Brother Watch found that about 2,000 public bodies in the UK—some 61%—currently use Hikvision and Dahua surveillance cameras. Other public bodies that have confirmed, in response to freedom of information requests, that they use those cameras include more than 73% of local authorities, more than 63% of schools, more than 66% of colleges, 54% of higher education bodies, 35% of UK police forces, and more than 60% of NHS trusts. There have also been subsequent reports that Hikvision cameras are being used on UK military bases.

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[Sir Iain Duncan Smith]

My hon. Friend is making an excellent speech. May I return him to the procurement point about what is national security and what is not? He will know, as I do, that if we go to Hong Kong we can see that HSBC, for instance, is already, in a way, in league with the authorities. The changes it is imposing include freezing the pension funds of people who are over here under British National (Overseas) passports and, at times, freezing their bank accounts. It says that it has to obey the Chinese Government. Is that not what we are saying? There is no particular definition. They are all operating, once these companies are in China, under the rule.

[Tim Loughton]

My right hon. Friend is, of course, right. He and I and others in this place who have been sanctioned in China and beyond have drawn attention to how effectively respectable global British companies are becoming complicit in the suffocation of the democratic principles, freedoms, liberties and rule of law that we all take for granted, and they need to answer for it. Are they on the side of the rule of law, of international freedoms and liberties in all the areas we have described, or have they thrown in their lot for a mess of pottage—or whatever we want to call it—with the Chinese Communist Government, notwithstanding their complete abrogation of any pretence to democratic accountability and freedoms for the individuals who not only happen to live within its borders but against whom they are increasingly able to extend their tentacles globally, not least in this country?

Hikvision and Dalua are both subject to China’s National Intelligence Law, which stipulates that

“any organisation or citizen shall support, assist, and cooperate with state intelligence work according to law”.

The law also permits authorities to detain or criminally punish those who “obstruct” intelligence activities. The presence of vendors who are subject to extrajudicial directions from a foreign Government which conflict with UK law may risk failure by the carrier to adequately protect networks from unauthorised access or interference.

In the UK, Uyghur people face a sustained campaign of transnational repression in the form of threats, harassment, cyberattacks, and online and in-person surveillance. LBC and the Financial Times have recently reported instances of Uyghur people seeking refuge in the UK being offered thousands of pounds a month and blackmailed by Chinese security officers to spy on Uyghur advocates. In that context, the Government must take seriously the threat posed by the presence of this equipment to British national security and the safety of exiled and dissident populations seeking refuge in the United Kingdom. Without urgent action, the UK risks facilitating a system of surveillance designed to extend Chinese domestic policy across borders.

The evidence, which is presented by reputable sources such as IVPM, Axios, The Intercept, The Guardian and the BBC, is deeply troubling. These and other reports paint a harrowing picture of the situation in Xinjiang and provide substantial evidence of Hikvision’s involvement. IVPM’s investigation reveals that Hikvision, a leading provider of surveillance technology, has actively contributed to the surveillance state in Xinjiang, where more than a million Uyghurs are estimated to be held in what we now know to be internment camps. Hikvision’s technology is reportedly used to monitor and control the Uyghur population, facilitating its repression. Worse, it is credibly accused of constructing the surveillance state in Xinjiang in close partnership with the Xinjiang Production and Construction Corps, a report corroborated by The Guardian, which published leaked documents outlining Hikvision’s close collaboration with Chinese authorities in developing and implementing surveillance technologies in Xinjiang. The evidence suggests a concerted effort by Hikvision to profit from this oppression.

Axios, in its comprehensive reporting, explains that Hikvision’s surveillance cameras are integrated with sophisticated artificial intelligence systems to track, profile and identify individuals in Xinjiang. Let me be clear: this technology is trained to recognise Uyghur-looking faces with a view to profiling them, flagging them when they are doing things of which the Chinese Government do not approve, and then facilitating their persecution through mass surveillance and control with the aim of suppressing their cultural, religious, and political freedoms.

The scale and sophistication of Hikvision’s surveillance technology exacerbate the already dire human rights situation in the region. The Intercept’s exposé provides damning evidence that Hikvision’s technology has been directly used in the internment camps, enabling the Chinese Government to monitor and suppress the Uyghur population. One source revealed that Hikvision’s cameras were installed throughout the camps, capturing every move and expression of the detainees. This raises alarming questions about the company’s complicity in the perpetration of human rights abuses that our own Government have described as

“torture…on an industrial scale”.

The evidence leaves no room for doubt. Hikvision’s involvement in the surveillance and control of the Uyghur population in Xinjiang is deeply troubling, and, even without the security concerns so ably highlighted by my right hon. Friend the Member for Chingford and Woodford Green, would warrant the company’s removal from our supply chains, consistent with our modern-day slavery commitments. We cannot turn a blind eye to the suffering of millions of innocent people, and help those who persecute them fill their pockets with public money.

[Bob Seely]

I have a genuine question for my hon. Friend, who is making a brilliant speech, and for the Minister. Given Hikvision’s frankly repugnant role in the ethnically based oppression of an entire people, why on earth is it not covered by our Modern Slavery Act 2015 and how did we let such a repugnant company into this country under any guise?

[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.

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

I rise to speak to a number of amendments. It is worth highlighting that the bread and butter of the work of the Public Accounts Committee, which I have the privilege of chairing, is looking at procurement—failed procurement in particular—and making sure that we get on the record and into the brain of Whitehall the lessons learned from those failures. We have also been at the forefront of looking at procurement during covid, and we did our first inquiries into that as early as June 2020. I want to place on record my thanks for the hard work of the National Audit Office, which immediately pivoted to online working to enable us to continue our scrutiny of the Government as a cross-party parliamentary Committee.