Public Procurement: Prioritising British Suppliers

Thursday 22nd October 2026 Lords Chamber

Question

11:30

Asked by

[Lord Spellar]

To ask His Majesty’s Government what assessment they have made of the impact of WTO rules and EU regulations on their ability to prioritise British suppliers for public procurement.

[The Parliamentary Secretary, Cabinet Office, and Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Baroness Twycross) (Lab)]

We are changing public procurement to work harder for Britain. In the last six months, this Government have issued new guidance on steel transparency requirements and the use of the national security exemption, as well as revising their social value model to support local communities. These reforms will support growth, create more jobs and strengthen skills while complying with our international agreements, and we will continue to do more.

[Lord Spellar (Lab)]

I thank the Minister for that reply, but can she reflect on the fact that we are still getting replies from Ministers that their ability to preference British manufacturers, for example of buses, is constrained by the World Trade Organization and our agreements with the EU? Yet the United States is a member of the WTO, and not only does it have “buy American” legislation on the statute book but the federal Government mandate in their grants to states and local authorities that they have to buy American. Within the EU, the founding members Italy, Germany and France blatantly preference their own suppliers. Can we change the mindset inside government to put British industry and British workers first?

[Baroness Twycross (Lab)]

The Government have been working to ensure that public procurement plays its full role in delivering our industrial strategy. My noble friend is right about the value of public procurement: every year, this country spends around £400 billion. We think that the new social value model will encourage contracting authorities, including central government departments, to deliver good-quality jobs, skills and opportunities in communities. We believe we can do this while still upholding our international commitments. Guidance will be published in the near future.

[Baroness McIntosh of Pickering (Con)]

My Lords, the Trade Act specifically stipulated that farm produce imports should meet the same high animal welfare and environmental standards as this country’s. Can the Minister assure the House that that is happening, and will she investigate the reason why country of origin rules have not been applied so that the consumer can be aware of which country produce is coming from?

[Baroness Twycross (Lab)]

I will look into the noble Baroness’s second point and commit to write to her. The Government are open to considering all lawful means of achieving our ambition that half of all food purchased across the public sector should be locally produced or certified to higher environmental standards. Our commitment to farmers and growers in this respect remains steadfast.

[Lord Pack (LD)]

My Lords, a crucial element of getting procurement right is transparency, so that British suppliers know what they can bid for and we can all judge how the public sector is doing in awarding contracts. But the latest research by procurement specialist Chris Smith shows that, since the transparency requirements in the Procurement Act came into force, three in 10 public contracts have not been published, despite the legal requirements to do so. When can we expect the public sector to start fully complying with that requirement of the law?

[Baroness Twycross (Lab)]

I am not aware of the point the noble Lord raises, but I thank him for drawing it to my attention. I will look into it and revert to him.

[Lord Tyrie (Non-Afl)]

My Lords, the WTO is widely held to be in deep trouble. Its dispute resolution mechanism is scarcely used and countries are imposing unilateral tariffs everywhere. The UK has to reconsider its position in the light of this. To think that through—that was part of what the noble Lord implied in his Question—have the Government made an assessment of the overall effect of the decline in WTO effectiveness on UK trade?

[Baroness Twycross (Lab)]

The World Trade Organization remains a really effective way for us to enable British businesses to get that reciprocal access to £1.3 trillion in public procurement opportunities overseas annually. We think that this is a valuable way of ensuring that our suppliers and businesses get access to opportunities across the world.

[Lord Watts (Lab)]

My Lords, when the Government produce their guidance, will they notify local and regional governments about their decision and expect them to abide by the rules or suggestions they make? Quite frankly, a lot of procurement is done through those bodies.

[Baroness Twycross (Lab)]

I agree that a lot of procurement is done through local authorities. There are some really good examples from local areas of what local government already does. We will endeavour to make sure that local government is aware of the new regime in the same way as we want central government to adapt how it works.

[Lord Deben (Con)]

The noble Baroness has again committed the Government to buying from local farmers throughout the system. The trouble is that the Government do not publish facts regularly so that we can see how they are doing. Everyone locally knows perfectly well that it is not working at the moment. Can she assure the House that we will have regular updates about the proportion of food in schools that is bought locally, where the food comes from and how often people look carefully at where it comes from to see whether, as my noble friend pointed out, it meets the same standards that we insist British farmers meet?

[Baroness Twycross (Lab)]

My understanding is that food standards in schools are an issue that the Department for Education has been looking at. It feels like it would be easy for me to commit to that but quite difficult for us necessarily to deliver it. I will look into the noble Lord’s point and get back to him.

[Lord Fox (LD)]

My Lords, the noble Lord is right to ask this Question. When we discussed the public procurement Act in 2023, it was an issue of great interest. There is an opportunity and a remit for this: authorities can pursue UK jobs, skills, local supply chains and social value through properly designed award criteria and contract conditions. Is the Minister satisfied that the public bodies have that skill and knowledge to properly design those contracts so that we can make sure that British businesses can get them?

[Baroness Twycross (Lab)]

The noble Lord is right that you can do a lot within the rules to ensure that we really focus on the benefit of British spend for the British population and British jobs. This is largely why we published the new social value model, which has a much sharper focus on good-quality jobs, skills and opportunities. We have committed to publishing guidance on that and establishing pilots with mayoral strategic authorities on this before the new approach comes into force on 1 January next year.

[Baroness Finn (Con)]

My Lords, the Government have committed to prioritise national security in our procurement processes. How will that policy affect the Government’s flagship gimmick, Great British Energy? Might it mean an end to our reliance on Chinese solar panels?

[Baroness Twycross (Lab)]

There is nothing gimmicky about our work on Great British Energy. It is intended to deliver for the British population and it will. We are clear that the national security guidance supports the use of the national security exemption in a way that is consistent with our domestic procurement regime and international trade agreements on procurement and will continue to do so.

[Lord Browne of Belmont (DUP)]

My Lords, does the Minister accept that WTO procurement rules and, in Northern Ireland, the continued application of EU procurement rules can make it harder to prioritise UK-built buses? What are the Government doing to ensure that investment in zero-emission buses supports jobs in Great Britain and Northern Ireland, as well as greener transport?

[Baroness Twycross (Lab)]

The Department for Transport recently published a 10-year pipeline for zero-emission buses, covering procurement through to 2035. This will help give British manufacturers the long-term capacity they need to plan ahead and invest in their workforce. It will benefit producers and manufacturers from across the UK.

[Baroness Smith of Llanfaes (PC)]

My Lords, if the Government are serious about growth in every postcode, what specific actions are they taking to make sure that smaller businesses are able to scale up, grow and compete with companies in the bigger cities across the UK?

[Baroness Twycross (Lab)]

We want SMEs to benefit from the Government’s spend in the same way as larger companies and manufacturers. For that reason, on 23 March, the Government published new targets for the amount we will spend with SMEs by the end of March 2028. Small businesses across the country are set to receive over £7.4 billion of government money a year by 2028. We hope that this will help them grow but, in particular, it will also help make sure that we get the best opportunities for small businesses.