Local Government: Ethical Procurement

Alan Duncan Excerpts

Tuesday 15th March 2016 Westminster Hall

[The Parliamentary Secretary, Cabinet Office (John Penrose)]

It is always good to have your sure hand guiding our proceedings, Mr Streeter. I start by joining the chorus of congratulations to the hon. Member for Birmingham, Northfield (Richard Burden) on securing this debate. He is right that this is an important issue. He is also right to say what it is about and what it is not about, and to acknowledge that there are sincerely held views on both sides of the broader issue. He is right to put that point up front and pay it due respect. I echo those points.

As the hon. Gentleman has asked some distinct questions, and other questions have embroidered around them, I will try to address those questions as I go through my speech. I am sure he will pick me up if I do not. I will try to make sure that he has a minute or so at the end to sum up.

[Sir Alan Duncan (Rutland and Melton) (Con)]

Will the Minister give way?

[John Penrose]

Briefly, but I will then have to make progress.

[Sir Alan Duncan]

At the beginning of his comments, will the Minister clarify an important point of fact, which is the kernel of this issue? Will the Government’s proposed procurement rules permit a local authority to adopt a policy against investment in, or purchase from, Israeli settlements in the Palestinian west bank?

[John Penrose]

The answer is that it depends; I am sorry to be a little indistinct. I will come on to the details. I hope to give my right hon. Friend a proper answer, rather than just a straightforward yes or no, because there are situations where councils will be able to and situations where they will not.

The overarching principles behind public procurement are twofold. First, public sector procurers are required to seek the very best value for money for the taxpayer. Secondly, public procurement must be delivered through fair and open competition. Public sector procurers have to follow detailed procedural rules laid down in the Public Contracts Regulations 2015, which implement the Government’s domestic procurement policy and wider EU and international rules, including the EU procurement directives and the WTO Government procurement agreement; a number of right hon. and hon. Members have referred to the GPA in this debate.

Under those obligations, our contracting authorities are required to treat all suppliers equally, regardless of their geographic origin. The regulations have recently been updated and modernised, but the basic principles are long-standing and have been in place for many decades. Any breach of the rules puts public authorities and the Government themselves at risk of breaching all sorts of laws. Serious remedies are available to aggrieved suppliers through the courts for breaches of those rules, including damages, fines and what lawyers call “ineffectiveness”, which basically means contract cancellation.

A number of colleagues have mentioned that ethical procurement has a much wider meaning than we have focused on here. We could talk about it in relation to arms firms, defence industry investment or investment in the tobacco industry. However, we have focused, perhaps understandably, on a specific example. The point is that “ethical procurement” is not a defined term—it means different things. There are many examples of how procurers take ethical considerations into account. For example, the rules allow authorities to exclude suppliers that have breached certain international social, environmental or labour laws. In addition, we already ensure that prime contractors behave ethically towards their subcontractors—for example, by requiring 30-day payment terms. That applies through supply chains, as the hon. Member for Foyle (Mark Durkan) said.

The Public Services (Social Value) Act 2012, which came into effect in 2013, placed a requirement on commissioners to consider the economic, environmental and social benefits of their approaches to procurement before the process starts.

[Sir Alan Duncan]

In that case, is there anything in the Minister’s list that includes the illegal origin of the products to be bought?

[John Penrose]

The point is that although we are clear that the settlements themselves are absolutely illegal—I am happy to clarify the Government’s foreign policy—that does not necessarily mean that activities undertaken by firms that happen to be based there are themselves automatically illegal. A separate, case-by-case decision must be made about whether each potential supplier satisfies the rules. I will give more detail about that as I go, if I can.

We have flexibilities in our procurement rules. Some things are explicitly ruled out—

European Union Referendum Bill

Alan Duncan Excerpts

Tuesday 16th June 2015 Commons Chamber

[Mr Clarke]

If, on the day of the referendum poll, a member of the electorate does not realise that different Members of both the Conservative and the Labour parties—at the very least—are campaigning on different sides of the campaign, I regret to say that we will all have failed, because that member of the public will have been singularly uninformed about the progress of about 20 years of debate, during which that has always been the case. But there we are: the issue of the date has been determined. The Government have given way and have been derided for doing so, and I will spend no more time on the subject.

The more serious point—although I do not think this is a serious problem—is the suggestion that the absolute statutory rigour of purdah should be applied to the Government as a whole acting as a Government throughout the final four weeks of the referendum campaign. I have already made this point during an intervention, but it is important.

People are suggesting that the whole Government machine should be switched off for those four weeks on a whole list of issues. They say it would be improper that any public body, the Government machinery or any Minister purporting to speak as a Minister should be allowed to engage in anything that might be designed to encourage voting in the referendum or to express a Government view on any issue that might be germane and regarded by people on either side of the argument as relevant to the outcome. I ask my hon. and right hon. Friends at least to pause—as I am personally prepared to do—until Report, which, as I have discovered from this mysterious message on Twitter, is when the Government will make proposals that might reassure people but that might fall short of the full rigour of the rather odd referendum legislation that we passed a few years ago. Obviously, that legislation did not exist when we last had a referendum on Europe, when the Government were deeply divided and very odd messages came out.

Given that everybody is going to concede to my hon. and right hon. Friends anything that can reasonably be seen to put any legitimate fears to rest and to reassure them that this is a sensible approach, we cannot ignore the risk that one might, rather oddly, be closing down the whole machinery of Government for some time. I have already cautioned against conspiracy theories and paranoia. We all know that individual members of the Government will go out and give their own personal views on one side or the other—they are allowed to do that.

[Sir Alan Duncan (Rutland and Melton) (Con)]

Will my right hon. and learned Friend give way?

[Mr Clarke]

In a moment. Why on earth should a Minister not be allowed, as a Minister, to advocate that people might be encouraged to vote? As the hon. Member for Ilford South (Mike Gapes) rightly asked, would a Minister who goes to Brussels for a difficult meeting on an aspect of agricultural policy or of the research and development budget be told by his officials that they would melt away the moment he expressed a view on an issue that might have been raised by my hon. Friend the Member for Stone or me in the referendum campaign?

I think we have received genuine undertakings. Everybody wants a fair referendum, so let us not resort to the legalism of section 129—[Hon. Members: “Section 125!”] That shows my regard for legalisms, despite my being a lawyer: section 125 is very important! When we get to Report, let us take a considered look at what would happen if we threw the whole weight of the law at this issue and had one of Her Majesty’s judges adjudicating on whether the pronouncements of some Parliamentary Secretary in Brussels had broken the statutory injunctions and he should have been reduced to silence.