Procurement Bill [HL]

Lord Davies of Brixton Excerpts

2nd reading
Wednesday 25th May 2022 Lords Chamber

[Lord Davies of Brixton (Lab)]

My Lords, it has been an interesting, wide-ranging debate. I will base the bulk of my speech on the Government’s Green Paper, Transforming Public Procurement, published in December 2020. My interest is in what has been described as contract compliance by public authorities. It must be understood that public authorities, those covered by this legislation, have a range of objectives that come into play when they procure goods and services. Obtaining the goods or services at the lowest possible price is only one of a range of objectives they could follow.

Another objective—an overriding objective, I argue—is to encourage and secure a range of government policies through the contracts into which they enter. The Government’s support for this understanding of the role of procurement was clear in the Green Paper, which said:

“By improving public procurement, the Government can not only save the taxpayer money but drive social, environmental and economic benefits across every region of the country.”


I repeat: government policy is about not just price but achieving

“social, environmental and economic benefits across … the country.”

There is no indication of an order of priority of these different objectives.

The Green Paper states that

“we want to send a clear message that public sector commercial teams do not have to select the lowest price bid, and that in setting the procurement strategy, drafting the contract terms and evaluating tenders they can and should take a broad view of value for money that includes social value … We propose allowing buyers to include criteria that go beyond the subject matter of the contract and encourage suppliers to operate in a way that contributes to economic, social and environmental outcomes on the basis of the ‘most advantageous tender’.”

I anticipate that my noble friend Lord Hendy will not talk about bus shelters but emphasise how this approach can support improvements in employment standards.

Simply as another example, I emphasise how contract compliance, operated as part of procurement policies, can lead to improvements in environmental standards both in the UK and abroad. It is no exaggeration to say that this is a crucial element in what the Government need to do to achieve their goals for arresting climate change. It would be absurd if public authorities did not assess the impact on the climate of their procurement policies.

My concern is therefore that the Government’s position as set out in the Bill is now less clear-cut than it was in the Green Paper. For example, in paragraph 3 of the Explanatory Notes there is the statement of different goals, but paragraph 4 then goes on to talk only about

“value for money for taxpayers.”

We already have a national procurement policy statement, which was issued last year and is a sort of progenitor of the statutory statement we can anticipate later this year, I assume. Again, it sets out the range of objectives but then, in a separate paragraph, identifies and gives precedence to value for money. I am concerned that value for money is in some way seen as the key objective and the others as subsidiary. Do the Government still adhere to the approach set out in the Green Paper? This is obviously a key issue to consider in Committee, so will the Minister make the position clear: does the policy in the Green Paper still apply? In the explanatory statement and the statement of principles—the policy statement—it appears that at one stage there was a paragraph setting out the range of objectives, but then, unfortunately, someone read it and said, “This won’t do; we need an additional statement to emphasise money.” I really want clarity on that.

What role will there be within the national procurement policy statement for local policy objectives, even local objectives not fully in line with national objectives? The useful report, as ever, from the Library tells us that the Cabinet Office set out that the intention of the NPPS was not to impose the Government’s political priorities on bodies normally outside of their control, but rather to influence them. As you read through the paragraph however, it is clear that it is expecting its own democratically elected separate bodies to adopt the Government’s core principles. Will the Government make it clear that local authorities, which have their own democratic mandate, will not be dragooned by central government?

Finally, people may be surprised to know, a point about pensions. There is nothing in the Bill directly relating to pension schemes, but some schemes will end up being classed as contracting authorities and will be required to undertake procurement in the same way as government departments and local authorities. The Government say that attempts to introduce flexibility to simplify public procurement processes could impact on this sort of organisation. Great stress has been placed on the importance of simplicity in the process. I am not sure that simplicity is a good objective on its own. Clarity is an important objective, but simplicity can lead to confusion and difficulties for those organisations not regularly working through this process.

I am not expecting the Minister to respond on the impact on pension schemes at this stage, but it is an issue to which I think we need to return—smaller organisations caught within the remit. The Bill already includes provision for some exemptions, and we will need to look at whether waivers are required for some specific organisations.

Elections Bill

Lord Davies of Brixton Excerpts

Lords Hansard - Part 1 & Committee stage
Wednesday 23rd March 2022 Lords Chamber

Clause 11, as well as reflecting those things—and I am sorry to say this to some noble Lords who have spoken; I know that they do not like it—reflects the preference of British voters as expressed in the 2011 referendum. I am sorry this is the case. Two-thirds of people voted in favour of retaining first past the post for parliamentary elections in the 2011 referendum. Faced with that—

[Lord Davies of Brixton (Lab)]

The noble Lord is characterising my vote. It was against the alternative vote system and not for first past the post. We voted on an alternative vote system. That is not what the Minister is suggesting the vote was on.

[Lord True (Con)]

My Lords, I do not know whether the noble Lord has been here all through the debate, but I maintain the position that the Electoral Commission has reported. I have given the facts to the Committee on the problems that arose under the supplementary vote system.

Legislation: Skeleton Bills and Delegated Powers

Lord Davies of Brixton Excerpts

Thursday 6th January 2022 Lords Chamber

[Lord Davies of Brixton (Lab)]

My Lords, this is an important issue in terms of controlling the Executive and establishing the role for your Lordships’ House. I very much welcome the fact that this debate has been introduced by the noble Baroness. It refers specifically to skeleton Bills, but by incorporating the two committee reports the debate is somewhat wider. I do not make any apology for that.

I will use my brief time to highlight one specific issue identified by the Delegated Powers and Regulatory Reform Committee: that of the recent growth in the use of what the committee describes as “disguised legislative instruments”. This is dealt with in paragraphs 92 to 120 of its report. The committee provides various examples of this trend, but the common factor is that Ministers are being given the power to supplement primary legislation with what is, in effect, disguised legislation: instruments that are legislative in effect but not subject to parliamentary oversight. Examples have been quoted. The committee refers to

“powers to make a ‘determination’ … to determine ‘arrangements’ … to issue a ‘code of practice’, a ‘protocol’ or a ‘public notice’”,

and my major concern, to issue “directions”. The committee concluded that the

“the multiplicity of disguised legislative instruments is confusing to Parliament and to the public, and does not … promote the good law principles of law that is clear and accessible.”

The use of Treasury and other departmental directions in the context of the legislation on public service pension schemes sparked my concern, but I have subsequently come to understand that it is a wider problem, as highlighted in paragraph 101 of the committee’s report. It arises from Section 12 of the Public Service Pensions Act 2013, which provides a mechanism for what is called the cost cap as a limit on employer contributions. It provides that the cost cap should be determined in accordance with Treasury directions.

We have just had the McCloud and Sargeant case, which the Government lost, and there is a very expensive remedy. The Government have decided, by using directions, that the cost within the cost control mechanism should be borne by the members. I do not wish to argue the case for or against that decision, but it is manifestly a matter of public policy, where Parliament should have appropriate oversight over such an important decision.

Although we need to understand that there is not a hierarchy of significance in terms of different forms of legislation, some directions have a bigger and more immediate impact on individuals, their income and benefits than some pieces of legislation. Yet we spend a lot of time on the legislation and do not even get to see the directions. This is surely wrong. I think that is in accordance with the committee’s conclusions. It sets out a simple principle:

“In the absence of convincing reasons to the contrary”,


these devices “should not be used.” Will the Minister let us know whether he shares the concern about disguised legislation? If so, what steps will be taken to limit its use?

Budget Statement

Lord Davies of Brixton Excerpts

Wednesday 3rd November 2021 Grand Committee

[Lord Davies of Brixton (Lab)]

My Lords, with the leave of the Committee, I apologise for my late arrival but I was attending a meeting of the Finance Committee, and I understand that it is in order for me to participate. I have heard the majority of the contributions and benefited from what has been said.

I have a single, narrow but important point relating to pensions. the Chancellor said in his speech:

“I am announcing today that we will consult on further changes to the regulatory charge cap for pensions schemes, unlocking institutional investment while protecting savers”,—[Official Report, Commons, 27/10/21; col. 280.]


that took 25 words. It takes 29 words for the Red Book to say that

“the cap can better accommodate well-designed performance fees to ensure savers can benefit from higher return investments, while unlocking institutional investment to support some of the UK’s most innovative businesses.”

It goes on to refer to barriers to institutional investment.

I have three points to make in response. First, it would have been better for the Chancellor to have made it clear in his speech and in the Red Book that the charge cap on expenses applies only to default funds under automatic enrolment. Other forms of pension where people opt for other funds under automatic enrolment, or the many arrangements that take place outside the automatic enrolment arrangements, are not subject to the charge cap. It is up to the provider and the member of the scheme to arrive at their own provisions.

Of course, in practice the great majority of pension arrangements are default schemes under automatic enrolment. The number of schemes that have been taken up is testimony to the success of the automatic enrolment introduced by the last Labour Government. I think the default schemes are popular because people simply do not want to tackle what is inevitably a difficult decision. It could be characterised as great faith in pension providers, but I would put my money on inertia in the face of a choice for which most people do not have any training or experience and where there is limited or no independent advice.

Secondly, the situation where the default fund is the de facto standard arrangement places a particular responsibility on the Government not to play fast and loose with the trust, or the inertia, of the majority of people providing themselves with pensions. Over the many years that I have spent working on behalf of pension scheme members and promoting their interests, I have all too often encountered people with bright ideas, impressed with all the money that is held in the form of pensions, coming up with ideas to seek to use those resources for purposes other than providing pensions. The money in those funds is of course the members’ money and should be used in accordance with their wishes, not the wishes of Governments or others with other objectives.

That brings me to my third point. The Chancellor’s claim that

“savers can benefit from higher return investments, while unlocking institutional investment to support some of the UK’s most innovative businesses”,

is all too reminiscent of cold-call investment hucksters making promises that are too good to be true. If the potential returns are so attractive and so dependable, why are pension providers not able to promote them on their own terms, outside the default fund? Instead, they are all too ready to make unverifiable promises depending on future optimism. Make no mistake: this provision is about higher charges on workers’ pensions, with no guarantee of anything in return.

My advice to the Government is to be very careful here. They are, in effect, providing us all, the population, with investment advice. Of course, they are not authorised to do so. There is a history of pension scandals. Can the Minister assure us that he will take personal responsibility for making sure that we do not get another one?

Brexit Opportunities

Lord Davies of Brixton Excerpts

Thursday 16th September 2021 Lords Chamber

[Lord Frost (Con)]

This is obviously a very significant issue and why we put forward the proposals that we have in the Command Paper to try to deal with the problem. Our proposals for dual standards for goods circulating in Northern Ireland and a different way to manage the governance of the arrangements would, we hope, deal with the anomalies that exist, but, of course, they remain to be negotiated. It is a very significant difficulty which we have debated frequently and hope to resolve.

[Lord Davies of Brixton (Lab)]

My Lords, I am not used to this unarmed combat. Will the Minister update the House on the work of the Partnership Council? It held its first meeting on 9 June, since when we have heard nothing. This is despite the series of difficult issues that the council is meant to resolve following our departure from the EU, not least the recognition of professional qualifications. This body has the appearance of being the “long-grass council” where the issues that the Minister has failed to resolve will be left to fester.

[Lord Frost (Con)]

My Lords, I am certainly happy to update the House. The Partnership Council met before the summer, as the noble Lord noted. I would expect it to meet again before the end of the year. It is of course the supreme body of a complex substructure and the specialised committees have been meeting. Those that have not will meet over the rest of this month and in October, and will provide proposals and ideas to the council. So, although it may not be as visible as we would wish, there is a huge process under way that is designed to look at difficulties and, we hope, find ways of resolving them, including the question of qualifications that the noble Lord mentioned.

UK Government Union Capability

Lord Davies of Brixton Excerpts

Thursday 1st July 2021 Lords Chamber

[Lord Davies of Brixton (Lab) [V]]

My Lords, I, too, congratulate the noble Earl, Lord Kinnoull, on the debate and the noble Lord, Lord Dunlop, on his report. This Government’s lack of focus has been made out clearly by previous speakers, but there is also the Government’s glaring lack of respect for the devolved Administrations. In my brief remarks, I emphasise that devolution is a moving target, moving into and developing new areas, notably—to me—those of welfare and social security.

The problem here is not so much at the official level. What the report makes clear is the lack of effective joint working. One of the most dispiriting references is to the Joint Ministerial Working Group on Welfare, which the noble Lord, Lord Dunlop, says has become a forum largely for airing grievances and managing disputes rather than a forum for fostering more effective collaboration.

I add that I am proud to be British, English and even a bit Welsh, so I know that saying that we have one language in these islands is the sort of destructive attitude that is driving us apart.

Ministerial Code and Register of Ministers’ Interests

Lord Davies of Brixton Excerpts

Wednesday 19th May 2021 Lords Chamber

[Lord True (Con)]

My Lords, I try to make it a habit never to comment on the BBC, but I take note of what the noble Baroness says about television licences. She used a very important word in her question: “allegations”. Some are allegations; I believe some are smears. Most of them have been answered, and they are also being investigated. I suggest that we see what happens.

[Lord Davies of Brixton (Lab) [V]]

My Lords, the Minister referred to the remarks made by the Paymaster-General in the Commons yesterday. In the Government’s response to these questions today, we have again had this harping on about getting on with saving lives and striving to do their best. This is sheer obfuscation. That is not the issue. The question before us is: should Ministers comply with the Ministerial Code? Will the Minister take the opportunity to assure us that the fact there is a pandemic has no relevance to the absolute obligation on Ministers to comply with the code? The fact that we have a pandemic and that they are doing their best is irrelevant. Should they or should they not comply with the code?

[Lord True (Con)]

My Lords, I believe that all Ministers and all in public life should aspire to the highest standards, and I think that is the effort made. I do not agree that it is “harping on” to say that the Government are attending to the vital and urgent needs of the country in relation to Covid and recovery. A lecture of that kind comes ill from a party whose leader thinks his priority is to grab a roll of wallpaper in John Lewis. I wonder whether that has been declared.

Kalifa Review of UK Fintech

Lord Davies of Brixton Excerpts

Tuesday 27th April 2021 Lords Chamber

[Lord Agnew of Oulton (Con)]

My Lords, as I touched on in answer to an earlier question, we absolutely recognise how important is to get our young people enthused by this industry of the future. I referred to computer science, and we are certainly looking at increasing the number of maths teachers so that children can be more enthused at an early age. I hope to meet the Israeli ambassador shortly in order to understand more about Israel’s Magshimim programme, which gets 14 year-olds involved in a career in cybersecurity.

[Lord Davies of Brixton (Lab) [V]]

My Lords, this is an important report, laying down the way to go in this area, but what I find lacking is consideration of how it will affect the consumer of financial services. It is important not to fall into stereotypes, but there is a real problem with the digital exclusion of some consumers across all sections of our society. Will the Minister assure the House that, hand in hand with the development of financial technology, consideration will be given to ensuring the widest possible sharing of the benefits by consumers?

[Lord Agnew of Oulton (Con)]

The noble Lord is right: we do not want to see citizens excluded from the digital world into which we are heading, and that matter is under continual consideration. It is also worth stressing that, as a country, we are very much innovators and our consumers are keen for the sort of products that are coming out. For example, 2.5 million UK consumers and businesses now use open banking-enabled products; indeed, we were the first country to develop open banking standards, in 2018.

Financial Services Bill

Lord Davies of Brixton Excerpts

Report stage
Wednesday 14th April 2021 Lords Chamber

[Baroness Noakes (Con)]

My Lords, I have added my name to Amendments 45 and 48 in the name of the noble Lord, Lord Eatwell. I also support the intent behind the amendments in the name of the noble Baroness, Lady Bowles of Berkhamsted, and I know that she too supports his amendments. As has been said, these amendments concern one of the key issues that emerged during scrutiny of the Bill: the parliamentary accountability of regulators and the scrutiny of their actions. As already noted, there was widespread agreement around the House at Second Reading and in Committee that Parliament should have a role in scrutinising the rules that the FCA and PRA may make under the new rule-making powers created by the Bill.

Of much greater importance will be what happens when the Government expand the rule-making powers of the FCA and the PRA, as they have outlined in their consultation document on the review of the financial regulation framework. What we do in the context of the Bill is clearly important in signalling what we expect in the context of a larger shift in rule-making powers, if that is what the Government decide to do following consultation. This is particularly important because the Government’s analysis of parliamentary scrutiny in their consultation document was not encouraging; it was largely a defence of the existing committee activities in each House, with no regard to the new circumstances created by the extensive new rule-making powers. The Government—somewhat surprisingly, given their excellent Brexit credentials—seem not to have taken on board that the scrutiny context has changed significantly with the repatriation of financial services regulatory powers from the EU. That context should drive how we see the way forward.

Since our debate in Committee, my noble friend Lord Howe has made available to us the texts of letters from the PRA and the FCA which broadly say that they will do whatever Parliament decides, which is only right and proper. I do not think the letters add much to the analysis of the issues we debated in Committee, but they nevertheless demonstrate a constructive willingness to co-operate with parliamentary scrutiny. When my noble friend responded to our debate in Committee, I was not filled with confidence that the Government really understand the dimensions of the issues around scrutiny and accountability in the context of these additional rule-making powers. I have seen the rather late-in-the-day letter from the Economic Secretary which landed in our email boxes this afternoon. I shall be kind and say that the direction of travel is positive, but we have not yet reached a satisfactory landing point for this debate. I expect we will continue to pursue this issue well beyond the passage of the Bill.

As my noble friend Lord Blackwell knows, I do not support his Amendment 37A because it is a rear-view mirror amendment. I strongly believe that Parliament should have the opportunity to get involved with the rules made by the FCA and the PRA in time to influence their final shape. It is not satisfactory to think that ex-post scrutiny is an effective mechanism for parliamentary involvement. I do not believe the independence of the PRA and the FCA is threatened by this intervention in how rules are made, given the context of the very significant new regulatory rule-making powers expected to be devolved to them. That is why I support the amendments in this group in the names of the noble Lord, Lord Eatwell, and the noble Baroness, Lady Bowles of Berkhamsted, which provide a much better basis for Parliament’s future involvement in additional rule-making powers.

[Lord Davies of Brixton (Lab) [V]]

My Lords, these amendments are all on the same broad theme. As the previous speaker mentioned, there is a broad consensus that something needs to be done to provide a formal role for parliamentary scrutiny in the work of financial regulators. I do not want to detain the House, but I will take the opportunity to emphasise points that I have made at earlier stages. The basic question, to me, is: who regulates the regulators? The question is why we should trust the regulators; the answer is openness and engagement. Clearly, we have a particular interest here but can, I believe, contribute massively to the work of the regulator.

For us to raise these issues is not to question the expertise or good will of the people who serve on the regulators’ boards or work in their offices. It is simply wrong to assume that, once appointed, they can be left to get on with the job. As is apparent in the debate, there is clear consensus about the need for scrutiny. That is not contested. Obviously, there are clear reasons why they would benefit—the expertise of this House is a factor—but my particular concern is to establish systems that minimise the risk of regulatory capture. This is the experience, widely found, whereby regulators tend to become dominated by the interests they regulate and not by public interest.

I emphasise that this is not about corruption; it is more, in my mind, a social and cultural problem. I do not think the concept, in theory, is contested. The answer is to strengthen and develop the widest possible involvement of all sorts of bodies in the work of the regulators. Clearly, Parliament has a particular role and these amendments explore possible approaches to it. I hope the Minister can say a bit more than what was in the letter. Does the Minister consider regulatory capture to be something that occurs, and where the systems that are established address it and minimise the risk?

[Lord Sharkey (LD) [V]]

My Lords, I will speak to Amendments 18, 19 and 20 in this group. I support them all but prefer the more prescriptive Amendment 20. In these matters, it seems to me that ambiguity is not our friend. Wide latitude in interpretation can easily frustrate intent. As my noble friend Lady Bowles has so forcefully explained, that intent here is to ensure that Parliament has some effective scrutiny role in the activities and rule-making of the PRA and the FCA, by requiring that the information Parliament may need to do this is properly supplied. At present, this is absent or insufficient or likely to be post hoc and ineffective.

This is a specific example of a much larger problem in the relations between the Executive and the legislature. There is an increasing tendency for the Executive to bypass, or try to bypass, Parliament or to reduce scrutiny to formulaic rituals with no real influence on outcomes, such as our SI procedures. The seriousness of this tendency has been commented on fairly widely and frequently in the past few years.

Financial Services Bill

Lord Davies of Brixton Excerpts

Committee stage & Lords Hansard
Wednesday 3rd March 2021 Grand Committee

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, I am delighted to follow the right reverend Prelate. We both sit on the rural action group of the Church of England. I should also declare that as a Bar apprentice in Edinburgh, one of my first duties was as a debt collector. I cannot claim that I had any particular training in that regard, and I was probably the least sympathetic at the time, given my youth and inexperience. I therefore congratulate the noble Baroness, Lady Bennett, on the research that she has carried out in preparing for the amendment and bringing it forward. I also thank the Reset The Debt campaign for what they have achieved, as well as the Church Action on Poverty campaign in bringing these issues to the fore.

It may be that my noble friend the Minister is not minded to look sympathetically on the amendment but, at the very least, I ask him whether he accepts that there is a problem that needs to be addressed in this regard, for the simple reason that there will be an uplift in council tax of some 5% in some areas. It would also seem that, as yet, we have failed to address the issue of zero-hour contracts, which remains vexatious.

In moving the amendment, the noble Baroness, Lady Bennett, referred to food banks. My experience is not that recent but occurred between 2010 and 2015, when I had cause to visit them in my area. What impressed me most is that it was often not people on benefits who used them but those in work but who did not work sufficient hours to make ends meet. This is a category of people to whom we owe something, and is an issue that should be addressed.

In particular, I ask my noble friend what instruction is given to IVAs and others that administer debt relief orders on the power they have to be more sympathetic to and imaginative about the circumstances in which debtors find themselves. Given the rather modest remit set out in Amendment 55, I hope that my noble friend might look at it fairly sympathetically. If he feels unable to support it, perhaps he will bring forward something along these lines at the next stage.

[Lord Davies of Brixton (Lab) [V]]

I want to say a few words at this late hour strongly in favour of Amendment 55 and mention the possibility of a wider-ranging debt jubilee. There is clearly a case for this amendment, and the same case can be made for a wider-ranging approach to relieving the burden that debt places on us all, not just on the individuals. Clearly it ruins lives and leads to much misery, but it also affects the rest of us: it acts as a drag on the economy and the recovery that we now so desperately need. Anything that we as a society can do to relieve the absolute burden of debt, the better.

The proposal in the amendment for a fair debt write-down is a welcome development to the debt relief scheme. The moral case for passing on some of the discount that currently goes to debt collection agencies is clear, and there is an advantage to the Treasury. The same case fundamentally applies to us as a whole. We need a more comprehensive package of debt cancellations, targeted at the household sector. We want a way of writing off debts, just as so many debts were written off in the financial sector 12 or 13 years ago. We were told then that some banks were too big to fail, because of the harm it would cause the economy. I argue that the challenges facing individuals, because of their debt, mean as much or even greater harm for us all.

The main argument today is that such a scheme, as well as relieving much individual misery, would provide a direct, targeted macroeconomic boost to the economy, exactly where it is needed, helping some of the most hard-up in our society. It will boost economic growth, and help those who have fallen into the misery of debt—and all of us.

[Baroness Noakes (Con)]

My Lords, I will offer a slightly different perspective on this. I understand the problems of overindebtedness among poor people, but I do not believe that Amendment 55 makes sense. If I understand the proposed scheme correctly and if a debt under a debt respite scheme is sold for less than its face value, the original borrower has to pay back only that lower amount plus 20%. Let us say that I buy a debt with a face value of £100, for which I pay £80. I can recoup £96, which is £80 plus 20% of £80. That might seem reasonable on a loan-by-loan basis but, in practice, loans are sold in groups or books.

To the extent that there is a market for debt respite scheme debts, the amount that a purchaser pays will take account of two main things—first, the likelihood that the debt will be repaid; and, secondly, the difference between the income receivable on the debt, if any, and the purchaser’s cost of funds.