Procurement Bill [Lords]

Kirsty Blackman Excerpts

2nd reading
Monday 9th January 2023 Commons Chamber

[Kirsty Blackman (Aberdeen North) (SNP)]

Happy new year to you, Madam Deputy Speaker, and to everyone in the Chamber. Thank you for calling me to speak on Second Reading of the Procurement Bill.

I will take the tiniest bit of leeway at the beginning of my speech to thank my predecessor as the SNP Cabinet Office spokesperson, my hon. Friend the Member for Argyll and Bute (Brendan O’Hara), for his hard work in this role. He does not leave an easy gap to fill as he moves on to lead for us on international development, but I will do my best to learn as quickly as possible, and what better way than with the Second Reading of the Procurement Bill and the subsequent Bill Committee. That is not a joke—the Minister will be totally fed up with me by the time the Bill Committee has ended.

Both the SNP Westminster group and the Scottish Government have significant concerns about the content of the Bill as currently written. I am disappointed by how the Paymaster General put forward his views on the Scottish Government’s action, given that constructive discussion is going on about how best to amend the Bill. I hope he is going into those discussions in a more constructive manner than it sounded like from his tone at the Dispatch Box when he spoke about the views of the Scottish Government. Corrections need to be made before the legislation can be considered acceptable, because the Bill undermines the devolution settlement.

We have not tabled a reasoned amendment to the Bill on the basis that the Scottish Government hope they can resolve the issues with the UK Government. However, should the UK Government fail to fix the Bill, we absolutely will oppose the legislation at future stages. The Bill seeks to confer a power exercisable concurrently by UK and Scottish Ministers to implement the Government procurement chapters of the agreements with Australia and New Zealand by secondary legislation. Although the negotiation of international agreements might be a reserved matter, their implementation in devolved areas, such as Government procurement, is a devolved matter.

The correct constitutional solution would be to amend the Bill to grant the implementation powers solely to Scottish Ministers in Scotland—obviously not in the rest of the UK. If the UK Government refuse to make that concession, at the very least the Bill must be amended to require the consent of Scottish Ministers when UK Ministers act in devolved areas to implement international agreements. It is a vital issue of principle. Devolution must not be undermined every time a sitting Westminster Government fancy doing so.

The Scottish Government are working to resolve these issues with the UK Government, and that is why we have not tabled a reasoned amendment to reject the Bill, but I and my colleagues urge the UK Government to continue that work. They often claim that they want to work with the Scottish Government, and we want to ensure that this Bill is not added to the litany of devolution-undermining legislation that has been put through since Brexit.

We have further concerns about the Bill, and I hope the Minister will accept them in the constructive spirit in which they are meant. We believe that the UK Government must ensure that supporting environmental objectives is clearly and explicitly included in the Bill’s objectives. Those objectives should be compatible with the Scottish Government’s more ambitious climate change reduction targets. If the UK Government are to act in such a way on reserved matters, they need to take account of the fact that the devolved legislatures have different and more ambitious climate change targets.

[Robin Millar (Aberconwy) (Con)]

The hon. Lady referenced the devolution agreement, and she has just mentioned reserved matters. Can she clarify whether she is referring to the Scotland Act 1998 and devolution as set out within its terms?

[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.

Procurement Bill [ Lords ] (First sitting)

Kirsty Blackman Excerpts

Committee stage
Tuesday 31st January 2023 Public Bill Committees

[Florence Eshalomi (Vauxhall) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr Mundell. I start by paying tribute to Sarah, Christopher and Huw in the Public Bill Office for all their hard work in going through over 100 amendments tabled for Committee stage. I also thank the Minister for his opening remarks.

We have been clear that we want to work constructively with the Government to get the Bill into as good a state as possible. We all want procurement to work for British people, inspire confidence in the system and offer genuine value for money. I hope that the Minister will consider our amendments on their merits, as genuine attempts to get the Bill into as good a place as possible.

As we know, the Bill began its life in the Lords and underwent significant changes before reaching this place. While we expected the Government to table amendments to their own Bill—especially given that, sadly, we have seen four Chancellors of the Duchy of Lancaster since the Bill’s introduction in the Lords on 11 May 2022—I have to say that the scale of change between the Bill as drafted and the Bill before us today does not inspire confidence that what we end up with will be without significant loopholes. Even as we start Committee stage today, the Minister has put his name to 71 amendments. That is a noticeable number, following on from the hundreds we had in the other place. Of course, we welcome changes that bring the Bill into a more workable state, but if we are having to amend it on such a scale with just one stage of parliamentary scrutiny left, we cannot have much confidence that the end product will not be riddled with errors and inconsistencies that have gone unfixed.

When we are talking about a third of public spending and the livelihoods of countless workers rely on us getting this right, it is disappointing that the Government introduced a Bill that still clearly needs significant work in Committee and on Report. I know that several of the amendments have come as a result of the ministerial merry-go-round that the Government have subjected us to over the past year. We broadly welcome those changes, particularly in relation to the increased consideration of small and medium-sized enterprises within the Bill.

[Kirsty Blackman (Aberdeen North) (SNP)]

Does the hon. Lady share my concern that a lot of the evidence we have seen, such as the oral evidence given in the Lords, was provided on pretty much a different Bill from the one we are discussing today, and the one we will end up with after all the Government amendments?

[Florence Eshalomi]

I thank the hon. Lady for that point. It is so important, because we have seen what can happen when we do not get procurement right. We all know the impact it has on our local communities; we all have small businesses and organisations in our communities that are good at handling and dealing with public contracts but never get a look in. The fact that so many really good amendments were tabled in the other place but not taken up by the Government is quite disappointing.

What businesses ask us for is certainty, especially during these difficult economic times, but the mess the Government have made of the Bill does nothing but offer more confusion to the many businesses who rely on procurement. The Bill today is vastly different from the Bill introduced in the Lords, but it is also different from the Bill promised in the Government’s Green and White Papers and—who knows?—it may be vastly different from the Bill that ends up on the statute book. That does not scream strong and stable from this Government, and it is unacceptable when public services and livelihoods are on the line.

I am sure we will hear warm words from the Government that many of the amendments we discuss in Committee are unnecessary as they plan to address them in the national procurement policy statement. But how can the Government ask us, businesses and the people who rely on procurement for the day-to-day running of the country to trust them on their word after the year of chaos and uncertainty they have subjected us to, not least in the state of the Bill?

Even this first clause had to be forced in by the Government in the other place due to confusion in the Bill originally introduced to the Lords. Labour did not oppose the introduction of clause 1, which narrows down the definition of procurement to cover public contracts, and we will not oppose it today. We understand why the definition has been included—to distinguish between the specified procurements and other general procurements, particularly as we know that certain procurements that are not meant to be caught by the full framework of this legislation are no longer automatically included. We also agree with the need to familiarise our language in respect of the World Trade Organisation’s agreement on Government procurement, which the United Kingdom became a part of on 1 January 2021.

However, I share some of the concerns expressed by Lord Coaker in the other place about the use of the term “procurement” in the Bill. In particular, amendment 34 moved in the other place took non-covered procurement outside the remit of procurement objectives. I understand why that is necessary for the purpose of the Bill, but I would like to think that all procurement, covered or not, is carried out along the principles of value for money, integrity and maximising public benefit. However, I read carefully the explanation from Baroness Neville-Rolfe in the other place and found her explanation convincing enough to not table an amendment on the issue.

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[Kirsty Blackman]

Will the Minister give us some examples of bodies that could be included or excluded by the continued inclusion of those words?

[Alex Burghart]

I am delighted by the hon. Lady’s enthusiasm to hear my next paragraph.

The relevant NHS bodies that are covered by the Bill will be specifically identified in regulations made under the power in schedule 1(5). This is exactly the same approach as under our existing procurement regulations, which is appropriate and helpful as it enables the list of central Government authorities to be updated from time to time as organisations change. There is absolutely no doubt that NHS trusts and various other NHS bodies are contracting authorities. This is because they clearly meet the test for a public authority set out in clause 2(2)(a), which is that they are publicly funded. That test is how we determine whether an entity is a public authority.

Clause 116, which was inserted in the other place, needs to be removed and replaced with the original clause. As it stands, the clause would delete the power agreed by Parliament in the Health and Care Act 2022 for the Department of Health and Social Care to make healthcare procurement regulations that are appropriate for patient care—otherwise known as the provider selection regime. NHS England and the Government have consulted extensively on proposals for the provider selection regime since 2021, and it has received strong support from health and care stakeholders.

The 2022 Act and the powers within it were approved by Parliament and received Royal Assent as recently as April 2022. Parliament recognised then that the procurement of healthcare services provided to patients is a special case and would benefit from procurement rules that would allow for the further integration of services and more joined-up care for patients. The provider selection regime is designed to support the reforms made by the 2022 Act by having flexible and robust procurement rules to support greater collaboration and integration in the NHS.

If clause 116 remains unamended, DHSC will be unable to proceed with its plans to foster the greater integration of healthcare services that better serve patients. If this power is not reinstated, procurement for NHS healthcare services will end up with a confusing scheme of double regulation under the Department of Health and Social Care’s healthcare procurement regulations and under this Bill. It is also likely to lead to greater competition and less collaboration for those healthcare services. I am working closely with colleagues in DHSC to ensure that the provider selection regime is compatible with, and not used to circumvent, the procurement obligations in the Bill, which properly apply to much of the NHS procurement landscape. Parliament will have the opportunity to scrutinise the provider selection regime regulations through the affirmative procedure when they are laid by DHSC in due course.

New clause 13 provides a power for a Minister of the Crown to make regulations disapplying the Bill in relation to areas covered by healthcare procurement regulations made under section 12ZB of the National Health Service Act 2006, as inserted by section 79 of the Health and Care Act 2022. Hon. Members will recall from the debate on the Health and Care Act that a separate but interrelated process of reforms is under way for the procurement of certain healthcare services. Using the powers in that Act, DHSC is currently preparing regulations to govern its proposed provider selection regime, with the aim of improving collaboration in the sector and removing barriers to integrating care. The Bill, following enactment, will therefore need to be disapplied to the relevant extent to enable that scheme of regulations to exist and achieve its intended purpose.

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Will the Minister clarify that legal point, as well as the point on housing associations? They are just two cases in which the lines between public and private may be blurred, and there are countless other examples in which that ambiguity may exist. I will save him the trouble of our opposing the Government’s amendment, but I expect some responses from the Minister on the issue.

[Kirsty Blackman]

Thank you for chairing this sitting, Mr Mundell, and I thank your fellow Chair, who will be responsible for overseeing us and ensuring that we behave ourselves, which I am sure we will. I appreciate the opportunity to take part in the Committee and look forward to positive discussions about improving the Bill. I am not terribly hopeful that the Government will listen to much of what we say, but I hope they will listen even if they do not necessarily take it on board. In previous Bills, the Government tabled amendments that we had tabled. I hope the Minister will listen to some of what we say and that we can get clarity on some matters in response to our questions.

I want to make a couple of comments on the NHS. I am glad to hear the Minister’s confirmation that NHS trusts will definitely be included in the definition. It is good to have him say that in Committee, and it is helpful to the wider understanding of how the Government intend the Bill to work.

Let me comment on how procurement rules are intended to apply, and how the NHS and NHS trusts in England are moving. We need NHS reforms and NHS procurement reforms to result in two things: the best outcomes for patients and the best outcomes for people working in the NHS. Those two things are not mutually exclusive; they go hand in hand. If people have good terms and conditions, and pay that they can afford to live on, they will do a better job than if they are struggling to make ends meet and therefore worrying.

If decisions around NHS procurement are best for businesses—putting businesses’ interests first—those decisions will directly conflict with those other two aims. It may be that having some private-sector input is the best option in some situations, but it should never be the first port of call. We should run and manage the NHS so that we have fair pay and terms and conditions for people working in it, and the best possible outcomes for patients. We should outsource as a last resort. It will be interesting to see the further guidelines and the statutory instruments put forward by the Department of Health and Social Care in that regard.

It may seem odd that I am commenting on this issue, as an MP from Scotland whose NHS is entirely separate, but it has a significant impact on Scotland’s budget. How the NHS is funded in England gives rise to Barnett consequentials that allow the Scottish Government to fund the NHS in Scotland, so the less the Government are willing to spend on the NHS in England, the less the Scottish Government have to spend on our priorities, particularly in the NHS but also in other areas. I look forward to seeing the future statutory instruments and I will not oppose any of the suggestions under consideration.

[Alex Burghart]

Again, I thank the Opposition for their support for the amendments.

The hon. Member for Vauxhall asked an important question about housing associations. On the question of whether the definition of contracting authority includes housing associations, the proposed definition, as with its predecessor, does not address all individual bodies or categories of bodies explicitly. It is the same for multi-academy trusts. There are simply too many bodies that exist and that change over the course of time to address it that way. Rather, the definition uses a number of tests that determine whether a particular body is covered or not. As we go through the Bill line by line, we will come across those tests over and over again. Registered providers of social housing are included in our coverage schedules to the WTO Government procurement agreement under the indicative list of bodies that may be covered. The new definition aims to ensure consistency with those international commitments.

It is the case that under normal circumstances, simple oversight would not meet the test for management and control. However, in the case of registered providers of social housing, it is well understood and documented that the Regulator of Social Housing has more than simple oversight, carrying out regulatory activity that does meet this threshold—as under the existing regime as a body governed by public law. I reassure the hon. Lady that the Bill does not change that position.

I thank the hon. Member for Aberdeen North for her interest in the English NHS. We are also committed to having an excellent NHS that both supports the people who work in it and is free at point of use for all citizens.

Amendment 27 agreed to.

Clause 2, as amended, ordered to stand part of the Bill.

Clause 3

Public contracts

Question proposed, That the clause stand part of the Bill.

--- Later in debate ---

[Florence Eshalomi]

Hear, hear, and I thank my hon. Friend for making that important point. We all remember the summer flash floods almost two years ago. People may think, “Actually, London is insulated from that”, but a number of my constituents were affected, and one issue that they outlined was the failure of Thames Water to maintain its pipes. Thames Water is another utility company that is essentially rewarding its shareholders instead of making sure that the public, which receives a vital and critical service from the company, is treated fairly. Customers see their water rates increasing and ad hoc repairs causing disruption on many roads, but all some of those companies think about are their shareholders, who continue to receive massive payouts. When we talk about procurement contracts, it is important that we think about the end users—the customers, the residents, our constituents—who all deserve value for money.

[Kirsty Blackman]

It is the case, though, that this Government are not keen to make a public service a public service. An awful lot of local banks have been closed, changes to Royal Mail since privatisation mean that people cannot get the services they need, and post offices have been closed. All that could be avoided by changing the mindset and ideology, and classing those things as public services for the benefit of the public, rather than for the benefit of shareholders.

[Florence Eshalomi]

I thank the hon. Lady for making such a vital point. The Minister will wonder why I have so many examples, but just last week, I was notified that another local bank in my constituency, NatWest on Clapham High Street, will close and that a number of the branch’s customers had not been told. That is just another example of key services on our high streets, which many of our constituents rely on, disappearing. It is important that we remember the public element of those key services that continue to benefit from public contracts.

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[Florence Eshalomi]

I thank my hon. Friend for making such a valuable point. I am sure that Members will remember the fantastic private Member’s Bill on fire and rehire promoted by my hon. Friend the Member for Brent North (Barry Gardiner), which we debated in the House. Sadly, the Government voted it down. Throughout the pandemic, up and down the country, we saw a number of big multinational organisations using the cover of the pandemic to fire their staff, make drastic changes to their work conditions and try to re-employ them on lower wages and weaker conditions. In organisations such as British Gas/Centrica and British Airways, dedicated levels of service from staff were thrown out of the window, yet those companies continue to receive big payouts for their shareholders and CEOs. We need to address this situation; the Government could have addressed it, but they failed to do so. We have a Procurement Bill in front of us that could help to address some of the loopholes, yet the Government are failing to take it on board.

Perhaps the most frustrating thing for our train passengers is the poor service that they continue to receive while they know that the train operating companies that do such a poor job will continue to be rewarded with those contracts. LNER runs the east coast main line and we might think that it would face similar logistics to Avanti, yet it has nowhere near the same problems. It is not just a timing issue. It is shameful that until 27 November 2020, Northern rail services between some towns were carried out using bus-like Pacer trains that were designed to be inexpensive temporary solutions in the ’80s.

We have heard a lot about levelling up, but we cannot level up when we have such inequal transport across the country. I say that as a Londoner, where we have Transport for London and regular buses. Whenever we leave—this issue is raised by many Members from all parties—we see that the level of service and transport provision across the country is not fair.

[Kirsty Blackman]

I am lucky enough not to have to travel on the west coast main line terribly often, but when I did last year I ended up having to get an overnight Megabus because there were no trains. It has put me off ever visiting any of those places on the west coast that I would normally get to by train. Those communities are losing out as a result—not just the people who live there all the time, but the people who want to visit the really cool places on that line.

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We have an opportunity to create a procurement system that is fit for purpose, fit for our armed forces and fit for British business. As the war in Ukraine continues, we must continue to support our allies and fulfil our NATO commitments, but without risking our country’s capabilities. With a reformed, fit-for-purpose procurement system, we can achieve all this, but changes need to be made. Waste needs to be reduced, and British businesses must have the first bite of the cherry. I look forward to working with the Minister on the Bill to ensure our country and our armed forces get the best and most efficient system of procurement.

[Kirsty Blackman]

I want to focus on the last point made by the hon. Member for Islwyn on local content and contract value. The value of these contracts, even when they are within budget, is significant. A huge number of jobs are being created and massive amounts of Government money are being spent, but I do not feel that the MOD is utilising it in the best possible way, not only because of the problems of budgets being overrun, the amount of time being taken, and equipment not necessarily being fit for purpose when it arrives, but also because of the fact that the way the contracts system works is that the MOD is dealing with tier 1 suppliers.

The system is not hands on enough. We need to look at the suppliers that will be subcontracted and ensure that local content is used and local jobs are created. If the MOD is only looking, for example, at the tier 1 contractors and not digging underneath, and if the majority of the contract are then being subcontracted, there is not adequate oversight or steering of the contract to ensure that best possible use is being made of public funds, so we get both the best equipment and the highest quality jobs created and funded as a result.

In Scotland, one of the things that the MOD is not doing quite as well as it could be is working with the supplier development programme. That programme literally links public authorities and public contracting authorities with suppliers, but it has not had as much input from the MOD as it would like. No matter what the situation is with the reserved nature of the MOD, the reality is that it has lots of places in Scotland, and lots of those require procurement. That conversation between the local contractors and the MOD itself is not happening on the scale it should be. Local suppliers do not have the access to the contracts that they should or would like to have. One way this could be improved is by the MOD becoming more involved in the supplier development programme, which is specifically about making those links.

[David Duguid (Banff and Buchan) (Con)]

I acknowledge the existence of the supplier development programme, but can the hon. Member explain why those suppliers would not ordinarily or necessarily interact directly with the MOD? Is it possible that having a Scottish version of that interaction is getting in the way?

[Kirsty Blackman]

No. A number of these contractor organisations went along to a training session that was run by the supplier development programme on applying for MOD contracts. But the thing is, those tier 1 suppliers were being given the contract. The MOD is not looking at local suppliers in the first instance in the way that it could.

I am not saying that local suppliers should always get every contract. Such a blanket approach would not be appropriate; but even those that have gone through training and have a better understanding of how to apply for MOD contracts are not necessarily being included. The supplier development programme is, for example, running a major event on 17 May this year where companies are put in touch with public authorities, but the MOD has not confirmed that it is willing to attend the event, or suggested that its tier 1 contractors should attend. I am absolutely not saying that the MOD should exclusively work with the supplier development programme. However, this is specifically about making those links. If the MOD were to get involved, it would have a better understanding of the companies out there that it would be able to contract from, the companies would have a better understanding of how best to put in tenders for the MOD, and that link would be better made between the two organisations.

I am not seeing this from the point of view of the MOD being a reserved organisation so I do not like it or agree with the way it works. The supplier development programme has not raised the same concerns with me about other reserved functions that happen in Scotland. It is specifically finding this issue with the MOD, which does have significant numbers of bases and places in Scotland, but is not as willing to engage as it could be. I am just pushing gently—I am not trying to have a big argument about this—to suggest that the MOD could do better in this regard. One of the best ways to do that would be to open that conversation and ensure that it is getting involved.

[David Duguid]

Genuinely, in the spirit of trying to resolve the issue the hon. Lady brings up, I would be interested to talk to her offline about this. I have suppliers in Banff and Buchan who have in the past, and perhaps still do, provide services to the MOD—in fact, I know at least one of them still does. As far as I know, those suppliers deal with the MOD directly. If there is a way that we can get more businesses from our constituencies to the MOD, I would be more than happy to help.

[Kirsty Blackman]

I am happy to have a conversation with the hon. Gentleman afterwards and ensure he has the contact details for the supplier development programme, so that it can lay out some of its concerns to him. Hopefully, he can similarly provide a gentle push in the background to ensure that everybody—both the people looking to contract and the contracting authorities looking to have the best possible contract and tender applications made—is getting the best possible outcome from this scenario.

[Alex Burghart]

It is a pleasure to be opposite my friend on the Opposition Front Bench, the hon. Member for Islwyn. I am sorry to say that such was the scale of his knockout defeat in that debate that it appears to have blurred his memory—we established without controversy that, as I defended, Lennox Lewis was the greatest British fighter of all time.

To the hon. Gentleman’s point, we certainly agree that it is absolutely important to get these contracts right. The spirit running through the Bill is to have a streamlined process that makes it easier for everybody to understand their opportunities and responsibilities. On the point made by both the hon. Gentleman and the hon. Member for Aberdeen North, we will see as we go through the Bill that there are many opportunities through transparency and clauses put in to support SMEs to enable British businesses of different sizes to be able to avail themselves of opportunities in procurement, generally, but also in defence. In that spirit, I look forward to having specific conversations with the hon. Gentleman on those clauses as we progress.

Question put and agreed to.

Clause 7 accordingly ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned. —(Julie Marson.)

Procurement Bill [ Lords ] (Second sitting)

Kirsty Blackman Excerpts

Committee stage
Tuesday 31st January 2023 Public Bill Committees

[Florence Eshalomi]

I thank my hon. Friend for that example of why social value is so important. That contract was a missed opportunity to employ local people. We all want those local benefits, and employment in our constituency, so it is important that contracts be awarded to local companies, as well as the big ones.

Amendment 10 would require public value to be among the procurement objectives. That would complement our amendment on social value; together, the amendments would add real teeth to the Bill, and would give contracting authorities the mandate to make decisions that would benefit not only their area but the whole country. That is important because we spend £3 billion a year on procurement, and although the Bill is a step forward, without clear mandates on social value and public value, contracting authorities may miss out on the chance of creating tremendous value for the public through their procurement processes. Amendment 89 clarifies that by explicitly providing a wider definition of value for money. The Bill does not define value for money, nor does it set out what can or should be considered when an assessment is being made of which is the most advantageous tender.

Legislation allows for wider considerations of value, but the determining factor too often remains the low unit cost. That is problematic because it can lead to services being procured that do not effectively meet needs, and it can drive higher costs in the long term, particularly when it leads to a spiral of support needs. People do not get the support that they need, and their need for support escalates as a result. They are forced to keep going to services that cannot give them the help that they need, or cannot address the root causes of their issues.

Although the Cabinet Office is planning training to be rolled out alongside the legislation to encourage culture change, it is important that the legislation goes as far as possible in encouraging better practice. Further defining value for money is an example of how it could be done.

The aim of amendment 89 is to help to prevent the false economies that arise when we take value for money on a short-term and shallow basis. When we are considering such massive parts of public spending, crossing many levels, it is vital that every penny spent ties together. We do not want a situation where saving a penny in one pot loses a pound from another. By defining value for money in the way that the amendment does, we could ensure that contracting authorities consider the wider impact of their decisions. Again, that could lead to significant efficiency savings for this and future Governments, and to stronger public services for all to enjoy.

New clause 2 would place the procurement principles on the face of the Bill: promoting the public good; value for money; transparency; integrity; fair treatment of suppliers; and non-discrimination. In their December 2020 Green Paper, “Transforming public procurement”, the Government proposed enshrining those principles in law. In responding to the consultation, the Government stated that 92% of 477 respondents agreed with the original desire to put the procurement principles in the Bill, so I was not the only one surprised when the principles were missing from the Bill when it was published in the other place.

Our new clause 2 seeks to accomplish the original aim of the Bill. I know that we will hear from the Minister that we should trust the Government on such issues, and that we should wait for the national procurement policy statement, rather than looking to put things in the Bill. The principles are so important to how we carry out procurement, however, and perhaps the best source for why that is so comes from the Government. In the Green Paper, the Government say of the public good:

“The decision to invest public funds into policies, services, projects and programmes is subject to analysis and appraisal to assess the public good that is expected to accrue as a result of the expenditure. For national spending this will have been conducted in accordance with the HM Treasury Green Book guidance and subject to National Audit Office scrutiny. Procurement should draw a clear link between the objectives, outcomes and anticipated benefits that underpin the investment decision and the selection of contracting parties to deliver those benefits…Public procurement should also be leveraged to support strategic national priorities. Commercial teams should have regard to the Government’s national priorities when conducting public procurement. These will be set out in the National Procurement Policy Statement…This is consistent with international practice where public procurement is regularly leveraged to achieve social and environmental value beyond the primary benefit of the specific goods, services and capital works through operational delivery that contributes additional social value.”

The Green Paper goes on to say of value for money:

“The Government is making clearer the ways in which value for money is assessed at the point of the investment decision, which will be set out in a revised Green Book. A critical element of the assessment is a strong strategic case that sets: a clear objective aligned to government priorities, a rationale for intervention, and/or robust evidence and analysis for how different options for delivering that intervention will advance that objective…The role of procurement is to translate the desired outcomes into the right contracts and select the supplier or suppliers that will deliver these in the way that offers best social value for money. For many procurements there may only be a single contract, but for complex major projects there will be many hundreds of separate contracts of different types, sizes and sectors that need to be packaged and procured in such a way as to deliver the whole project successfully. Whether there is one contract or many it is critical to maintain the ‘golden thread’ from government priorities via the business cases through to procurement specifications and the assessment of price and quality when awarding contracts.

Value for money does not therefore mean simply selecting the lowest price, it means securing the best mix of whole-life quality and effectiveness for the least outlay over the period of use of the goods, works or services bought. Value for money also involves an appropriate allocation of risk and an assessment of the procurement to provide confidence about its probity, suitability, and economic, social and environmental value over its life cycle.” On transparency, the Green Paper states:

“The principle of transparency in public procurement is central to the integrity and accountability of the system and the fight against corruption. This is consistent with best international practice. It ensures business opportunities are accessible and processes and decisions can be monitored and scrutinised. It ensures that decision makers are held accountable for spending public money and helps open up public procurement to more effective competition that in return can deliver better value for money.”

On integrity, it states:

“The principle of integrity is key to strengthening trust and combating corruption. Procurement professionals must always bear in mind the needs of the ‘customer’ or ‘user’. Planning a public procurement must promote good governance, sound management of public money, and a professional relationship between buyer and supplier, e.g. managing conflicts of interest, protecting intellectual property and copyrights, confidential information or other standards of professional behaviour.”

On the fair treatment of suppliers, it states:

“The principle of fair treatment of suppliers means all suppliers must receive fair and reasonable treatment before, during and after the contract award procedure so as to encourage participation by suppliers of all types and sizes. Suppliers should have timely access to review mechanisms to ensure the overall fairness of the procurement process.”

And on non-discrimination, the Green Paper states:

“The principle of non-discrimination applies to procurement under the new regulations and means contracting authorities cannot show favouritism among domestic suppliers. This principle also applies to suppliers who have rights under an international trade agreement that covers the procurement. Non-discrimination in this context means that suppliers, goods and services from any other party to the agreement are given no less favourable treatment than domestic suppliers, goods and services.”

Thank you, Mr Efford, for indulging me; I felt it was really important to outline the very same principles that the Government put in the Bill, but on which they have now reneged. I do not think anyone in this room would disagree with those principles, but the treatment of the procurement principles during the lifetime of the Bill shows why we are keen to make sure we get this down in legislation. We cannot rely on just words and expect to trust the Government when they have already changed their mind on the Bill so much.

Delegating so much responsibility to regulations and statements risks taking the Bill further away from its original intentions, and I do not think that even the Minister wants that. I hope he has listened to those key statements, as outlined by his Government. I urge him to live up to the pledges in the Green Paper, which were supported in the other place, and to support our amendment.

[Kirsty Blackman (Aberdeen North) (SNP)]

Thank you for chairing our sitting this afternoon, Mr Efford; we appreciate it. I am going to talk about my amendment 101 and also the Labour party’s amendments 9, 10, 89 and new clause 2.

I am happy to support all the Labour party’s amendments. It is particularly important to put new clause 2 in the Bill. I cannot find a definition of value for money or of public benefit in the Bill. If the Government are making suggestions about how contracting authorities should proceed, they should be clearer about what that means and what outcomes they are seeking in the Bill, rather than in a national procurement statement to come at a later time. I understand that the Government’s priorities will change, which is to be expected, particularly when we expect a change of Government. That will happen and they will definitely have different priorities, but the principles that we are talking about in new clause 2 will surely not change. They are the threads that should run through everything we do and all the decisions we make.

I want to mention integrity specifically. The Prime Minister has said that he wants his Government to be marked by professionalism, accountability and integrity; it is very clear that integrity is one of the Government’s priorities in this regard, so not having it on the face of the Bill when the Government have been very clear that they support it seems odd to me. Adding it to the Bill through new clause 2 would be incredibly useful.

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[Alex Burghart]

As the hon. Lady knows, transparency sits throughout the Bill. As I have just said, there are far greater requirements to publish than ever before, on an online platform that the Government will provide. She gave the important example of Ukraine. She will remember that we talked about this on Second Reading: the Ukrainians were advisers to the UK Government when we were putting our ideas together, so we are very much building on what they did in Ukraine. This will be an extraordinary step forward for transparency in the nations that are taking it up.

The Bill also requires contracting authorities to have regard to acting, and being seen to act, with integrity. That will oblige them to consider how to prevent fraud and corruption through good management, prevention of misconduct, and control. Failure to take anti-corruption steps or measures will be an indication that the contracting authority did not have a regard to the importance of acting and being seen to act with integrity.

Contracting authorities will also be required to comply with the provisions in the Bill on conflicts of interests and the exclusion of suppliers, preventing contracts from being awarded to inappropriate suppliers. That provides further opportunities to directly address transparency and anti-corruption issues within the context of a procurement. I hope that we all agree that it is essential that the procurement regime commands the trust of suppliers, the public and our international trading partners. In our view, the Bill already provides for those matters as it stands.

Amendment 89 seeks to define value for money. Clause 12 specifically does not define value for money to leave a degree of flexibility for different types of contracting authorities to adapt the concept for their own procurements. Contracting authorities should be able to select the most advantageous tender that prioritises things that deliver value for money for them. There are many precedents on the statute book where the term is left undefined, and that allows for a degree of flexibility. I could point to the Communications Act 2003, the Energy Act 2004, the Defence Reform Act 2014, the Bus Services Act 2017, and so on.

[Kirsty Blackman]

The Minister has answered the question in relation to value for money not being defined in this Bill because it is mentioned in other measures without that kind of definition. Regarding the term “public benefit”, is it also the case that it is widely used in other legislation without being defined? If the Minister does not have an answer now, I would be happy to hear something afterwards.

[Alex Burghart]

No, I am happy to say that it is already set out in the social value Act, I think, which I mentioned at the start of my remarks. Similarly to amendment 9, we feel that amendment 89 is unnecessary, as “public benefit” already allows for those factors to be considered, where appropriate and relevant to the contract being awarded.

New clause 2, also tabled by the hon. Member for Vauxhall, seeks to oblige contracting authorities to follow the six principles that the Government consulted on in the Green Paper. Now, the Green Paper was just that; it was a Green Paper and it formed the basis of what came subsequently. The six principles in the Green Paper were subsequently refined and then translated into the objectives and specific obligations that now exist in the Bill in the light of the responses to the Green Paper.

The language of a Green Paper is not the language of legislation, and one of the main lessons from the Green Paper and the consultation was the need to reflect the principles in a way that helps contracting authorities understand how they will implement them. That is what we have done. However, I assure the Committee that each of those principles remains within the Bill in an appropriate form. “Value for money” remains a fundamental tenet of the procurement regime. It is well understood by contracting authorities so does not need to be elaborated on.

“Public good” was focused on the delivery of strategic national priorities, so we revised it to the objective of “public benefit” to address the concerns raised in the public response to the Green Paper that it was solely about national, and not local, priorities. The revised principle supports wider consideration of social value benefits.

As we have discussed, “transparency” remains as an objective to encourage information sharing with suppliers, and “integrity” also remains an objective. The public response to the Green Paper indicated that “fair treatment” was too subjective for contracting authorities to determine by objective standards, so we introduced the concept of “treating suppliers the same”, which hon. Members will find in clause 12(2). Finally, “non-discrimination” has been converted from an objective to a hard-edged obligation in clauses 88 to 90.

The combination of the objectives and specific legal obligations in the Bill deals with procurement principles more effectively than the broad principles that the Government consulted on in the Green Paper. I therefore respectfully request that the amendments be withdrawn.

[Florence Eshalomi]

I heard the Minister’s response, and I think, again, that it is disappointing that there is a total shift between what was introduced by the Government in the Green Paper and what we now see in front of us. That was also noted in the other place.

I welcome the aim of the amendments tabled by the hon. Member for Aberdeen North. That is something that we do support, and I know that she highlighted it in a Westminster Hall debate just last week. Climate change is something that we are very much concerned about.

On ensuring that we think about the next generation, we can only do that if we protect the environment and the Earth that we are on now. We only have one opportunity. We cannot do it later, because there will be nothing left. That is a key issue that our young people are concerned about, and it must be front and centre in this Bill.

The climate elements of the Bill are really important. They touch on social value and on public value. There is an interwoven link showing why that is important, and that should receive due consideration, so it is a shame to hear the Minister not wanting to take those measures forward.

[Kirsty Blackman]

If possible—I did not indicate this before—I would like to push amendment 100 to a vote.

[The Chair]

We will come to that.

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[Kirsty Blackman]

I am quite happy to support these amendments, which are clever and necessary. They would both improve the process and make clear the direction of travel and intention behind the Bill. Procurement legislation and processes, and the tender processes that organisations have to go through in order to win a contract, are sometimes quite exclusionary. They are difficult. As the hon. Member for Vauxhall mentioned, they are easy to navigate for companies with significant teams of lawyers and tender-writing experts, but much more difficult to navigate for small organisations, which may be doing a huge amount of good but unable to translate that into writing the best possible tender. That is not to say that some of them do not write excellent tenders—I am sure some of them do—but it is important that we take that into account and include a presumption to consider such organisations.

Charities are struggling at the moment. Every charitable organisation that I have spoken to has mentioned its concerns about how it will carry on. We know that during the cost of living crisis, people are reducing their discretionary spending; they do not have any money left to spend on things such as charitable giving, and therefore charities are really in need of contracts to be able to continue to provide their services. Charities have workers—people work for charities. Without securing sensible, value-for-money contracts, charities will not be able to give their staff the uplift they need in order to avoid the cost of living crisis. It would be helpful specifically to include charities in the Bill and define that.

On co-operative societies, I have thought a fair bit about how we encourage those businesses and organisations that are not currently co-operatives but may benefit from becoming a co-operative. How do we make that landscape easier? How do we make it easier to understand how to become a co-operative organisation? I represent Aberdeen, where we have a significant number of companies that grow to a certain size and then get sold off. Some of those companies continue to flourish under some multinational, international umbrella, but some of them are just subsumed and disappeared, because the multinational is doing its best to buy up the intellectual property so that there are fewer competitors. In some of those situations—I am not saying it is the case in all situations—a co-operative would be the best way forward for the company. I do not think enough is being done to smooth the path for that and to put it on a more level playing field.

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[Florence Eshalomi]

I beg to move amendment 22, in clause 13, page 10, line 2, leave out “may” and insert “must”.

This amendment would require a Minister to publish a National Procurement Policy Statement.

The amendment seeks to mandate that the Government “must” publish a national procurement policy statement, instead of just “may”. I am sure the Minister will tell me that the amendment is unnecessary as, of course, the Government will seek to publish a national procurement policy statement. However, as has been stated, the change that we have seen in the Bill from the Green Paper to today means that we can take nothing for granted when it comes to the Government’s word on procurement.

The amendment is identical to the one tabled in the other place by Lord Lansley. When Baroness Noakes introduced it, she said that the clause’s current wording leaves the door open for a statement not to be published. Given the importance of the policy statement in setting rules for covered procurement, it would be deeply damaging for it not to be published. I urge the Minister to ensure that that cannot happen by supporting our amendment.

[Kirsty Blackman]

It seems to me that this is probably the easiest amendment for the Government to accept. They have made it clear how important the national procurement policy statement will be, and how a significant proportion of the decision-making processes in the Bill will flow from that statement.

I support the amendment, and I would suggest going even further in saying that every Government should publish a national procurement policy statement. We have had quite a lot of Governments recently, but after every general election and every first King’s Speech of a new parliamentary Session, the Government should be clear in a number of areas. They should set out their policy direction of travel, not just in procurement but in general. That is a key moment when the Government could refresh their national procurement policy statement.

I do not have a significant issue with the Government updating the statement based on priorities. We have seen what has happened in the last few years with covid, and in the past decade or so, we have developed a better public understanding of the impacts of climate change. Science has changed, and not only have priorities changed, but the social system has changed as a result of covid. It therefore seems that updating the statement would be a sensible thing to do. If the Minister is not willing to accept the amendment, I urge him to make it clear that the Government intend to publish the national procurement policy statement, no matter whether the clause says “may” or not.

We will come to the clause stand part debate, but the clause states that there is an intention to keep the statement “under review”. Does the Minister expect that if Government priorities were to change significantly, a new or a tweaked statement would be published? For example, if something major happened, as with covid or the war in Ukraine, priorities may change as a result. Does he expect Government Ministers to at least consider updating the national procurement policy statement in the light of drastic changes that may or may not come to us in future?

[Alex Burghart]

Amendment 22 would require the Government to publish a national procurement policy statement rather than just allowing them to do so. We have had a lot of debate about the nature of procurement policy and the associated important elements of procurement, such as driving social change.

As has been demonstrated by the sheer number of topics that we have touched on, procurement is often used to transact wider policies. That is correct, but we have to be realistic about the fact that those policies shift over time. The hon. Member for Aberdeen North gave a couple of examples of that. Indeed, the Government demonstrated how quickly we can change our procurement policies in the light of Russia’s illegal invasion of Ukraine. It is therefore both preferable and necessary that procurement policy is aligned with wider Government objectives. As such, the publication of an NPPS is a decision based on the strategic policy priorities relevant to the Government at that time. It needs to be as flexible as possible, and mandating a Minister to publish one takes away some of that possibility.

However, I assure the hon. Lady that the Government absolutely intend to publish an NPPS. They are working on it at the moment, and I look forward to bringing it to the House and discussing it when the time comes. She is right that it will be possible for Administrations to update their national procurement policy statement, but it will also be possible for them to withdraw it. One reason for not mandating is that there may be times when the Government are working on a new one, and there is a hiatus between the two. I therefore do not see that changing the drafting of the clause and mandating the statement is necessary. I respectfully request that the hon. Member for Vauxhall withdraw her amendment.

--- Later in debate ---

Amendment 105 in the name of the hon. Member for Aberdeen North seeks to add provisions to ensure that no supplier involved in modern day slavery, crimes against humanity or genocide is granted contracts. That is a valid concern and similar to those addressed in amendment 111. We are definitely minded to support her amendment. I look to her to introduce her amendment and to the Minister to hear his response.

[Kirsty Blackman]

I will cover the amendments in the order that seems more sensible to me, which is probably not the order in which they appear on the selection list and amendment paper—apologies. I will do my best not to go over the same ground that has been covered by the shadow Minister in her excellent extensive speech. We are discussing a significant hefty chunk of the Bill and a number of different issues in one section.

The terms of Government amendment 28 are almost the opposite of new clause 2, which we discussed earlier. As I said then, I think it is one of the most important Labour amendments. I still believe that to be the case, and I think the withdrawal of the 33 principles would make the Bill poorer. This is one of those moments when you read a Bill—I am not sure how many people read Bills—and you think, “Hey, this is pretty good.” And then the Government take out the clauses that you actually liked. That is not helpful. The Government did exactly the same thing in the Online Safety Bill Committee. Before sending that Bill to the Lords, they took out some of the most useful and helpful clauses, which would have made most difference to people’s lives. I will therefore resist the Government amendment to this Bill vigorously.

Amendments 7 and 11 were tabled by the shadow Minister. I will not add too much on those, other than to say that cyber-security is one of the biggest risks facing us as Members of Parliament, the United Kingdom, the devolved Administrations—all of us. At this moment, that risk is only increasing. To have a conversation about cyber-security and national security in Committee is important, but they must also be considered during any procurement decisions. We want to improve cyber-security and national security and to take them into account, rather than forgetting them or hoping that they do not exist.

Amendment 107 on the fair treatment of workers struck me as one of the places where Government spending—public spending—could have the best benefit. Spending public money delivers not only great services for citizens, but high-quality jobs. It delivers jobs that are well paid and that have, in a lot of places, comparatively great terms and conditions. It is incumbent on us to ensure that the principles of fair work are held throughout all the decisions made on public spending. It is incredibly important that, when we use public money to create jobs, those jobs are good, well-paid jobs and, where possible, they financially recognise the increased cost of living—that the Government make the uplifts they should be making in the negotiations with various trade unions, which are struggling at the moment on behalf of workers and their members.

I will also strongly resist Government amendment 29. The shadow Minister explained it well. This is a pretty low bar. Clause 13(4) states:

“The strategic priorities to be included in the statement must include, but are not limited to…achieving targets set under the Climate Change Act 2008 and the Environment Act 2021”.

The Government passed those Acts. Why do they not intend them to be a strategic priority? Were they just things they passed in order to tick a box? If tackling climate change is a priority, clearly it should be part of the national procurement priorities.

Last week or the week before, in a Westminster Hall debate on public procurement, we heard the percentage of public money spent on public contracts; it is something like £1 in every £3. That is so much money! The clause as drafted is asking the Government to include a piece of their own legislation in the Bill as one of the strategic priorities. I do not think that that is asking too much.

I have just covered subsection (4)(a) and, in earlier discussion, we covered paragraph (b) at some length—again, I agreed with that. Paragraph (d) covers:

“minimising the incidence of fraud, waste or abuse of public money.”

That is very important. We saw the issues caused by the covid PPE contracts and the resultant massive waste of public money. It is totally inconceivable for the Government to open themselves to getting into that mess again, or for us to end up with another illegal fast-track lane, no matter how urgent the circumstances. The circumstances meant there was an urgent need for suitable PPE, not an urgent need for the Government to procure a whole lot of unusable PPE, or to prioritise recommendations from those in the VIP lane above companies that had a track record of producing PPE. It has not worked. It has failed our doctors, nurses and those working on the frontline. It has failed all of us who contribute towards public money and want it spent in a good way. It is therefore important to minimise instances of fraud, waste or abuse of public money. That should not need to be stated, but it does.

Procurement Bill [ Lords ] (Third sitting)

Kirsty Blackman Excerpts

Committee stage
Thursday 2nd February 2023 Public Bill Committees

[Kirsty Blackman (Aberdeen North) (SNP)]

The shadow Minister is making a powerful and well-researched case that builds on the case she made in Committee on Tuesday. I do not want to test the Committee’s patience by making a speech on this, but I want to let her know that I am willing to support her amendment should she push it to a vote.

[Florence Eshalomi]

I thank the hon. Member for her support.

At the moment it is clear that SMEs find the process frustrating and time-consuming. In his written evidence to the Committee, Colin Cram, who set up the conference company Open Forum Events Ltd to run conferences to support the delivery of improved public services, outlined his experience of the procurement system for SMEs. He stated:

“Tendering is expensive and time consuming. The way the UK’s public sector operates all too frequently inadvertently discriminates against SMEs, which will include the most innovative of suppliers on which the UK’s economy and future global competitiveness will depend. Many SMEs—which means most businesses in the UK—do not know how to tender properly and they don’t have the time to do so. According to the Federation of Small Businesses, at the end of 2021 there were 5.5 million SMEs employing fewer than 50 people each. Their average turnover was £1.25 million. However, only half were registered for VAT, so most will have a turnover well below that. Many of these will be capable of delivering contracts greater than the thresholds”.

He continued:

“Having to tender for every contract that might interest a small business would prove prohibitively expensive. To illustrate the point, a mid-cap business sought my advice. It was winning just 1 tender in 20 and was thinking of withdrawing from the public sector. I suggested that it should employ 2 full time tenderers. It took my advice, and its win rate went up to 1 in 4—without changing either the products or services that it was providing...To put together the simplest of tenders will cost not less than £1000 if properly costed. So, 4 attempts at tendering for the simplest of contracts would cost £4000 and 20 in order to win at least 1 contract would cost £20,000.”

I am pleased that we have made progress on SMEs, but Labour Members fear that, without more clarity and market engagement, SMEs will still be put off by the cost of applying for contracts that they think they have little chance of getting.

SMEs should not have to employ two full-time tenderers to improve their chances of winning contracts that they know they can do. Pre-tender marketing engagement can help to establish contracts that are more easily digested through the bidding process. We understand that some contracts will not be suitable for SMEs, but early engagement can help in figuring out where that is the case and hopefully open up more contracts to a variety of companies. I thank the hon. Member for Aberdeen North for supporting our amendment, and I hope other Members and the Government will support our amendments 20 and 21.

[The Parliamentary Secretary, Cabinet Office (Alex Burghart)]

It is a pleasure to serve under your chairmanship, Mr Efford. Amendments 20 and 21 seek to ensure that preliminary market engagement explicitly refers to SMEs.

I thank the hon. Member for Vauxhall for her support of the changes that Baroness Neville-Rolfe made in the House of Lords. We are all committed to improving options and opportunities for small and medium-sized enterprises to take advantage of the substantial amount of public procurement that exists in this country. We fully agree that preliminary engagement is an important part of that. That is why we have included the new duty to have regard to SME participation in the procurement objectives.

The duty will apply in relation to pre-market engagement just as it will cover the whole of the procurement life cycle. Consequently, we do not consider it necessary to clarify in the pre-market engagement clause that the word “suppliers” captures SMEs. It clearly does, and in view of the broad application of the general duty to support SMEs, there is no need for any drafting changes to be made.

To be clear, the new SME duty will lead contracting authorities to consider not only whether they have engaged with SMEs in their preliminary market engagement, but whether their procurement process and timelines are accessible to smaller businesses, supporting them to win and deliver more public contracts. It is nice to hear the hon. Member for Aberdeen North support small and medium-sized enterprises in England—would that the SNP in Scotland had supported the Bill, giving those same opportunities to SMEs in Scotland. I once again extend my invitation to her and the Government at Holyrood to join us on this journey.

[Kirsty Blackman]

The Minister keeps talking as if Scotland does not have procurement legislation, and will not have procurement legislation going forward. It is absolutely the case that we will continue to have procurement regulations and rules, and a fairer procurement system—one in which we do things such as mandate the real living wage, for example.

[Alex Burghart]

The hon. Lady has previously given some good examples of things that are going wrong with current procurement. The SNP has not tabled any reform to procurement in Scotland, and I am afraid that, without reform, Scotland will be stuck with the old regime, whereas from spring next year, small and medium-sized enterprises in England, Wales and Northern Ireland will be taking advantage of the regime set out in the Bill.

[Kirsty Blackman]

I hope the Minister is not suggesting that when the Scottish Parliament passes procurement legislation, the UK Government will again levy a section 35 order to stop us changing our procurement legislation.

[Alex Burghart]

Certainly not, because I am sure that there would be no need, whereas it was very clear that there was a need in the case to which the hon. Lady refers. She will know that the Government used that constitutional power reluctantly, but very well advisedly.

Amendment 25 would require contracting authorities that have stated in the tender notice that a contract is suitable for small and medium-sized enterprises to, in the event that no SMEs submit a tender, withdraw that tender notice and engage with small and medium-sized enterprises prior to republishing it, unless they can show that such engagement took place prior to the original publication. The Bill supports—indeed, it actively encourages—buyers to conduct preliminary market engagement. We have gone further than existing regulations: clause 17 requires the publication of a preliminary market engagement notice, and clause 12 contains a duty to have regard to reducing barriers facing SMEs. That should lead to increased openness and greater inclusion of SMEs in preliminary market engagement.

However, amendment 25 would add an extra layer of bureaucracy and delay for procurers to manage, and could well frustrate suppliers who have prepared a tender, only for it to be withdrawn if no qualifying bids are received. It is far better for us to increase SME participation in procurement by reducing barriers and highlighting the many benefits they bring to the public sector. I respectfully request that the amendment not be moved.

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[Lloyd Russell-Moyle]

From July in Scotland, grants will require that the real living wage is paid, and it is already included in procurement rules. That has led to Scotland now having fewer, in percentage terms, workers earning less than the real living wage than in England. We in England and Wales deserve the same. It pushes up wages across the sector. For too long, public authorities have used procurement as a way to undermine salaries and salary rates. It is an ideological viewpoint that the private sector is always best but, in reality, far too often, what “best” means is paying poverty wages. Sometimes innovation from the private sector and the charity and third sector is important, but if it is on the back of paying wages that are below standard, it is not acceptable. That is why I beg to move amendment 95 and linked amendments 96 to 99. Hopefully, they will start to redress the balance.

My hon. Friend the Member for Leeds East (Richard Burgon) asked the Minister’s colleague previously about the Government’s position on this, and the Government said that they do not believe in dictating employees’ wages. The reality is that by not setting a minimum floor—no one is suggesting a maximum—we are undermining good companies that pay good wages. Decent employers can lose out from people playing fast and loose with wages. We have seen numerous scandals, including fire and rehire, TUPE rules not being enforced and collective bargaining being undermined.

Wages below the real living wage require universal credit support. Let me be very clear: if someone is paid below the real living wage, the Government subsidise them. That is, in reality, a subsidy for that piece of work—that procurement. That puts companies whose workers do not receive that subsidy in a worse situation. To create a level playing field, all should receive the real living wage. That would mean that no employees in those companies have to receive a state subsidy for their work. That basic principle—that level playing field—must be enforced in this Bill.

Procurement bodies can incorporate a number of tests relating to the real living wage, but they cannot require that absolutism in contracts. If a company does not fulfil the living wage requirements set out in its procurement tender, but it does fulfil the other requirements, it is required to be offered the contract. That directly undermines the small and medium-sized organisations that work hard to pay the real living wage.

In Brighton, we have a great collaboration between the chamber of commerce, which requires all its members to pay the real living wage, and the trade unions. That kind of collaboration between businesses and unions needs to be supported. People who are not members of a chamber of commerce-registered body should not be able to come in and undermine those contracts.

The Minister might say that this proposal endangers international obligations, or that it means that UK workers are more fairly treated, but because Scotland has already incorporated it, we know it is not a breach of international agreements. It is important to ensure that British workers are respected when British money is being paid out—I should say English and Welsh money, because that is what these rules will be for. We need to ensure they get their just desserts and are not undermined by offshoring with low wages, and companies that are paying their fair share must not be undermined by universal credit subsidies. I commend these amendments to the Committee.

[Kirsty Blackman]

I congratulate the hon. Member for Brighton, Kemptown on these excellent amendments. I am glad that he mentioned what is happening in Scotland, and I will talk a bit more about that.

It is interesting that the Government say they do not believe in dictating employees’ wages, given that they literally set the national minimum wage and they refuse to lift it to the level of the real living wage. They absolutely could lift it to a level people can afford to live on, but they refuse to do so. They chose to change its name, rather than changing the amount and sorting out the significant age discrimination in the national living wage.

The hon. Gentleman is absolutely correct that in Scotland, 91% of people are paid at least the real living wage, which is significantly higher than the minimum wage in the other UK nations. In October 2021, we started to routinely mandate payment of the real living wage in Scottish Government procurement contracts. In 2022 we published updated statutory guidance under the Procurement Reform (Scotland) Act 2014 to reflect the change and the extension of the Fair Work First criteria to include specific reference to provision of flexible working and no use of fire and rehire. We have gone even further than the real living wage; our public money must be spent in a way that requires fair work practices. That is incredibly important because we have the opportunity to spend public money in a way that supports workers and ensures people are best placed to manage the cost of living crisis that we currently face. It ensures that people are fairly paid.

We are not asking for much. Ensuring that people are paid a wage that they can live on and does not need to be subsidised quite so much by universal credit is not a big thing to ask for. We are asking for dignity and respect for people. We are asking for people to be paid a fair wage and to be treated fairly.

[Lloyd Russell-Moyle]

There is an alternative to these amendments, which is for the Government to adopt Labour’s policy to change the rules of the national minimum wage so that they take into account the cost of living in this country and therefore adopt the standard of the real living wage. I am sure the hon. Lady would support that Labour policy.

[Kirsty Blackman]

Absolutely. We have for a long time been calling for the UK Government to change their national pretendy living wage to an actual real living wage. We have also asked for the age discrimination to be removed, because it does not cost a 17-year-old with one child any less to run a house than it costs a 32-year-old with one child; people face exactly the same costs. The UK Government are trying to require people to live with their parents, which is exclusionary and discriminatory because not everybody has that option.

The Minister is right to say that the Bill applies in England and Wales and also in reserved functions carried out in relation to Scotland, so there will be some impact on Scottish procurement, or on procurement that affects Scotland or is in Scotland. But I fear that he misunderstands the devolution settlement and the constitution when he suggests that perhaps I, as a Scottish MP from a Scottish constituency, elected to this place that makes laws, should not express an opinion. I was elected to this place in the same way as he was. There are not two tiers of MPs in this place, or so we were told by the Conservative Government when they put through the English votes for English laws rules. There is no two-tier system, so it is appropriate for me to comment on these situations and support amendments, and to consider whether the impact on workers is important. Whether they are in England, Wales or Scotland, it is important.

It is also appropriate for me to consider the Barnett consequentials of any decisions made. For example, if there is a change in the way that procurement legislation works so that more people are paid the real living wage, we might see a situation where procurement ends up with slightly higher costs and universal credit ends up with slightly lower costs, meaning that we end up with more Barnett consequentials for the Scottish Parliament to spend and greater flexibility within our very limited budgets.

If the Minister is going to continue criticising the Scottish Government’s and the Scottish Parliament’s approach to procurement—he is within his rights to do so—he has no high ground in talking to me if I talk about the England and Wales approach to procurement. I am perfectly entitled to do so. In fact, he has not been elected to the Scottish Parliament, which has power over procurement in Scotland; he has been elected to this Parliament, which does not.

[Tom Randall (Gedling) (Con)]

I completely agree with the hon. Lady that there are not two tiers of Members in this House. She mentioned a 17-year-old. Can she expand on that? I am looking at the Living Wage Foundation website, which states:

“Living Wage accreditation does not require employers to pay the Living Wage to volunteers or apprentices.”

What impact, if any, has the introduction of a real living wage as part of the procurement rules in Scotland had on apprentices in Scotland?

[Kirsty Blackman]

The hon. Gentleman is absolutely right that there is an issue with that, because the national living wage is set differently for apprentices. He is correct that the Living Wage Foundation’s rules on apprenticeships are different. I do not have the figures on whether the wages of our apprentices have risen as a result of the changes that have been made. However, I am sure that the fair work procedures and the rules around that—the inability to fire and rehire, for example—are applicable to apprentices and ensure that they have a higher level of protection than they did previously. In exactly the same way, we have greater requirements with respect to flexible working requests.

Although I cannot give the hon. Gentleman the exact details on figures and wages, I can say that working conditions are, as standard, better as a result. I am sure that many people who were putting procurement contracts out to tender required the real living wage and great working conditions. The amendments would mandate that, so that it is set in stone and everyone is brought up to that minimum standard, although some will well exceed that.

[Florence Eshalomi]

I thank my hon. Friend the Member for Brighton, Kemptown and the hon. Member for Aberdeen North for their remarks. The amendments are important because so many people are having to take the difficult decision to take strike action as their wages cannot sustain them. We are seeing situations where people are unable to feed their children and heat their properties. People who work in our core public services are relying on food banks. Instead of demonising those people, we as politicians, and the Government, should be looking at how we can help them.

I am proud to be a member of GMB and Unison. We should remember that trade union members are ordinary people. They pay their union subs, yet they are losing a day’s pay by going on strike to show the Government that their wages cannot sustain them. People are effectively on poverty wages. During this cost of living crisis, it is important that we listen to their valid concerns.

We see a number of employers still not doing the right thing by recognising the issues that their employees are going through, while still making millions of pounds in profits. As I said in my remarks on amendment 107, Labour is committed to delivering fair treatment for all workers, and that must include fair pay and conditions, workplace wellbeing and the development of workers’ skills. We believe that procurement offers a great opportunity to increase social value. Our later amendments will make it clear that we do not want to see those who are breaching the rights of their workers awarded public contracts.

Our ambitions on the minimum wage should not be limited to workers in procurement. Instead, Labour believes we should increase the minimum wage for everyone across the economy. An incoming Labour Government would want to ensure that everyone across the economy is paid a fair day’s wage. We would instruct the Low Pay Commission to factor in living costs when it sets the minimum wage, ensuring that it covers the cost of living.

The cost of living continues to increase for many people and, as inflation continues to rise, their salaries are not keeping pace. These measures would put hundreds of pounds into the pockets of the lowest-paid workers. We would also scrap the low pay category for workers aged 18 and 19.

Procurement Bill [ Lords ] (Fourth sitting)

Kirsty Blackman Excerpts

Committee stage
Thursday 2nd February 2023 Public Bill Committees

[Alex Burghart]

New clause 1 would legislate for the establishment of a committee to consider the threat to national security and cyber-security from suppliers in supply chains delivering public contracts. The Government take national security considerations extremely seriously, and we understand the importance of countering threats to our security throughout our supply chains. We recently demonstrated that through our action to remove Chinese surveillance equipment from sensitive sites across the Government estate. The inclusion of the national security exclusion ground in schedule 7 to the Bill will bring about a significant improvement to the existing EU-derived regime. It will allow a supplier to be excluded on national security grounds, even when the procurement does not meet the bar for exemption on those grounds.

We understand the intention behind the hon. Lady’s new clause, but it duplicates aspects of the new procurement regime underpinned by the Bill. I have already mentioned the ability to exclude a supplier on grounds of national security. The Bill requires any contracting authority that wishes to rely on those grounds when excluding a supplier or rejecting their tender to first notify a Minister of the Crown, who must be satisfied that the supplier should be excluded.

The notification not only ensures that the Minister agrees to the exclusion, but serves to alert them, if they are not already aware, that there may be security concerns about the supplier. The Minister may accordingly decide to investigate the supplier under clause 60, which could lead to the supplier being placed on the debarment list under clause 62. Furthermore, if a supplier already holds a public contract and is found to meet any exclusion ground, clause 77(2)(b) enables the contract to be terminated. Clause 77(2)(c) extends that to subcontracts. As with exclusion, any proposed termination on the grounds of national security must be brought to the attention of the Minister for a decision; again, that could trigger debarment from future procurements.

Under the new clause, the proposed committee would also consider threats to cyber-security. Existing policy in this area is detailed in procurement policy note 09/14. That mandates that where contracts have certain characteristics, suppliers must meet the technical requirements prescribed by the Cyber Essentials scheme. That applies when ICT systems and services supplied by the contract either store or process data at official level. In addition, the MOD, through the defence cyber protection partnership, has developed the cyber-security model that is to be applied to its procurements to ensure cyber-security-related risks are adequately managed throughout the life of the contract.

In short, contracting authorities are already alive to the need to consider national security, including cyber-threats, when procuring public services, and are well placed to review their contracts and supply chains for such threats, bolstered by the provisions of the Bill. However, I am mindful of the concerns raised by colleagues on Second Reading, and those concerns will continue to inform Government thinking as we move forward.

Amendments 15 to 19 seek to make exclusion on national security grounds mandatory, rather than discretionary. Any risk to national security should of course be taken very seriously indeed, but it is right that we leave some scope for nuance and flexibility in the application of the exclusion ground. Suppliers may pose a risk in some contexts, but not in others. For instance, in a relatively innocuous procurement, the exclusion of a supplier might not be merited if the contracting authority was confident that there was no potential for harm. A company that might raise concern in the manufacture of one technical device might also produce paper clips, which would not be a threat to national security.

It is important to note that contracting authorities must consider all exclusion grounds, mandatory and discretionary, against every supplier in each procurement. Any decision not to exclude a supplier that poses a national security risk must be weighed against that risk, and I am confident that contracting authorities will do so carefully.

[Kirsty Blackman (Aberdeen North) (SNP)]

I understand what the Minister is saying, but if the contracting authority is spending public money on those paper clips, it is funding a company that can breach national security and do things that are against the national interest. The contract may not be a risk to national security, but the company is, so surely it should be a mandatory, rather than a discretionary, exclusion.

[Alex Burghart]

There would be a balance of risks. Not all security threats are proven. Of course, it is up to the authority to assess the concerns at the time.

Question put, That the amendment be made.

Procurement Bill [ Lords ] (Fifth sitting)

Kirsty Blackman Excerpts

Committee stage
Tuesday 7th February 2023 Public Bill Committees

Division 18

Ayes: 5

Noes: 9

[Kirsty Blackman (Aberdeen North) (SNP)]

I beg to move amendment 103, in clause 41, page 29, line 10, at end insert—

“(5A) Where a direct award justification applies, before making a direct award to a supplier a contracting authority must satisfy itself that no preferential treatment has been conferred on the supplier by virtue of any recommendation made by a Member of the House of Commons or the House of Lords.”

[The Chair]

With this it will be convenient to discuss the following:

Amendment 104, in clause 44, page 30, line 23, at end insert—

“(c) any connections between the supplier and any—

(i) registered political party,

(ii) Ministers of the Crown, or

(iii) Members of the House of Commons or House of Lords

where such connections are of a nature likely to be relevant to the direct award of the contract.”

Amendment 111, in clause 44, page 30, line 25, at end insert—

“(4) Any Minister, peer or senior civil servant involved in recommending a supplier for a contract under section 41 or 43 must make a public declaration to the Cabinet Office of any private interest in that supplier within 5 working days.”

This amendment would implement the recommendation of the National Audit Office that any contracts awarded under emergency provisions or direct awards should include transparency declarations.

[Kirsty Blackman]

These amendments arise mostly, although not entirely, as a result of what happened with PPE during covid. I would be less inclined to move the amendments if the Government had shown any contrition about the situation we find ourselves in. They tend to stand up and say, “Well, we needed to procure things in a rush, so we have no regrets about the situation.” It would be much better for them to stand up and say, “We needed to procure in a rush, but lots of mistakes were made along the way and therefore we believe that we need to do better next time.” A full investigation would also be helpful.

The situation we find ourselves in is this: a significant amount of PPE, of significant value, was unusable; the VIP lane has been considered unlawful; and those who made recommendations—one person, certainly, who made a recommendation—have personally benefited from Government contracts that were awarded. In the light of that situation, it is incredibly important that the procurement rules we set up ensure that such a situation cannot happen again—that there is both a requirement for the people making direct awards to satisfy themselves that no preferential treatment has been given on the basis that the person has been recommended by a Member of the House of Commons or the House of Lords, and that, should there be any connections between the supplier and a registered political party, Ministers of the Crown or Members of the House of Commons or House of Lords, that information is laid out in the transparency notice.

That is not asking too much. We all have a register of interests that we are supposed to keep up to date—the ministerial one slightly less often, or very much less often, than that for MPs. Asking for a higher level of transparency, when we know that those links occur, is not asking too much.

The Conservatives have a tendency to point to the fact that, “Well, we have people in the House of Lords who have come from business, therefore of course they will continue to have business interests.” I am not suggesting that they should not—that is absolutely fine—but we should be transparent about it and we should know if a contract has been granted to somebody who will benefit as a Member of the House of Lords. Is the supplier, or the person receiving the procurement contract—the beneficial owner—a peer or a Member of the House of Commons? Are they linked, in some way, to a political party?

We know from Sky’s investigation that a number of Members of Parliament receive money from companies. That is registered, but there is no requirement in the Bill, as it stands, for it to be noted; there is no requirement, when the contract is being given, for that which is open and registered already. Members of Parliament have to register if they receive a certain amount of money from a company, so it should follow that, if the company is being given a procurement contract, it is registered as part of the transparency notice. That should be noted up front.

That is not asking too much, particularly in relation to amendment 104, which is specifically about transparency notices and ensuring that that stuff is clear. It should not be too much work for anyone doing the transparency notice. Absolutely, it will create a little bit of extra work, but all they will need to do is cross-reference the registered interests, and then put that in the transparency notice so that we are all aware of the links.

[Lloyd Russell-Moyle]

The hon. Lady is raising some important points about how mistakes were made during the covid period. It is important to note, however, that those same mistakes were not made in Labour-controlled Wales or SNP-controlled Scotland, where transparency seemed to be much higher and fast-track schemes were not implemented. Is there a case for greater light to be shone in this place, where the rot seems to have truly set in?

--- Later in debate ---

[Kirsty Blackman]

I absolutely agree. In fact, that adds to the case that we should be willing for there to be an investigation. It shows that, actually, we can do it right and in such a way that individuals do not benefit from that.

[David Duguid (Banff and Buchan) (Con)]

I thank the hon. Member for giving way. I look forward to her supporting Scottish Conservative calls for transparency on certain procurements—of ferries and suchlike—by the Scottish Government.

The hon. Member said that it should not be too much to ask. I have heard that argument many times about making amendments, not just to this Bill but to others. She said herself that the registers of Members’ and Ministers’ interests already exist. Does she not feel that making “shouldn’t be too much to ask” amendments to any Bill risks diluting its effect?

[Kirsty Blackman]

I do not think that that is the case. We should not have such an issue that we need journalists, such as those at Sky, to shine a light and make those links. There should be a requirement for that transparency to be in place. Although we have the registers of Members’ and Ministers’ interests, they stand alone and are separate from the procurement contracts. If we end up in situations where people are benefiting significantly, having that in the transparency notice is important.

[Florence Eshalomi]

The hon. Member makes a valid point. Does she agree with my concern that only the other week the Paymaster General said that Ministers’ interests will be updated, but not until May, whereas we as Members have to update our entry in the Register of Members’ Financial Interests within 28 days? Why the delay?

[Kirsty Blackman]

I absolutely agree. The former Chancellor and chairman of the Conservative party, the right hon. Member for Stratford-on-Avon (Nadhim Zahawi), did not update his list of ministerial interests for a significant period after he was put into his role. In fact, some of the most egregious issues did not come to light properly until he updated the list of ministerial interests in January, some three months after he became the party chairman.

I agree that the lack of transparency is a significant issue, and I was disappointed in the Government responses. They do not seem keen to move on the register of ministerial interests being updated more regularly. Surely, given the amount of Executive power in this place and the post-Brexit creep towards increasing the amount of ministerial or Executive power—taking power away from Members—it is even more important for ministerial interests to be registered.

[Lloyd Russell-Moyle]

Does the hon. Member agree that the proposal would be in the interests of a governing party that is facing so many scandals—from Baroness Mone to the Randox lobbying affair—that have almost brought down Prime Ministers? It would help to protect the Conservative party from some “bad apples”, as Conservatives might put it.

--- Later in debate ---

[Kirsty Blackman]

I agree and would add to that: how many former treasurers of the Conservative party who have given significant amounts to the party have just happened to end up in the House of Lords? Who knows how that has happened? We know that there are people in this House and in the other place with significant business interests, and the amendment is not a criticism of that; it is not a negative thing, but it is about ensuring transparency.

[Chris Evans (Islwyn) (Lab/Co-op)]

The nub of the issue is that people have been appointed to the House of Lords and, in a particular case—I do not want to mention the name—they are not then taking an active part in proceedings in the other place. We could mention a number of peers who have hardly spoken since they were appointed, or not spoken at all. Rather than using that position to serve the Executive of this country, they have used it to lobby for contracts from the Government. That needs to be stamped out. Does the hon. Member agree that it is now time to look at how we appoint people to the Lords, and perhaps remove appointment to the Lords from the honours system altogether?

[Kirsty Blackman]

I absolutely agree. Each former Prime Minister is able to put forward whoever they want to the House of Lords, so we end up in this situation of having 850 peers and counting. The numbers are increasing drastically because the Government keep putting in more people to balance the politics in that place.

On the amendment, it is important for the Government to be willing to consider how best to improve transparency. So far, they have shown no willingness to improve transparency or to accept that there have been issues and that mistakes have been made. We need to change the system.

The UK has fallen in Transparency International’s corruption index, which has nothing to do with the Financial Action Task Force one. The FATF index is about corruption when it comes to money laundering, but Transparency International’s is about corruption in the public sector. It looks specifically at such issues as breaches of the ministerial code—in particular, ones that have not been investigated—and the scandals we have seen and continue to see.

The Prime Minister cannot keep sacking people who breach the code; we need to change the system so that they never get to that position in the first place—so that they can never commit the egregious breaches of trust we have seen and can never profit as individuals as a result of their position in this place or the other place. If the rules and systems are changed—which they clearly need to be—the Prime Minister will not need to sack people, because they will never be able to breach the rules and will never be able to profit as individuals simply as a result of their links to this place.

I will push amendments 103 and 104 to a vote when we come to that point and am happy to support amendment 111, tabled by the Labour Front-Bench team.

[Florence Eshalomi]

We fully support amendments 103 and 104, tabled by the hon. Member for Aberdeen North, which consider how we embed transparency into the system of direct awards. The two amendments highlight why we need additional layers of scrutiny to address glaring areas of conflict of interest in respect of Members of both the Commons and the Lords. It is vital to have additional checks in place.

Throughout the proceedings on the Bill the Minister has talked about the principle of impartiality, and said that the Bill will make VIP lanes, such as those we have seen, illegal and that it is all going to be fine. But that is just not the case. We need only to look at the pandemic to see why we desperately need to make sure that our procurement system is more agile and more transparent. The Tory VIP lane exposed a weakness in the system.

We must remember that we are talking about taxpayers’ money. We are at a time when so many people are feeling real difficulty in their choices and are seeing their household incomes reduce. Council and social housing tenants dread their rents going up. A number of councils have already highlighted how they are going to increase their council tax, including a borough in south London that is proposing to increase council tax by 15%.

Taxpayers’ money was wasted on contracts that were not fit for purpose and wasted as profits for unqualified providers. Worryingly, the Government have written off £10 billion of public funds that were spent on PPE that was either unusable, overpriced or undelivered, and it is worth bearing in mind that we are still spending £700,000 of taxpayers’ money a day on storing unused gloves, goggles and gowns. That money could pay for spaces in after-school clubs. It could pay for 19,000 full-time nursery places. It is public money.

The Bill does not pass the Mone or Paterson test; that waste could still be allowed to happen, over and over again. Handing more power to Ministers in respect of direct awards is not the way we want to go. We support the two amendments, because it is important that we empower local authorities to be able to ask the necessary questions when it comes to conflicts of interest. The current procurement system is not working, and we need to include new checks.

The amendments could be further strengthened by placing the onus on individual Ministers, civil servants and special advisers to make the necessary declarations but, as we have seen, when the onus is on them, they still do not make those declarations. Essentially, they have to be dragged kicking and screaming. We are in a situation in which we will not see the declarations of Ministers’ financial interests updated until May, if we are lucky. Anything could happen before May.

I draw the Committee’s attention to amendment 111, which we think further addresses the aims of amendments 103 and 104. We have an opportunity to learn from past mistakes and to tighten the freedom of Ministers to award direct contracts. It is about hardwiring transparency into our system. That should be a good thing and something we should all support. Instead, it seems the Minister wants to continue to have a back door and a VIP entrance. We must be clear that the Bill offers us a chance to clear that up.

The facts and figures speak for themselves. Some £3.4 billion of taxpayers’ money, in the form of contracts, went to Conservative donors and friends. A former Conservative Minister lobbied for Randox, which then provided 750,000 defective tests that had to be recalled, all while he was being paid £100,000 on top of his salary. Globus (Shetland), a business that has donated £400,000 to the Conservative Party since 2016, received £94 million-worth of PPE contracts.

Millions of people struggled during covid-19. The Government did some good things—including the furlough scheme to help people not to lose their jobs and the support for businesses—but a large group of people missed out on any money, including the 3 million people who form ExcludedUK. For those people who paid their taxes, submitted their returns and did not receive any money to have seen contracts dished out to friends, when those contracts were not even viable, was a slap in the face. When millions of people struggled during covid-19, it was not fair for them to have seen friends and donors of the Tory party prosper. As it stands, the Bill would continue to allow that to happen.

Our amendment 111 takes an important step, with amendments 103 and 104, towards addressing the situation, by asking Ministers to act, ensure genuine transparency in the system and restore trust in public money. This is about trust in the system. A number of members of the public do not trust our system; this is about restoring some of that trust and ensuring that, after years of waste and mismanagement, we do not find ourselves in this situation again.

Our amendment is based on a proposal by the independent National Audit Office and would mandate that:

“Any Minister, peer or senior civil servant involved in recommending a supplier for a contract under section 41 or 43 must make a public declaration to the Cabinet Office of any private interest”.

I hope we all agree that that is a straightforward, pragmatic proposal. It is not about layers of bureaucracy for business; it is about layers of additional scrutiny on Ministers to help to give the public confidence that another PPE Medpro scandal will be stopped and that we will not see a situation in which handfuls of millions of pounds of public money are redundantly spent on equipment that we cannot use.

The three amendments would outlaw VIP lanes once and for all, ensuring that we stop corruption. They would introduce a timeframe for transparency around declarations so that we can have information about conflicts of interests, instead of it being drip fed through the media or journalists. They would ensure that these scandals are not allowed to build up gradually over months and continue the erosion of trust. I hope the Minister agrees that Members of Parliament and the Government should have nothing to hide. If there is nothing to hide, they should support these reasonable amendments, which will help us to clean up our procurement system.

--- Later in debate ---

I agree that it is of the utmost importance to ensure that no supplier receives unfair advantage due to a private interest, whether related to a party, Minister, peer or civil servant. I reassure the Committee that the Bill is clear on that. Clause 81(3) states that if a conflict of interest puts a supplier at an unfair advantage, and if steps to mitigate cannot avoid that advantage, the supplier must be excluded. The Government are committed to managing conflicts of interest in all contracts, not just direct awards. We have demonstrated that in the strong provisions throughout the Bill. I respectfully request that the amendment be withdrawn.

[Kirsty Blackman]

I thank the Minister for his response. I would like to press the amendment to a vote.

Question put, That the amendment be made.

Procurement Bill [ Lords ] (Sixth sitting)

Kirsty Blackman Excerpts

Committee stage
Tuesday 7th February 2023 Public Bill Committees

[Florence Eshalomi]

As the Minister highlighted, amendment 87 would sadly overturn Lords amendment 91, made on Report, in relation to forced organ harvesting. I agree with the Minister that there can be no doubt that organ harvesting is an abhorrent practice, but we should be careful when saying that this measure would just result in additional bureaucracy and time in contracts and procurement.

The practice of forced organ harvesting involves the removal of organs from a living prisoner, which results in their death or near death. It is something that none of us should stand by and watch. Linking this back to taxpayers’ money, no taxpayer would expect a single penny of their public money to go to a company explicitly linked to this practice. Tragically, there is evidence that forced organ harvesting may not be a particularly niche issue.

The Minister highlighted that the measure, although well intended, would add more time and another layer of bureaucracy. I want to go back to the debates in the other place, and some of the powerful words from Lord Alton of Liverpool and Lord Hunt of Kings Heath, who moved the amendment that led to our discussion today. Both made moving and compelling arguments for the inclusion of the measure against forced organ harvesting, providing examples of evidence that the practice is taking place on an extremely depressing scale in China.

The excellent speeches made by Lord Alton and Lord Hunt have been backed up by the Office of the UN High Commissioner for Human Rights, which stated that serious human rights violations have been committed in the Xinjiang Uyghur Autonomous Region,

“in the context of the Government’s application of counter-terrorism and counter-‘extremism’ strategies. The implementation of these strategies, and associated policies in XUAR has led to interlocking patterns of severe and undue restrictions on a wide range of human rights. These patterns of restrictions are characterized by a discriminatory component, as the underlying acts often directly or indirectly affect Uyghur and other predominantly Muslim communities.”

The OHCHR also stated that the treatment of persons held in the system of so-called vocational education and training centres—VETC facilities—is,

“of equal concern. Allegations of patterns of torture or ill-treatment, including forced medical treatment and adverse conditions of detention, are credible, as are allegations of individual incidents of sexual and gender-based violence. While the available information at this stage does not allow OHCHR to draw firm conclusions regarding the exact extent of such abuses, it is clear that the highly securitised and discriminatory nature of the VETC facilities, coupled with limited access to effective remedies or oversight by the authorities, provide fertile ground for such violations to take place on a broad scale.”

That is damning. It shows there is evidence of this already happening. In an April 2022 paper published in the American Journal of Transplantation, Matthew P. Robertson and Jacob Lavee stated:

“We find evidence in 71 of these reports, spread nationwide, that brain death could not have properly been declared. In these cases, the removal of the heart during organ procurement must have been the proximate cause of the donor’s death. Because these organ donors could only have been prisoners, our findings strongly suggest that physicians in the People’s Republic of China have participated in executions by organ removal.”

As a country, we must stand steadfast against these practices and ensure that any supplier with ties to forced organ harvesting is not allowed anywhere near our procurement system. I do not think taxpayers would expect anything less. No one wants to be linked to these horrific practices.

I fully understand and appreciate that the Minister may have covered these and other concerns in his remarks, but we may want to consider that there is no doubt this practice is an exclusion ground. In Committee in the Lords, the Minister, Baroness Neville-Rolfe, said it was almost certain that it would be covered by paragraph 12, but I think we have to ask ourselves, how many times have we heard that something is almost certain, only for it not to be covered when the Bill passes? We cannot and should not take chances on this issue. It is a fundamental and critical issue of human rights. If the Committee is to do its job, we cannot support the attempts to remove forced organ harvesting as a discretionary exclusion ground. For those powerful and valid reasons, I will not be supporting the amendment.

[Kirsty Blackman (Aberdeen North) (SNP)]

It is tempting to think that forced organ harvesting is so far removed from anything that we consider human, or a normal occurrence, that it does not happen—but it does. As the shadow Minister laid out, the issue was discussed in significant detail in the other place. We know it occurs.

The Minister has given some level of assurance that other parts of the Bill cover this practice. Could he be explicit that he does not believe that any supplier involved in forced organ harvesting would be eligible to receive a public contract through the procurement framework set out in the Bill? If he can give that explicit assurance that he believes the practice is covered elsewhere in the Bill, and that provisions elsewhere in the Bill adequately do the job of this provision, I would be happy not to oppose the amendment. That assurance from the Minister would give us a measure of reassurance and comfort that the Bill covers everything that he intends and expects.

[Alex Burghart]

We are assured that the absolutely abhorrent practice of forced organ harvesting would qualify as serious unethical behaviour. Consequently, that would mean that, in the Bill, it would be covered by the grounds of professional misconduct. Within the Bill, we have that provision; outwith the Bill, we have the Health and Social Care Act, to which I referred in my remarks. I hope that no one will take away anything other than the fact that the Government are strongly opposed to this practice and to the people who conduct this practice and that we wish public procurement to have no part in it.

Question put, That the amendment be made.

--- Later in debate ---

I do not think that we can see ourselves being weaned off such technology overnight, otherwise what we are discussing would be an easy task. The beauty of the clause, however, is that it mandates the Secretary of State to lay out a clear timeframe for its removal. Bodies would even have six months in which to do that. Given that Hikvision is already banned in the US for links to internment camps in Xinjiang and banned in Whitehall, the timeframe could easily be met for the rest of the procurement supply chain. I urge the Minister to reconsider that.

[Kirsty Blackman]

Throughout the discussion of Hikvision and other companies in relation to human rights abuses, genocide and crimes against humanity, the Minister has missed the point. The shadow Minister has absolutely got the point.

For a start, the US has already blacklisted Hikvision. If the US believes that there is enough evidence to do that, and the Scottish Government are getting rid of the Hikvision cameras we have in Scotland, I do not see why the UK Government are unable to act in that regard. Two other jurisdictions have found enough evidence to debar Hikvision from providing cameras involved in our public life, yet the UK Government feel that there is still not enough evidence. They are somehow suggesting that perhaps the situation is over-egged, but it appears that the Foreign Affairs Committee does not think the situation is an over-exaggeration, and that it thinks that there is actually a risk and danger.

This is not just about the threat to our national security, although that is obviously incredibly important, and the Labour Front Benchers have been clear about national security throughout our discussion of the Bill. This is also about supporting a company that is committing human rights abuses. It does not matter whether a company is committing them here or elsewhere; the reality is that through public procurement, we are funding a company using facial recognition in mosques and committing atrocities against Uyghur Muslims in the Xinjiang region. How is that okay just because it is not causing any problems here?

Even if the company were not causing any threat to national security, this is about the direction of travel. On modern slavery, for example, the Government are pretty clear that no matter where that is happening, we do not want to be entangled with suppliers involved in modern slavery and enslaving people. We should not want to be involved with, and companies and suppliers should not be giving public money to, the people committing these crimes. Just because this is not modern slavery, it does not mean that they are not creating significant problems and putting people in severe danger as part of the extreme regimes that they are working for.

I do not see the justification in allowing public money to be given to any of these organisations. As I said last week, it is not as though this is a high bar; it is a low bar. We are saying that modern slavery and genocide are crimes against humanity. Those are pretty much the most serious things we can think of. Any organisation involved in those should not get public money, whether or not it is a threat to national security.

I am slightly pleased that the Government and the Minister seem a bit more willing to look at the possibilities regarding Hikvision. I appreciate that removing it from secure and sensitive sites, particularly, is a priority for the Government—they have agreed that they will do that—but that is not enough; we should not fund these organisations at all. Asking the UK Government to make a move in that regard in order to remove this technology and ensure that Hikvision does not get any more of our money is incredibly important, and not too much to ask.

I stress again the point made by the hon. Member for Vauxhall: the clause does not ask for immediate removal. It gives the Government six months to publish a timeline for removal—it is not giving them six months to remove the stuff, but to produce a timeline. They are not being asked for something entirely unreasonable. There are other camera providers and technologies out there that could be used instead to provide safety and security for places that we want to be safe and secure, without our supporting a company propping up a regime that is profiling and committing crimes against humans just because they happen to be Muslim. That is completely unacceptable, no matter where in the world it is doing that. Whether or not this is being done in the UK, the Government should take action on that.

I will therefore strenuously resist any attempt to remove clause 65 from the Bill. I used this phrase earlier, but it should not be too much to ask for the Government to take action on this issue. I am pleased that the Minister seems to have moved his language slightly since our previous debate, but it is not good enough and we are not there yet. We need a firm commitment from the Government to remove this technology that is causing so much harm to the lives of so many and to remove the support for the people causing such harm.

[Alex Burghart]

I thank hon. Members for their remarks. As I said, we think that the clause as drafted would be unworkable. On what the hon. Members for Vauxhall and for Aberdeen North said, we are moving to a new debarment regime, and I am not able to prejudge who will be covered by that regime. Suppliers will be considered for addition to the debarment list based on a rigorous and fair prioritisation policy. That policy is under development, and it is too early to say which suppliers will or will not be added to the debarment list.

We should remember that the new regime will give broader exclusion powers to authorities that have primary responsibility for applying the exclusions regime. The sorts of crimes we have touched on this afternoon, such as organ harvesting, modern slavery and the like, are very serious crimes against people and humanity, and no doubt that will have a bearing on future judgments. I appreciate where the amendment in the Lords came from, but we do not think the clause is workable. As a Government, however, we continue to consider the issue carefully.

Question put, That the clause stand part of the Bill.

Procurement Bill [ Lords ] (Seventh sitting)

Kirsty Blackman Excerpts

Committee stage
Thursday 9th February 2023 Public Bill Committees

The UK needs to be an active player on the global stage. The only way to do that is by proving we can meet our international obligations, and actions speak louder than words. I am proud of this country’s response to the war in Ukraine. I hope the same commitment to our international community will be continued throughout the procurement process.

[Kirsty Blackman (Aberdeen North) (SNP)]

I agree with the hon. Member for Islwyn that the Minister is giving us a run for our money today. I feel like I was speaking particularly slowly on Tuesday, as I was not feeling great and my brain was taking a while to catch up, but hopefully I can be a bit speedier today and get through with a higher level of coherence. Apologies if I said anything then that did not make much sense.

I will focus on clause 90, the Minister’s amendment 59 and our amendment 102. The Bill seeks to confer the power exercised concurrently by UK and Scottish Ministers to implement the Government procurement chapters of the agreements with Australia and New Zealand by secondary legislation. We agree with that and have no query about the fact that the negotiation of international agreements is a reserved matter but, as the Minister noted, the implementation in devolved areas, such as Government procurement, is a devolved matter. Procurement is devolved to the Scottish Government and Scottish Parliament, and we make our own decisions about how best to implement that.

The correct constitutional and devolution-respecting solution would be to amend the Bill to grant implementation powers solely to Scottish Ministers in this regard. I agree that the Minister has put forward an amendment that changes what clause 90 says, but the amendment also says:

“Regulations under subsection (1) may not be made unless a Minister of the Crown considers, or the Scottish Ministers consider, that the regulations are necessary in order to ratify or comply with an international agreement to which the United Kingdom is a signatory.”

The “or” is what I have a problem with, on the basis that it still allows the UK Government to act in devolved areas. I recognise the restrictions put in place by the rest of the amendment in terms of the breadth of the action that can be taken, and I recognise that the UK Government Minister has worked with colleagues in the Scottish Parliament to ensure that we are getting a bit closer together; indeed, it is closer than in the Bill that originally came to us from the Lords. However, I still feel that amendment 102 is necessary to protect the devolution settlement, because we should not have UK Government Ministers acting in devolved competencies. They should not be able to take this decision wherever they feel it is necessary to do so.

We are not for a second suggesting that we would not act in concordance with our international agreements, because we would. I am sure the Minister would not suggest otherwise, as the Scottish Government do stick to their international agreements—regardless of whichever Government signed up to them, we do our very best to fulfil them. However, this is about the implementation of procurement rules and ensuring that that works in the best possible way for Scotland.

The Scottish Parliament is writing legislation on procurement for Scotland, which, as has been noted a number of times in this Committee, is distinct and separate in Scotland. We already have our own procurement system, which works on a different basis to the procurement system down here. We have already talked about the real living wage running through our procurement rules, where it is not in the rest of the UK. We already have a distinct situation. The UK Government are not elected to take this action in Scotland. The Scottish Parliament is elected to take this action in Scotland and to implement it in the way that will work best for our procurement systems and for the people of Scotland, who elected the Scottish Parliament to do that.

Amendment 102 says:

“A Minister of the Crown acting under subsection (1) must acquire the consent of Scottish Ministers.”

I do not think that is too much to ask on the basis that this is a devolved area. Actually, if the UK Government are making new procurement rules that relate to Scotland’s implementation of its international agreements, ensuring the consent of Scottish Ministers means those rules will work within our procurement frameworks, systems and situations in order that those agreements can be properly implemented.

The Scottish Government want and intend to implement these international agreements properly. However, in order for that to happen as written, the UK Government will need a significant understanding of the Scottish procurement system, which is distinct from that of the rest of the UK. Our system will continue to be distinct in order to be able to write appropriate legislation that will apply in Scotland and work within our devolved legislation. It seems like a burden for UK Government Ministers to have to learn that, when actually, they could just say to Scotland, “How would you like this to be written?” and the Scottish Government could say, “This is how we would write it.” We could then have a discussion about whether or not that implements our international agreements. I am certain that it would, because the Scottish Government are good at acting in compliance.

Lastly, respect for the devolution settlement is an important tenet of our democracy. Devolution to Scotland is what the Scottish people voted for. We have the Scottish Parliament, which is significantly more popular than the Westminster Parliament in terms of the actions taken on behalf of the Scottish people. It is also significantly better regarded in terms of accessibility. I do not mean accessibility simply in terms of the building; I mean accessibility in terms of people being able to come and speak to Ministers and to have Ministers or civil servants listen and take action that improves their lives. It is much closer to people, and people feel that. Moving this process even further away seems like a real negative for people in Scotland.

[David Duguid (Banff and Buchan) (Con)]

I am listening to the hon. Member very carefully. Given her assertion that only people who are elected to the Scottish Parliament should make these decisions, should not she and I, and indeed the Chairman of the Committee, get our coats and head home early today?

[Kirsty Blackman]

As I mentioned in previous speeches, we are taking decisions here for the entirety of the UK. Like it or not, I have been elected in the same way as the hon. Member has, as a UK member of Parliament. We therefore have the right in this place to take decisions on procurement in England and procurement in Wales. We do not have the right to take decisions on procurement across the UK, given the agreement that the implementation of procurement and how it works in Scotland is devolved.

In fact, this Bill does not confer any rights on Members of Parliament to make decisions for the people of Scotland. It confers the power on Ministers to make that decision, which is very different from conferring it on Parliament. I have spoken before about the Executive power creep of recent years, which continues to give more power to the Executive and less to parliamentarians and MPs in this place. It is therefore important that the Scottish Parliament gets to take these decisions. I do not think the UK Government should be allowed to override the devolution settlement whenever they feel it convenient to do so, as we saw recently when they used section 35 to stop legislation put through the Scottish Parliament on a cross-party basis.

Again, the Bill is a further overreach of the UK Government’s powers. We are not suggesting for a second that the UK does not have the right to sign up to international agreements. It absolutely does, but we have the right in Scotland, as part of the devolution settlement, to implement those rules in devolved areas. In that regard, I would like to push amendment 102 to a vote. I am not convinced that I will get terribly much support, but I will do my best anyway. Hopefully the Minister will move Government amendment 59, which is a step forward, as I have said, and I hope he will also agree to the inclusion of our amendment.

[Alex Burghart]

To address the most pressing issue in this group, I must confess to having a Celtic heritage. Indeed, my grandfather was from south Wales, and his grandfather was born in the workhouse, not terribly far from the constituency of the hon. Member for Islwyn, so he has found me out.

--- Later in debate ---

[Kirsty Blackman]

The Minister is suggesting that clause 90 will be used only in extremis. Do I read that correctly, or is that not his suggestion?

[Alex Burghart]

Certainly, if there was an international agreement and the Scottish Government wished to legislate or regulate to implement it, that would be our preference. As I say, it is important that we put safeguards in the Bill. On the hon. Lady’s point about burdens being placed on officials by having to keep up with procurement regulations in Scotland, I can assure her that my officials welcome the burden, and that their understanding of such regulations is so strong that they would not notice the extra weight at all. I hope that she will not move her amendment.

Question put and agreed to.

Clause 88 accordingly ordered to stand part of the Bill.

Schedule 9 agreed to.

Clause 89 ordered to stand part of the Bill.

Clause 90

Treaty state suppliers: non-discrimination in Scotland

Amendment made: 59, in clause 90, page 60, line 32, at end insert—

“(1A) Regulations under subsection (1) may only include provision that is equivalent to provision in—

(a) subsection (1), (2), (5) or (6) of section 88 (treaty state suppliers),

(b) section 89 (treaty state suppliers: non-discrimination), or

(c) Schedule 9 (specified international agreements).

(1B) Regulations under subsection (1) may not be made unless a Minister of the Crown considers, or the Scottish Ministers consider, that the regulations are necessary in order to ratify or comply with an international agreement to which the United Kingdom is a signatory.

(1C) In subsection (1B), the reference to being a signatory to an international agreement includes a reference to having—

(a) exchanged instruments, where the exchange constitutes the agreement;

(b) acceded to the agreement.”—(Alex Burghart.)

This amendment would mean that a Minister of the Crown or Scottish Ministers, in making regulations under clause 90, may only make provision equivalent to provision in Part 7 and if the Minister considers, or Scottish Ministers, consider it necessary in order to ratify or comply with an international agreement.

Amendment proposed: 102, in clause 90, page 60, line 32, at end insert—

“(1A) A Minister of the Crown acting under subsection (1) must acquire the consent of Scottish Ministers.”—(Kirsty Blackman.)

Question put, That the amendment be made.

Procurement Bill [ Lords ] (Eighth sitting)

Kirsty Blackman Excerpts

Committee stage
Thursday 9th February 2023 Public Bill Committees

[Alex Burghart]

I am grateful to the hon. Lady for supporting the clauses. As we are nearing the end of our debate today, I will come back on a couple of points that the hon. Lady made so that we have covered everything off.

Before the lunch break, the hon. Lady kindly supported the clauses in part 9 of the Bill. As mentioned, if suppliers are breaching contractual terms, that will be a matter to be resolved pursuant to those contractual terms. The contracting authority will actively monitor compliance of these types of matters under its usual contract management and monitoring procedures, which will be strengthened by the Bill. I hope that adequately answers the hon. Lady’s question such that there is no longer any need to confirm in writing.

Similarly, in the closing stages of Tuesday’s sittings, the hon. Lady asked whether contracts already entered into following a procurement process will be terminated automatically if a contractor subsequently becomes an excluded supplier. Termination of contracts is often covered by contractual terms, but clause 77 gives contracting authorities an implied right to terminate a contract should a contractor become an excluded or excludable supplier. Although it is not automatic, authorities are able to terminate in the circumstances set out in clause 77.

Given the range and variety of contracts that contracting authorities will enter into, they need to be able to consider individual circumstances and the fulfilment of contract deliverables. Automatic termination of contracts when a supplier becomes excluded or excludable takes no account of other contractual obligations and would have serious implications for the delivery of the essential goods, services and works on which the public rely.

There is no need to mandate automatic termination. Contracting authorities should be trusted to exercise discretion appropriately, including in relation to national security. As with excluding a supplier prior to contract award under the national security ground, a contracting authority will be required to seek approval from a Minister to terminate a contract on this ground. I hope that gives the further detail the hon. Lady was looking for.

[Kirsty Blackman (Aberdeen North) (SNP)]

If I can crave your indulgence, Mr Mundell, I will not be present at the Committee’s next sitting, so I want to say thank you very much to the Clerks, to Hansard and, in particular, to two staff members, Josh Simmonds-Upton and Sarah Callaghan, who have been excellent in providing me with valuable support.

[The Chair]

Thank you for putting that on the record.

Question put and agreed to.

Clause 121 accordingly ordered to stand part of the Bill.

Clause 122 ordered to stand part of the Bill.

Clause 123

Commencement

Amendment made: 115, in clause 123, page 81, line 14, leave out subsection (3) and insert—

“(3) A Minister of the Crown may not make specified regulations under subsection (2) without the consent of the Welsh Ministers.

(4) In this section, “specified regulations” means regulations to bring into force provisions regulating procurement by a devolved Welsh authority other than procurement under—

(a) a reserved procurement arrangement, or

(b) a transferred Northern Ireland procurement arrangement,

but ‘specified regulations’ does not include regulations to bring into force provisions in Part 7 (implementation of international obligations).

(5) In this section, ‘devolved Welsh authority’ has the meaning given in section 157A of the Government of Wales Act 2006.

(6) A Minister of the Crown may by regulations make such provision as the Minister considers appropriate for the purpose of ensuring that—

(a) Parts 1 to 6 and 8 to 13, or particular provisions in those Parts, so far as not already brought into force under subsection (2) do not regulate procurement by a devolved Welsh authority other than procurement under—

(i) a reserved procurement arrangement, or

(ii) a transferred Northern Ireland procurement arrangement;

(b) existing legislation continues to regulate procurement by devolved Welsh authorities and procurement under devolved Welsh procurement arrangements.

(7) Regulations under subsection (6) may modify this Act.

(8) In this section—

“existing legislation” means any enactment, other than this Act or regulations made under this Act, that is passed or made before section 11 (covered procurement only in accordance with this Act) comes into force;

a reference to a provision regulating procurement includes a reference to a provision conferring a function exercisable in relation to procurement.”—(Alex Burghart.)

This amendment would make commencement of devolved Welsh aspects of the Bill subject to the consent of the Welsh Ministers, and would allow UK Ministers to amend the Act resulting from this Bill so that the Act no longer applies in respect of devolved Welsh procurement and could be commenced without consent.

Clause 123, as amended, ordered to stand part of the Bill.

Clause 124

Short Title

Amendment made: 84, in clause 124, page 81, line 18, leave out subsection (2).—(Alex Burghart.)

This amendment would remove the technical amendment made by the House of Lords in respect of the financial privileges of the House of Commons.

Clause 124, as amended, ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned. —(Julie Marson.)

Procurement Bill [Lords]

Kirsty Blackman Excerpts

Report stage
Tuesday 13th June 2023 Commons Chamber

[Sir Iain Duncan Smith]

I rise to speak to the amendment in my name and those of 26 others in the House of all parties.

The real issue here is the existence of a specific law in China that makes pretty much all companies in China, but particularly those involved in technology, a public risk in procurement to the United Kingdom. Article 7 of the People’s Republic of China national intelligence law 2017 states:

“Any organisation and citizen shall, in accordance with the law, support, provide assistance, and cooperate in national intelligence work, and guard the secrecy of any national intelligence work that they are aware of.”

In other words, under the Chinese national intelligence law, they must completely comply with all demands and requests for information in the business they are in, and deny they have done that to any other country or authority that asks. We have had Chinese companies coming to the House and lying to Select Committees about what they are doing, all saying that they have no obligations under the national intelligence law. They do have obligations under that law and they will lie for their country as a result.

We need to start by understanding the problems, and I thank my hon. and right hon. Friends on the Front Bench for having listened to the arguments and changed the terms, first by referencing the national intelligence law, which is very important, because many Departments will play fast and loose unless what they must do is made very clear. We have been encouraging the Government, who came out with views on Hikvision, Dahua and other companies supplying surveillance equipment to the UK, knowing that they are a surveillance risk not because they are cameras in a particular fashion but because what they glean is available completely to the Chinese authorities under the national security laws.

We have heard from my hon. Friend the Member for Isle of Wight (Bob Seely) about the small devices—a growing threat that I have not referenced but which also gets caught by the national intelligence law. China is leading in this technology, which is one way in which it can keep track of its own people, but they are now using it more broadly. I had a suspicion and heard that the cars that my hon. Friend was referencing were Downing Street cars. There is a very good chance that the Prime Minister and others may have been tracked by the Chinese Government without our knowledge.

We must therefore remember that first and foremost China poses a significant threat to us, our interests and the way we live our lives. Until we all agree and come to those terms, we simply cannot move on; that is the key. Government Departments and the Government have dragged their feet over this because we do not want to upset the Chinese—but it takes a lot to upset the Chinese because they carry on as before. The amendment is intended to get the Government to accept that we should reference the national intelligence law because that defines all Chinese business and companies and therefore they are a threat.

There are other Chinese companies that are a problem that will not be named, and surveillance cameras are part of this. I must confess that when my brother-in-law went around an area of a farm looking at the surveillance cameras, he spotted that they were Hikvision cameras—they are not listed in the contract because the contract provider is a UK organisation, but we discovered that they are everywhere.

Once I heard the news that the Government clearly wanted Departments to get rid of those cameras, I made a set of freedom of information requests to all Departments about whether they had cameras, where they were, whether they were on their buildings, and what plans they had to get rid of them, having spotted that a lot of Departments still had them, including the Ministry of Defence. All Departments—bar I think the Wales Office, which came clean and said it did not have any or was getting rid of them—claimed that, under section 24 of the Freedom of Information Act 2000, they did not have to answer because it was a security risk. The security risk is having the cameras, not answering the damned question! Excuse my language, Mr Deputy Speaker. It is all about where the cameras are and what they are doing, and that is the point of the amendment.

I hope that Ministers will take this matter forward and tell Departments to stop obfuscating. If they are asked a direct question they should tell the honest truth and explain that under the new rules under the Bill they will be getting rid of those cameras, which is absolutely critical.

[Kirsty Blackman (Aberdeen North) (SNP)]

The right hon. Gentleman makes an excellent point on national security, particularly the risk posed by this equipment. I credit him and others across the House who have worked to encourage the Government to move on this matter. As well as the national security issue, does he share my concern that companies such as Hikvision are involved in human rights abuses in China, for example with the Uyghur Muslims?

--- Later in debate ---

[Sir Iain Duncan Smith]

That is not the subject of the amendment but I will touch on it briefly. I have already spoken to the unions on this and I am very much in line with their position. The Government need to look very carefully at what has taken place, particularly because it reduces competition in the market. The links to the authoritarianism of the Chinese is one of the big worries, so I suggest that the Government have a serious look at that.

Returning to the point made by the hon. Member for Aberdeen North (Kirsty Blackman), these cameras are also being used in internal suppression in China. We know about the suppression of the Uyghurs; that is a genocide that is taking place. Even though the Government will not say it is genocide, everybody else believes it is: Parliament here has said it; the Americans have now said it; and so, too, have many other countries. I do not know why we cannot say this is genocide, but that is a question for another debate. The fact is that many of these instruments are being used as part of that suppression in the camps as well as to watch carefully so that suppression can take place. Right now, forced labour, forced sterilisation and re-education in camps are all taking place in China.

The hon. Member for Vauxhall (Florence Eshalomi) referred from the Dispatch Box to the Opposition’s amendments. It is worth reminding her that China poses a risk in just about every single area with its human rights abuses and abuses of workers’ rights, yet so many of our companies want to ignore that.

While I welcome much of what the Government have done, I do not plan to move new clause 1 today, but only because I want more from the Government. I think they understand that.

I come back to the “sensitive” point. The truth is that, by definition, all Government Departments must be sensitive. As I said, I spent six years in charge of the DWP, and what I know is that there is arguably no more sensitive Department, because stopping payments for one or two days from the DWP would wreak havoc across the United Kingdom. People would not be able to get money to pay their rent, to buy their food or to live—all those things of vital importance. So a foreign power might be able to use information to target a Department such as the DWP that is not on the list because it may not appear as sensitive as the Ministry of Defence, GCHQ or—God bless us—the Foreign Office, when in reality, it is much more sensitive.

When we try to use a word like “sensitive” to give ourselves a little bit of a break, the problem becomes: who defines sensitive, and how often we will redefine it? I recommend that the Government describe all Departments as sensitive or else get rid of the word. That would put the onus on the Departments to come to the Cabinet Office to say, “We need an exemption for a period” or, “We can’t do this as fast.” The current wording means that they will not have to do that if they are outwith the term “sensitive.”

The reality is that we have had a number of Dispatch Box commitments from a load of Government Ministers about interpreting these things, but they never come to fruition. We were promised guidance in the other place on slavery during the passage of the Nationality and Borders Bill, but that was never put in. We really want the Government to commit at the Dispatch Box to changing what they are doing with “sensitive” when the Bill goes to the other place. “Sensitive” is too weak a position. It lets Departments off the hook and will put all the onus on the Cabinet Office. That must be reversed to ensure that this removal gets done.

[Kirsty Blackman]

I really appreciate the right hon. Member giving way again. Would he consider asking the Government for removal from all sites and, when they produce their timeline, to have them say, “These are our priority sites, which will be done first, but there will be removal from all sites off the back of that”? That would cover removal from all sites but allow the Government to prioritise if they cannot do things overnight.

[Sir Iain Duncan Smith]

I agree that that would be the common-sense way of doing it; I think we are all on the same page on this one.

The thing about our new clause is that, without the word “sensitive”, the position is simple. The new clause uses the same language as the Cabinet Office’s announcement in November, which recommended the removal of Chinese CCTV from sensitive sites. Now, that was the wording. Okay. But when we ask, “What has happened? How many Departments have felt under pressure to do that?”, we start to discover that they are not doing it because it is too difficult, and they want the requirement to go away. My answer is: do not use the word “sensitive” in that respect. It is about national security law, and Government Departments must either be completely defined as “sensitive”—if we want to use that word—or be bound to rid themselves of all companies obligated under the national security law. If they are unable to do that, they must make their case so that we can question that publicly and comment about what is going on.

I conclude on this simple point. The new clause is there to try to make it clear that we face a most significant and dangerous threat from the Chinese Communist party in control of China today. It is everywhere. It is using slave labour to produce polysilicon to collect solar rays. We all beat our chests proudly and proclaim that we are heading towards net zero, but on whose backs is that? It is people working in slave labour conditions to produce these things, people under surveillance, and people taken away on genocides. A Government already doing this internally are now referring it out to us. We must make it clear beyond peradventure that Government Departments must now rid themselves of equipment and never place contracts with other companies on equipment that comes under the rule of the national security law. I am looking for commitments from the Government today that, by the time the Bill gets to the other place, that will finally be resolved. If so, they will have my approval and that of many others in the Chamber.

--- Later in debate ---

[Ms Marie Rimmer (St Helens South and Whiston) (Lab)]

This House, this country and the British public have a long history of supporting human rights. That is why I rise to support amendment 3 in my name. It is signed by Members from across this House.

Up to 100,000 people are brutally butchered for their organs in the People’s Republic of China. It is industrial-scale, state-sponsored organ harvesting, now a nationwide industry worth more than £800 million. The average age of victims is 28. That is not a mere coincidence: 28 is considered by the Chinese Communist party to be the best age for organ harvesting. Hundreds of thousands are kept in internment camps until they are ripe for slaughter. Two or three organs from healthy young adults—28—are worth up to half a million pounds.

The evidence for this crime is growing by the day. The China and Uyghur tribunals, chaired by Sir Geoffrey Nice KC, former lead prosecutor at The Hague, concluded that Falun Gong, a peaceful religious movement, was the primary target. Worse still, the Chinese Communist authorities have now added the Uyghurs in Xinjiang, some Christians and other prisoners of conscience. The tribunals heard reliable evidence of Uyghur Muslims being subjected to comprehensive blood testing and the collection of DNA, which would allow the oppressive regime to create an organ bank, ready for withdrawals on demand.

Forced organ harvesting is an evil practice that this Government should be doing all they can to stop. At present, there are no specific restrictions on suppliers who are involved in forced organ harvesting. In Committee in the Lords, the Minister stated that this Bill was not the appropriate place to address this issue. I could not disagree more. The hard-earned money of our constituents is free to be used propping up this evil atrocity, but that is not right in a country that prides itself on supporting human rights. We all have a duty to our constituents to make sure they are not inadvertently supporting organ harvesting, or any crime indeed. The Minister also said that forced organ harvesting would already be covered on the grounds of professional misconduct. We have heard that before, only for it to turn out, once a Bill becomes law, that it is not covered. On professional misconduct, may I provide just one example? Once when a surgeon was removing organs, he noticed—he went into a cold sweat—that the body he was operating on was in shock: he was still alive. Professional misconduct!

Forced organ harvesting is not an issue to take such a chance on; it needs specific references relating to this crime against humanity. Last month’s G7 heard our Prime Minister state that we need to work together with our allies to “de-risk” ourselves from China. In the United States, Congressman Chris Smith has introduced a Stop Forced Organ Harvesting Bill, which the House of Representatives almost unanimously supported—straight across. This amendment keeps us in line with our allies. Last November, the Prime Minister delivered his big foreign policy speech and said, on our relationship with China, that

“we will make an evolutionary leap in our approach. This means being stronger in defending our values… And it means standing up to our competitors, not with grand rhetoric but with robust pragmatism.”

This amendment is robust pragmatism in practice. It is not grand rhetoric, but action— action to make sure we are strong in defending our values; action to make sure public money is not supporting a crime against humanity; action that this whole House can be proud of, as it always has been on human rights.

I urge Members from across the House to support amendment 3 to keep our hands clean from this evil practice of forced organ harvesting. We must not continue to turn a blind eye to these horrendous breaches of human rights. Governments across the world need to step up on this. We need to be working together, for—believe you me—China would be far more difficult than Russia.

[Kirsty Blackman]

It has been an incredibly wide-ranging debate. Everyone has had the opportunity to speak on their own amendments and I find myself trying to speak on everyone’s amendments. I will do my best but if I miss anyone’s it is not personal—it is just that there are a lot of them. I will try to focus on those we are expected to vote on and some that we feel most passionately about.

I was glad to hear the Minister talking about the positions of the Welsh and Scottish Parliaments and recognising that they are consistent with previous positions on trade deals. We consistently believe there is overreach in extending into devolved areas and that is why legislative consent has been withheld on this occasion. Since Brexit particularly, the UK Parliament has been meddling in devolved areas, or allowing itself the power to do so, far more than previously. That is one of the many unfortunate consequences of “bringing back power”: it is power to the Executive, not so much to the devolved Administrations or the rest of us in Parliament.

This Bill is key because the spending of taxpayers’ money for the benefit of, and on behalf of, taxpayers is a hugely powerful and important method the Government can use to ensure that they serve citizens in the best possible way, and that they support behaviours that they want to support and reject those they want to reject, in much the same way as tax laws and new tax measures can be created and implemented to discourage or encourage certain behaviours. There is an opportunity in the Procurement Bill and public procurement to do more than the Government have done in encouraging behaviour.

A number of amendments from Opposition Front Benchers specifically focus on that. I am pleased to see the tax transparency amendment, new clause 10. It makes sense to ask companies to be open and upfront about how much tax they are paying. It is very difficult to find out some of this information and it makes a huge amount of sense that decisions around public procurement could and should be made on the basis of considering whether companies are actually paying the tax they are or should be liable for here.

Amendment 2 from the Opposition on transparency declarations is also incredibly sensible. A number of Members around the House have mentioned the VIP lanes and the fact that there were fast-track contracts in relation to covid. The amendment strikes the right balance. The Government say we need to have fast-track processes and to be able to award contracts quickly. Amendment 2 would still allow that to happen. It would allow the speed that is necessary in emergencies and crises such as covid. It would allow procurement to happen speedily, but would increase the transparency; whether it is an MP, a peer, a senior civil servant or a Minister, a transparency declaration would be required. We wholeheartedly support that amendment.

I turn to amendment 18 on breaching staff rights. The amendment is once again about trying to encourage the behaviour we want to see. We want to see public money, public spending and public contracts going to companies who treat their workers fairly and do not breach workers’ rights. The amendment sets a high bar on exclusion from public procurement as it is specifically about excluding those companies found guilty by an employment tribunal or a court; it not just on the basis of one whistleblower whose case may not yet have been proven. Once again, we wholeheartedly support that.

Procurement Bill [Lords]

Kirsty Blackman Excerpts

Consideration of Lords message
Wednesday 13th September 2023 Commons Chamber

[Mr Deputy Speaker]

I call the SNP spokesperson.

[Kirsty Blackman (Aberdeen North) (SNP)]

It is a pleasure to be here talking about Lords amendments for the second day in a row. I am glad to see the Procurement Bill making progress and getting towards becoming legislation. As the Minister has commented on a number of occasions, we have not got to the place that he wanted in relation to his conversations with the Scottish Government about the Bill. To be fair, we have also not got to the place we wanted for the Bill. Neither of us is entirely happy with the position that has been reached, but I do appreciate the work that has been done to communicate between the Governments on this. Both tried to find a compromise solution, but it was just impossible on this occasion to come to one that we were both happy with.

Specifically on the Government motion to disagree with Lords amendment 102B on forced organ harvesting, the hon. Member for Llanelli (Dame Nia Griffith) has laid out a number of very important points and I do not want to go over those. The Minister has said there is an absence of evidence that there is any forced organ harvesting in any of the supply chains involved in UK procurement, and I do appreciate that that is case. However, if the Government are able to find out that there is an absence of evidence on this, surely it should not be beyond the means of those procuring or of companies supplying or buying things that are bidding for Government procurement contracts to find out that their supply chains are not involved. If the Government are able to find out these things, surely those companies should.

The point made by the hon. Member for Llanelli about raising awareness is incredibly important. We have worked very hard with companies through the changes in various Acts, including improving companies’ corporate social responsibility and requiring them to make modern slavery statements. We have worked hard to ensure that companies are taking their social responsibilities seriously, and I therefore do not think that this measure is unreasonable. It would not apply to all companies; it applies only to companies bidding for Government contracts. Surely we want companies bidding for Government contracts to ensure that they are as within the law as possible, upholding human rights and demonstrating corporate social responsibility. I do not think it is unreasonable for us to ask those companies to look into their supply chains and consider whether they are financially supporting organisations or companies that are involved in forced organ harvesting. I think it is reasonable for us to ask them to spend a little bit of time doing this if they expect to take on Government contracts.

[Sir Iain Duncan Smith]

Actually, it is simpler even than that. In America, first, it is an offence for a company to have falsified, knowingly or unknowingly, its declarations on supply chains. Secondly, the US Government use companies such as Oritain that use criminal science to test where products were made and whether declarations were correct, and they are therefore able to enforce them. What is happening is that those supply chains are now being rigorously declared by American companies that do not wish to lose Government business. It would not be too much to ask the Government to do spot checks, using such companies that are available to them, and I have recommended it to the Foreign Office, not that that really matters.

[Kirsty Blackman]

I think the right hon. Member makes a reasonable and proportionate suggestion. Although we disagree on lots of things, I am very surprised to find myself agreeing with him for the second time this week on this. I do appreciate his suggestion, and I hope those on his Front Bench are listening to the advice he has given.

I am not going to test the House’s patience by dragging this out. We will be voting with the Labour party against the Government’s motion to disagree, because we believe that the more stringent controls are something it is absolutely reasonable for us to ask of companies. This is not for all companies, as I have said, but just for those that hope to get Government contracts.

[Ms Marie Rimmer (St Helens South and Whiston) (Lab)]

In this week of all weeks, the House needs to show that our democracy is strong and that we are not intimidated by other nations. The Chinese Communist party has shown that it holds our democracy in contempt. Today we have an opportunity to put tough talk into action.

Forced organ harvesting is a systemic trade that is taking place on an industrial scale in China. Up to 100,000 of its citizens are butchered each year for their organs. This is a state-sponsored crime against humanity. The two or three organs harvested from a healthy young adult are worth over £500,000. Evidence of this crime has been extensively investigated by the China and Uyghur tribunals chaired by Sir Geoffrey Nice KC, the former lead prosecutor at The Hague. At the tribunals, evidence was heard of systematic medical testing of thousands of prisoners of conscience, allowing the oppressive regime to create an organ bank.

I have spoken extensively on the horrors that have occurred due to forced organ harvesting in previous stages of the Bill, so now I will address some of the concerns that the Government expressed in the other place when opposing the amendment. The Government claim that forced organ harvesting will be covered by existing provisions of the Bill. Certain conduct will absolutely not be covered by the existing provisions on professional misconduct. Supply chains can be complex, and improper conduct may often be one step too far removed from the crime for professional misconduct elements to be made out. Trying to cover all the different ethical and professional misconduct regulations across a multitude of industries is not practical. Only by having a specific provision for forced organ harvesting will we ensure that British taxpayers’ money is not funding this horrific trade. Otherwise, it will be all too easy for companies to hide behind complex supply chains.

The second issue that the Government raised in the other place was that there was no evidence of UK organisations facilitating forced organ harvesting, yet there are companies with substantial operations in the UK providing immunosuppressive drugs for transplants in China. There is evidence of companies dramatically raising their stake in the Chinese market over the past few years. Sources on the ground claim that CellCept, an immunosuppressive drug, has been used on Chinese prisoners for transplants. There is no evidence that those individuals consented.

That is why a clear and direct provision relating to forced organ harvesting is necessary. UK taxpayers’ money should not inadvertently be supporting this inhumane trade perpetrated by the Chinese Communist party. There must be the ability or at least the option to stop it. The amendment is not asking for draconian action. It simply gives discretionary powers to exclude a supplier from a procurement contract if there is a connection to forced organ harvesting. That would give the Government the ability to act to prevent the complicity of UK taxpayers in forced organ harvesting.

The amendment must be seen in the context of our country’s wider relationship with China. The Government have extensively talked tough about standing up for our values against China. China is a trading partner that we cannot ignore or close ourselves off to, but that does not mean that we should not take such opportunities as this amendment to do right by our values and by humanity. Only a couple of days ago, the Prime Minister told the Chinese Prime Minister that attempts to undermine British democracy are completely unacceptable and that we will defend our democracy and our security. The amendment gives us the opportunity to use our democracy—the democracy that they seem to hold in contempt—to stand up for our values against China.

I urge colleagues across the House to take this opportunity to send a clear message to the Chinese Communist party, in this week of all weeks, that this House will stand up for our values by keeping Lords amendment 102B in the Bill.