Schedule 10 - Single source defence contracts

Procurement Bill [Lords] – in the House of Commons at 4:45 pm on 13 June 2023.

Alert me about debates like this

Amendment made: 59, page 121, line 27, leave out “subsection (4) or (5)” and insert “this section”.—(Alex Burghart.)

This amendment would allow single source contract regulations to make provision as to whether a contract is or is not an amendment of an existing contract for any purpose under section 14 of the Defence Reform Act 2014, not simply for the purposes of subsections (4) and (5).

Third Reading

Photo of Jeremy Quin Jeremy Quin The Paymaster General and Minister for the Cabinet Office 5:37, 13 June 2023

I beg to move, That the Bill be now read the Third time.

I stand here today proud of the progress we have made to deliver an important manifesto commitment. The Procurement Bill constitutes a vital piece of legislation following our exit from the European Union, which allows us to set our own rules that will work best for the UK. I am delighted to say that we will sweep away bureaucratic regulations and broaden opportunity to small businesses right across the country.

One in every £3 of public money, some £300 billion a year, is spent on public procurement. For too long, modern and innovative approaches to public procurement have been bogged down in bureaucracy. We are changing that. The Bill simplifies our public procurement rules, cutting down the 350 different procurement regulations to create a single rulebook. This will create a more efficient, innovative and friendly procurement system, increasing value for money and opening up public contracts to small businesses, in turn supporting the Prime Minister’s commitment to grow the economy.

Photo of Jeremy Quin Jeremy Quin The Paymaster General and Minister for the Cabinet Office

I keep promising my colleagues that I will be brief, but I will always give way to the hon. Lady.

Photo of Debbie Abrahams Debbie Abrahams Labour, Oldham East and Saddleworth

The Minister is being very generous with his time. He will not be surprised by my question. I was a little disappointed that my new clause 12, on introducing and mandating project bank accounts, was disregarded. I mentioned the estimate that 6,000 small construction firms will go into insolvency this year. What is the Department’s analysis of how that might be prevented by project bank accounts?

Photo of Jeremy Quin Jeremy Quin The Paymaster General and Minister for the Cabinet Office

I am sure I could try to produce a one-hour solution, or I could be more direct with the hon. Lady. I know she has raised this issue on numerous occasions, but she and I have not spoken about it one-on-one. If she wishes to speak to me about it, we could have a meeting, if that would help. I might learn something from it or I might be able to inform the hon. Lady, but if she wishes to do that, I will make certain that we have that opportunity.

Photo of Jeremy Quin Jeremy Quin The Paymaster General and Minister for the Cabinet Office

I will also have a meeting with my hon. Friend, if he wishes.

Photo of Bill Wiggin Bill Wiggin Chair, Committee of Selection, Chair, Committee of Selection, Chair, Committee of Selection

Construction businesses are terribly important. If the Government could do something about the ban on building, for example because of pollution in the River Wye, then those construction businesses would find new opportunities and would flourish.

Photo of Jeremy Quin Jeremy Quin The Paymaster General and Minister for the Cabinet Office

My hon. Friend is vociferous on the issue of the River Wye. He never misses an opportunity and has proved his dexterousness yet again, in doing so in this debate.

We, on the Government Benches, are proud to be the party of small business. I am delighted that, as part of this Bill, authorities will now have to have regard to small and medium-sized enterprises and the barriers that they face.

Finally, the Bill will put in place a new exclusions framework that will help to make it easier to reject bids from suppliers whose performance on previous contracts has been unacceptable, or who have been involved in serious wrongdoing, such as fraud, collusion or modern slavery. Crucially, on Report, we introduced a package of vital amendments that will protect our national security and ensure that public contracts do not go to suppliers who pose a risk to our country.

We will also create the national security unit for procurement, which will proactively investigate suppliers for national security threats, and we will publish, within six months of the passing of the Bill, a timeline for the removal of all the surveillance equipment provided by suppliers subject to the national intelligence law of China from sensitive Government sites, protecting places that are most vulnerable to sinister interference and espionage. Together, these changes constitute robust protections against the ever increasing national security threats.

I would like to take this opportunity to thank all hon. Members across the House for the quality of the debates and the scrutiny provided throughout the passage of the Bill. I am indebted to my hon. Friends and to those across the House for the helpful engagement and the comments they have made, which have undoubtedly refined this crucial piece of legislation.

I am particularly grateful to my hon. Friend Alex Burghart for his excellent work on Committee and on Report in this House, and to Baroness Neville-Rolfe for her tireless work in the other place. The Bill has had a long progression, so I would also like to thank our predecessors, Lord Agnew and my right hon. Friend Sir Jacob Rees-Mogg, for their work on the Bill in its earlier stages.

I thank the officials who have worked on this Bill, particularly the Bill manager, Katrina Gajewska, Sam Rowbury, Ed Green, Janet Lewis and other officials who worked on this legislation, as well as the staff in the private offices of all the Ministers in the Cabinet Office, for their support and help throughout.

When he entered office, the Prime Minister said that he would deliver on the manifesto on which we were elected. I am proud today to be doing just that, and I wholeheartedly commend the Bill to the House.

Photo of Angela Rayner Angela Rayner Deputy Leader of the Official Opposition, Deputy Leader of the Labour Party, Shadow Secretary of State for the Future of Work, Shadow Minister for the Cabinet Office and Chancellor of the Duchy of Lancaster 5:43, 13 June 2023

I start where Jeremy Quin left off, by saying thank you to all right hon. and hon. Members who have spoken today, in particular my hon. Friend Florence Eshalomi for her contributions throughout the stages of the Bill. I also thank the brilliant Clerks and the House staff, and everyone who has been involved and on hand to support every step of the Bill.

It has been a long and complex process, and I know the Cabinet Office has been very busy in recent weeks, so I welcome the opportunity to debate something of more substance today. Unfortunately, the substance of the Bill, while necessary, is a little bit of tinkering around the edges of a broken system. I understand the need for a new Procurement Bill, to consolidate the patchwork of former EU rules and to bring the spaghetti of procurement regulations into one place, but it seems this distracted Government are more concerned with the civil war than writing good legislation.

Britain faces huge economic challenges—challenges made worse by years of economic incompetence, a disastrous kamikaze Budget and a Government on the side of vested interests. Wages have flatlined, prosperity has turned to stagnation and Britain has the highest forecast inflation in the G7. Procurement is one of the biggest and most effective tools available to Government to drive up standards across the economy and create world-class, affordable and effective public services.

As the Minister said in his response, we are talking about £300 billion of public money a year, a third of public spending and more than the NHS budget. What we should be debating this evening is a bold new set of rules to direct investment to the places that need it most. We should be discussing how we can clear the pipes and flush out the system with transparency after years of cronyism and waste. We should be debating legislation that pumps money back into the pockets of local communities, creates decent jobs and skills in our towns and cities, and hands wealth back to the people who built Britain.

Instead, what we have before us today is a damp squib. This Bill fails to close the loopholes that saw obscene waste of taxpayers’ money through the VIP lane, it fails to mandate social value to secure investment in good British business, and it fails to create robust protections for workers. Labour recognises the need for a new procurement Bill, and for that reason we will not oppose this one, but surely we can do better than this.

This evening the Government chose to vote against a Labour amendment that would have blocked VIP lanes, for the third time. They have had three opportunities to show that they have learnt from the waste and the cronyism that we saw during the pandemic, and on all three occasions they have refused. In fact, loopholes included in this Bill will make it easier for Ministers to bypass existing transparency rules. The Tory VIP lane is at the heart of why we need a procurement Bill. It exposed the true weaknesses in the system and showed us why we desperately need a more agile and transparent procurement system.

Photo of Jeremy Quin Jeremy Quin The Paymaster General and Minister for the Cabinet Office

It is a bit late in our proceedings, but I really would encourage the right hon. Lady to read the Bill, even at this late stage.

Photo of Angela Rayner Angela Rayner Deputy Leader of the Official Opposition, Deputy Leader of the Labour Party, Shadow Secretary of State for the Future of Work, Shadow Minister for the Cabinet Office and Chancellor of the Duchy of Lancaster

I think the Minister knows full well that I have read the Bill, and it is a real shame that in the conversations that my hon. Friend the Member for Vauxhall and I have had with him and his team, they have refused to help stop this loophole. The Tory cronyism on the VIP lane is still there in this legislation. The VIP lane enabled a shameful waste of taxpayers’ money and profiteering by unfit and unqualified providers, and as a result the Government have written off £10 billion of public funds spent on personal protective equipment that was unusable, overpriced or undelivered.

While I welcome the moves in the Bill to issue “transparency notices” before awarding a contract, these are just baby steps; they barely scratch the surface. We must see end-to-end transparency. And it is not just me who thinks that. The amendment that the Government voted down today is a proposal by the National Audit Office, a totally independent body calling for the Government to end their murky practices that saw taxpayers’ money wasted at eye-watering rates.

This Bill also gave us an opportunity to reimagine the way we spend public money in order to promote decent work across the economy, to reward businesses that treat their workers right, and to use procurement to raise the floor on working conditions for all. Any suppliers given taxpayers’ money should provide their workers with decent pay, respect, dignity and fairness, as well as access to a trade union. Economies across the world expect that from their employers. In France, Germany and the Netherlands, for example, more collective bargaining, stronger workers’ rights and a fair share of wealth lead to higher growth, productivity and staff retention. President Biden’s Government direct investment to companies with a track record of treating their workers with respect, so why can’t we?

But over the last 13 years, the Tories have failed to use the levers of government to drive up standards for working people. In fact, things have got worse. I am disappointed but not surprised that the Government today voted down our amendment, which would have held suppliers to account when they repeatedly abuse workers’ rights. Taxpayers do not expect their money to be handed to suppliers with a track record like that. They want to see their money going to suppliers who pay their staff properly and who uphold fair conditions, job security and union access. That is the bare minimum.

I also want to take this moment to welcome the Government’s last-minute amendments on national security. I could not help but recognise some of those amendments. I would also like to pay tribute to Alicia Kearns, whom I worked closely with to highlight the need for change in managing the risk in procurement. I welcome the Minister’s recognition that the current system leaves the door open for foreign threats to enter our supply chain and for taxpayers’ money to be spent with no oversight on whether they are properly vetted. That said, I hope the Minister can tell us what criteria his Government will use to identify suppliers who pose a risk to national security, and I hope he will consider the inclusion of cyber-security criteria in that assessment.

In closing, I would like to once again thank all hon. and right hon. Members for their contributions today. While procurement might seem a dry topic, it is absolutely central to the way that our country works, and when Ministers abuse the procurement system, it is taxpayers who suffer. As we saw during the pandemic, the VIP lane for PPE contracts was a scandal of epic proportions that allowed the shameful waste of taxpayers’ money and inexcusable profiteering, yet instead of learning the lessons of this failure, this evening Ministers voted for a third time to protect the loophole that allows the VIP lanes to exist. The Government have a duty to learn the lessons from the pandemic and, quite frankly, Ministers have abdicated that duty here today. While the Tories are too distracted to govern, Labour in power would flush cronyism out of the system and protect taxpayers, to ensure that every pound is spent in the national interest.

Question put and agreed to.

Bill accordingly read the Third time and passed, with amendments.