Schedule 7 - Discretionary exclusion grounds

Procurement Bill [Lords] – in the House of Commons at 1:22 pm on 13 September 2023.

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Photo of Alex Burghart Alex Burghart The Parliamentary Secretary, Cabinet Office 1:22, 13 September 2023

I beg to move, That this House disagrees with Lords amendment 102B.

It is an honour once again to open the debate on this important Bill, which I am delighted to say is now so close to receiving Royal Assent. The Bill is a key Brexit benefit, delivering a simpler, more transparent procurement framework that will benefit small businesses and meet the needs of UK suppliers and contracting authorities.

Colleagues in the Chamber will also, I hope, remember that, when the Bill was last debated in this House, we offered significant new measures to protect the UK’s public procurement supply chain from threats to national security. Those included new grounds to add suppliers to the debarment list for particular types of contracts that will allow us to ban risky suppliers from bidding for those contracts; the creation of a new national security unit for procurement that will provide dedicated resources in the Cabinet Office to scrutinise national security risks in procurement; and a commitment to publish a timetable for removal of surveillance equipment supplied by companies subject to the national intelligence law of China from Government Department sensitive sites. Earlier this week in the other place, we went further: my noble friend Baroness Neville-Rolfe provided an official clarification of the definition of sensitive sites and committed to an annual written report detailing progress. I am sure this House will welcome our additional agreements and agree that they demonstrate the Government’s unwavering dedication to tackle these issues seriously.

I will deal today with one amendment that the other place sent back to this House, on the subject of organ harvesting. Let me begin by saying that I think all sides of this House are in complete agreement that organ harvesting is a dreadful practice that has no place in our supply chains. The question before us today is whether Lords amendment 102B is the right or necessary one to make, given other provisions in the Bill. In Committee in this House, the Government removed a discretionary exclusion ground for suppliers engaged in forced organ harvesting. The other place has subsequently proposed an amendment in lieu, with some modifications of the original amendment. This new version of the Lords amendment does not cover unethical activities relating to human tissue; it does, however, still cover forced organ harvesting and dealing in devices, equipment or services relating to forced organ harvesting.

I urge this House to reject this amendment for a number of reasons. First, as I have said previously, I do not believe that the amendment is necessary as, crucially, organ harvesting is already dealt with under existing provisions in the Procurement Bill. Under the Bill, any suppliers failing to adhere to existing ethical or professional standards that apply in their industry, including those relating to the removal, storage and use of human tissue, could be excluded on the grounds of professional misconduct. It is worth adding at this point that, as far as His Majesty’s Government are aware, no supplier in the UK public sector has been involved in forced organ harvesting. This means that it is very unlikely that any of our public money is being spent on that terrible practice. As noted above, however, if such a situation did arise, the exclusion for professional misconduct would apply.

Secondly, the amendment has significant consequences for contracting authorities. It extends to suppliers

“dealing in any device or equipment or services relating to forced organ harvesting.”

That is an incredibly broad provision that would be extremely difficult for contracting authorities and suppliers to verify in respect of all supply chains and customer bases. If there were any doubt about whether that discretionary ground applied, local authorities or NHS trusts would need to undertake significant due diligence to satisfy themselves that the entire supply chain and the end user of all goods provided by suppliers—potentially including oxygen masks, IT equipment and so on—were not used in these terrible practices. It would mean that a small business tendering for Government contracts would need to understand where their customers might be using or selling their products, to enable them to genuinely and legitimately confirm that they were not subject to this ground.

More generally, the amendment would create excessive bureaucracy, requiring each and every supplier bidding across the thousands of contracts awarded by contracting authorities each year to declare that they are not guilty of forced organ harvesting, when we know that there is no evidence of that horrific practice occurring in UK public sector supply chains. We believe that such a burden would be unjustified when the Bill already covers this issue.

Thirdly, the Government are already taking steps to tackle the issue of organ harvesting. We have been explicit that the overseas organ trade, or complicity with it, will not be tolerated. For example, by virtue of the Health and Care Act 2022, it is already an offence to travel outside of the UK to purchase an organ. In addition, the Government continue to monitor and review evidence relating to reports of forced organ harvesting in China, and maintain a dialogue with leading non-governmental organisations and international partners on this very important issue. This Bill creates new rules for suppliers and contracting authorities that will hopefully stay on the statute book for many decades to come.

Photo of Iain Duncan Smith Iain Duncan Smith Conservative, Chingford and Woodford Green

I apologise for being slightly delayed, Mr Deputy Speaker: I did not see this debate pop up on the annunciator. I rushed to ask a question about this topic. Forgive me.

On the issue of organ harvesting, I understand the difficulties with this particular amendment, so while I am instinctively supportive of what the Lords are trying to do, I understand the Government’s arguments. However, there is a way to tighten this up. Organ harvesting is taking place in China—it is a regular occurrence—but I would not rely too much on declarations from supply chains. We have already unearthed the problem that supply chains are under no obligation to do the due diligence that would enable them to know whether companies, or the people they are trading with, have any involvement with organ harvesting. Tightening that up would be great.

On that basis, does my hon. Friend accept that we now have to make sure that China is on the enhanced tier of the foreign agents registration scheme? That would really put power in the Government’s hands to make sure that supply chains were properly checked. Will he say to our right hon. Friend the Prime Minister and to all those concerned that it is time we did so? China is a genuine threat to us, industrially as well as politically.

Photo of Alex Burghart Alex Burghart The Parliamentary Secretary, Cabinet Office

My right hon. Friend is an expert on these matters. I thank him for his intervention—I have to say that I was quite surprised that he was not sitting behind me when I stood up in the first place, but I am delighted to see him in the Chamber now. I am sure that my right hon. Friend the Prime Minister will have heard his remarks and will consider them carefully. This is obviously a procurement Bill, and we are doing our best to create the post-Brexit framework that will give us an enhanced ability to improve all aspects of procurement in our society.

In Committee and on Report in this House, we thought it was necessary to tighten up national security considerations to make sure that foreign hostile actors could not get involved in public procurement. We have—as my right hon. Friend knows, because he gave us good advice—taken steps to make sure that we remove technologies that come from those hostile actors from sensitive sites. On the broader point he made at the end of his comments, that is beyond my pay grade, but I have no doubt that those above my pay grade have heard what he has said.

This is an excellent Bill. It is a tribute to the officials who have worked on it and to my predecessors who worked on it in the Cabinet Office. I therefore urge the House to reject the amendment made by the other House and support the Government’s motion.

Photo of Nia Griffith Nia Griffith Shadow Minister (International Trade), Shadow Minister (Cabinet Office) 1:30, 13 September 2023

Coming in as I do at the tail end of the passage of this Bill, I would like to take this opportunity to thank my predecessor, my hon. Friend Florence Eshalomi, for all her work on the Bill, and to say that I look forward to working constructively with the Minister.

Turning to the Government motion to disagree with Lords amendment 102B, we can all agree that forced organ harvesting—a practice involving the removal of organs from a living prisoner that results in their death or near death—is abhorrent. The debate on this Government motion is about whether there should be a specific clause in the Bill to make it clear that we do not want to see a single penny of taxpayers’ money go to any company linked to this practice, or whether that is adequately covered by the concept of professional misconduct that can be used against serious unethical behaviour.

We heard powerful speeches in the other place from Lord Alton of Liverpool and Lord Hunt of Kings Heath, who made compelling arguments for the inclusion in the Bill of the measure against forced organ harvesting and provided evidence of the practice taking place in China. I thank my hon. Friends the Members for Vauxhall and for St Helens South and Whiston (Ms Rimmer) for all they have done to highlight the issue.

Furthermore, the Office of the United Nations High Commissioner for Human Rights has stated that serious human rights violations have been committed in the Xinjiang Uyghur autonomous region:

“Allegations of…torture…including forced medical treatment…are credible”.

This is a very current issue, and we would like to see specific mention of it in the Bill.

First, including a specific reference to forced organ harvesting in the Bill will highlight the issue and send a message to potential supply companies to make specific checks that they are not inadvertently in any way associated with the abhorrent business of forced organ harvesting. Secondly, although the Minister has said that forced organ harvesting is already covered by the ground of professional misconduct, which includes serious unethical behaviour, specific mention of it in the Bill will highlight to those undertaking procurement to be particularly vigilant in respect of any potential association of supply companies with this appalling practice. Thirdly, making specific mention of forced organ harvesting helps to send a clear message to China and anywhere else it may occur that the practice will not be tolerated and that there will be economic consequences.

The Minister has objected to having specific mention of forced organ harvesting because it means additional paperwork, and we all want to cut down the amount of paperwork that companies have to deal with. However, I would suggest in this case that a small amount of additional work is well worth it if it sends a strong message of condemnation, strengthens awareness of the issue and hastens the end of this abhorrent practice. The Opposition support the position taken by the other place of including the measure on forced organ harvesting in the Bill, and will therefore vote against the Government’s motion to disagree with the Lords amendment.

Photo of Kirsty Blackman Kirsty Blackman Shadow SNP Spokesperson (Cabinet Office)

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, 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.

Photo of Iain Duncan Smith Iain Duncan Smith Conservative, Chingford and Woodford Green

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.

Photo of Kirsty Blackman Kirsty Blackman Shadow SNP Spokesperson (Cabinet Office)

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.

Photo of Marie Rimmer Marie Rimmer Labour, St Helens South and Whiston

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.

Photo of Alex Burghart Alex Burghart The Parliamentary Secretary, Cabinet Office

With the leave of the House, I thank all Members who have made points in this important debate. Let me remind colleagues that the exclusion grounds in the Bill have been selected in the areas of greatest risk to public procurement. I return to the point I made at the start: there is fortunately no single known instance of such practice in the UK public procurement chain. We do not see it as a great risk to public procurement. I welcome Dame Nia Griffith to her place and her new role, and I look forward to debating with her and working with her in the weeks and months ahead.

The hon. Lady mentioned the World Health Organisation. The Government regularly discuss allegations of organ harvesting with the WHO, and also with other international partners and human rights NGOs. Ministers in the Foreign, Commonwealth and Development Office wrote to the WHO in Geneva to encourage it to give careful consideration to the findings of the China tribunal on organ harvesting in March 2020. I very much do not want the House to get the impression that we do not take this seriously. It is a feature of our diplomacy and our work, where we are co-operating with like-minded nations that abhor this practice.

A number of Members raised points about professional misconduct. The existing provisions relating to professional misconduct apply where suppliers fail to adhere to ethical or professional standards that apply in their industry or where the supplier is engaged in professional misconduct that brings into question their integrity. I assure the House that practices involving the removal, storage and use of human tissue that are either illegal or contrary to ethical professional standards will be covered. It is therefore unnecessary to single out that particular practice in the Bill.

Kirsty Blackman spoke on a number of issues. It remains a sadness for the Government that the Scottish Government chose not to be part of this Bill, leaving Scotland out of this new procurement regime and depriving small and medium-sized enterprises in Scotland of the advantages that will come. They will also sit outside the new security measures that we have introduced, but that is a matter for the Scottish Government, and I hope that Scottish voters are listening and that as this Bill goes through they realise the opportunities that their Government have chosen to deprive them of.

The hon. Lady raised an issue about the scope of Government contracts. We are dealing with many contracts from many different layers throughout public procurement, which could be such things as grass-cutting services in a local authority. With the amendment, we would be asking small and medium-sized enterprises to conduct a level of diligence that goes way beyond their needs and expertise. That is a disproportionate burden to place on them. If we put too many burdens on small and medium-sized enterprises, we may discourage those businesses from applying for public contracts, which is one of the precise and specific aims of the Bill. We have £300 billion-worth of public procurement every year. I want to see small and medium-sized enterprises in England, Wales and Northern Ireland getting a bigger bite of that pie, as I am sure do you, Mr Deputy Speaker. I understand that SNP Members will vote against this Bill that they are not part of, which I am afraid speaks to their peculiar constitutional mindset.

To the point made by my right hon. Friend Sir Iain Duncan Smith, I remind him that if anybody falsifies their procurement declaration, that would be grounds for exclusion under the Bill. We therefore believe that that point is covered off.

I commend Ms Rimmer again on everything she has done to shine a light on these terrible crimes. She is always at the forefront of these debates and ensures that the plight of people in China is heard in the House. To her points, I say again that if we were to specify this one crime, of which we have found no evidence in UK supply chains, we would also be inviting a long list covering every conceivable misconduct in a vain attempt to provide certainty on specific issues. That would create a large bureaucratic burden, which is precisely what we are trying to get away from in the Bill. However, I reassure her again that having looked at this over and over again, we believe that the existing professional misconduct exclusion grounds will cover that and help contracting authorities to do their bit to ensure that we do not have suppliers in our supply chains who are involved in those abhorrent practices.

I hope that we can move this vital Bill a step closer to Royal Assent. The House has made its view clear once before, and I ask that it makes its view clear a second time.

Question put, That the House disagrees with Lords amendment 102B.

The House proceeded to a Division.

Photo of Nigel Evans Nigel Evans Deputy Speaker (Second Deputy Chairman of Ways and Means), Chair, Restoration and Renewal Programme Board Committee, Chair, Restoration and Renewal Programme Board Committee 1:45, 13 September 2023

Order. A deferred Division was going on in the No Lobby. That will be paused while this Division takes place and will resume after it is over, with injury time of about 10 minutes so that those who have not voted in the deferred Division will get an opportunity to do so.

Division number 326 Procurement Bill [Lords]: Motion to disagree with Lords Amendment 102B

Aye: 273 MPs

No: 193 MPs

Aye: A-Z by last name

Tellers

No: A-Z by last name

Tellers

The House having divided: Ayes 274, Noes 194.

Question accordingly agreed to.

Lords amendment 102B disagreed to.

Ordered, That a Committee be appointed to draw up Reasons to be assigned to the Lords for disagreeing with their amendment 102B;

That Alex Burghart, Julie Marson, James Daly, Peter Gibson, Nia Griffith, Chris Elmore and Kirsty Blackman be members of the Committee;

That Alex Burghart be the Chair of the Committee;

That three be the quorum of the Committee.

That the Committee do withdraw immediately.—(Scott Mann.)

Committee to withdraw immediately; reasons to be reported and communicated to the Lords.