Moved by Baroness Evans of Bowes Park
3: Clause 2, page 2, line 17, leave out from “Authority” to end of line 21 and insert “, when considering the award of a contract in respect of the carrying out of the Parliamentary building works, to have regard to—(i) the prospective contractor’s policy relating to corporate social responsibility, and(ii) the prospective contractor’s policies and procedures relating to employment (including in relation to the blacklisting of employees);”
My Lords, I shall speak to the two amendment in my name and that in the name of the noble Lord, Lord Blunkett. Noble Lords will be aware that an amendment was tabled by Chris Matheson on Report in the other place imposing a duty on the sponsor body to require the delivery authority, when allocating contracts for construction and related work, to have regard to the company’s policies on corporate social responsibility, including those relating to the blacklisting of employees or potential employees from employment. This was opposed by the Government due to existing legislation on blacklisting, and because we considered it more appropriate for these matters to form part of the programme delivery agreement between the sponsor body and delivery authority. The amendment was passed but had defects—namely, that policies on blacklisting are employment policies, not, strictly speaking, matters of corporate social responsibility. We are therefore tabling this amendment in order for the spirit of the original amendment to remain in the Bill while ensuring that it is appropriately drafted.
This amendment will ensure that there is a duty on the sponsor body to require the delivery authority, when considering the award of a contract in respect of the carrying out of the parliamentary building works, to have regard to the prospective contractor’s policy relating to corporate social responsibility and its policies and procedures relating to employment, including in relation to the blacklisting of employees. We have worked with colleagues in the other place on this amendment and they are content with this change of wording.
The second amendment in my name relates to the reporting of contracts and fulfils a government commitment made in the other place. On Report in the Commons, MPs debated an amendment requiring the sponsor body,
“to undertake, and publish, an annual audit of the companies that have been awarded contracts for the Parliamentary building works, with a view to establishing their size and geographical location”, which was tabled by Meg Hillier. It was clear that such an amendment commanded support on all sides, and the Government agreed to bring an amendment on the reporting of the awarding of contracts to your Lordships’ House. Schedule 1 of the Bill already requires that the sponsor body must prepare and publish a report once a year on the carrying out and progress of the parliamentary building works. The amendment requires that that report includes information about persons to whom contracts for carrying out the works have been awarded, particularly their size and the areas in which they operate. We believe that the amendment fulfils the spirit of the amendment debated in the other place while being appropriately drafted and included at the proper place in the Bill. Again, in proposing this amendment we have worked with colleagues in the other place who are supportive of the wording. I hope noble Lords will support both amendments in my name.
Finally, I thank the noble Lord, Lord Blunkett, for tabling his amendment on ensuring that R&R provides opportunities for businesses across the UK. The Government have always sought to encourage the shadow sponsor body to give thought to how the delivery authority will engage with SMEs and businesses across the UK in restoring the Palace of Westminster. That is already happening on other projects on the parliamentary estate, such as the work on the restoration of Elizabeth Tower. The shadow sponsor body is committed to creating economic opportunities across the UK, and, once it is established in statute, we expect to continue this commitment. Once the R&R programme is under way, parliamentary committees will no doubt want to scrutinise the work of the sponsor body and the delivery authority, including what opportunities have been created across the regions.
Nevertheless, an amendment tabled by Neil Gray was passed on Report in the other place requiring the sponsor body, in exercising its functions, to have regard to the need to ensure that economic benefits of the parliamentary building works are delivered across the nations and regions of the UK in terms of contracts for works, and in any other way that the sponsor body considers appropriate. This is a parliamentary project, and we accepted the will of the other place to include an amendment in the Bill on that principle. However, we identified some concerns with the amendment relating to procurement law. In particular, when developing its procurement strategy and assessing bids, it would not be lawful for the delivery authority to factor in the geographical location of companies, which could expose it to legal challenge. The Government therefore committed to support the drafting and tabling of this alternative amendment, which addresses those concerns.
This amendment places in the Bill the provision that the sponsor body, in exercising its functions, must have regard to the need to ensure that opportunities to secure economic and other benefits of the parliamentary building works are available in all areas of the UK. We believe that the amendment retains the spirit of the amendment passed in the other place while adhering to public procurement law, so I hope noble Lords will support it. I beg to move.
My Lords, I shall speak to Amendment 9. I am grateful for the understanding and commitments made by the Leader of the House, and that we have consensus. In the light of that and the fact that we have taken a very long time on the first clause of the Bill, and in order not to hold people up, I shall be incredibly brief.
I think there has been a real collaborative effort to put together the jigsaw that is before us in relation to this proposition. As the noble Baroness, Lady Byford —to whom I am grateful for her support on this and other aspects of the Bill—knows, we considered this at some length in the Joint Committee scrutinising the Bill. There is unanimity because we all want this to be seen as a national project benefiting the nation as a whole. I shall come to other arguments later on other amendments, but on this one we have anonymity—I am sorry, I mean unanimity, although we might have anonymity as well if we carry on too late tonight; no one will know what we have debated.
My own area benefited originally from the stone for this building. A lot of the stone came from South Yorkshire and adjoining areas. Big Ben at the moment is being constructed with a mechanism from the north, from the city of Sheffield, and I think we can make this a real economic win-win. We need to because very big infrastructure projects, including the one that I am associated with in relation to skills and employment for the Heathrow expansion, need to be seen to reach out for gross domestic product, for GVA and for productivity. We have a terrible gap on all three of those in our country, comparing London and the south-east with the rest of the UK. If we can make a small contribution with this substantial investment of public money, we will all benefit from it.
My Lords, I will just say a few words. I thank the noble Lord, Lord Blunkett, for his comments. The Joint Committee went into quite a bit of discussion about the fact that this should be a UK project, not a London and the south-east project. I am grateful to my noble friend the Leader of the House for responding to the way in which the debates went in the Commons and for coming up with the proposed amendments, because that is a great benefit to us. Corporate and social responsibility is extremely important in this day and age. It is so easy to just say, “Well, yes”, but not actually do it, so spelling this out in the Bill will make a huge difference.
The other thing that we talked about in the Joint Committee was the opportunities this would give for young apprentices and those who are retraining, who are necessarily young people, to learn skills and take part in a project of this size and complexity. I am very grateful that we will be able to encourage small and medium-sized enterprises to be involved in this project. I will not repeat everything that the noble Lord, Lord Blunkett, has said, but I am very happy to support this amendment and I thank the Leader of the House for bringing forward the amendments that she has spoken to already.
My Lords, I was slightly surprised to hear the noble Baroness’s remark that this is a UK project, not a London and south-east one. The overwhelming majority of the work and the employees will be located in London and the south-east. Saying that that is not the case does not make it not the case. It is the case. This is an issue we will address later. By virtue of the fact that Parliament is located in Westminster, the temporary premises will be in Westminster, and all the refurbishment works will take place in Westminster, it is a London and south-east project. We might as well admit that completely frankly. Some weasel words about it being open and promoting the interests and knowledge of the rest of the United Kingdom do not, I am afraid, amount to anything at all when the overwhelming focus of Parliament before, during and after this work will be on London and the south-east.
I appreciate the noble Lord’s comments. It would be a great mistake to say that people from elsewhere who have the skills and opportunities to come here are not able to use them. Is the noble Lord really saying that people who live in London and the Greater London area are the only people who will be involved in this project? If he is, that is a very sad state.
I certainly was not saying that; I was simply stating the obvious. The work will be overwhelmingly located in London and the south-east because that is where Parliament is currently located.
That is indeed where the work will be done, but it does not have to be done solely by people living in London and the south-east. I suspect there will be quite a few people coming from abroad to work on this project as well. If that is so, I do not see why we cannot have people who live further from London than the 25-mile radius around it.
If I can interject in this discussion, there is a real danger that the noble Lord, Lord Adonis, is right, but it does not have to be like that. That is why I am very supportive of Amendments 9 and 27, which are exceedingly important. When the Minister winds up, I would appreciate it if she could comment on Amendment 27 and the annual report to Parliament on “the areas in which” those who have contracts operate.
It seems that the decisions will have been made by then. They are very dependent on the nature of the procurement exercise, which is why Amendment 9 in the names of the noble Lord, Lord Blunkett, and the noble Baroness, Lady Byford, is terribly important. It seeks to insert provisions that,
“opportunities to secure economic or other benefits of the Parliamentary building works are available in all areas of the United Kingdom”, which implies that the start of the procurement process will be geared to deliver that objective. The Government and those responsible for making the decisions about procurement need to plan this very carefully. It will not be enough for the procurement system simply to take national contractors from a national list, with companies that say they can employ people from all parts of the country. In reality, what will almost certainly happen is that the noble Lord, Lord Adonis, will be proved right because the labour force will come from a narrower part of the UK—London and the south-east. I want to avoid that.
It is important that procurement reaches SMEs, not just big national companies. It needs to get specialist professions such as specialist architects, and get to companies based purely in the regions of England, or based only in Scotland, Northern Ireland or Wales. It will not be enough for only national contractors to get the lion’s share of the business. I hope the Government will plan to achieve all this in a proactive way. I fully understand the legal position in relation to procurement law, but this is surely about enabling proper competition, not simply relying on a system which does not promote genuine competition. To do that requires competition to be enabled rather than minimised.
My Lords, in following on from my noble friend I welcome these amendments. I was very pleased to hear the noble Lord, Lord Blunkett, and the noble Baroness, Lady Byford, refer to skills and apprenticeships. I return to a subject which I raised at Second Reading. The noble Baroness, Lady Stowell, and I served on the Joint Committee on the Palace of Westminster and will readily remember the evidence we received regarding the importance of skills. However, we are talking about skills in the heritage sector, where there may be a shortage at the moment, and there could well be lead times in training people to deploy those skills when it comes to R&R.
One of the recommendations which the Joint Committee made in paragraph 306 of its report is that,
“market engagement should begin early, and be facilitated by the early establishment of a shadow Sponsor Board and shadow Delivery Authority”.
I understand that we do not have a shadow delivery authority at the moment, but it would be helpful if, in responding to the debate—if not tonight then in writing—the Minister could tell us what steps have already been taken to pursue that market engagement and identify where there might be bottlenecks, and see what could be actively done at the moment to try to ensure that there will be an adequate supply of skilled tradespeople when the time comes to undertake this important work.
My Lords, sometimes competitive tender can breed low bidding rates, and contractors make up their profits through claims. Is the idea to generate negotiated unit prices or have competitive bidding?
My Lords, before the Minister answers, I am a great believer in trying to get as many SMEs to bid as possible, but one has to think about the risks they will be required to take, as well as the conditions of contract and the penalties if it is late. You can imagine one or two big contractors being given the overall responsibility to do this, because they are the only people who can manage the risk. There will be a rush to get this done. Wherever the supply of timber, stone, other materials and expertise comes from, we will have to work very hard if we want to get real SMEs to do this, as so many noble Lords expect. It will not happen unless we work very positively towards it.
My Lords, I am pleased that this group of amendments is being debated here today to deal with the responsibilities the sponsor body will have, in particular those relating to the contracts to be awarded. I thank the Minister for the Government’s Amendment 3 on the social responsibilities of the sponsor body, which fulfils their promise in the Commons to address the concern raised by my honourable friend Chris Matheson: that contracts have regard to the prospective contractor’s policy on both CSR and employment policies and procedures. The company’s wider attitude to social responsibility has to be a key consideration when awarding contracts.
On employment practices, we welcome the specific reference to companies that have undertaken blacklisting activities which will lead to their exclusion from consideration. This shameful practice has previously seen businesses compile files on thousands of workers, recording details of their political and trade union activities to prevent them gaining employment in their respective trade. Sadly, there is evidence that blacklisting has remained rife in recent years, and this is an important step not least because many construction staff currently working on building sites are employed by businesses which have previously been convicted of such unlawful behaviour. In such a prestigious project as R&R, it is important that Parliament makes a stand and warns businesses that if they neglect their social responsibilities, are not up to scratch on their employment practices or engage in illegal blacklisting, they will not play a role in restoration and renewal projects and will not be awarded contracts.
I fully support my noble friend Lord Blunkett’s Amendment 9. He is right to underline that the economic benefits of the work have to be available in all areas of the UK. This was again a key theme from noble Lords at Second Reading. We must make it clear that this is a project for the whole country and that all the rewards, including for businesses, are felt in all areas. I particularly endorse the comments of the noble Lord, Lord Shipley, and the noble and learned Lord, Lord Wallace, on skills and apprenticeships, which was also a familiar theme at Second Reading.
In summary, government Amendments 26, 27 and 30, placing a duty on the sponsor body to include information on contractors’ size and areas of operation in its annual report, are welcome and will help to provide the transparency and accountability needed. Finally, on employment-related issues and the importance of ensuring full staff consultation on the R&R programme and project, at Second Reading my noble friend Lady Smith asked the noble Earl to confirm that there would be full engagement with staff and their representative unions. I would be grateful if the Minister confirmed this and reassured the House that the Government fully recognise its importance.
I am very grateful to all noble Lords who have contributed to this short debate. I am also grateful for the support for these amendments from across the House. A number of noble Lords raised the issue of procurement and contracts. This is the very reason why we are setting up the independent sponsor body and the independent delivery authority, which have the experts and expertise to ensure that SMEs around the country can take advantage of this. We believe that setting up these bodies in a timely manner is exactly the best way to ensure that the benefits of this project are felt around the country, notwithstanding the concerns of the noble Lord, Lord Adonis. We very much look forward to ensuring this project has the buy-in of the regions and workers across the United Kingdom because it will be a fantastic project. I hope we will also see regeneration of skills apprenticeships in key areas. I am very grateful to noble Lords for their support for these amendments.
Amendment 3 agreed.