Amendment 12

High Speed Rail (West Midlands–Crewe) Bill - Report (2nd Day) – in the House of Lords at 5:45 pm on 8th December 2020.

Alert me about debates like this

Lord Berkeley:

Moved by Lord Berkeley

12: After Clause 58, insert the following new Clause—“Non-disclosure agreements(1) The nominated undertaker, or any subcontractors thereof, must not enter into any non-disclosure agreement with any party in connection with the scheduled works unless the assessor of non-disclosure agreements related to the scheduled works (“the assessor”) has certified that it is in the public interest.(2) The Comptroller and Auditor General must appoint a person to be the assessor.(3) The assessor must be— (a) independent, and(b) a current or former high court judge, higher judge or Queen’s Counsel.(4) In this section, “independent” means independent of—(a) Government,(b) HS2 Ltd, and(c) persons contracted or subcontracted to carry out the scheduled works.(5) The assessor must undertake his or her work with a presumption in favour of transparency and public accountability in matters connected to the scheduled works.(6) The assessor must review any non-disclosure agreement between the nominated undertaker, or any subcontractors thereof, and any party in connection with the scheduled works and in place before this section comes into force to certify whether it is or is not in the public interest.(7) The assessor may not determine that a non-disclosure agreement is in the public interest for the purposes of subsection (1) or (6) except for the reason that it is justified because of exceptional commercial confidentiality.(8) If the assessor certifies under subsection (6) that a non-disclosure agreement is not in the public interest that non-disclosure agreement immediately ceases to have effect.(9) In this section, a “non-disclosure agreement” means any duty of confidentiality or other restriction on disclosure (however imposed).”Member’s explanatory statementThis amendment seeks to require HS2 to subject all proposed NDAs to independent scrutiny.

Photo of Lord Berkeley Lord Berkeley Labour

My Lords, I am grateful for the opportunity to debate non-disclosure agreements again. I have tabled the same amendment that we debated in Committee to get a little more information from the Minister concerning some of her answers. I am grateful to her for the meetings that we have had and the answers that she has given. We have to remember that an NDA goes much wider than a particular project —HS2 or any railway.

It is worth pointing out that this amendment, proposing an independent assessor, is something which would be voluntary. She said that NDAs can be entered into voluntarily, but I understand from the way that HS2 has developed the process that if you want information, you have to sign an NDA. It is voluntary if you want the information. In Committee, the noble Baroness, Lady Randerson, pointed out that some local authorities like signing NDAs with other organisations, so that a small group or maybe even one person on the council can keep all the information to themselves and not inform their colleagues.

Another part of the Minister’s answer in Committee was that:

“If an independent assessor were appointed to scrutinise such agreements”—

NDAs—

“they would be breaching the privacy of those agreements.”

That is a circular argument. I am sure there would be a way of resolving it if both parties wanted to. My final comment is to question what she stated later:

“I am confident that the use of NDAs by HS2 is in the public interest.”—[Official Report, 12/11/20; col. GC 528.]

I agree that some certainly are in the public interest. We would not want to have every detail of every contractor whose contracts are being negotiated, or for them to be unable to have an NDA. Clearly that is confidential, but there are over 300 NDAs. HS2 Ltd is also quoted as signing an NDA with its own training body. If that cannot be kept confidential to the extent wanted, it is a bit sad.

I have taken a lot of useful evidence from a report by the former Construction Minister Nick Raynsford, who reviewed the process of NDAs. He concluded that they “undermine public trust” in major infrastructure projects and he criticised the

“widespread use of confidentiality agreements by the HS2 company” and stated that they had a

“corrosive sense on the part of the public, that planning is no longer protecting their interests.”

This issue cannot be resolved today, and I have no intention of dividing the House. Personally, I think that having an independent assessor to review all the HS2 NDAs, and, with the presumption of transparency and public accountability, to check whether they are in the public interest, would be a useful thing. I suspect that it would cost very little and would delay things very little once it got over the initial stages. I end by asking the Minister: what do all these companies have to hide? I emphasise that I do not suggest that there should be no NDAs but that there should be some means of limiting them to those which are for good commercial reasons rather than possibly to avoid embarrassment. I beg to move.

Photo of Baroness Kramer Baroness Kramer Liberal Democrat Lords Spokesperson (Treasury and Economy)

My Lords, I very much support the noble Lord, Lord Berkeley, in coming back on Report to the issue of confidentiality agreements, more commonly referred to as NDAs. Thanks to more recent news articles, we now know that HS2 has required 339 bodies to sign confidentiality agreements, and that is required because otherwise they get no access to the information necessary to discuss HS2-related issues. I therefore hope that HS2 is now beginning to take on board the concerns of the public and many Members of Parliament, local authorities and civic groups, that confidentiality agreements are hindering the transparency which should underpin such an important project. I say that as a strong supporter of the project; I always have considered HS2 vital to economic growth across the UK.

Of course there are issues of commercial sensitivity which need to be covered by confidentiality agreements, and this amendment both accepts that and provides for it. However, the presumption should always be for transparency, with confidentiality on an exception basis. I have some hope that the Minister, Andrew Stephenson, recognises the problem. Gagging of any kind cuts Ministers off from the information they need. The late and slow leak of information, especially related to cost, land purchases and compensation, has harmed HS2 and generated suspicion. We need to be very open in explaining that, in any project on this scale, projecting costs and timetables is very difficult and will always change. I personally believe that the biggest problem we have with HS2 is understating its benefits, since it will serve us for generations, and most of the longer-term benefits and regeneration benefits away from the stations are not included in the official analysis.

I thank the noble Baroness, Lady Vere, for organising a Zoom meeting between interested Lords, herself, Andrew Stephenson, who is the relevant Minister, DfT staff and HS2 to discuss the issue. I and others have received a follow-up letter. The letter does not exactly allay concerns, but it makes it clear that the risk assurance committee of HS2 will now review the matter and will, I hope, recognise the damage to trust and reputation that has been and is being caused. I have to say that HS2 is not alone. Organisations public and private across the globe are having to revise their notions of appropriate confidentiality. No entity any more can rest in the comfort zone of just releasing good news.

As we made clear in Committee, this amendment does not deal with the settlement agreements usually used to manage whistleblowers. The idea I have heard that settlement agreements do not act as gags is nonsense. Why does the Minister think that Doug Thornton—the best known whistleblower on HS2, who was HS2’s director of land and property until he was dismissed when he raised concerns internally—did not sign one? He could have saved himself years of agony if he had.

HS2 has provided me and others with copies of its whistleblowing policy. On paper it looks fine, but pretty much every financial institution, private sector company, hospital, care home, prison, social services department or bank that has been caught in appalling behaviour has an exemplary tick-box whistleblowing system. The system just does not work in practice. That is why the whole issue of whistleblowing needs an overhaul. Following the Zoom call I talked about earlier, I realised that some parties do not understand why the noble Lord, Lord Berkeley, and I have spoken directly to only a few whistleblowers. It is because we are not prescribed persons. I suspect that the noble Baroness, Lady Vere, is not a prescribed person—the Minister, Andrew Stephenson MP, is a prescribed person, but it is a very narrow group. Any whistleblower speaking to me or to the noble Lord, Lord Berkeley, is not protected by PIDA, the Public Interest Disclosure Act. I stop any whistleblower from speaking to me who is not going public anyway, and I am sure that the noble Lord, Lord Berkley, does the same. It is much too risky for them.

I hope very much that when the audit and risk assurance committee of HS2 looks at confidentiality agreements, it will also do a deep dive into its internal “Speak Out” whistleblowing system, including talking to professional bodies such as the Institution of Civil Engineers and the Royal Institution of Chartered Surveyors from which members often seek advice when they run into an issue like this. I also hope that it talks to civil society groups such as WhistleblowersUK and Protect. Those of us who are concerned with these issues are now relying on the Government to make sure that the flaws in the use of both confidentiality and settlement agreements at HS2 are sorted. As the noble Lord, Lord Berkeley, said, the issue goes far wider than HS2 and far wider than rail, but we will be watching and listening because issues that are concealed never actually go away and, when they emerge, they come back to bite a project.

Photo of Lord Rooker Lord Rooker Labour

My Lords, like the noble Lord, Lord Carrington, I thought at one point that I would scratch myself from the remaining amendments. However, as I noticed my name was still there today, I thought I would do noble Lords the courtesy of not pulling out, although I do not have a lot to say on the detail. I am not familiar with what happened on this in Committee, and my noble friend Lord Berkeley said that it was the same amendment. However, subsection (6) of the proposed new clause looks to me as though it is retrospective. Are the promoters of this amendment seriously contemplating a change in the law to retro- spectively have all the current arrangements that, one assumes, have been mutually entered into reviewed by this independent assessor? Have I got that right? I do not quite see where the benefit of that would come from.

I fully accept, of course, that the noble Baroness, Lady Kramer, is in support of HS2, but there are people who could look at this amendment and say, to be honest, that it comes from a desire for disclosure of sensitive information to damage the project. I know she does not have views in that respect and I can remember her support when she was a Minister, but the fact is that this amendment could turn into that problem. I am not familiar with all the details, and I was surprised at the number of non-disclosure agreements; there have been over 300. On the other hand, when one looks at what is involved here—at the scale of the project, the number of contractors, the number of people involved in it or affected by it—that turns out, on reflection, to be quite a small number.

Of course, if it is true that this helps to avoid placing homes and businesses in unnecessary blight, as HS2 claims, that is a good reason for such agreements and for protecting the personal information of the people involved. I am not in favour of curtailing the activities of whistleblowers, but I fully take the point that Members of the House of Lords are in a different position from Members of the House of Commons—rightly so, frankly.

I will leave it there, but I would be interested to hear what the Minister has to say about this amendment, which is ill thought-out and does not have my support.

Photo of Baroness Randerson Baroness Randerson Liberal Democrat Lords Spokesperson (Transport) 6:00 pm, 8th December 2020

My Lords, I want to speak to the principle behind the amendment rather than its exact terminology.

There was a time when NDAs were exceptional, but well over 300 of them for HS2 show that we have moved a long way from that in terms of commercial procedure. Why do we have FoI questions and FoI legislation? In many cases, processes such as NDAs were being used to hide inconvenient pieces of information. Information is power; it always has been and always will be.

My noble friend Lady Kramer excellently outlined the complex issues associated with this, particularly on proscribed people. That picks up on the Minister’s response when we discussed in Committee the issue of the number of people coming forward as whistleblowers.

However, the issue goes far wider than HS2 and will, I am sure, be aired in this House on other occasions. The Grenfell inquiry is totally separate, but that public inquiry has revealed how important the detail of commercial arrangements is and what motivation there may be for such hiding that detail. There is commercial realism, but nevertheless, there is a balance to be struck. When individuals sign these agreements they often do so without fully appreciating the complexity of what they are signing up to.

Photo of Lord Tunnicliffe Lord Tunnicliffe Opposition Deputy Chief Whip (Lords), Shadow Spokesperson (Defence), Shadow Spokesperson (Treasury), Shadow Minister (Transport)

My Lords, I too attended the Zoom session on this issue. I thank the Minister and those present for organising it.

I can see that NDAs were necessary in the consultation stage, but there is a question mark, which is difficult to debate, over whether they were necessary in such volume. More importantly, was there possible misuse to suppress whistleblowers? We were given some assurances about that, which, once again, I found at least partially convincing. I hope that the Minister will repeat those assurances for the record.

There is a more general point as to whether NDAs are overly used in public procurement. I believe that there may be a case for more transparency and that the Government should consider launching a general investigation into transparency in public procurement. However, I agree with the noble Lord, Lord Berkeley, that that is a bigger issue and it would be inappropriate to pursue it further at this point.

Photo of Baroness Vere of Norbiton Baroness Vere of Norbiton Parliamentary Under-Secretary (Department for Transport)

My Lords, I recognise that transparency is a key issue in relation to HS2. It enables oversight by Ministers and Parliament, and provides accountability to the public on how we are spending taxpayers’ money and on how the project is being delivered. This amendment is trying to get to the heart of this issue of transparency. However, I do not recognise that it is of any aid in this endeavour. I am not sure that I can add much more to what I already said in Committee or in subsequent meetings, but I will happily go round the track again to put the Government’s position on record.

HS2 enters into two types of agreements—confidentiality agreements and settlement agreements. Confidentiality agreements enable the exchange of information between HS2 and other individuals or organisations, including local councils and businesses. With such an agreement in place, HS2 Ltd can have open and frank conversations with the other party about a range of plans and proposals, some of which may not come off. These could include early considerations of different design options that, if made public, could cause unnecessary alarm and blight local properties.

Confidentiality agreements also enable those other parties to share information with HS2 Ltd without it being made public. These agreements are being made not because HS2 Ltd wants them, but because the other party does. For example, a small local business could share its accounts to determine the compensation available to it. This could not happen if confidentiality was not ensured.

As a number of noble Lords have noted, in the history of HS2 since 2011, 339 confidentiality agreements have been signed. Not all will have been required by HS2; some will have been required by the other contracting party. I know that some feel this is too many. I have to disagree. Thousands of landowners, businesses and councils are involved with the project, so I do not think this is disproportionate. I have the feeling that the noble Lord, Lord Rooker, does not think it is disproportionate either.

Confidentiality agreements are not entered into with staff members at HS2 Ltd. There are confidentiality obligations within staff members’ employment contracts, but this is standard business practice, consistent with that in other public sector organisations.

Settlement agreements are a completely separate form of legal undertaking. They are entirely voluntary and include confidentiality provisions in line with the guidance set out by the Cabinet Office. These agreements can be signed only when an individual has taken independent legal counsel and fully understands their rights and obligations. Settlement agreements are entered into with a small minority of staff who are leaving HS2 to document mutual actions that avoid tribunal claims, or to keep private the sums involved in certain redundancies.

Neither confidentiality agreements nor settlement agreements can be used to gag those who wish to raise concerns about HS2. Whistleblowers are protected by law and none of HS2 Ltd’s business practices contravenes or frustrates this. HS2 Ltd has a whistleblowing procedure called Speak Out, as the noble Baroness, Lady Kramer, noted. This provides a route for staff, contractors and members of the public to raise concerns. The operator of this line is independent of HS2. Queries or concerns raised through this process are investigated by HS2 Ltd’s counterfraud and ethics team, and any necessary action is taken. Where necessary, suitable independent third parties will be brought in to investigate the issues raised. Updates are provided regularly to senior HS2 leaders, including non-executive directors, who act within the seven principles of public life: selflessness, integrity, objectivity, accountability, openness, honesty and leadership.

A number of noble Lords have noted that there may be one or two deficiencies in the amendment. It states that an independent third party should have control over how HS2 Ltd uses what it refers to as non-disclosure agreements—NDAs—which are those two previous agreements I spoke about. We do not feel that this is appropriate, necessary or, indeed, helpful. This issue was considered by the Secretary of State for Transport during the passage of this Bill in the other place, including whether it might be pertinent to appoint further observers or implement new complaints processes. The conclusion was that the use of these standard agreements should not be constrained by the imposition of a third party. There is simply no evidence that such an imposition is necessary or in the public interest.

If a party wishes to enter into a confidential agreement with HS2 Ltd, they should be free to do so. Indeed, they should also have the option for the very existence of that agreement to be private. I tried to follow the contribution of the noble Lord, Lord Berkeley, earlier, and I thank him for it, but I was a little confused. On the one hand, he said that he wanted an assessor for the public interest and to look at all the agreements that have happened in the past—which, as the noble Lord, Lord Rooker, pointed out, is slightly problematic—but on the other hand he noted that the use of a third party should be voluntary between the two parties. I could not figure out how that would work or, certainly, what problem it would solve.

I do not believe that the amendment has merit but I recognise that transparency is important. HS2 Ltd already publishes the number of settlement agreements it has signed in its annual report. In addition, HS2 Ltd will begin reporting the cumulative number of confidentiality agreements it has signed in that same report. I believe that HS2 Ltd is using these agreements in the public interest, and I therefore hope that the noble Lord will feel able to withdraw his amendment.

Photo of Lord Berkeley Lord Berkeley Labour

My Lords, I am very grateful to all noble Lords who have spoken in this short debate, particularly the Minister, for the meetings, the letter and other comments she has made. I shall respond very briefly to some of the comments made by noble Lords.

I say to my noble friend Lord Rooker that this amendment started in the House of Commons probably two years ago. As the Minister said, it was rejected at that stage, but there seemed to be quite a lot of support in some parts of the House, which I thought was interesting.

The noble Baroness, Lady Randerson, mentioned balance. I think that goes to the heart of what I believe is necessary. Of course, there have to be NDAs. My point about NDAs being voluntary was that companies or individuals did not have to sign an NDA if they did not want to—that was the voluntary bit. On the question of balance, we have talked about more than 300 NDAs that have been listed, but I suspect there are very many more among landowners that we have not discussed. Of course, it is perfectly reasonable that they should sign NDAs as part of their negotiations.

This is an issue that will go on. It is helpful that the risk assurance committee set up in HS2 will look at some of these things. I am not actually suggesting that we go back to square one and look at every NDA that HS2 has signed, but one could say that one would look only at new ones signed after the Bill gets Royal Assent. However, this has been a very useful debate and I am particularly grateful to the noble Baroness, Lady Kramer, for her support. I beg leave to withdraw the amendment.

Amendment 12 withdrawn.