Amendment 72

Procurement Bill [HL] - Report (2nd Day) – in the House of Lords at 4:20 pm on 30th November 2022.

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Lord Scriven:

Moved by Lord Scriven

72: Clause 40, page 26, line 22, at end insert—“(3A) Provision under subsection (1) must not confer any preferential treatment on suppliers connected to or recommended by members of the House of Commons or members of the House of Lords.”Member’s explanatory statementThis amendment is intended to prevent the future use of “VIP lanes” for public contracts.

Photo of Lord Scriven Lord Scriven Liberal Democrat

My Lords, I will also support Amendment 113 in this group in the name of my noble friend Lord Fox, which I have put my name to.

Imagine this House’s response to a public sector procurement Bill or statutory instrument that came before your Lordships’ House with the following provisions. The Government could, without reference to anyone, set up a new procurement channel that was mainly for people who knew Members of the Houses of Parliament, and particularly government Ministers. The companies offering the items would not have to be trading, or could just have a few weeks’ incorporation, and would still be included in the special channel. Normal scrutiny and due diligence would not be required of such contacts. These contacts would have preferential treatment over existing and trusted suppliers. They would be 10 times more likely to get a contract, many running into multi-millions of pounds, than other companies not in that special channel, many of which would have had a trading history of years of supplying relevant, safe and reliable goods and services. In addition, those on the special channel would be able to make three times the normal profit margin before the usual and rigorous value-for-money checks were carried out.

Quite rightly, we would be outraged and would see that as unethical and an unacceptable way to spend billions of pounds of taxpayers’ money. I hope that a fatal Motion would be put so that such provisions were stopped in their tracks. However, that is exactly what happened with the VIP channel set up for PPE in 2020. The findings of the National Audit Office and other reports that have been investigating the VIP channel paint a picture that is not acceptable and should never be part of an ethical public sector procurement process. The National Audit Office reported that companies referred to the VIP channel lane by Ministers, senior MPs and Peers had a success rate for gaining PPE contracts 10 times greater than other companies, many of which had a history of supplying reliable PPE in the other procurement routes. Parliamentary Questions show that 41 out of 111 contracts awarded through the high-priority lane by May 2020 had not gone through the formal eight-stage due diligence process.

If speed is required in public sector procurement, the normal rules of probity and ethical standards cannot and must not be ditched. We know that it leads to some with access to government Ministers’ personal WhatsApp contacts, telephone numbers or email addresses ending up making many billions of pounds for nothing more than having those contacts, and the door is open to the public sector market with the ability to supply goods and services. It is reported that some individuals have made over £29 million in personal gain from a company that was not even incorporated when they were lobbying government Ministers to get in the VIP lane, and indeed, when they eventually landed a multi-million-pound contract, they provided some goods and services that were not fit for purpose and could have put our NHS staff at risk had they been used.

Amendment 72 prevents another VIP lane from being set up that creates special and lucrative routes to market for those with privileged access to Members of the Houses of Parliament, and particularly to those in the Government. It will still allow the Government to procure in an emergency but would ensure that one route to getting to market exists—one doorway, with the same due diligence and rules applied regardless of who made the recommendation of the individual or company, rather than a fast-track and light-touch scheme for those who have a contact who is a senior politician or government Minister.

Without this simple amendment, there is nothing in the Bill to prevent another unethical procurement scandal that could set up a VIP lane and become another get-rich-quick scheme for some who have personal access to government Ministers and senior politicians. As the National Audit Office said, contracts awarded by the department through the parallel channel made up only 3.6% of all contracts awarded but accounted for 52% of expected contract value.

With this in mind, I ask the Minister: what in this Bill would prevent another VIP channel from being set up that is predominantly populated on contracts from senior politicians and government Ministers? I look forward, as I am sure many noble Lords do, to hearing what the Minister has to say to reassure the House that the Bill has provisions that will prevent the kind of scandal that the country saw with the VIP lane set up. It was mainly populated by those who had contact with senior politicians and government Ministers, who made millions of pounds in personal gain for those contracts while going through a regime of much lighter touch than that for those not in the VIP lane. If the Minister cannot convince the House that provisions in this Bill will prevent this from happening again, I am minded to test the opinion of the House.

As a matter of objective, Clause 11 is meant to ensure that, in carrying out public sector procurement, bodies are

“acting, and being seen to act, with integrity”.

Amendment 72 will do exactly that, and ensure probity and integrity, so that never again will taxpayers see their money used in such a cavalier and unethical way as they did with the PPE VIP channel. I beg to move.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Liberal Democrat Lords Spokesperson (Cabinet Office)

My Lords, I have tabled Amendment 97 for two reasons. First, it is to ask for an assurance from the Minister that the procurement review unit will be set up, and secondly, it is to put down a strong marker on the reasons that the Minister’s department presented for attempting to exclude my amendment as constitutionally improper.

The Minister will recall that, in the responses to the Green Paper, there was a warm and widespread welcome to the proposal that an autonomous unit should be set up within the Cabinet Office to oversee contracting authority compliance with the new procurement rules and so help to realise the benefits intended from the transformation of public procurement legislation. In turn, the Government’s response gave a clear commitment to set up what it now labelled the procurement review unit. This is not in the Bill, however. Therefore, will the Minister Pepper v Hart that commitment, so to speak, by stating in the House that this remains the Government’s clear intention, and that during the passage of the Bill an effective PRU will be established, along the lines indicated by the Government’s response to the consultation?

On the second issue, the slide presentation to the briefing given to Peers on the PRU between Committee and Report, which I was unfortunately unable to attend, stated that the principle of indivisibility of the Crown means providing statutory powers to Ministers whereby they can direct action to be taken by central government departments—in other words, another part of the Crown—and is not usually provided for in legislation. To do so also risks fettering the non-statutory powers Ministers already hold.

I had not previously heard the principle of the indivisibility of the Crown, nor that this principle inhibited Parliament from including specific instructions to Ministers in legislation. It is, after all, an assertion of prerogative—executive sovereignty against parliamentary sovereignty—although oddly qualified by including the adjective “usually” in its attempted exclusion of legislation.

Under Boris Johnson as Prime Minister, we suffered a number of attempts to assert executive authority against parliamentary sovereignty, but I and others had hoped that, under Prime Minister Sunak, we might return to a better observance of our constitution’s constraints and conventions. I therefore consulted a number of experts and the Lords Library. I was struck by the puzzlement on the face of a senior clerk when I asked how familiar he was with this principle—a puzzlement that increased when he was unable to find any reference to it in the volume on public law that he then consulted. The noble Lord, Lord Lisvane, told me that this is a doctrine “of some antiquity” and that he had not previously come across any occasion when it had been cited as a reason for resisting an amendment. He referred me to an article in the Cambridge Law Journal of 2018 which firmly states:

“The … doctrine … must be abandoned—the Crown is plural and divisible”.

The Library pointed me to a government paper, presented to a Commons Select Committee in 2003, which stated:

“It is long established law that Parliament can override and displace the prerogative by statute.”

The Minister’s written reply to my questioning of the relevance of this principle nevertheless stated that

“Ministers hold non-statutory powers of authority derived from common ways of working and according to the hierarchy of government … The award of powers in legislation for oversight purposes could challenge that common authority.”

I will not detain the House with further references to treatment of this issue in Supreme Court and Law Lords cases, beyond adding that the noble and learned Lords, Lord Mance and Lord Scott, once disagreed in a case on whether this principle was still applicable, and that the court’s conclusions in Miller 1 in 2017 seemed to be definitive. It therefore seems appropriate for me to bring this to the attention of the House’s Constitution Committee for further consideration.

I remind the Minister that page 48 of the Conservative manifesto in the last election pledged to set up a constitution, democracy and rights commission and specified:

“After Brexit we also need to look at the broader aspects of our constitution: the relationship between the Government, Parliament and the courts and

“the functioning of the Royal Prerogative”.

That is only one of the many pledges that have now been broken.

I do not expect the Minister to accept my dismissal of the relevance of this arcane, antiquated constitutional doctrine, but I hope that the House and outside constitutional experts, on further consideration, will unite in rejecting this attempt to limit parliamentary sovereignty over the Executive.

Photo of Lord Aberdare Lord Aberdare Crossbench 4:30 pm, 30th November 2022

My Lords, I shall speak briefly on Amendment 97, which the noble Lord, Lord Wallace of Saltaire, has just introduced, concerning the procurement review unit. I am grateful to the Minister for organising a very helpful meeting recently outlining the Government’s thinking on the role of the PRU. This is not envisaged as a statutory body, so does not currently feature in the Bill, but it will have some important functions relating to SME engagement in public procurement, such as fostering much-needed culture change in the construction sector and promoting SME access through means such as training, transparency and, above all, better payment practices for public contracts.

These include making 30-day payment terms apply throughout the public sector supply chain, with the 30-day period measured from when an invoice is first received rather than when it is deemed valid. Contracting authorities will be required to publish their payment performance every six months. The payment performance review scheme, PPRS, run by the Cabinet Office, which has been underresourced in the past, will be given extra capacity, staffing and weight. The current system, based on reporting the volume of invoices paid within 30 days, can allow late payment of large sums to be drowned out by a high volume of lower-value instant payments. To give a truer picture, I hope the Minister might consider requiring the value of payments made within 30 days to be reported, as well as the volume.

The PRU will also carry out proactive spot checks to assess compliance with payment terms throughout the supply chain. The Minister might explore the possibility of using technology to track payment times, which might ultimately lead to more real-time transparency of payment performance. I understand that many construction firms already use technology to produce their payment reports.

These are all very welcome aspects of the Government’s plans for the procurement review unit. I hope the Minister will put them formally on record in her response, thereby averting, or at least reducing, the need for Amendment 97 to include the PRU in the Bill.

I end by congratulating the Minister on her piece in the Times on Monday confirming her commitment to making it easier for small firms to compete for and win public sector contracts. I hope the Times readership will actively support us in holding her and the Government to that commitment.

Photo of Lord Alton of Liverpool Lord Alton of Liverpool Crossbench

My Lords, I can be brief. I thoroughly support everything that the noble Lord, Lord Scriven, said to us in moving his amendment. I do not need to repeat arguments that I placed before your Lordships earlier this week on Monday, in December last year, and then again in January and March this year, and even in the Question that we had just before our proceedings on PPE, which continues to be stored in the People’s Republic of China at a cost to us of some £770,000 every day.

I am extremely grateful that the Minister responded so quickly after our debate on Monday with a letter that I received this morning. For the purposes of the record, I will read out one paragraph. She wrote:

“You made a number of points about PPE contracts which have been found to have underperformed. I also understand you have asked written questions … on these matters. I appreciate your desire for more information on this and I will be writing to the Secretary of State highlighting both your views and those expressed by others in the House.”

That is a very welcome response and I am grateful to the noble Baroness for going to that trouble.

I have sent a copy of our Hansard from Monday to my noble and learned friend Lady Hallett, who is chairing the public inquiry to which the Minister referred during our debate on Monday. The Minister said that lessons would be learned, and that the Covid inquiry would

“cover procurement and the distribution of key equipment and supplies, including PPE”.—[Official Report, 28/11/22; col. 1593.]

I am grateful to her for that.

I have only one other point. On Monday, I raised the issue of repayments. That is not something that can wait for the several years it might take the public inquiry to make its recommendations. I refer the Minister to my two questions about defaulting PPE suppliers and the actions that will be taken through the faulty contract PPE recovery unit. I also asked about individual settlements, which, as she said, are protected by commercial secrecy. I asked

“how will Parliament and the public be notified about money returned to public funds by defaulting PPE suppliers through the actions of the faulty contract PPE recovery unit?”—[Official Report, 28/11/22; col. 1581.]

How will that work? Can the Minister illuminate us a little further? If she cannot, would she be prepared to put pen to paper in a follow-up letter to me as a result of today’s debate? I am grateful to the noble Lord, Lord Scriven, for giving us the opportunity to explore this issue further.

Photo of Baroness Bennett of Manor Castle Baroness Bennett of Manor Castle Green

My Lords, it is a great pleasure to follow the noble Lord, Lord Alton, and indeed the noble Lord, Lord Aberdare, who raised such important points about payment terms for small and medium-sized enterprises. That is a long- term issue that has not been addressed. There is a real opportunity here, as the noble Lord outlined.

I will speak briefly to Amendment 72, in the names of the noble Lord, Lord Scriven, who so comprehensively introduced it, and the noble Baroness, Lady Brinton. I confess that I attached my name to it at the absolute last minute because I expected a rush of Members from around your Lordships’ House doing so. I thought it was important to demonstrate that there was a breadth of support.

I should perhaps warn the Minister that that support appeared to come from the Government Front Bench earlier, when the noble Lord, Lord Markham, responding to the PPE Urgent Question repeat from the other place, said that the earlier procurement

“should not have been on the basis of referrals”.

It would appear that this amendment delivers exactly what the noble Lord said should happen in future. That is a very interesting reflection of what is happening in your Lordships’ House.

Briefly, we know that the Government would like to treat all this as ancient history, but I and, I am sure, other Members of your Lordships’ House have seen that for members of the public this is still a source of very deep anger and concern. This morning I was on Radio 5 Live’s politicians’ panel and a caller raised this issue, albeit in the context of Matt Hancock’s appearance on “I’m a Celebrity”.

There were a couple of powerful letters in the Guardian this week. I do not know either of the correspondents. Dr Tristram Wyatt noted that in 1919, after the First World War, the President of the Board of Trade introduced a profiteering Bill to ensure that profiteering by suppliers would never happen again. In the same paper Dr Jeremy Oliver questioned why all these PPE contracts were not let on a full cost plus margin basis. This is of great concern to the public. I am hearing from all quarters again and again that people are simply saying, “Never again.” What happened in the Covid-19 pandemic with the VIP channel must not be allowed to happen again. This clear, simple amendment delivers just that.

I will also briefly express concern about government Amendment 116. We had an extensive discussion about this in Committee, which I will not revisit, but this appears to be a significant weakening of the protection of public concern about potential conflicts of interest. I look forward to the Minister’s explanation of that.

Photo of Lord Lee of Trafford Lord Lee of Trafford Liberal Democrat

My Lords, I rise briefly to strongly support Amendment 72. There is absolutely no need for a VIP channel or similar. Surely, it just encouraged opportunistic entrepreneurs—to be charitable —rather than genuine experienced manufacturers. Will the Government publish a list of all MPs and Peers who used the VIP channel and on whose behalf they were lobbied?

Photo of Lord Moylan Lord Moylan Chair, Built Environment Committee, Chair, Built Environment Committee

My Lords, I rise to strike a jarring note, although I do not intend to wander into the potentially treacherous waters of the divisibility or otherwise of the Crown. I think the Government have rather got it right on these amendments and noble Lords are barking up the wrong tree.

As I said in Committee and at Second Reading, noble Lords in some cases appeared to have misconceived this Bill throughout as if it were an enforcement measure against criminal or quasi-criminal activity, but it is not and it has never been intended as such; nor does it have that effect.

We come to an amendment that says explicitly that no preferential treatment may be conferred on

“suppliers connected to or recommended by members of the House of Commons or members of the House of Lords”.

To the extent that that is already a criminal act, and corruption is involved, criminal proceedings would be the right thing to undertake and not proceedings under this Bill, which is essentially administrative in character and carries no punitive clauses. The remedy for breaches under this Bill in most cases is for a supplier to sue for damages and the fact that they have been treated badly or unfairly. This is not a Bill intended to combat corruption.

If noble Lords feel it is required to explicitly exclude Members of this House and of another place, why is it not required to explicitly exclude giving preferential treatment to your first cousins, or your family in a broader sense, or your best friends, or people you were at school with, or all sorts of other persons who perhaps should be listed on the face of the Bill?

I briefly come to the procurement review unit—

Photo of Baroness Brinton Baroness Brinton Liberal Democrat Lords Spokesperson (Health)

Does the noble Lord not agree that Clause 40 allows the Government to set up such a preferential channel?

Photo of Lord Moylan Lord Moylan Chair, Built Environment Committee, Chair, Built Environment Committee

I think it has been agreed by all Members of the House that in certain emergency circumstances the Government need to be able to take action outside the normal procurement channels. If Clause 40 has that effect, that is fine, but Clause 40 also allows channels to be set up that include someone with whom you were at school, with whom you are best friends, who was your best man, who attended your wedding or whatever. How would we know? These things cannot be set out comprehensively in the Bill. This is a classic case of shutting a stable door after the horse has bolted.

There seems to be a notion that the procurement review unit needs to be on a statutory basis because it will have some enforcement capacity. I doubt the need for a procurement review unit at all, but if the Government choose—among their many, multifarious activities—to ask a number of civil servants to monitor the way in which the Bill, if it becomes an Act, is being implemented, that is a perfectly legitimate thing for the Government to do. But it is a decision by the Government to ask their own civil servants to do something that appears relevant and important to them at the time, and the circumstances may change.

For example, the noble Lord, Lord Aberdare, mentioned that the unit could monitor late payment. That would be a perfectly worthy thing to do, because late payment of invoices is currently an important matter. It might not be an important matter in future. It would be very strange to have this set in statute in this way. This is just a civil servant department; it does not require this statutory basis, because it will not have the enforcement powers that noble Lords seem to suggest.

Similarly, on Amendment 113, the desire to spell out an ever-longer list of persons covered by conflicts of interest has the same tendency, as I mentioned in relation to Amendment 72, to exclude—and, so to speak, exonerate—those not specified in the list. It is a potentially endless list by the time you have thought of everybody you might want to include.

I have spent more than 30 years in public life in one capacity or another; I do not boast about it, because many noble Lords have spent as long or longer. Throughout all that, I have understood that conflicts of interest will arise in the course of one’s activities. The key question is how one manages them in a way that requires sensitivity, flexibility and responsibility in each case. If I had intended to enter public life and conduct myself dishonestly—I assure noble Lords that I have endeavoured not to do so—I would have managed to achieve a degree of dishonest advantage, whether or not this had been spelled out in this essentially procedural Bill. If I had done so in a way that was clearly a breach of the criminal law, I hope I would have been prosecuted under the criminal law, under a wide range of offences available to prosecutors relating to corruption in public life. I would not look to this Bill, which would not be used in my case. I have made this point on several occasions: I think noble Lords are misconceiving the purpose and nature of the Bill as, in essence, a large enforcement framework.

I will make one final point before I sit down. A sense of proportionality is required as well. One has to remember that the Bill is intended to apply not only to multi-billion contracts let by central government departments but to modest contracts let by local authorities and other, smaller public bodies that are caught within its net. One has to bear that degree of proportionality in mind at every stage.

I very much hope that these amendments are not pressed to a Division and that my noble friend will stand firm and not allow the Bill to be further distorted in this way.

Photo of Lord Fox Lord Fox Liberal Democrat Lords Spokesperson (Business, Energy and Industrial Strategy) 4:45 pm, 30th November 2022

My Lords, this has been an interesting debate that covered a wide range of interests. It is always a pleasure to follow the noble Lord, Lord Moylan, and the case he made in favour of Amendment 72 was strong and subtle because by acknowledging the role that Clause 40 plays in this Bill, he also acknowledges the need for Amendment 72.

The noble Lord mentioned Amendment 113. The purpose of having the list in it is to make it clear that in the past, NHS staff have not been included and there are very real examples of problems in this area. Its purpose was to draw your Lordships’ attention to the need to include that cadre of people, who are making very large public procurements, in the realm of this Bill. He will be no doubt delighted to know that it is unlikely that I will press the amendment to a vote.

Photo of Baroness Hayman of Ullock Baroness Hayman of Ullock Opposition Whip (Lords), Shadow Spokesperson (Environment, Food and Rural Affairs), Shadow Spokesperson (Levelling Up, Housing, Communities and Local Government)

The noble Lord, Lord Scriven, ably and clearly laid out why he has tabled his amendment and the concerns in this area. They partly remain from the debate we had in Committee, but they have also been raised on a number of further occasions, including earlier today. We have heard why people are concerned and why they think this amendment is needed. There are concerns around the VIP lanes and the way that different contracts were awarded during the Covid pandemic.

Listening to the debate today, earlier debates and other discussions, including in the media, as the noble Baroness said, it is clear that we have a real problem with a loss of trust in the procurement system, particularly government contracts. For me, this Bill is an opportunity to restore that trust. The Minister will no doubt say that the Government have listened and heard what was said, and the VIP lanes will not happen again. I trust what the Minister says, and we know that other people have said the same, but my concern is that if you do not close loopholes in legislation, they are still there for others to exploit. In my opinion, this opens a loophole because it makes it possible to hand out contracts in the way it was done before.

It is incredibly important that we retain the ability to procure when the usual channels need to be speeded up, for example, or if there is a need to do things in a slightly different way. Importantly, this clause allows that, but at the same time we must not allow this loophole to exist going forward. That is why we support this amendment and if the noble Lord wishes to press it to a Division, he will have our full support.

The noble Lord, Lord Aberdare, who has been extremely clear in putting across the concerns all the way through the progress of this Bill, made some really important points about late payments. Again, I know the Minister is keen to do what she can to resolve that problem, so I look forward to her response.

Photo of Baroness Neville-Rolfe Baroness Neville-Rolfe Minister of State (Cabinet Office)

My Lords, I thank noble Lords for their contributions to this debate and thank my noble friend Lord Moylan for his general point about the purpose and effect of the Bill; it was a point well made. I also agree with the noble Baroness, Lady Hayman of Ullock, that we need to restore trust in procurement. I will come on in a minute to explain what we are doing to avoid a repetition of the VIP lane problems.

I shall speak first to the government amendments. The Bill strengthens existing obligations on conflicts of interest, and I think everyone will agree that it is crucial that the requirements are clear. I am therefore tabling Amendment 116 to Clause 78(4), which will avoid a contracting authority being required to address all circumstances that a reasonable person “might” consider a conflict, a potentially impossible feat. Instead, the Bill will require the authority to address those circumstances the authority believes “likely” to cause a reasonable person to consider there to be a conflict.

I do not accept that this is a problem. The noble Baroness, Lady Bennett, spoke on this issue, and it is always good to have her challenge. This amendment narrows the scope of the obligation, but in a way that makes it deliverable. Sensible, practical ways of doing things are an issue that I have been concerned about, and when I get feedback on these points, we try to make changes.

Part 10 of the Bill allows Ministers to undertake investigations of contracting authorities’ compliance with the Act and issue recommendations that contracting authorities must have regard to when considering how to comply. Without government Amendment 139, Ministers could investigate the House of Commons, the House of Lords and the devolved Administration equivalents, which we believe would create a constitutional impropriety.

Government Amendment 153 ensures that a Minister of the Crown may issue statutory guidance, as a result of a procurement investigation, to Northern Ireland departments only with the consent of a Northern Ireland department, in order to be consistent with the requirement for consent from Welsh Ministers.

The Bill has improved obligations regarding conflicts of interest that apply to all procurement procedures, including direct award. I accept that concern remains over conflicts of interest in Covid procurement, partly because of the history we have all been debating, and these are being addressed by the Government. The concerns expressed from a public procurement perspective are around failings in due diligence and contract management. The noble Lord, Lord Alton, eloquently raised some of these issues on Monday, and I am very glad he found our letter useful. That letter is of course in the Lords Library.

I reassure noble Lords that the Department of Health and Social Care is continuing to investigate contracts and to work through resolution processes with companies that provided PPE which cannot be used. There is a confidentiality issue, as we have heard several times, but I appreciate that there is a desire for more specific information on this. That is why I will be raising it with Health Ministers, as the noble Lord has mentioned. However, I hope I can also reassure the Committee in relation to this group of amendments.

Amendment 72, a key amendment in this group, has been tabled by the noble Lord, Lord Scriven, to help prevent the future use of parliamentary VIP lanes for public contracts. I do not believe the amendment is right or necessary, as I will explain. The Bill contains safeguards ensuring 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. That is laid out clearly in Clause 77(3). Noble Lords should note that this is not at the contracting authority’s discretion; it “must” exclude in those circumstances.

The noble Lord asked what we are doing to prevent VIP lanes in future. Perhaps it is worth reiterating two or three points for the convenience of the Committee. Yes, we will be preventing VIP lanes in future. Our direct award provisions have clear and narrow parameters for use. They include new transparency obligations, requiring contracting authorities to publish a notice before making a direct award, and retain obligations to publish contract details once awarded. So we are getting sunlight and transparency.

Conflicts provisions also make a clear requirement in relation to conflicts assessments which are applicable to direct award. If a situation like Covid-19 were to occur again—I heartily hope it will not—pursuant to Clause 40, the Government could set out in advance what types of direct awards were required to address the situation, meaning advance transparency to the market and suppliers. Finally, the equal treatment obligation in Clauses 2 and 3 will ensure that VIP lanes cannot happen again.

The conflicts of interest provisions in the Bill are intentionally broad to capture any person who influences a decision made by or on behalf of a contracting authority, and cover direct and indirect interests. Furthermore, outside the Procurement Bill, the ministerial and Civil Service codes provide that conflicts of interest must be avoided in the exercise of official duties. Elected officials in local government also need to adhere to the rules around keeping a register of interests—as the noble Lord, Lord Moylan, said, this is also in relation to such things as corruption. As we know, parliamentarians also have to register all their interests.

We take all this very seriously. In July 2022, the Cabinet Office published further guidance to Ministers on participation in commercial activity. It is very important to ensure a level playing field for suppliers, to ensure fair and open competition and protect against corruption. That is what the Bill and the associated transformation and training programme will do. The wider publication of notices for all direct awards to be made, including in emergencies, will bring further transparency into the system. I repeat the point only because it is important.

This demonstrates that highlighting this particular potential of parliamentarians, as Amendment 72 does, is not required. It might even be counterproductive, because it suggests that other potential conflicts such as connection with procurement officers, who may know unpublished details of contracts or contract prospects, are less significant to good governance or should be less of a focus, which is just not the case. Parliamentarians can bring helpful commercial insights, expertise and experience of innovative business practices. It is important that we retain this while implementing a robust procurement framework to ensure that outside interests do not lead to suppliers receiving preferential treatment. I believe our Bill achieves this.

Amendment 113, tabled by the noble Lords, Lord Fox and Lord Scriven, seeks to broaden the range of people in respect of whom conflicts of interest should be identified and to prescribe further actions on suppliers in this area. The provisions in the Bill that specify the people in respect of whom conflicts of interest should be identified are broad. Clause 76 includes anyone acting for or on behalf of the contracting authority in relation to a procurement, including those who influence a decision made by a contracting authority related to the procurement. Therefore, all the persons listed in proposed new paragraphs (a) to (g) of this amendment who have influence in respect of the relevant procurement decision will already be caught by the current provision.

Nobody has raised this, so I will not go into detail, but we had two reports from Nigel Boardman into the circumstances around Covid and VIP lanes. We have accepted those recommendations and made changes, including in Procurement Policy Note 04/21. One point worth making is that a key theme in Boardman and the NAO reports mentioned was the lack of record-keeping and audit around decision-making. The Procurement Bill strengthens the requirements on conflicts of interest compared with the current law. A new duty has been introduced in Clause 78(5) to require contracting authorities to confirm that a “conflicts assessment” has been prepared and then reviewed and revised as necessary when publishing a procurement note. I remember speaking against this at an earlier juncture, but I now draw it to the attention of noble Lords.

As I said on Monday, the Covid inquiry will cover procurement, as the noble Lord, Lord Alton, mentioned, and the distribution of key equipment and supplies such as PPE. It will identify the lessons to be learned and inform future pandemics across the UK, reminding us all of the often tragic events of that period in our lives.

Amendment 97, tabled by the noble Lord, Lord Wallace, refers to the procurement review unit. We all agree that the oversight regime that will be provided by the unit is a critical aspect of the new procurement rules and will be critical to its success. Noble Lords should be assured—I think this is the assurance the noble Lord is seeking—that the Cabinet Office is committed to establishing an effective procurement review unit for this purpose and an advisory panel of sector experts to assist it. I previously gave this assurance in Committee and in the constructive meeting I chaired with noble Lords from across the House with Cabinet Office experts on 15 November.

The key objective of the PRU will be to oversee contracting authorities’ compliance with the new procurement Act. It will also investigate suppliers who may need to be added to the statutory debarment list. We will continue the work of the Public Procurement Review Service in investigating individual complaints.

The noble Lord, Lord Wallace, returned to the argument about the indivisibility of the Crown and why that means that powers are not needed to investigate government departments. This long-held legal principle provides that the Crown is one legal entity, and it still applies. I have a long note, which I have already communicated to the noble Lord, Lord Wallace. Unless he feels that he will press his amendment, he may prefer that we continue the debate over a cup of tea, given his constitutional expertise—I very much look forward to that.

I have a little time to answer the noble Lord, Lord Aberdare, who has almost become a friend—

Noble Lords:

Oh!

Photo of Baroness Neville-Rolfe Baroness Neville-Rolfe Minister of State (Cabinet Office)

I meant a noble friend. We intend to issue guidance recommending that contracting authorities include provisions allowing spot checks on the payment performance of supply chain members through their terms and conditions. This does not need to be done in legislation; we are currently exploring options to include it in the model government contract and terms and conditions. As I have made clear throughout, digital tech is integral to these reforms, as the noble Lord said, and we will use it.

I apologise for speaking like this, but I feel passionately that we have learned from the past and that it is important not to overreact to past problems. I have felt this in many areas that I have dealt with in my long life. I respectfully request that the noble Lord withdraws his amendment and the other noble Lords do not move theirs.

Photo of Lord Scriven Lord Scriven Liberal Democrat

My Lords, I thank all noble Lords who have taken part in this debate, which is a continuation of what we have spoken about in Committee and on Report. It is about ensuring that, if the Bill—which concerns spending billions of pounds of taxpayers’ money—is to go through, trust, fairness and integrity are central to everything that happens and every penny of taxpayers’ money spent. Every amendment in this group is about that.

I have listened intently and diligently to what the Minister said on my Amendment 72, but the noble Lord, Lord Moylan, made a very important point. In answer to my noble friend Lord Fox, Clause 40 gives exactly the same powers that previous Ministers have had through statutory instruments, and this will get us to the same potential mess that the VIP lanes got us to with PPE. I note everything that the Minister said, but Clause 40 could do away with nearly everything in the Bill because it gives the Government unfettered discretion to set up a fast-track lane, as we have seen before. Giving that amount of power to a Minister in a time of crisis, when all power reverts to the Minister and those who are close can have privileged access to contracts, as we have seen, means that I wish to test the opinion of the House on this occasion.

Ayes 201, Noes 220.

Division number 1 Procurement Bill [HL] - Report (2nd Day) — Amendment 72

Aye: 199 Members of the House of Lords

No: 218 Members of the House of Lords

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Amendment 72 disagreed.

Amendment 73 not moved.

Clause 43: Frameworks