Amendment 91

Procurement Bill [HL] - Report (2nd Day) – in the House of Lords at 5:30 pm on 30th November 2022.

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Lord Hunt of Kings Heath:

Moved by Lord Hunt of Kings Heath

91: Schedule 7, page 106, line 41, at end insert—“Involvement in forced organ harvesting15A (1) A discretionary exclusion ground applies to a supplier if a decision-maker determines that the supplier or a connected person has been, or is, involved in—(a) forced organ harvesting,(b) unethical activities relating to human tissue, including anything which involves the commission of an offence under sections 32 (prohibition of commercial dealings in human material for transplantation), 32A (offences under section 32 committed outside UK) or 33 (restriction on transplants involving a live donor) of the Human Tissue Act 2004, or under sections 20 (prohibition of commercial dealings in parts of a human body for transplantation) or 20A (offences under section 20 committed outside UK) of the Human Tissue (Scotland) Act 2006, or(c) dealing in any device or equipment or services relating to conduct mentioned in paragraphs (a) or (b).(2) “Forced organ harvesting” means killing a person without their consent so that their organs may be removed and transplanted into another person.”Member’s explanatory statementThis amendment is designed to give a discretionary power to exclude suppliers from being awarded a public contract who have participated in forced organ harvesting or unethical activities relating to human tissue, including where they are involved in providing a service or goods relating to such activities.

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Labour

My Lords, in moving Amendment 91 I will support all the other amendments in this group.

In the Prime Minister’s speech to the Lord Mayor’s Banquet two days ago, he said that China posed a

“systemic challenge to our values and interests … a challenge that grows more acute as it moves towards even greater authoritarianism.”

I want briefly to draw the House’s attention to one aspect of that country’s behaviour in relation to the appalling forced organ harvesting from prisoners of conscience and to ask the Government to accept my very modest amendment as a small but important measure towards, I hope, ending this practice. This would give a discretionary power to exclude suppliers from being awarded a public contract who have participated in forced organ harvesting or unethical activities relating to human tissue, including where they are involved in providing a service or goods relating to such activities.

Forced organ harvesting in China is the removal of organs from a living prisoner of conscience for the purpose of transplantation, killing the victim in the process. It is state-sanctioned and widespread throughout China, with the Chinese Communist Party targeting individuals because of their religion, spiritual beliefs or ethnicity. The victims are known to be primarily Falun Gong practitioners and Uighur Muslims. There are also several lines of evidence to show that Tibetans and house Christians are likely victims of forced organ harvesting.

With regard to the Uighurs and other minorities in Xinjiang, the Office of the UN High Commissioner for Human Rights published its report into Xinjiang in August this year, which stated:

“Allegations of patterns of torture or ill-treatment, including forced medical treatment and adverse conditions of detention, are credible, as are allegations of individual incidents of sexual and gender-based violence.”

Both Uighurs and Falun Gong practitioners are arbitrarily arrested, detained in camps, tortured, face sexual violence, disappear while in detention and are murdered on a vast scale for their organs.

The evidence is now explicit. In April this year, a paper by Matthew Robertson and Dr Jacob Lavee was published in the American Journal of Transplantation titled “Execution by Organ Procurement: Breaching the Dead Donor Rule in China”, which was cited in the US Congressional-Executive Commission on China Annual Report 2022. Their paper found that, in 71 different Chinese medical studies published between 1980 and 2015 and sourced to 56 hospitals in 33 cities, brain death could not have properly been declared, and therefore the removal of the heart during organ procurement must have been the cause of the donor’s death. The authors state in a recent article in the Tablet that

“the act of execution was joined with the act of heart removal, and was carried out by surgeons on the operating table.”

In Committee, the Minister resisted my amendment, although she appreciated the seriousness of the issue that I raised. She said that the Bill is clear that any serious breach of ethical or professional standards applicable to the supplier would meet the discretionary exclusion ground for professional misconduct. But she also argued that while the exclusion ground of professional misconduct is intended precisely to cover all the ethical issues arising in different industries and sectors, the grounds for exclusion cannot and should not list every issue within a particular industry.

I understand the argument about lists in legislation, but sometimes there is a strong reason to list a particular practice. This practice is so appalling that there is a strong case for listing it. It is a discretionary ground. It is not mandatory. I have made my amendment as mild as possible, to encourage the Government to accept it. If the Minister continues to say that it is not necessary to list organ harvesting, I would point her to Schedule 7, which specifies a number of grounds for discretionary exclusion, including labour market conduct and environmental misconduct. The organ harvesting that I am talking about fits that strength of criteria.

I return to the Prime Minister’s very important speech on Monday night about our relationship with China. It was nuanced, of course, and it recognised some of the economic realities of that relationship, of which the Minister will be well aware. However, he affirmed that the media and parliamentarians must be able to highlight issues in China without sanction, including calling out abuses in Xinjiang and the curtailment of freedom in Hong Kong.

Last year, the House agreed an amendment to the Medicines and Medical Devices Bill to include consent provisions for imported human tissue for use in medicines. Earlier this year, we amended the Health and Care Bill to prohibit the commercialism of organ tourism. They may be small steps, but internationally they were regarded as a visible sign of this country’s concern and as significant. I hope that tonight the House will go one step further. A discretionary power is a modest ask of the Minister. I really hope that we can take one small step towards ending these abhorrent practices. I beg to move.

Photo of Lord Alton of Liverpool Lord Alton of Liverpool Crossbench 5:45 pm, 30th November 2022

My Lords, as in Committee, the noble Lord, Lord Hunt of Kings Heath, has made a very eloquent, powerful and compelling case for supporting this modest Amendment 91. I am happy to be a signatory to this amendment again.

In Committee, the noble Lord and I, with the noble Baroness, Lady Northover, asked the Government about a hospital being built in China in connection with a British company. I thank the Minister for the parliamentary reply about that hospital, which she gave me on 29 November. But I am concerned to learn that the company involved, International Hospitals Group, has a continuing hospital partnership in the People’s Republic of China.

I draw the House’s attention to the words of the British Medical Association, which describes China as a country where there is

“evidence of medical involvement in the Chinese state’s genocide against Uyghur people”, and the statement of the China Tribunal, chaired by Sir Geoffrey Nice KC, which describes the “significant scale” of enforced organ harvesting throughout China, all of which should surely encourage us to think very seriously about what more we can do, as we did on the Health and Care Bill, as the noble Lord, Lord Hunt, said. All of us who heard the arguments then went into the Lobbies to support him, and I hope that if it becomes necessary—which I hope it will not—we will do the same tonight.

I am also a signatory to Amendment 141, tabled by the noble Baroness, Lady Stroud. This is an argument, again, that we have had in previous legislation—again in the health Bill—about the use of slave labour in Xinjiang. I draw attention to my being vice-chairman of the All-Party Parliamentary Group on Uyghurs. It is an issue that I have raised again and again, and mentioned here again during debates on this Bill on Monday last. I will not try to curtain-raise for the noble Baroness—she is more than capable of doing that for herself.

My purpose, therefore, in rising, is to specifically draw attention to and speak to the cross-party Amendment 94, which is in my name and, not for the first time, in the name of my noble friend Lord Blencathra —to use a phrase the Minister used earlier on. I do so because the noble Lord, Lord Blencathra, is my noble friend in so many respects, and we have joined common forces. Old Chief Whips should stand together on such matters, and I am always pleased to be in the same Lobby as the noble Lord. I am pleased that the noble Lord, Lord Coaker, who has been so formidable, and the noble Lord, Lord Fox, who again has been formidable on these issues throughout, are also signatories to this amendment.

The amendment would require the Government to set out a timetable. In a way, we have already been given half a cake, and I want again to be grateful to the noble Baroness. She was able to say to me that she accepts the substance of our case, but what she has not been able to accept—I hope we will convince her to do so this evening—is that there should be a timetable determining when we will prevent further surveillance cameras entering the United Kingdom and being placed often in very sensitive positions, as I will describe. This amendment would remove them from the Government’s procurement supply chain where there is established evidence that the supplier has been involved in modern slavery, genocide or crimes against humanity.

It is particularly topical, as we read reports today of the use of surveillance technology in arresting, imprisoning and re-educating protesters caught up in the wave of unrest in China. There are reports in British and American newspapers today about how surveillance technology—some of the very things we are debating in this amendment—has been used to arrest young people, who then have the whole of their personal histories seen through the devices that they own. Some of their friends have been arrested as a result of access to that information and been arraigned in police stations.

As a result of the hangover from the Government’s so-called “golden era” of relations with the PRC, which the Prime Minister said in his Mansion House speech on Monday was over, we have allowed our surveillance and technology supply chain to be dominated by Chinese surveillance companies with credible links to the genocide taking place in the Uighur region. I am not using that word in a rhetorical way. It was a word used by the former Foreign Secretary and Prime Minister, Liz Truss; it was her word that “genocide” was under way in Xinjiang. It is a word that Secretary of State Blinken has used in describing events there, and many others have, too.

Both Hikvision and Dahua Technology, two of the companies in question, have been blacklisted in the USA for their links to the internment camps in Xinjiang and their role working hand-in-glove with the CCP to construct the largest authoritarian surveillance state, which has surpassed even George Orwell’s wildest dreams. There is little distinction between these Chinese technology companies and the state that they serve. They not only work on behalf of the PRC but receive generous state subsidies to do so, which allows them to undercut their rivals and dominate the domestic UK market.

It is therefore little surprise that the Chinese Ministry of Foreign Affairs has attacked any notion of the United Kingdom Government banning the use of Hikvision and Dahua cameras as “unreasonable suppression” of Chinese companies. I appreciate the engagement from Ministers on this topic, from the noble Baroness but also the noble Lord, Lord True, who met with me privately on this matter on a couple of occasions. During one of those meetings, we were told that there are now 1 million—I repeat, 1 million—Hikvision cameras in the United Kingdom alone.

The announcement last week, then, by the Chancellor of the Duchy of Lancaster that the Government are following the example of the Department of Health and Social Care in banning Hikvision cameras from sensitive areas and removing existing cameras from the network, which mirrors the action from the US that I have just referred to, and has just finalised a permanent ban on the sale and import of Hikvision and Dahua Technology cameras, is a welcome one. This is an issue which the noble Lord, Lord Clement-Jones, and I have raised on the Floor of the House in regret Motions, in months gone by and in previous debates.

Now that the Government have finally recognised the security and human rights concerns of having Hikvision and Dahua cameras in government departments, the question arises: will they commit to a plan for their removal from the public sector supply chain in its entirety? That is what the amendment is about. As the Government will note, successive freedom of information requests from IPVM, Big Brother Watch and Free Tibet, and Parliamentary Questions, have revealed that Hikvision and Dahua are deeply entrenched in our public sector supply chain. Local councils, NHS trusts, schools, prisons, jobcentres and our railway network all have Hikvision and Dahua cameras in their supply chain and their physical infrastructure.

Do we really want the prying eyes of an authoritarian state that has been accused of genocide, and which, as the Prime Minister, Rishi Sunak, said just last month, is the

“biggest state based threat to our economic security”, in our schools, hospitals, and local council buildings? Similarly, how can the Government justify public contracts and taxpayers’ money going into companies where there are credible links of complicity in genocide and the internment camps in Xinjiang? This requires more than “robust pragmatism”, whatever that may mean.

The Government urgently need to come forward with a strategy to remove Hikvision and Dahua Technology cameras from the whole of the procurement supply chain. In the words of the Biometrics and Surveillance Camera Commissioner, Fraser Sampson, whom I met last month, these cameras are built on “digital asbestos”. We need a serious government-led plan for their removal. That might take several years. It is the same issue that we had to face with Huawei. We should also develop technology to mitigate the risks these cameras pose in the meantime. We can do that by looking at issues such as connectivity through software, which Canadians are developing at the present time, which might not require the physical removal of all cameras.

Such a plan could emulate a similar timetable that Ministers set out in the then Telecoms (Security) Bill—to which I moved amendments—for the removal of Huawei from the UK’s 5G network. This would include setting a hard date to phase out and remove Hikvision and Dahua technology and hardware from the procurement supply chain; looking at provision and support that can be offered to cash-strapped local authorities to help with the removal; and considering following the USA in banning the sale and import of these cameras in the United Kingdom.

I welcome the leadership that Ministers have shown recently in banning the use of Hikvision and Dahua cameras in government departments, but I urge them to consider applying that same leadership to the rest of the procurement supply chain. The Government are no longer saying that they are unaware of the security and ethical concerns of using these cameras and they cannot wish away the existence of these cameras in the wider procurement supply chain. We need an urgent timetable and a plan to remove Hikvision and Dahua from the UK supply chain in its entirety. I hope the Minister will further consider accepting the entirety of this amendment so that such a timetable and plan will be put in place.

Photo of Baroness Stroud Baroness Stroud Conservative

My Lords, I will speak to Amendment 141, which is in my name and those of the noble Lords, Lord Alton and Lord Coaker, and of the noble Baroness, Lady Smith, demonstrating cross-party support for it. I add my support to the other amendments in this group.

I also underline my gratitude to the Government and my noble friend the Minister for seriously engaging with the amendment over the summer. I know that we share a desire to mitigate the two key risk areas in public procurement that the amendment covers: first, the possible UK dependency on authoritarian states; and, secondly, the risk of modern slavery in government supply chains. I covered these areas in Committee, so I will keep my comments brief and seek to address any concerns that my noble friend might have raised.

To recap, proposed new subsection (1) would place a burden on the Secretary of State to create regulations that reduce public bodies’ dependency on authoritarian states. As we know, there is no agreed definition of what constitutes an “authoritarian state” in UK law or regulation. Therefore, proposed new subsection (2) would adopt the categorisation contained in the integrated review of security, defence, development and foreign policy, allowing the legislation to adapt to contemporary geopolitical developments in line with the latest iteration of the review. The countries the amendment would currently apply to as “threats” are Iran, Russia and North Korea, and, as a “systemic competitor”, China. As we have heard, this perspective on China was reiterated by the Prime Minister only this week.

Proposed new subsection (3) sets out what must be included in the regulations. Questions raised by my noble friend the Minister in Committee and now included concern about whether this amendment would place an obligation on the Government not to procure from these nations. The answer is no. The amendment enables the Government first to identify where we are dependent on authoritarian regimes for key supplies; then to define acceptable levels of dependency across industries; and then to publish an annual review of dependency. It does not prohibit procurement from these nations.

The real question we should be asking is why, given all that we have experienced with Covid and Ukraine, we would not want to do this. With this information, the Government are then in a position to manage down risk to the British people in key sectors. Had Germany undertaken such an approach to its dependencies, it would never have allowed itself to develop such a dependency on Russia for energy. The entire amendment has been framed to give the Government regulation-making powers, meaning that they have the ability to ensure that there are no unintended consequences and to draft the regulations in line with the wider strategy for public procurement.

Another question raised by my noble friend the Minister was whether this would impact on our procurement flexibility. There is no evidence for this; rather there is clear international precedent for this proposed new clause. For example, the EU Commission staff working document Strategic Dependencies and Capacities provides mapping of EU dependencies in the most sensitive ecosystems and provides a range of policies that could be taken to address these issues. The United States also publishes a similar regular review.

The risks of economic dependency, however, are not the only relevant matters here. The second part of the amendment proposes new subsections (4) and (5), which address a separate issue: modern slavery in the supply chains of publicly procured goods. The presence of modern slavery in supply chains is clearly unacceptable. This has rightly been acknowledged by the Department of Health and Social Care, which has already taken steps in the Health and Care Act to eradicate from its supply chains goods “tainted”—a Department of Health word—by slavery.

Proposed new subsection (4) in this amendment adopts substantially the same language as Section 81 of the Health and Care Act, passed earlier this year. The requirement to bring regulations to, in the words of the Department of Health and Social Care, eradicate

“from all public contracts goods or services that are tainted by slavery” now stands as part of that Act.

As things stand, when the Health and Care Act regulations are drawn up and passed, those procuring health equipment will have to apply different human rights standards from those procuring goods and services on behalf of other government departments. The main intention of this amendment is to align procurement standards across government so that the UK Government speak with one voice. It seems odd for us to be unwilling to procure goods from Xinjiang for the NHS but comfortable doing so for the Home Office. This is about correcting a loophole in the law and seems a matter of simple common sense.

From my conversation with the Minister, it would seem that Department of Health officials are already in conversation with Cabinet Office officials about how to draft these regulations to implement them for the Department of Health. This enables those same officials to work to draft regulations that would work for the whole of government.

I know the Minister has some concerns about aspects of this amendment and its potential chilling effect on business, but where this has been operationalised in, say, the US, it has not had such an impact. I will address the Minister’s potential concerns, the thrust of which, if I understand them correctly, is that the amendment could increase the compliance burden on small and medium-sized businesses. We are not seeking to create extra burdens above and beyond what is necessary, but this amendment is about fine-tuning our existing system to bring it in line with best practice.

As I have stated, proposed new subsection (5)(a) to (c) focuses on ensuring that there is one consistent standard of regulation for modern slavery across government. Rationalising the standard so that the Department of Health and Social Care is not an outlier seems sound. The regulation-making powers lie in the hands of the Government to ensure that small businesses do not suffer.

Proposed new subsection (5)(d) requires businesses to know the sources of their products. Businesses that do not know the origins of the products they are selling, or their constituent parts, are unable to offer assurances about labour standards in their supply chain, but they also face major business barriers to guaranteeing supply and implementing product control and recall. This means that most businesses can map out their supply chain. Calling for transparency to ensure that we do not have modern slavery in supply chains is relatively uncontroversial.

Ultimately, the two risk areas of dependency and modern slavery cut to the heart of our character as a nation. We want to stand as a beacon for liberal democratic values around the world. To do this we need to ensure we retain the autonomy to act in line with our values by reducing our dependency on authoritarian states. We also need to ensure that we are living consistently within our values by ensuring that there is no modern slavery in our supply chains. The Department of Health and Social Care has shown the way. This amendment enables the rest of government to come into line.

Photo of Lord Blencathra Lord Blencathra Conservative 6:00 pm, 30th November 2022

My Lords, I rise to speak to the cross-party amendment in my name, alongside those of the noble Lords, Lord Alton, Lord Coaker and Lord Fox. I fully support the strong case that my noble friend Lord Alton has made regarding the links between Chinese surveillance camera suppliers Hikvision and Dahua Technology and the gross human rights violations taking place in Xinjiang. I congratulate my noble friend Lady Stroud on an excellent speech setting out all the answers to the questions the Government have posed as to why our amendment would not be acceptable. She made a compelling case.

I also congratulate my friend the noble Lord, Lord Alton, who, for the last few years, has been nibbling at the heels of government Ministers in every department and moving these similar amendments dealing with genocide in Xinjiang province. We did it on the Trade Bill, the NHS procurement Bill, an education Bill and others. Of course, in some cases there had to be a compromise amendment in the Commons. Eventually, a few months later, the Government would then announce their own initiative going partly along the road the noble Lord suggested. I care to bet that even if we lose the vote in this House tonight, or if we win tonight but it is removed in the Commons, in six months the Government will come along and suggest something partly along the lines of his amendment.

Rather than go over his arguments again, I will use my remarks to discuss the security concerns regarding the prolific use of Hikvision and Dahua cameras in the UK procurement supply chain. Those concerns are not isolated. Our closest partners—real strategic partners, including the USA, Australia and the EU—have expressed their own worries about the use of Chinese technology suppliers, particularly in sensitive areas such as government buildings and the European Parliament.

The USA has taken swift and strict action to blacklist the sale and import of Hikvision and Dahua cameras, has ordered their removal from government buildings and is actively considering placing them on a sanctions list, which would have a substantial impact on the ability of the companies to operate worldwide. The US Department of Homeland Security warned as early as 2017 about the potential for a back door into Hikvision camera software that it deemed “remotely exploitable”—a view subsequently backed up by security researchers, who warned in September 2021 that Hikvision cameras have the

“highest level of critical vulnerability”.

As the noble Lord, Lord Alton, mentioned, the Government’s own Biometrics and Surveillance Camera Commissioner, Professor Fraser Sampson, has repeatedly warned us that Hikvision and Dahua cannot be trusted as procurement suppliers. Not only have they refused his requests to publish further information about legitimate human rights and security concerns, but Professor Sampson rightly points out that we require considerable caution when it comes to involving foreign suppliers of surveillance technology.

After all, Hikvision and Dahua cannot be considered to be anything like normal private business companies operating in a free-market economy. Both not only receive generous subsidies from the Chinese state but under Article 7 of China’s national intelligence law they are expected to work hand in glove with the state. This law requires that:

“Any organisation and citizen shall, in accordance with the law, support, provide assistance, and cooperate in national intelligence work, and guard the secrecy of any national intelligence work that they are aware of.”

That is the obligation on Hikvision and Dahua. In effect, these companies are not only required by China’s national intelligence law to help assist with national intelligence work, but they are bound to secrecy not to reveal the extent of their collaboration with Chinese intelligence services.

I fully welcome the announcement last week by the Chancellor of the Duchy of Lancaster that he has instructed government departments to remove Hikvision and Dahua technology cameras from sensitive areas

“in the light of the threat to the UK”.

Now that the Government have admitted the security threat posed by these companies’ cameras in government departments, I hope that Ministers will be honest about the threat they pose to our procurement supply chain generally.

After all, how can it be consistent for the Government to direct departments to remove these cameras on security grounds but not offer similar guidance and a timetable for local authorities, NHS trusts, schools, our transport network and all other vital infrastructure to follow suit? Surely, the threat of authoritarian state-sponsored snooping from a Government many consider to be a systemic threat, alongside Russia, requires swift action.

The cross-party amendment in my name and that of other noble Lords would give Ministers a mandate to publish a timetable for the removal of Hikvision and Dahua cameras and technology from the whole procurement supply chain. It would allow the Government to consider a timetable similar to the one we currently have in place for the removal of Huawei from our 5G telecommunications network, and it would signal to the public at large that the Government take the security threat posed by Chinese technology companies very seriously indeed.

I fully support what the Prime Minister said in his speech on Monday evening. He said that the

“so-called golden era is over” with the PRC and that the UK must focus on dramatically improving our national resilience and economic security. In my opinion, there never was a golden era, at least, not for the UK. But, of course, China had one—a massive trade surplus, infiltration and theft of our commercial secrets on a massive scale, our political and business elites kowtowing to any Chinese demands and our universities grubbing for Chinese money at the expense of freedom for their students.

In January 2021, the Foreign Office in a Written Answer to me called China a “strategic partner”. Can you believe it: China called a strategic partner by the Foreign Office, in the same category as the US and our loyal NATO allies? Perhaps that is all I have come to expect of the Foreign Office. While I acknowledge the speech of my right honourable friend the Prime Minister in part, perhaps the Foreign Office has struck again and inserted those words—that China will be treated with “robust pragmatism”. What on earth does that weaselly phrase mean? My noble friend the Minister—the Lady in red—with her tremendous intellect will no doubt be able to give us a definition. In fact, I reckon she could probably give us 10 different definitions of “robust pragmatism”. But let me give you mine. The pragmatic part is that we will continue buying billions of pounds-worth of goods from China because it is cheaper, more convenient and easier than starting to onshore them. The robust bit is that we will criticise them a bit when we hand over the cheque: “Naughty, naughty Communist Party of China. We deplore some of the things you are doing in parts of China.” Of course, we will not mention what is really happening—slavery and genocide—because that would be too robust.

In conclusion, let us implement the Government’s new policy on China tonight. Let us be robust and pragmatic, pass this new clause and start with a commitment from the Government to remove Hikvision and Dahua cameras from the whole of the UK procurement supply chain. It is the only way to give credibility to the Prime Minister’s speech on Monday night.

Photo of Lord Fox Lord Fox Liberal Democrat Lords Spokesperson (Business, Energy and Industrial Strategy) 6:15 pm, 30th November 2022

My Lords, as other speakers have alluded to, we have been in this place before, but the things we hear are no less shocking or important for us to debate. I am speaking to Amendments 91, 95 and 141 and, as stated, my name is on Amendment 94.

It is worth thinking about how we got to where we are, as alluded to by the noble Lord, Lord Blencathra, in his stirring speech: we bought on price. We ended up with Huawei because we bought on price and eroded our own switchgear industry. On the point made by the noble Baroness, Lady Stroud, about resilience in our supply chain, we narrowed our options by simply buying on price.

The point of the amendments, whether together, separately or blended, is to put values into the purchasing process as well as price. All the way through the debate, in different ways, the purpose of what we have heard from colleagues is to put values into what we do. Public purchasing is not just about price; it is about extending the values of this country across what we do. Unless we are doing that, we are spending the money badly. We may be spending it cheaply in the short term but it becomes very expensive in the long term, not necessarily for the citizens of this country but for those of the country from which we purchase. That is why I am supporting the amendments.

I have some technical observations. We have talked about potential back doors in technology. During the early days when the Government were trying to make Huawei work, there was a group of people—in Banbury, I think—who spent their time looking closely at Huawei’s technology in order to determine how dangerous or otherwise it was to the UK. If they are not still there, we need that group of people doing that not just with surveillance cameras but with network routers and all the other technology that supports networks in everyone’s homes in this country. We need to have a strong feeling of the security danger right across our information networks. The people who were doing that originally should be reformed. I understand that they are not the Minister’s group and that they probably come under the Home Office or indeed DCMS, but I hope she can carry that message from here.

To respond to the first part of the amendment by the noble Baroness, Lady Stroud, on supply chain resilience, the Bill will provide a very good database from which to do the sort of analysis she is talking about, so that we can determine just how resilient the supply chain is. How dependent are we on two or three suppliers? I hope, whether or not the noble Baroness’s amendment is accepted or voted through, that that is what the Government are doing. Are the Government going to use that sort of information, which will be much more readily available from the digital platform, to understand our resilience or otherwise? If they are, where in government will that be done and by whom, and who will be accountable for doing it? We will have the means to do it, whereas before it was almost impossible without a tremendous amount of work to establish who was buying what from where. Now we will have that information to hand.

These are three really important amendments. If their proposers choose to move them, we on these Benches will certainly support them.

Photo of Lord Coaker Lord Coaker Shadow Spokesperson (Defence), Shadow Spokesperson (Home Affairs), Opposition Whip (Lords)

My Lords, often in this House there are important occasions when there are really good debates. On this set of amendments, we have heard some brilliant speeches from all who have spoken: the noble Baroness, Lady Stroud, the noble Lords, Lord Blencathra, Lord Alton and Lord Fox, and my noble friend Lord Hunt. Why have these speeches been so good? Because, as the noble Lords, Lord Fox and Lord Blencathra, have just said, this is the chance for this Chamber to put in the Bill the procurement policies we want this country and this Government to pursue. It is a chance, through those policies, to stand up for what we regard as the international values that are important to us. That is why it is important that it goes into the Bill.

We have had this debate all the way through considering the Bill—at Second Reading, in Committee and now on Report. Time and again, we have said it is important that this country stands up and says, “This is what we think the £300 billion or so we spend on procurement should do to bring about the sort of community we want”, not only domestically but internationally. That is why it is so important. Each noble Lord who has spoken has been so inspiring, because they are speaking from the heart.

The Minister will not disagree with many of the values that have been stated. The disagreement comes in our wanting to see them in the Bill, so that it makes a statement of intent for our country. The noble Baroness, Lady Stroud, said of her Amendment 141, to which I am pleased to have put my name, that the Government are concerned about it having a chilling effect. I hope it does have a chilling effect on those who seek to use procurement to deliver policies and values that we do not support, as it is quite astonishing.

I will spend a couple of minutes on my noble friend Lord Hunt’s Amendment 91. I know we want to get to a vote, but sometimes it is worth stating what is important in this great democratic Chamber. Let me read out what he wants to be in the Bill through his proposed new sub-paragraph (2), which I fully support. Why would we not state, regarding procurement, that forced organ harvesting—this is what we seek to oppose; the amendment also mentions human tissue—

“means killing a person without their consent so that their organs may be removed and transplanted into another person”?

I understand that thousands of occurrences of such organ harvesting are alleged to have taken place. Nobody in this House is in favour of that, but my noble friend Lord Hunt’s amendment says that that should be in the Bill as a statement of what we want our procurement to achieve. I fully support my noble friend, who deserves the thanks of the House for bringing forward that amendment, which is supported by many others, including my noble friend Lady Hayman and the noble Baroness, Lady Northover.

The same is true of the amendment from the noble Baroness, Lady Stroud, against modern slavery. Nobody here is in favour of modern slavery or human trafficking, but we know that procurement policy should seek that objective. It should be laid out and pursued as something we stand up for, as an international example to countries across the world. That is inspiring. It is worthwhile and important for us to do. The Government will say that it is unnecessary—“Of course we are against modern slavery and human trafficking”—but I say we should put it in the Bill as this amendment, along with others, would do.

The noble Lord, Lord Blencathra, gave a fantastic speech. He got excited and emotional; sometimes we should do that—with logic, which is extremely important—and wake up to these things. Sometimes we need to get emotional. The sorts of policies and decisions that we debate in this Chamber affect millions of people in our country but hundreds of millions across the world. They are worth getting emotional and upset about, because they make a difference. It is not playing tennis on a Sunday; it is about international law and what makes a difference to huge numbers of people’s lives.

As the noble Lord, Lord Blencathra, said, the Government themselves have said that there is concern about the security of the country in relation to the use of these surveillance cameras, which the noble Lord, Lord Alton, mentioned. The Government say that government departments should not use Hikvision or Dahua cameras and take them out, so they admit that there is a security risk and say that something should be done about it. But, as the noble Lord, Lord Blencathra, said, what about all the other cameras within local authorities, such as street cameras and cameras in hospitals? Do they not pose a security risk? If they do in a government department, I cannot see why they do not when they are outside one but happen to be run by Westminster council. This is ludicrous and illogical, and the Government need to take account of it.

That is why Amendment 94 of the noble Lord, Lord Alton, is so important. It says that we need a timeline to ensure

“the removal of physical technology … from the Government’s procurement supply chain” because this will tackle modern slavery, genocide and crimes against humanity. Everybody in your Lordships’ House agrees with that; no one is opposed it. The Government will say that it is unnecessary and we do not have to do this because they will, of course, have no procurement policy that does not take all these things into account.

We will certainly support my noble friend Lord Hunt, should he push his amendment to a vote, as well as the noble Lord, Lord Alton—we will see where we get to with others. But the difference between us and the Government is that sometimes you need to say what you mean. Legislatively, we should say that we, as a UK Government and Parliament, believe these things are so important that they should be put in the Bill, that we hold to these international values, and that we will set an example for other countries to do the same and that our procurement policy will reflect this. That is our opportunity in these votes.

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

My Lords, I am grateful for the debate on this issue, and I hope that the House will forgive me if I take a little time to address the important matters that have been raised. As always, there has been much emotion, and there have been some strong speeches, for which I am grateful. However, I need to take the House back to the Bill.

On Amendment 91, tabled by the noble Lord, Lord Hunt, and the noble Baroness, Lady Northover, on forced organ harvesting, I pay tribute, as I have done before, to the tenacity with which the noble Lord has pursued this important issue. It is right that this abhorrent practice is exposed and confronted. The Government have taken action, both at home and abroad, to make clear that complicity in the abuses associated with the overseas organ trade will not be tolerated. As the noble Lord said, the Health and Care Act made it an offence to travel outside the UK to purchase an organ, and the Government have urged the World Health Organization to consider the findings of the China Tribunal on organ harvesting. I confirm to the noble Lord, Lord Alton, that the hospital he referred to in China will not carry out organ transplants. Moreover, it did not receive any government funding.

However, I am afraid it remains the case that the Procurement Bill is not the right place to take action on this issue. Every exclusion ground, whether mandatory or discretionary, must be considered for every supplier on every procurement—that is thousands of contracts every year. Each additional ground will add a burden for contracting authorities that, however marginal, will add up to a significant amount of time and money overall. I am reminded of my noble friend Lord Maude’s comments on Monday about the risk of trying to include too many wider public policy objectives in the Bill. If we add this, what else do we need to add? This is why I have sought to limit the grounds, particularly those that, like this one, require an assessment of factual circumstances, to those where there is a major and particular risk to public procurement. I am not aware of any evidence that any supplier to the UK public sector has been involved in forced organ harvesting.

Moreover, the scope of the proposed exclusion ground is very broad, covering not just organ harvesting but also any

“unethical activities relating to human tissue”.

The third limb of the amendment permits exclusion simply for

“dealing in any device or equipment or services relating to conduct” covered by the first two limbs. This would seem to extend so broadly as to cover even the use of ordinary surgical equipment, where the supplier might have had no prior knowledge that it was previously used for the prohibited purposes. For these reasons, I am concerned that this ground would be extremely difficult for contracting authorities to apply in practice. While I sympathise with the noble Lord, Lord Hunt, I cannot see a way of including organ harvesting in the Bill, although I am glad that we have focused on it this evening.

I turn now to Amendments 94 and 95 tabled by the noble Lord, Lord Alton. In response to his comments on the situation in Xinjiang, I say that of course the Government are concerned about the widespread use of invasive and systematic surveillance there that disproportionately targets Uighurs and other minorities. In line with the Prime Minister’s speech on Monday, which has been much referenced, the UK has led international efforts to hold China to account for its human rights violations in Xinjiang. We have imposed sanctions, provided guidance to businesses, announced measures to tackle forced labour, and led statements at the United Nations. The Government have spoken out publicly, and will continue to do so.

I am glad there has been a warm welcome for last week’s announcement in relation to the use of Chinese surveillance equipment on the government estate. This is a significant step; all government departments will be expected to remove such equipment from sensitive sites, and to avoid procuring it in future. I confirm that this applies to both Hikvision and Dahua. This is a clear demonstration that the Government are prepared to act to protect the integrity of our security arrangements. We recognise that action taken should be proportionate to the risk. We encourage all organisations to follow national cybersecurity guidance when selecting a technology supplier, and this guidance clearly sets the security standards that suppliers should meet and the considerations that organisations should be making during the procurement process. We will continue to keep this risk under review and will take further steps if they become necessary.

In addition, we have taken action in the Bill to introduce an exclusion ground for suppliers that are considered to pose a threat to the national security of the UK. Combined with the new powers for a centralised debarment list, this will mean that where the risk is sufficiently serious, Ministers can act quickly to ensure that suppliers who threaten national security face exclusion from all contracts across the public sector. We have shown our determination only last week, as I said, and the Bill strengthens our powers in this space.

I turn now to what Amendment 94 actually does. In mandating a timeline for the removal of existing physical technology or surveillance equipment from the Government’s supply chain, the amendment seeks to interfere directly with security arrangements on the government estate. I am afraid this is out of step with the Bill, which is principally about setting rules for the fair and open procurement of contracts by the entire public sector. The Bill is not concerned with existing equipment or kit which has already been installed, or with the termination of existing contracts by central government. On that basis, while I sympathise with the points made by noble Lords, and will ensure they are shared more broadly, I believe that we are taking the right approach in the Bill and I am very uneasy about this amendment.

I turn now to Amendment 95 on product labelling; there has not been much discussion of it.

Photo of Lord Alton of Liverpool Lord Alton of Liverpool Crossbench 6:30 pm, 30th November 2022

My Lords, if it is helpful to the noble Baroness, I say that, because of the time and because we did have a preliminary debate about this in Committee, it would not be my intention to test the opinion of the House on Amendment 95. I am quite happy for her to write to me with any remarks that she might have liked to have made.

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

I think that would be extremely helpful. I am grateful to the noble Lord.

I turn finally to Amendment 141 tabled by my noble friend Lady Stroud and others. I am grateful to her for tabling it and for the debate today. The amendment covers two distinct issues: supply chain resilience and modern slavery. I congratulate her and others on all they have done in recent years to promote awareness and encourage change on these important issues—a great deal has changed in the last 15 years. I am also grateful to her for a very useful meeting on the amendment, to help me understand how it might work in practice. While I admire her campaigning on modern slavery, discussion revealed the impracticality of some of the details of her amendment, as I shall try to explain.

The Government have publicly stated the importance of strong and resilient supply chains to our economic and national security. The Ukraine war and the shortages and economic challenges it has precipitated have really brought that home, and the decision announced last week in relation to ownership of the Newport microchip plant demonstrates how seriously these issues are being taken. As the noble Lord, Lord Fox, said, our plan for transparency and the new online platform will help us to assess the risk. Through our trade agreements and market access work, we support British businesses and contracting authorities to build more diverse and resilient supply chains.

Supply chain resilience considerations are now embedded in the work of every government department. A global supply chains directorate has also been established in the Department for International Trade to strengthen the supply of critical goods to the UK. I will be happy to facilitate a meeting with the Minister responsible, so that my noble friend can bring her knowledge and challenge to that important work: I believe that would be helpful in progressing matters, having spoken to her about these issues. Strong and resilient supply chains have a diverse base, which relies on an effective trading system. I know this from my own practical experience of diversifying retail supply from China to Vietnam, Bangladesh and Ethiopia. As far as possible, this means promoting a market-led approach to supply chain resilience and encouraging a range of import sources.

From time to time, there can be a crisis or an issue, such as modern slavery, in any market and with almost any supplier, so we need options. The appropriate proportion of supply from an overseas market can go up or down, but the proposal in the amendment to set dependency thresholds across all categories of public procurement would be a major exercise and a market-distorting measure.

While I welcome recent trends towards western manufacturing in certain strategic industries, such as battery technology, the UK continues to trade with China to support British jobs and growth in non-strategic areas and keep inflation down—which noble Lords do not seem to be worrying about—but I emphasise that we will uphold our values and ensure that our national security, freedom and democracy are protected as we work with allies to hold China to its international commitments.

Photo of Lord Alton of Liverpool Lord Alton of Liverpool Crossbench

Before the noble Baroness leaves that point, it is important to put on the record that we currently have a trade deficit with the People’s Republic of China of £40 billion. Dependency, resilience, and the destruction of our own manufacturing base because we are outcompeted through the use of slave labour and goods that are priced much more cheaply than people on a living wage can produce in the United Kingdom—these are issues that the Government need to take rather more seriously than she has just done.

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

I do take these issues seriously and I commented on diversification, which I have personally been involved in. It is because there is a large amount of trade with China that this cannot be changed overnight—and there might not be a case to do so in non-strategic areas. Inflation is very important and the opening up of Asia has historically been helpful in this country. The Prime Minister said in his speech that we must be realistic and clear about China, but that obviously does not mean we should abandon our values.

It goes without saying that practices such as slavery and human trafficking have no place in government supply chains. We have shown our determination to address modern slavery in many ways, including in the Bill. I draw my noble friend’s attention to the fact that under Clause 27, contracting authorities must ask suppliers to provide details of their intended supply chain for the contract. Authorities can consider whether a subcontractor is subject to a ground for exclusion such as modern slavery. If they conclude that this is the case and that it has failed to self-clean, the lead supplier itself is liable to be excluded from the procurement if it does not take the opportunity to remove the subcontractor from its supply chain. However, we must recognise the complexity of the issue.

My noble friend’s amendment says that

“The Secretary of State must … make provision” in procurements and contracts to eradicate slavery and human trafficking, and that this is to be done by secondary legislation, but I fear that the amendment fails to reflect the sheer complexity of the matter. Regulations cannot specify precisely which award criteria might be appropriate to address the risk of slavery and human trafficking in every different procurement: this depends on the nature of the particular contract being tendered, including what is being purchased and the likely nature and location of supply chains. The right vehicle to help contracting authorities address slavery and human trafficking risks is in guidance, and there is already comprehensive guidance setting out the action that departments must take. This is 46 pages long and includes sections on managing risks in new procurements, assessing existing contracts, taking action when victims of modern slavery are identified, supply chain mapping, useful tools, training and questions to ask.

My noble friend will know that I have committed to put the matters addressed in the guidance on a statutory footing as part of the national procurement policy statement, provided for under Clause 12 of the Bill. This would mean that all contracted authorities would have to have regard to that guidance, which I think the noble Baroness can see is a significant step forward.

Finally, I note that the draft provisions in the amendment go significantly beyond the language in the Health and Care Act with which it was my noble friend’s stated intention to bring the Bill into alignment. Amendment 141 also creates a strong expectation that the Minister will make regulations, and that they will cover the matters referred to in the amendment, so it is effectively a must.

I know that people are looking forward to getting to the end of this debate, so I will not go through the problems with proposed new subsection (5)(d) to (f), but I will ask noble Lords to note that this will be burdensome to contracting authorities as well as small businesses. I know that my noble friend does not much care about the latter, but there might be wider concern about the gumming-up of contracting authorities in this matter when we have already made arrangements in the Bill to give modern slavery much more focus, and have added that to the relevant schedules.

We believe that proposed new subsection (5)(f), for example, is disproportionate and contrary to the open principles of our procurement regime, as well as to the interests of efficiency, value for money and common sense. Moreover, countries and regions that pose risks change over time, and that is another reason to use guidance, and not this Bill, on this matter.

Finally, I say to my noble friend Lord Blencathra that we should remember that the new regime will give broader exclusion powers to contracting authorities—he referenced Huawei—which will have primary responsibility for applying the exclusions regime.

In closing, I respectfully ask the noble Lord, Lord Hunt, to withdraw his amendment, but I emphasise the progress that this Bill has made, and I therefore find some of the comments on this group a little disappointing.

Photo of Lord Scriven Lord Scriven Liberal Democrat

Just before the Minister sits down, so we understand, because some may want to press this to a Division, I ask: what would the Government’s intent be if this Bill was to pass with a debarment list, particularly with regard to companies that the Government no longer wish to deploy their surveillance equipment in the UK? Would such companies go on the debarment list, or would it just be down to guidance to determine whether such equipment is purchased by non-central government bodies?

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

If the noble Lord looks at Schedule 6, which is the criteria for the debarment list, he will see that it includes modern slavery and security, so there is no reason why those could not be used in an appropriate way. I hope that helps.

Photo of Lord Scriven Lord Scriven Liberal Democrat

My question was: is it the Government’s intention to use the debarment list for these types of companies, or is it still going to be down to guidance?

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

They are mandatory grounds for exclusion, so if you find that you have a security issue—as we obviously found in relation to Hikvision—those become mandatory exclusions. On modern slavery, again, they are mandatory exclusions. Clearly, if a company is able to self-clean and has shown that it has changed the arrangements, it will not necessarily stay on the debarment list. I do not want to mislead the noble Lord.

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Labour

My Lords, this excellent debate has been both moving and profound, because it has dealt with horrific human rights abuses in China but has also attempted to develop an argument about our strategic relationship with that nation.

The Minister said that she was disappointed by some of the remarks. She gave us a full reply, which I am very grateful for, but I too was rather disappointed by her response. Essentially, she said that our concerns are legitimate but that this Bill is not the right place for them to be expressed. But, as the noble Lord, Lord Fox, and my noble friend Lord Coaker both suggested, this is a Procurement Bill, setting the regime for government procurement for a number of years ahead. Where better to place values—not just the issue of the lowest common denominator price—than in this Bill, which sets the parameters under which billions of pounds are going to be spent by government and government agencies over the next decade?

The arguments that the Minister put forward were technical, and the Government could have come back and tabled their own amendments, which might have met the technical issues she faces. However, ultimately, the Government have set their face against expressing some profound values in this legislation, but I think that we should do so. I would like to test the opinion of the House on Amendment 91.

Ayes 191, Noes 169.

Division number 2 Procurement Bill [HL] - Report (2nd Day) — Amendment 91

Aye: 189 Members of the House of Lords

No: 167 Members of the House of Lords

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Amendment 91 agreed.

Amendment 91A not moved.