Amendment 14A

Economic Activity of Public Bodies (Overseas Matters) Bill - Committee (2nd Day) – in the House of Lords at 5:15 pm on 17 April 2024.

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Baroness Chapman of Darlington:

Moved by Baroness Chapman of Darlington

14A: Clause 3, page 2, line 17, leave out subsections (2) and (3)Member’s explanatory statement This would remove the regulation making power for Ministers to add exceptions to the bill by secondary legislation. This is to probe when Ministers would expect to use this power.

Photo of Baroness Chapman of Darlington Baroness Chapman of Darlington Shadow Minister for the Cabinet Office, Shadow Spokesperson (Treasury)

My Lords, my noble friend Lord Collins is not moving this amendment, but I will do my best as his understudy.

This group is slightly different from the first, but we will probably touch on a number of the same sorts of issues, as it is all about trying to get some clarity. I take what the Minister said about this being only about procurement and investment decisions. Even so, the question of what procurement and investment are in relation to the Bill is something else that we might need to tease out. If an organisation’s primary activity is in another country, as the noble Lord, Lord Boateng, referred to, would the act of withdrawing from that activity be seen as a boycott under the Bill? If the Minister is saying that it would not, that is incredibly helpful information that may well soothe some of the concerns that will be raised in our consideration of this group.

My noble friend Lord Collins and I have tabled the amendments in this group in an attempt to tease out from the Minister exactly what the Government have in mind. I do not think that the public response to the Bill has been quite what the Government may have hoped or anticipated it would be when they embarked on this endeavour. Most public sector organisations are far too busy battling to provide services—often in extremely difficult circumstances—to their patients, students or service users to be following the back and forth of this debate. That serves to re-emphasise the importance of our considerations, and of making sure we do not land them with something that is unworkable and does not achieve the objectives.

Many of us understand what the Government set out to do when they started all this, so with that in mind, we tabled the probing Amendment 14A to discover in what circumstances Ministers anticipate using the power that they are giving themselves, which allows them to change the scope of the application of the Bill through secondary legislation. We are interested to hear what the Minister has to say about why Clause 3(1) and (2) are needed, and how she thinks they will work in practice. These subsections refer to the powers which allow the Secretary of State to remove any of the exemptions that are listed in the Bill, such as the one on national security. I cannot imagine that ever happening, but there is a whole list of exemptions in there—we are very pleased to see some of them. But why is that power seen to be needed? We cannot imagine a circumstance in which any of those exemptions would need to be removed. It seems an odd power for Ministers to take for themselves.

These decisions matter in the scope of the Bill, and they can have a profound impact on our relationships with other nations and our diplomatic efforts around the world, sometimes in incredibly sensitive situations. I have seen no evidence of Foreign Office engagement with, or even support for, the Bill, and it would be a concern if these decisions were to be taken by SI. We all want government to work interdepartmentally and for all decisions to be consulted upon internally in the right way, but we understand that is not always the situation. This concern was expressed at Second Reading, so can the Minister assure us that before any delegated legislation is proposed, appropriate input will always be sought from the Foreign Office?

We have a whole bunch of amendments which are probing—tongue in cheek is too strong a phrase but we could not think of any other way to do it. This is how we do things: we table amendments, discuss them and through that we get a better understanding of what the Government are trying to do. We tabled a handful to make a point—we could have gone on, but we did not—and I will run through them.

Amendment 22 would exempt schools and early years providers from the scope of the Bill. This was tabled with a view to finding out whether the Government intend early years settings to be involved. It comes back to the issue of what is and what is not a public body. Is a private school a public body? Is an independent nursery funded by a government childcare programme a public body? Is a childminder being paid indirectly by the state a public body?

Similarly, Amendment 23 would exempt charities providing public functions. We have heard the example of housing provision, because some housing providers are also charities.

Amendment 24 exempts community interest companies. There are thousands of such bodies up and down the country, engaged in all kinds of activities. Many are responsible for delivering public services, be that in social care, education, the arts or prisoner rehabilitation—virtually every area of activity you can think of. How are they to regard the Bill? What steps should they be taking to educate themselves and find out how to make sure that they do not do anything to make themselves fall foul of the Bill?

Our Amendment 25 exempts sporting bodies. Do the Government really want to get into this issue of sporting boycotts and which athletes should be doing what, where? If a sporting body did not deem that there was to be a boycott, but individual athletes decided that they did not want to take part in a tournament, what would happen then? There is pressure and debate, inevitably, whether it is part of a BDS campaign or not—but how you define what that is, I do not really know. How would that be considered? How could those people make sure that they are not, in any way, falling foul of this legislation?

We have also tabled an amendment asking for a list of public bodies. I was trying to be helpful and to work out the best way of getting this clarity. To answer the earlier point from the noble Baroness, Lady Noakes, it could be a list that the Minister takes the power to be able to amend and add to, although I completely accept that any schedule containing a list would very quickly need to be updated. We would not want to put something in a Bill that would not stand the test of time, but these schedules are amended on a fairly regular basis.

I asked the government website for a list of public bodies, and there is one. It contains 601 organisations. I doubt it is a comprehensive list, but it contains the 24 ministerial departments, 20 non-ministerial departments, 421 agencies and other public bodies, 113 high-profile groups—they are interesting—19 public corporations, including the BBC, and the three devolved Administrations.

I looked through this list and there were some public bodies listed that I thought we needed to discuss a little bit further. What would happen with some of our defence-related organisations? There is an exemption for national security, but how would that be defined in relation to the Bill? Would that need to be something that would be tested in court? The Minister sighs: I can well understand why. There are defence training academies and there are organisations that deal with the media in relation to defence and make decisions about what adverts, and so on, can be used. These are all public bodies that have duties relating to our relationships with other nations, and they could conceivably be asked to make decisions that would fall foul of this legislation.

The Government have not really thought about the implications for some of these bodies. I accept that some of them are probably relatively low-profile, small in scale or inactive. However, our job is to make sure that we make this as future-proof and workable as we can. That is why we have tabled Amendment 54, which asks for a list, because if your name is on a list, at least you can be alerted to the fact that this is happening and you can take the necessary steps to comply.

If not, it becomes very confusing for decision-makers. As we discussed at Second Reading, these will often be volunteers or people who have not had the necessary training and who are not following the proceedings here. We really would not want to criminalise people inadvertently, when the Government are seeking to do something that is really quite narrow and, as the Minister has said, involves mostly local authorities and universities, which could be done in a completely different way.

Photo of The Bishop of Manchester The Bishop of Manchester Bishop 5:30, 17 April 2024

My Lords, I shall speak in favour of Amendment 54, to which I have added my name. I also support the other amendments in this group. I listened carefully to the previous debate. As other noble Lords have noted, there is a strong overlap between this and the previous group.

Again as others have said, my concern is that, before we pass this Bill, we get clarity on who it covers. I declare a particular interest in that those of us on these Benches, along with other diocesan bishops of the Church of England, do carry out public functions. From time to time, these might bring an individual, in our corporate capacity as bishop of a diocese, within whatever definition of a public body or authority we might eventually land on.

In responding to an earlier group debated before the Recess, the Minister referred to the fact that mayors, police and crime commissioners—and, indeed, Government Ministers—also exercise public functions and hence fall under the scope of the Bill. However, since what these officeholders have in common is that they are elected or appointed primarily to exercise political functions, I can see the logic that maybe they should not use their investment and procurement functions in order to pursue a foreign policy in contrast to that of His Majesty’s Government. Notwithstanding the fact that some diocesan bishops are members of your Lordships’ House, is it really intended that we, along with the small charitable funds for which we are responsible in our corporate personality, should fall under the scope of the Bill? If we place those modest charitable funds with an external investment body, do we have constantly to ensure that that entity does not at any point seek to make restrictions in contravention of the Bill, by investing our money where it should not be—or not investing it where it ought to be?

Other Church institutions are at potentially greater risk of being inadvertently caught up in the scope of the Bill. Noble Lords will be familiar with the Church Commissioners, the body that manages the historic endowments of the Church of England, for the furtherance of the mission and ministry of the Church in perpetuity. It was my great privilege to chair the commissioners’ board, until the end of last year, as the delegated deputy of my most reverend friend the Archbishop of Canterbury. During my tenure, we grew our reputation, alongside our sister pensions board, as being among the world’s leading ethical and responsible investors.

As noble Lords well know, the commissioners require parliamentary approval to spend capital. Indeed, I spoke before the Easter Recess when we brought just such a measure before your Lordships’ House. What noble Lords may not know is that six state officeholders, including the Prime Minister and the Lord Speaker, are ex officio Church Commissioners, notwithstanding that the Government make no contribution to the commissioners’ coffers. Noble Lords will have noted a plea there. The ability of the commissioners’ investment team to deploy assets in furtherance of our mission objectives is not a case of anyone taking taxpayers’ money and using it to pursue their own independent foreign policy, yet, on some readings, these Church bodies may be seen as being within the scope of the Bill. Can the Minister clarify whether such bodies are indeed in scope?

Beyond the Church of England, there are many religious, charitable and other foundations—across a variety of faiths and of no faith—which perform functions in areas such as education. We have heard that referred to before. I am a grammar school boy. I benefited from a scholarship. My widowed mother could never have paid school fees. Such bodies raise and hold endowment funds for such purposes in order to enable students and pupils from less well-off backgrounds, like mine, to fully access and benefit from their services. I know that goes on because I am regularly invited to donate.

What is true of schools is even more true of the endowment funds of universities and colleges. Let us suppose that such an institution receives an offer of funds from a private philanthropist in the UK or beyond who wishes to make some stipulation as to where the endowment may or may not be invested. This is private money. Would this Bill mean that the foundation has to refuse the money, not because the country that it wishes to boycott is already on the list but because it may come on to a subsequent list at some future date?

The simplest way out of this confusion is for the Bill to contain either a schedule of the types of bodies to which it applies, as in the amendment in the name of the noble Baroness, Lady Chapman, to which I have added my name, or to use a definition that points to a well-defined list in existing legislation. The noble Baroness, Lady Noakes, offered that earlier today in the previous group. The advantage of requests under the Freedom of Information Act is that they are ubiquitous and long-standing. I know because I get them all the time and turn them down because they do not apply to me. As we have already heard, this means that most institutions are now very clear as to whether FoI applies to them. The same cannot be said for other definitions, even those contained in the Human Rights Act. So, in responding to this debate, can the Minister let us know how His Majesty’s Government are going to provide the clarity over scope that will be essential for this Bill to become a workable Act?

Photo of Lord Deben Lord Deben Conservative

My Lords, I declare an interest in the sense that my wife is a trustee of a major public orchestra. It does not receive public money, but I just make the point: if you do not receive public money, are you one of these public bodies? If you do, do you become one, and does that mean that you make a choice, which is quite a serious choice?

I also declare an interest because in my business we advise people on procurement and sustainability of procurement. I say to my noble friend that procurement is a very difficult issue on which to advise, because it is very widespread. What does it mean? It means almost everything from what might be called lavatory rolls at one end to procuring very large numbers of services or products. It can also cover the issue of the orchestra that procures another orchestra from abroad. As the noble Lord, Lord Boateng, said, it might have intended to bring an orchestra from, let us say, Russia to this country; if it then decides not to do so, is that the kind of decision that comes under the Bill?

I also have a concern, as the noble Baroness put forward, that the Secretary of State has an ability to remove from the exceptions things that for most of us are really important. If we are not to be allowed to procure on the basis of sustainability or climate change—things that really are existential issues—we have a serious problem, because on any definition of public bodies, the very bodies we are talking about are the ones that ought to be procuring and investing on those bases. The idea that this is only temporary, that it is in the Bill but can be removed by the arbitrary decision of the Secretary of State—and it could be arbitrary, because there is nothing in the Bill to say it is other than arbitrary—worries me considerably.

I rose not just to say that to my noble friend. I am afraid that the Government have a record of producing Bills that do not appear to have been carefully thought through. If the Bill had been produced to me as Secretary of State for the Environment, I would have sent it back and said, “There are too many questions in this, and I don’t want to have to present it to either House of Parliament because I can’t answer a number of the questions”. I do not blame my noble friend for not being able to answer some of these questions, but they are pretty fundamental, are they not? I just wonder what the Secretary of State responsible for the Bill said when it was brought in front of him. Did he ask what the definition of public body is or what a public function is? If he asked those questions, did he get answers? If he got answers, were they satisfactory, and why do we not have those answers when the questions are asked on the Floor of the House?

My worry is this. Out there large numbers of bodies, some of them very small, are worried that this will affect them. I do not believe that kind of legislation does us any good at all. Precision is absolutely crucial here, and we need to restrict this to a very clear, relatively small number of bodies and have a very clear understanding as to what it means.

If we take sporting bodies receiving government money—I cannot claim to be a sportsman and I declare no interests whatever on this front—it seems to me that if individual sportsmen wish to boycott something, the sporting body probably has to discuss that. If a body discusses that, it seems to me that under this Bill it can easily get itself into a position in which that is improper, if not illegal. Again, I do not see why people should have to ask themselves this question.

We are, at the moment, seeing a very inelegant discussion about individuals’ decisions on tax matters, pretty unfairly in most cases I have heard. It is difficult to understand quite a lot of the detailed tax legislation, but producing this legislation will ask a whole lot of other people to understand very detailed and extremely difficult concepts. I say to my noble friend that all I want is to feel that I could vote for something that I understand, and that other people can understand, which does not reach beyond the necessary areas and actually achieves some good. Those are three perfectly reasonable requests, but I am not sure that the Bill meets any of them so far.

Photo of Lord Warner Lord Warner Crossbench

My Lords, we are dealing with a Bill that is in highly controversial territory. If we have sloppy definitions in the Bill, it will encourage litigation. It would be a strange thing if we passed a Bill with a lot of problems around definitions that causes, over time, more people to raise issues around sources of investment through the courts. With all due respect to the Government of Israel, from time to time they have shown quite an enthusiasm for using litigation to make their points.

Also, picking up from the last group of amendments, we live in a rather different time in terms of who raises money for public services, particularly capital money for investments. If we take health and care, the areas I know something about, there is a lot more interest in the idea of going into the private sector—private equity and PFI being good examples—to try to raise money to build facilities of some kind or another for which the public sector has found it difficult to find the money. People who raise funding and use it to provide public services perform a kind of public function. If we have a sloppy Bill, they leave themselves exposed to probing of where their sources of money come from. You then run the risk of driving these people away from the kind of investments in public service that we may need to get some of our old capital structures improved over time. I suggest to the Committee that if we do not tighten up these definitions, we run a series of risks that are self-defeating to any Government.

Photo of Lord Boateng Lord Boateng Labour

I am very grateful to my noble friends for these probing amendments, and even more grateful after hearing the contributions from Members opposite that they have elicited. A number of very serious questions have been raised about ambiguity and lack of clarity.

I hope that the Minister is not tempted to reply with words that are meant to reassure us, such as, “Don’t worry. Everything will be all right. The Secretary of State will decide”. I must confess to the Minister that, the older I get, the less confidence I have in Secretaries of State. I suspect that, in a few months’ time, she will begin to have less confidence than she currently has. There is a good reason for that: all of us—I emphasise this—whatever side of the House we are on, need to be wary of overpowerful government.

I hope that the Minister is able to answer this question. I reflect on times in which those who ran nurseries also provided fruit for children, on the basis that an apple or orange a day helps, and the people who ran such nurseries said that they would not provide Outspan oranges. A range of folk from the voluntary and charitable sector have run those nurseries—mothers’ unions have run them—and they said that they would not provide Outspan oranges because they knew the oppressive system that provided them. They substituted their values for those of the Secretary of State, and it is very a good job that they did, because their values were superior. I want to know this: will nurseries that are run by volunteers and provided by the charitable and voluntary sector, and happen to receive some form of public money from somewhere, be covered by this measure? If they are, it will be and should be no comfort to us or anyone, on any side of this House, that the Secretary of State can be left to decide.

Photo of Lord Willetts Lord Willetts Conservative 5:45, 17 April 2024

My Lords, I intervene briefly, if I may, in support of Amendment 54, which is calling for a comprehensive list to be laid before Parliament. This debate is getting a bit metaphysical about public bodies, and it is revealing that there is no authoritative shared definition of a public body and no single authoritative list of public bodies. The term “public body”, on which the Bill rests, is itself very hard to define. I have two observations about this.

First, we therefore reach out to lists of bodies that have been developed for other purposes in other legislation. There are candidates around: one is the Freedom of Information Act. I am looking across at the Lib Dem Benches, because I vividly remember a debate within the coalition about whether or not universities should be covered by the Freedom of Information Act. The Lib Dem members of the coalition thought that that information should be available from universities. We had a negotiation as part of some wider deal and agreed that universities should be covered by the Freedom of Information Act. At no point in those exchanges did people think that that meant we were defining them as public bodies. We were simply trying, for the purposes of where the information should be and what should be covered by the Freedom of Information Act, under pressure from a member of the coalition, to include universities. It was not intended to be an authoritative definition for other purposes of legislation. In these circumstances, I think that it is sensible to say that we should just have a list of the bodies for which this legislation is most relevant and not try to reach out to find some other list or some permanent definition on all accounts.

There is a second reason, which, if I may say so, is particularly relevant for us on these Benches. There is a paradox in the Conservative position here: the supporters of the Bill are quite keen to stop sanctions, boycotts and anti-investment campaigns by as many bodies as possible. That means that Conservatives are currently reaching out for a very ambitious definition of “public body” because they want as many as possible to be covered.

I am not totally sure that, in the long run, this is an approach that Conservatives will not find comes back to haunt Conservatives, who may think they have ended with an overambitious definition of “public body” that in turn gets used for many other purposes. There are good reasons for a highly precise and limited list of bodies to be covered by this legislation—anything else and you are on very slippery ground, and we may find it has consequences that, even within my own party, people come to regret.

Photo of Baroness Janke Baroness Janke Liberal Democrat Spokesperson (Work and Pensions)

My Lords, I thank the proposers of these amendments for offering an opportunity to establish, as many have said today, some precision and clarity on the range and definition of the public bodies referred to in the Bill. The Minister has an opportunity to reassure us and many groups who fear the implications of this Bill.

In Amendment 22, we are talking about schools or nurseries. The Minister has said we are talking about procurement, but do the Government really intend that school governors should sit poring over the school meals procurement to see whether they are contravening the terms of this Bill in any way? Indeed, as the noble Lord, Lord Deben, said earlier, would they also contravene the terms of the Bill even in talking about it and taking advice?

Do the Government intend that charity commissioners and trustees should take into account the implications of this Bill, and perhaps face vexatious challenges to contest some of the decisions that they have already made? The fact that the definitions are so poor, as many people have said here today, will leave open legal action and vexatious possibilities of weaponising this legislation, by the whole scope that seems to be covered. But the Minister can reassure us today, or in writing, that the list of public bodies covered is, as the noble Lord, Lord Willetts, said, closely defined and clearly identifiable by those whom it affects.

Particularly concerning, as highlighted in Amendment 26, is the implication for charitable organisations delivering public functions in terms of overseas aid and humanitarian work. Often founded on moral principles, as the right reverend Prelate said, many of these organisations have foundations which relate to moral principles and values, which they take into account when taking their decisions, whether on procurement or on investment. I believe territorial considerations must also be key to the functioning of these groups and charities. I agree we need a clear definition, and I would also like to understand and be reassured by the Minister on the reason for the additional powers being given to Ministers.

On the last amendment on this list, we should really have a much better idea—I think the noble Baroness, Lady Blackstone, who said that we are swimming through a sticky pudding, was absolutely right. We are totally unclear about the terms and the scope of this Bill, and I hope that we may be reassured in the course of this Committee.

Photo of Lord Davies of Brixton Lord Davies of Brixton Labour

I have two questions relating to the issue of what constitutes a public body. My major interest in this Bill is Clauses 12 and 13, about local government pension schemes. It is interesting that it requires a separate section of this Bill to deal with local government pension schemes; that clearly indicates that these organisations are not public bodies. The Government’s commitment was in relation to public bodies and yet the Bill is being extended to these other organisations, which require their own section in the Bill, as they are clearly not covered by the general term “public bodies”. Perhaps the Minister could confirm or explain that particular point.

I have a different point relating to pension schemes. Some of these public bodies that we have been talking about have their own funded pension schemes, which are making investment and procurement decisions. As I understand it, because they are separate trusts, they are not themselves public bodies. But they belong to a public body and they are associated with the public body, so it is possible, within the bounds of trusts law, for those pension scheme trustee bodies to consider a decision that might potentially fall foul of this legislation. Therefore, we have the odd situation that the trustees can discuss these matters, but presumably the sponsoring organisation, which does count as a public body and is covered by the Bill, cannot discuss what the trustees whom they nominate should or should not be doing. There is a certain contradiction here, and again I invite the Minister to explain how that will operate in practice.

Photo of Baroness Randerson Baroness Randerson Liberal Democrat Lords Spokesperson (Transport)

My Lords, I will briefly go back to the Government’s own list of public bodies on GOV.UK. Of that list of public bodies, there are 18 listed for the Department for Education, none of which is a university. The Minister referred to overlapping definitions in the Bill. I have been sitting here and thinking about that, and wondering where the University of Buckingham sits in the Government’s concept of where universities lie, because that is a private university but one which is fulfilling exactly the same functions as all the other universities in the UK. Those other universities are, of course, exempt charities and so we are on a whole series of conflicting paths here, with just one aspect of the definition of public bodies that this Bill seems to wish to encompass. I raise these issues so that the Minister can perhaps give us some of her thoughts on these overlapping definitions and where they actually sit within the Bill.

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

My Lords, first, we are in the territory of the chilling effect, are we not? If there is a very large number of bodies which are not going to be sure how far they come within the scope of this Bill, they will be very nervous about doing things that they would otherwise do. That is why leaving it so unclear as to how far the definitions of this Bill stretch over the sector, in which public and private institutions, and public and private functions, overlap so closely, is highly undesirable.

Secondly, this clearly will require very substantial subordinate legislation. I think it is the sense of this House that it is a bad thing to pass Bills that need too much subordinate legislation. Yesterday, the noble Lord, Lord Hayward, whom I regard as an extremely good friend, said to me that the subordinate legislation under the Elections Act, which we passed in 2022, is now approaching 1,000 pages, and that the Electoral Commission is spending a considerable amount of its time providing guidance for local authority electoral registration officers on what this means for them. That is bad legislation; we want to avoid that again here.

Thirdly, there have been occasions, as others are aware, where lists of public bodies have been provided. The Minister will remember the SI on trade union levies being taken, or no longer being taken, automatically from pay scales for particular public bodies. That had a list, at the end, in the schedule, of over 200 bodies, which included some quite interesting ones such as the Scottish salmon council, and various semi-charitable local institutions to do with, as I remember, care homes and nurseries.

Fourthly, to add to the question of universities, what universities are most concerned about is whether or not the student loan book, which is a very large sum, is included in the Treasury’s calculation of national debt. That is not a marginal issue; it is quite important. That is why definitions such as this and how they are used by different parts of government and recognised be the courts are extremely important.

Photo of Baroness Noakes Baroness Noakes Conservative 6:00, 17 April 2024

My Lords, on the previous group of amendments I explained that I was concerned about the lack of certainty involved in the definitions. However, I feel the debate on this group has engineered more uncertainty than in fact exists.

My noble friend the Minister explained that the Government used the Human Rights Act definition because there is 25 years of jurisprudence, and the noble Lord, Lord Stevens, helpfully suggested that the Government update their understanding of what that definition means. I believe that most of the bodies know whether or not they are subject to the public sector duty involved in the Human Rights Act—not all of them, and there are certainly issues at the margin, but we need to get this in proportion. For example, I suspect that most of the bodies that the right reverend Prelate referred to already know whether or not they are subject to the human rights duty in Section 6 of the Human Rights Act. So although I continue to believe that clarity is important and that we need to find ways of achieving that clarity, we should not overstate the difficulties of establishing who is within the terms of the Bill and who is not.

Photo of Baroness Blackstone Baroness Blackstone Independent Labour

My Lords, could the Minister comment on the actual functions of some of these so-called public bodies? I assume that secondary schools will be regarded as public bodies. They have a wide range of functions focusing on educating the children who are pupils there, but they are also responsible for the development and improvement of their school buildings. Let us take the example of a school that has an extremely rich alumnus who wishes to reward it for the excellent job it did in educating him, and allocates to it a very large sum of money to put up a completely new building: will that be caught by the Bill’s scope, so that the school has to decide whether it will be found to be breaking the law because it takes into account moral and ethical considerations in its purchase of goods for providing a very large new school building? These are the sorts of questions that people will face, and I am not sure that the governors of most state secondary schools will be terribly familiar with Section 6 of the Human Rights Act; nor will they find it that easy to get advice about it. Perhaps the Minister could comment on that sort of situation.

Photo of Lord Stevens of Birmingham Lord Stevens of Birmingham Crossbench

I take the point that the noble Baroness, Lady Blackstone, just made in respect of schools, but I also agree with the point the noble Baroness, Lady Noakes, made about the jurisprudence that has arisen, which has clarified this for a number of institutions, including, I think the right reverend Prelate the Bishop of Manchester will find, the Church of England. In fact, I believe the first case to test whether a body in the Church was indeed a public authority was Aston Cantlow Parochial Church Council, which was trying to exact a chancel repair charge. In the Appellate Committee of the House of Lords at the time, the noble and learned Lord, Lord Hope, deemed that the parochial council was not a public authority. Many details have been laid out by the courts quite clearly over the years, but if the Government could adduce that on to a single sheet of paper in the way that has been described, it would be very helpful.

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

My Lords, as I set out in my response to the previous group, the Government chose to apply the ban to public authorities as defined by Section 6 of the Human Rights Act 1998. It is a great advantage that your Lordships, perhaps in contrast to the other place, scrutinise Bills in this way. I cannot accept that it is a sloppy Bill—it is a good Bill—but I think that concerns have been overstated. My noble friend Lady Noakes just explained why, very eloquently. We need clarity. Most bodies know whether or not they are covered.

There is another good reason for using the Human Rights Act definition—obviously, I am happy to look further at its implications, as I have said—which is that the Government intended to apply the Bill to a broad range of bodies when they are exercising public functions. This was to ensure a consistent approach to foreign policy across the UK’s public institutions, to stop public bodies legitimising divisive campaigns, which can undermine community cohesion, and to allow public bodies to focus on their core purpose when engaging in procurement and investment. That was the intention of the manifesto commitment that I mentioned in the previous group.

These amendments seek, rightly, to probe the scope of the Bill’s definition of public authorities, but they also probe the need for the power to make exceptions to the ban. I will try to address each in turn.

I am very glad that the right reverend Prelate the Bishop of Manchester has joined the debate. The Church of England would be in the Bill’s scope only to the extent that it exercises public functions. We have heard a little about the interpretation of that in the courts.

Before I address the specific amendments, I remind the Committee that the Bill will not create any new criminal offences. That is a very important point. I also take this opportunity to address the point raised by the noble Lord, Lord Boateng, and the noble Baroness, Lady Chapman, which was picked up by my noble friend Lord Deben, on orchestras. Orchestras are very unlikely to be regarded as public authorities. Moreover, withdrawing from an event is unlikely to be regarded as a procurement decision for the purposes of our Bill. The definition of a procurement decision does not include contracts where it is the public authority providing the service.

I can also reassure the noble Baroness who raised the issue that defence contracts are also exempt from the Bill. In addition, for contracts in scope, the Bill already contains an exception to the ban for national security considerations. In practice, if a case is reported to an enforcement authority it will look at whether the public authority had regard to any of the exemptions to the Bill—for example, the national security exemptions —during the decision-making process. Evidence of this might include if the public authority shows that it was following guidance from the UK Government, or became aware, for example, that a supplier was engaged in espionage.

Amendments 26 and 23 probe whether charitable organisations would come under the Bill’s scope. Charities would be captured by the ban only if they were performing public functions. It is the Government’s understanding that most charities will not be covered by the Bill. I hope that provides reassurance to noble Lords.

Photo of Lord Collins of Highbury Lord Collins of Highbury Opposition Whip (Lords), Shadow Spokesperson (Equalities and Women's Issues), Shadow Spokesperson (Foreign and Commonwealth Affairs and International Development), Shadow Deputy Leader of the House of Lords

I am sorry to interrupt, but I was just checking the relevant parts of the Bill relating to enforcement. The Minister said that no new criminal actions arise from the Bill. What we do have is the ability of the Secretary of State to have enforcement powers that include monetary penalties. If people refuse to pay the monetary penalties, what would that result in?

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

Perhaps I might continue on the points raised in the debate and come back to that point. It is a very reasonable question but I am not going to answer it without advice. However, there are no criminal sanctions in this Bill, which there often are in the Bills we consider in this House.

There may be a small number of cases where charities are delivering public functions; they would therefore be captured in respect of those functions. However, it is important to note that it does not mean that a charity is a public authority just because it is in receipt of public funding.

The Bill will not apply to charities’ private functions. For example, for universities, decisions that are part and parcel of delivering higher education would be public functions so they would be in scope of the ban. If a charity did have public functions in scope of the ban, it would apply only to investment and procurement decisions made within the public functions. That is a point that I need to emphasise. Therefore, the ban would not restrict how such bodies decide, for example, to distribute humanitarian aid, which was the subject of the earlier debate.

Photo of Lord Boateng Lord Boateng Labour

I think the Minister, or those who advise her, has misunderstood the point I raised in relation to the orchestra. The orchestra is putting on a concert version of “The Rite of Spring” as part of a Stravinsky festival. That festival is being held in a number of cities throughout the world. It is booked to appear at the new opera house in Dubai. It puts out a tender for ballet companies to provide the dance section of “The Rite of Spring” for this concert version. It specifically precludes in its procurement—so perhaps those who advise the Minister can reflect on this—the national ballet company of a country that has recently invaded a sovereign nation because it does not wish reputationally to be linked with that national ballet company. That is quite clearly a procurement. Is the Minister saying that that would not be covered by the Act and that the fact that the orchestra concerned receives a proportion of its funding from the public purse does not make it fall within the ambit of the Act? It is to that question specifically that an answer would be helpful. If she cannot give that answer, it demonstrates very clearly the concern about ambiguity that all contributors to this debate have articulated.

Photo of Baroness Noakes Baroness Noakes Conservative

The noble Lord, Lord Boateng, has concentrated on the procurement decision, but before you get to decide whether a procurement decision is relevant, you have to decide whether it is a public authority—so it will come back to whether the orchestra is a public authority before getting to any issue about whether a procurement is covered.

Photo of Lord Boateng Lord Boateng Labour

That is what we want an answer to: is it a public authority for that purpose because it receives public funding?

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

I am glad that we have focused on an individual example because, in my experience, this always helps us to clarify our own thinking. I think that, if the noble Lord, Lord Boateng, will allow me, I will take the orchestra example away, along with the example given by the noble Baroness, Lady Chapman, work out the right approach and get back to noble Lords, perhaps in discussions outside the Chamber.

We all want the same thing: to make sure that the Bill applies to the right bodies in the right way. That is what we are seeking to do, which is why we started with human rights legislation, which is often a popular start, for good reasons, to legislation. However, we have, as we do, scrutinised the detail of legislation today and have come up with some extremely good questions. It behoves us to go away. I am sure we can find good answers and use them to improve the Bill, which is, as I said when I introduced the Bill, what we are determined to do to get a good Bill that leaves this House in the right place and delivers on our manifesto commitment.

I turn now to Amendment 25, which seeks to probe whether a national governing body of sport that is in receipt of public funding would be in scope of the Bill. It raises some of the same questions and issues that we are going to consider. It is possible that a governing body of sport could be in scope of the Bill. If a sporting body is considered to be a public body under the Human Rights Act, on the basis that it exercises some public functions, the ban would apply only to the public functions exercised by that body, but a sporting body being in receipt of public funding would not in itself be enough for it to be considered a public authority. These bodies play a significant public role.

Photo of Baroness Chapman of Darlington Baroness Chapman of Darlington Shadow Minister for the Cabinet Office, Shadow Spokesperson (Treasury)

We have got the public function thing again, which the Minister has referred to frequently. She has clarified that public funding is part of what will determine whether the sporting governing body is a public body, but she said that would be relevant only in the conduct of public functions. I am not clear on this, given that at the end of the previous group we were promised a response on what a public function is. I think the Minister said that she would follow up in writing, but she is relying on that term frequently in her response to this group of amendments, which I do not think is helpful, unless she can say something at this stage about what she considers a public function to be.

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

The noble Baroness is right that we need to use the term “public function” with care and to be entirely clear what it means, but the receipt of public funding is another legitimate issue that we need to understand—and understand the scale as well.

Photo of Baroness Chapman of Darlington Baroness Chapman of Darlington Shadow Minister for the Cabinet Office, Shadow Spokesperson (Treasury) 6:15, 17 April 2024

As an example, if a young people’s badminton team were to be taking a tour of south-east Asia and felt it did not want to take part in events in certain regions of China and came under some pressure on this from parents or other groups, how would that be? You could say that enabling young people to engage in sport is perhaps a public function. I do not know. How would that be considered?

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

That example would not be procurement or investment, so it would be outside the scope of the Bill. However, the noble Baroness has raised the point. Sporting bodies can be within scope, as I explained, in procurement and investment decisions. The reason for this is that these bodies play a significant role in public life and it would send a very unhelpful signal if we were to single out governing bodies of sport as an exception to the Bill.

Photo of Baroness Chapman of Darlington Baroness Chapman of Darlington Shadow Minister for the Cabinet Office, Shadow Spokesperson (Treasury)

I am sorry to keep on about this, but there is then a need to define procurement. In the example that I am, perhaps tenuously, relying on, there would surely be procurement of transport services, accommodation services, catering services and venues.

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

It seems to me that the issue here is boycotting a sporting event, and that is not a procurement or investment decision—but I have already undertaken to look carefully at these individual examples, because we all want to understand exactly what we are talking about and to come to the right outcome.

Amendment 24 would carve out community interest companies. While it is not inconceivable that a community interest company might perform a public function, neither the purpose nor the structure of a community interest company naturally lends itself to that. It is not, by and large, what the Bill is designed for.

Amendment 22 seeks to probe whether schools and early years providers, such as nurseries, are in scope of the Bill. I can confirm that all publicly funded schools will be captured by the ban when they are performing public functions, and some early years providers will also be public authorities on that definition. Other early years providers may be captured to the extent that they are performing a public function. However, I will take noble Lords’ concerns on that issue away, because I think it comes into the same category as the other two examples we will be looking at.

Privately funded independent schools—and I think this will probably apply to private universities—will be captured to the extent that they perform a public function. However, they are unlikely to perform functions of a public nature in scenarios where they are captured as hybrid public authorities, which we discussed on the previous group. The ban will ensure that publicly funded schools remain shared spaces for all, and the Bill will ensure that schools and early years providers can remain focused on their core duties, rather than being distracted by divisive campaigns promoted by BDS and others.

Photo of Lord Deben Lord Deben Conservative

If a Church of England or Catholic school says it will not buy from a country that is persecuting Christians, that is concentrating on its core responsibility. It is not avoiding it; it is what it is there for, which is to uphold the faith. Are we really going to dictate whether or not it should make that decision?

Photo of Lord Roborough Lord Roborough Lord in Waiting (HM Household) (Whip)

My Lords, the Minister has an advisory speaking time of 20 minutes. May I respectfully suggest that we leave any further interventions until the end to allow the Minister to answer as many of the existing questions as possible?

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

I have already said that I am trying to answer the many questions noble Lords have asked. There have been a great many interventions on me and I have been very patient. I have also made some undertakings to try to clarify some of these points, including childcare, which would cover the schools that my noble friend Lord Deben mentioned.

Perhaps I could turn to Amendment 54, which requires

“the Secretary of State to provide a comprehensive list”, of the bodies in scope

“before the provisions in Clause 1 can be brought into force”.

The Government are not able to provide a comprehensive list of bodies captured by the Human Rights Act definition. However, I have tried to be clear on the categories of bodies that includes. To repeat, these include: central government agencies and non-departmental public bodies; UK Government Ministers and devolved Ministers; local authorities; administering authorities of local government pension schemes; universities and higher education providers with public functions; publicly funded schools; and some museums and galleries in receipt of significant public funding.

As with any definition, there will be further cases at the margins where it is impossible to generalise without the full facts of a case. That, of course, is where the courts come in. Legislation often uses general definitions—for example, the Human Rights Act from which we have taken the scope or the scope of bodies covered by obligations under public procurement legislation.

Finally, I turn to Amendment 14A. This would remove from the Bill the powers granted to the Secretary of State to amend the schedule to make exceptions to the ban for certain bodies, functions and types of considerations, and to amend or remove regulations made under these powers. I understand concerns about the use of subordinate legislation—the noble Lord knows that—and we are lucky that we have such a good committee to supervise its use. However, these powers are necessary to ensure that the ban can evolve over time and operate as intended, for example in response to emerging global events.

I assure the noble Baroness, Lady Chapman, that the FCDO is fully supportive of this legislation, and all regulations made under this Bill would follow the normal procedure of cross-governmental clearance and, of course, be approved by the Foreign Secretary. In the event that in future the ban has unintended consequences for a certain public authority, it is right for the Secretary of State to have the power to exempt that body, or a function of the body, from the ban via statutory instrument—I think today’s debate shows that that is necessary—and this would be subject to affirmative resolution by both Houses.

These powers will also allow the Secretary of State to exempt certain types of considerations from the ban. For example, Ministers may decide to exempt a narrow type of consideration to ensure the ban can evolve in line with government policy. The powers future-proof the legislation to ensure the ban can continue to operate effectively and mitigate against any unforeseen circumstances.

Before I close, I should perhaps address the point made by the noble Lord, Lord Deben, on the environment. The ban applies only to decisions that target a particular country or territory. For example, environmental campaigns, including ones against fossil fuels that are not country specific, are outside the scope of this Bill. I also reassure my noble friend that the power in Clause 3 cannot be used to remove any exception to the ban in the Bill as passed by Parliament. There is a schedule the noble Lord can look at, which includes environmental misconduct, which we are coming on to discuss.

I hope, finally, to address the point raised by the noble Lord, Lord Davies of Brixton, with regard to why there is a separate clause in the Bill for local government pension schemes. The administering authorities for local government pension schemes are public authorities under Section 6 of the Human Rights Act. Capturing administering authorities of LGPS in a bespoke provision means that the Pensions Regulator can use its existing powers and procedures to enforce the BDS ban for the administering authorities of LGPS. That avoids the Pensions Regulator setting up a separate enforcement system for the Bill. I am happy to have a discussion with him; we often discuss pensions issues which are of limited interest sometimes to the whole House.

I hope that my response to this group of amendments —importantly, alongside the undertakings I gave in response to my previous group which we expanded a little to bring in telling examples—will help the Committee to understand why we have chosen the Human Rights Act definition and I ask the noble Lord to withdraw his amendment. I look forward to further discussion.

Photo of Lord Collins of Highbury Lord Collins of Highbury Opposition Whip (Lords), Shadow Spokesperson (Equalities and Women's Issues), Shadow Spokesperson (Foreign and Commonwealth Affairs and International Development), Shadow Deputy Leader of the House of Lords

I hope I am able to intervene at this point before the noble Baroness sits down—some of these new rules that have been introduced for Committee stage I find incredibly damaging to our ability to properly scrutinise this Bill; I raised that point at the committee.

The noble Baroness said that the FCDO fully supports this legislation. She may recall that, at the previous Committee day, I specifically raised this question because I wanted to inform the Committee of the precise nature of the FCDO’s advice following United Nations resolutions regarding the Occupied Territories, which are specifically mentioned in this Bill. Perhaps she can take this opportunity to tell us how that advice could potentially impact the sort of investment and procurement decisions that organisations might make. There is advice issued by the FCDO in relation to the Occupied Territories.

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

We are going to be discussing the Occupied Territories in a group two or three later in this Bill and I do not have an answer to the noble Lord on this point today, except to reiterate that this Bill has been collectively agreed. I was particularly talking about the arrangements for regulations which, in turn, had been collectively agreed. I explained the system that when you have a new statutory instrument, there is a write-round which involves all relevant Ministers. In this particular case, that would certainly include the Foreign Secretary.

Photo of Lord Warner Lord Warner Crossbench

Before the noble Baroness sits down, can I ask her to take away the point I was ineptly trying to raise earlier? If a public body—we could take as examples housing, health and care—has an investment decision to make on a new building and/or new services, is it expected to find out more about the sources of the money going to be used to enable it to perform public functions and provide new public buildings? Are they expected to go that far?

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

I am grateful for that point, but I am not sure I entirely understand it, so perhaps I can offer to meet the noble Lord or to write to him and make sure that he gets an answer in good time.

Photo of Baroness Chapman of Darlington Baroness Chapman of Darlington Shadow Minister for the Cabinet Office, Shadow Spokesperson (Treasury)

My Lords, I was not expecting this group to elicit quite the debate it did, but it was incredibly helpful and welcome in exposing what the noble Lord, Lord Warner, called “sloppy”. He makes a fair point. The Minister said that she did not like that phrase but, given that we have been unable to agree a definition of a “public function”, unable to elicit a proper definition of “procurement” and have not agreed what a “public body” is by any means, I have to agree with him.

This is not us being mendacious or deliberately creating problems for the Government, although you could argue that is a fair thing for the Opposition to want to do; that is not what we are doing here. Like the noble Lords, Lord Willetts and Lord Deben, we are trying to get to the real nub of how this Bill enables the Government to fulfil the commitments that we all accept they made in their manifesto. We understand that the Government want to stand by those commitments, but we are so concerned that the legislation before us could end up straying into so many more areas. I honestly do not think that when this went into the manifesto, anybody had sporting bodies or schools in mind, yet here we are with the Minister unable to answer some quite straightforward examples, including a very good one from my noble friend Lord Boateng. I regret that.

I agree with my noble friend Lord Collins that, when the Government Whip pops up to try and rescue the Minister from having to take too many more interventions, that is fair enough, those are now the rules, but this place is supposed to be able to spend a bit more time in Committee—

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

I think that is a little unfair. The noble Baroness knows that I am always ready to take interventions and have continued to do so. I am doing my best to do the job that this Chamber does so well. We have used the Human Rights Act definitions and this Chamber has decided that that causes problems. I am sure those are soluble.

Photo of Baroness Chapman of Darlington Baroness Chapman of Darlington Shadow Minister for the Cabinet Office, Shadow Spokesperson (Treasury) 6:30, 17 April 2024

I absolutely did not mean any disrespect whatever to the Minister. She is completely right; she has never declined to take an intervention and has been very accessible on every occasion that I have needed her to be so outside this Chamber. The point I am making is that these considerations in Committee intentionally sometimes involve a lot of back and forth, because we are trying to get to the point—trying to understand, to improve and to do our jobs.

This has been a helpful debate. We leave with a few more questions even than we arrived with. I am sure we will come back to some of this in later stages but, for today, I beg leave to withdraw.

Amendment 14A withdrawn.