Bill Esterson
MP for Sefton Central · Labour · United Kingdom
“As the Prime Minister said on Tuesday, our energy supply and our energy security are not a question of having either oil and gas, or renewables; they are about both. It is a great pity that proper process was not followed in 2022 or 2023. [ Interruption.”
“I warmly welcome my right hon. Friend’s commitment to continuing Britain’s global leadership on climate action, including by going to COP31. I also welcome his focus on breathing space for people and businesses, but, as he said, it will take a lot more than that to deliver the growth and reindustrialisation that he is so committed to.”
“Last week the Committee heard from Claire Dykta, the director of strategy and policy at NESO, who told us: “Operational decisions are taken by authorised, trained personnel only.” Her comments were confirmed by Alastair Martin, the chief strategy officer at Flexitricity, who, in the same session, said: “I do not think the idea that the he…”
“As the Minister has just said, new nuclear is essential for energy security. It is also essential as an alternative career for workers in oil and gas.”
“Paul and Susan Robinson each worked for the Health and Safety Executive for more than 40 years. They have not been able to plan for their retirement since finishing work last year; they have been living off their savings and the small loan that they have had. They are typical of the dozens of constituents who have contacted me.”
“Hudson primary school in my constituency does a brilliant job. It is a family hub, it specialises in support for children with SEND and autism, and it has a nursery, but its building, which is 80 years old, suffers from a high water table that brings damp, mould and structural problems for the building—as does occasional flooding.”
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“In the debate we have just concluded, the Minister referred to matters that fall under the set of amendments we are now considering and the reciprocal nature of the benefits of the GPA. These amendments relate to the impacts on those companies tendering for UK procurement contracts and the way they might be addressed through the annexes to the GPA that we might seek once we have acceded to that body. The amendments relate to the desire for procurement to look beyond short-term pricing—a problem that has bedevilled procurement—and I will give some examples a little later. All four amendments pick up elements of the points made to us by Rosa Crawford in her oral evidence on Tuesday about the desirability of price value or life cycle costing in procurement.”
“They also allow for maximum wages, although that is rarely used. They allow for legislation to prevent discrimination on the grounds of age, sex and religion; legislation to support or regulate trade unions; a maximum working week; legislation on health and safety; behavioural nudges, which are making an appearance for a second time in our deliberations, to encourage workers to take up pensions, for example; and Government provision of education and training schemes to enhance skills and encourage the recruitment of apprentices.”
“That is why our amendments call for the Government to pursue with GPA partners the potential for the inclusion of labour standards, environmental standards, support for small and medium-sized businesses and consideration of public health consequences in our annexes to the GPA. I will define what we mean by that. In amendment 24, we refer to “labour market interventions and compliance with ILO standards”. That means we want to ensure that companies that fulfil their obligations to their workers, treat workers well and meet their commitments to working with trade unions in a productive manner are not undercut by companies that do not. This is about rewarding responsible businesses, as well as supporting workers. Labour market interventions in procurement allow for minimum wages and living wages.”
“Yes, and that is why it is important that we maintain as a minimum not just the GPA regulations but the Public Contract Regulations 2015, that they are renewed and that we look to build on them, which is the reason for the amendments. Ministers—including, on occasion, the Minister present—have indicated their support for British business, and the Prime Minister on numerous occasions has encouraged us to buy British. I imagine that the logical extension of that statement is that he wants Government procurement departments to buy British as well, and I will come to other examples of what Ministers have said. This is about having the strongest possible procurement system.”
“I thank my hon. Friend for that excellent example of why ILO obligations matter. She is absolutely right that it is about paying decent wages, but of course one of the consequences of having such provisions in public procurement is that not only the workers and their families, but communities benefit due to greater spending power in local economics. This is an economic measure as well as a social measure. That is why it is right that progressive procurement considers it.”
“I cannot remember whether it was the Minister of State or the Secretary of State who quoted the Government’s attitude towards the climate crisis and the achievement of net zero, but it certainly was quoted by Ministers this morning.”
“Similar descriptions are applied in amendment 25, which mentions, “environmental exceptions and carbon considerations”. The current UK minimum standards take into account energy and water use, carbon footprint, resource efficiency, and life-cycle costs in order to set minimum standards of sustainability for Government purchases. Our standards need to be protected, both in terms of maintaining these procurement standards and of ensuring that our schedules at the GPA remain up to date with the action needed to address the climate crisis. If we allow the public procurement regulations to lapse, we will not include such provisions as those I have just described, which are picked up in amendment 25. I know that Ministers take this seriously because the point was made in oral questions just this morning.”
“I am grateful to my hon. Friend. He said that smaller organisations find it difficult to win contracts, and that is why the Government have to use their authority and make sure the regulations are in place. Amendment 26 is about small and medium-sized enterprises, and it should absolutely cover social enterprises too, many of which are SMEs. It is essential that such things are in regulations to support the sorts of enterprises that my hon. Friend describes, and to pursue socially valuable activities. I will come to the Public Services (Social Value) Act 2012 a bit later, which was initiated by a former Conservative MP, Chris White, and passed with the support of the coalition Government. It gives more detail in this area.”
“It was you. I knew you wouldn’t sit there quietly. I am glad that the Minister did mention it, because he is absolutely right, but without the support of the regulations, it is that much harder. The climate crisis will not be addressed unless there is intervention—and substantial intervention. Public procurement policy through the GPA is one very important tool in the toolbox in achieving those objectives.”
“I thank my hon. Friend for providing an excellent example in the renewable energy sector of just how important it is that we do as we say and that we are strongly committed through Government action—at national, local and devolved level—to tackling the climate crisis.”
“I thank my hon. Friend. That is absolutely right, and there are a number of good examples. Unfortunately, the evidence is there that we did not adopt a life cycle-costing approach or a price-value ratio for procurement decisions, instead basing them on narrow, short-term pricing. My hon. Friend the Member for Harrow West made a similar point but, fortunately, life-cycle costing was chosen in his example from Cumbria. This is one of the changes. Yes, the amendments are about ensuring the continuity of existing arrangements, but in the end they are about improving our procurement and improving the social, environmental and labour outcomes of these matters, to the benefit of society as a whole.”
“There are some wider questions, which may well be raised as we discuss the next set of amendments, about where we source food from and the need to consider not only the carbon footprint and transport, but some of the impact of intensive farming more widely and the way that our society eats a lot of meat, which is a real concern not only for health, but for the climate, because of the natural resources used up in feeding animals. We have so far addressed the descriptions of ILO standards, environmental exceptions and carbon considerations in the amendments—”
“Again, I am grateful. We should take my hon. Friend’s question seriously, because if we have a procurement system that encourages a greater carbon footprint in our food supplies, the consequences will be damaging to our attempts to meet our climate obligations and to tackle the climate crisis. He also mentions the public health elements of this; in fact, he picked up on at least two of the amendments just in that example. In the end, we want to address the problems of obesity, which has been one of the most serious public health challenges in our society for some time, but we also want to address the carbon footprint.”
“That is a good question: what is possible if restrictions are in place because of international obligations in this area? I imagine the Minister will pick up on that in his response, but there are a number of important points in my hon. Friend’s comments. Yes, we must show leadership, but we should do that at a local and national level for businesses in this country. We should also show leadership elsewhere in the world, by setting our sights high regarding our obligations on the environment, labour, public health and support for SMEs. Through our procurement policy there are other areas of regulation and law where such things also apply.”
“That is great, but it is not always going to the SMEs that it should. There are other examples from the public health crisis. Companies in my own constituency have come to me wanting to either import or manufacture personal protective equipment, but they have been completely unable to do so because of the barriers to entry in our procurement system.”
“However, Serco has now won the contract for the test and trace system. It has no experience whatever in test and trace. There are companies and small firms out there that have the expertise and have been saying for months that they can do it. They have been trying to help, but they have hit a brick wall. Once we join the GPA, I do not see why we could not negotiate along those line with our partners. Ideally, that would be part of our procurement regulations. That is possible. In the interim we need to retain the best possible arrangements and then build on them. The danger is that the public contracts regulations will expire at the end of December and we will go backwards when we need to go forwards. The Government spend nearly £6.5 billion—a very large figure—on procuring with UK SMEs.”
“SMEs that have come to me since the start of the crisis have expressed concerns about their inability to contract directly through the Department for Business, Energy and Industrial Strategy or the Cabinet Office, or to get support for exports—this point is often made—through the Department for International Trade. They have been unable get such support because everything goes to the big firms. The big firms have their own procurement departments and they win all the contracts. That has happened yet again with Serco, which only a few months ago was fined for failing to complete a contract successfully. Serco was the cause of so much of the problem in the failed probation privatisation. Thankfully, last week’s statement by the Justice Secretary put a final nail in its coffin.”
“Indeed, that is generally where effective research and development in technology is derived from. Lately, large firms without their own research and development departments have simply taken over small firms that do. That is because of the kind of the situation under discussion. If we want to succeed, it is essential that we put our investment, including public investment through procurement, into those small businesses. I intended to speak later about some of the procurement problems, but I will mention one or two now. I am about to move on to public health improvements, which is the subject of the fourth amendment in this group, and in which context contracts have been awarded.”
“I am pleased that my hon. Friend has mentioned the innovation and entrepreneurial ability of our SMEs. The Under-Secretary of State for International Trade, the hon. Member for Beverley and Holderness (Graham Stuart), said this morning that small businesses are the “backbone of the economy”—I think I have remembered that correctly—and he is right. However, we need to encourage them more. They are innovators and entrepreneurs. That entrepreneurial spirit is often where the best ideas come from, and my hon. Friend is right that that drives productivity. Businesses running start-ups and scale-ups with new ideas and often enthusiastic members of staff are in a stronger position to deliver the kinds of new ideas, changes and technological advances that make such a difference.”
“For example, Manchester City Council—I want to ensure a good political balance in the examples given by Labour Members—has delivered according to an environmentally sustainable local agenda. It has delivered support for workers—the agenda set out by my hon. Friend the Member for Warrington North—and it has delivered on public health agendas, too.”
“I am grateful to the hon. Gentleman for raising that issue. I have seen from the figures that Scottish procurement has been significantly better, by an order of magnitude. I do not know the balance between direct and indirect procurement, but if indirect procurement is handled appropriately and margins are still maintained and the quality and innovation is still available in the contracts, then that works. The hon. Gentleman asked me a question. My intention is to make things easier to do, not harder. Our request is to improve the regulations, negotiate with our partners in the GPA, and to retain and enhance what is in retained EU law. This applies not only to Scotland but to local government, Northern Ireland and Wales. There are different systems and they do a much better job.”
“That is a piece of international trade we could have benefited from, which should add to the value of the story. I am afraid that we have not done this well.”
“I will not go into how many tests we are doing, whether they are actually being done, how much double-counting is going on or any of that. He had a solution, which was better because it did not involve the invasiveness of nasal swabbing—it was saliva only. I have raised this with the Minister’s colleagues and tried to break through. I am not just using these as examples; I have done my best to get through to Government procurement, because they can really make a difference in this crisis. To this day, he still has not managed to get UK approval for those tests, which are easier to administer and easier to analyse. He could have set all that up and we could have been here two months ago, given when he first developed the technology to do it. I think that is a real shame.”
“Yes, of course, there are questions about ensuring that quality standards are in place—I understand that and they understand that—but they had done all that work because they have a long-established business. Yet they were unable to break through the procurement system. I will give another example of a company that contacted me. It was set up by a British man in California, so it operates in America. He has the scientific specialism to design tests that identify whether people have the virus. He worked out how to do it with a saliva-only test. He had proven to the Food and Drug Administration, the US accrediting organisation, that he could do it and won a sizeable contract, including with the US military. He then approached the UK. This was at a time when we had a real problem with a shortage of tests.”
“That is an excellent local example. As I said, constituents have made similar points to me. I have a constituent who can manufacture 40,000 reusable medical robes a month. They are reusable up to 100 times. In comparison, the winner of the contract—whichever very large conglomerate it is that keeps winning them—is delivering medical gowns from overseas. We saw the fiasco with the Turkish consignment, where most, if not all, were unusable. There have been earlier examples of where what was taken out of the packaging fell apart. Yet here was somebody in my constituency making that offer, but they were completely unable to make progress or to win the contract. They had demonstrated their capability, having gone through all the accreditations.”
“That is my understanding. I heard a reaction from one Member on the Government Benches that suggested that they did not agree with the assertion that there was a bias against the north. I represent a constituency very near to that of my hon. Friend the Member for Warrington North. I am glad that our mutual hon. Friend the Member for Harrow West raised that point, because one of the reasons given to firms in my constituency was that they were too far from London. I am afraid that that is what has been said by procurement officials in Government, and that cannot be right. My hon. Friend is right to raise the matter, and he is right that it has to be one of the answers. It covers the environmental aspects of amendment 25 and the small business and economic requirements of amendment 26, as well as those under amendment 27.”
“I am very glad that the hon. Gentleman’s constituents’ companies have been successful in contracting with the Government, but the fact remains that in the experience of my hon. Friend for Warrington North, and in mine, that is what has happened.”
“No, not yet, because I have not finished answering the hon. Gentleman’s first question. He really needs to wait, rather than intervene. We can certainly discuss the point further. I have raised it at length with officials and with the Ministers’ colleagues, and it needs to be addressed. It may well be that officials were speaking out of turn. I am prepared to believe that, and I have not made a big issue out of it previously. The bigger point is that we are losing out on expertise, and we have lost out on the potential during this crisis for better procurement and supply of PPE and, in the case of the firm in America, of testing capacity and capability. That is not sensible and it is not where we need to be. I am happy to discuss the matter with the hon. Gentleman later, but I suggest that we move on.”
“I am grateful for that offer. It is something that we have already done with Ministers, but I am happy to revisit it. It may be that revisiting it would be helpful now that some time has elapsed since the response to my case—I do not know about that of my hon. Friend the Member for Warrington North—was received. It is important to recognise that we are trying to improve the situation so that we do not have such problems, whether they are authorised by Ministers or not. I am not going to stand here and say that the Minister and his friends authorised that kind of comment, but I am afraid that it happened, and I think the Minister’s offer is a good one. We need to find out why and ensure that it does not happen again, so I will take him up on that.”
“The GPA aims to liberalise and increase access to member states’ public procurement markets. The TUC has concerns that provisions in the GPA are more limited than current measures included within the EU Procurement Directive 2014, which was transposed into the UK domestic law through the Public Contract Regulations 2015. These limitations centre on two areas: The definition of most advantageous tender set out in Article X paragraph 9 of the GPA does not include reference to a price/quality ratio that includes qualitative, environmental and/or social aspects as currently set out in Section 67(1) to (3) of the Public Contract Regulations 2015—this should be a minimum requirement.” I think the debate we have just had makes that point, with many examples.”
“It covers the climate impact of emissions, deforestation and biodiversity and the economic impact of the government procurement agreement on UK businesses, including on job creation and skills, and, as I have described, on public health. That is what the amendments seek to address. I turn to some of the challenges and the evidence that we took mostly from the TUC and Rosa Crawford. In the TUC’s written evidence, it described the threats of the government procurement agreement. The evidence says: “Currently the UK is part of the World Trade Organisation’s Government Procurement Agreement (GPA) through the EU’s membership. The UK government plans to accede to the GPA as an independent country once the transition period ends at the end of December 2020.”
“In a public health sense, that includes, but is not limited to, ensuring that air quality is protected as part of projects; that the UK diet is not harmed, as we have discussed; that the cost of healthy diets does not increase; and that projects do not adversely affect UK mental health. In terms of UK procurement, when we talk about public health, we mean the health of the public in a wider sense as a result of the way in which public and private organisations operate. Public health medicine is part of the greater enterprise of preserving and improving the public’s health. That is why procurement matters in that respect. We took evidence about the social impact—I mentioned the Public Services (Social Value) Act, which I will come to later—which includes, but is not limited to, wages, including the gender pay gap and workers’ rights.”
“Thank you. There is a wider point about making sure that we get these things right. On amendment 27, we have heard examples of why the annexes to the GPA need to improve the way in which public procurement operates. They should address, or attempt to address, public health. The timing, because of the covid crisis, makes that all the more important. What I mean by “addressing public health” is that the public health value of a provider should be considered in addition to the price, rather than simply going for the cheapest provider. Some of the examples demonstrate where there have been problems in that regard.”
“I hope that the Minister and Conservative Members will take them in that context and consider the long-term economic, social, environmental and labour value to be had from this kind of approach to procurement. Unless we are prepared to use this moment to deliver the continuity that the Bill is about, it is hard to see how we will maintain the standards of procurement that we have at the moment, let alone enhance them.”
“I could not help but enjoy the Minister’s description in this morning’s evidence session that he had not enjoyed a filibuster for a long time. I assure you that I have no intention of filibustering and I will not be reading out the entirety of what I have available, but in bringing my remarks to a close, I want to say this: the four amendments are tabled in the hope that we are supporting Government policy, as stated by the Prime Minister and Ministers and in the Conservative manifesto. The four amendments are designed to support our domestic economy, and to balance the needs of our domestic economy with supporting the rules-based approach to international trade. They are designed to support the levelling-up agenda that the Government say they are keen to promote.”
“Indeed, all these amendments give the Government an opportunity to support policies that were proposed in the manifesto that Conservative Members fought the December election on, or to support things like “buy British”. I am not advocating a similarity to Buy American, but that is the way the United States applies its GPA provisions and there is much we can learn from that, as I said earlier about support for smaller firms. Domestic procurement spending is an essential part of how we will recover from the economic crisis that has come alongside the covid crisis, and I hope the Government will act on that basis. [ Interruption. ] It is always a good idea to come to a Bill Committee very well prepared.”
“Too many UK companies are not winning UK contracts—a point that was made by Nick Ashton-Hart earlier—and it would be a challenge for them to compete on price in other GPA markets with lower regulatory and labour standards, such as China, which I think my hon. Friend touched on earlier, other parts of south-east Asia, and even the United States. There is a massive question mark about whether that is desirable, which is one of the reasons I tabled amendment 24, which addresses labour market interventions and compliance with ILO standards. I know that the Government are very keen on non-regression when it comes to labour rights and standards. That is one reason why amendment 24 matters—it gives the Government an opportunity to demonstrate, in the area of procurement, that they do what they say they believe in.”
“Security is a carve-out of its own: Governments are allowed to procure domestically on the basis of security. However, we are all aware of the saga of the fleet solid support ship. Happily, it appears that the Government, having delayed taking decisions or making announcements, are heading to the point where there may be a domestic award of that or a similar contract. It is remarkable, and really quite scandalous, that we got to the point where there was a question mark over whether that contract would be awarded domestically. Security, and the way security contracts are let, gives us examples—in the same way my hon. Friend the Member for Harrow West did with modern slavery—of how the amendments might be applied by Government if we can negotiate them with our GPA partners.”
“Thank you, Sir Graham. My hon. Friend is right to raise this issue, because it is absolutely relevant to amendment 24, which deals with “labour market interventions and compliance with ILO standards”. The way that workers are treated in supply chains is an extremely important aspect of procurement, and a great deal can be learned from the Modern Slavery Act 2015, which was passed by this Government’s predecessor. The way that those at the top of supply chains are required to police those supply chains for evidence of modern slavery and exploitation more widely gives us a valuable lesson about how procurement might be used to achieve the goals set out in all these amendments, not least amendment 24, which deals with labour. I mentioned defence security.”
“The amendments attempt to ensure that we do not see that as a standstill situation, and that we are pushing the Government to enhance the regulations as much as possible in order to achieve the sorts of policy objectives that Ministers have set out, and that the Opposition have referred to in our contributions this afternoon. I do not think the Minister addressed the points made in the debate we have had on these amendments; some of what he said was about the next group. He made decent points about the difficulties of those reviews, but that comes next. I ask the Committee to support these amendments, and we will push them to a vote. Question put, That the amendment be made.”
“If the Minister will tell us that they will be reinstated when they expire, that would be undoubtedly helpful, but that is not what he said in his response to the debate, so I am still concerned. We entirely support our accession to the GPA; we made that clear in the reasoned amendment, and we make it clear again this afternoon. The amendments are about trying to ensure that we retain the provisions in the GPA to ensure continuity, but we also ensure continuity initially by ensuring that there is continuity of what is in the public contracts regulations. That is the issue, because without the public contracts regulations continuing alongside our annexes in the GPA, procurement policy in this country will be significantly weakened. A big part of why we tabled the amendments in the first place was to ensure continuity.”
“Having double-checked what he said, I should tell him that the reviews that we are requesting are in the next set of amendments. The amendments in this set call for negotiations with our partners, so there is no suggestion that we would require the Government to look at Government Departments that no longer exist. We can assure the Minister that that is not a concern that he needs to consider. He mentioned what, I think, all hon. Members on this side referred to regarding the public procurement regulations. The issue here is that under UK retained law they were implemented in 2015 for a five-year period and therefore expire at the end of December this year.”
“He made a reference to my relationship with the co-op; I should tell him that, like him, I am a member of the Co-operative party—I think he knew that, but had temporarily forgotten—and come from a very proud family of co-operators. My mum, having been a director of the co-op for very many years, taught me well on that subject. I agree with everything he said in that respect, and he quite rightly referred to the sensible nature of our amendments. I will give the Minister credit for one thing. Unlike some of his parliamentary colleagues, he did not try to name any footballers at Manchester United and get them wrong, so I suppose that is in his favour. However, I think he might have got confused between this set of amendments and the next set.”
“That was quite some debate. I was very impressed by the speech of my hon. Friend the Member for Putney, who made some formidable comments and demonstrated her knowledge of the subject matter in relation to environmental matters and the ILO. I certainly appreciated her reminding us all about the importance of ensuring that we follow the sustainable development goals in everything we do in this country. I look forward to more of her contributions in the remaining time this afternoon and in next week’s sittings. My hon. Friend the Member for Harrow West spelled out in more detail some of what he said in interventions.”
“You will be pleased to learn, Sir Graham, that I have no intention of repeating exactly the same debate. I will just repeat what I said in response to the Minister—I think he was referring to this group when he mentioned the reviews. I take his point, and these are probing amendments partly for that reason.”
“Having said that, and as I said in my opening remarks, they are probing provisions and we will not be pressing them to a Division. Question put and agreed to. Clause 1 accordingly ordered to stand part of the Bill. Clause 2 Implementation of international trade agreements”
“I do not object to the suggestion of asking the International Trade Committee and the Lords treaties Sub-Committee to take on additional roles, although I share the slight surprise of the hon. Member for Dundee East about the fact that the Chair of the International Trade Committee was not consulted before the announcement was made. That is not the real issue, however. The issue is that the new clauses request a review of the regulations. They do not request a review of the membership or proposed new members, so that is a rather different point. I hope that the International Trade Committee would be asked to review any proposed changes to the regulations in discussions and negotiations with our partners. I do not object to the same thing for potential accessions, but that is a rather different point from the one we were making.”
“I think this is the first time in the Minister’s parliamentary career that he has ever admitted he was wrong— [ Laughter. ] I give him credit for being gracious enough to do so. We may have seen history in the making. The Minister does this a lot. He claims we are against something when we are not. We spelled out in our reasoned amendment last time, and we spelled it out in our reasoned amendment this time, that we support the accession of the GPA. We voted against the Bill as a whole because we oppose the Bill as a whole. That does not mean that we oppose everything in the Bill. He knows that, but he keeps saying it. I know he likes to have some fun.”
“I am glad that my hon. Friend has mentioned investment treaties; they absolutely should be part of the description given in clause 4. Does he agree that that is not least because of the fact that the 180 bilateral investment agreements that this country is party to have investor-state dispute settlement clauses, some of which are being used right now to prepare legal cases against our own Government? Such clauses are a particular concern in areas such as construction. I suggest to my hon. Friend that in this crisis, given that they are being used along with construction contracts and procurement, we need to be very careful to ensure full scrutiny of everything of an international trade and investment nature.”
“Q Good morning, Allie and Jonathan. Thank you for giving evidence to us. Neither of you mentioned the first clause, on the Government procurement agreement. Will you both comment on the opportunities your members see? That is something the Government have been very keen on, in speeches given by the Minister and the previous Secretary of State. What opportunities are there, given the provisions in the Bill, for the Government procurement agreement, and what else is needed for your members to make the most of those provisions? I will come back to further questions after we have an answer to that.”