Procurement Bill [HL]

Report (2nd Day)

Clause 40: Direct award to protect life, etc

Amendment 72

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

and

“the functioning of the Royal Prerogative”.