My Lords, this has been an interesting debate. It has been interesting to listen to comments on this area, particularly from the noble Baroness, Lady Neville-Rolfe, and my noble friend Lord Berkeley in their introduction to their amendments. Clearly, the changes proposed could have huge implications for utilities. There was a greater amount of flexibility for utilities in the Utilities Contracts Regulations 2016 that this Bill loses. The Government have acknowledged that consolidating the UCR with the Public Contracts Regulations will be a major and complex legislative exercise. Considering the issues we debated earlier, I hope that this is an area where we can work together to make sure we get it right for everybody involved.
One of the things we have to be careful about is not increasing bureaucracy when at the heart of the Bill is the desire to speed up procurement processes. I will note a few things in the briefings I have had on the Bill. First, it is worth noting the international Agreement on Government Procurement, which is within the framework of the WTO. It establishes rules requiring that
“open, fair and transparent conditions of competition be ensured in government procurement.”
Although it does that, it does not require WTO members to implement procurement rules for the utilities sector.
Furthermore, as we have heard, the UK is no longer obliged under EU law to implement procurement rules for the utilities sector. The UK’s utilities sector is, of course, very different from those in many of its European counterparts. Therefore, using solutions that were originally designed for European markets may not be appropriate for the UK. We need to take note of all that.
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The Law Society of Scotland sent over a very interesting briefing. It draws attention to the fact that Clause 5 reintroduces the purpose test for a contract
to constitute a utility contract, which was previously contained in the 2012 regulations but is not in the 2016 regulations, under which a contract will be a utilities contract only if the goods, services or works are
“mainly for the purpose of”,
rather than relating to, a utility activity. Its concern is that this may lead to a return to the pre-2016 view, where the courts were required to consider whether a given good, service or work was required for the purposes of a utility activity.
This is very interesting and there is quite a lot to consider, so I am interested to hear the Minister’s response. I guess we all want to understand how the decisions around the utilities part of the Bill were reached.