My Lords, the noble Lord is right to raise the issue of cross-border services. We will come to that later in the Bill. I am not excluding discussion of cross-border. It is an overall policy position that I am stating. We will come to the cross-border issue later in the legislation. I do not want the noble Lord to think that we are having a kind of Sicilian motorway approach, where the Mafia money ran out. I fully understand where he is coming from on that. I was really replying on the broader point.
Time runs on and I must get on to the specific and very important points made not only by the Delegated Powers Committee but by noble Lords who have tabled amendments. I will try to persuade the Committee that the amendments are unnecessary and that the strictures of the Delegated Powers Committee were strong. I heard the word “a scorcher”, but perhaps I do not necessarily need that. I heard the remarks from all sides on that. We will carefully consider them, notwithstanding what I say now. Obviously, it believes it is a reasonable position, but we will consider those remarks.
Amendment 18 would remove paragraph 17 of Schedule 2, which has been alluded to. The effect of this would be to remove an exemption for certain public passenger transport services that exists in our current procurement legislation. The exemption exists and it is necessary as procurement for such services is governed by a separate regime operated by the Department for Transport. It is important that the Bill does not impinge on that separate regime and that the exemptions under the Bill fully align to ensure that public passenger transport services are regulated by the correct regime. There is no intention to exempt public passenger transport services beyond those currently exempt and governed by the Department for Transport regime.
Amendment 21, tabled by the noble Lord, Lord Wallace of Saltaire, seeks to remove a provision that exempts concession contracts for air services provided by a qualifying air carrier. Removing this would bring those contracts within the scope of the Bill, which would be a fundamental change to the existing position.
Air services are separate markets driven and operated by the private commercial sector. The public sector does not generally procure or intervene in these services. Given the distinctive features of the air transport market, and the state’s historical limited intervention in it, it would not be appropriate to bring air transport within the scope of the mainstream procurement rules. However, I assure noble Lords that the power is limited to specifying the meaning of a “qualifying air carrier”, which is, in essence, someone licensed under the existing regime for air carriers. This power is not wide-ranging and is needed only to ensure that the definition refers to the correct regime. Therefore, I ask noble Lords not to press Amendments 18 and 21.
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Amendment 28, tabled by the noble Lord, Lord Wallace of Saltaire, would remove the ability of the Government to make an exemption determination which would exempt particular utility activities from regulation under the Bill where they are exposed to competition. This power cannot be used to alter the basic parameters of the exemption, set out in paragraph 7(2) of Schedule 4. This provides that utility activities will not be regulated where there has been an exemption determination establishing that there is fair and effective competition for the activity and entry to the market is unrestricted. These decisions cannot be taken lightly and we cannot just exempt certain utility activities because we want to. Utilities are covered under the WTO Agreement on Government Procurement and
other agreements. An exemption under those agreements is available only where we are satisfied that competition exists.
The justification for this power is that regulation of procurement in the utilities sector is unnecessary when competition is functioning well and access to the market is not restricted. Effective competition is a much better mechanism than procurement regulations for improving outcomes for utility consumers, leading to lower prices and better-quality services. This power replicates a power previously exercised by the European Commission under the Utilities Contracts Regulations 2016 to exclude certain utilities where they were subject to competition. The Government therefore do not support this amendment.
Amendment 31, tabled by the noble Lord, Lord Wallace, would remove Clause 8(2), which gives an appropriate authority the power to specify in regulations the services within the scope of light-touch contracts. We will come to those later, but light-touch services are currently identified by common procurement vocabulary codes, which are well used and understood in the market. The services currently identified via CPV codes are outside the scope of the WTO Agreement on Government Procurement, albeit they are within scope of some national treatment provisions in certain international agreements. This important context demonstrates that this power is more limited than it may at first appear. It would not be permissible for Ministers to enact such regulations in a manner contrary to the UK’s international agreements. For example, they could not just determine on a whim that professional services covered by international agreements should be subject to light-touch provision. There is therefore a natural limitation on the scope of the power.
Furthermore, the CPV codes currently listed in Schedule 3 to the Public Contracts Regulations 2015 will be captured by regulations made under paragraph (2) of Schedule 3, so the application of the power will result in no wider a light-touch regime than exists under the current arrangements. We will discuss light-touch contracts and Clause 8 further in a subsequent debate, but I hope noble Lords agree that this power is not as broad as it may first appear, alleviating concerns about its use and allowing the amendment to be withdrawn.
Amendment 208, tabled by the noble Lord, Lord Wallace, looks to remove Clause 33(8). It would restrict an appropriate authority’s ability to specify which services may be reserved for public sector mutuals and the ability to amend the list over time. This power is appropriately restricted to services that have already been specified in regulations made under Clause 8 for light-touch contracts. Thus, while the power under Clause 33 may at first appear broad, on closer inspection that is not the case. It is not intended to be tertiary legislation. Clause 33(8) merely allows an appropriate authority to specify in regulations which of these services already specified as light-touch services by regulation under Clause 33(8) too can be reserved for public service mutuals, though I understand where the noble Lord was coming from in his concerns.
Clause 33 is similar to Regulation 77 of the Public Contracts Regulations 2015 and is intended to reserve similar contracts for similar organisations. The 2015
regulations contain a list of services, identified by CPV codes, which are currently able to be reserved, and this includes services such as welfare and rehabilitation. Under the Bill, a list of services, also to be identified by CPV codes, will be specified as reservable light-touch services in regulations made under Clause 33, so that the regime will continue to operate in a similar fashion. However, while changes to the reservable light-touch services are not currently anticipated, it may prove appropriate to expand the list of reservable services in line with the evolution of the market in the future. Setting out the reservable services in the Bill would require an amendment to the primary legislation to effect these possible changes, vastly reducing the ability of the regime to respond and adapt when necessary. So, in that light, I would respectfully request that these amendments not be moved.
I now turn to the particular concerns expressed about Clause 86. In support of this Government’s move towards ensuring greater transparency in procurement, there are a number of provisions in this Bill which place requirements on contracting authorities to publish information in the form of notices. Clause 86 confers a power to set out the information to be published or provided in such notices as well as the place it is to be sent. Again, the GPA sets out the core of the detail of many of the notices we have described in this Bill. That should give noble Lords a clear indication about the sorts of information that will be required to be published using these powers. However, the Government wish to push further on transparency than required by the GPA. For this reason, we have created a range of new notice obligations and proposed the power to set out the detail of the notices. The flexibility inherent in taking this power allows us to tailor the transparency regime over time to ensure that we can benefit from greater transparency across the procurement landscape. Using the power, we can also ensure that the technical requirements for publication can keep pace with developing information technology regimes.
In deference to the breadth of the power, and I acknowledge what noble Lords have said, the Bill makes provision for regulations to be subject to the affirmative procedure so the content will come before both Houses for consideration, both as the regulation is laid the first time, and then for subsequent changes, giving oversight to this House.
Amendment 530, tabled by the noble Lord, Lord Wallace, would mean that the power to make regulations specifying a method to price qualifying defence contracts under the Single Source Contract Regulations 2014, other than by applying the pricing formula set out in the Defence Reform Act 2014, should be subject to an affirmative procedure. As drafted, the amendment would not achieve the intent. However, we note and will consider the committee’s recommendation on that point.
Amendment 532 would require regulations making above-inflation increases to the financial thresholds on publishing specific notices subject to affirmative resolution. It is clear that such thresholds will need to be amended over time to take account of inflation and other such economic changes. In addition, our expectation is that as contracting authorities adjust to the
administrative burdens of publishing such information, over time the threshold may be lowered to increase transparency, but we may also find that some types of contracts and some types of contracting authority benefit from higher or lower thresholds. The power proposed in the Bill will therefore allow regulations to set a more targeted and appropriate threshold, based on experience as the regime develops. We believe that these thresholds are not a matter that justifies the fullest examination, in terms of parliamentary time, to oversee and therefore we have proposed the negative procedure. However, again, while we cannot support this amendment, we will consider this further alongside the other recommendations from the DPRRC.