Defence Reform Bill - Schedule 10 - Single source defence contracts

Mr. Burghart argues for the regulation of single source defence contracts, emphasising the need for transparency and fair competition in procurement processes.

Mr Seely thanked the Minister for his work on the Bill, acknowledging progress but noting more work is needed. He raised concerns about dual-use technology and the risks posed by cellular modules in Government vehicles being used by competitor nations to listen into conversations.

Mr Green thanked the Minister for his proportionate response but asked about the timescale for removing suspicious kit under the Bill. He sought a clearer indication of what sort of timeline would be needed.

Mr Duncan Smith questioned the definition of 'sensitive sites,' suggesting that all Government Departments are inherently sensitive. He noted the potential disruption to services such as those provided by the Department for Work and Pensions.

Mr Seely mentioned a security service incident involving a UK Government vehicle with Chinese cellular modules, expressing curiosity about an update on the investigation's findings.

Mr Mangnall praised the Minister’s speech but inquired about practical timelines for investigations and debarring businesses bidding through procurement processes.

Highlights inefficiencies and wastage in emergency procurement during the pandemic, citing £15 billion wasted on unused supplies. Emphasises the need for transparency to prevent future misuse of VIP lanes and support small businesses through proactive procurement policies.

Applauds the emphasis on supporting SMEs but queries whether the amendments favour insourcing of public services over SME support.

Raises concerns about reliance on foreign sources for PPE, particularly China, during the pandemic, questioning whether there is a need to secure domestic or trusted international manufacturing capacity.

Concerned about the human rights abuses by Chinese companies, particularly regarding Uyghur Muslims.

Supports the amendment and questions the timescale for removal of surveillance equipment, suggesting it should be accelerated to less than five years.

Raises concern about the involvement of CK Hutchison in Government contracts and its links to Hong Kong's suppression of democracy, asking if these companies should be restricted from UK contracts.

Suggests that the Government could prioritise certain sites for removal of equipment but commit to removing it from all sites eventually.

Supports amendments to improve transparency, prevent excessive profits from privatisation, and ensure that suppliers pay the real living wage. Raises concerns about national security implications of potential Government contracts with firms linked to human rights abuses in Hong Kong.

Intervened to ask Apsana Begum why the majority of PFI contracts for hospitals, medical facilities and schools were awarded under the previous Labour Government.

Seely supports new clauses to better understand the UK's economic dependence on China. He raises concerns about high import dependencies, systemic threats posed by Chinese companies like Huawei and Quectel, and the need for annual statements of dependency. He also highlights human rights abuses in Xinjiang related to cotton production.

[INTERVENTION] Iain Duncan Smith adds that the move towards electric vehicles will increase dependency on China, as Chinese battery factories are transforming into car manufacturing plants selling to the UK.

Ms. Abrahams argues that new clause 12 would require contracting authorities to use project bank accounts on their projects where the net value of the main contract is over £2 million. She cites examples such as Carillion's collapse, which resulted in an estimated £800 million loss for subcontractor retentions and £148 million taxpayer loss. The proposed clause aims to protect small businesses from payment abuse by large companies and improve construction quality and safety.

Mr. Loughton argues that Hikvision cameras are used across various public sector entities, such as NHS trusts, schools, police forces, jobcentres, prisons, military bases, and local council buildings. He highlights the severe human rights violations committed by China in Xinjiang, including the use of biometric data collection and genomics surveillance. Mr. Loughton emphasises that these companies are subject to China’s National Intelligence Law which compels them to support state intelligence activities. He asserts that their presence poses significant risks to UK national security and calls for a comprehensive investigation into Hikvision's activities.

Ms Hillier supports the amendments, highlighting the need for evaluating procurement processes to improve future decision-making. She emphasises the role of the Public Accounts Committee in scrutinising procurement failures and notes that evaluation can prevent sending good money after bad. She advocates for more transparency and skilled professionals in procurement.

[INTERVENTION] Mr Penrose agrees that the cost of evaluation is a rounding error compared to potential savings from early contract termination. He also notes the existing network of 'what works centres' and suggests expanding their role could be more efficient.

Mr. Kruger argues for the Bill, highlighting the need for a new procurement model that better supports national security and economic resilience. He supports simplification of tendering processes to help SMEs and social enterprises, and commends the Government's efforts to prioritise national security in procurement practices.

Minister Duncan Smith interjected to discuss productivity measures across countries, noting that international comparisons can be misleading due to varying national priorities such as health and education. He agrees with Mr. Kruger's call for a reformed procurement model.

She supports amendment 60 which would ensure the Government assesses and reports on the impact of procurement policy statements concerning environmental and climate targets. She also proposes new clause 17 to mandate public contracts for food supply to align with nutritional guidelines, particularly plant-based diets, citing environmental benefits such as reduced greenhouse gas emissions from animal agriculture. She highlights that this approach would encourage local community solutions, promote sustainable practices, and improve overall health and economic conditions.

Amendment 68 seeks to ensure proper evaluation of public expenditure through an arm’s length body according to established criteria. It aims to improve value for money, transparency, and accountability in procurement processes. Penrose emphasises that while 50% of advertising budgets might be wasted, we should know which part in government spending is inefficient.

[INTERVENTION] Suggested post-occupancy evaluation for public buildings as an effective tool. Supports Penrose’s idea to improve procurement efficiency and value for money.

Concerned about areas of the Bill that create opportunities to circumvent procurement rules. Urges Government to ban VIP lanes, prevent cronyism and ensure transparency in procurement decisions.

Mr Mills argues for amendments that would empower contracting authorities to exclude suppliers based on credible evidence of economic crime, rather than waiting for convictions. He also supports including bribery as a mandatory exclusion and tightening exceptions around exclusions to ensure companies take concrete steps to prevent future wrongdoing.

Ms Robinson interjects, supporting stronger whistleblower protections in procurement processes. She cites the US False Claims Act as an example that has recovered billions of dollars in fraud and suggests similar measures could save millions for taxpayers.

Amendment 3 aims to address the industrial-scale, state-sponsored organ harvesting in China, which affects up to 100,000 people annually. The practice is worth over £800 million and primarily targets Falun Gong practitioners but also includes Uyghurs, Christians, and other prisoners of conscience. It highlights the need for specific references relating to this crime against humanity rather than relying on professional misconduct regulations.

Supports new clause 10 for tax transparency, amendment 2 on transparency declarations, and amendment 18 to discourage breaching staff rights. Also supports amendments on environmental impact and SME prompt payment.

The MP emphasises the importance of considering national security laws in relation to China, urging the Government to include all Departments within this category. He suggests starting with a broad power definition and allowing variations or changes through supplication.

The MP reminds the Minister about new clause 12, which covers contracts worth over £2 million and aims to improve liquidity for small businesses through project bank accounts.

Questioned Mr. Quin about disregarding her new clause 12, which aimed to introduce and mandate project bank accounts, citing an estimate that 6,000 small construction firms will go into insolvency this year.

Asked Mr. Quin about lifting the ban on building due to pollution in the River Wye, suggesting that such action would provide construction businesses with new opportunities and help them flourish.

The amendment aims to prevent the creation of VIP lanes, which enabled a significant waste of public funds during the pandemic. Angela Rayner argues that the current Bill does not go far enough in ensuring transparency and accountability, and instead proposes stronger measures such as end-to-end transparency and robust protections for workers.