I agree with my hon. Friend and commend her for the considerable amount of work she has done on whistleblowing—she truly is an expert. In general, the Americans have some good ideas on this. I was at a briefing last week where someone took me through those powers: if someone brings a private prosecution and the Government take it on halfway through, that person gets to keep 20% of the proceeds that are recovered, and if the Government do not take it on and that person is successful, they get to keep 40%. That creates a real incentive in the system for someone to take the huge risk to their personal wellbeing and career of exposing wrongdoing. I think we could learn a very great deal from the American position in that respect.
The amendments I want to speak to can be covered in three different groups. Amendment 67 would give contracting authorities the power to exclude suppliers when they have evidence of economic crime-related wrongdoing, not just a conviction for it. The Bill contains various measures by which authorities that are going through a procurement exercise do not actually have to see convictions—they can see credible evidence. We have ended up in the rather bizarre situation where I can exclude somebody from a procurement if I believe they have been part of a cartel in South America even though they have not been convicted, but I think they might well have been if they were in the UK; however, I cannot exclude somebody who I have real evidence has been committing economic crime in the UK, because there has not been a conviction for it yet.
The problem with that model is that convictions for crimes such as fraud have fallen by about two thirds in the past decade. We have not had a successful prosecution of a large corporate for fraud for a decade, I think, although we have had some deferred prosecution agreements. If we are relying on excluding dodgy companies from the process only where there has been a conviction, we are going to end up in the rather unfortunate position of there not being enough convictions to make the regime successful.
To me, it seems quite reasonable to allow an extension of the more wide-ranging rules in the Bill to apply to an authority that has credible evidence that an economic crime has been committed, especially if that prosecution process is ongoing when that authority is doing the procurement exercise, instead of it not being able to exclude that party from the exercise even though there is a real chance that they could be convicted quite soon. I just think that situation would be a real weakness. I am not saying that we would mandate exclusion in that situation, but empowering authorities to not go ahead with that party or bidder when they have credible evidence seems like quite a reasonable thing to do.
When this issue was raised in the House of Lords, the Government’s response was that it would impose an unreasonable burden on contracting authorities, but as I have just said, the Bill already imposes quite significant potential burdens to try to work out if somebody has been guilty of cartel-like behaviour. I suspect that would be harder than working out whether they have been guilty of actual fraud in the UK. We have the new unit being created that could support authorities in that process. That would not be mandatory. It would be an option that they could use in situations where they have that evidence, so there would not necessarily be any burden at all. I urge the Minister to give real consideration to whether a system that only allows successful prosecution of excluded companies that behave terribly in these areas of crime is the right balance to strike.
4 pm
Amendments 64, 65 and 66 look to strengthen the offences covered by the mandatory exclusion. The Government have, probably reasonably, chosen to include tax evasion, but for some reason the first and foremost economic crime of bribery is not down as a mandatory exclusion. We mandatorily exclude somebody for evading tax costing the Exchequer, but in a procurement Bill, we are not mandatorily excluding somebody who has been relatively recently convicted of bribery. If we want to have a respected and robust procurement process, we do not want parties that have ever engaged in bribery anywhere near tendering for high-value contracts in the UK. That seems a significant omission. A company recently convicted of bribery should not be successfully bidding for large contracts in the UK public sector. I do not think anyone would disagree with that.
Even if we do have that mandatory exclusion, the Bill provides various exemptions. Say some major UK provider has been successfully prosecuted for bribery by some rogue subsidiary directors in Africa: we could find a way of letting the provider off from that mandatory exclusion with the exemptions in the Bill. I urge the Minister to seriously consider why we have not started from the default point that, if someone has been convicted recently of bribery, they should not be getting public
sector contracts in the UK. We could extend that to full economic crimes such as money laundering. The idea would be to try to give a powerful incentive to these generally large companies: we do not want to see them getting caught for bribery, money laundering or sanctions evasion anywhere in the world because, if they are, they risk not only facing the full force of criminal law, but losing all the high-value contracts they have in the UK. They should want to take every step they can not to get caught in those situations. Will the Minister consider whether broadening the extent of the mandatory exclusions would be sensible?
Amendments 61, 62 and 63 try to tighten up the exceptions around the exclusions. The Government have drafted these provisions quite generously. Contracting authorities have quite a lot of discretion. In fact, I suspect what we mean is for them not to have quite the breadth of reasons to ignore exclusions. Amendment 61 would wipe out clause 58(1)(c), which allows companies to contract on the basis that they commit to taking steps to prevent wrongdoing occurring again. Paragraph (b) allows a company to continue if it has put those steps in place, but paragraph (c) says that all they have to do is consider taking those steps. It is reasonable, if a company has been convicted of something so serious that it has been excluded, that it should put the steps in place to stop that behaviour happening again before it is allowed to successfully tender for procurements in the UK, rather than promising vaguely that it might put some steps in place that hopefully the contracting authority would find some way of scrutinising during the course of that contract. That would be hard to do.
Clause 58(1)(e), which we are also proposing to remove, introduces a new highly discretionary catch-all ground that contracting authorities can consider
“any other evidence, explanation or factor”
effectively giving contracting authorities free rein to quote whatever reason they like to continue to contract with a supplier that engaged in wrongdoing. That is an incredibly broad exemption to offer. A factor could be, “They’re the cheapest bid, so we’ll go ahead with them.” If the message we are trying to send is that we do not want to contract with parties engaging in serious wrongdoing, that is far too broad an exemption to grant.
Amendment 63 would enable contracting authorities to get evidence from respective parties about the steps they say they have taken. As drafted, the Bill effectively prohibits the authority, unless it has reasonable grounds, from asking for evidence to support the contentions being made. All we are doing with this amendment is saying that the contracting authorities should have the right in any situation to have that evidence, so perhaps the default is the other way from what is in the Bill. That seems entirely reasonable. If a potential contracting party would be excluded but for an exemption, we would expect the contracting authority to get evidence that that exemption is being satisfied and not just to have that on a wing and a prayer.
I hope the Minister will consider that these amendments are constructive efforts to tighten up some of the drafting in the Bill and to make sure that the exclusions and debarring will work in practice in the way we hope.