My Lords, I have Amendments 4 and 190 in this group. Some questions have been raised by the Benches opposite about whether I was here for the commencement of the debate. I assure the House that I heard every word of the Minister’s opening remarks from my place and I am not usually regarded as invisible in your Lordships’ House.
Before I get to my amendments, let me say that I have much sympathy with the amendments tabled by the noble Baroness, Lady Brinton. I think we have to stop the culture of exceptionalism for the NHS and bring it within the ordinary rules; other noble Lords have said why that is. We should allow an exception only if there is a very good case for it so I will be listening very carefully to what my noble friend the Minister has to say about that when she concludes this debate.
My amendments each cover a distinct issue. I will start with Amendment 190 because that is the easier of them. Noble Lords may have noticed that my noble friend the Minister has added her name to Amendment 190 and I am grateful for the Government’s support in dealing with a technical issue that I raised in Committee following the eagle-eyed scrutiny of the Bill by Professor Sanchez-Graells of the Centre for Global Law and Innovation at the University of Bristol.
The Bill had defined how to value contracts including VAT when the contracting authority paid for the goods or services that it was procuring but failed to deal with the converse situation when it received money, which can arise under a concession contract. Amendment 190 puts this right and so sums receivable under contracts will be valued including the related value added tax. I look forward to moving this amendment formally in due course.
Amendment 4 is an amendment to government Amendment 2. Amendment 2 has virtually rewritten most of Clause 1 but my amendment would have also
been proposed in relation to the text of the Bill as introduced. It is about control and how to define it, which I raised in a couple of amendments in Committee.
A public authority is defined in the amended Clause 1(2) proposed by Amendment 2 as including a person who is
“subject to public authority oversight”,
which is in turn defined in amended Clause 1(3) as being
“subject to the management or control of … one or more public authorities, or … a board more than half of the members of which are appointed by one or more public authorities.”
Thus, if a board is involved, control is determined by the fact of appointments rather than the capacity to appoint members of the board. That is an unusual concept for those of us steeped in company or tax law.
The Clause 1 approach to control is in contrast to its use in determining whether vertical arrangements exist in order to qualify as an exempted contract under Schedule 2. The Schedule 2 definition has its own problems, which I spoke about in Committee, but its core concept is to use the Companies Act 2006 definition of control, which is based on capacity to control. I believe that the issues with Clause 1 and Schedule 2 were not satisfactorily dealt with when I raised these points in Committee, so I have returned to them today, to highlight that the Bill is not internally coherent in its approach to determining whether organisation A controls organisation B.
My solution is to import the Schedule 2 definition into Clause 1, save for paragraph 2(3) of Schedule 2. I personally think that sub-paragraph (3) is very odd in the context of Schedule 2, but it certainly does not belong to the approach for control in Clause 1. I have no intention of dividing the House on this matter and I am by no means confident of my drafting, but I believe that the Government should look again at the robustness and coherence of the approaches they have taken in the Bill.