My Lords, the next group covers a number of government amendments concerning our agreeing to implement the recommendations made by the Delegated Powers and Regulatory Reform Committee in its report on the Bill, published on 14 June 2022. This report was gratefully received, and the Government wish to thank the committee for its contributions. The Government have also tabled amendments to implement other recommendations from the DPRRC, which we will discuss when we debate amendments relating to utilities.
There are a number of places in the Bill where we apply financial thresholds which trigger obligations on a contracting authority. Amendments 175 to 178, 181 and 182 relate to the publication of contracts, the publication of information about payments, the requirement for pipeline notices and obligations relating to notices to be published in relation to below-threshold contracts. As drafted, these thresholds are to be amended by way of secondary legislation subject to the negative procedure.
However, the Delegated Powers and Regulatory Reform Committee recommended that where these thresholds are increased above inflation, they should be subject to the affirmative procedure. This is to ensure greater scrutiny where there is a change in transparency. This amendment actually goes further than the report’s recommendation. It ensures that where these thresholds need to be changed for any reason, the affirmative procedure should apply. We consider that the same rationale applies in relation to the threshold for publication of KPIs, which was not mentioned in the report, and will bring forward an amendment to achieve this as soon as parliamentary time allows.
The one exception is Clause 80, which, in relation to below-threshold contracts, prohibits the prior exclusion of suppliers on the basis of suitability. In this case, it is reasonable to maintain the use of the negative procedure, given that the thresholds applicable to this clause are aligned to the government procurement agreement thresholds which are also amended by the negative procedure.
Amendment 10 addresses the DPRRC’s concern that the power to define public passenger transport services as exempt under Schedule 2(17) gives a wide discretion to Ministers. This amendment removes the power entirely and defines the services to be exempt by reference to the “public service obligations regulations”, which are defined by reference to Section 136(11) of the Railways Act 1993.
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Amendment 12 relates to Paragraph 34 in Schedule 2, which carries over an exemption for concession contracts for the operation of a public service obligation for air services contained in the existing regime. These are air services provided for public interest reasons, where availability of other modes of transport or other air services is insufficient to serve the transport needs of a UK region. They typically require a subsidy, as otherwise they would not be economical to run. Examples include Dundee to London City Airport and Newquay to London Gatwick. This exemption is necessary as public service obligations for air services are awarded under a separate regime.
As it stands, the Bill exempts these types of contracts by reference to air services provided by a qualifying air carrier as defined by secondary legislation. The Delegated Powers and Regulatory Reform Committee has expressed concerns that this regulation-making power is too broad. To address these concerns, this amendment replaces the regulation-making power with a provision which defines the contracts that are to be exempted on the face of the Bill. It does this by defining what the contract does, that is implement a public service obligation, rather than by who the air carrier is. This is a good solution to what has proved to be an intricate technical problem.
Amendment 165 responds to a recommendation of the Delegated Powers and Regulatory Reform Committee. Paragraph 3(3) of Schedule 10 amends Section 15 of the Defence Reform Act 2014 to provide a power to specify an alternative method of determining the price payable under a qualifying defence contract and the circumstances under which that method is to be used. The committee’s view was that regulations brought forward under this power should follow an affirmative procedure. The Government accept the committee’s view, and hence this amendment. I hope noble Lords will therefore support these government amendments. I beg to move.