Buy British Policy: Restrictions (Hansard, 13 July 2000)

§ Lord McIntosh of Haringey
My Lords, the international and European law which prevents British public authorities from operating a buy British policy in respect of building projects includes the nondiscrimination and free movement provisions of the EC Treaty, the EC Public Works, Services and Supplies Directives, the WTO Government Procurement Agreement, the European Economic Area Agreement with ex-EFTA countries and various Europe agreements with central and eastern European countries.

§ Baroness Knight of Collingtree
My Lords, does the Minister agree that cheapest is not always best and 373 that it is not unreasonable to bear in mind public opinion? Would it not be possible, when considering very special and important works on British landmarks, such as this Palace of Westminster, to invite tenders only from British firms, which is not the same as inviting tenders worldwide and then only selecting any British tender? Or would that not be politically correct?

§ Lord McIntosh of Haringey
My Lords, I do not know whether it is politically correct but it is against our international agreements and against international law. I assume that the noble Baroness, Lady Knight, is referring to Portcullis House. This would not be a topical Question if she were not. She will know that Portcullis House has been the subject of legal proceedings on which an interim judgment has been given against the House of Commons authorities and on which a possible appeal is now pending. So it would be quite inappropriate for me to comment on any detail of that particular contract.
But in more general terms, in 1997, the last year for which full figures are available, contracts totalling £2.3 billion were awarded in the UK subject to those international agreements, of which all but £11 million were awarded to UK contractors.

§ Lord Lea of Crondall
My Lords, does my noble friend agree that that principle applies to the Reichstag just as much as it does to the Palace of Westminster? To follow up a point made by my noble friend, this agreement pre-dates our membership of the EC. I was a member of the EFTA Consultative Committee from 1969 to 1973 and I remember that this provision was in the Stockholm Treaty, to which we adhered, which set up EFTA. So that goes back a long way and it is two-way traffic.

§ Lord McIntosh of Haringey
My Lords, my noble friend is right in both respects. All of the agreements go back a very long way. The European Community agreements go back to 1973, when we joined the common market. The WTO Government Procurement Agreement dates back some 20 years, although it has become more extensive than it was when it originally came into being. Although it is extremely difficult to obtain statistics as regards the net balance of advantage to British contractors because so many contracts go to international consortia, the suspicion must be that it is very considerably to our advantage.

§ Lord Hylton
My Lords, I declare a financial interest in forestry in this country. Will the Minister consider whether the recent strength of the pound against the euro, combined with a probability that certain eastern countries have been exporting timber to us at less than the cost of production and restocking, might constitute a special case for the use of British timber in British building projects?

§ Lord McIntosh of Haringey
My Lords, I am not entirely clear that that follows from the Question that 374 I was asked, which was about building contracts. If the noble Lord, Lord Hylton, is accusing anybody of dumping timber in this country, there is a quite separate series of international agreements to deal with that issue.

§ Baroness Gardner of Parkes
My Lords, is it correct when invitations to tender are extended for any building, whether it be public or private, that there is no obligation to accept the lowest tender? Is it possible to accept one particular tender because, for example, there is a preferred design?

§ Lord McIntosh of Haringey
My Lords, yes, there is no obligation to accept the lowest tender. However, in certain circumstances—and this may be the case as regards the contract to which the noble Baroness, Lady Knight, referred—it must be shown that equal favour is being shown to contractors from any country; in other words, that national discrimination is not being exercised.

Lord Bruce of Donington
My Lords, does my noble friend agree that the enforcement of the European and international laws to which the noble Lord referred is distinctly patchy? Some very drastic revisions must be made to those laws, on the assumption that they are to be obeyed, if the irregularities in connection with the European Parliament buildings in Strasbourg and Brussels are to be brought within the realms of the ordinary legal understanding of fairness and justice, as understood in this country?

§ Lord McIntosh of Haringey
My Lords, I do not have evidence on which I could disagree or agree with my noble friend about what he describes as patchy enforcement of those international laws. If there is a claim in relation to any particular project, it is open to contractors to seek to take legal action against the public authority and it is open to the European Commission to take action on an international basis.