§ Mr. BlairTo ask the Chancellor of the Exchequer whether the Government have made any study of the impact on British industry of the EEC draft directive requiring all companies in the private and public sectors to put out to tender contracts for supplies above £500,000 and capital schemes above £3,000,000; when he expects this draft directive to come into effect; and if he will make a statement.
§ Mr. Major[holding answer 9 December 1988]: Recent proposals by the European Commission to extend rules on purchasing to bodies outside central and local government cover undertakings in the water, energy, transport and telecommunications sectors which operate on the basis of special or exclusive rights or an authorisation granted by a competent authority of a member state. The rules are intended to make purchasing more open, but let undertakings negotiate with selected suppliers or contractors instead of putting contracts out to tender. Individual contracts would be affected when their estimated value, net of VAT, exceed £142,000 for supplies (and software service contracts in the case of the proposal on telecommunications) and £3.3 million for building and civil engineering works; supplies requirements which were expected to exceed £500,000 in a product area over 12 months would be the subject of periodic indicative notices.
The proposals are part of the single market programme due to be completed in 1992. The Government are consulting closely with relevant purchasers and suppliers in the United Kingdom on possible changes to the proposals which would reduce any burdens the rules may impose. The rules should enable United Kingdom suppliers and contractors to compete more effectively in markets which in some cases have been difficult to enter.