Meeting of the Parliament [Draft]

Meeting date: Wednesday, March 20, 2024

Official Report 1050KB pdf

---

Economic Activity of Public Bodies (Overseas Matters) Bill

The next item of business is a debate on motion S6M-12551, in the name Tom Arthur, on the Economic Activity of Public Bodies (Overseas Matters) Bill, which is United Kingdom legislation.

16:56  

The United Kingdom Government’s Economic Activity of Public Bodies (Overseas Matters) Bill engages the legislative consent process because it would limit the executive competence of the Scottish ministers in relation to devolved matters.

We must, of course, be mindful of the context in which the bill is being introduced. The Parliament has made its views clear on the terrible situation in Israel and Gaza. However, although that might sharpen the mind in relation to the implications of the bill, it is important that we realise that the bill, and its impact on the Scottish ministers, is of broader application than just in relation to current events. I will therefore focus my remarks on the implications of the bill for devolution and why the Scottish Government does not recommend that the Scottish Parliament agrees to give its consent to the bill.

The bill would apply to all public bodies in Scotland and across the UK, but our consideration today is particularly in respect of its impact on the Scottish ministers, which triggers the need for legislative consent. The bill would limit the executive competence of the Scottish ministers by preventing them from taking moral or political disapproval of any foreign state conduct into account in devolved procurement and investment decisions.

Not only that, but the bill would make it unlawful for the Scottish ministers to publish a statement saying that they intended to take such matters into consideration—or even that they would intend to take such matters into consideration, were it not unlawful to do so. The bill places the policing and enforcement of that into the hands of the UK ministers. The secretary of state is given sweeping powers to compel the Scottish ministers—and other public bodies—to provide information; to issue compliance notices setting out the actions that the Scottish ministers should take or refrain from taking; and to fine the Scottish ministers, subject to interest, should he or she conclude that the terms of a compliance notice had been breached.

Remember that all of that is in relation to decisions that the Scottish ministers may take about otherwise entirely devolved matters. That displays a complete disregard for devolution, for this institution and, frankly, for democracy, limiting as it does the actions of Scotland’s elected Government.

The bill not only potentially prevents the Scottish ministers from taking a decision—now or at some point in the future—in relation to a devolved matter that they consider to be the right decision but prevents them from seeking to advance debate and discourse on the matter. The Scottish ministers would not even be able to publish a statement to say that it is that bill that is preventing them from acting on devolved matters in the way in which they thought was appropriate.

The UK Government argues that it is necessary to include the Scottish ministers in the scope of the bill to mitigate the threat of boycotts, which, it says, undermines UK foreign policy, but what evidence does it have to support such claims? Public procurement is a devolved matter. Our devolved Scottish legislation makes it explicitly clear that goods, services and bidders from a country with which a relevant trade agreement applies are entitled to be treated equally to those of domestic bidders. It makes it explicitly clear that, if a public body in Scotland, including the Scottish ministers, discriminates against a bidder on that basis, that bidder would be entitled to seek remedial action in domestic courts. That means that it is already unlawful for the Scottish ministers, or any public body in Scotland, to operate a blanket boycott policy against such countries. The bill’s provisions are completely unnecessary.

Procurement and investment decisions must always be taken in compliance with international obligations, but that does not mean that they should be taken in an ethical or moral vacuum. It is important that Scotland is able to take a values-based approach to international engagement, as set out in our international strategy and “Scotland’s Vision for Trade”. It would be unacceptable if the bill were to prevent the Parliament, the Scottish Government and Scottish public bodies from doing what is morally right, now and in the future. The bill significantly restricts the Scottish ministers’ ability to take rounded, proportionate decisions about the suitability of individual bidders for public contracts.

Finally, aside from our concerns with the policy content of the bill, we also have concerns about the way in which it is drafted. Clause 14 sets out the relationship between the bill and the Procurement Act 2023. The act will largely apply only to UK, Welsh and Northern Irish bodies. Devolved Scottish bodies will continue to be subject to existing devolved Scottish procurement legislation. However, clause 14 takes a different approach to procurement legislation in Scotland. It confers an enduring delegated power on UK ministers to set out that relationship in secondary legislation. We see no justifiable reason for that difference in approach and no reason why the impact on Scottish devolved legislation should not be subject to the same level of scrutiny as the impact on the UK legislation. I have asked UK ministers to consider amending the bill to address that point, but I understand that they have decided not to agree to that request.

The bill and, in particular, the inclusion of the Scottish ministers within its scope, is an unacceptable restriction of executive competence in relation to devolved matters. The threat of being fined for the Orwellian thought crime of daring to state the simple effect that the law has on the Scottish ministers’ decision making would set a dangerous precedent, and it is all just so unnecessary, given the protections that already exist in relevant international and domestic law.

I ask the Scottish Parliament to withhold its consent to the bill.

I move,

That the Parliament notes the legislative consent memorandum lodged by the Scottish Government on 19 July 2023; agrees not to give consent to the Economic Activity of Public Bodies (Overseas Matters) Bill; believes that the Bill would represent a wholly unnecessary and unwelcome limitation of the Scottish Ministers’ executive competence, and would act to stifle democracy, and calls on the UK Government to amend the Bill to remove the Scottish Ministers from its scope.

15:03  

As we have heard, the Economic Activity of Public Bodies (Overseas Matters) Bill intends to prevent public bodies, including local councils, national health service boards and devolved Administrations from making decisions about procurement and investment that are based on political considerations. The bill is currently in the House of Lords and is continuing in its parliamentary progress at Westminster.

The fundamental point is that matters of foreign policy and trade are reserved to Westminster. Therefore, it is not a matter for councils or public bodies to run an alternative foreign or trade policy. Indeed, many local councils might not be well enough equipped to consider all the relevant factors when arriving at such decisions in cases where issues might well be complex or heavily disputed.

Westminster and its committees with responsibility for foreign and trade policy are the correct avenue for such matters to be properly considered and debated. Foreign affairs are not under the remit of the Scottish Parliament. I would hope that the Labour Party would share our view on that.

I am afraid that I am going to disappoint Murdo Fraser. Ultimately, is it not the job of public bodies to use their judgment in accordance with their values? If people do not think that that is appropriate, is the mechanism to deal with that not the electorate at elections?

If people want to change the foreign or trade policy of the United Kingdom, they can do so at a general election, but I do not think that we should be tearing up the devolution settlement and rewriting the UK constitution just because of Mr Johnson’s concerns.

I am not surprised that the Scottish National Party and the Greens object to the bill, as they do not want the UK Government to have foreign or trade policy. I am a little bit surprised, however, that the Labour Party seems to share that view.

Despite the minister dressing up the issue as a great matter of constitutional principle, there is another angle to it that should concern us.

Murdo Fraser says that, in his view, the bill relates to trade and foreign affairs. In that case, why do the explanatory notes to the bill, as published by the UK Government, state that the bill triggers legislative consent requirements?

I will come on to explain why I have wider concerns about the proposed legislation, and the minister should listen.

There are many oppressive regimes and states in the world, many with appalling human rights records towards their own citizens and others. There are numerous examples that I could give to the chamber: state sponsorship of terrorism by Iran in the middle east and elsewhere; Myanmar’s treatment of the Rohingya population; and China’s treatment of the Uyghurs and its atrocities in Kashmir and Tibet. There are many more.

I am not aware of any organised campaigns to boycott, divest or sanction any of those countries or any of their regimes. There is only one country that is subject to campaigns to boycott, divest and sanction, and that is Israel. Criticism of the current Israeli Government is perfectly legitimate, but Israel still has a track record of human rights that is far better than those of any of its neighbours. For those who follow minority religions, for women and for those of the LGBT community, Israel is streets ahead—centuries ahead—of any other country in the middle east, and Israel is the only fully functioning democracy in the region, yet only Israel is singled out for boycott, divest and sanction campaigns. Why? It is hard to avoid the conclusion that it is directly linked to the ethnicity of the majority of the population of Israel—in other words, the Jewish people. This is the world’s oldest hatred rearing its hideous head once again. There is no other reasonable explanation for Israel alone being singled out compared with other countries.

We might be the only party in the chamber that is prepared to point out the double standards of the boycott, divest and sanction movement, but we make no apology for doing so. If the UK legislation before us is blocking that, it should be supported, not opposed.

That is not just our view; it is also the view of the Scottish Council of Jewish Communities, which is extremely concerned at the stance being taken by the Scottish Government on the issue, as the minister will know.

Israel is already party to relevant agreements that give bidders from Israel the relevant protections in domestic procurement law in Scotland. I know that Mr Fraser has had a long-standing concern about legislation being required and necessary. Why does he think that the bill is necessary?

I can give Murdo Fraser the time back for the interventions.

I do not understand why the minister does not recognise the concerns in the Jewish community in Scotland, which I have just referred to, about the approach that is being taken by the Scottish Government on this particular issue. Since 7 October 2023, there has been a significant and well-reported rise in antisemitic incidents in Scotland. We have reports of Jewish people in Scotland feeling unsafe in their own country. We should do nothing here that increases those fears.

In the words of the Scottish Council of Jewish Communities,

“it is a cause for concern to the Jewish Community that the decision to issue special procurement advice about Israel alone may indirectly encourage antisemitism from those who conflate the local Jewish community with the State of Israel.”

I will quote directly the conclusion of the Scottish Council of Jewish Communities, which is important. It says:

“While undoubtedly welcome, ministerial comments that Jewish people in Scotland should not be a proxy target for those who dislike Israel or Israeli government policy—or that dislike of Israel should not be an acceptable excuse for antisemitism—pious sentiments do not change behaviours. Legislation does, and we therefore urge the Scottish Parliament to take note of the vulnerability and anxiety of many Jewish people in Scotland as demonstrated by the large majority view among the Scottish Jewish community in support of the Westminster Bill, and so reject the Scottish Government Legislative Consent Memorandum to the Economic Activity of Public Bodies (Overseas Matters) Bill, so as to permit the UK Parliament to legislate for Scotland on this occasion.”

We would do well to listen to that plea and avoid giving succour, however unintended, to those in Scotland who would attack the Jewish community—and reject the motion before us.

17:10  

I will begin by agreeing with the minister, who set out very clearly the context in which the legislation is taking place. It is right to acknowledge and repeat that what happened on 7 October was an act of terrorism; it was barbaric and horrific. Similarly, what has happened subsequently in Gaza is nothing short of a humanitarian disaster. We must make every effort to stop the killing and get the support that is required in place, and to ensure that there are no further acts of terrorism.

Let me be very clear with Mr Fraser that my views on these issues are a matter of record in this place. We must have no complacency about antisemitism. Let me also be very clear that any procurement policy that singled Israel out specifically would be an act of antisemitism under the International Holocaust Remembrance Alliance guidelines. Let me say that unequivocally.

It is unfortunate, however, that Mr Fraser approached this debate by singling out that particular issue, because the legislation would go far beyond the Israel-Palestine issue, as difficult as that might be.

Can Daniel Johnson name any other countries, with human rights records far worse than that of Israel, that there have been campaigns to sanction? This debate is only about Israel.

They may well not receive such prominence, but there are campaigns against procurement from Myanmar and from China because of the Uyghur situation. The situation in Israel-Palestine receives a lot more attention, but it is incorrect to say that it is the only situation that receives that attention.

More importantly, although I agree with the Government’s motion, the issue goes much further, because it is about stifling local government. We need to remind ourselves that local government has a long-standing, historic role—dare I say a constitutional role, given that that was mentioned by Mr Fraser?—in this country. It is because of local government that we have seen much social progress through municipal socialism developing healthcare and welfare systems that we would not have had otherwise.

Likewise, the position that local government has taken on key global issues has been important. In 1981, Glasgow District Council gave the freedom of the city to Nelson Mandela. Subsequent to that, the campaigns that were undertaken by local government were instrumental at a time when the national Government did not want to concede the issues regarding South Africa.

Mr Johnson made the point that the campaign against anti-apartheid South Africa was largely led by local authorities in Scotland and throughout the rest of the UK. Thank goodness they played a part.

The other aspect of this is that many of our local authorities have twin cities, and sometimes there is hardship to go through with them. I have seen that in Aberdeen with its twin cities of Bulawayo in Zimbabwe and Gomel in Belarus, with which the local authority has chosen to break links at certain points because of the political situation in those countries. Are Mr Fraser and others really saying that local authorities should be unable to do that?

Indeed, and I think that Mr Fraser and others would need to answer for themselves.

In my view, it is important that democratic bodies such as local government reflect the values of the people who elect them. It is important that they are able to use their economic judgment not only in matters of global import but in other issues such as fair work, fair trade and the environment. It is only right that local government is able to exercise its economic judgment, using its procurement powers, to ensure that its procurement is falling in line with its value judgments. If what local authorities do is deemed to be unacceptable and to exceed their parameters, there is a mechanism for that; it is called an election. Local people can judge for themselves who they return to local government.

What does it say about the state of the Government’s foreign policy that it is so weak that it is undermined by the procurement positions of local government? That is a nonsense. What is worse is that the bill goes further and applies to bodies such as universities, which are supposed to be independent. I worry about what that will do to their independence and what further ramifications there might be. Universities guard their independence with great pride, and they are also very cautious about anything that would undermine it. It is useful and important to note that Universities Scotland has said unequivocally that it would want universities to be removed from the provisions of the bill.

Ultimately, it is a sign of a weak Government—a Government that would rather stoke culture wars because it struggles to deal with the consequences of its own economic decisions; and a Government that would rather seek division because it struggles to be relevant in the day-to-day issues that people face. It is no wonder, because this is a Government that is seeking to avoid an election because it fears the consequences and what the people’s judgment will be when the general election comes along.

17:16  

I thank members for their contributions. The strength of feeling about the bill is obvious to anyone who is watching the debate.

It is clear that, although the effects of the bill are felt in relation to decisions that might be taken about relatively technical public procurement and investment matters, it provokes a range of views about issues of the utmost importance, including the current situation in the middle east. As I hope my opening remarks made clear, I do not think that a half-hour debate on legislative consent is the place to do justice to those issues.

The Government’s view on those issues is well known, and I do not propose to go into detail on it again here. Indeed, the current constitutional settlement means that the consent of the Scottish Parliament is needed only in relation to the inclusion of the Scottish ministers in the scope of the bill and to the limitation of executive competence as a result. However, although we might recognise that there is a range of views on those matters, a recognition that there might be a range of views is precisely what the bill fails to achieve. It would, by force of law, prevent the Scottish ministers from even publishing a statement saying that it would do things differently were it not for this UK Government bill. I will state that again: it would, by force of law, prevent the Scottish ministers from even publishing a statement saying that it would do things differently were it not for this UK Government bill. It would also allow the secretary of state to investigate, issue compliance notices and even levy fines on the Scottish ministers if they did not comply. That cannot be acceptable.

The nature of parliamentary democracy means that there will inevitably be some members who think that the Government should be doing more in relation to a given issue in its procurement and investment decisions. Inevitably, there will be some members who think that the Government should be doing something differently or not at all. The effect of the bill is to remove the ability of the Scottish ministers to take those views into account and to make decisions on them in relation to what are devolved matters.

The bill will also remove the ability of this Parliament to hold the Scottish ministers to account for those decisions, because the Scottish ministers will be unable to act or, potentially, even to explain why they have not acted. The Scottish ministers would be allowed to take disapproval of foreign state conduct into account in procurement and investment decisions, such as we have done in relation to Russia, only if the UK Government had first permitted that by way of regulations. If members will forgive the understatement, I am not sure that it is optimal to always have to rely on sound judgment from the UK Government on such matters.

However, that is not the point. The point is that, on devolved matters such as public procurement, devolved ministers must be able to make the decisions that they see fit, albeit always in compliance with international obligations and international law. The bill will row back devolution, and we must stand firm against that. Let us not forget those international obligations. They already prevent boycotts, they already give bidders from Israel and elsewhere the right to bring legal action against discrimination, and they were put into domestic law by the Scottish ministers and the Scottish Parliament.

The limitation of executive competence that the bill seeks to impose on the Scottish ministers is unacceptable. It is disproportionate and unnecessary, and it runs contrary to the basic principles of democracy and devolution. I therefore ask members to agree the motion and to send a message to the UK Government that its proposal is deplorable.

That concludes the debate. There will be a brief pause to allow for a changeover of members on the front benches.