Economy and Fair Work Committee

Meeting date: Wednesday, November 22, 2023

Official Report 688KB pdf

---

Economic Activity of Public Bodies (Overseas Matters) Bill

Agenda item 4 is consideration of a legislative consent memorandum on the UK Government’s Economic Activity of Public Bodies (Overseas Matters) Bill. The stated aims of the bill are to ensure a consistent foreign policy across the UK by preventing public bodies from indicating political or moral disapproval of a foreign state when making decisions about procurement and investment.

I welcome from the Scottish Government, Tom Arthur, Minister for Community Wealth and Public Finance, who is joined by Russell Bain, deputy director in international futures and brand Scotland policy; Alasdair Hamilton, who is a procurement policy portfolio manager; and Robert McConnell, who is a lawyer. I invite the minister to make a brief statement to the committee, and I will then invite members’ questions.

Thank you, convener, and good morning to the committee.

The bill triggers the consent process because it alters the executive competence of Scottish ministers by preventing them from taking moral or political disapproval of the conduct of any foreign state into account in procurement decisions. That is not necessary. There are already significant protections in domestic procurement law. It is undemocratic. It would allow UK ministers to fine Scottish ministers even for saying that they would have taken disapproval into account were it not unlawful to do so. It risks our ability to take a values-based approach to international engagement. Whether that is in relation to Ukraine today or to apartheid South Africa in the past, it should be clear why that is important. The Scottish Government does not recommend that consent be given.

Thank you, minister. I will now take questions from members.

Good morning, minister and colleagues. I have a number of short questions, and I hope that we will get short answers.

First, minister, would you accept that international affairs and matters of international trade are reserved to the UK Parliament?

Yes.

Thank you. In your memorandum, at paragraph 20, you refer to the UK Government: which UK Government are you referring to?

I will consult the document. That would be a previous UK Government.

Which one?

The UK Government that was in power at the time when apartheid was taking place.

Right. I am just trying to get some precision on the dates that you are referring to.

That would be the UK Government that was in power at the time. There was an approach—it was clearly understood at the time—when those were the circumstances in South Africa.

I am genuinely confused by this. I did a little simple research and found that, for example, Margaret Thatcher’s Government condemned apartheid on a number of occasions. Famously, Margaret Thatcher, when she met Archbishop Desmond Tutu, condemned apartheid. She condemned apartheid in 1984 during a visit to the United Kingdom by P W Botha, the South African leader. The UK Government was also involved in sanctioning South Africa, so I am not entirely sure what that paragraph refers to.

There was an approach that the UK Government took over the duration. The point that is highlighted relates specifically to clause 4 and the implications that that would have had. It would have prevented public bodies or Scottish ministers from publishing a statement saying that they would have acted in a particular way. The way in which the legislation is set out and will operate would have created restrictions on the competence of Scottish ministers, had a Scottish Parliament been in existence at that time. Had the UK Government had such legislation in place, it would have restricted the competence of Scottish ministers.

I am concerned, minister, that you are founding your arguments on a statement in your legislative consent memorandum that is not sustainable, but let us move on to the substance of the issue, if we can.

There are many repressive regimes in the world. There are many countries in the middle east, for example, that have terrible track records when it comes to the rights of women, the LGBT community and religious minorities and that repress free speech. Countries such as Iran are particular examples of that, and countries such as China have deplorable human rights records. Are you aware of any campaigns to boycott, divest and sanction many of those countries?

No.

No. So, this is all about Israel, is it not? That is exactly what the whole debate and the legislation are about: they are about Israel, which, for some reason, is being singled out by campaigners when all those other repressive regimes are being ignored. Over the past few weeks, particularly since 7 October, we have seen a dramatic rise in antisemitic activity. I have certainly spoken to members of the Jewish community in Glasgow who say that they have never experienced such a hostile environment as the one that they are experiencing today. They feel unsafe in Scotland. You will have read the submission, I am sure, from the Scottish Council of Jewish Communities, which shows overwhelming support for the bill and which opposes the action that the Scottish Government is taking. Are you not concerned that, in opposing the bill, the perception will be that you are giving succour to antisemitic sentiments when, you should instead be giving reassurance to the Scottish Jewish community, given that it feels more threatened than it has done at any point in the past 40 years?

I refute the implication that the bill is in any way giving succour. Every single person and every member of the Parliament is completely unified in their unconditional and unqualified condemnation of antisemitism in all its forms. We are considering this morning a legislative consent memorandum whereby the UK Government is seeking to alter the competence of Scottish ministers and to change the devolution settlement. That is specifically what we are considering in the LCM, and that is situated in the broader context of consistent acts by the UK Government to undermine devolution. That is specifically what the LCM speaks to.

I can perhaps understand why the Scottish Government would have taken that view before 7 October, but we are in a very different situation now.

The Scottish Council of Jewish Communities says in its submission:

“we…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”.

That was written before 7 October. I imagine that, if we were to ask the council today, we would get a much, much stronger response. Do you not think that, given what has happened, you are on the wrong side of the argument?

I respect that there is a range of views, and a range of views was aired when the legislation was considered at Westminster. The position that we are considering today is the implications for devolution, specifically the executive competence of Scottish ministers. That is a distinct matter and something that we, as parliamentarians, have to pay close attention to and consider carefully, particularly in the context of what we have seen over recent years, namely, the approach by the UK Government that has been encroaching upon devolved competency. That is what we are specifically considering. The legislation would alter the executive competence of Scottish ministers, and we are opposed to it on that basis.

Okay. Thank you, minister.

Do any other members wish to ask a question?

Morning, minister. On Murdo Fraser’s point, I remind folk that the Conservative Government in the 1980s tried to stop boycotts against apartheid South Africa. We should remember that.

Amnesty International, in its evidence to the UK Parliament, highlights that Scotland is attempting to

“use the leverage of public procurement to incentivise companies to behave sustainably with regard to human rights, labour rights and the environment.”

Similarly, Human Rights Watch said that, if the bill comes into operation,

“The effect could be to hamper these groups from taking steps in business dealings to avoid causing or contributing to human rights abuses and international crimes.”

The Local Government Association in England has raised concerns, and Universities UK has raised concerns about freedom of speech and so on. My question to you is this: what would be the potential impact on the procurement policy or pension fund investment decisions of councils or universities if this bill were to become law?

Scottish ministers and public bodies in Scotland of course take decisions on procurement that are consistent with and uphold our obligations under international and domestic procurement law. It is also recognised, and is expected of all those who are in a position to take them, that decisions are not taken in an ethical or moral vacuum. We have a strong record on public procurement. We have clear provision set out in legislation and a suite of tools to assist public bodies in their procurement decisions. All public procurement decisions that are taken in Scotland have to be consistent with domestic and international procurement law obligations.

Thank you very much.

We have received some evidence on the Scottish procurement policy note from 2014 that strongly discourages trade with illegal settlements in the occupied Palestinian territories, which, I understand, is still a relevant policy. The minister presents a case in which the Scottish Government argues that it does not deviate from UK foreign policy. Are you confident that that position is consistent? I raise those points on behalf of the committee in respect of representations and evidence that we have received.

It is important to note that, with the coming into force of the Procurement Reform (Scotland) Act 2014 and subsequent regulations, along with a suite of tools, we promote sustainable procurement across Scotland, which takes into account a wide range of considerations and factors. Alasdair Hamilton may want to expand on that.

Our approach over the past few years, since the 2014 act came into effect in 2016, has been to focus on producing sustainable procurement guidance and sustainable procurement tools for purchasers across Scotland. Those cover issues such as modern slavery, conflict minerals and human rights. They are more of general rather than particular application, but they touch on some of those issues that are live across the world.

The committee is going to do some post-legislative scrutiny of that act, so we may consider that area in more detail.

What engagement has the Scottish Government had with the UK Government and other devolved Administrations that have also been considering the LCM?

There was an exchange of ministerial letters following the bill’s introduction, and there has been continued engagement at official level throughout the process of the consideration of the legislation.

Have you had any discussions with other devolved Administrations?

Our primary engagement has been with the UK Government. I ask Alasdair Hamilton to comment on whether there has been any specific engagement with devolved Administrations.

There has been constructive engagement with Welsh Government colleagues in particular. Ultimately, they take their own considerations into account.

There are no other questions from members. That brings us to the end of the evidence session on the LCM. I thank the minister and his officials foewwr attending. I will briefly suspend the meeting to allow for a changeover of witnesses.

10:13 Meeting suspended.  

10:16 On resuming—