20 February 2014

S4M-09051 Procurement Reform (Scotland) Bill: Stage 1

The Deputy Presiding Officer (John Scott): The next item of business is a debate on motion S4M-09051, in the name of Nicola Sturgeon, on stage 1 of the Procurement Reform (Scotland) Bill.

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Stewart Stevenson (Banffshire and Buchan Coast) (SNP): As I represent the biggest fishing-dependent constituency, I am very familiar with the concept of sustainability. I am also very encouraged that the bill’s provisions are likely to lead to improved opportunities for employment, particularly for young people, through the embedding of apprenticeship requirements. There is much in the bill to be encouraging about.

We have heard a bit of discussion—most recently from Alison Johnstone—about sustainability. Section 8 is rather confusingly constructed in that it places sustainable procurement as an equal consideration, but then says that it must not trump economic operators, for example, and goes on to exclude the economic operators from EU procurement, but leaves sustainable procurement in place for EU-governed procurement. Therefore, there is scope for the Government to have a careful look at the wording of section 8 to benefit the strength that there ought to be behind sustainable outcomes.

It is worth pointing to the certainty that is provided by section 3, which is on regulated contracts. Amounts are provided. When I was a member of the Local Government and Regeneration Committee and we were looking at regeneration, one thing that emerged was that many council officials appear to advise their councillors, and other officials further down the line, in restrictive terms in relation to amounts, so that councils could not really just give business to local businesses. The certainty that the bill provides may help on that. I look forward to that being the case and to the issue being further developed at stage 2.

Section 9 is on the sustainable procurement duty. I very much welcome the need to “promote innovation” in that section. We must signal absolutely clearly that we want people to be imaginative and to think of new ways of doing things. Innovation might often involve something quite small that would have a big benefit and impact on a local SME or company that employs people in single figures.

I turn to section 22 and section 23, on selection of tenderers. The matters that I will raise may be covered in secondary legislation; if they are not covered in the minister’s summing up, I hope that they will be considered. I want to mention novation—in other words, the general ability in contract law, once someone has been awarded a contract, to sell that contract on to someone else. In general, contracts will say that they can be sold on only to approved people, but there is a general danger that a rigorous sifting process to award the contract to people whom we think are decent enough to get it could be bypassed if they were to sell on the contract. The same issue arises in engagement of subcontractors, of course. I certainly want the secondary legislation to make it clear how those processes will happen when contracts are awarded, in order to ensure that we do not in the first place suborn the selection of tenderers.

Tax avoidance has been the subject of discussion. Neil Findlay and other members used the word “avoidance”, and James Kelly and Alison Johnstone used the words “aggressive tax avoidance”. I absolutely agree with what was said. The trouble is that avoidance is something that we all do every day. I will give a very specific local example. When I pass a filling station that is selling diesel at £1.43 per litre and go to one that is selling it at £1.33 per litre, I am avoiding paying tax because in buying a cheaper product I am paying less tax. That is perfectly proper and to be expected.

We should look at what happens in the United States, where corporate taxation is based on the proportion of economic activity within the jurisdiction. If we can get our taxation on to that basis, many of the problems will disappear. We will not be able to do that terribly quickly, but it would be awfully nice to do it at all.

The principles in the bill are not new and are highly to be commended. I look forward to seeing the bill go through Parliament and hope that it gives more opportunities to small local businesses and improves the sustainability of the products that we buy.


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