We need a new deal on government procurement to support British industry

Gareth Thomas

Ministers must do more to help British firms create good jobs in the regions and nations of the UK. During the worst recession since records began, the government should be using the contracts it negotiates to create employment here in Britain. A national ‘Made in Britain’ kitemark should be established, too, to help consumers who want to choose goods they know will be helping communities and creating jobs across the country.

Last year, as Covid took hold and the full scale of the national emergency became clear, local British businesses desperate to help get enough personal protective equipment into our hospitals and care homes were too often ignored by government ministers in favour of overseas contractors.

A National Audit Office report last year estimated that between February and July the government spent £12.5bn on PPE, five times as much as it would have cost in normal times, much of which was spent overseas instead of with British suppliers and manufacturers. But this high price was no measure of quality, and some of the government’s orders placed with firms in Turkey and China proved unusable.

We now know that when doctors and nurses were crying out for more PPE, British firms – often on the doorstep of the very hospitals where more PPE was needed – were being sidelined. In one such example, a firm from Cheshire had lined up a deal with local trusts to provide 40,000 reusable gowns only for it to fall through in April as the government ordered a huge shipment of disposable gowns from Turkey, forcing the family run business to lay off five staff. One of the most breath-taking cases saw ministers supporting the use of a Spanish middleman, paid £21m by a Miami-based company specialising in jewellery, to source supplies of PPE from companies in China.

The government has argued that the extraordinary circumstances of the pandemic led to extraordinary measures when procuring PPE. But if in a national emergency local firms can’t get a hearing for what they can do to help, what chance do the majority of small- and medium-sized British firms have when there isn’t a global pandemic?

Ministers also claim that new procurement rules mean some contracts under a certain size in value could go to British companies. In truth, this is merely confirmation of a global agreement that we have recently signed: no substantive or substantial change to help British companies win Whitehall contracts has occurred.

There must be protection to ensure the taxpayer doesn’t have to pay inflated prices, of course. International commitments must be honoured, and stronger protection against cronyism needs putting in place. But my bill would stop government departments and ministers ignoring good British firms. It would introduce a presumption on all parts of government and contractors operating for them to buy British wherever possible. This would be done whilst continuing to abide by existing rules on best value, adherence to international procurement law and our other post-Brexit agreements.

There is suspicion in many boardrooms that it helps to be close to London to win government contracts. Figures from the House of Commons library show that during 2020 businesses in London and the South East won almost 53% of all of the contracts that went to firms across England. That is 615 of the 1,162 most lucrative contracts awarded by central government going to companies in London or the South East, with the other 547 being divided amongst the other seven regions of England. The North East of England was worst served by central government procurement schemes, seeing its firms secure just 16 of the most valuable Whitehall contracts.

Ten years after the Conservative government came to power, there is a huge divide in which parts of England benefit from the deals ministers do. The government still has no plan to put this right and tackle the huge gap in which regions of England benefit from its biggest contracts. It’s time that changed. My bill would therefore also require ministers to publish more detailed data on the value of government contracts awarded to firms by region. A measure that would monitor whether businesses in every region are being treated fairly and, crucially, how many jobs are being created.

This is about jobs and how quickly Britain emerges from recession. It’s about the huge social value government can create for our constituents. When procurement is done with imagination it provides stability for families and creates new career opportunities. The government’s handling of Covid and lockdown has made the economic damage from this pandemic, never mind the cost in lives and health, so much worse and ministers should be looking at what else they can do to speed the recovery.

Lastly, my bill would also require ministers to develop a Made in Britain kitemark so that consumers can choose more easily to buy a good or service that they can be confident has been produced in the UK. Helping consumers to identify what’s been developed in Britain might just make the difference as to whether someone here keeps their job.

The last thing our country should do is close its mind to the world outside our shores. It would be madness to turn our backs on the expertise, imagination and enterprise in the great goods and services we can purchase from friends in Europe, across the Commonwealth in Asia, Africa and of course in the Americas and Australasia. However, just as many of our allies seek to buy local when they can, so should we.

Many areas of the country are currently suffering jobs losses due to the government’s handling of the pandemic and its dismal Brexit deal. Now is the time for a new deal on government procurement to support British industry and make it easier for the British people to back British firms, creating jobs here in every region and nation of the UK.

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