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As so often, I must tell the Minister that those people know that the Government regard them without confidence. They understand that the Government suspect them and that the Government, and many of their supporters, regard them as an unwelcome presence in this country. Therefore, I hope that the Minister will be able to reinforce and re-emphasise what the Home Secretary said about there being no new procedures.

The Home Secretary said that there are new channelling arrangements at Heathrow. Is there any possibility of a new channel being introduced for non-British citizens and non-EC nationals under those arrangements? It would be absolutely intolerable if that were the case and it is important that, when he winds up, the Minister gives a clear assurance that there will not be any new arrangements of that sort. Such arrangements would serve only to strengthen the alienation, and lack of trust and confidence felt by many non-British citizens and non-EC nationals who have good reason for wanting to travel through and outside the Common Market. Such people need that reassurance tonight, and I hope that the Minister will be able to give it.

6.47 pm

Mr. Jeremy Corbyn (Islington, North) : On occasions such as this, I feel as though I am in a county council chamber discussing the possibility of sending a letter to Whitehall asking whether it would be good enough to consider our views. Due to the Single European Act and the way that the European Community operates, we have less and less power over what happens to this country's nationals or the movements of people within the EC.

In the Government's memorandum, reported by Lord Cockfield in October 1987, during the British presidency of the European Commission, they initiated the idea that there should be some harmonisation of immigration and refugee law throughout the European member states.

My hon. Friend the Member for Edinburgh, Central (Mr. Darling) made an excellent speech, in which he demonstrated the double standards that exist in the European Community. There is talk of free movement of EC nationals throughout the Community but no talk of free movement of peoples who are not EC passport holders, but who are legal, long-term residents of one of the member states.

It seems extraordinary that, when a pensioners' group in north London wishes to arrange a day trip to Calais, its members have to look around to see how many of them are Caribbean and cannot therefore go on the trip because they cannot obtain visas from the French embassy here in time. The same applies to Indian people and others. That is a serious and nasty experience for those people, because they do not have the same freedom of movement as others. The British Government are hardly in a position to lecture others on this subject when we think back to the views that the Government have expressed and the legislation passed through this House, which has largely removed the rights of hon. Members to intervene on immigration matters. The Government passed the Immigration (Carriers' Liability) Act 1987 and have failed to face up to the many legitimate criticisms made of their attitude to refugees by the United Nations High Commissioner for Refugees.

Page 6 of the Government's response to the EC document says :

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"The Government accepts the need for closer co-operation between member states in asylum matters and, in particular, for an agreement on the determination of which member state is responsible for considering asylum requests."

I view that statement with an ominous feeling. I see behind it a levelling down of the treatment of asylum seekers to the lowest common denominator in Europe. The Government's attitude in the case of Viraj Mendis, when they refused to consider the offer of a third country, make me suspicious about that statement.

The Home Secretary's final comment on the EC document said : "The conclusion of Immigration Ministers at Munich concerning airports, to which the report refers, was conditional upon agreement to abolish controls on non-EC nationals. As already indicated in this Memorandum, no such agreement has been reached."

I suspect that the Government do not plan to reach agreement. I and people in my constituency and others fear that there will be two standards throughout the Community in 1992.

I want to refer briefly to "The Migrant and Refugee Manifesto" published at a press conference in the House this morning. That deals with real rights for 16 million people across Europe who are largely denied the same sort of rights that exist for EC nationals. They do not have rights of movement or, in most cases, the right to vote, despite the fact that they pay taxes, and often they do not have a right to employment. We are creating a two-tier economy in Europe, with the semi-legal economy of migrant workers in low- paid jobs in sweatshop industries being treated as second-class citizens throughout Europe.

The manifesto demands 10 points to be applied throughout Europe. They are the right to stay ; the right to family reunion ; free movement within the EC ; full social and political rights ; full legal rights ; no to racism, fascism and police brutality ; no to repatriation and deportations ; no to economic racism ; the right to organise independently, and an amnesty to all unauthorised workers. That would go a long way towards removing the fear that exists in many migrant communities in Britain and other EC member states. I hope that when the Minister replies to this brief debate he will refer to the general points in the manifesto, which I understand is being sent to him.

Mr. Maclennan : Does the hon. Gentleman accept the harmonisation of the law in the areas that would be necessary to give effect to those rights?

Mr. Corbyn : Yes, that is a fair point. My point was that the harmonisation of the law is taking place for EC nationals, but the same rights are being deliberately excluded from non-EC nationals resident in EC member states, partly as a result of the Government's actions. It is for those reasons that I hope that the Minister will give serious consideration to the legitimate points that have been raised on behalf of a large number of migrant and refugee organisations.

6.51 pm

The Minister of State, Home Office (Mr. Tim Renton) : I am delighted to have the opportunity to reply to this short but interesting debate, particularly since I spent this morning at a place where in a few years' time we shall be looking carefully to see just how frontier controls and checks are working post-1992. I spent the morning at the Eurotunnel shuttle terminal at Cheriton and at the exhibition centre there. With me were senior immigration

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officials whose job it is to see how, at the shuttle terminal at Cheriton, we can streamline frontier checks while keeping what we consider to be the essential element of those checks when the Channel tunnel comes into action in June 1993. When it opens, the Eurotunnel, the largest building programme in Europe this century, will be a major contributor to, and beneficiary from, the single market that we are discussing.

I followed the speech made by the hon. Member for Edinburgh, Central (Mr. Darling) with interest, but he was in a muddle, although a well-meaning muddle, about the document. On the one hand he argued that the Commission's proposals were not effective enough. I remind him that in his opening remarks my right hon. Friend the Secretary of State stressed strongly that practical co-operation was often more effective than treaties. That practical co-operation between our police force and European police forces is developing all the time in such matters as the seizure of drug traffickers' assets, extradition and mutual legal assistance.

On the other hand, the hon. Gentleman was arguing that the document would be too effective. He talked about fortress Europe which, if it came into being, would have too stringent an effect upon the movement of people. I remind the hon. Gentleman and my hon. Friend the Member for Southend, East (Mr. Taylor), whose remarks I followed with the closest interest, that paragraph 8 of the Home Office statement on the Community document states clearly the areas in which we differ from the Commission. For example, we believe that

"the Communication and the report misunderstand and seriously under- estimate the contribution which frontier checks make to essential defences against terrorism, drug smuggling and other crime, does not accept that either the progress so far achieved, or the measures under contemplation, would justify the complete abolition of frontier checks within the Community ; and differs"--

this may be the most important point that I shall address to my hon. Friend the Member for Southend, East--

"from the Commission on the implications of the Single European Act, particularly as regards the treatment of third country nationals." The hon. Member for Edinburgh, Central implied that someone who had been refused entry at Athens might also be refused entry at Heathrow for that reason alone. That may be the case if the Commission's view prevails, but our firm view is that we shall continue to operate United Kingdom immigration controls at our ports and airports under British rules.

One point on which I must contradict the hon. Gentleman is that Group 4 does not have access to the computer services systems of the immigration service.

Mr. Darling : Will the hon. Gentleman give way?

Mr. Renton : If the hon. Gentleman will forgive me I shall not give way as I have very little time. [Interruption.] With the greatest respect, the hon. Member for Vauxhall (Mr. Holland) was not in the Chamber so he cannot know what the hon. Member for Edinburgh, Central said.

Group 4 does not have access to computer service systems of the immigration service. Information on the immigration service headquarters computer is registered under the Data Protection Act 1984. It is exempted from disclosure under exemption nine.

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The working group on immigration is considering a common list of persons who would be refused a visa by EC countries. The United Kingdom would, of course, require primary legislation in order to refuse a visa to someone simply at the request of another member state. It is clear from the present legal position that we cannot do that.

The Schengen approach, to which the hon. Member for Edinburgh, Central referred, envisages the abolition of all frontier controls and is probably more relevant between countries with large land frontiers with each other than in the case of an island such as Britain. We are not proceeding down the Schengen route. We are interested in what is being done. We understand that it intends to rely on internal controls, but we as an island do not need to do that, and, by tradition, we prefer not to.

The hon. Member for Edinburgh, Central asked about those who legally settled here as did the hon. Member for Bradford, West (Mr. Madden). There is no reason why, either in our or the Commission's view of 1992, a person settled in the United Kingdom should have any additional difficulty in returning here. I remind the hon. Member for Bradford, West, who has a particular expertise on immigration subjects, that we are talking today about controls and checks at frontiers, not about rights of residence. There is no question of 1992 affecting the right of a person now settled here to stay here. There is nothing sinister about the exchange of basic information on asylum seekers, such as the number arriving, their nationalities, decisions taken, or what we know about organised illegal immigration. We remain completely responsible for the determination of asylum applications in the United Kingdom. The ad hoc group that covers that area is interested in trends, not in individuals.

My hon. Friend the Member for Southend, East, spoke on a subject about which he feels deeply and which he has raised with me before. Some of the topics dealt with in the Commission's report relate to goods--for example, licit drugs, works of art and antiques. Proposals in those matters would normally come under the qualified majority proposals. But in the basic area of the freedom of movements of people and their personal luggage our clear view is that the proposals must be made on the basis of unanimity. We have made that clear to the Commission in respect of its proposed directive on firearms, about which my hon. Friend particularly asked. We shall continue to press our view that that should be based on article 235, which relates to frontier controls and carries the power of veto, rather than on article 100A, which requires only a qualified majority.

I stress to the House that our approach to these matters is very much that of making the most progress possible towards 1992 and lifting the burden of frontier checks and formalities to the greatest possible extent for European Community citizens while retaining immigration checks for residents of third countries and the ability to prevent the movement of illicit drugs and terrorist weapons. This is practical progress in keeping with the importance we attach to the completion of the Community's internal market. I believe that this progress is of great value, not just in treaties and rhetoric but in expanding the markets for business and services for the Community market of 320 million people.

Question put and agreed to.


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That this House takes note of European Community Document No. 10412/88 relating to the abolition of controls of persons at intra-community frontiers ; and endorses the Government's view that in considering the relaxation of frontier controls within the European Community the Government must keep in place necessary measures to control terrorism, drug trafficking and other crime, and immigration from non- community countries.

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Public Procurement

7.1 pm

The Paymaster General (Mr. Peter Brooke) : I beg to move, That this House takes note of European community Documents Nos. 7496/88 and the Supplementary Explanatory Memorandum submitted by the Treasury on 24th October 1988 and 5909/89 relating to public works contracts and 10497/88 and the Supplementary Explanatory Memorandum submitted by the Treasury on 2nd May 1989 relating to compliance with Community rules on procedures for the award of public supply and public works contracts ; endorses the view that revisions to Directive 71/305/EEC are necessary to improve public purchasing throughout the Community ; welcomes the Government's endeavour to secure a statisfactory outcome in discussions on the proposal on public works contracts in the Council of Ministers ; and supports the Government's intention to press for a means of improving compliance with Community rules on procedures for the award of public supply and public works contracts which places appropriate responsibility on Member States.

Madam Deputy Speaker (Miss Betty Boothroyd) : I have to announce that Mr. Speaker has selected the amendment standing in the name of the hon. Member for Thanet, South (Mr. Aitken) and other hon. Members.

Mr. Brooke : The debate is about two of the proposals that the Commission has made with the purpose of opening up public procurement.

We debated the first of the Commission's proposals, which was intended to improve the supplies directives, in Standing Committee in December 1986. Later that month the Commission submitted the first version of its proposal to amend the works directive ; a year later, it submitted a measure intended to secure compliance with that directive and with the supplies directives ; and it introduced proposals to cover the so-called excluded sectors last autumn. We shall be debating the proposals on the excluded sectors on another occasion, but it has been agreed that it is appropriate to deal today with both the proposal to amend the works directive and that to improve compliance.

Although the proposal on works was submitted in December 1986, the Commission made significant changes to it about a year ago. The Select Committee on European Legislation considered that the amended proposal raised issues of legal and political importance and recommended it for debate. Unfortunately it was not possible to arrange a debate before the Council of Ministers adopted a common position. However, I did try to keep the Chairman of the Committee informed of developments in Brussels, and I am glad now to have the benefit of the views of the House before the directive comes to the Council for adoption on the basis of the re-examined proposals that the Commission has now submitted.

In the case of compliance, there have so far been only initial discussions in Brussels. It has already become clear, however, that the Council is likely to reach a common position that differs in a number of important ways from the Commission's proposals. I believe that what is emerging may prove more acceptable to the House than the Commission's proposal, but I have to say that the new texts will require very careful examination.

Before going further, I should like to say a word about the procurement directives generally. They were originally adopted long before the present programme to complete the single market. The works directive was adopted before

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we joined the Community. The existing directives were put in place because the Community wanted to provide a framework that helped ensure that the obligation under the treaty not to discriminate on grounds of nationality was fulfilled. The same purpose was behind the Commission's inclusion of public procurement in its White Paper on the internal market in 1985, and Heads of Government have since given support to the objective of opening up public procurement more fully.

Changes to the supplies directives have been in force since last January. Changes to the works directive are clearly in prospect--and we can expect measures to be adopted which will make it easier to enforce compliance. The Government have welcomed those initiatives because we believe that the administrative burdens that the directives may impose are outweighed by the contribution they can make to the achievement of a single market.

I accept that others may hold different views on the balance of advantage. A large number of people have helped us by commenting on the proposals and many have disagreed with parts of them. I greatly value the willing co- operation and assistance that they have given. I suggest to them that they changes that we are discussing to the works directive improve the chances of contractors in this country winning business in other member states of the Community and that it is to our advantage to ensure that adequate procedures are available to make sure that the rules are obeyed throughout the Community.

Mr. Teddy Taylor (Southend, East) : What procedures?

Mr. Brooke : I repeat--to ensure that adequate procedures are available to make sure that the rules are obeyed throughout the Community. I appreciate that my hon. Friend the Member for Southend, East (Mr. Taylor) has put his name to the amendment and I am sure that he will speak to it in due course. I promise that I will respond to him at that stage.

I propose to highlight the main changes that it is proposed should be made to the works directive to make it more effective, and to draw attention to one or two points that we think will cause difficulty. I will then comment on the changes to the Commission's proposal to improve compliance that are now being discussed in Brussels. The proposal to amend the works directive includes a number of changes which are similar to those adopted last year in relation to the supplies directive and which we were able to support. More time is to be allowed for contractors to respond to advertisements and to invitations to tender. Contracting authorities are required to publish notices of contracts they have awarded and to give explanations to eliminate candidates or tenderers on request. They are also required to publish the essential characteristics of works contracts above the threshold as soon as decisions on planning are taken. Other measures to improve transparency and to assist the monitoring of compliance include the retention of records and the provision of statistics.

Contrary to some suggestions, the proposal does not limit the use of the so -called restricted procedure. That is the procedure used by most of our contracting authorities and involves the selection of tenderers from those firms that express an interest. This reduces the burden on

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contracting authorities and also on contractors, since the cost of submitting tenders can be very high. Contracting authorities will need, of course, to be able to show that they make their selection of tenderers without discriminating against candidates from other member states.

There are exclusions for works declared secret, those that are subject to national security considerations and those that need to be procured under other international rules. The proposal replaces the previous limited exemptions from the open and restricted procedures by negotiated procedures involving one or more contractors, with a call for competition in some cases. This should reduce the incidence of single tendering and provide greater opportunities for contractors without imposing undue burdens on contracting authorities. Similarly, new provisions on the use of standards will increase the ability of contractors to compete throughout the Community while taking in from the supplies directive derogations that were negotiated there to protect value for money.

The directive is also amended to catch any form of contract for civil engineering or building works let by, to begin with, Government Departments and local authorities, but it is not intended to apply to contracts to be let by management contractors. The field of application is extended to encompass bodies which meet criteria for defining "bodies governed by public law" and to include rules on the award of concession contracts and the award of works contracts to third parties by concessionaires. In addition, authorities covered by the directive that fund more than 50 per cent. of the cost of a contract for civil engineering works or certain building works must make compliance with the directive a condition of the funding. The threshold, however, is to be raised to 5 million ecu--about £3.3 million at today's rates. The fivefold increase means a considerable lightening of administrative burdens on contracting authorities. There are a number of improvements intended to benefit small firms. For example, the publication of contract award notices should help them to target main contractors. There is a separate provision allowing contracting authorities to ask tenderers to indicate any share of the contract that they intend to sub-contract to third parties. To make it clear that contractual freedom is not affected, the Council agreed to say in its common position that information given to the contracting authority is without prejudice to the question of where responsibility lies for the contract. The Commission, accepting a suggested amendment from the European Parliament, now wishes the provision to say :

"Without prejudice to the question of final responsibility." This may be acceptable although we would prefer to see an explicit reference to contractual responsibility.

An area where the existing directive and the proposal were unclear was whether contracting authorities could require tenderers to be quality assured. It is important that they should be able to require that, since the Government mean to increase the use they make of quality assurance. The Council agreed that technical specifications should be defined in the directive to include requirements for quality assurance. It helped to be able to say that a standard on quality assurance had been adopted at European level that national standards bodies would be required to implement. It was a British standard, BS5750, that was adopted, and I pay tribute to those responsible for its development and for its acceptance


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The Council also agreed to amend the provision in the Commission's proposal relating to abnormally low tenders. That required contracting authorities to ask for written explanations in such cases, but it was putting an unnecessary burden on contracting authorities in cases where they were prepared to accept the offer. The changes now made will limit the obligation to ask for explanations, and take them into account, to cases where the contracting authorities consider rejecting such an offer.

Another area in which improvements have been made is the acceptance of variants. The proposal now says simply that where the criterion for the award of the contract is that of the most economically advantageous tender, contracting authorities may take account of variants that meet their minimum specifications, which they must state in the contract documents together with any specific requirements for their presentation. A proposal to limit the rejection of variants now says only that rejection is not allowed on the sole ground that a variant has been drawn up by reference to European standards, or the like, instead of those to which the contracting authority had referred.

Two provisions that pose difficulties for us result from amendments that the European Parliament proposed to the common position and which the Commission has taken into its re-examined proposal. The first would allow contracting authorities to impose conditions for participation aimed at assisting the fight against long-term unemployment or for the employment of young people. But that could be only in the context of programmes agreed by the Commission. The background is that last September, in deciding on a case brought before it by a court in the Netherlands, the European Court of Justice pronounced on the position under the existing directive. It found that the directive allowed member states to make their own rules on public procurement provided they were compatible with Community rules and that, subject to national rules, contracting authorities were free under the directive to impose conditions relating to the use of the long-term unemployed--provided there was not discrimination, direct or indirect, against firms from other member states. The nature of the condition would have to be mentioned in the tender notice published in the official journal.

What is now proposed would limit the freedom of member states to forbid conditions of the kind that it mentions. Conversely, the provision might prevent the use by contracting authorities of other conditions for participating in a contract procedure. The proposal also changes the balance of responsibilities by letting the Commission rather than national courts decide in the first instance whether a condition is discriminatory. Finally, the meaning of the expressions "operational programmes" and "competent authorities" is unclear. For these reasons, that provision is not one that we could support.

The second provision that causes us difficulty is a requirement on contracting authorities to state where information can be obtained on the employment conditions applicable where the work is to be carried out, and to require tenderers to state that those conditions have been taken into account in their offers. That provision involves just the kind of administrative burden we want to avoid. Clearly it is important that contractors should make their offers with the necessary knowledge of the environment in which they would be working. But that is best done by the firms themselves making inquiries or

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having inquiries made for them. Making it a requirement for contracting authorities to state the source or sources of the relevant information assumes knowledge that they may not have, particularly of works to be carried out elsewhere. If they make errors of omission, it could lead to confusion over liability. The solution that the Council found in its common position was to say that contracting authorities may indicate the sources of the relevant information. If the provision is mandatory, there may need to be safeguards for contracting authorities.

Mr. Teddy Taylor : Can my right hon. Friend say what will happen procedurally? He says that the European Parliament proposed two changes to the common position that Britain does not like. What will happen next? Will there be a majority vote, or must there be unanimity? If there is not unanimity, will we have to scrap those proposals? My right hon. Friend is right in the thick of it, and it would help the House to understand those matters if he will explain what will happen to those two unacceptable amendments.

Mr. Brooke : I shall answer my hon. Friend's question, but I want to make absolutely certain that my reply is correct. I shall respond to his point later.

Before moving on from the works directive, it may be helpful to refer to the position on negotiations with those who submit tenders. The Council agreed with the Commission to publish a statement on the extent to which negotiations can take place where there is competition based on open or restricted procedures. Negotiations will be ruled out where they are likely to distort competition, but it will be recognised that discussions can properly take place for the purpose of clarifying or supplementing the contents of tenders or the requirements of contracting authorities. We regard it as important to ensure that contracting authorities can hold such discussions in their pursuit of value for money.

The proposal for the directive to improve compliance does not relate only to the works directive, but applies to the supplies directives as well. Getting better compliance has long been the Commission's objective, and member states have shared it. Most, of course, are fairly certain that there are not undue problems in their own countries. They say that what they need is to be sure that others are following the rules. The United Kingdom can justifiably claim that it has a good record in observing the rules. That is not the point. For suppliers and contractors to have the necessary confidence to go out and get the business, they need to be satisfied that their bids will be properly and fairly considered.

That is what the proposal on compliance is intended to ensure. At its heart is a set of requirements that member states must ensure are fulfilled in each country. They come down to saying that procedures shall exist to enable firms who may feel aggrieved to obtain reviews through judicial or other procedures. Putting it that way enables the Commission to cope with different practices in the various member states. But it is worth pointing out that the Commission is showing itself insistent on ensuring that, whatever the system, there is a completely independent element within it.

The Treasury describe in the latest supplementary explanatory memorandum how discussions in the Council machinery are pointing towards significant changes in the proposal. I regret that it was not possible to provide the

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memorandum until a day or so ago. However, it shows the very latest position in the Council, and I shall say more in a moment about how we see the position on one or two points.

Rather than take up time by examining the way that the proposal developed at every stage, let me describe some key points in the version now being discussed. The latest form of the proposal still provides for damages to be available to persons harmed by an infringement, but leaves the decision on how damages are to be calculated in the hands of member states. We believe that that is right. We do not believe that, as the Commission originally proposed, it should be possible to claim compensation in respect of forgone profits or lost opportunities.

The proposal in the form that the Council is now discussing no longer gives the Commission a power to intervene as of right in court proceedings, as the Commission originally intended. Instead it provides that member states may require that the leave of the court is obtained before the Commission presents its observations. Courts in the United Kingdom can, if they wish, already invite the Commission to do that. Normally, however, they would expect to refer a question of European law to the European Court of Justice. We need to consider whether a provision pointing them in another direction is justified.

The proposal in its latest form does not give the Commission the power to suspend award procedures. Instead it includes a procedure whereby the Commission may notify a member state if it considers there is to be a clear and manifest infringement. It is recognised that the member state, in replying, may refer to the fact that review proceedings are under way. I know that some interests--such as the Confederation of British Industry-- would prefer the main feature of the enforcement mechanism to be a system of audit. That idea is attractive, and I believe that it may have an important place in securing more open procurement in the excluded sectors, where directives on procurement have still to be adopted. However, I do not believe that we can hope to convince the Commission or other member states that audit can take the place of the kind of rules that we are now discussing in relation to Government Departments and local authorities. For one thing, we cannot, at least at this stage, expect to obtain the more flexible re gime for the award of contracts that we hope to get for the excluded sectors, and which provides the main rationale for adopting the audit approach.

The CBI itself wants to establish what it calls a central complaints procedure that may include more than letting firms seek notification by the Commission in the way I have described. I shall be interested in how the CBI develops its thinking, but I note the difficulties that may arise in preserving the proper bounds of responsibility of the Commission and of member states. The CBI says that actions in the courts should always take place after contracts are awarded. I ought to point out that the courts in this country can already step in before that point.

I know that hon. Members may have a number of other concerns with both the compliance proposal and that on works. I should like to say a word or two more about the Government's view. The Government share to the full the wish to avoid unnecessary bureaucracy. I believe that the changes made to the Commission's original proposal to

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amend the directive on works go a long way towards getting rid of the rigidity that makes life difficult for purchasers. Many of the points that are raised apply, in fact, more to supplies than to works. Then there are those who would prefer the directive to impose obligations of a social kind on contracting authorities. The Government believe that it is not appropriate for a procurement directive to do this, and that view is shared by a number of other members states.

Hon. Members may ask whether the works directive, even when it is amended, is likely in practice to increase competition. So far, the number of contracts awarded to non-national firms has been small. The number will grow, but we should not expect figures like this to tell the whole story. Increasingly, contractors are looking at other ways of breaking into new markets, such as joint ventures and the acquisition of existing businesses. Such moves will be made easier by the provisions in the new directive that are designed to give greater openness to the process of awarding contracts.

Some of those who have commented to us on the Commission's proposal on compliance have been concerned about the risk of expensive litigation. The point is a fair one, though, of course, it arises because of the wish, which we share, to give suppliers an opportunity to take up complaints. The courts will be able, within the terms of the Commission's proposals, to deal with frivolous actions. There may be a case for making this explicit, while avoiding unnecessary harmonisation of national provisions. In relation to the excluded sectors, the Commission has itself made it clear that it recognises the extent to which commercial enterprises may be vulnerable to litigation, and will take that into acount in making its separate proposals on the enforcement of any rules on procurement that may be adopted for those sectors.

As for the present proposals on compliance and works, the Government believe that they include features that it is practicable to include in new directives soon and that it is worthwhile to try to do so. Subject to seeking the changes I have mentioned in the proposal for works, the Government propose to join other member states in agreeing to adopt the directive. As for compliance, we believe that there are important benefits to be obtained, and we therefore propose to work with the Commission and other member states to produce a system that puts responsibility on member states, where it belongs.

7.23 pm

Mr. Teddy Taylor (Southend, East) : I beg to move, as an amendment to the motion, at the end to add :

and would welcome the provision of a speedy and effective system of arbitration in cases where contractors consider that they are not being afforded fair and equal rights to tender and to secure public purchasing contracts.'.

I am afraid that my hon. Friend the Member for Thanet, South (Mr. Aitken), who is one of the most conscientious Members of the House, was expecting the motion to be debated later in the evening. I am therefore moving the amendment on his behalf. I apologise for the fact that my hon. Friend is not here, but I remind the House that he is one of the most conscientious Members in his attendance at Euro-debates.

I hope that the Government will accept this brief and non-controversial amendment. We are all of the view--whether one is critical or uncritical of the EEC--that anything that can bring about free trade in Europe should

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be supported 100 per cent. If the 1992 programme will achieve that aim, we shall all be very happy, particularly if it does not bring protectionism with it.

What worries me, my hon. Friend the Member for Thanet, South and others, is that there have been many assurances of this nature in the past. However, for all kinds of reasons--certainly not through the Government's fault-- nothing has happened. Hon. Members will recall that after the Prime Minister returned from Europe she told us that she had received a firm assurance that the EEC would impose spending controls. Unfortunately, they did not work because the Commission was still able to use crazy accountancy devices. The Court of Auditors report which has just been published shows that, while budget expenditure was expected to increase by 3 per cent., it actually increased by 25 per cent. We expected good things to happen. Sadly, they did not happen--not because of the Government but because we did not check everything out.

We have also encountered problems with 1992 itself. The insurance industry, in which I am involved, expected exciting things to happen in connection with free trade, but sadly the directive illustrates that free competition will be very limited. We have received assurances in the past about fraud. I know that the Minister is taking a personal interest in the activities of the Mafia. He will have read the recent statement by the leader of the magistrates in Sicily that he fears that the directive might lead to an extension of the nasty activities of the Mafia. The Mafia used to be in charge of crime, prostitution and the drugs industry in Sicily, but we understand that it is now engaging in other activities because money from the common agricultural policy is much easier to come by. Whether or not that is true, fraud is a problem.

We are worried that all these excellent measures will add to the costs of contracting authorities, councils and public bodies. They will have to provide a great deal of information and go through all kinds of procedures which may not work. That is why it would help enormously if the Government felt able to provide an easy arbitration procedure. If a British contractor felt that he was being discriminated against unreasonably, or that he was being treated shamefully by a public authority, he would then be able to do something about it.

The Minister probably knows about the example that I intend to mention. If he does not, he should speak to his right hon. and learned Friend the Foreign Secretary or to the Secretary of State for Transport. Southend wanted to be able to fly a plane to Ostend and then to run a bus from Ostend to Frankfurt. We were told that we could do so ; European Community legislation on the subject was clear ; we could go ahead right away. The Minister knows what, sadly, happened. We had to appeal to the Foreign Secretary who went to see Mr. Genscher, the Foreign Affairs Minister in Germany. They talked about it, but nothing happened. Then the Foreign Secretary approached the splendid Minister of State at the Foreign Office. She tried terribly hard. She took infraction proceedings--which I do not understand, but other hon. Members will. Unfortunately, nothing happened.

With some of my friends on Southend council I then flew to Bonn. There, together with the splendid British ambassador, we went to see someone who, we were told, was the head of the German transport department. We had a frosty meeting with him. We found that he was not the head of the department ; he said that he was in charge

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of the Berlin airlift. When I told him that the Berlin airlift ended over 30 years ago he told me that there were residual problems.

The point is that, although the law was clear, we battled on for four years and got nowhere. After the four years were up and when it seemed that something was going to be done, we found, sadly, that the poor firm had gone bust.

I know that the Minister is battling hard for Britain, as he always does. He is fighting for jobs and for the good of Britain in the Community. However, it will not help Britain if lots of extra bureaucratic controls are imposed. Something must be done about it. I am worried about the proposal that all these matters should be referred to the Commission. The Minister must be aware of what happens when matters are referred to the Commission. There are all kinds of discussions, meetings and procedures. If my right hon. Friend is in any doubt about that, he should talk to the boss of Amstrad, Mr. Alan Sugar. He will tell my right hon. Friend what he thinks about the Commission.

All we want is easy access to easy arbitration. We do not need a great court system, but we should have a small number of highly qualified arbiters. They should not have the right to change a contract, as that is extremely difficult, but they should have the right to impose penalties and perhaps to award compensation. It is crucial that there should be an easy method of access to prevent organisations such as the German La"nder, which have behaved rather strangely in the past, and to stop some of the sillier local authorities--perhaps some of the British local authorities--from showing discrimination where there should be freedom. Therefore, I hope that the Minister will appreciate that the amendment does not bind the Government in any way. It does not tell them to stand on their head and to throw out the regulations.

We all agree that free trade and the extension of freedom to purchase would be good, but there is not much point in putting extra burdens on industry unless we discover that the system works. Therefore, I hope that the Minister will accept the amendment and start a new process of good will and co-operation in the House of Commons so that we can all fight together for British industry and British jobs.

7.30 pm

Mr. Stuart Holland (Vauxhall) : I begin by saying that the Opposition welcome the amendment and we hope that the Government will accept it.

Mr. Quentin Davies (Stamford and Spalding) : The hon. Member for Vauxhall (Mr. Holland) uses the first person plural to describe the Labour party. Will he tell us why only one Labour Member is present for a debate on a very important issue?

Madam Deputy Speaker : Order. That is not relevant. As this is a timed debate, we should make some progress.

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