Groceries Code Adjudicator Bill [HL]
Debate between Lord Borrie and Baroness Wilcox
Lord Borrie
My Lords, if there is a “naming and shaming” proposal from the adjudicator, according to Clause 8 he or she has got to give written notice specifying,
“what information is to be published … how it must be published… and… the time by which it must be published”.
Clearly, there has to be a response to that. While it is not called an “appeal”, none the less, because notice has to be given by the adjudicator as to what he intends and the supermarket can respond to that, there is a time factor, and there is in effect an opportunity for the supermarket to say further things that it wants to say.
The common-law rule of natural justice, which we all know about, is that everybody has a right to be heard before some decision is made which may be adverse to them. The rule of natural justice as I have always understood it is that you only have an opportunity to be heard once. You cannot call upon some right of appeal under that rule, because that would be giving you the right to be heard twice, and that is not the position. Of course, there is always judicial review but that is, I admit, limited in that you have to show something seriously wrong with the decision, and that no reasonable person would have made such a decision. It is fair enough that anybody should have a right of judicial review to have that checked, but no case for an appeal has been made out. The whole set-up of the adjudicator is meant to be fairly speedy and so on. Subject to the points I have mentioned—you have to be given advance notice about naming and shaming, and you have a right to respond to that—there is no call for any more than that.
Baroness Wilcox
My Lords, the question of appeals is important and I can fully understand the desire of my noble friends Lord Howard of Rising and Lord Eccles to return to it at this stage of the Bill. However, although we have considered the matter carefully, the Government’s position remains unchanged.
Financial penalties clearly deserve a full merits right of appeal and the Bill provides for this. However, the other sanctions, including the requirement to publish information, have no direct legal consequence against a retailer. A recommendation is just that and is not binding, and a requirement to publish is essentially simply about distributing and sharing information which will, in all likelihood, be in the adjudicator’s investigation report. For this reason, therefore, judicial review is sufficient.
Although a judicial review will not normally involve a reconsideration of all the factual evidence, it could consider whether the adjudicator had reached a decision which was not supported by the facts, or had taken into account irrelevant facts or had failed to take account of relevant facts. I draw a comparison with the Financial Services Authority. Under the terms of the Financial Services Bill currently proceeding through this House, the FSA—or, in future, the Financial Conduct Authority—may issue public warning notices about a specific firm. Before making such a notice, it must give the firm the opportunity to comment, but there is no right of appeal before publication. Issuing a public warning notice in this way is, given the potential impact on reputation of the financial services firm in question, similar in consequence to our requirement to publish information which also has the benefit of warning those who deal with a retailer that they have been found in breach of the code. The requirement to give the firm the opportunity to comment is similar to that provided in Clause 5(4) of this Bill. This is similar to what the noble Lord, Lord Borrie, has also said on this point.
Furthermore, as I said in Committee, a full right of appeal, requiring the repetition of a detailed fact-finding exercise, could seriously delay the requirement to publish and so substantially diminish its impact. In particular, we expect a full merits appeal of this kind normally to take significantly more time than a judicial review because it involves a reconsideration of all the facts. Taking these matters into account, the Government consider that a full right of appeal is needed only against financial penalties, and that otherwise the possibility of judicial review by the court would be sufficient.
On whether appeals should be in the CAT or the High Court, this is a finely balanced question and I have written to Peers on this matter already. We do not think it would be wrong for either the CAT or the High Court to hear such appeals, nor do we think there is likely to be a significant difference in speed. However, on consideration, we do not think using the CAT would make the best use of its expertise, which is, of course, in competition matters. This is because, although introduced on competition grounds, the context of the adjudicator’s functions concerns contractual and commercial relationships between retailers and suppliers. The expertise needed to address these practices can be found in the High Court, or the Court of Session in Scotland. We do not think that the particular specialist expertise of the CAT is needed in order to consider the adjudicator’s decisions.
A further practical issue is whether, if the CAT were to hear appeals against financial penalties, appeals against costs or judicial reviews of all decisions of the adjudicator were also to be referred to the CAT. To the extent any appeals or reviews remained in the High Court, one could see two separate appeals or reviews on related subjects being taken forward in different fora at the same time. On the other hand, if they all took place in the CAT, this could lead to the CAT making rulings on matters even further from its core competition remit. That is a difficulty which is avoided by the Bill as we have it now. Therefore, in conclusion, we consider that appeals should most appropriately be to the High Court. I therefore ask the noble Lords to consider withdrawing their amendments.
Groceries Code Adjudicator Bill [HL]
Debate between Lord Borrie and Baroness Wilcox(12 years, 6 months ago)
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Lord Borrie
I cannot see how the Minister can possibly have a good reason for rejecting the perfectly straightforward amendment of by my noble friend.
Baroness Wilcox
My Lords, the reports that the adjudicator must publish at the end of each investigation are a vital part of his or her accountability and an important way of keeping retailers, suppliers and consumers informed of his or her work. It is therefore right that we should carefully examine what is contained within them. To take each of the amendments in turn, I find the amendment in the name of the noble Lord, Lord Browne of Ladyton, interesting and he has made his case eloquently. It is indeed reasonable that the report should give the reasons for the decisions reached, as well as the decisions themselves. I would be happy to speak with him further about this amendment before the next stage of the Bill.
I am less sure of Amendment 33, which is proposed by my noble friend Lord Eccles. I think that it is reasonable to say that the adjudicator’s report need not always identify the retailer concerned. This is because there may be cases where the adjudicator considers that the matter can more appropriately be dealt with privately. For example, if there were no breach of the code, the adjudicator might conclude that it would be unfair to name the retailer that had been investigated, due to the possible reputational damage.
Businesses: Debt
Debate between Lord Borrie and Baroness Wilcox
Baroness Wilcox
The fact that we are being asked to substantially write it is an enormous help. It means that we can write it following the legislation that we already have, which I have already explained and on which I complimented the previous Government for putting in place. The most important thing that we can get out of this is a requirement that local public authorities have to pay within 30 days. It is very important to get that in place, and it is certainly worth taking the time to get it right.
Lord Borrie
My Lords, is it not the case that this Act will never be adequately enforced until a public official is given the statutory task of enforcing prompt payment and prompt interest payment on behalf of SMEs? Next week the Government will announce the appointment of a groceries adjudicator to help farmers in their battles with supermarkets. Surely there are wide reasons for saying that a public official is needed to assist in enforcing this Act as regards the late payment of debts.
Baroness Wilcox
The noble Lord, Lord Borrie, who is a former Director-General of the Office of Fair Trading, always comes up with something on which I would like to reflect, and I will do so on this occasion. If he would like to write to me explaining exactly what it is that he thinks is a good idea, this Government are always willing to listen.
Office of Fair Trading
Debate between Lord Borrie and Baroness Wilcox(12 years, 10 months ago)
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Baroness Wilcox
I obviously cannot anticipate the Government's announcement, but we aim to build on the best of the OFT and the best of the Competition Commission in the creation of a world-leading Competition and Markets Authority. The Government recognise that the system for the enforcement of the anti-trust prohibitions is not working as well as it should. Cases take too long and a strong challenge to decisions is often mounted on appeal. It is worth remembering that we have a reputation in the world as being one of the best places in which markets work. Markets work well here. They are open and fair. We have to make sure that we have timely and effective enforcement. That is what the consultation has been about.
Lord Borrie
My Lords, does the Minister agree that whatever reorganisation of the competition authorities is to take place in the future, adequate resources must be made available to ensure that there is effective combating of price-fixing cartels and other anti-competitive practices? Does she also agree that in relation to the cases referred to by the noble Lord, Lord Naseby, the record shows that, on the matter of liability as distinct from the precise amount of penalty, the OFT has been upset on appeal to the Competition Appeal Tribunal only relatively rarely? It has admittedly been told by the Competition Appeal Tribunal that the amount of penalty is sometimes too large and has been reduced. Since money has been referred to by the noble Lord, Lord Naseby, is it not the case that last year, and I think the year before, the OFT brought in some £60 million to the Exchequer from fines—fines that had been upheld by the Competition Appeal Tribunal?
Baroness Wilcox
The noble Lord, Lord Borrie, was of course director-general of the Office of Fair Trading when I chaired the National Consumer Council. I have enormous respect for his view and have listened carefully to what he has just said. As I said in my original Answer, one reason why we looked to merging the Office of Fair Trading and the Competition Commission is to make sure that they are right and fit for purpose for our times and that there are the right resources needed for the world that we face. There is no doubt about it that the Office of Fair Trading has had a wonderful reputation in the past, and we would like to think that the new merger, if it goes forward, will take forward the very best of the OFT and the very best of the Competition Commission.
Payday Loans
Debate between Lord Borrie and Baroness Wilcox(12 years, 11 months ago)
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Baroness Wilcox
My noble friend is absolutely right: credit unions are the way to go. Why they have never taken off in Great Britain, I will never know. For years and years consumer groups have tried to get people to save with credit unions. However, the Department for Work and Pensions will shortly report on its study on how we can best support these credit unions, which wish to extend their services to benefit many more customers.
Lord Borrie
Will the Minister indicate whether she agrees that percentage rates, including the annual percentage rate for loans which are available for only a short period, are often highly misleading? Indeed, they may suggest that the costs are far higher than they really are. Does she agree that what is needed by the consumer is cost in pounds and pence for each day that the loan is available, and information on whether there are administration costs or other costs? That clarification would be much more helpful than a mere percentage sign and a number.
Baroness Wilcox
I have to agree with every word that the noble Lord has said. He is a past director of the Office of Fair Trading and extremely well informed on this matter and together we have done much work on it over the years. There is no doubt that the APR should be replaced, certainly with a total cost of credit. We know that APRs are not the clearest way to show exactly how much short-term loans, such as payday loans, cost. It sounds terribly frightening to hear the figure £2,000. However, as we know, people borrow this money for a short number of days. The information they want is how much the loan will cost them for the short number of days they need to borrow it. As I say, I agree completely with the noble Lord’s remarks.
Finance: Hostile Takeover Bids
Debate between Lord Borrie and Baroness Wilcox
Lord Borrie
To ask Her Majesty’s Government what is their policy towards hostile takeover bids by foreign interests of United Kingdom companies of national or strategic significance.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)
My Lords, the United Kingdom has a tradition of welcoming long-term foreign investment that can bring in new technologies and skills. Ownership of companies is a commercial matter for the companies concerned. Where mergers may affect the public interest, powers exist to protect issues such as our national security.
Lord Borrie
My Lords, so far as it goes, that is a fine Answer and I entirely agree with it. I suggest, however, and I hope that the Minister agrees with me, that some takeovers from abroad may have serious adverse consequences for the consumer interest, for the workforce or for both, and that some takeovers come from countries that do not themselves allow the process of a takeover bid in the reverse direction—in other words, there is no reciprocity. Does the Minister agree that there are provisions in the Enterprise Act 2002 that enable the Government, in the case of concerns of national strategic importance, to intervene? I think that the phrase is that “an intervention notice” may be submitted. If that is not satisfactory, the Act provides for statutory orders to be made to the same effect. Has the Minister considered these matters in relation to a Bill that she knows a great deal about, the Postal Services Bill, under which Royal Mail shares will be made publicly available and might, unless something is done about it, be purchased for a foreign entity?
Baroness Wilcox
The noble Lord will know that the Postal Services Bill is still in this House. While no decision has been taken on the formal method of sale, we would certainly not rule out the sale of shares in Royal Mail to foreign-based companies. The noble Lord, Lord Borrie, knows from his experience as director-general of the Office of Fair Trading that we have methods in place to make sure that any bids we look at will be right and proper for the safe concern of the future. The Government’s objective, as noble Lords know, is to secure the future of the universal postal service and to maximise value for the taxpayer. You can be assured that this Government will do what is best for Britain.
Postal Services Bill
Debate between Lord Borrie and Baroness Wilcox
Baroness Wilcox
My Lords, I fully appreciate the sentiment behind the amendment. The name “Royal Mail” has been synonymous with the delivery of the postal service in the United Kingdom for hundreds of years. In fact, the noble Lord, Lord Kennedy, has told us the date on which it was established, and I can understand why he seeks reassurance that the name will be preserved. However, I have to say that the choice of the name of the company delivering the universal service provider should be a commercial decision for the company and its shareholders. I do not believe, however, that future owners of the company will rush to change its name, because this would not make commercial sense.
I say that because “Royal Mail” is, as the noble Lord said, one of the most recognised brands in the UK, perhaps in the world. There is no doubt that the name is a commercial asset to the company—an asset that potential investors will value; and so will we. It is the Government’s firm belief that any future owners of Royal Mail would recognise the power of the brand, and it would be folly on their part to seek to dismantle such a brand in any way.
Your Lordships will remember the previous attempt to change the name. Once again I repeat the noble Lord’s point; “Consignia” was not a success. It is not a name that you hear mentioned at Royal Mail headquarters these days. As my noble friend Lady Wheatcroft said at Second Reading, the BBC summed up the name change as,
“nine letters that spelled fiasco”.
It would take a brave, or perhaps foolish, owner to seek to change the name again.
Noble Lords will also wish to note that while there might be support for ensuring that Royal Mail continues to be associated with the universal postal service, there are those in the other place who are opposed to a privatised company using the name or the other royal associations currently used by the company. We do not agree and we believe that Royal Mail, as the universal service provider, should continue to be able to use the name and the royal association, provided that suitable safeguards are put in place to ensure that the associations are used respectfully and appropriately at all times. Discussions about these safeguards are ongoing.
I am therefore afraid that, although I greatly sympathise with the noble Lord’s request, I ask him to withdraw the amendment.
Lord Borrie
I would have spoken immediately after my noble friend Lord Kennedy, except that I imagined—wrongly—that there was no answer to his point and that the noble Baroness would give way. It is unsatisfactory that when a sale is to be made, there is no firm or unfirm indication in the Bill that the name will be kept. I suppose that the name “Royal Mail” is protected in one sense, because it is a trademark that no one else can use. Perhaps I was wrong to think that the noble Baroness would adhere to that and say, given the radical change in terms of privatisation, that the name should be protected in more than one sense, not only as a trademark but as a name that cannot readily be altered. We all remember the absurdity of “Consignia”, of which my noble friend Lord Kennedy reminded us. Goodness knows what name someone might think up in the future. People, even heads of business, do silly things in relation to their names. Some of us remember other names that have been changed and had to be changed back again because they turned out to be a complete failure. I ask the Minister to change her mind and at least agree to think further before Report.
Employment Law
Debate between Lord Borrie and Baroness Wilcox
Baroness Wilcox
I thank my noble friend for that encouraging question. We are hoping to achieve earlier resolutions to workplace disputes so that both parties can resolve their problems in a way that is fair and equitable for both sides without having to go to an employment tribunal. We want to ensure, when parties need to come to an employment tribunal, that the process is as swift, user friendly and effective as possible. We hope very much indeed that we will be able to use ACAS more and more, and we are consulting with it at the moment.
Lord Borrie
My Lords, does the noble Baroness agree that extending from one year to two the period for which one must be in employment in order to claim for unfair dismissal in the industrial employment tribunals would represent a serious reduction in employee rights, which have been developed over the years? As she rightly said, the legislation has been there since 1999, due of course to the efforts of the Labour Government at that time to ensure that where there is inequity between the power of the employee and the power of the employer, fairness should be achieved through the work of the employment tribunals.
Baroness Wilcox
My Lords, we really feel that this will be a better way of going forward for both sides. What we are looking for here is flexibility for businesses, especially small and medium-sized businesses, to give them confidence, and fairness for employees. We hope and we know that the so-called “day one rights” will stay in place. The proposals will not affect the existing “day one rights” of people when they start to bring a case for unfair dismissal; for example, when they believe that gender, race or some other form of discrimination has taken place, or where someone is dismissed for exercising their legal rights, such as asking for a written statement or to be paid the national minimum wage. The proposals relate to the areas where we do not wish people to rush first to a tribunal. If the qualifying period is only one year, it means that everything starts to happen too quickly. I know through my business experience people who have come to work with no experience. It takes them a while to get used to the job, and extending the time will make the employer and employees take a better look at each other and see whether they can keep themselves together, rather than rushing to tribunals and not going to ACAS first.
Competition Commission and Office of Fair Trading
Debate between Lord Borrie and Baroness Wilcox
Baroness Wilcox
My Lords, I am very happy to reassure the noble Baroness, Lady Kingsmill. Her expertise in this area is recognised around the House. As she said, she worked on the Competition Commission as a deputy chair. Without doubt, the panel of peers, to which she refers, has done a marvellous job. There is no intention on our part to get rid of what is good; if we can, we intend to improve on what is already there. When the consultation paper comes out in the new year, I hope that she will speak strongly so that we shall have the advantage of her expertise.
Lord Borrie
My Lords, will the noble Baroness consider—in due course, at any rate—that in order to get the most skilled and experienced practitioners in business and the professions, as my noble friend Lady Kingsmill feels is desired, it is almost certain that we will have to engage part-time people, because most people with that sort of experience are not willing to give up their jobs to take another job in the Civil Service? In considering the Government's plans, will the Minister also explore whether it is possible to keep the staff of the investigating arm of the new body separate and distinct from the staff of the decision-making and more quasi-judicial part?
Baroness Wilcox
The noble Lord, Lord Borrie, with whom I have worked many times over the years, has the OFT as his expertise, so anything that he has to say on the subject is certainly worth listening to. When it comes to the consultation period in January, I am sure that all the points that he has just made will be taken into consideration. As I said before, we have absolutely no intention to ruin a good thing; the idea is to try to improve it. Therefore, the better the consultation, the better, and I look forward to his contribution.
Competition Act 1998 (Land Agreements Exclusion Revocation) Order 2010
Debate between Lord Borrie and Baroness Wilcox
Lord Borrie
My Lords, I commend the Minister and my noble friend Lord Young for their support for this proposal. It was pointed up by one reference to which the Minister referred, the Competition Commission report in 2008 that dealt with grocery retailing. We all know that there has been quite a lot of scandal and abuse in that field, with some supermarkets leaning on small farmers and other people in a way that has damaged competition and the interests of consumers. Exclusivity arrangements in a particular area can prevent the entry of competitors, and it is fortunate that this ruling today—if we approve the new order—will be dealt with effectively.
I draw attention to paragraph 9.1 of the Explanatory Note, which says:
“Following the Order’s revocation, there may be increased demand for OFT advice to parties about the compatibility of land agreements with competition law”.
The Minister has explained that the OFT is going to produce revised guidelines and that time is to be given so that the order does not become immediately effective and those who have not done their homework will still have time to do it. I am all in favour of that, but I would like an assurance from the Minister that the OFT has got and will be allowed to have adequate resources, which will not be cut, to deal with what may be quite a lot of requests for advice. After all, one should remember that many parties to agreements that will now be unlawful because they are anti-competitive may be small parties. They will not have their own legal departments that they can lean upon and from which they can immediately get a response. They will have to go elsewhere, to a trade association or a private lawyer. I suggest that very often the obvious place to go to will be the OFT. Can the Minister assure me that they can do that particular job?
Baroness Wilcox
My Lords, I thank noble Lords for their contributions to this debate. I thank the noble Lord, Lord Young, who I hoped would give his support, as this is after all his work. The knowledge that the noble Lord, Lord Borrie—the previous director-general at the Office of Fair Trading—will be here always sends a shiver through me, because I always know that he is going to ask me a question that I cannot answer. In this case, his points are valid. Yes, we are allowing more time and, yes, the OFT will be helping and guiding. I assume that it will be able to do that within the range of funds available to it, and I am sure that the noble Lord will be the first to complain if objections arise because it has not been able to respond. I hope that that is not the case.
The noble Lord makes the case that many of these parties will be small ones that will need help and advice, and will have to turn to outside advice since they will not have in-house lawyers. I hope that I can reassure him on this point. If there is anything more that I should have said to him, I shall receive advice from the Box and write to him to confirm.
I hope that we are happy to continue with this order, which will remove the doubt that land agreements in line with other agreements must be properly assessed to ensure that they do not restrict competition. The Government’s purpose is to provide for consistent application of the law and to promote effective competition in markets, helping to deliver value and quality for consumers while boosting productivity and efficiency for business. By delaying the effect of the revocation until next April, we are giving parties sufficient time to review their existing and future agreements in line with the OFT’s latest guidance. They will also have the breathing space to make any necessary adjustments to comply with the law. I commend the order to the House.