Enterprise and Regulatory Reform Bill
Debate between Lord Borrie and Viscount Eccles(11 years, 11 months ago)
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Lord Borrie
Surely the noble Viscount would agree that these things sometimes have a deterrent value. People know about them; there is no need for them to be served with a writ.
Viscount Eccles
I quite agree about deterrents: a nuclear bomb is a deterrent. You have to provide a deterrent. Everyone will say, “Well we expected that, so now we’ll only go to 70 and not 90”. I am sorry, but I do not agree with the philosophy behind such a system. The minimum number of sanctions and penalties that you can achieve is the best, and the greatest degree of things working properly by consent is the best way to go.
Groceries Code Adjudicator Bill [HL]
Debate between Lord Borrie and Viscount Eccles
Viscount Eccles
My Lords, following on from the noble Lord, Lord Whitty, I do not understand,
“information that is publicly available”
as stopping anybody doing anything. The only thing a trade association, for example, has to do is to make its report on an alleged breach of the code public; it does not have to quote the names of companies. It cannot just go to the adjudicator with verbal information. It has to take the trouble to find out where the problems are.
I have huge sympathy with the immense consternation that is going on among dairy farmers. It is an extremely uncomfortable process. If the NFU has reason to believe that the code is not being observed, there is a case for it to collect as much evidence as it wishes from its members, who stay anonymous, and put its report about these breaches of the code into the public arena, presenting it at the same time to the adjudicator. That is a tremendous protection to both the public and the adjudicator; otherwise we shall all be left with a suspicion that what is happening is rumour and hearsay. It seems tremendously important that people’s reasons for doubting whether the code is being adhered to become public.
Lord Borrie
The noble Viscount, Lord Eccles, seems to have forgotten that the whole requirement in this Bill is that the investigation can properly go ahead only if there is a reasonable suspicion on behalf of the adjudicator that an investigation is required. That is the essential requirement in the Bill and I do not think it appropriate, for many of the reasons mentioned by the noble Lords, Lord Plumb and Lord Whitty, and others, that it has been so difficult up to now because of the difference in bargaining power between the suppliers and the retailers. In addition to the requirements that are already in this clause, there is no need to establish that the information should be made public, for example by the NFU.
Groceries Code Adjudicator Bill [HL]
Debate between Lord Borrie and Viscount Eccles(12 years, 5 months ago)
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Viscount Eccles
My Lords, I am grateful for that intervention, and no doubt we shall come on to discuss the climate of fear. The concern of the National Farmers’ Union is a pretty difficult issue because very few farmers are direct suppliers to supermarkets and so they are not covered by the code. Indeed, the detriments identified by Professor Lyons, to which I shall come in a moment, include the extended chain of supply to the supermarkets. Perhaps I should say at this point that I owned some cows for a while, but maybe it is not an interest I need to declare on this occasion. It is a difficult issue and we shall come on to it. I do not accept that the problem of indirect suppliers and the question of arbitration so torpedoes the present regime that it is necessary to change it. It may be necessary to do so and I am here to be persuaded, but at the moment I would not change it.
Of course, with regard to farmers, I think that we are going to talk primarily about milk and cheese production. Some 53% of milk finds its way into fresh milk, 27% into cheese and the remaining 20% into manufactured products. While I think we will be talking about that, I do not believe it quite lies within the remit of where Professor Lyons was finding detriments, except on the point of indirect supply.
The first detriment that Professor Lyons worried about was that he thought that the third-party intervention—however that was structured, but at the time the description was “ombudsman”—would be counterproductive. I suppose that was based on “two’s company and three’s a crowd”, or some such version of it. He thought that independent arbitration with the addition of monitoring by the Office of Fair Trading was a better option than the intervention of a third party for the interests of the industry.
Secondly, Professor Lyons worried very much about anonymity. He did not believe that it could be maintained and he cited the German experience. I have no doubt that we will discuss anonymity in more depth as we go along. Thirdly, he thought that justifiable investigations had a very limited potential because he did not see the third party intervening in disputes or discussions between supermarkets and suppliers about a particular contract. Her Majesty’s Government do not think that that is the way that the adjudicator should work. Professor Lyons thought that finding justifiable investigations would be quite difficult because of the length of the supply chain and the lack of ability to look into actual disputes. I am sure that we will want to discuss that more.
Next, Professor Lyons thought that any third party—an ombudsman or now an adjudicator—could be seen to be in support of suppliers, and of them throughout the supply chain. He thought that that itself could become anti-competitive. He saw difficultly in dealing with complaints from suppliers about buyers and at the same time achieving benefits for the public, particularly long-term ones. The successful outcome of intervening in a contract between suppliers and supermarkets would presumably be that the suppliers got better terms. It was difficult to link that to a benefit to the public—that link was pretty weak.
Professor Lyons also saw any third party intervening in this market as being subject to external pressures and to the almost inevitable regulatory creep. Regulatory creep has been a feature of our lives in recent years, as noble Lords have seen in the amendments to secondary legislation which have tended to make legislation more complicated and severe, not lighter or less severe. Finally, Professor Lyons said that this would be a much more expensive system than leaving things as they are.
Quite a lot of these points have been discussed but I submit that they have not really been properly dealt with and therefore, as I am probing and as we go through, I am sure that these subjects will recur. It will be interesting to see where the argument leads us. I very much agree with Professor Lyons. Sometimes, minorities can turn out to be right. His minority report was very good and absolutely on the ball. I am still left with the question: why have we got this Bill? I beg to move.
Lord Borrie
My Lords, perhaps I may intervene at this point. Most Members of the Committee know that I had a connection with the OFT—the Office of Fair Trading—but retired from it 20 years ago, after many years as its director. I no longer have any position of that kind and therefore do not have anything formally to declare.
However, references to the Office of Fair Trading by the noble Viscount led me to consider whether there was a great deal of point in establishing—for a fairly narrow field of anti-competitive complaints from farmers and others who complain about the power of supermarkets—a specially appointed new body created as a corporate sole, with all the debates, complications and so on that are involved in doing so. The subject of the Bill covers a fairly narrow sphere. It does not deal with all complaints against supermarkets, but only those connected with groceries. It does not even apply to all supermarkets, but only the 10 that are especially designated.
There are surely many reasons for thinking that there may not be an adequacy of work for the groceries adjudicator to justify the appointment of an adjudicator and, as one of the schedules states, a deputy adjudicator and all the paraphernalia of an office—although I admit that it is stated that back-office facilities may be provided by the Office of Fair Trading. If back-office facilities can be provided by the Office of Fair Trading, why are these powers not simply given to the OFT to monitor, to check, to listen to complaints and if necessary push those complaints further to the Competition Commission, and so on?
The points made by the noble Viscount are quite convincing but, as the phrase goes, we are where we are. We have given the Bill a Second Reading. We are now at the Committee stage. We can go backwards, of course, but there would then be an emptiness and nothing immediately to take its place because the Office of Fair Trading does not have all the different powers intended for the adjudicator under the Bill. I therefore return to the point that the Bill in front of us will set up a particular body—the groceries code adjudicator—and we have details in front of us to elaborate, consider and change, as a normal Committee does. In summary, it is not worth while continuing with the fundamental points made by the noble Viscount, although there is a lot of value and a lot of point in what he said. However, that would represent a backward step and we would, in effect, be replacing entirely the contents of the Bill with something else.
Lord Borrie
The only thing that I can say is that it has been the deliberate intention of the Government through their drafting of the Bill to deprive the adjudicator and to deprive anybody else except civil courts—in a completely different process—of the ability to determine a civil claim or something like it. As the noble Lord, Lord Browne, has considered this matter very deeply and carefully, there cannot be a lot between us. We are talking about a matter of title or name. Whatever that is, it does not seem suitable for the Judicial Appointments Commission to be involved in the appointment of this individual in a narrow field of the grocery trade, with the fairly narrow role provided by the Bill.
Viscount Eccles
Perhaps I could ask the noble Lord, Lord Browne, whether we have any other adjudicators.
Postal Services Bill
Debate between Lord Borrie and Viscount Eccles
Lord Borrie
My Lords, subject to the questions that have usefully been asked by the noble Baroness, Lady Kramer, and to which the Minister will no doubt respond, the amendments proposed by my Front Bench and the noble Lord, Lord Low of Dalston, are useful and would have definite gains if they were accepted by the Government. I want to make two points. First, in relation to a review by Ofcom, which is provided for and to which one cannot in principle object, Amendment 66, in the names of my Front Bench team, would confirm the uniform tariff. I do not see how the Minister can object to that; it is a brief and clear amendment. The second point, which was mentioned by both the noble Lord, Lord Low, and the opposition Front Bench, is that there should be a transitional period for the thing to work through. There should be a period in which there will be no change. That, too, seems a helpful and creative amendment, which has been modestly but clearly put forward.
Viscount Eccles
My Lords, Clause 33 provides for a process that has been accurately and elegantly described by the noble Lord, Lord Low, whose amendment concentrates on the Secretary of State’s powers. That is clearly the right place to put the emphasis. There seems to be no case at all for preventing Ofcom carrying out the review. The clause is expressed in entirely neutral terms, but in accordance with European legislation. It just says:
“OFCOM may from time to time review the extent to which the provision made … reflects the reasonable needs of the users”.
I cannot see how anybody could object to that. The review might indeed come out as saying not that the obligation should be reduced but that it should be increased. It is a neutral expression.
What is of more consequence is the point made by the noble Lord, Lord Low. Not only can the Secretary of State direct Ofcom to carry out a review without prejudice to what that review says or what the Secretary of State’s reaction to it will be, but he also has these order-making powers. What is being sought by the amendment of the noble Lord, Lord Low, is a statutory delay in the ability to use those powers. I find that difficult because Ofcom is coming to this service obligation afresh. We simply do not know what conclusions about the overall needs of the regulatory regime it will come to when it presents them in the first quarter of next year. Ofcom is independent, very large, very experienced and has substantial resources. It is most unlikely that it will come to conclusions that do not meet the reasonable needs of the users of postal services. That is what it is required to take into account.
In that event, we could speculate about the content of an order made by the Secretary of State in response to an Ofcom review but, frankly, it would be pure speculation. There is the conspiracy theory that is being promoted by the Benches opposite. Nothing supports the contention that there is a conspiracy in this. You can have doubts about how private sector companies behave. They have an ability sometimes to be one step in front of Whitehall because, on the whole, they do their homework with great diligence and know what they are allowed to do and what they are not allowed to do. However, we have decided in this Bill that we want private sector investment in both Royal Mail and, eventually, via the mutual option, the post offices.
Postal Services Bill
Debate between Lord Borrie and Viscount Eccles
Lord Borrie
Like the noble Lord, Lord Skelmersdale, I have been interested to read Clause 1(2). It seems to be inelegantly worded, confusing and surplus to requirements. Why is it inelegant? Does one normally have the words “But see” another clause? It seems more like a text message or an e-mail rather than a provision in a Bill. Why is it confusing? Its position is confusing because essentially the first three clauses deal with Royal Mail. Clause 4 deals with the Post Office network. The Government properly have a different attitude from one to the other and so, I am sure, does my own Front Bench. Subsequent clauses deal with the network and there is no need for this cross-reference inelegantly expressed in Clause 1(2). I share the noble Lord’s view about that.
Viscount Eccles
My Lords, I, too, apologise for not having been present at Second Reading, but I support my noble friend Lady Kramer and the noble Lord, Lord Jones, on the Cross Benches. This amendment may be based on a misunderstanding. If there is to be a successful deal to move Royal Mail on and to bring in private capital, that deal will need to be set up by the board of Royal Mail and the chief executive of Royal Mail. It will not be set up by the Secretary of State, who I hope will stay right out of any negotiations that might take place to achieve that deal. The noble Lord, Lord Young of Norwood Green, seemed to expect the Secretary of State to play an active role, which is completely mistaken.