Groceries Code Adjudicator Bill [HL]

Lord Grantchester Excerpts

Tuesday 26th June 2012 Grand Committee

[Viscount Eccles]

Very briefly, I am sure that the noble Lord recognises that in doing this he goes far beyond the recommendations of the Competition Commission. The one thing that the commission did not do was go up the supply chain, as I would call it, but never mind. It declined to do that. The code is between direct suppliers—although I recognise that the Bill includes something about indirect suppliers—and supermarkets. It is based on the supply agreements between the supermarkets and those suppliers. If we go down the road that the noble Lord indicated, we are in for regulatory creep, exactly as the professor predicted.

[Lord Grantchester]

I support my Front Bench colleague at this stage. As at Second Reading, I declare my interests as a dairy farmer in Cheshire and in having been involved in dairy supply-chains both with farmer co-ops and on behalf of the Royal Association of British Dairy Farmers over many years. In support of the comments made in response to the previous amendment of the noble Viscount, Lord Eccles, there is an extremely delicate relationship between a supplier and the supermarket, and it takes quite some managing. It is not necessarily a question of fear. I am often reminded of the words in the Bible that the lion will lie down with the lamb. When I was in with the supermarkets, I always wanted to make sure that I was a lion but I never quite achieved that status. It is an extremely delicate relationship.

The noble Viscount said that the groceries code has been in existence for two years. It is eminently sensible that we complete this legislation to get the adjudicator in place and then, two years after that, have the review that the noble Viscount looked for. That would be an excellent time to review whether the code should be extended further up the supply chain to the suppliers of suppliers: the consolidators and the processors that have that direct relationship. I am sure that we will then find that there are lots of parts that the code does not cover, to which my noble friend from the Front Bench has alluded already. For example, I point to the practice of offsetting invoices from the supermarkets to suppliers and the charges that they think are quite acceptable to deduct from the suppliers. Those lead to long, detailed arguments and a very awkward time between a supplier and the supermarket. I am sure that putting that review on a statutory basis would, in two years’ time, allow Parliament—it would be wider than just the Competition Commission—to be consulted on the reach of the GSCOP code.

[Baroness Wilcox]

The noble Lord, Lord Knight, has brought us an interesting amendment, supported by his colleague, the noble Lord, Lord Grantchester. It is perhaps not fully aligned with the subject of the Bill, which is the creation of a groceries code adjudicator. I reassure noble Lords that the groceries code, contained within the Groceries Supply Code of Practice Order 2010, already has full statutory force and the requirement to incorporate it in their supply agreements is binding upon all large supermarket retailers. There is therefore no need for the Secretary of State to establish it by statutory instrument.

Furthermore, the review of the groceries code is the responsibility of the Office of Fair Trading not the Secretary of State. If the OFT considers that a change in the code or the order is needed, it can advise the Competition Commission accordingly. As the code concerns the remedying of practices that are concerned with competition, it is right that oversight of the code rests with the independent competition authorities, which have the necessary expertise and can make decisions based on objective economic criteria.

The noble Lord, Lord Knight, also asked whether it is right that the Competition Commission can make such orders without recourse to Parliament. Noble Lords who wish to discuss the powers of the competition authorities will have to wait until the Enterprise and Regulatory Reform Bill enters this House. However, the Government consider it entirely appropriate for the Competition Commission to make remedies based on the findings of its investigations.

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[Lord Grantchester]

I rise to propose Amendment 5. Far be it from me to come between my two noble friends on Amendment 4, but I reflect that although there may be very little between them, there is a slight implication for some of the processes in the Bill. I would be interested to hear the Minister’s response to this question.

In proposing Amendment 5, we have approached it from the—

[The Deputy Chairman of Committees (Lord Geddes)]

With great respect to the noble Lord, I think he means that he is speaking to Amendment 5, not proposing it.

[Lord Grantchester]

Sorry, speaking to Amendment 5—moving Amendment 5.

[Lord Geddes]

No, speaking to Amendment 5.

[Lord Grantchester]

I thank the Deputy Chairman for clarifying that. We have approached it in a simple, straightforward way: that this is, in fact, the role of a regulator. As we have argued and discussed on previous amendments, the role of the regulator is a high-profile one at the moment, with a wide range of powers to effect change in the UK groceries market. It is only appropriate that the Secretary of State should consult with both the relevant Select Committees in the other place to reflect the standing that such a person will have in the business and parliamentary world, so that it is fully transparent to the supply chain that this has been well considered.

[Baroness Wilcox]

My Lords, these amendments concern the independence of the adjudicator and, in particular, how this may be safeguarded through the appointment and dismissal processes. I fully agree that the independence of the adjudicator is critically important to the successful operation of the role.

I have just been passed a note for the noble Lords, Lord Browne and Lord Borrie, on the name “adjudicator”, which I thought might be helpful. The term has been chosen because an ombudsman must deal with consumers rather than businesses. That is the answer to that one.

Before addressing the amendments, I first reassure noble Lords that the Bill provides the adjudicator with full operational independence. There is no question of the Secretary of State telling the adjudicator what to do, who to investigate or what the sanctions should be. It is, however, normal practice that public appointments should be made by Ministers, in accordance with the standard rules and procedures on public appointments. In addressing these amendments I intend to draw parallels with other public bodies in the field of competition.

On the amendments of the noble Lord, Lord Browne of Ladyton, the adjudicator will not be a judge and it is therefore not necessary to involve the Judicial Appointments Commission. Similarly, the panel members of the Competition Commission, who might also be considered to have a similar quasi-judicial role in their rulings on appeals from sectoral regulators, are not appointed or recommended by the Judicial Appointments Commission. It is similarly appropriate that the Secretary of State should appoint both the adjudicator and, if there is one, deputy adjudicator, as both are public appointments. In a similar way, the Secretary of State currently appoints both the chair and the chief executive of the Office of Fair Trading. The Office of Fair Trading can, of course, also impose financial penalties.

On dismissal, the Secretary of State may dismiss the adjudicator only if they are satisfied that he or she is unable, unwilling or unfit to perform his or her functions. This is not a judgment that would be made lightly and could be subject to judicial review if made incorrectly. Given these safeguards, I do not consider it necessary to require the Lord Chief Justice’s approval, nor to make specific provision for the circumstances of criminal conviction, which the Secretary of State could, in any case, take into account when judging whether the person was appropriate for the role.

Finally, on the amendment tabled by the noble Lords, Lord Knight of Weymouth and Lord Grantchester, I make two points. First, while the Government support the principle of suitable parliamentary oversight of public servants, they believe that pre-appointment hearings by Select Committees are only for those roles where it is vital that the post’s independence from government or its importance to the public is of the highest importance. It does not seem clear that the adjudicator, though very important to the groceries sector, would fall within this category.

Secondly, even were the post of adjudicator such a post, it is also not general practice for Select Committee oversight to be set out in primary legislation, but rather for it to be decided by the Secretary of State responsible. I hope that that is helpful and, therefore, ask the noble Lord to withdraw his amendment.

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[The Earl of Sandwich]

The noble Baroness, Lady Byford, and others said exactly what I would have. I am an NFU member. I know how much the Government have steered a course in this to accept third parties. I do not know what the noble Lord, Lord Howard, meant by “all and sundry” but it is a rather sinister phrase. It presumably means mischief and none of us wants that. I hope that the Government keep the wording as it stands.

[Lord Grantchester]

Picking up on quite wide-ranging amendments, I think that on this side we are content that included in the drafting of the clause is the fact that third parties can be party to the complainant. That is perhaps the easiest way to put it. Yet we appreciate what has been said and would like the Minister to underline and put on the record that that is indeed the case. On this side, we think that third parties will act as a responsible check and balance to the process in that they will pick up widespread experience of the supply chain, including from other suppliers who may come forward with information. I am sure that they will act as a steadying hand on any vexatious claims that individual suppliers might feel they have under their own individual circumstances. I will also reply to the noble Lord, Lord Howard. Of course, on this side we are very concerned that fair and best practice should be everyday experience for all businesses, whether they supply supermarkets or not.

[Baroness Wilcox]

I thank all noble Lords. We are considering three amendments in this group—two intended to make it easier for the adjudicator to begin investigations and one to make it harder.

I assure noble Lords that the Government are in complete sympathy with the aims of the amendments tabled by my noble friends Lord Razzall and Lord Teverson, and by the noble Lord, Lord Browne. We firmly believe that the adjudicator should be able to consider information from any source when deciding whether to start an investigation, whether or not this is provided by way of complaint. However, it is unnecessary to make explicit provision for the breadth of information that can be considered. I assure noble Lords that in this respect Clause 4 is written broadly and places no limits on who can complain to the adjudicator or what evidence the adjudicator can consider as reasonable grounds for suspicion. My officials have discussed this clause with trade associations and representatives of suppliers, including the National Farmers’ Union and the Food and Drink Federation, and they have raised no concerns over the wording of Clause 4.

The amendment of my noble friend Lord Howard of Rising would return the Bill to the draft that was originally published for pre-legislative scrutiny last year by restricting the sources of information that the adjudicator could consider to information from suppliers and information in the public domain. I remind noble Lords that this issue was considered carefully by the BIS and EFRA Select Committees, both of which explicitly rejected the version of the clause that is now being proposed. They concluded that third parties, including trade associations and whistleblowers, could have a valuable role to play. After discussion with both suppliers and retailers, the Government decided that that was right. Trade associations, for example, may have a better overall picture of practices in a sector, which could reveal systematic breaches of the code. The Government therefore consider that it is right that the adjudicator should be able to consider any relevant information when making decisions to investigate. However, I reassure my noble friend Lord Howard of Rising that we have also introduced Clause 15(10) to enable the Secretary of State to restrict the possible sources, if it turns out that third parties do act irresponsibly.

I say to my noble friends Lady Byford, Lady Randerson and Lord Howard that there is protection in the Bill against malicious complaints, in that costs can be awarded against a complainant who makes a vexatious complaint or one that is wholly without merit. If those answers are seen as good and fair, I will ask the noble Lord, Lord Browne, to withdraw his amendment.

Railways: High-speed Rail

Lord Grantchester Excerpts

Tuesday 10th January 2012 Lords Chamber

[Earl Attlee]

My Lords, the noble Lord has made this point more than once. I suspect that it has some validity, and at a suitable opportunity I will discuss it with ministerial colleagues.

[Lord Grantchester]

My Lords, my noble friend mentioned the Y network. I believe that the base of the split of the Y will be at Lichfield. The Statement refers to the east arm of the Y, with intermediate stations in the East Midlands and South Yorkshire. The West Midlands route to the north-west is also of crucial importance. Our Victorian pioneers obviously knew what they were doing when they placed the gateway to the north-west at Crewe, as this opens up Liverpool, Derbyshire, Lancashire and Cumbria, as well as Wales, both north and mid-Wales. This Trent Valley route will build on the existing mix of the north-west, link to the airports and, as I understand it, the new deep port plans for Wales. It is also important that there are east-west links which, through Crewe, could link back to Manchester and the east side. Can the Minister tell the House the Government’s plans for this west north-west route and assure us that these phasing plans through legislation do not get interpreted as just focusing HS2 on the south?

[Earl Attlee]

My Lords, the noble Lord has asked me a detailed question about route strategy, and I shall be delighted to write to him.

Renewable Transport Fuel Obligations (Amendment) Order 2011

Lord Grantchester Excerpts

Monday 5th December 2011 Grand Committee

[Lord Bradshaw]

I will concentrate my remarks on the used cooking oil industry, which gets a rather raw deal from the Government under these proposals. We have to remember that the business is sustainable, which even my noble friend Lord Reay would admit. Basically, it uses waste products from the cooking industry to make biodiesel. It is a new business—it only really began in about 2007—so is not an industry with any great roots. It is made up mostly of SMEs—small and medium-sized enterprises—and is not dominated by big corporations. There is a real threat that the growth of the industry will be not only stopped but reversed by the passage of this legislation.

Used cooking oil is actually very green compared with fossil fuels—and with many grown crops, particularly if we are not certain of their source. One of the biggest problems in judging whether a crop has been grown in a sustainable way is that the certificates of origin provided by many suppliers are highly suspect. I ask noble Lords to reflect on the last time they bought a piece of teak garden furniture with a label on it saying, “Sourced from sustainable forests”. I would say, “How do you know what went on in Indonesia?”—and I am sure that the suppliers do not, either.

We are talking about recycling a waste product, and the industry works on very tight margins. It is not an industry that has any room for manoeuvre. The Minister replied to a Written Question of mine about the price of a road transport fuel obligation certificate. I believe that the prices he quoted in his Answer were from a few big dealers, whereas most of the trading takes place between small industries, which we do not know anything about. However, the figures that he quoted, which indicated a doubling of the price of certificates, should be contrasted with the fact that on some occasions the certificates are worth nothing. Twice nothing is nothing, so doubling the price has not had a great effect.

This is a retrograde piece of legislation in respect of the treatment of the used cooking oil industry. I say to my noble friend that we are going to risk more unemployment and less expansion of the industry, which has the capability of expanding because there is still plenty of used cooking oil to collect and refine. I have one last question for him and I would be very interested to hear his answer. In view of the withdrawal of the tax differential and the uncertainty over the value of the tradable certificates, would he put his own money into this industry?

[Lord Grantchester]

I recognise the importance of this order for transport and meeting our climate change obligations. Its sustainability provisions are entirely to be welcomed. However, the lengthening of the timescale from 2011 to 2014 is a further example of the Government dissipating the momentum of the last Labour Government. This is impacting further on the confidence of the investor market, as has been identified across the renewable industry in its relationship with this Government.

I have one specific query. I understand that elements of the sustainability criteria are currently being consulted on. The consultation is set to end on 15 December, the date the order becomes operable. I understand that the UK Petroleum Industry Association has lobbied on the penalty of 30p a litre for non-compliance, stating that there is not sufficient time for its supply chains to meet the standards. The association asks that any fines should not apply before 1 April 2012, to allow supply chain purchases and contracts to catch up with the certification process for the biofuel products. The UKPIA states that it does not know whether biofuel products already contracted will meet the certification process and standards. This seems an understandable request. Can the Minister clarify his department’s position?

[Lord Davies of Oldham]

My Lords, this has been a fascinating debate. The Minister has quite enough on his plate in terms of issues to tackle without me adding a great deal to his burden. I have some sympathy for him; he is well aware of the fact that the Merits Committee of the House expressed some criticism of the amendment order. Clearly there is also, among those in the affected industries who are directly interested in the issues, a belief that a considerable amount of backsliding by the Government is going on. This is a pretty modest measure against the background of the Chancellor's denial of environmental issues last week, and the clear indication that the Government are going to soft-pedal on planning issues, reduce subsidies to the solar panel industry and offer subsidies to some of the most polluting industries. The measure must be seen in that context. Therefore, I will give an element of reassurance to the Minister; we on this side support the measure, inadequate though it is. We hope that it will be the basis on which in due course something more constructive can be developed.

The Minister must know about the concerns of the industry. The issues raised by the order around verification and reporting are complex, and there is a danger that if people get it wrong and biofuels prove not to conform to the requirements, the industry will get into further trouble. However, we should look at how little notice the industry has from the period of consultation to the implementation of the order, which is only a week and a half from being part of the requirements.

The industry also indicated that there are areas to which it seems no consideration at all has been given. For example, the development of hydrogen fuel with regard to motor transport is not considered in relation to the order. From what we can see, the Minister's general perspective is that the Government will keep the issues under review. That is a long way off definitive policy, which is what the order is meant to represent. The industry deserves better from the Government. As the noble Lord, Lord Bradshaw, indicated with regard to the production of biodiesel, it is important that people know the parameters within which they will work. How can we expect them to invest, particularly in these very difficult times, against a very uncertain perspective?

I heard what the noble Lord, Lord Reay, said and I hope that the Minister will give some response. When 97 per cent of the world's scientists who are interested in this area regard climate change as moving apace and as a threat to the world, the concept of deindustrialisation may be emotive but we certainly have to change. Without change, we will face a catastrophic future.

Sports Grounds Safety Authority Bill

Lord Grantchester Excerpts

Friday 13th May 2011 Lords Chamber

[Lord Grantchester]

My Lords, I support wholeheartedly the introduction of this Bill today. It is welcomed and supported on all sides and widely throughout sport. That football has changed and developed in this country to such wide acclaim today throughout the world is due in no small measure to the safety and ground improvements implemented following Lord Justice Taylor's report into the Hillsborough disaster. Like other noble Lords, I can recall clearly the events that fateful day in April 1989, as I was at Villa Park watching the other semi-final between Everton and Norwich City. I declare my interest as an Everton shareholder and former director of Everton Football Club.

Noble Lords will recall that many spectators in those days went to football matches carrying radios to listen to other games while watching their team. It was a very eerie atmosphere that day as news of events at Hillsborough rippled through the crowd. I pay tribute to the work of the Football Trust and to my noble friend Lord Faulkner of Worcester for his tireless work on safety issues as deputy chairman of that body and since.

My noble friend has explained that the core safety and licensing function and local authority oversight role of the FLA will remain, while it will extend its advice, expertise and experience gained to other grounds, venues and sports on request. As a result, it will change its name to the Sports Grounds Safety Authority. He gave an excellent account of the Bill and its passage through the other place, where it has been endorsed on all sides and has afforded another opportunity for the Government—given the high regard that they and the football authorities have for safety—to reassure us of their continuing funding and expertise.

It makes abundant sense that that valuable knowledge and experience regarding safety at football stadia be shared. That is especially pertinent to LOCOG in the run-up to the Olympics and Paralympics in 2012. The conduct of the Football Licensing Authority has been admired widely and its work endorsed by the Football Supporters’ Federation and supported by the Hillsborough families and their Members of Parliament in another place.

I just ask one or two questions for clarity to my noble friend and one question to the Minister. I appreciate that safety is not a devolved matter and that the Bill extends to England and Wales only. Bodies in Scotland and Northern Ireland will be able to access the expertise of the new Sports Grounds Safety Authority on request. Is my assumption correct that the original footballing provisions of the Football Spectators Act 1989 setting up the FLA applied to Scotland and Northern Ireland? Can my noble friend or the Minister confirm that? Can my noble friend clarify that football grounds in Scotland and Northern Ireland are subject to the same rigorous control regimes and that that will be undertaken free of charge?

I follow up with a question about charges and fees. Although I understand the sensitivity of costs in any new order, the Bill will not require additional funds as the safety authority extends its services. The safety authority will be able to charge for its advice and expertise extended to other sports grounds and venues. However, I understand that that is discretionary. Has my noble friend any more information on how that may operate? Has he any guidance on what level of fees may be levied and in what circumstances? It would be a matter of great regret if safety were jeopardised should advice not be sought from the safety authority because it incurred a cost that the relevant sports ground did not want to pay.

Lastly, can the Minister clarify the position of the Sports Grounds Safety Authority under the Public Bodies Bill, now starting its passage through the other place? The position was debated in your Lordships' House in Committee on the Public Bodies Bill, and the Bill was subsequently amended and provisions of various clauses altered. I understand that post-2012, the new authority is in jeopardy of being taken over by some other authority. Can the Minister, on behalf of the Government, be any clearer today regarding their intentions for the safety authority? Will she correct any impression—perhaps inadvertently given in Committee—that once the high-profile events of the Olympics and Paralympics during 2012 are over, the Government will drop their guard regarding safety issues and that the focus on safety can be downgraded or subsumed under some other authority. Can she reassure us that the operation of the safety authority will not become historical; that its work will not be finished and its licensing function will continue? Football and other sports grounds need to continue upgrading, and the work continues under the Football Stadia Improvement Fund, which has now reached its 10th anniversary, funding more than £102 million-worth of benefits through funds provided by the Football League and the FA.

As has been stated, the Bill has made progress through the other place without amendment. I can remember only one other such Bill, the Gangmasters Licensing Authority Bill, achieving such a measure of success. It is an indication of widespread support. I wish for similar speedy passage for the provisions of the Bill.