Natural Resources Body for Wales (Consequential Provision) Order 2013
Debate between Lord Knight of Weymouth and Baroness Randerson(11 years, 5 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State, Wales Office (Baroness Randerson)
This order was laid before the House on 3 June 2013. First, I apologise to noble Lords for an error that appeared in paragraph 3.2 of the Explanatory Memorandum. The memorandum omitted to note that Part 7 of the draft order will apply retrospectively from 1 April 2013. Part 7 concerns transitional and savings provisions. This is in line with the provisions for Parts 1 to 5, and Articles 29 to 31. This administrative error has been amended, and corrected versions are now available.
The order is made under Section 150 of the Government of Wales Act 2006, which allows for consequential amendments to primary and secondary legislation in consequence of provisions made by an Assembly Act or subordinate legislation. The order is made as a consequence of the Natural Resources Body for Wales (Functions) Order 2013, brought forward by the Welsh Ministers, which was approved by the National Assembly on 19 March 2013. I shall refer to this as the functions order. The order transferred functions in relation to Wales from the Environment Agency and the Forestry Commission to the new body, Natural Resources Wales. It also abolished the Countryside Council for Wales and transferred its functions to the new Natural Resources Body for Wales.
This consequential order provides for the completion of legal arrangements for the Environment Agency, the Forestry Commission and Natural Resources Wales to operate together in their respective areas in the most effective and efficient manner. For example, it makes provision to remove Welsh Ministers from the appointment and funding of the Environment Agency and the Forestry Commission. It also amends the Environment Act 1995 to ensure that the new Natural Resources Body for Wales can make appropriate charging schemes in relation to the EU Emissions Trading Scheme, and that the Environment Agency and the Natural Resources Body for Wales can make cross-border arrangements for cost recovery and charging for water abstracting licences.
In preparing this consequential order, the Wales Office worked closely with the Department for Environment, Food and Rural Affairs and other key UK government departments, as well as the Welsh Government. We are all agreed that the provisions in this order are necessary to ensure that Natural Resources Wales can exercise its functions to fulfil its remit and co-operate effectively with its counterpart organisations across the UK.
This order is also important to the UK. Without it, the Environment Agency and Forestry Commission in England will be unable to delegate their functions to the Natural Resources Body for Wales and similar bodies across the border, and would therefore be unable to fulfil their remit efficiently and cost-effectively. For example, in the event of a pollution incident in Wales that impacted on England, the Environment Agency in England would not be able to delegate the clean-up to the Natural Resources Body for Wales. This could result in unnecessary duplication of decision-making and deployment of staff, and a waste of Environment Agency resources. That is just one example of the importance of this order to both the UK and Welsh Governments.
This order demonstrates the UK Government’s continued commitment to working with the Welsh Government to make the devolution settlement work. I hope that noble Lords will agree that this order is a sensible use of the powers in the Government of Wales Act 2006 and that the practical result is something to be welcomed. I commend this order to the Committee.
Lord Knight of Weymouth
My Lords, I am grateful to the noble Baroness for introducing the order so clearly. She will perhaps be relieved to know that I have not suddenly taken on shadow Welsh Office responsibilities but that in the comradely spirit of the Front Bench I am helping out and using my experience in shadowing Defra to have a look at the order and make sure that everything is as it should be from our point of view.
I can say from the outset that we are supportive of the order. From my reading of the Explanatory Notes and the other documentation, it appears that all the consultations have been carried out well by the Welsh Office and the Government. Obviously, the order brings forward measures that have come from the Welsh Assembly Government and we would not want to get in the way of their fine work.
Therefore, my only question to the Minister—and not wanting to delay the Committee—is that the merging of the devolved functions of the Environment Agency and the Forestry Commission with the Natural Resources Body for Wales will produce some interesting learning for the rest of the United Kingdom in terms of joined-up working in this area. Does the Minister know of any mechanisms that the Environment Agency, the Forestry Commission or indeed Defra will be putting in place to ensure that we can learn those lessons and see whether or not there are aspects of joint working that we could do better here as this new body proceeds in Wales? It is not always fashionable, I know, for us in England to learn from Wales—sometimes it is more likely for Ministers to be sent to New Zealand than across the Severn Bridge—but there are things that we could learn from our friends in the devolved Assembly and I would be interested in the Minister’s response.
Baroness Randerson
I thank the noble Lord, Lord Knight, for his positive words in support of this order. Referring specifically to the noble Lord’s question, it is very much the case that close and co-operative working will continue between the Environment Agency, the Forestry Commission and the new Natural Resources Body for Wales. It is essential that that close co-operation will continue, from the perspective of both England and Wales.
First, there will be training co-operation, which will greatly benefit the new body in Wales because it will be able to call upon training opportunities in England, where the numbers undertaking training are very much larger and therefore there is a wider range of opportunities. Close working is also very important because, of course, rivers do not follow national boundaries. The organisations concerned—the predecessor organisation in Wales and the continuing organisations in England—are used to working together and co-operatively in order to reduce costs. They work across border when there is agreement and it is essential that that kind of co-operation continue. I think that so long as there is co-operation, both in operational working and in training, there will be ample opportunities for the organisations which continue to exist in England to learn and to observe what is taking place in Wales.
Perhaps I may also briefly mention to the noble Lords that there was recently a triennial review of the Environment Agency and the Forestry Commission in England which looked at whether those bodies should continue in their current form, should be reformed or should be merged. That triennial review concluded that the bodies should continue but that there should be reforms. I think it is important that the lessons from that review be taken. By the time of the next triennial review, which will be in 2016, there will of course be ample opportunity to have learnt from the experience in Wales. With those comments, I commend the order to the House.
Groceries Code Adjudicator Bill [HL]
Debate between Lord Knight of Weymouth and Baroness Randerson
Lord Knight of Weymouth
My Lords, we consider Amendments 15 and 18 to be consequential to Amendment 11A and therefore, if the House passes Amendment 11A, it should be aware that it would also be voting to pass Amendments 15 and 18. I am grateful to the noble Lords, Lord Curry and Lord Cameron, for their support for those two amendments. Amendment 11A specifies that the adjudicator has the power to fine in any circumstances that he or she sees fit as soon as Clause 6 is commenced. That is, it gives the right to fine from day one. It therefore follows that Amendment 15 to Clause 9, which deletes those powers being introduced by order of the Secretary of State, and Amendment 18, which deletes Schedule 3 detailing the order-making process by the Secretary of State, should also be agreed to.
The question of whether the adjudicator should have the power to fine from day one concerns what makes an effective regulator. We have seen regulatory failure in recent times in respect of banks—much as I applaud the action of the FSA in exposing and then fining Barclays over the LIBOR scandal.
How much better would it have been if we had had an effective Press Complaints Commission? Perhaps the grotesque scandal of phone hacking could have been prevented if there had been a regulator with more teeth than just the ability to name and shame. Clearly, the powerful forces of the media have not feared their regulator or the threat of a statutory regulator with real power.
I welcome the Government’s conversion to the principle that the adjudicator may need the power to fine. They listened to the Select Committees, and that is good, but this is not a wholescale Damascene conversion. If they are coming back down the road, it is with no great conviction, as they are not offering those powers from day one of the operation of the adjudicator.
Of course, that should be no great surprise, as it is arguable that the Bill is full of lukewarm commitment. There is no sign of wanting to keep the code alive and updated as circumstances change, as we have discovered. The Bill to establish the adjudicator includes the power to abolish the office by ministerial diktat, as we will debate later today. The concession to allow complaints by third parties was also given in response to the Select Committee, but along with a clause to allow the Government to change their mind back again by another order. The charge of foot-dragging is reasonable.
If the Government were truly listening to the Defra and BIS Select Committees in the other place, the power to fine would be available from inception. The Government said in response to the Select Committee's recommendation:
“If there is evidence of significant non-compliance with the Groceries Code and the existing regime seems not to be sufficiently effective, there is the prospect of a swift introduction of financial penalties, without the need for primary legislation”.
That is their main argument for the way the Bill is currently constructed. The key phrase here is “swift introduction”. Even with the concessions on adjudicator guidance that we will debate shortly, it will still take a long time.
As things currently stand, first, the adjudicator will get up and running and run investigations following complaints. Then, when a significant breach is found, the retailer is named and shamed. It is hard to see that taking less than a year. Then, after a reasonable period, more complaints and another investigation, there may still be significant non-compliance. That will take another year. The adjudicator then decides to use that as evidence of the need for powers to fine and recommends accordingly to the Secretary of State. I find it hard to believe that the decision to fine in principle would then take less than three months for the Secretary of State to consider. Then there will be a consultation on that decision in principle for it to be confirmed and the process of moving orders through Parliament to begin. That will take not less than six months. Then, the adjudicator has the powers and can launch another investigation following a further complaint and then use the powers to fine.
No one can seriously believe that all that can be done sooner than three years after the adjudicator was established. So much for swift introduction. The National Farmers’ Union has always supported fines, but now appears to concede reserve powers because it does not want to delay the Bill. I respect its concern. We have listened carefully to it throughout, but if we decide today to improve the Bill by allowing what others, such as the Federation of Small Businesses, still want, there need be no delay. The FSB has e-mailed me to say:
“We remain concerned that without the ability to impose significant financial penalties, the Adjudicator will find it difficult to be fully effective. While powers contained within the Bill, particularly the ability to name and shame, are important, we believe that the Adjudicator will need a full range of penalties available to it as soon as it is set up to ensure that it is able to deal with the complaints it may face”.
I also refer your Lordships to the campaign on this Bill led by ActionAid, which includes an extraordinary alliance of organisations, as diverse as the FSB, the Country Land and Business Association, Unite the Union, the World Wildlife Fund, WSPA, Friends of the Earth, the Church of England and the Campaign to Protect Rural England—not necessarily normal bedfellows as a group. They say that Parliament should ensure that the adjudicator can,
“launch investigations on the basis of credible evidence provided by third parties, such as business associations, NGOs, trade unions and MPs”.
They add that they should be able to do this from day one. The Government have already agreed in Amendments 16 and 23 that the adjudicator may upon appointment begin drafting guidance on the use of fines, and that concession is welcome. However, that means that, unless the Government decide to dig in their heels and change the Bill back in the Commons, if your Lordships’ House is minded to agree these amendments now there need be no delay. On this side of the House, we are absolutely committed to this Bill making rapid progress. That is why we took it quickly through Committee in the Moses Room, with an extended day; that is why we are progressing relatively quickly today; and that is why we have delivered on our side to the commitment to conclude Lords’ consideration of all stages of the Bill by the Summer Recess.
I would like to add one more thing—on listening. As we have heard from the noble Lord, Lord Plumb, and my noble friend Lord Grantchester, feelings are running high in the dairy sector about how exploited liquid milk producers are. When discussing this crisis with these producers, I tried to reassure them that Parliament was listening and legislating through this Bill, but too many have given up on us and do not believe that we will make any difference. Without the power to fine from day one, they may be right and another chance to rebuild trust in this Parliament will be lost. However, I am pleased that some retailers are listening to these producers, including some supermarkets. I take this opportunity to mention a welcome initiative by Sainsbury’s. In April, the farmers who supply Sainsbury’s milk voted to move to an industry-leading cost of production-based supply model. Following their first pricing review of dairy costs, they increased the price they pay farmers for milk by 0.26p to 30.56p per litre from 1 July. That is a marginal amount, but it is welcome and I am happy to pay tribute to the fact that there are some supermarkets that want to make progress.
Not all large retailers are acting voluntarily, however, so we need to push them down the road of responsibility. It all comes down to whether the adjudicator should grow teeth or be born with them. We are in the process of bringing a guard dog into the world to protect the groceries supply code. Currently, our hound will be able to patrol the perimeter, to sniff out and investigate intruders or potential intruders. The beast will be able to bark if it finds anything, in the hope that someone will notice or that the intruders will think someone will notice and therefore voluntarily back off. However, if the intruders persist, they will do so in the knowledge that the dog has no teeth; it is all bark and no bite, all name and shame and no fines. I hope our guard dog never has cause to bite, but I do want potential intruders to worry that it might and that it can take a chunk out of their profits straight away—not in the future if we decide later perhaps that it needs teeth. We need effective regulation of overmighty vested interests. Retailers making multibillion-pound profits are very mighty indeed. Their suppliers need protection from an effective regulator, and that regulator needs the power to fine from the start.
Baroness Randerson
My Lords, I am surprised at the noble Lord’s ferocity on this given the record of the previous Government, which although well-intentioned was hardly decisive and swift on this issue. I think his judgment that it would take three years to bring in fines is very speculative. However, I am sympathetic to his argument. Certainly, I have been listening very carefully to the idea that we need fines from the start.
For that reason, I am very pleased to see Amendments 16 and 23 from the Government in this group, which will ensure that financial penalties can be brought in quickly. Bearing in mind the Government’s philosophy, which is light-touch regulation, I can see that this fits in with that philosophy.
Groceries Code Adjudicator Bill [HL]
Debate between Lord Knight of Weymouth and Baroness Randerson
Lord Knight of Weymouth
My Lords, if I am following correctly where we have got to, I am moving Amendment 50, which is in my name, and speaking to Amendments 51, 63 and 64. These are all amendments to Schedule 3 or Clause 12 and are to try to streamline the process, should we be unsuccessful in persuading the Government to have powers to fine from day one. In the exchange that we had on earlier amendments I got the impression from the Minister that she may be minded to concede a little on this, so I will be extremely brief to give her maximum time to elucidate on whatever concession she may or may not have available.
I remind the Committee that my understanding of how things stand is that the adjudicator would be established and would operate without fines. They would then perhaps do some investigations and find that they are not really having much of an effect with naming and shaming, so would recommend to the Secretary of State that the powers to fine would be useful to him or her. The Secretary of State would then make an order under Clause 9 but would have to consult a variety of people on whether to make such an order, as set out in paragraph 6 of Schedule 3. The order would then be published and we would have the time taken by Parliament to consider it. Eventually, it would be passed—at which point, the adjudicator has to issue guidance as to how he or she would then use the financial penalties and consult on that guidance. At the end of all that, the adjudicator would be able to use those powers to fine. In my judgment, that would take at least a couple of years, probably more, which is why I mentioned 2015 earlier. I am delighted, however, that the Minister is about to tell us that it is going to be a lot better.
Baroness Randerson
My Lords, I want to refer to Amendment 52 in my name. I will also be brief, as I am sure noble Lords will be relieved to hear. My amendment would simply remove paragraph 6 from Schedule 3. It fits neatly with my previous amendment, to which I spoke, because it removes the cumbersome nature of the consultation. Regarding the list of people to be consulted, in my experience with legislation the moment that you start being as precise as this is, the very next year it is out of date. Then you have to change the list by secondary legislation or amendments, and so on. It is also a strange list because it starts by being very precise and then goes on in very general terms:
“one or more persons appearing to the Secretary of State to represent the interests of suppliers”.
There is the same in relation to consumers and then, finally,
“(g) any other person the Secretary of State thinks appropriate”.
Why not just have general consultation and leave who is consulted to the common sense of the Secretary of State? Why not move to a much swifter process than this cumbersome list indicates? I urge the Minister to take this opportunity to think again about this aspect of the Bill.
Lord Knight of Weymouth
I apologise to the Committee. I should have set out what we are proposing as the streamlining. In essence, we are suggesting in Amendments 63 and 64 that the adjudicator could publish straight away the draft guidance about how they might use the financial penalties, so that we at least remove that stage in the process. I am looking forward to hearing what is said.
Lord Knight of Weymouth
My Lords, in moving Amendment 78, in order to ease time a little, I shall speak to Amendment 82 in the next group, and in support of Amendment 87C tabled by the noble Baroness, Lady Randerson, which I support very much. They are all in connection with the annual report in Clause 14. Amendment 78 proposes that instead of reporting only when it occurs to the adjudicator that there is an issue on the code, he should have to report every year on the code’s effectiveness. That would be a more active stance and follows our concern that it should be a living code that is thought about regularly to make sure that it is always fit for purpose.
Amendment 82 reflects our wish that Parliament should have more of a role in respect of the adjudicator. Although we appreciate that the annual report, once given to the Secretary of State, would then be published and that Parliament would get a copy, it would be more satisfactory for Parliament to be listed as one of the organisations to which the annual report would be submitted.
Finally, in support of Amendment 87C, we think that the people who pay the levy to fund the adjudicator should be able to see clearly what are the operating costs. Whether they are paying a reasonable sum for the running of the adjudicator should be transparent. If Amendment 87C is accepted, so that the manner in which the levy is calculated by the adjudicator is regularly reviewed, that will provide the transparency that ensures that the adjudicator is not operating in a frivolous fashion. On that basis, I hope that the Minister is listening, as ever, and I beg to move.
Baroness Randerson
My Lords, I shall speak to the three amendments tabled in my name in this group, Amendments 85A, 85B and 87C. I shall take Amendments 85A and 85B first. As the Bill stands, the Secretary of State will review the adjudicator’s performance initially after two years and then every three years. The amendments provide that that review should take place initially within a year and then annually. We believe that the proposed two-year review period is too long before we hear anything about the achievements of and progress made by the adjudicator, and that a period of three years between reviews is too long.
If the adjudicator is doing well, retailers will change their culture and behaviour, and three years is a long time with no judgment on how the adjudicator is working. As I said earlier, it has taken a long time to get to this stage. It has taken six or seven years to get this far, so we need to know how the new system is working sooner than two years after the adjudicator has been established. I point out to noble Lords that, under the groceries code, retailers have to submit compliance reports to the OFT within 10 weeks of the end of every working year, so why should the adjudicator not report to the Secretary of State or be reviewed by him every year?
I turn briefly to Amendment 87C. Clause 15(4) sets out the detail of what the review must cover. This amendment would add a new paragraph (c) that would ensure that the Secretary of State considered both the funding for the adjudicator and how the levy was calculated. This introduces what is in many ways a different issue. It concerns the equity of a levy that is to be established on the basis that it will be set at a flat rate. This amendment introduces the concept that the levy might vary according to the amount of work done by the adjudicator in respect of each of the supermarket chains. In other words, those retailers who trouble the adjudicator a great deal by generating a lot of work—because there are a lot of complaints about them—will pay more than those retailers who generate hardly any complaints. Further, a flat-rate levy would not reflect the relative size of the different supermarket chains.
We do not have time to do so today but it would be interesting to look at the relative size of the 10 large retailers. Although they are the 10 largest, the biggest is significantly larger than the smallest of them. The flat-rate levy does not seem to reflect that. It will nurture a sense of unfairness among the retailers if there is no movement from a flat rate to a levy that reflects the amount of business that they have brought to the adjudicator—if I could put it that way. The Minister may give us some words of reassurance on this but, as a probing amendment, it is important to raise the issue this afternoon.