Groceries Code Adjudicator Bill [HL]

Debate between Lord Knight of Weymouth and Lord Borrie

Monday 16th July 2012 Lords Chamber

[Lord Knight of Weymouth]

My Lords, the amendment in my name and that of my noble friend Lord Grantchester relates to the role of Parliament in respect of the new office of the groceries code adjudicator. In pushing the amendment which we discussed in Committee and bringing it before the House today, we do so, believe it or not, in the spirit of the coalition agreement. I remind noble Lords that the coalition agreement stated:

“We will strengthen the powers of Select Committees to scrutinise major public appointments”.

In Committee, I reminded noble Lords that that followed manifesto commitments from both the Conservative Party and the Liberal Democrats at the election.

Since we met in Committee, a letter from the noble Baroness’s ministerial colleague, Norman Lamb, to my colleague in the other place, Ian Murray, has to some extent further clarified the Government’s position. Mr Lamb writes that,

“the Government believes that posts which should be subject to pre-appointment hearings will generally be senior non-executive roles which either: play a key role in regulating Government; play a key role in protecting and safeguarding the public’s rights and interests particularly in relation to the actions and decisions of Government; or where it is vital for the reputation and credibility of the public body in question that the post holder, and is seen to be, independent of Ministers and Government”.

I think that the Government need to reflect on whether the BIS and EFRA Select Committees should have a role in confirming the appointment of the groceries code adjudicator, given what the Government are saying. The new office that we are establishing in the Bill is important. It is something which has to have a certain reputation and credibility, and which has to be independent of Ministers and government. I think that this office passes the tests that Mr Lamb sets out in his letter to Mr Murray, although I know that the Minister himself does not agree. He goes on to say:

“The Government does not consider that the groceries code adjudicator, though very important to the groceries sector, would fall within these categories”.

I think that the Government need to reflect on this. I am not going to push this to a vote today, because this is the sort of concession that the Government should want to make to the other place as it is their Select Committees that will have a role in confirming the appointment. However, I would strongly advise, if the Minister is willing to take advice, that this amendment is entirely in the spirit and wording not only of what the coalition agreement, her party’s manifesto commitment and her coalition partner’s manifesto say, but of what, in effect, at least one of the tests that Mr Lamb sets out in his letter to Ian Murray says. I therefore beg to move, for the sake of the debate.

[Lord Borrie]

My Lords, I support my Front-Bench spokesman who has just introduced this amendment. I hope I am right in thinking—the Minister will no doubt correct me if I am wrong—that the Bill currently going through the other place requires that the head of the proposed Competition and Markets Authority should be appointed by a Minister with the approval of the appropriate departmental committee. If that is so, and I am glad to think that it will be so, it emphasises the point that the Minister made in relation to the last amendment—namely the need to firmly establish the competition authorities’ independence of Ministers. She kindly said that this followed the Enterprise Act of the previous Government in their efforts to emphasise the independence of the competition authorities. It seems to me unduly subtle to say that the head of the Competition and Markets Authority, which is to be created shortly, is of a higher calibre of significance and importance than the groceries adjudicator. It is true that the groceries adjudicator’s role is narrower than that of the Competition and Markets Authority but, none the less, it is significant in its field. Indeed, the Government’s whole introduction of the Groceries Code Adjudicator Bill is based on the notion that, in a certain area of significance to the consuming public—supermarkets—the independence to be achieved by the appointment of this adjudicator is of some importance. I therefore hope that the Minister will agree with my noble friend who has introduced this amendment.

--- Later in debate ---

[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.

[Lord Knight of Weymouth]

My Lords, I was ready to give an impassioned speech to try to persuade the noble Lord, Lord Howard of Rising, that he was wrong, but I think we have heard enough really good arguments from all sides of the House, so I will not delay the House by doing so. I will simply use the opportunity to thank the National Farmers’ Union, the Food and Drink Federation and the Federation of Small Businesses for their robust position on this, in saying that we should oppose these amendments.

Groceries Code Adjudicator Bill [HL]

Debate between Lord Knight of Weymouth and Lord Borrie

Thursday 28th June 2012 Grand Committee

[Lord Borrie]

My Lords, the origin of the Bill, as we all know, stems from a Competition Commission report that found fault with major supermarkets in ways that I shall not trouble to delineate now. It seems appropriate that the levy should be imposed on major supermarkets to pay for the financing of the groceries code adjudicator’s position and office. However, I prefer the wording of the amendment of my noble friend Lord Knight, so I will not push my amendment. I certainly will not push the point about not requiring the Secretary of State’s consent.

[Lord Knight of Weymouth]

My Lords, I shall speak to Amendments 108 and 112, and to Amendment 121, which refers to Clause 20, because it is related to the same point. For the sake of efficiency I will do it in that way. Indeed, I shall speak in relative support of the amendment of my noble friend Lord Borrie. I am relaxed about whether the wording is “must” or “shall”. I am sure that there are parliamentary draftsmen who have a very strong opinion on the most effective word as long as the meaning remains. For the sake of plain English we need to be clear about what we are doing here in Parliament. I believe that it is the Government’s intention that the adjudicator’s office should be fully funded by the levy on the major retailers and that the taxpayer should not fund it. If that is the Government’s intention they should say so and be clear in the Bill in the same way as they are about other bodies that are funded by levies. That clarity would help everybody and that is what the amendments would do.

Amendment 121 to Clause 20 would remove the option for the Secretary of State to make grants to the adjudicator so that, again, the office would be fully funded by the major retailers. That is all that that amendment would do. Amendment 112 would remove the provision for a flat rate levy from the 10 major retailers and replace it with a requirement for the levy to be calculated in proportion to annual turnover. As we have heard, there is a significant difference between the sizes of major retailers whose turnover is more than £1 billion. I think that it would be fairer, certainly initially, for the levy to reflect turnover. It may be that in time the levy would reflect those retailers that occupy the most time for the adjudicator and cause the highest number of substantiated complaints and investigations. However, for now, relative to turnover is a better solution. As I recall I think that that was what the Competition Commission recommended. I look forward to a willing Minister.