Groceries Code Adjudicator Bill [HL]
Debate between Lord Whitty and Duke of Montrose
Lord Whitty
I, too, support this amendment. It seems to me that this clause as it stands, combined with Schedule 3 and the possible orders under it, the nature of which we do not yet know, could seriously constrain the nature and instances of the financial penalties which the adjudicator felt able to impose.
There are difficulties here. If I look at other regulators, adjudicators or ombudsmen, a delay has rarely awaited the Secretary of State before the provisions for their powers came into practice. I do not see any particular argument why that should be the case here, either immediately, in terms of the year or so’s delay in giving the powers, or in how the powers are exercised in broad terms.
I was going to widen the debate, and I shall still mention this point: financial penalties are one thing—the “fines”, as we normally call them—but quite often the most obviously appropriate remedy would actually be compensation to the supplier that had been disadvantaged by the behaviour and practices of the retailer. I have an amendment following this group that deals with that issue, but it deals with it rather crudely. I have now read the Committee proceedings on this, which indicate the complexity of writing in compensation in the way that I am proposing, and I will therefore not be moving that amendment. However, there ought also to be some process whereby financial penalties are augmented by the ability of the arbiter or the adjudicator to refer the possibility of compensation to appropriate authorities.
In reality, naming and shaming is not enough. Although I agree with the noble Baroness, Lady Randerson, that it can be important for the reputation of the company, fines are even more important in terms of that reputation. At the end of the day, though, the organisation that has been disadvantaged is the small business, the farmer or whoever it is who has been at the receiving end of the abuse. Somehow within this regulation and code there ought to be an ability for the adjudicator to recommend, possibly under the powers of recommendation, that the issue of potential compensation is referred to the appropriate legal authorities. That is missing at the moment, although it could be included within the recommendations.
The point here is that we should not be placing undue time delays or undue constraints on the ability of the adjudicator to impose sufficient redress. If we removed Schedule 3 and altered Clause 9, we would be able to put the Bill into operation as rapidly as possible and establish a more equitable balance within the supply chain.
The Duke of Montrose
Is part of the purpose of the adjudicator that the disadvantaged person should not be identified? If that is so, how do they go about talking about compensation?
Lord Whitty
The person is not necessarily unidentified; that depends on the supplier. I know that those arguments were made in Committee and I accept that it would not be for the adjudicator to impose compensation or the level of it themselves. However, it ought to be open to the adjudicator to be able to say, “It looks as if a supplier or a number of suppliers have been disadvantaged by this practice and the issue should be referred, effectively, to the courts”. That could be part of the recommendatory powers. That is not the central issue on this group of amendments, though; they are really to remove the constraints on the Secretary of State and allow the adjudicator to have a whole range of potential financial sanctions.