Oral Answers to Questions

Mark Spencer Excerpts

Thursday 7th March 2013 Commons Chamber

[Richard Benyon]

The hon. Gentleman makes a very good point about the extremes of weather we have experienced in the last 12 months. We were facing a real problem with drought, and there was a 3% chance of getting a sufficiently wet summer to alleviate it, yet it happened. However, it has of course brought huge other problems. I do not accept the hon. Gentleman’s point about the level of spending—I refer him back to my response to the previous question—and I can assure him that we listen very carefully to experts in the EA. When we asked its leadership what further projects it could bring forward if we found extra money, it told us and we got the money; that was announced in the September statement.

[Mr Mark Spencer (Sherwood) (Con)]

What can the Minister do to assist residents who live near small tributaries and who cannot understand which authority is responsible for them? There seems to be confusion between highways authorities, the EA, local councils and county councils as to who has responsibility for clearing the waterways around tributaries.

[Richard Benyon]

My hon. Friend makes a very good point. This matter was discussed at yesterday’s EA board meeting and we are in close touch with the EA and other organisations. There is a degree of confusion. That was brought out in the Pitt review. Some effort has been put in, and some progress has been made in addressing the problem, but I absolutely concede we are not there yet and there is still confusion about who is responsible and what the priorities are. We want to make sure that the priorities are protecting people and their properties and the environment.

Groceries Code Adjudicator Bill [Lords]

Mark Spencer Excerpts

Tuesday 26th February 2013 Commons Chamber

[Philip Davies]

No, I do not agree with that at all. I will come on to this point in a bit more detail soon, but the hon. Lady is forgetting something. The big supermarkets, without a shadow of a doubt, are massive companies that have hundreds of stores in their chains. By definition, a viable supplier to a supermarket chain has to be a very big company as well, otherwise it would not have the wherewithal to supply all the supermarket’s branches. When I get to the detail of my new clauses, I will talk about the thresholds that the Bill should apply. She will see that far from it being the case that vast supermarkets are being awful to very small suppliers, many of the suppliers are bigger than the supermarkets that they are supplying. She ought to bear that in mind.

[Mr Mark Spencer (Sherwood) (Con)]

My hon. Friend misunderstands the whole supply chain in the UK. There are organisations that provide hubs to supply supermarkets, but those hubs are supplied by very small primary producers such as family firms. Those firms are microscopic in comparison with the supermarkets.

[Philip Davies]

My hon. Friend makes a good point. If he has a big problem with the middleman, so to speak, for example in the dairy industry, he should pursue his complaint with the middleman, rather than having a go at the supermarket.

The hon. Member for Alyn and Deeside (Mark Tami) made a point about special offers. There is a view that supermarkets have been forcing suppliers against their will to do special offers, such as buy one, get one free or buy three for two. Let me tell the House, as somebody who has worked in this environment, what happens in the real world, rather than in the invented world that people want to talk about.

My hon. Friend the Member for Fylde (Mark Menzies) is here and he will know what happens as well as I do because he worked for Asda at the same time as I did. He will recall that, before I left, Asda decided that it did not want to do special offers any more and that it would have no special offers in its stores. It did not want any buy one, get one frees or three for twos. It asked its suppliers instead to just sell it the product at an everyday low price and to put what they would have invested in a promotion into providing that price. It was not companies such as Asda that were forcing suppliers to do buy one, get one frees; suppliers were falling over themselves to do special offers in the supermarkets and to get their products in the promotional areas.

Some of those firms have massive marketing budgets. They have marketing budgets that supermarkets would love to have. They use that budget to do offers such as buy one get one free or three for the price of two. They are trying to persuade people who buy Daz for their washing, for example, to move to Persil. To persuade people to do so, they give them a buy-one-get-one-free offer.

--- Later in debate ---

[Philip Davies]

As ever, my hon. Friend is eagle-eyed. The amendments are the same, but the purpose of tabling two was to give the House a choice, because as it happened, I envisaged the interventions that the hon. Member for Alyn and Deeside (Mark Tami) has made.

At Asda, we found huge reluctance on the part of suppliers to stop special offers. They lobbied Asda for ever to do more and more of them to promote their brands, and an everyday low price did not offer them the same marketing opportunity.

[Mr Spencer]

I applaud my hon. Friend’s campaign to get his whites whiter, but he must recognise that there is a fundamental difference between a supplier of a brand of washing powder and a supplier of a cauliflower, carrot or parsnip, because it is not possible to brand a carrot or a cauliflower.

[Philip Davies]

I am grateful to my hon. Friend, and again, I take his intervention as a signal that he will support my amendment. That brings us on to the nub—

[Philip Davies]

I am grateful, Mr Speaker, and you are absolutely right, as ever. My hon. Friend the Member for Sherwood (Mr Spencer) seems to indicate that he is prepared to support new clauses 1 and 2, and I will be grateful to him for that. It seems that the longer we go on, the more support I am garnering for my case, so I am encouraged to go on a bit longer.

[Mr Spencer]

My hon. Friend will recognise that putting a figure on turnover as suggested in the new clauses would mean that there was a difference between somebody supplying a low-value product such as a carrot and somebody supplying a high-value product such as a bottle of champagne. If we were to put a firm figure in the Bill, as time and inflation moved inevitably forward, that figure would become smaller and smaller in real terms and small and medium-sized enterprises would be dragged over the threshold.

[Philip Davies]

My hon. Friend appears to be indicating that he prefers new clause 2 to new clause 1, which further persuades me that I should seek to press new clause 2 to a Division, if you allow me to do so, Mr Speaker.

The Bill was sold to people on the back of what I believe was a false premise—the idea that supermarkets are screwing suppliers into the ground remorselessly and hoping that as many of them as possible will go bust. It is a completely nonsensical argument.

--- Later in debate ---

[Philip Davies]

My hon. Friend makes a good point, which strikes at the heart of new clauses 1 and 2. We can argue about the necessity of the Bill, and as far as I am concerned it is not only unnecessary—as my hon. Friend the Member for North Swindon (Justin Tomlinson) made clear, there are no complaints about the existing code, so it is a solution looking for a problem—but the most unconservative-minded thing that we could possibly see. I have no problem with the Liberal Democrats supporting it, because of course they are always a left-wing tribe, but I am worried that members of my own party are supporting this intervention in the free markets.

Two companies, free to make their own decisions, are making agreements and signing a contract, and then we in the House think that we should intervene in that contract that they have both entered into freely and say, “By the way, we don’t think you should have signed that contract.” I have always thought that companies are more than capable of deciding those things for themselves.

[Mr Spencer]

Again, my hon. Friend misunderstands the concept of what the groceries code adjudicator is intended to achieve, which is related to exactly the point that he has just made. When an agreement has been made between two parties, if both sides stick to it there is no problem, but there is a problem when one side tries to change that agreement and goes back on it at a later date.

[Philip Davies]

My hon. Friend makes a good point, and he seems to make the point that the Bill is totally unnecessary. I am not a lawyer—my hon. Friends the Members for Christchurch (Mr Chope) and for Bury North are, and I will happily bow to their expertise—but it seems to me as a layman that if two sides sign a contract and one side then breaks it, there are already laws in place to ensure that the matter can be seen through in the courts. The courts ensure that contracts entered into voluntarily are honoured, so we do not need to do that. The Office of Fair Trading already looks after the groceries code, which deals with these matters anyway.

--- Later in debate ---

[Philip Davies]

This is a red letter day for me, because I now have another volunteer to support my new clause 1 and new clause 2, which I will come on to in a second. The hon. Gentleman may well not have read them and therefore may have intervened inadvertently, but when he actually finds out what is in new clause 1 and new clause 2—if I am ever allowed to get on to that—he will find that he agrees with the point I am making. I do not agree with the principle of the Bill; I am the first to make that clear, and that relates to the purpose of new clause 3. On new clause 1 and new clause 2, the Bill was sold on the premise articulated by the hon. Gentleman—we have big supermarkets that are in a vastly preferential situation to very small suppliers, and that the House should be looking after those very small suppliers where they face problems. That is the premise of the hon. Gentleman’s point, and that is what my hon. Friend the Member for Sherwood is indicating. That is how the purpose of the Bill was sold.

I believe the Bill is totally unnecessary, but I am the first to accept that that is a minority view and that it will go ahead. My new clauses seek to ensure that the Bill hits its given purpose—to look after the small suppliers that my hon. Friend the Member for Sherwood is rightly keen to look after. I do not disparage him for that. Currently, the Bill will not just look after the small suppliers that my hon. Friend and the hon. Member for Corby (Andy Sawford) are so concerned about; it will give an avenue for complaint to all suppliers of supermarkets, whatever their size. All I can do is reiterate the fact that the vast majority of suppliers to supermarkets are huge companies in their own right, and that some of them are bigger than the supermarkets they supply.

Let us make no bones about it. One way or another, the suppliers—whether in terms of special offers, deals or whatever—hope that ultimately the adjudicator will deliver a benefit to their bottom line. Suppliers hope, through whichever avenue, that this will ensure that they have a healthier bottom line.

[Mr Spencer]

My hon. Friend must also recognise that the role of the groceries code adjudicator is as a referee. If a large corporation—we all know they exist—is in a trading disagreement with a supermarket, then the supermarket could use the groceries code adjudicator to make sure that it gets a fair deal from that large supplier.

[Philip Davies]

My hon. Friend makes his point. As it happens, I am a Conservative. I know it is an old-fashioned view these days in the Conservative party, but I believe in the free market. Companies such as Asda, Tesco, Morrisons and Sainsbury’s are big enough to look after themselves. They do not need a referee to look after a contract on their behalf against any supplier; big companies are more than capable of doing that themselves. My hon. Friend may take the point that it is the role of Parliament to intervene in every contract negotiation between two companies.

--- Later in debate ---

[Mr Spencer]

Again, my hon. Friend is misrepresenting the role of the groceries code adjudicator. When a deal is done between two suppliers, whether large or small, as long as it is stuck to, there will be no role for the adjudicator. Those large companies can do their negotiations, and those deals will stand fast. The adjudicator would get involved only when the supermarket goes back and tries to change the original agreement. That is its role.

[Philip Davies]

So my hon. Friend does not think that Procter & Gamble is big enough to look after itself. He thinks poor little Procter & Gamble—that poor mite—needs a state adjudicator to intervene on its behalf because it might find itself at the wrong end of an unfair negotiation with a supermarket.

--- Later in debate ---

[Philip Davies]

My hon. Friend makes a good point. The Bill would still allow Walkers to screw the potato suppliers—who provide the raw materials—into the ground as much as it liked, but it would prevent Asda, for example, from trying to negotiate the best deal with Walkers for its crisps.

I have mentioned Coca-Cola. I also wonder whether Heinz Ltd would really need to take a complaint to an adjudicator. Is Heinz not big enough to look after itself? Why on earth are we passing legislation to intervene in disputes between big supermarkets and big suppliers such as Heinz, Diageo, United Biscuits, Kraft Foods, Nestlé, Premier Foods, Fullers Foods, Britvic Soft Drinks Ltd and Mars? Are we really saying that the House must set up a state regulator to intervene in negotiations or disputes between massive multinational companies? Those companies have recourse to the courts if they feel that a contract has been breached. Are we really saying that Heinz does not have the wherewithal to take a case to court if it feels that a supplier has dealt with it unfairly? Does anyone want to stand up and say that Heinz does not have the wherewithal to take such a case to court? Who wants to make that point?

[Mr Spencer]

rose—

[Philip Davies]

My hon. Friend does.

[Mr Spencer]

I will happily challenge my hon. Friend on that point. Those large companies have the ability to negotiate deals, and those deal will be stuck to. The groceries code adjudicator will not get involved in those kinds of negotiations. The adjudicator will have a role to play when a supermarket tries to go back on a deal and change it at a later date.

[Philip Davies]

We all know that that is the case, but my point is that if companies such as Heinz, Walkers, Nestlé or Coca-Cola feel that a supermarket has breached a contract with them, they can take the case to court. We do not need the state to set up an adjudicator to decide which side is right. As it happens, I am quite relaxed about supermarkets trying to screw those big suppliers into the ground to get the best possible deal. Those suppliers are making massive profits, and I would prefer to see that money benefiting my constituents rather than adding to the bottom line of those multinational companies.

--- Later in debate ---

[Mr Spencer]

I shall not detain the House for long, but I want to make some general comments about some of the amendments and new clauses.

I rise with an enormous amount of frustration, because in my opinion a number of Members seem not wholly to understand the role of the adjudicator and how they will fit in to the grocery supply chain in the United Kingdom. There has been an enormous amount of debate on new clauses 2 and 3, tabled by my hon. Friend the Member for Shipley (Philip Davies), which I would like to explore. I understand his motivation in trying to ensure that the adjudicator deals with smaller companies, but I think he misunderstands how the grocery supply chain works.

--- Later in debate ---

[Philip Davies]

My amendment does not seek to restrict the remit only to very small suppliers but to suppliers with a turnover of up to £1 billion; surely my hon. Friend cannot argue that a supplier with a turnover of £950 million is a very small supplier.

[Mr Spencer]

I am grateful to my hon. Friend for his intervention, as it allows me to clarify that that is my exact point. At no point will there be such a negotiation, as this is not a David and Goliath situation. We are talking about two Goliaths, so the adjudicator will have no role. My hon. Friend has made a career of criticising unnecessary legislation and it seems strange that he should now want to introduce an unnecessary clause into a Bill. I hope that he recognises that new clause 2 would not be necessary simply because the adjudicator will not have a role in negotiating between two Goliaths.

[Justin Tomlinson]

Surely the new clause will send a crystal clear message to the adjudicator, when they take on the role, about where they need to focus their efforts.

[Mr Spencer]

Again, there is a misunderstanding of what will happen. We are talking about very large companies that are negotiating with very large companies. They both have an equal amount of commercial muscle, so no one party will be able to bully the other. That is quite important. The adjudicator is meant to get involved as a referee and negotiate when one large party abuses a smaller party and uses its commercial muscle to push something through.

[Andrew George]

I support the arguments that my hon. Friend is making. He knows that this is a dynamic and creative market in which a number of intermediaries and subsidiaries have been created with a turnover of more than £1 billion, which could be used as a means of sidestepping the legislation if new clause 2 was accepted.

[Mr Spencer]

I recognise that. I pay tribute to the hon. Gentleman, who has worked on this matter since before I became a Member. Perhaps that is something that the adjudicator could look at as we move forward. There is this ability to put a film between parties and cause an issue. That comes back to small suppliers, who supply the middlemen.

New clause 3 would cause the Bill to expire after seven years. It would be disappointing if it did so. Using the analogy of a football match, if we get to half time and the referee has not needed to issue a yellow card, no one suggests that we do not need a referee in the second half.

[George Eustice (Camborne and Redruth) (Con)]

We have had plenty of time to understand how supermarkets deal with their suppliers and it is precisely because of that that everyone who has looked seriously at this issue has concluded that we need an adjudicator.

[Mr Spencer]

I am happy to agree with my hon. Friend and I pay tribute to the work that he has done to bring the legislation to this point.

[Mr David Nuttall (Bury North) (Con)]

Does my hon. Friend agree that, regardless of whether there have been complaints, the existence of the adjudicators office will bring a cost so it would make sense to bring the whole thing to an end if it is not proving worth while to the consumer?

[Mr Spencer]

My hon. Friend makes an interesting point. We could make the same argument across government; if crime starts to fall in an area, do we withdraw the police because they are not necessary? We have to have a referee to make sure that the rules are being obeyed. The groceries code adjudicator will be a great referee and will have the teeth to make sure that the Goliath does not bully the David. That is something that the Government should be proud of and take forward to bring a little parity and common sense to the market.

[Huw Irranca-Davies]

I am pleased to speak in this debate and I welcome the speeches that have been made so far. I did not expect it to be as sparky as it has been, but I welcome that because it allows us to flush out the arguments about the amendments and new clauses, as well as the fundamental principles of what we are trying to achieve.

I did not intend to speak to new clauses 1, 2 and 3, but I wish to reiterate the comments made by the hon. Member for Sherwood (Mr Spencer), the right hon. Member for South East Cambridgeshire (Sir James Paice) and others. A great deal of discussion in Committee focused on the fact that the adjudicator’s office will intentionally be small, mean and lean. It will not be some behemoth, as the hon. Members who spoke to new clauses 1, 2 and 3 suggested it would be. It is supposed to be an intelligent organisation that does not go on fishing expeditions but responds to good intelligence. I suspect that if there are no cases to follow, the report will be very slim indeed. I suspect that the adjudicator will not respond to Procter & Gamble or anyone else if they are asked, “Please look at the power relationship within the supply chain and how we are being disgracefully abused.”

The hon. Member for Shipley (Philip Davies) spoke to new clauses 1, 2 and 3 at great length. New clause 3 gives the reality to the mission, which is at a set moment in time to get rid of the adjudicator, which would fly in the face of the advice that has come down over years from the Competition Commission and others that there is a need for such an adjudicator. Lean and mean, yes, but the hon. Member for Shipley should have some faith in the adjudicator and, having advertised the position and given her the power and set up the office on a lean, mean basis, he should allow her to decide where to investigate to achieve a good, efficient supply chain.

--- Later in debate ---

[Ian Murray]

I will be quick, but let me start by returning the thanks to the Front-Bench team—the Minister of State, Department for Environment, Food and Rural Affairs, and the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire (Jo Swinson), who I recall on Second Reading stamped her authority and said that we would not have fines in the Bill. We now have fines. They stamped their authority in Committee and said that they would not send the appointment of the adjudicator to the BIS Select Committee because it would be a dereliction of their parliamentary duty and was not an important enough position to be subject to a Select Committee pre-appointment hearing. I am delighted that Ministers have come round to our way of thinking. I am also delighted that they came round to the way of thinking of the other place by putting trade associations into the Bill. The Bill is far better now than when it first entered the House, and the Ministers listened to some close analysis and persuasion from the Opposition.

Let me right a wrong that happened in Committee. It is traditional at the end of Committee proceedings to thank all the officials, the Chair and everyone who has been involved in the Committee. I forgot to thank one person—my hon. Friend the Member for Ogmore (Huw Irranca-Davies)—when I was wrapping up the Committee. He has done more in the House than many to get us to where we are today, and I would like to right that wrong by putting on record my thanks to him for everything that he has done and, of course, for his wonderful speech earlier today.

I have tried twice to thank the hon. Member for St Ives (Andrew George) both in the Chamber on Second Reading and in Committee. Just before thanking him, he popped up and threw a wobbler at me of some description. I am delighted that I have been able to thank him today without him doing that.

Of course, my hon. Friend the Member for Ynys Môn (Albert Owen) first brought the matter to the House in his private Member’s Bill, and it should be a proud moment for him today as we send the Bill to the palace for Royal Assent. The last two thanks are to everyone who served on the Committee. We had lively debates. I am disappointed that my hon. Friend the Member for Vale of Clwyd (Chris Ruane) has not taken the opportunity to be in the Chamber. The Under-Secretary of State for Business, Innovation and Skills, had been on her feet for only about 20 seconds in Committee when my hon. Friend popped up and suggested that we should call the new adjudicator Oftrolley. I could not let the moment pass without putting it on record that I am disappointed that he is not here.

We have used a lot of terminology such as “toothless tiger”, and there was a danger that the Bill would be that. The Bill now has teeth. There are still some things that Opposition Members would have added to the Bill, but unfortunately that has not come to pass. We hope that the Ministers will be amenable to changing the way in which the adjudicator works as the process beds in. There are problems with the code itself. The hon. Member for—is it East Bedfordshire?

[Mr Spencer]

Sherwood.

[Ian Murray]

Sherwood, of course. I was not even in the right part of the country. The hon. Gentleman used the example in Committee of the dairy farmers dispute. In fact, that dispute would not have been covered even if the adjudicator had been in place, because there had not been a breach of the code. That example was interesting in terms of trying to keep the code live and make sure it is as responsive to the industry as possible—not just to the suppliers. The hon. Member for Shipley (Philip Davies) made some important points. It needs to be responsive to the supermarkets. They make such a considerable contribution to our economy, and we must not forget the role they play. The code has to be responsive to their needs too.

We set three tests for the Bill at the outset, and we have met all of them. We are a little disappointed on intermediaries and supply chain issues, and I hope that Ministers will reflect on those. I gave a commitment on Second Reading and in Committee that we would work constructively with the Government to make this a better Bill. We have done that and we have got a better Bill. Everyone who has been involved in this process for far longer than I have been should be very proud tonight that we will have an adjudicator and, I hope, a far better supply chain and a far better supermarket market.

[Mr Spencer]

I shall just take 60 seconds to add my congratulations to those on the Front Bench for introducing this Bill. I also pay tribute to the hon. Member for Ynys Môn (Albert Owen) who, before I was a Member of Parliament, had pushed this issue forward through a private Member’s Bill. It is worth noting that it took a change of Government for the Bill to receive Government support, and the coalition should be proud that it has managed to introduce legislation that will level the playing field.

All hon. Members can support fair play, and it is worth reminding everyone that the Bill is not about an adjudicator poking their nose into a private deal or relationship between a supplier and retailer. It is about ensuring that, after they have done the deal, they all stick to the rules and play by the book. I am very proud that the coalition Government have introduced the Bill and will get it on to the statute book. I look forward to fair play in the retail sector.

Horsemeat

Mark Spencer Excerpts

Tuesday 12th February 2013 Commons Chamber

[Kerry McCarthy]

Exactly. I raised that very issue with the Secretary of State for Environment, Food and Rural Affairs yesterday, and I have to say from his response that it looked as if it was the first he had heard of it; he simply said that we rely on scientific advice, which I think is scandalous.

I am just halfway through my description of the process involved in producing pink slime. The recovered beef material is then processed, heated and treated with gaseous ammonia or citric acid to kill bacteria. It is then finely ground, compressed into pellets, flash frozen and shipped for use as an additive. There was a public outcry over this issue a while ago, and we saw Jamie Oliver appearing on American TV decrying its use. There was a real backlash, and companies such as McDonalds, Burger King and Taco Bell announced that they would discontinue its use. There was also an outcry about it appearing in meals in the public sector, and promises were made that that would no longer happen. Once consumers knew that there was pink slime in their food, they did not want it and wanted the meat industry to stop producing it.

There is also a substance that has become colloquially known as “white slime” in meat products. It is officially known as “mechanically separated meat” or “mechanically recovered meat”. This is the product most likely to be used in highly processed meat products such as burgers or pies. It is a paste-like product produced by forcing beef, pork, turkey or chicken under high pressure through a sieve to get every last little scrap of meat off the bone. Questions have been raised about its safety and some have argued there should be limits on how much of it should be used in a food product—for example, no more than 20% is allowed in hot dogs. The fact is, however, that consumers do not realise that this is in their hot dogs. Finally, there is advanced meat recovery, which separates meat from bone by scraping, shaving or pressing the meat from the bone—again, typically used in hot dogs.

Let me quote what John Harris said in an excellent article in yesterday’s The Guardian—it may sound a bit of a cliché to keep quoting this newspaper, but it is not particularly fond of vegetarians generally. He said that EU regulations insist that if a product is to be called “meat”, it has to be

“skeletal muscle with naturally included or adherent fat and connective tissue”.

He said that our Food Standards Agency insists that economy beefburgers must contain at least 40% of this product, which must come from cows. That is not very reassuring; I think people expect their beefburgers to have beef in them, not cartilage, fat and connective tissue.

In talking about the relentless search for profits from cheap food, John Harris cited a Financial Times article saying that Findus products came from a factory in Luxembourg, which was supplied with meat by a company in south-west France, which had acquired frozen meat from a Cypriot trader that had subcontracted the order to a trader in the Netherlands—who was then supplied from an abattoir and butcher located in Romania. As John Harris says, how messed up has our food system become? All this is a far cry from the sort of meat that many Members praised during yesterday’s statement on horsemeat. The advisability of buying local meat from a local farm sold by a local butcher was highlighted, where the path from the pasture to the plate is a matter of public record. Indeed, I have heard people saying that they take local sourcing so far that they even know the name of the cow they are consuming.

It is very easy to say that, and in ideal world, people would be looking to buy organically reared locally produced products, but that is very expensive. Yes, it can be said that people should try to cook their own food and source it locally instead of buying ready-made meals, but I am sure many MPs grab a ready meal from Tesco or Marks and Spencer on their way home after a vote. We should not be too judgmental about people who turn to value ranges and ready-made meals, as my hon. Friend the Member for Hackney North and Stoke Newington (Ms Abbott) said. If someone has only a couple of pounds left in their purse and there is a £1 lasagne ready meal or an eight-pack of Tesco economy burgers left in the shop, they will buy one of those rather than buying the mince, the sheets of pasta, the flour, the butter, the tomatoes, the herbs and the cheese that they would need to make lasagne from scratch. Many people do not even have the necessary cooking facilities in any case. I have seen single men in my constituency living in bedsits with just a microwave for cooking.

[Mr Mark Spencer (Sherwood) (Con)]

This should not seem like rocket science to the hon. Lady. If I told her that I could flog her a cheap telly, she would think to herself, “There must be something wrong with that TV.” It does not strike me as much of an extension of that argument to suggest that if those processed meat products are so much cheaper than other products, their quality will not be the same.

[Kerry McCarthy]

Sometimes people simply do not have a choice between buying the slightly dodgy knock-off cheap telly that has probably come off the back of a lorry and going to one of the high street shops and buying a top-of-a-range brand. That is the point that I am trying to make. People may well know that what they are eating is not as good as the organic produce that is sold in, for instance, The Better Food Company, an organic supermarket in Bristol, but they do not have the option of going there. As I have said, even if people had enough money to buy more than one day’s food and could plan ahead and try to cook their own meals, they would still not be buying premium “best of British” mince. They would be buying the sort of mince that was mentioned just now by my hon. Friend the Member for Brent North (Barry Gardiner), and about which I asked the Secretary of State yesterday. If the Government manage to find their way around European Union regulations, that mince could be up to 50% fat and collagen, and other substances that are not meat, without the consumer’s being any the wiser.

We need to get the message across to Government Members. We are living in a world in which people’s cost of living is being squeezed from all sides. Their incomes and benefits are being cut, their rents are going up, and fuel prices, fares and food prices are rising. Obviously they will buy the packet of eight Tesco value burgers for £1, because they have no other option. According to statistics released last week by Mintel, the market research company, some 30% of consumers now buy budget ranges, as opposed to just one in five back in 2008. We cannot insist that everyone should buy the premium, locally sourced, top-of-the-range products, because some people simply cannot afford to do that. The important point, surely, is that all food should be of a decent quality, and all consumers should know what is in their food.

--- Later in debate ---

[Mr Mark Spencer (Sherwood) (Con)]

It is a great pleasure to follow the hon. Member for Brent North (Barry Gardiner). Although he represents an urban constituency, he speaks with great knowledge and experience about the food industry, and has a reputation for doing so. May I also draw attention to my declaration in the Register of Members’ Financial Interests?

This topic has not suddenly emerged over the past two and half years; the problem we are talking about today has been a long time coming, and therefore some of the comments from Opposition Members stick in my throat like a dodgy burger. They speak as if this Government have created this problem, but the entire situation has been changing since the second world war, when the proportion of cash an individual spent on their food bill was much larger than it is today. Then, families would have spent 60% of their income on food, but today that figure is much smaller and as such we have lost the context of how valuable our food is.

I drew an analogy with television, but we could say the same about car tyres. A person would never buy second-hand car tyres from someone offering them on the cheap, because they would instantly recognise that their individual safety could be at risk. However, we as consumers seem to have got into a position where we are happy to see the price of food fall and be driven down. We have lost the concept of how valuable our food is, and that has led us to the position we are in today.

The hon. Member for Brent North referred to the fact that the Education Secretary plans to reintroduce cooking and food to the curriculum, which is a great step forward. Two generations of consumer have lost contact with how food is produced and with how to cook raw product, and again, that is to the detriment of our food industry. If the Government can do anything, more education about how to cook food and deal with raw products will mean that consumers are able to buy better quality food for the same money if they learn to shop about and source food from the right places.

Today, UK agriculture finds itself in a different place from the rest of the world, but that is no fluke and comes from bitter experience. The BSE crisis in the UK taught the beef industry valuable lessons about consumer confidence and how the consumer needs to understand, know and have confidence in a product. Today we know that if we go to our local butcher, not only will they be able to sell us a very high-quality cut of meat or processed beefburger, but they will be able to identify the animal that the beefburger came from, as well as its mother and father. That is the level of traceability in the UK butchery industry today, and UK consumers should understand that. Certainly, when that is compared with some of the points made by the hon. Member for Bristol East (Kerry McCarthy) about the processed meat industry, and with some of the products sold as meat that normal people would not recognise as such, there is a strong message to deliver on behalf of the UK meat industry.

This is not rocket science: the shorter we make the chain, the easier it is to have such traceability, and labelling will be important as we move forward. We heard from the Opposition about how the labelling of our products should be more prominent, yet when they were in power, there were several private Members’ Bills and lobbying by the then Opposition to try to improve labelling and ensure that consumers understood where and how their food was being produced.

[Simon Hart]

On that point, does my hon. Friend agree that in this instance there was nothing unclear about the labelling? It said beef but in fact it was horse.

[Mr Spencer]

Absolutely, and that is fundamental. Frankly, that could not happen in the UK because environmental health officers and trading standards officers are checking a paper trail that goes right back.

[Pat Glass (North West Durham) (Lab)]

I agree with much of what the hon. Gentleman has said, but surely the issue is about criminality, which is international. If a criminal changes the label, it does not matter whether the meat is British or comes from abroad; consumers will not have confidence.

[Mr Spencer]

I acknowledge that position, but my point is that given the traceability in the UK industry, the opportunity to change those labels is simply not there. Registered vets in every abattoir in the United Kingdom are watching the line and checking that the carcases are stamped and marked. They cannot be changed. When one buys what is basically a block of frozen meat from an international buyer, it is easy to pull off the label that says “beef” and slap on one that says something else, or reverse that process. That is a sad state of affairs.

Consumers want to know exactly what they are eating, but today we are in a position where I could set up my own little factory, buy in Brazilian chicken, make chicken pies in my kitchen, and sell them as Nottinghamshire chicken pie. We need to look more closely at the labelling process so that the industry tells consumers exactly what they are buying and where it has come from.

In the end, the consumer has the power and can choose where they source their products. They can choose to go to a supermarket or to a local, small and independent high-street butcher. They can shop around and make those decisions. I acknowledge that that becomes challenging right at the bottom, where people are struggling to make ends meet and to find the cash to buy those products. That is why we need a regulatory system that they can have confidence in, that they can support and that they acknowledge.

My final message is that this weekend, when people are thinking about what they want to have for dinner, they should go to their local butcher, look him in the eye and say, “Where has this animal come from? Tell me about it.” People will then be able to eat that dinner with confidence, knowing that they are buying good-quality, locally produced meat.

[Neil Parish]

(Tiverton and Honiton) rose—

Horsemeat (Food Fraud)

Mark Spencer Excerpts

Monday 11th February 2013 Commons Chamber

[Mr Paterson]

The hon. Gentleman has, I think, missed the point. The Irish had local intelligence of a local problem in Ireland, which is why random testing was done in Ireland. On his other question, I have discussed the issue with the chief executive of the Food Standards Agency, and she is clear that, with her organisation having made some sensible efficiencies, she can certainly deliver everything we ask.

[Mr Mark Spencer (Sherwood) (Con)]

May I draw attention to my entry in the Register of Members’ Financial Interests? Given that the problem is with international processors, can the Secretary of State reassure us that any change in legislation or regulation will not fall on the shoulders of small independent butchers and retailers?

[Mr Paterson]

My hon. Friend raises an important point. There has been a lot of acknowledgement around the House about the benefits of local production, but sadly in recent years we have seen the closure of a large number of small local abattoirs. Such abattoirs are of real value—there are animal welfare and food-quality benefits—so we should be judicious in any moves we make and value small country abattoirs.

Groceries Code Adjudicator Bill [Lords]

Mark Spencer Excerpts

Monday 19th November 2012 Commons Chamber

[Jo Swinson]

I will happily confirm the reference in that clause:

“When carrying out an investigation the Adjudicator may consider any information that it seems appropriate to consider and is not limited to considering the information mentioned in subsection (1)”—

subsection (1), of course, lists a range of places from which information could be provided. The point of that phrasing is to ensure that the adjudicator has flexibility in considering information from whatever source. That includes, but is not limited to, information from trade associations, as the Chair of the Select Committee mentions, from a whistleblower, or others who might have concerns or evidence of malpractice about compliance with the code. We do have—

[Mr Mark Spencer (Sherwood) (Con)]

Will the Minister give way on that point?

[Jo Swinson]

I am still responding to the earlier question, but if the hon. Gentleman will have a little patience I will come to his intervention shortly.

On the other point raised by the hon. Member for West Bromwich West (Mr Bailey), there will obviously be a regular review of the adjudicator. That is appropriate in ensuring that it functions as it should and that any necessary changes can be made, but we will not prevent the adjudicator from properly considering information before the initial review is produced. I want to make a little progress and then I will take an intervention from my hon. Friend the Member for Sherwood (Mr Spencer).

The adjudicator will be funded by a levy from the 10 largest retailers and will have the power to investigate breaches and to impose sanctions against supermarkets found to have breached the code. Some Members have previously criticised the Bill as being anti-business. What is anti-business about ensuring that the grocery market works as well as it can, without being distorted by anti-competitive and unfair practices?

[Jo Swinson]

I will make a little progress, and then I will give way.

The direct or indirect suppliers who are among the potential beneficiaries of the Bill include fresh food intermediaries and food and drink manufacturers. That is why the Bill is supported by major business groups, including the Food and Drink Federation, the British Brands Group, the Association of Convenience Stores and the National Farmers Union. A fair market is one in which suppliers and supermarkets are free to innovate, expand and offer the widest possible choice to the consumer without fear of being disadvantaged by unfair dealings elsewhere.

[Mr Spencer]

The Minister refers to blacklisting, when suppliers will be disadvantaged by coming forward. Can she reassure the House about how she will achieve that when, for example, the number of suppliers in the east midlands for a specific vegetable will be limited, and it will be quite easy to identify which one is supplying that product to a particular supermarket?

[Jo Swinson]

Clause 18 provides that there is a duty on the adjudicator to protect confidentiality. That goes beyond not allowing publication of the name of the individual or supplier making the complaint. As my hon. Friend rightly says, there are circumstances where an investigation could, in effect, give away who had made the complaint. In that circumstance it would be possible for the adjudicator to undertake a slightly wider investigation in terms of geographic scope or the types of vegetable being investigated, so that it would not be possible to identify which individual or supplier had come forward and made a complaint.

--- Later in debate ---

[Jo Swinson]

Absolutely. Morally, it is incumbent on anyone who comes across evidence of appalling crimes, such as human trafficking, to ensure that it is presented to the appropriate authorities so that they can take action.

Even without fines, there are financial consequences for retailers who breach the code. There may be internal costs of complying with an investigation, such as the cost of sending senior executives to give evidence to the adjudicator. The adjudicator will have the ability to make a retailer who has breached the code pay the costs of the investigation. It is also our intention that the retailers who cause the adjudicator the most trouble should pay a greater share of the levy. Taken together, those factors will reward good behaviour and discourage non-compliance.

[Mr Spencer]

Will the Minister give way?

[Jo Swinson]

If the hon. Gentleman will forgive me, I will make a little progress, because he has already intervened.

It benefits no one to reach straight for fines before we have exhausted the other options. We seek to impose a proportionate and effective solution. A move straight to fines would risk creating an unnecessarily adversarial environment, which would ultimately detract from our key objective of achieving long-lasting change in the culture of retailers.

--- Later in debate ---

[Ian Murray]

That should be in the hands of the adjudicator. We are asking the adjudicator to do a job to assess whether someone has breached the code. The adjudicator should therefore be given the power to determine the sanction. If the sanction is to seek recommendations, then that is the sanction. If the sanction is to name and shame, then that is the sanction. If the sanction is a fine, we should leave that in the hands of the adjudicator to determine. That could be a debating point in Committee. The Minister is chuntering from a sedentary position, but the argument is whether financial penalties should be in the Bill. If they are, the Secretary of State could then propose that fines be within certain parameters, or up to the adjudicator, or a proportion or a multiple of the loss achieved by a particular supplier. There are a plethora of ways for an adjudicator to determine a financial penalty. [Interruption.] The Minister says, “I don’t know,” but the Government have not told us what they would propose. Yes, we do not know how much the fine should be. That would be up to the adjudicator, within parameters applied in respect of the Secretary of State, to determine how much a fine should be, and that should be in the Bill.

[Mr Spencer]

Does the hon. Gentleman agree that those charged with the responsibility for spreading the message of the naming and shaming will be the same publications taking the advertising revenue? I wonder how much enthusiasm to naming and shaming there will be from those publications, when that might put their own advertising revenue in jeopardy.

[Ian Murray]

That is a wonderful point, and I think we now have our second candidate for the Committee—or given that helpful comment, perhaps not. The hon. Gentleman is right: there is a conflict of interest. The hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) mentioned the large full-page adverts that supermarkets produce relating to fair trade. Indeed, if it is about advertising revenues, there will be a conflict of interest, and I hope that the adjudicator would take that into account. If fines were included in the Bill, an adjudicator could balance up what would be the best punishment for a particular crime and deal with it in that way. By hamstringing the adjudicator from day one on fines, we are merely pushing down some of those routes by which questions would have to be answered.

Let me run through some of the issues relating to the adjudicator potentially being toothless, which is why we are calling for fines to be available to the adjudicator from day one. We are not the only people who are calling for that. In January 2009, the hon. Member for Somerton and Frome (Mr Heath)—the current Minister with responsibility for agriculture and food, who has been chuntering on about fines for the past few minutes—said, when he was an Opposition spokesperson all those many months ago, that there must be “an ombudsman with teeth” to ensure that farmers get a fair deal. I wonder whether he and his colleagues will support our amendments in Committee to give the adjudicator such powers, because they did not support them in the other place. He is not the only one. The hon. Member for Tiverton and Honiton (Neil Parish) said last year:

“I agree with my hon. Friend and other Members that the adjudicator must have real teeth so that they can take action to stop abuses.”—[Official Report, 5 April 2011; Vol. 526, c. 240WH.]

Just this weekend, a host of stakeholders wrote an open letter to The Sunday Telegraph. It is worth my quoting from it, because it touches on the crucial part of the Bill:

“Sir, Having got the Groceries Code Adjudicator Bill this far, the government will be scoring an own goal if it denies the supermarket watchdog the one tool that will make it effective: the power to levy fines from the outset. The evidence of supermarkets’ unfair treatment of suppliers—which includes farmers both here and in developing countries—is all too clear. Watering down the bill so that penalties only go as far as ‘naming and shaming’ will not be a sufficient deterrent and the Adjudicator risks failing in its job to hold supermarkets to account.”

That letter was signed by ActionAid UK, the National Farmers Union, the Federation of Small Businesses, the Campaign to Protect Rural England, the National Federation of Women’s Institutes, Traidcraft, the Tenant Farmers Association, the Country Land and Business Association, the Independent Fruit Growers Association, the Catholic Agency for Overseas Development, Friends of the Earth, War on Want, RedOrange and Great Glemham Farms. Clearly, then, there is a great movement to provide for fines in the Bill, and I cannot understand why the Government have not listened to the letter.

We are in danger of creating this toothless tiger—I have “tiger”, but it could be a dog, I suppose. Let us imagine an old-fashioned circus act. Where is the fear in a circus clown putting his head into a tiger’s mouth, only to have his neck viced by the tiger’s gums? There is no way we can put fear into the hearts of the supermarkets with an adjudicator that does not have the power to fine. Providing for fines in the Bill does not mean that fines should be imposed on retailers randomly—I hope there would never have been sufficiently serious breaches to require the invoking of the power—but allowing the adjudicator to have the power easily to hand might influence the retailers’ actions and go some way in preventing serious breeches of the code.

Clause 9 gives the adjudicator the power to fine retailers, subject to permission from the Secretary of State. Even if the adjudicator decided that the power to fine was necessary, several considerable hurdles would have to be jumped. First, the adjudicator, who would be best placed to decide whether fines were appropriate, would have to publish guidance in deciding the amount of financial penalty—a point that goes back to the Minister’s intervention. Secondly, once that had been given to the Secretary of State, he would have to consult stakeholders on the guidance. Finally, a statutory instrument would have to be presented to Parliament and passed by affirmative resolution. This hugely drawn-out process will do nothing to instil much-needed confidence in farmers and small businesses that might have been severely affected by a breach of the code by a retailer that the adjudicator thinks merits a fine.

We must trust the adjudicator to issue remedies fairly. By not providing in the Bill for the power to fine, the Government are in danger of scoring an own gaol, as said in The Sunday Telegraph letter from ActionAid. Indeed—if I may continue with the footballing analogy—a red card could be issued. It would be available to the adjudicator in the case of a penalty, but it would not be in its breast pocket, where it could be issued fast and effectively against the offender if necessary. Essentially, we are saying in the Bill that if the referee wants to issue a red card, he will have to ask the Football Association, after which the FA will consult on its use and then pass a new law to allow it to be used. I much suspect that the match would have finished many months before the decision is made.

The Business, Innovation and Skills Committee and the Environment, Food and Rural Affairs Committee have also said that the power to fine should be provided for in the Bill. Furthermore, in a recent joint statement, the Grocery Market Action Group, ably chaired by the hon. Member for St Ives and made up of 23 organisations from across the farming, international development, environmental and small business lobbies, called on the Government to give the adjudicator the power to levy fines. I ask the Minister, again, why she is not listening to the entire industry when it comes to fines.

I turn to the intermediaries. At the bottom of all this lies the nagging doubt that many of the alleged abuses will not be resolved even by the presence of a perfectly functioning adjudicator, because the problem is in the code itself, not its implementation. Central to this idea is the code’s limited scope—this point has been raised by voices across the sector—as much of the bad practice occurs at the level of intermediaries not covered by the code and therefore the adjudicator. For example, let us imagine that a supermarket has a ready meal supplier, but decides it wants fewer carrots in the ready meal and goes through the proper GSCOP processes to remove carrots. The supermarket can do that legitimately under the code, and that is only right. However, the ready meal supplier will buy those carrots from a carrot supplier, and could therefore dismiss one of its suppliers of carrots or change the terms of the contract without any recall to the groceries code. In that example, nothing would have gone wrong according to the groceries code, so we could see suppliers further down the chain being harmed quite considerably by the decision of an intermediary.

Equally, that binary view of the market seems inappropriate when the supplier is a huge manufacturer of branded goods, such as Unilever, Kraft, Nestlé or Coca-Cola, whose turnover may exceed that of even the retailer. We are protecting the relationship rather than the carrot producer further down the chain. The adjudicator will be required to recommend changes to the code to the Office of Fair Trading, yet the British Retail Consortium claims that the OFT has taken no action to offer feedback on the annual reports that its members have already submitted under GSCOP on their implementation of the code or even to publish them.

Many farmers and growers are currently not covered by the code, as they do not directly supply the 10 largest retailers. Nevertheless, they are often the ultimate victims of unfair behaviour and the transfer of risks and costs. We hope that ensuring that retailers comply with the code will resolve those issues. If, despite the adjudicator’s best efforts, those problems persist, primary producers will continue to struggle to make a fair return for their enterprises and consumers will continue to suffer from the subsequent lack of investment. That is why it is critical that the adjudicator should have the power in the Bill to keep the code live, to enable such issues to be dealt with if the adjudicator deems that to be necessary. May I ask the Minister what consideration she has given to those concerns and whether she will come back to us in Committee with an assessment of the issues affecting intermediaries?

Finally—

--- Later in debate ---

[Mr Bailey]

My hon. Friend makes an important point, which I was going to come on to. An individual’s shopping habits are determined by all sorts of factors. I do not know what evidence there is, but I would guess that the perception of value for money at different retailers is an important criterion. Other factors are accessibility and personal habits and traditions. I do not see that the publication of an adverse report by the groceries code adjudicator about a particular retailer would affect many people’s shopping habits and, therefore, the bottom line of that retailer.

[Mr Spencer]

Does the hon. Gentleman recognise that the opposite might be true, in that a supermarket whose brand is built around price point might gain kudos from squeezing its supply base so tight that it can deliver the lowest prices to the consumer?

[Mr Bailey]

The hon. Gentleman makes an interesting point. I am sure that one could develop an argument along those lines. I hesitate to do so because I have an innate faith in good will and do not believe that a supermarket would be so unscrupulous as to do that. Perhaps he does not share my innate faith in the good will of supermarkets.

--- Later in debate ---

[Andrew George (St Ives) (LD)]

It is a pleasure to follow the Chair of the Business, Innovation and Skills Committee, the hon. Member for West Bromwich West (Mr Bailey). It was interesting that in his introduction he declared an interest as a Labour and Co-operative party Member. It has been my privilege over many years to chair the Grocery Market Action Group, which has been mentioned in this debate. Reflecting on the discussion about naming and shaming, I should perhaps name and fame the stores that indicated that they would support the measures proposed in the Competition Commission’s report of April 2008 when we wrote to the stores that would be affected. Marks and Spencer, Waitrose and Aldi were the three stores that indicated that they would support the measures, with some reasonable conditions. In spite of my efforts to talk to the Co-op, I was surprised that it was not prepared to sign up at that stage. However, the regulation has been in place since February 2010, and there are opportunities now for all those stores to reflect on that.

Like others, I want to commend many people who have been the architects of this extremely welcome measure. The hon. Member for Ynys Môn (Albert Owen) has already been mentioned—indeed, I mentioned him in an intervention. His private Member’s Bill did a great deal to pave the way for the measure. Former Members, too, made significant contributions. In 1998, Colin Breed, the former Member for South East Cornwall, made a valiant effort to put the matter on the agenda. He undertook an inquiry, which stimulated a further inquiry by the Competition Commission, entitled, “Checking out the Supermarkets”. He stimulated much activity, which is reaping the appropriate reward today on the Floor of the House. The former Member for Stroud, David Drew, was also a significant contributor to the debate, as was the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski), who is not in his place, but was present earlier. I have had many conversations with the hon. Member for Tiverton and Honiton (Neil Parish), who has been a strong supporter of the proposal for a long time. I also commend the Minister for an excellent exposition of the purpose of the measure, and the Government’s strong support for what is now Government primary legislation, even though its origins were a private Member’s Bill under a previous Government.

I do not need to repeat much of the background to what we hope will be legislation in perhaps weeks—certainly not many months. It is worth reflecting on the fact that, when I was originally involved, and certainly when the former Member for South East Cornwall engaged in the work, there was no party political support for regulation, even among Liberal Democrats, who subsequently adopted the proposal in their 2005 manifesto. In those days, the proposal that there should be any regulation was advanced only against all the odds. Even the National Farmers Union proposed a buyer’s charter and set its face against regulation, even though I and others had proposed it. It has therefore taken many years and a glacial pace to achieve progress. To be in the position whereby the proposal had all-party support at the last general election was remarkable. The larger parties clambered on board at the last minute, only months before the election. However, we had almost created a “who blinks first” scenario as we went into the general election, and all parties came on board and supported the proposal.

Significant commendation should be given to Peter Freeman, chairman of the Competition Commission, and the whole commission, for an excellent inquiry, which commenced in 2006 and concluded in 2008. It considered all the evidence that many of us had been encouraging the competition authorities to scrutinise for many years. It reached the telling conclusion that, in some cases, as the Minister said, the supermarkets were guilty of transferring excessive risk and unexpected costs to suppliers, with the consequent detrimental knock-on effect on not only suppliers and their capacity to continue trading, but consumers and, indeed, innovation in the retail sector.

I do not approach the matter from the position that supermarkets are wicked. Their activities are entirely rational. Had all of us been in the same position, and we had not maximised all our market muscle to advance the interests of our company, and we had therefore lost market share in a cut-and-thrust market, we would have failed in our duties. However, the question is, “When does effective, clever and successful use of power become abuse?” The Competition Commission rightly identified that we have long passed the point at which that use of power has become abuse, as the many examples that have been given today show.

The previous Government rightly supported changes to the common agricultural policy, which forced farming to become much more market facing. Price support policies were done away with, the protections that farming was so used to in this country were no longer in place, and the industry needed to live or die by the marketplace. However, how could farmers and growers succeed or survive in that climate? I appreciate that many growers, pig farmers and others struggled to survive long before those changes. Nevertheless, leaving that aside, how could farmers survive when, as Prime Minister Tony Blair said, the supermarkets had got them in an arm lock? One could argue that they had got them in an even more painful position at times. The supermarkets were able to control market conditions, which was a conclusion of the previous Competition Commission report.

What are we trying to achieve? It has always been my view that if supermarkets have nothing to hide, they have nothing to fear from embracing the Bill. I have said to the supermarkets that, if they are clever, they should embrace the proposal and see it as something good. The hon. Member for Camborne and Redruth (George Eustice) suggested that there should be a panel to review the supermarkets’ success in applying the code. My view is that, if the supermarkets are prepared to embrace and invest in the proposal, there would be a fair trade regulator, which could give a mark to each supermarket to show whether it was a fair trader and grade it accordingly. Supermarkets could then perceive the code as a promotional tool rather than a stick with which to beat them.

Fining has predominated today’s discussions and will doubtless do so in Committee. After all these years, I do not want to risk any further delay in implementing the proposal. I would not like any amendment to the Bill to cause such delay. Will the fear of reputational damage be sufficient to persuade supermarkets to apply the code effectively and not to engage in the sort of practices that got us into the current position? Of course, I am on the side of those who want fining on the face of the Bill, but I believe that reputational damage has an impact. I remember the days when genetically modified technology was introduced and available to the supermarkets. Non-governmental organisations undertook a lot of campaigning, which dissuaded the supermarkets from putting GM products on their shelves. If there were adverse reports, the campaigning bodies—if they were doing their job—would draw the attention of customers and the public to the failure of those supermarkets.

[Mr Spencer]

On that point, there cannot be a more passionately felt issue than animal welfare. Does the hon. Gentleman acknowledge that the British pork industry had much higher standards of animal welfare than its counterparts in Europe, but that that made no difference to whether consumers bought British or foreign pork?

[Andrew George]

There is evidence and evidence to counter it on all sides, and that takes us to a point that the hon. Member for North Antrim (Ian Paisley) made earlier. Providing that customers who are buying British are reassured that it genuinely is British and not some kind of subterfuge, the point about animal welfare is relevant. Customers understand that significantly higher animal welfare standards have been in place in the UK for many years, particularly in the pig industry, and that is one of those reassuring messages. I agree, however, that it does not always work, particularly when the message becomes confused.

When I intervened on the Minister, I said that there was likely to be a lot of evidence of contraventions of the code from the time it was first put in place on 4 February 2010. My concern is that the position of adjudicator will be such that they will operate for only one day a week from the Department for Business, Innovation and Skills, and when they are fully operational, they will work three days a week with three or four members of staff. I also understand that the Gangmasters Licensing Authority already wants to present 1,000 pieces of evidence to the adjudicator, and I am concerned about whether sufficient resources will be in place to deal with all the work, cases and evidence that may be brought forward.

--- Later in debate ---

[Mr Mark Spencer (Sherwood) (Con)]

Let me first draw attention to my entry in the Register of Members’ Financial Interests. As a farmer, I am in the fortunate position of not supplying one of the major supermarkets, but I do, of course, know plenty of people in that position, including many of my constituents.

I broadly welcome the Bill. It is fantastic, it is timely, and the Government should be congratulated on the way in which they are addressing the current problem. It was with some frustration that I listened to the criticism from the Opposition Benches that it had taken two and a half years for legislation to be presented, given that, when in government, they presided over the rise of the supermarkets and the power that they gained.

[Fiona O’Donnell]

Rather than referring to “criticisms”, perhaps, in this new atmosphere, we could refer to suggestions for improvements—which, in all fairness, have come not just from Opposition Members but from Government Members.

[Mr Spencer]

I shall be talking about possible improvements. I think that there is a fair amount of cross-party agreement on the way in which the Bill can be improved. However, I also want to talk about some of the good practice that we see out there. We have heard a great deal of criticism of supermarkets and the way in which things work, but there are plenty of examples of supermarkets and farmers working closely together to improve the supply chain, add wealth to both businesses, and bring employment to rural areas. I think we should recognise that there is more to be celebrated than there is to be criticised, although we need to ensure that when things go wrong, there is a way of stepping in to sort them out.

When I embarked on my business career, my grandfather told me that the definition of a good deal was “a bit for me, a bit for you, and then another deal”. I think that we have reached a stage at which the supermarket sometimes wields too much power in the relationship, to the extent that I almost feel obliged to make it absolutely clear that some of the practices that I intend to highlight bear no resemblance to the activities of any of my constituents. There is a genuine fear out there of blacklisting and being removed from the stocking lists of supermarkets, such is their power.

I think it worth examining the practices that have gone on in the agriculture industry and its relationship with supermarkets. The first that springs to mind, which no one has mentioned so far today, is the operation of payment terms, which the supermarkets have stretched to a point at which big business is being financed by little business. That applies not only to agriculture, but to many other UK industries in which little suppliers are delivering products to big suppliers. The big suppliers do not pay for more than 90 days, and the smaller producers are forced to borrow from their banks in order —in effect—to lend the money to them.

One of the most shocking practices, to which other Members have referred, is the practice of rejecting loads of products when the price of the market goes through the roof, when there is over-supply, or when the weather changes, as in the case of the strawberry industry. There is real abuse of the system when supermarkets are able to reject a load that is perishable and cannot be returned without giving any recompense to the primary producer.

I am told that when a contract is being negotiated with a supermarket, the first line of the negotiation relates not to the retail price, the production price or even the wholesale price, but to the margin that returns to the supermarket. The primary producer must guarantee that margin. That cannot possibly apply to any other relationship between supply and retail. Whether the product is cauliflowers, carrots, plimsolls or widgets, if the supermarket decides to arrange a promotion and reduce its retail value, the primary producer will lose out while the margin of the supermarket will be protected and never squeezed.

[Huw Irranca-Davies (Ogmore) (Lab)]

Does the hon. Gentleman agree that those margins are seen not only in the direct relationship between producers and major retailers, perhaps on contract terms, but throughout the supply chain? Sometimes a retailer will say “Well, it’s nothing to do with us, guv”, but somewhere along the line an intermediary will be saying, “We want those margins.”

[Mr Spencer]

That is a valuable point. There have been a number of references to the dairy industry, and to small dairy farmers all over the United Kingdom. It should be borne in mind that very few small dairy farmers deal directly with the supermarkets. They nearly always negotiate through a dairy producer, someone who is making cheese or yoghurt, or even a bottling plant. The hon. Gentleman has made an important point, and we shall probably need to consider it once we have sorted out the Bill.

Another important topic is that of promotions. Many consumers will no doubt think that “buy one, get one free” offers and other promotions show supermarkets’ generosity, as they must be shrinking their margins. The truth, however, is that it is the primary producers who pick up the tab for the reduced price of the product, and they are often also asked to increase the supply of that product.

Earlier in the year a series of adverts ran on TV promoting asparagus at half price. The weather had been so shocking that I do not think there can have been a single blade of English asparagus on the market at that time. I almost shuddered for our asparagus producers. Many of them had obviously signed a contract to supply a supermarket, and an advertising spot had been booked six months in advance, without regard to the weather. When that time slot in the calendar came, the adverts rolled out and asparagus producers were probably having to buy asparagus from Mexico or Spain to meet their contracts to supply that promotion. There is no flexibility in the system, or common sense from some supermarket buyers.

The worst practice, however, is backdating. A primary producer can supply a supermarket for two years, let us say, and then the supermarket can suddenly say to that producer, “By the way, we’re backdating the price of all that product you’ve supplied to us for the last 12 months, and you owe us £50,000.” That primary producer is then faced with the prospect of either finding that money from somewhere—borrowing it or taking it out of their bank account—or reneging on the contract and never being dealt with again. That truly is an abuse of power. I hope the grocery ombudsman will be able to stop such practices.

Key issues are what tools will be available to the ombudsman and how he will make sure the code of practice is adhered to. That brings us to schedule 3 and the subject that has been dominating the debate: if the adjudicator cannot fine supermarkets, will he have sharp enough teeth to ensure that the code is adhered to? I do not ask the Minister to commit to anything in his winding-up speech, but I ask him to assure us that he will have an open mind and will consider the Committee’s deliberations, and be willing to make an amendment if he feels that that is the right thing to do.

I reiterate that there is much more good than bad in this Bill and it represents a great step forward. With the will of the House and a fair wind, I think we can get to the right place for the primary producers, and also for our consumers, who want good quality food in our supermarkets at the right price, and, crucially, at a price that is sustainable.

Small dairy farmers begin the process of producing milk by choosing an animal to breed. They then breed that cow, which takes nine months, bring that heifer to full production, which takes two years, and then, finally, they get milk from that animal. It takes four years of hard work and investment to get to the point of supplying any milk, therefore. In that time, supermarkets can change their contract on an hourly basis. The whole of the risk is with the primary producer, and at present there are occasions when the whole of the reward is with the retailer. I sincerely hope that we can start to redress the balance in that relationship, to the benefit of supermarkets, primary producers and consumers.

--- Later in debate ---

[Neil Parish]

My hon. Friend makes an excellent point. Much work was done by the previous farming and food Minister, my right hon. Friend the Member for South East Cambridgeshire (Sir James Paice), to get voluntary dairy codes in place. The Minister of State, Department for Environment, Food and Rural Affairs, the hon. Member for Somerton and Frome (Mr Heath) is carrying on that good work. The hon. Member for Brecon and Radnorshire (Roger Williams) said that we need to be sure that the groceries code adjudicator will be able to look at the voluntary codes and contracts. I repeat that it is essential that a share of the money that the consumer pays for his or her product goes to the processor and the producer.

We are moving into a world of some 7 billion people. That world does not have oceans of cheap food. In many ways, that is a good thing, but it is also difficult for consumers across the world. There are people in this country who are struggling to buy food and it is essential that they get a good deal. However, in order to get a good deal, we must ensure that the producer, be it of milk, beef, lamb, carrots, potatoes or other vegetables, gets a return. If they get a return on their investment, they will produce more food and do so efficiently. That is the way to ensure that we can deliver products at a good price on the supermarket shelf.

Some of the ways in which large buyers and retailers have abused their position over the years have made food prices higher rather than lower. In the short term, when the supermarkets have a price war that drives prices down, it seems like the consumer is getting a good deal, but it drives many people out of business, meaning that there is less production than there was before.

Until now it has been possible to go around the world and bring in the extra product that is needed. However, to take the meat sector, where is the beef that is out there in the world? Forty years ago, the Chinese were eating 500,000 tonnes of beef a year. Now, they are eating 5 million tonnes of beef a year. The UK produces about 1 million tonnes of beef, so one can see that instead of eating half as much beef as we produce, China is now eating five times that amount. All the beef that used to be sloshing around in Brazil and Argentina, which could once be bought cheaply and used, dare I say it, to drive down the price of beef in this country, is no longer there. That is why it is important not only to get things right for the consumer and the trade, but to ensure that we will have reasonably priced food in the future.

In the summer, 3,000 dairy farmers protested outside Westminster, and we had a huge meeting. It was absolutely right for the farmers to protest. They had some of the worst weather that I have seen in my lifetime, and the cost of producing milk went up while the price went down. However, is it right that those farmers with family farms have to march up the hill every time and show how desperate they are to make a fair living? Is it right that we have to use social media to name and shame supermarkets? Again, the hon. Member for Brecon and Radnorshire made that point. It is not right. There is something wrong with the process of trade in this country, and that is why the groceries code adjudicator is so important.

We set much store by the Bill. Other hon. Members referred to the common agricultural policy and the single farm payments. All Members want farmers to get more money and more of their income. Farmers would much rather have more of their income from the market—from what they produce—than from what they receive in the single farm payment. They would thus not be so vulnerable to the politics of not only Britain, but the European Union.

The rising population, the need to produce more food from the same amount of land throughout the world, global warming, and the fact that northern Europe and Britain will need to produce much more food, mean that we should be able to get a good price for that food. However, if we have not got the market right, the price of food will not go back to the producer, and we will not produce the amount of food that we need.

There is a need for food security, and a moral issue about producing food. Some people in the world cannot afford to eat and it is therefore important that we produce more food—sustainably, and in an environmentally and animal-welfare friendly way. That is what our consumers want: to be sure that, when they go to a supermarket or a small retailer, they get they get a fair deal, and that that also applies to the producer and the grower, not only in this country, but in developing countries. Our supermarkets often do not give producers throughout the world a fair deal. Let us hope that the groceries code adjudicator can do that.

We have rightly talked a lot about the retailer and the producer today, but we must remember that nearly 500,000 people in this country are involved in food processing, and 80% of the food that they process is grown and produced in this country. The Bill is therefore good not only for the producer but for the processor and I believe that, in the end, it will be good for our supermarkets.

Much as one would perhaps enjoy a major war with the supermarkets and the big retailers, it is ultimately not a war that we want because where do 70%, 80% or even 90% of the population buy their food? They buy it in supermarkets—they want to shop there. We must be sure that, when they shop, the groceries code adjudicator will have enough teeth to ensure that the consumer, the producer and the processor—everyone in the food chain—get a fair deal.

[Mr Spencer]

Does my hon. Friend acknowledge that farmers need to bear some of the responsibility? Many dairy farmers, instead of selling to a co-operative, decided to trade direct. If they stuck together, they would be much stronger. Some farmers almost pay gate money to obtain those direct contracts, and steal contracts from other farmers, thereby contributing to their own downfall.

[Neil Parish]

I welcome my hon. Friend’s intervention. I often say that farmers’ great strength is their independence, although that can also be their great weakness. I welcome the deal between Milk Link and Arla Foods because this country now has a co-operative that controls some 25% of the milk, giving it real clout in the marketplace. It is right for farmers to come together and co-operate, and the Bill will help such co-operation within the farming, processing and retail sectors. As I said, no retailer has anything to fear from the groceries code adjudicator if they have the correct practices, and that is right. Finally, I say again that the Government welcome this Bill, but the Business, Innovation and Skills Committee and the Environment, Food and Rural Affairs Committee must look to put real fines in place so that those who abuse the grocery trade can be brought to book, and not only named and shamed, but properly fined.

Ash Dieback Disease

Mark Spencer Excerpts

Monday 29th October 2012 Commons Chamber

[Mr Heath]

That is absolutely right. We have actually allocated £8 million from existing resources for new research into tree health over the next four years, which I hope will go some way to supplementing what is already in place. There are question marks in the international scientific community over such things as the pathology of the organism and its means of transmission, which we need to explore more fully. The fact that those countries with a high level of infestation—Denmark, Germany, Poland and others in northern Europe—still do not have the answers to some of those questions indicates the complexity of the issue. It is not the case that Britain has not been playing its part; scientific research sometimes takes time.

[Mr Mark Spencer (Sherwood) (Con)]

Will the Minister assure the House that his officials are working with importers and nurseries to ensure that no affected stock remains that may be planted in the future, so that forests such as Sherwood stay not only clean and green, but great places to visit?

[Mr Heath]

We will continue the programme of inspection that has identified those saplings that may be a risk and destroyed them. The ban has been in place on a voluntary basis—it is now on a statutory basis—to ensure that nothing came into the country over this summer and therefore was not available for the next planting season. We can be reasonably assured that infected trees will not be planted this winter—at least those from commercial sources—but we need to maintain vigilance, which we certainly will do. We will also work closely with the industry, which understands how dangerous the disease is and wants to co-operate. I am grateful for the help it has given to the Department in identifying and dealing with the threat at an early stage.

Badger Cull

Mark Spencer Excerpts

Thursday 25th October 2012 Commons Chamber

[Mr Mark Spencer (Sherwood) (Con)]

I am delighted to be called to speak, but of course disappointed that we are under such time restriction. I suppose it is a symptom of how engaged Members are with the subject that they want to get on their feet and speak about it.

I draw Members’ attention to my declaration of interest. As a Nottinghamshire farmer I am very much interested in the subject, because we have a healthy badger population and I am keen to ensure that it stays that way. We have talked about how TB is spreading across the south-west, and it is now in Derbyshire and certainly spreading towards me, which makes me fearful.

As a farmer operating in that part of the east midlands, it is difficult not to take offence at some of the things that have been said today. It has been implied that farmers do not care about animals and do not have animal welfare at the top of their agenda. I put it to individuals who make those accusations that someone simply does not get out of bed at 5 am every day of the week, every week of the year to look after animals if they do not care passionately about their welfare. The implication that people want a cull for the sake of a cull causes great offence in some rural areas, and that needs to be addressed vigorously.

For me, this is not about badgers. It is about TB. It is ironic and pretty disappointing that TB is not mentioned at all in the motion. Members on the opposite side of the argument have attempted to skew it away from tuberculosis control and solely on to badgers. We all have the same aim, which is to prevent the culling of cattle and the spread of bovine TB, and we have to use the tools that are available to us. It would be wrong to rule out one of those tools at this early stage.

I do not want to cull a single badger or a single cow, but this disease is out of control. We are not controlling it. One Opposition Member actually said that we should do nothing, but that seems to me like the Tinker Bell approach of standing still, closing our eyes and hoping it gets better. That does not seem like the answer to me. We have to take action and do something to control the spread of the disease.

We all welcome the fact that a vaccine is coming very soon, but it has been coming very soon for the past 15 years. In fact, we heard earlier that it is months away. I am delighted if that is the case, because then the vaccine will be here by next summer. However, if we get to next summer and no oral vaccine for badgers is available, we will be in the same position as we are in today. We have to take action to prevent the disease from spreading.

We have heard Members say that we should vaccinate badgers, but the practicality of that seems to have escaped them. Individual badgers would have to be physically caught and tagged to ensure that we could identify which had been vaccinated and which had not, so that we did not waste our time revaccinating the same badgers. We would have to go through the whole process again every 12 months, which is simply impractical.

We must somehow break the cycle of infection from cow to badger, badger to cow, badger to badger and cow to cow. We are doing one part of that, and by taking out infected cattle we are breaking the spread of the disease between cows, but we are not tackling the infected badger population, and we must find a way to do that. A vaccine is not available, and unfortunately the only other tool is a cull. We must make use of all the tools available if we are to be effective.

We are short of time so, in conclusion, we must remember the impact that bovine TB is having on UK food prices and milk production. We all get out of bed in the morning and enjoy milk on our cornflakes, but if we do not tackle this issue, the supply of fresh milk from our dairy farmers will be under severe pressure—and I, for one, want my cornflakes in the morning.

Oral Answers to Questions

Mark Spencer Excerpts

Thursday 25th October 2012 Commons Chamber

[Mr Heath]

The hon. Gentleman should recognise that, as I said earlier, what we are talking about is poverty. One thing that I have always stressed is that poverty exists right across the country, in rural areas as well as urban ones, and we need to deal with it. The Government have been taking action to help protect the most vulnerable, and we will continue to do so.

[Mr Mark Spencer (Sherwood) (Con)]

What message would the Minister give to my local authorities, which are taking land out of food production to develop on the green belt when there are perfectly adequate brownfield sites available in the borough?

[Mr Speaker]

Order. That is tangentially related indeed to the question, which is not to be encouraged. I am bound to say that a brief reply of a sentence will suffice.

Bovine TB and Badger Control

Mark Spencer Excerpts

Tuesday 23rd October 2012 Commons Chamber

[Mr Paterson]

We have been round this course already. I recommend the hon. Lady goes back to Lord Krebs report of 1997. The executive summary, written by Lord Krebs, is a brilliant synopsis of the problem. He said that the evidence of a link between badgers and the disease was “compelling”. He is absolutely clear that there is a link. The debate is on how the cull should take place, which is what he has criticised. What we are proposing is pilots, and we believe we have come up with a more efficient and effective method. In case the hon. Lady missed the statement, I repeat that we are going for a much larger area with hard boundaries, such as major roads, motorways and rivers, and a more effective system of culling. That is entirely consistent with the scientific advice from Krebs and the RBCT.

[Mr Mark Spencer (Sherwood) (Con)]

Thank you, Mr Speaker, for assisting me in trying to lose weight.

Farmers in Nottinghamshire find themselves in a fortunate position. The county is TB-free, so badgers are TB-free, but the disease is spreading towards us from Derbyshire. My farmers will be glad that the Secretary of State will use the whole toolbox to prevent their cattle becoming infected, but farmers in two-year and four-year testing parishes will want to know whether the testing intervals will be reduced in clean areas?

[Mr Paterson]

I do apologise, Mr Speaker. I was speaking to the Minister of State and missed my hon. Friend’s question at the end. Could he possibly pose it again?

[Mr Spencer]

There is a conspiracy to make me bob up and down.

Farmers in Nottinghamshire find themselves in a TB-free zone and currently undergo testing on a four-year or two-year cycle. They will be concerned that there will be an attempt to reduce the interval between tests in clean areas. Does the Secretary of State have any plans to do so?

[Mr Paterson]

My hon. Friend is absolutely right to raise that point. The annual testing that we glibly talk about poses an enormous burden on farmers and is a fraught event. Virtually the whole of the west of England is on annual testing, and he is absolutely right to fear for his farmers in Nottingham that the interval might be reduced, because putting a herd through the skin test is an horrendous experience. That is another good reason to get on top of the disease quickly, before it spreads into his area.

Seasonal Agricultural Workers Scheme

Mark Spencer Excerpts

Wednesday 20th June 2012 Westminster Hall

[Mr Mark Spencer (Sherwood) (Con)]

I congratulate my hon. Friend on securing the debate. I hope he recognises that we are not talking about unskilled labour. The dexterity and speed with which some of those people can operate machinery and harvest shows great skill, and such skills would enable people to go on to employment later in their lives.

[Gordon Henderson]

Absolutely right—and training prisoners to become agricultural workers might encourage them to work on the land when they leave prison, which would solve another problem. One of the problems with getting prisoners to work, however, is that unemployed people who are not in prison resent inmates being given jobs that might otherwise go to them. Encouraging prisoners to take jobs that other domestic workers have turned their backs on, such as those jobs in agriculture, would solve that particular problem.

I have spoken to the governor of one of my three local prisons and he was keen to trial such a scheme. Cynics may say that prisoners would not want to work on farms, but until relatively recently Standford Hill open prison on Sheppey, in my constituency, operated a farm that supplied produce to the prison estate. The workers on the farm were, in the main, inmates and they were bitterly disappointed when the previous Government decided to close the farm down.

Even if such schemes were successful, there would still be a need for more labour than the domestic labour force could or would supply. As I said earlier, the present SAWS arrangements finish in 2013, but the Government have not yet made it clear whether they intend to introduce a successor scheme. I urge Ministers in the Department for Environment, Food and Rural Affairs to press the Home Office to deal with the problem as a matter of urgency, bearing in mind that we are already in 2012. Farmers in my constituency are keen to see a replacement for SAWS in place before the end of this year. They want any new scheme not only to recognise the continued need for a certain number of overseas workers, but to maximise the potential use of local labour.

The National Farmers Union has put together a proposal that includes the following criteria, which it believes are critical to the overall architecture of a new SAWS scheme. Any new scheme should be overseen by the Home Office, as SAWS is now, and be managed by licensed operators, again as now, with an annual quota decided by the Home Office and the Migration Advisory Committee. A new scheme should include a robust system for checking arrivals, departures and return to the home country. It should go back to the origins of the original scheme, as a youth work experience programme. It should require operators to continue to recruit from the European Union in preference to non-EU applicants. However, a new scheme should be available to university-level students of agriculture or agriculture-related subjects from any country, with return arrangements with the UK.

To be consistent with Government policy, the new scheme should be contained within tier 5 of the points-based temporary workers and youth mobility system. As such, it could meet the UK’s cultural and international objectives. It should have a specific set of standards that are subject to an accreditation scheme managed by SAWS operators. Permission to work and to remain in the UK should be via a work card or specific visa category, and restricted to the dates on the work card, with a maximum period of six months.

Under the previous SAWS programme, agriculture students were often set assignments to complete during their placement. That should be encouraged under a new scheme. A more robust educational element could include, for example, the provision of English language lessons and on-the-job training. Growers should be encouraged to provide cultural activities in the local area to enable the community and the workers to experience each other’s culture.

In addition, the Government should try to encourage British citizens to work in the agriculture industry. Changing perceptions and improving the career development and progression opportunities in the horticulture sector are an important part of achieving success. The Government should consider adapting the UK benefits system to allow those on benefits not to lose their entitlement while undertaking work on a daily call basis. I am convinced that that would encourage inactive citizens to take on seasonal work.

Understandably, the employment of prisoners and ex-prisoners is a touchy subject, and employers approach it with a certain amount of caution. I believe that an offer of financial support for employers to train and mentor prisoners and ex-prisoners might encourage more widespread take-up under the scheme. Consideration should be given to a summer programme carrying vocational and academic credits in addition to cash pay. Hopefully, that would attract more students to work in the industry.

I turn to two issues of concern to my local farmers that will have an impact on the future prospects of employment in the agriculture industry in my area. First, reforms to the common agricultural policy are being discussed, and farmers are worried about the way in which the Department for Environment, Food and Rural Affairs seems to be trying to divert funds from pillar 1 direct payments to pillar 2 rural development funding. In particular, the greening component, which represents 30% of the value of direct payments, is conditional on additional environmental action on their land. That includes cultivating a minimum of three crops every year, retaining areas of permanent pasture, and ensuring that 7% of arable land is an environmental focus area.

British farmers believe that such a proposal would put them at a disadvantage because many of them have already adopted additional environmental measures on their farms through agri-environment schemes, and it would be difficult for them to set aside more land to comply with the greening proposal. Farmers believe that greening will reduce their overall competitiveness, making them more rather than less dependent on direct payments. I would welcome the Minister’s acknowledgement of those concerns, and an assurance that they are being addressed.

Finally, my local farmers are worried about the delay in abolishing the Agricultural Wages Board, which they maintain restricts employers by demanding that they pay full wages for 16-year-olds, and which makes it difficult for agricultural workers to get a mortgage because they do not receive a salary. I would welcome an indication from the Minister of the proposed timetable for scrapping the board.

--- Later in debate ---

[Huw Irranca-Davies]

The hon. Gentleman knows the area well, and an advantage of the devolution of administration and powers is that we can, and should, learn lessons about differential applications across the UK. We need to do more within the joint committees that bring the devolved Administrations together and in discussions between Ministers, so that those lessons can be learned. He makes a good point. We should not always try to work from a completely blank sheet of paper, but look at what works well elsewhere.

Will the Minister provide us with the timetable for changes to the GLA? His written statement of 24 May was not clear on the consultation timetable or process. Is he in a position to provide us with that now? Will he confirm that the GLA will have the necessary resources to tackle worker exploitation in the relevant sectors, even under the new approach? We all want the GLA, in its revised form, to be lean, mean and effective, but that requires resourcing, so I seek assurances on that. Will he also provide information on how he intends the GLA to work more collaboratively with other organisations, including the Serious Organised Crime Agency?

I want briefly to talk about the abolition of the Agricultural Wages Board, which I have discussed on several occasions with the Minister and other hon. Members. He knows how strongly I and the Labour party feel on the issue. That strength of feeling is shared by some of the farming unions, such as the Farmers Union of Wales, and by farm workers and the Welsh Government. The AWB protects 152,000 farm workers in England and Wales and has mirror effects on others in the sector. It ensures that people working in the countryside, from apprentices to farm managers, get a fair deal. In its 62-year history, it has provided basic pay and protection for fruit pickers, farm labourers and foresters. That covered wages, but also holidays, sick pay, overtime and bereavement leave.

The Minister will no doubt say—we have had this discussion many times—that many farmers pay well above the agreed wage rates; and I do not disagree. He may also say that there is a national minimum wage—so what is the fuss? However, the AWB does far more than set pay minimums, and when it is gone, the pay and other terms and conditions are threatened. The wages of 42,000 casual workers could drop as soon as those workers finish their next job, once the AWB is gone. It is probable that the wages of the remaining 110,000 will be eroded over time. Ministers have said in the past that farm workers will be protected by the minimum wage, but only 20% cent of farm workers are on grade 1 of the AWB. The rest earn considerably more than the minimum wage. The downward pressure on higher grades in economically difficult times will be high. Children who do summer jobs or part-time jobs currently receive just over £3 per hour, but they are not covered at all by the national minimum wage. They will have no wage protection—unless the Minister wants to correct me on that—when they do holiday work, as has been mentioned, or weekend work, after the board is abolished.

[Mr Spencer]

Does the shadow Minister recognise that agriculture has changed dramatically in the past 20 years? A combine harvester costs £250,000 and no farmer will put an unskilled member of staff in charge of machinery of that value. We have heard from my hon. Friend the Member for West Worcestershire (Harriett Baldwin) about laser machinery for measuring asparagus. The salaries that are now attracted in agriculture are far above those provided for under the Agricultural Wages Board. I wonder whether times have moved on and it is no longer necessary.

[Huw Irranca-Davies]

Time will tell if we abolish the board. However, not only has the Farmers Union of Wales welcomed its retention in Wales—and discussions are ongoing to see how that can take effect if the AWB is abolished in England; it has said it welcomes the clarity that the board gives on a range of conditions for agricultural workers. That is particularly true for small farmers who do not want to get into endless discussions about individual contracts, with different people on different wages for essentially the same job, and consequent disputes. The AWB provides a very good service for an industry that is often fragmented and disparate. The point that the hon. Member for Sherwood (Mr Spencer) makes about modern technology and food processing is valid for many parts of the industry, but things are not uniformly like that. That is why the Labour party sees the AWB as providing a safety blanket, to ensure that all workers’ terms and conditions are properly protected.

DEFRA’s own figures suggest that the abolition of the AWB will take £9 million a year out of the rural high street through holiday and sick pay alone—that will be £9 million coming out of the rural economy, because it is not going into people’s pockets in one way or another. That is not an insignificant figure, and it is worthy of further consideration. In the 18 months or so since the Government announced their intention to abolish the AWB, a lot has changed. The economy has gone into a double dip recession. The cost of living has risen dramatically. Food and fuel prices have risen well above inflation. Overall unemployment is up, and youth unemployment is chillingly high at more than 1 million. As we watch developments on the continent unfold day by day, it appears there will be no improvement in people’s circumstances for some time yet. A study commissioned by The Guardian and published this week showed that almost 7 million working-age adults are living in extreme financial stress, from pay cheque to pay cheque, one push from penury, despite being in employment and largely independent of state support. Many of those will be agricultural workers in rural communities.

I ask the Minister to think again. Why, against that backdrop, do the Government insist on pressing ahead with the policy, taking money out of the rural economy and the pockets of rural agricultural workers, and making things harder for people, many of whose wages will fall as a result? Those in rural areas already face significant challenges in housing, transport and access to schools. The abolition of the AWB may prove another difficult hurdle to overcome. However, if the Minister is determined to press ahead, I want to ask some additional questions. We are all awaiting an announcement on when the AWB will be abolished, but we have not had that clarity yet. Yesterday evening, I met with the farmers unions—and some farmers unions, of course, support the abolition. They were asking when there would be clarity and a timetable: when will it happen? When does the Minister intend to lay an order before the House abolishing the AWB? Farmers’ patience is being stretched. In the mean time, can he confirm that negotiations with the AWB for the year ahead have been concluded? Will the pending abolition affect those? Has he asked his Department to reassess the proposals in the light of current economic circumstances? If not, why not?

I recently submitted a freedom of information request to the Minister’s Department for the impact assessment of the abolition of the AWB. It was rejected. No doubt he will explain why, and give the normal Whitehall reasons, but his response implied that the assessment would be published soon, so when will we see it? We want to get behind the detail, to see what the effect will be on rural communities. In the absence of the impact assessment, will the Minister guarantee that, on the abolition of the AWB, children will not be paid below the minimum wage, that the wages of workers in AWB pay bands will not be depressed, that rents on farm cottages will not rapidly escalate to full market value, or tenants be turfed out because they cannot afford them, and that when new recruits are taken on it will not be on inferior terms, creating a two-tier work force for the same jobs?

If the Minister doubts that that might happen, and thinks it is only I who say it, I refer him to the Incomes Data Services report for the Low Pay Commission, “The implications for the National Minimum Wage of the abolition of the Agricultural Wages Board in England and Wales”. What does the change mean for the national minimum wage, where the Government’s defence lies— “Don’t worry, the NMW will take care of this”? The report states:

“Once abolished, many of the provisions of the Order will either be only partially covered by other statutory employment legislation, or not at all. Employment legislation does not make any provision for specific rates of pay linked to skills, specific rates of pay for overtime, a minimum rate of pay for workers of compulsory school age, rights to paid training, standby duty and night allowances, entitlement to paid bereavement leave, a birth or adoption grant”

and so on. It also states that

“abolition removes protection for young workers of compulsory school age”

and that

“the statutory minimum rates for both workers aged 16 to 20 and apprentices will be significantly less under the NMW than they currently are under the Agricultural Wages Order.”

Hon. Members have spoken passionately about the need to enhance skills and training in the agricultural sector, but the report states clearly that the wages of apprentices and those learning their skills will be depressed.

The report states:

“There may also be issues around the accommodation offset, whereby in some cases agricultural workers may be worse off under the NMW rules”,

and it explains why:

“There is no such threshold under the NMW”

for workers’ accommodation. It also states:

“The NMW rules on accommodation offset allow deductions to be made even if the worker could have lived elsewhere. This could mean that agricultural workers who are not currently subject to the accommodation offset…could be subject to it in future.”

It continues:

“On piece work, agricultural piece workers are currently guaranteed to get at least the minimum rate appropriate to their grade.”

That is more favourable than the national minimum wage approach,

“where slower workers can earn less than NMW if a properly assessed ‘fair’ piece rate is applied.”

It is not true to say that the abolition of the AWB is not a problem because the national minimum wage will deal with the issues. There is far more to the AWB’s terms and conditions than that, which is why I am asking the Minister to think again.

I thank the hon. Member for Sittingbourne and Sheppey for raising this important debate, and thank all hon. Members for some very good contributions. We want to see a rural economy that works for all working people. It should be fair across the board, as these are tough times for all those who work in agriculture. I look forward to the Minister’s response.