Groceries Code Adjudicator Bill [HL] Debate
Full Debate: Read Full DebateBaroness Wilcox
Main Page: Baroness Wilcox (Conservative - Life peer)Department Debates - View all Baroness Wilcox's debates with the Department for Transport
(12 years, 2 months ago)
Grand CommitteeI hope the Minister and also the noble Lord, Lord Browne, will forgive my intervention in the early part of the Bill.
I want to make a slightly more general point, since we are close to the Title of the Bill. There is something missing in the early part of the Bill: that is, the link with the original Groceries Supply Code of Practice. I know that this will come up again, but I want to raise it right at the beginning. The Competition Commission uses the important phrase about stopping,
“the transfer of excessive risks and unexpected costs”,
by retailers on suppliers, and encouraging compliance. To make that point, I have put down an amendment to Clause 15. I apologise that I missed putting an amendment down to the Long Title. I hope the Minister will find a few minutes, or a few sentences, to answer that point somewhere in the course of the debate.
My Lords, we are off to a marvellous start. This is a great level to start at—whether we are doing something in plain English or not. I was in on the beginning of the Plain English Campaign, as, I think, was the Office of Fair Trading and the noble Lord, Lord Borrie. I was rather hoping we would get a crystal award for how we have written this Bill in plain English, but I can see I am going to have to work very hard during this Committee stage to reassure everyone that we are trying to be as clear as possible.
I fully appreciate the sentiment behind this amendment. The Government have committed to writing the Bill in plain English, and we strive to apply this principle to all communication as the Bill goes forward. However, in this case the amendment would change the meaning of the clause. “There will be” is a prediction, whereas “There is to be” indicates that the Bill establishes the Groceries Code Adjudicator. I hope that that clarifies the point for the noble Lord.
I will answer the second question when we come to the appropriate amendment, if that is okay. I thank the noble Earl for giving me notice.
It might. I wonder if the noble Lord, Lord Browne, would be kind enough to let me take this away and return. I ask him to withdraw his amendment.
My Lords, I will be more than content to withdraw my amendment, and to go away and reflect on the response of the noble Baroness to my rather small point. I am surprised, I have to say, at the nature of the response, given that I know that at least one piece of legislation has been passed by this House which includes the phrase “there shall be” in its first sentence. I suspect that there are many others, but I shall have to go and do some research now. If it was a prediction that the legislation fulfilled, perhaps that is the proper construction; I am not entirely sure. However, we should not detain the Committee with this point, given that we all need to go away and reflect on it. I am happy to withdraw my amendment, but I give the noble Baroness notice that I am not entirely persuaded by the response she deployed. This is not the most important issue that the Committee will consider this afternoon, but it is important that there should be consistency in legislation. I beg leave to withdraw the amendment.
It is very helpful to have the contribution of the noble Lord, Lord Howard, because he has a particular view that we can leave this all to the market, which is operating perfectly. I disagree. I remember from my economics A-level that you can have perfect markets but you can also have imperfect ones and powerful players within markets who abuse their market position. I believe—as did the Competition Commission in its analysis—that that is the case here. That is where the noble Lord and I will differ as we debate these things. In the end, those suppliers will struggle to find another market. Often, they have worked with a supermarket and built up a relationship where they have been persuaded that it is worth investing in, for example, growing a product. That needs at least a 12-month timeline. The supplier or grower of that product takes on a huge risk because they have invested 12 months in advance but the contract will only give them at best three months’ notice of cancellation. They can just be cancelled on and that happens all the time. That is a difficult aspect of that market relationship.
I give another example: I know of an innovator of a new chocolate product using pomegranate dust from Afghanistan. That innovator had to invest significantly in developing the product. It is a fine product but the innovator has to recoup the cost of that investment and needs to get the product out in volumes that are only achievable using large supermarkets. The response from the supermarkets is, “Yes, we like the product. If you want us to stock it then you need to pay us to take it on. If you want a decent shelf position, you need to pay us some more money. If you want point-of-sale merchandising, you need to pay us for that as well”. That individual needs to acquire a huge amount of investment to be able to innovate. In the end, a healthy market allows new players to come into it, to innovate and introduce new supply. That is not happening very easily in this particular market because of that power relationship and the structure of how it is set up. I strongly urge the noble Viscount to withdraw his amendment and strongly urge the Committee to support proceeding with the establishment of the adjudicator.
My Lords, this group of amendments goes to the very heart of the Bill. It concerns whether or not there should even be a groceries code adjudicator, or whether oversight of the code should continue to rest with the Office of Fair Trading. It is therefore only fitting that we should debate it early on, and I thank the noble Viscount, Lord Eccles, for raising it. I also thank him for allowing us to discuss all these amendments in one go. I also thank the noble Lords, Lord Borrie, Lord Razzall, Lord Curry, Lord Knight and Lord Howard, for their contributions to this debate.
I will not repeat all that I said at Second Reading. I know that the majority of us here support this Bill. Suffice it to say that, in its 2008 report on the supply of groceries, the Competition Commission found that the buying power of large supermarkets was potentially a cause for concern. It found that retailers were transferring excessive risks or unexpected costs to their suppliers, a practice that was likely to lessen suppliers’ incentives to invest and innovate, and that this would operate to the long-term detriment of consumers.
The Competition Commission therefore made an order that required large retailers to incorporate the Groceries Supply Code of Practice into their contracts with suppliers. It also recommended that an independent groceries code adjudicator be established to enforce the code and ensure that it was effective.
The adverse effect on consumers is not something expected to follow immediately and directly from a specific action by a retailer. Rather, the transfer of excessive risk or unexpected costs lessens incentives for innovation and investment, and the reduction in innovation and investment is what causes consumers harm.
This is a long-term effect and not one that can easily be measured—and not one that we should stop to measure before we have even implemented the measures recommended by the Competition Commission. I ask noble Lords to note that in the pre-legislative scrutiny the BIS Select Committee explicitly considered whether another review should be carried out, but concluded that we should instead implement the recommendations of the Competition Commission as swiftly as possible.
On the point from the noble Viscount, Lord Eccles, about the report from the Office of Fair Trading, I will pass his concerns to the OFT. I remind noble Lords that the OFT operates independently of Ministers, but I will pass that on and see if we can get some result for the noble Viscount. He has referred to the fact that the members of the Competition Commission were not unanimous in their view that an independent adjudicator should be established. He cited passages from the report which set out that minority opinion. He is right that one member of the panel did not agree with the rest, and I recognise that not everyone thinks the adjudicator is necessary. However, five out of six of the members did consider that an independent adjudicator should be set up. They concluded that an adjudicator is essential for the effective monitoring and enforcement of the GSCOP. That is why the Government are committed to establishing an independent adjudicator.
The amendments in the name of the noble Viscount, Lord Eccles, would give the powers in this Bill to the Office of Fair Trading, not to an independent adjudicator. However, the Competition Commission recommended an independent adjudicator. There are clear advantages to establishing an independent, dedicated office with industry expertise, which can build working relationships with supplier trade associations and retailers, monitor compliance and promote best practice. The Office of Fair Trading has told us that it fully supports the argument that the GCA should be an independent body, separate from the OFT or any other organisation. Furthermore, on a practical point, it would not be appropriate to give these powers to the OFT while the broader competition regime is undergoing so much reform.
The Government believe that the best way to address the issues in the groceries market identified by the Competition Commission is to establish an independent groceries code adjudicator to enforce the groceries code, not to give more powers to the Office of Fair Trading. This is also the view of the BIS and EFRA Select Committees, of the Office of Fair Trading and of five out of the six panel members of the Competition Commission investigation.
I have listened to all the views that have been expressed and I thank in particular the noble Viscount, Lord Eccles, for taking the time and trouble to explain his differences so clearly. However, at this stage, I would ask him to withdraw his amendment.
I support my Front Bench colleague at this stage. As at Second Reading, I declare my interests as a dairy farmer in Cheshire and in having been involved in dairy supply-chains both with farmer co-ops and on behalf of the Royal Association of British Dairy Farmers over many years. In support of the comments made in response to the previous amendment of the noble Viscount, Lord Eccles, there is an extremely delicate relationship between a supplier and the supermarket, and it takes quite some managing. It is not necessarily a question of fear. I am often reminded of the words in the Bible that the lion will lie down with the lamb. When I was in with the supermarkets, I always wanted to make sure that I was a lion but I never quite achieved that status. It is an extremely delicate relationship.
The noble Viscount said that the groceries code has been in existence for two years. It is eminently sensible that we complete this legislation to get the adjudicator in place and then, two years after that, have the review that the noble Viscount looked for. That would be an excellent time to review whether the code should be extended further up the supply chain to the suppliers of suppliers: the consolidators and the processors that have that direct relationship. I am sure that we will then find that there are lots of parts that the code does not cover, to which my noble friend from the Front Bench has alluded already. For example, I point to the practice of offsetting invoices from the supermarkets to suppliers and the charges that they think are quite acceptable to deduct from the suppliers. Those lead to long, detailed arguments and a very awkward time between a supplier and the supermarket. I am sure that putting that review on a statutory basis would, in two years’ time, allow Parliament—it would be wider than just the Competition Commission—to be consulted on the reach of the GSCOP code.
The noble Lord, Lord Knight, has brought us an interesting amendment, supported by his colleague, the noble Lord, Lord Grantchester. It is perhaps not fully aligned with the subject of the Bill, which is the creation of a groceries code adjudicator. I reassure noble Lords that the groceries code, contained within the Groceries Supply Code of Practice Order 2010, already has full statutory force and the requirement to incorporate it in their supply agreements is binding upon all large supermarket retailers. There is therefore no need for the Secretary of State to establish it by statutory instrument.
Furthermore, the review of the groceries code is the responsibility of the Office of Fair Trading not the Secretary of State. If the OFT considers that a change in the code or the order is needed, it can advise the Competition Commission accordingly. As the code concerns the remedying of practices that are concerned with competition, it is right that oversight of the code rests with the independent competition authorities, which have the necessary expertise and can make decisions based on objective economic criteria.
The noble Lord, Lord Knight, also asked whether it is right that the Competition Commission can make such orders without recourse to Parliament. Noble Lords who wish to discuss the powers of the competition authorities will have to wait until the Enterprise and Regulatory Reform Bill enters this House. However, the Government consider it entirely appropriate for the Competition Commission to make remedies based on the findings of its investigations.
I am grateful to the noble Baroness on that matter but I am struggling a little. Fundamental to the amendment is whether or not Parliament should have a role in scrutinising the Groceries Supply Code of Practice, which the adjudicator will referee. If the noble Baroness is saying that we will have to wait before we find out how Parliament will then scrutinise the code, we are in a difficult position to legislate. Have I misunderstood?
No, I do not suppose for one minute that the noble Lord has misunderstood, because I spoke quite slowly and clearly. As to whether it is a question I can answer now, I do not know. Obviously, the noble Lord may feel that the Bill is going to stop at this very moment if I do not answer that question, but perhaps I may have a conversation with him on this matter before we come back on Thursday. As I understand it, the powers of the competition authorities are going to be debated under the Enterprise and Regulatory Reform Bill when it enters this House. Perhaps I may leave it at that for the moment.
I move on to another question on whether the code will apply further up the supply chain. I should emphasise that government amendments that we will discuss later do not extend the code to intermediaries. The amendments ensure that only subsidiaries of the 10 retailers are covered, as they are in the code. I hope that that is clear when noble Lords read it tomorrow in Hansard. It might be a little more cogent. I have no more help from behind me, so perhaps I may ask the noble Lord to withdraw his amendment at this stage.
I am kind of grateful to the Minister for that. The noble Viscount, Lord Eccles, was in many ways right to say that I sought to go beyond where the Competition Commission had reached and was looking for an opportunity to debate this issue. We are establishing the adjudicator who will referee the code. Plenty of people who have debated the Bill want to ensure that the code is a living code and is regularly reviewed so that changes in market conditions can be accounted for. There are concerns about intermediaries and we are looking for ways in which we might think about whether the code could be extended to cover them. That is worthy of consideration. In response to what the Minister said, I am sure that if the Secretary of State were to ask the Competition Commission or the Office of Fair Trading to have a look at the operation of the whole supply chain, they would do so. I am sure that if the Secretary of State were to then ask them, as a result of that review, to consider whether or not the code should be updated, they would be happy to do so. That is the way things work in government. If the Secretary of State asks these people to do things, there is a very good chance that they will give that serious consideration and try and meet the Minister’s wishes.
I understand what the noble Baroness was saying regarding the Enterprise and Regulatory Reform Bill. In the end, I understand that there is nothing technically wrong with the code as it is written. The powers that were used properly to set it up remain until they are changed, subject to Parliament, by the Enterprise and Regulatory Reform Bill. I understand that they are not going to know how that works. For now, I am content for this Bill to be debated in the context of the current environment rather than some speculative future environment that may or may not come about, subject to parliamentary process. We can probably park that convoluted little debate in which we managed to find ourselves.
The fundamental thing remains: if this is not the right mechanism for keeping the code as a living code and something that Parliament can scrutinise, I am relaxed about that but would love for the Government to come back with a way for this Committee and your Lordships’ House to amend the Bill so that we can keep it a living code and, at points, consider whether or not it is up to date. With that, I beg leave to withdraw the amendment.
I thank the Deputy Chairman for clarifying that. We have approached it in a simple, straightforward way: that this is, in fact, the role of a regulator. As we have argued and discussed on previous amendments, the role of the regulator is a high-profile one at the moment, with a wide range of powers to effect change in the UK groceries market. It is only appropriate that the Secretary of State should consult with both the relevant Select Committees in the other place to reflect the standing that such a person will have in the business and parliamentary world, so that it is fully transparent to the supply chain that this has been well considered.
My Lords, these amendments concern the independence of the adjudicator and, in particular, how this may be safeguarded through the appointment and dismissal processes. I fully agree that the independence of the adjudicator is critically important to the successful operation of the role.
I have just been passed a note for the noble Lords, Lord Browne and Lord Borrie, on the name “adjudicator”, which I thought might be helpful. The term has been chosen because an ombudsman must deal with consumers rather than businesses. That is the answer to that one.
Before addressing the amendments, I first reassure noble Lords that the Bill provides the adjudicator with full operational independence. There is no question of the Secretary of State telling the adjudicator what to do, who to investigate or what the sanctions should be. It is, however, normal practice that public appointments should be made by Ministers, in accordance with the standard rules and procedures on public appointments. In addressing these amendments I intend to draw parallels with other public bodies in the field of competition.
On the amendments of the noble Lord, Lord Browne of Ladyton, the adjudicator will not be a judge and it is therefore not necessary to involve the Judicial Appointments Commission. Similarly, the panel members of the Competition Commission, who might also be considered to have a similar quasi-judicial role in their rulings on appeals from sectoral regulators, are not appointed or recommended by the Judicial Appointments Commission. It is similarly appropriate that the Secretary of State should appoint both the adjudicator and, if there is one, deputy adjudicator, as both are public appointments. In a similar way, the Secretary of State currently appoints both the chair and the chief executive of the Office of Fair Trading. The Office of Fair Trading can, of course, also impose financial penalties.
On dismissal, the Secretary of State may dismiss the adjudicator only if they are satisfied that he or she is unable, unwilling or unfit to perform his or her functions. This is not a judgment that would be made lightly and could be subject to judicial review if made incorrectly. Given these safeguards, I do not consider it necessary to require the Lord Chief Justice’s approval, nor to make specific provision for the circumstances of criminal conviction, which the Secretary of State could, in any case, take into account when judging whether the person was appropriate for the role.
Finally, on the amendment tabled by the noble Lords, Lord Knight of Weymouth and Lord Grantchester, I make two points. First, while the Government support the principle of suitable parliamentary oversight of public servants, they believe that pre-appointment hearings by Select Committees are only for those roles where it is vital that the post’s independence from government or its importance to the public is of the highest importance. It does not seem clear that the adjudicator, though very important to the groceries sector, would fall within this category.
Secondly, even were the post of adjudicator such a post, it is also not general practice for Select Committee oversight to be set out in primary legislation, but rather for it to be decided by the Secretary of State responsible. I hope that that is helpful and, therefore, ask the noble Lord to withdraw his amendment.
I am grateful to the Minister for dealing so comprehensively with the constituent elements of my argument. I am not entirely persuaded by all her arguments. I read that the distinction between an ombudsman and an adjudicator is that an ombudsman deals with only consumers and therefore cannot regulate a set of circumstances in which consumers are not involved. I am not entirely sure whether that argument is sustainable but it has been deployed in earlier debates on this legislation for justifying the move from the recommendation for an ombudsman in relation to this role. When I read it in the past I was not convinced and, with respect to the noble Baroness, I am not convinced now. However, I realise that that is the Government’s position, which I respect.
I am grateful to my noble friend Lord Borrie for his intervention and I am enormously respectful of his vast experience in the area of consumer protection and competition. I thought that he got almost to the point where he agreed with me but could not break through the cigarette paper that was between us—which I have to say he put there. I am also grateful to him that he thought that there was something in my argument.
There is nothing implicit in any of these arguments that is in any sense critical of the way in which I expect the Secretary of State to behave. I expect the Secretary of State of whatever party is in government in this country to behave in an entirely appropriate way and not to make capricious decisions. I accept also that it may be possible to find other examples—as there were in the noble Baroness’s brief—of similar types of appointment that have not been considered to be judicial appointments or have required the intervention of the Judicial Appointments Commission in the past. However—I will research this as I cannot be certain about it—I suspect that none of those roles was created by statute since the creation of the Judicial Appointments Commission in 2005. In view of the roles held in the OFT in the post-2005 constitutionally changed environment, I would argue that it would be inappropriate to appoint someone with those sorts of powers without the element of independence that we imposed on the nature of these appointments by passing that legislation.
I am concerned that perhaps we treat constitutional change now as being of the moment and that we revert to type thereafter. But the 2005 Act was a significant step in creating an element of independence in the role of people who exercise these types of functions. We extended it well beyond what people would normally think of as judges, for instance into tribunals that cover a significant area of public life. I do not believe that competition should be immune from that restraint as regards the constitution. However, despite the fact that I believe quite strongly in this argument, at this stage I am content to withdraw the amendment—before I do so I will give way to my noble friend.
My Lords, I thank the noble Lord for tabling these amendments and concur with the viewpoint of the noble Duke. I am speaking from a Welsh perspective, with experience of the Welsh situation. The noble Duke is correct to acknowledge the significant role of the devolved Administrations in relation to this topic. As has been said by both speakers so far, the devolved Administrations have power over key issues.
The Welsh Government obviously have considerable power over agriculture and agricultural issues. Indeed, that power has grown considerably in the 12 years since devolution. They make the key decisions on agriculture. Even on the economy, many levers are in the hands of the Welsh Government rather than the UK Government. It is really important that the adjudicator, once established, has a regular and close dialogue with the Governments—the Executives—of Scotland, Wales and Northern Ireland, because it is so important to their day-to-day decision-making on policy.
As a member of the Welsh Assembly for 12 years, I sat through more debates on the supermarket ombudsman, and more questions on when the supermarket ombudsman would be set up, than I could possibly recall and count. It is a topic that was very close to the hearts of Assembly Members in Wales, across the board. It would be right for them to be closely involved from now on.
My Lords, I fully recognise the interests of the devolved Administrations in this Bill: of the noble Duke, the Duke of Montrose, for Scotland and the noble Baroness, Lady Randerson, for Wales.
The Government have kept in close contact with the devolved Administrations through the development of both the policy and the legislation, and we are grateful for the strong support that they have given to this Bill. Officials in my department have discussed this with representatives of all the devolved Administrations on multiple occasions, and continue to do so. We would of course expect the adjudicator to informally interact with the devolved Administrations in the same way.
However, formally speaking, the groceries code is a non-devolved issue, as it is a matter of competition law. The adjudicator therefore has no formal responsibilities to the devolved Administrations. Given this fact, a statutory duty to report to such bodies would therefore be inappropriate, and could make the adjudicator’s role less clear. Additionally, it might suggest that the devolved Administrations had responsibility for oversight of the adjudicator, when in fact they do not have powers to control either the code or the adjudicator. However, as I have said, we have worked and will continue to work very closely with the devolved Administrations. It is in all our interests that we do so.
If I may, I will discuss the issue regarding the Competition and Markets Authority when we discuss the seventh group of amendments. I therefore ask the noble Lord to withdraw his amendment.
My Lords, I confess to being disappointed. It would appear that we have resorted to type in relation to the legalities of these issues. I am utterly schooled in making the arguments for them. However, with respect to the noble Baroness, she reassures me to a significant degree when she recounts the degree of interaction and co-operation that there has been between the devolved Administrations and the UK Government. I am reassured by that and would expect nothing less. She suggested that informally the adjudicator will be encouraged to continue that level of co-operation. To that degree she reassured me.
However, the noble Baroness disappoints me because it would appear that in the structures of Whitehall we have not got beyond the strict legalities of these arguments and cannot see how damaging this strict approach is to relations across the union. We need to be much more mature in the way in which we approach these issues, and we need to be much more political in not creating opportunities for grievance or for discussions that are perceived to be beyond power but which create an argument for more power. For example, if the Welsh Assembly sensibly had a debate about the importance of a supermarket ombudsman, in Scotland that would lead almost inevitably to an argument that the Scottish Parliament should have had the power to appoint one because the UK Government were taking a long time to do it. We would then get into a confrontation about the constitution that would be utterly unnecessary if we had an officer who was instructed by the legislation that we passed to set up his office to report to those institutions.
I confidently predict that if the adjudicator role beds in, at some stage a committee of the Scottish Parliament, Welsh Assembly or Northern Ireland Assembly will say, “We are conducting an inquiry into the economic opportunities that relate to a particular part of our society or economy. This officer has a role to play in that. We would like him to come and give evidence to our committee”. I also confidently predict that the occupier of this role will go, that the constitution will not melt down and that no great affront will be done to the divisions between devolved and reserved powers. I hope that at some stage we can come off these platforms where we tell the people of the United Kingdom that we are better together and that we respect each other and the settlement that we have, and drive that attitude down through Whitehall so that departments do not define themselves by whether they have reserved or devolved powers.
This is a disappointing response to the issue. I understand why legally it is being done. I am sure that the noble Baroness is aware of the possibility that while she is still in her office, somebody will come to her and say, “This does not go far enough. There is insufficient power for Scotland and it is disrespectful to the Scottish people”. I hope that those who provided her with the argument to defeat my simple amendment can provide her with the argument to deal with that when she has to go to Edinburgh to make the argument. However, I accept the inevitable. We are where we are. In these circumstances, there is nothing else I can do but beg leave to withdraw the amendment.
My Lords, I fully recognise the importance of ensuring that the adjudicator has the powers necessary to adequately carry out its functions. However, the powers listed in this amendment are already provided for in the Bill. I refer in particular to paragraph 16 of Schedule 1, which provides:
“The Adjudicator may do anything that is calculated to facilitate the carrying out of the Adjudicator’s functions or is conducive or incidental to the carrying out of those functions”.
It is clear that sub-paragraphs (a) and (d) of the amendment are covered by this. The adjudicator could, for example, use this to enter into contracts or to obtain and pay for legal advice. Similarly, it must be the case that the adjudicator has the power to enter into a lease, which is an interest in land. With regards to borrowing, I draw the noble Lord’s attention to, for example, provisions such as paragraph 20 of Schedule 2 to the Human Tissue Act 2004. That is exactly like our paragraph 16, except that it ends with the words,
“but may not borrow money”.
That implies that a general power includes a power to borrow unless it is specifically excluded. I hope that that is helpful.
My noble friend raises an interesting point and I thought that I would wait to hear whether the noble Baroness prayed in aid paragraph 16. I worry about the very broad nature of the power that the adjudicator gets in paragraph 16 to do whatever he or she thinks is appropriate to perform the functions. It seems sensible enough, but I am mindful of what the large retailers are saying to us in respect of them having to pay a levy to fund the operation of the adjudicator and there being very little protection for them as to how much that would cost. Paragraph 16 as it stands seems to give a very wide power that leaves them vulnerable to some considerable costs. I wonder if the Minister needs to reflect on whether there is a way to give some protection to the levy payers to make sure that, were this interpreted by a frivolous adjudicator who thought there were some incidental things to the carrying out of functions, they could not go slightly berserk and incur quite a large cost on those levy payers.
The noble Lord, Lord Knight, will be pleased to know that we are ahead of him on this. The adjudicator will be able to carry out these acts only if it is to facilitate the carrying out of the adjudicator’s functions or if it is conducive or incidental to the carrying out of those functions. This will ensure that the adjudicator’s powers are used responsibly and are not abused. For example, it would not be possible for the adjudicator to make investments in land. I hope that that may be of some help. I was about to say that we might add things like, “should not go to Ascot” or this, that and the other, but I am being frivolous. I think that that is broad enough to cover any difficulties there.
I am grateful to the noble Baroness. It is the “incidental” that would worry me the most were I a levy payer. I will leave it at that because I do not want to labour the point. We need to think about this a little. I know that we may have an amendment later that looks at whether the annual reports should explicitly include the cost of administration so that that is transparent and clear to levy payers as a way of ensuring that these “incidental” expenses are not excessive. I think that the point has been made.
My Lords, on the amendments tabled by the noble Lord, Lord Browne of Ladyton, I recognise that in due course the references to the Competition Commission and the Office of Fair Trading will most likely need to be changed to refer to the Competition and Markets Authority. My ministerial colleagues in BIS are currently working hard to ensure that the Enterprise and Regulatory Reform Bill, which will bring about these changes, makes a successful passage through the other Chamber. However, the Government believe that it would be presumptuous of us to take the will of Parliament for granted by making a reference to the Competition and Markets Authority when the Enterprise and Regulatory Reform Bill has not yet received its Third Reading in the other place, so we propose to consider the amendments tabled by the noble Lord, Lord Browne of Ladyton, at a later stage of this Bill’s passage through Parliament—namely, when the other Bill is more advanced.
With regard to the amendments tabled by the noble Lords, Lord Knight of Weymouth and Lord Grantchester, we all agree that when granting delegated powers, the appropriate degree of parliamentary scrutiny should be provided. Too weak a procedure could lead to a lack of scrutiny and the weakening of parliamentary authority. However, too stringent a procedure would not only be cumbersome, wasting Parliament’s valuable time, but could act as a barrier to timely action. The noble Lord, Lord Knight, asked why there are abolition provisions in the Bill. Abolition and review provisions are included in accordance with the broader policy on sunset and review that we are pursuing. It does not indicate an intent to abolish the body or transfer its functions.
The Public Bodies Act has been mentioned as a precedent. However, there is a big difference between that Act and this measure. The Public Bodies Act confers powers to abolish, reform and modify a wide range of public bodies, and confers a range of ancillary powers such as the power to amend primary legislation. However, this Bill is a limited measure to establish a new adjudicator in a single, specific area of the economy, the grocery sector. It is quite a different thing.
I remind noble Lords that the Delegated Powers and Regulatory Reform Committee examined the Bill. Its report is available to any Member who wishes to read it. The committee carefully considered whether the procedures provided by the Bill were appropriate, and specifically considered whether some measures should be delegated at all. However, it concluded that the procedures were appropriate and did not recommend the replacement of the affirmative procedure with the super-affirmative procedure at any point.
The noble Baroness is of course right to refer to the first report of the Delegated Powers and Regulatory Reform Committee. When it considered abolition, in paragraphs 6 and 7 of the report, and Clause 16(2), it stated:
“This provision illustrates the unusual nature of this Bill”.
It then goes back to its opening paragraph, which states:
“If the Competition Commission revoked the Order containing the groceries code, the Act would serve no purpose so it could be repealed. There would be no great point of principle involved in its repeal, for the Act is wholly dependent on the Order”.
The committee’s view was very much informed by the weirdness—which I referred to earlier—of setting up in primary legislation a quasi-referee to govern a code that Parliament has no power to scrutinise.
It is entirely appropriate and comparable with the Public Bodies Bill, which was about the bonfire of the quangos and the Government having the power in secondary legislation to get rid of quangos that they had set up in primary legislation. In this primary legislation we are setting up a quango. In Clause 16 the Government are seeking to use just the affirmative procedure if they want to abolish it. It is entirely consistent with the Public Bodies Act to argue for the super-affirmative procedure.
Perhaps if I go back and continue for two paragraphs, we might find something a bit more helpful. I will go back again to say that the Delegated Powers and Regulatory Reform Committee examined the Bill. It carefully considered whether the procedures provided by the Bill were appropriate, and explicitly considered whether some measures should be delegated at all. The committee concluded that the procedures were appropriate and did not recommend the replacement of the affirmative procedure with the super-affirmative procedure at any point.
On the abolition of the adjudicator, the committee stated:
“We considered whether this goes far enough and whether the policy and repeal of the Act in these circumstances should be effected by another Bill. But we are satisfied that the affirmative procedure is appropriate given the overall purpose of the Bill”.
On transfer of functions, the committee said:
“An order under clause 16(1) can transfer all or some of the Adjudicator’s functions to another public body (undefined). The power is balanced by the affirmative procedure; and the Adjudicator’s functions are specific under the Bill. We are satisfied with this approach”.
Abolition and transfer of functions are major steps that should be subject to the super-affirmative procedure. The Secretary of State can abolish the adjudicator only for being ineffective or unnecessary, under the clauses referred to by noble Lords, following one of the triennial reviews. These reviews require full consultation. Transfer of functions can be done only after consideration of whether it will increase efficiency, effectiveness and economy, while ensuring appropriate accountability to Ministers.
This Committee’s job is to carefully scrutinise delegated powers and to ensure that the appropriate procedures are chosen. If the committee had recommended changes to the Bill, we would have considered them extremely carefully, but it said that the procedures were satisfactory.
As I said at the beginning, one must ensure that the degree of scrutiny is proportionate to the powers involved. That is why it would be absolutely wrong, for example, for the negative procedure to be used in these cases. Equally, the super-affirmative procedure is a step too far. With that explanation, I invite the noble Lord to meet me after today and talk this through further. I would be delighted to do so, rather than taking up any more of the Committee’s time at this stage. Therefore I ask the noble Lord to withdraw his amendment.
My Lords, I look forward to the Government’s amendments at a later stage of the Bill and, although I was slightly premature, the opportunity to claim credit for them. I have to say to the noble Baroness that I would trade that for better consideration of the earlier amendment on the devolved Administrations. If I may crave the indulgence of your Lordships, I realise that when I was responding to that debate I failed to recognise and pay due regard to the contributions of the noble Duke, the Duke of Montrose, and the noble Baroness, Lady Randerson, who graciously supported my amendments and made arguments that created a cross-party consensus on this issue, which the Government were unfortunately immune to. I am grateful to noble Lords for their support and contributions to the debate. I beg leave to withdraw the amendment.
My Lords, I do not know if this will help or at least shorten what I need to say in the debate on whether Clause 2 should stand part of the Bill. I want to consider what the situation is and has been since 4 February 2010. The dispute resolution scheme is set out in the code in Part 5. Paragraph 11(5), of course, does not conform to the Bill. It states:
“The arbitration will be administered by the Ombudsman, if established. In the event that the Ombudsman is not established, or has a conflict of interest in relation to a particular Dispute, the arbitration will be administered by a single arbitrator appointed in accordance with the Rules of the Chartered Institute of Arbitrators in force for the time being.”
My understanding would be that it is a contractual obligation of the retailers that that is included in their contracts with their suppliers, exactly as I have read it out. It goes on in 11(6) to say:
“To the extent that they do not conflict with this Article 11, the arbitration will be conducted in accordance with the Rules of the Chartered Institute of Arbitrators in force for the time being”;
and in 11(9):
“Nothing in this Article will prevent a Designated Retailer including in a Supply Agreement a right for the Designated Retailer also to refer a Dispute to arbitration if the Dispute is not resolved … within 21 days”.
We need to know what the present situation is with the operation of the code. If the arrangements which have been set out with care by the Competition Commission, and included in the order are working perfectly well then I am bemused as to why the adjudicator would ever want to play any part in arbitration at all. I cannot see why it would be sensible for the adjudicator to play any part, because it is all there. Surely the adjudicator is to monitor whether these arrangements are working satisfactorily?
It may be, of course, that the further sophistication suggested by the noble Lord, Lord Browne, would also be a sensible thing to do. I have no view on that; I am not sufficiently expert. However, I cannot understand—and I need to be given some sort of comfort—why the adjudicator is involved in arbitration, as opposed to simply taking note of the fact that arbitration is taking place, and probably coming to a view as to whether, when it took place, it was a satisfactory procedure or not?
The noble Lord, Lord Browne of Ladyton, has raised an important question that it is well worth us examining closely. It is correct that the adjudicator will have two separate main roles. One will involve arbitration, as set out in Clauses 2 and 3 of the Bill. The other will involve investigations and is set out primarily in Clauses 4 to 10 of the Bill. Both roles will be carried out fairly and impartially. The two functions will be distinct from each other and it is important, as the noble Lord, Lord Browne said, that they remain so in order to prevent any conflict of interest.
The noble Lord, Lord Browne, asked whether the adjudicator would always be conflicted. Not necessarily. If arbitration is sought on a subject where the adjudicator has not carried out an investigation or given advice, it is likely that there would be no conflict of interest. We do not consider it inherent in the functions of the adjudicator that he or she will be conflicted in carrying out arbitrations.
It is important to remember that the adjudicator will carry out all their functions fairly and impartially. It is not the role of the adjudicator to act as an advocate for suppliers in carrying out investigations, but it is possible that conflicts will arise in particular cases, and the Bill provides the flexibility to deal with each situation as it arises. The Government consider that Clause 2(1)(b) in particular will help ensure that the distinction between the adjudicator’s arbitration and investigation functions is maintained and that any conflicts of interest are prevented. This clause allows the adjudicator to appoint another person to arbitrate a dispute. The Government envisage that this will be used in cases where a conflict of interest may exist, for example where the adjudicator has previously advised on, or investigated, an issue which is relevant to the dispute. To assist the noble Lord, Lord Browne, the powers to arbitrate are applied at the request of the supplier or retailer. No previous investigation is actually needed.
The adjudicator will be required to act responsibly and will refer any cases where a conflict may arise. However, in cases where there is no conflict of interest, the Government believe that it is sensible to allow the adjudicator to arbitrate. This was envisaged by the Competition Commission in its drafting of the groceries supply order. The adjudicator will, after all, probably be the single most experienced person in the workings of the code.
On the proposed procedure for appointing an arbitrator, I do not consider it necessary to set this out in the Bill. As the Explanatory Notes explain, in England and Wales and Northern Ireland, Section 94 of the Arbitration Act 1996 will broadly apply the provisions of Part 1 of that Act to any arbitrations carried out under the groceries supply order and this Bill. In Scotland, Section 16 of the Arbitration (Scotland) Act 2010 will broadly have a similar effect in applying the Scottish arbitration rules.
The arbitration legislation which will apply to arbitrations by the adjudicator or a person appointed by the adjudicator includes protections on fairness and impartiality, including an ability for parties to apply to the court to remove an arbitrator on those grounds. The adjudicator can of course be expected to satisfy himself or herself either that they can carry out an arbitration themselves fairly and impartially, or that the person they appoint will do so, but there is a safeguard in the arbitration legislation if, for some reason, that does not happen properly.
I wanted to respond to my noble friend Lord Eccles, and have now found the speaking note for that. The groceries supply order has already established a dispute resolution scheme for disputes arising between a particular retailer and a particular direct supplier under the groceries code. The order anticipates that the adjudicator, referred to there as the “ombudsman”, will arbitrate these disputes. This will both ensure that the disputes are arbitrated by an individual with a high level of expertise in the sector and will allow the adjudicator to gain a greater understanding of how the code is operating that will be helpful when carrying out his or her functions, such as providing advice or preparing the annual report. I hope that that is helpful.
I hope that these rather long but, we felt, necessary explanations have proved satisfactory to noble Lords. While I would of course be happy to speak further to the noble Lord, Lord Browne of Ladyton, about this matter, I ask him to withdraw his amendment at this stage.
My Lords, I am grateful to the noble Viscount, Lord Eccles, for expanding into a potentially fruitful area my further deliberations on this. I had not thought to look at the terms of the code itself, but his drawing my attention to the detail of the provisions on arbitration points to an area at least worthy of consideration: the interaction between existing provisions and those that would be enacted by the Bill, which are less descriptive. It interests me that the Government have chosen to legislate in way that is less clear than the simple provisions in the code, which the noble Viscount read out, composed by the Competition Commission. I will take some time to deliberate on that, but it is an area worth exploring, perhaps at a later date.
I am grateful to the noble Baroness for giving these amendments such careful consideration, and for her words suggesting that they raise an important issue. It is an important issue and I remain to be convinced that it would be appropriate for the adjudicator to embark on arbitration without doing some prior investigation. I suppose that it depends on what one means by “prior investigation”. Given that it is expected that the adjudicator will arbitrate in a very small number of cases over the course of a year, I would expect that he or she would pay great attention to whether it was appropriate to deploy scarce resources on such a request, even if it came from a big retailer.
I am only talking about expectations. It is up to Members of the Committee to make up their minds as to where the expectations that might arise as a result of this Bill being enacted lie. We all make up our own minds. In conclusion, I would much prefer it, and I think that it would be much in the public interest, if Clause 2 did not stand part of the Bill.
My Lords, my noble friend Lord Eccles has already made clear that he believes that the adjudicator’s function should be given to the Office of Fair Trading. The Government disagree and consider that with arbitration, just as with investigations, there is merit in establishing a dedicated, independent office which can build up a high level of expertise in the groceries market. I have already discussed this issue in some depth in response to previous groupings and have set out why we have made the provisions for the adjudicator to arbitrate.
The groceries supply order has already established a dispute resolution scheme for disputes arising between a particular retailer and a particular direct supplier under the groceries code. The order anticipates that the adjudicator—referred to there as the “ombudsman”—will arbitrate these disputes. This will ensure that disputes are arbitrated by an individual with a high level of expertise in the sector and allow the adjudicator to gain a greater understanding of how the code is operating that will be helpful when carrying out his or her functions, such as providing advice or preparing the annual report.
In response to the question asked by my noble friend Lord Eccles on whether the Bill will override existing arbitration clauses, the order already gives a right to suppliers to arbitration in accordance with Article 2 of the order. The Bill simply allows the adjudicator to carry out that arbitration role where appropriate. Similarly, with regard to Amendment 16, the purpose of Clause 3(1) is to increase the expertise of the adjudicator—something that will benefit both retailers and suppliers. It is entirely reasonable that just because the adjudicator has not acted as an arbitrator he or she should continue to have access to the information from that dispute. This clause provides the adjudicator with the means of obtaining it. Therefore, with that explanation, although I know it will not please him, I hope that it will persuade him to allow Clause 2 to stand part of the Bill.
I am grateful to my noble friend. Perhaps I may ask whether that last comment was on Part 2 of the code of practice, which does not seem to mention arbitration.
The order already gives the right to suppliers to arbitration, in accordance with Article 11. I am sorry, did I say Article 2?
My Lords, I shall not detain the Committee long with my amendments in this group. They are designed to protect legal professional privilege and confidentiality of communications in Scotland.
I am certain that the noble Baroness will say that legal professional privilege is recognised by common law and is therefore protected by it; that it is not therefore necessary to make legislation to protect it; and that the same applies in Scotland. My question to her, although she may not be able to answer it, is: why do we protect legal professional privilege in some legislation but not in other legislation? For example, in the Counter-Terrorism Act 2008, at paragraph 12 in Part 3 of Schedule 7, we enacted exactly the provision I have sought to include in the Bill. That is only one example and I can find others. I apologise to the noble Baroness for bowling her a bit of googly, even if I am a Scotsman—and we normally cannot play cricket at all, unless we captain the English team. Why on some occasions do we legislate to protect legal professional privilege and on others we do not? If she can answer that at some stage, I will be pleased. I do not intend to press this matter to a Division. I beg to move.
This is an important issue. It is clearly important that documents subject to legal professional privilege should not be subject to the information-gathering powers that are granted here. I thank the noble Lord, Lord Browne, for raising this point and reassure him that the Bill already gives protection to documents that are subject to legal professional privilege, on the basis of the general rule about legal professional privilege in civil proceedings. Because the enforcement mechanism in Schedule 2 and Clause 3 is via civil proceedings, the outcome is that legal professional privilege cannot be overridden.
I can say that confidently because legal professional privilege can be overridden only by express words or necessary implication. That is precisely what the House of Lords decided in the case of R (Morgan Grenfell & Co Ltd) v Special Tax Commissioner 2003. There are no express words of override here, nor is there anything that can be thought of as giving rise to unnecessary implication. In the mean time, I have been given an answer to the question put to me by the noble Lord. It is difficult to talk about other legislation, but we are clear that the intent is to protect legal professional privilege here.
As a result of the precedent to which I have just referred, the Bill has the effect desired by the noble Lord, Lord Browne of Ladyton, and I would therefore ask him to withdraw his amendment.
Picking up on quite wide-ranging amendments, I think that on this side we are content that included in the drafting of the clause is the fact that third parties can be party to the complainant. That is perhaps the easiest way to put it. Yet we appreciate what has been said and would like the Minister to underline and put on the record that that is indeed the case. On this side, we think that third parties will act as a responsible check and balance to the process in that they will pick up widespread experience of the supply chain, including from other suppliers who may come forward with information. I am sure that they will act as a steadying hand on any vexatious claims that individual suppliers might feel they have under their own individual circumstances. I will also reply to the noble Lord, Lord Howard. Of course, on this side we are very concerned that fair and best practice should be everyday experience for all businesses, whether they supply supermarkets or not.
I thank all noble Lords. We are considering three amendments in this group—two intended to make it easier for the adjudicator to begin investigations and one to make it harder.
I assure noble Lords that the Government are in complete sympathy with the aims of the amendments tabled by my noble friends Lord Razzall and Lord Teverson, and by the noble Lord, Lord Browne. We firmly believe that the adjudicator should be able to consider information from any source when deciding whether to start an investigation, whether or not this is provided by way of complaint. However, it is unnecessary to make explicit provision for the breadth of information that can be considered. I assure noble Lords that in this respect Clause 4 is written broadly and places no limits on who can complain to the adjudicator or what evidence the adjudicator can consider as reasonable grounds for suspicion. My officials have discussed this clause with trade associations and representatives of suppliers, including the National Farmers’ Union and the Food and Drink Federation, and they have raised no concerns over the wording of Clause 4.
The amendment of my noble friend Lord Howard of Rising would return the Bill to the draft that was originally published for pre-legislative scrutiny last year by restricting the sources of information that the adjudicator could consider to information from suppliers and information in the public domain. I remind noble Lords that this issue was considered carefully by the BIS and EFRA Select Committees, both of which explicitly rejected the version of the clause that is now being proposed. They concluded that third parties, including trade associations and whistleblowers, could have a valuable role to play. After discussion with both suppliers and retailers, the Government decided that that was right. Trade associations, for example, may have a better overall picture of practices in a sector, which could reveal systematic breaches of the code. The Government therefore consider that it is right that the adjudicator should be able to consider any relevant information when making decisions to investigate. However, I reassure my noble friend Lord Howard of Rising that we have also introduced Clause 15(10) to enable the Secretary of State to restrict the possible sources, if it turns out that third parties do act irresponsibly.
I say to my noble friends Lady Byford, Lady Randerson and Lord Howard that there is protection in the Bill against malicious complaints, in that costs can be awarded against a complainant who makes a vexatious complaint or one that is wholly without merit. If those answers are seen as good and fair, I will ask the noble Lord, Lord Browne, to withdraw his amendment.
My Lords, at Second Reading the Minister said that there would be no restrictions on who could complain to the adjudicator and she has confirmed that that is the position, which I am satisfied with. I am grateful to all noble Lords who have spoken in this debate for their support of that position, which was overwhelming, with one notable exception.
The noble Lords, Lord Teverson and Lord Borrie, raised the issue of my reference to the phrase “with an interest” as perhaps restricting those who can complain. I may, in including it, have been guilty of what I have been trying to avoid and want the Government to avoid: attaching legalese when it is unnecessary. The concept of “with an interest” is well recognised by lawyers. It was intended not to restrict but to indicate that there ought to be a bar against frivolous or vexatious complaints. The idea of title and interest is a concept with which I am entirely comfortable, but I understand that many other people may not be and may think that it would be restrictive. It would not prevent any of those identified groups that noble Lords want to be able to complain to the adjudicator from doing just that. In any event, I would think that the adjudicator would be experienced and able enough to indentify frivolous or vexatious complaints and see them off rather than have to wait until the end to deal with them by the imposition of expenses, as it were.
I cannot conclude without expressing a degree of regret at the tone of the preamble to the contribution of the noble Lord, Lord Howard of Rising, to which I listened with interest. I have some sympathy with it, which he will have gathered from my contribution. I am not interested in creating some monster which runs away in terms of regulation.
Before the noble Lord sits down, I realise that I omitted a response to my noble friend Lord Howard on a question that he asked. It was central to what he was saying, so I hope that the noble Lord, Lord Browne, does not mind if I intrude. My noble friend Lord Howard asked whether it was right that the adjudicator will have no power to require information before an investigation is started. The answer is yes. The adjudicator will have no such power; this is in paragraph 35 of the Explanatory Notes. The only exception to that is the monitoring of recommendations. I thank the noble Lord, Lord Browne.
I will finish what I had to say. I was pleased that the nature of our debate in Committee this afternoon was devoid of partisanship. I know that the noble Lord, Lord Howard, was perhaps just tweaking our tail a little and was not making too serious a point, However, I represented a group of farmers in my constituency, which was both urban and rural, for 13 years. I established a good relationship with them, and some of them became my very good friends, although I did not know them before I became a Member of Parliament. I say to the noble Lord, Lord Howard, that before he categorises people as manifestations of irony, perhaps he should make some inquiries. I am confident that, were he to interrogate members of the National Farmers’ Union in Scotland whom I represented for 13 years about whether they thought it ironic that I should be party to a process that is designed to protect their livelihoods and those of others, he would be surprised. Clearly he would be surprised, because he has a preconception about where I am coming from. The same could be said of my noble friends on the Front Bench. I understand that one of them farms, and so is well qualified to speak for farmers. Therefore, it might be better if we avoided such implications for the rest of our deliberations. I beg leave to withdraw the amendment.
My Lords, I will read out a sentence that is relevant to my amendment and also to the one we have just discussed. The Minister stated:
“After careful consideration, the Government have decided not to restrict the information that the adjudicator can consider”.—[Official Report, 22/5/2012; col. 726.]
That is entirely right. It is a free country, with free speech and so on. However, at the other end of the story, if we were to get into a situation where it was found that something had been brought forward that turned out to be vexatious, it would represent a failure and would be proof that the Bill was not working as well as it should.
I am mindful of the warning of Professor Lyons that he was not at all sure that the investigation potential was all that large, because of the length of the supply chain and because the adjudicator may investigate whether a large retailer has broken the groceries code. That is quite a narrow ground on which to mount an investigation.
In my amendment I put forward the argument that we should take out “suspect” and put in “believe”. There is a lot of hearsay and suspicion in the world, and in the way in which people think about the way supermarkets behave. When considering several Bills recently the House had no problem accepting that “suspect” was too weak and that we should “believe” before we start engaging in the expenditure of public money. I also think that it would be a protection for the adjudicator. This business of investigation is delicate and the adjudicator will have quite a hard time with it.
It is not an answer to say that Amendment 24 is irrelevant, because I think that the Office of Fair Trading should persist. That is my preference but of course I am capable of accepting that we should debate this on the basis that there will be an adjudicator, even though I want to see the continuation of the OFT. The adjudicator would welcome the protection of having to say that he or she “believed” that they had reasonable grounds rather than just “suspected”. I beg to move.
My Lords, the amendment would alter the criterion for starting an investigation so that the adjudicator would have to have reasonable grounds to believe that there had been a breach of the code, rather than reasonable grounds to suspect, before beginning an investigation. The decision on what threshold is needed is always difficult. However, we should consider what is being decided here. It is not guilt, liability or a sanction of any kind. All that is being decided is whether the adjudicator should begin an investigation that will allow him or her to decide, based on the results of the investigation, whether there has been a breach of the code. At this early stage of the process, the term “suspect” rather than “believe” has to be correct, particularly as the adjudicator generally will not benefit from the information powers set out in Schedule 2 until an investigation has started, and so may not be able to establish grounds for belief.
With that explanation, I hope that the noble Lord will see fit to withdraw his amendment.
My Lords, I thank my noble friend, although I will come back to the matter because I am not satisfied. I should like to point out that the minute an investigation begins, it threatens a supermarket with an unexpected cost. Starting an investigation is quite a serious matter and is not to be undertaken lightly. The word “believe” should be included in the prelude to an investigation. I also think, given the amount of information that would already be available and will become available to the adjudicator, it should not be too much of a problem to ensure that there is some certainty that the matter is worth investigating. I beg leave to withdraw the amendment.
My Lords, I am interested in the noble Baroness’s amendment. I shall not comment on it at length, but I understand the problem she raises here. I want only to ask the Minister whether, under paragraph 16 of Schedule 1, which we discussed earlier in respect of incidental powers, it would be better to offer the adjudicator some flexibility under this wonderful paragraph and thus allow him to use his judgment on what would be a reasonable level of travel expenses.
My Lords, I can understand why my noble friend is asking this question because she lives in the countryside. I live in Cornwall and I know about buses in rural areas, and can understand the principle behind the amendment. From a practical point of view, a simple distance criterion will be much easier for the adjudicator to apply than one based on the time taken to use public transport. It says here that it is more straightforward and harder to dispute to decide whether someone has travelled more than 10 miles than to calculate whether it would have been possible to make that journey within half an hour on public transport.
However, my instinct is similar to that of the noble Lord, Lord Knight, and I feel that somehow or other the adjudicator should at least be able to have some thoughts on this matter. Although I shall ask my noble friend to withdraw the amendment, I can say that we will go back and look at this issue to see what the answer may be. I do not know whether there can be some discretion, and I may be treading on all sorts of impossible ground, but when we discussed this matter previously, and my team asked why we should consider this, I said, “I think you will find that this is a rural question”. There is obviously sympathy in the Committee for my noble friend’s question. I therefore ask her to withdraw her amendment. However, I will take it away and see if there is anything else that we can come back with.
I thank my noble friend for that response. I am not wedded to the half-hour period suggested in the amendment, but I wanted a debate about the need for rural accessibility. I am grateful to the noble Lord, Lord Knight of Weymouth. We all appreciate some of the real difficulties that people face. I am grateful to the Minister, and it gives me great pleasure to withdraw my amendment in the hope that we will come back with something at the next stage. I beg leave to withdraw the amendment.
I cannot see how the Minister can possibly have a good reason for rejecting the perfectly straightforward amendment of by my noble friend.
My Lords, the reports that the adjudicator must publish at the end of each investigation are a vital part of his or her accountability and an important way of keeping retailers, suppliers and consumers informed of his or her work. It is therefore right that we should carefully examine what is contained within them. To take each of the amendments in turn, I find the amendment in the name of the noble Lord, Lord Browne of Ladyton, interesting and he has made his case eloquently. It is indeed reasonable that the report should give the reasons for the decisions reached, as well as the decisions themselves. I would be happy to speak with him further about this amendment before the next stage of the Bill.
I am less sure of Amendment 33, which is proposed by my noble friend Lord Eccles. I think that it is reasonable to say that the adjudicator’s report need not always identify the retailer concerned. This is because there may be cases where the adjudicator considers that the matter can more appropriately be dealt with privately. For example, if there were no breach of the code, the adjudicator might conclude that it would be unfair to name the retailer that had been investigated, due to the possible reputational damage.
I am most grateful to the noble Baroness for giving way. In what way will the Freedom of Information Act apply to the adjudicator? If a report was published that did not identify a retailer and someone wanted to find out who the retailer was, would it apply? I think that that is pertinent to the noble Viscount’s amendment.
Will scrutiny from freedom of information or the parliamentary commissioner not undermine the principle of confidentiality? The duty to maintain confidentiality is very strong and the Bill is explicit that it can only be overruled in certain defined circumstances. Those would not include a freedom of information request and that position is a result of Section 44 of the Freedom of Information Act, which is engaged by Clause 18. Generally, freedom of information will apply to the adjudicator with the exception of Clause 18 overriding it. I am sorry that that was a slightly disjointed answer. Was it of help?
I am grateful to the Minister for giving me another chance to seek clarification. It seemed clear and then the second piece of in-flight refuelling to the Minister made it less so. She essentially said that there is a confidentiality get-out on FOI for the adjudicator. Normally, freedom of information would apply to the work of the adjudicator unless there were good reasons for confidentiality such as protecting the interests of a retailer who would otherwise be damaged. Is that the case? If the Minister or her in-flight refuelling were able to give us some examples, that would be quite helpful.
My view—and that of the advisers behind me—is that at this stage I need say only one thing: I will write to the noble Lord. That will be easier and fairer. We will make sure that everyone else receives a copy of that, too. I apologise for not being able to be clearer at this stage. Maybe it is getting late. Furthermore, regarding the deletion of subsection (4), it is only fair that if a retailer is identified in a report they are given a reasonable opportunity to comment on a draft of that report before publication.
That brings us on to my noble friend Lady Byford’s amendment, which would require the retailer’s comments to be published as an annex to the report. Although I understand the thinking behind that, on balance it is unnecessary. Although the retailer may comment, the adjudicator is not obliged to include any of these comments and the final report is fully the adjudicator’s. Furthermore, if a retailer knew that any comments they made would be published, it could impair free and frank discussions. I hope that that clarifies the position a little. Apart from the fact that I will write to everyone to clarify the point about freedom of information, I ask noble Lords to withdraw their amendments.
I am slightly mystified by the Minister’s response to my question. I would be grateful if she would take it away and think about it because it was a surprise.
Despite the lateness of the hour, I am significantly perked up by the noble Baroness’s response. I have no doubt that what tipped the balance in my favour was the support that I received from the noble Viscount, Lord Eccles, but more importantly that I managed at last to persuade my noble friend Lord Borrie that there was some merit in one of my amendments. I am extremely grateful to him. He has almost rehabilitated his relationship with me with that intervention. I am delighted that the noble Baroness is willing to take this away. I would of course say this but, with respect, it enhances this part of the Bill. It will have the consequence of reducing the amount of contention that follows decisions if it is clear that people can expect that there will be reasons given for them.
I listened carefully to the amendment by the noble Viscount, Lord Eccles, and I have some sympathy. Coupled with the contribution of the noble Baroness, Lady Byford, there is an issue here that requires further exploration. I think that—with respect—there was a cross-purposes discussion that took place between the proposal of the noble Baroness for comments to be published, and the response from the Minister that that would in some way impede the process of investigation. I understood the noble Baroness to be saying that the comments and response deserve to be published. As these will be published in any event, it would be a much more coherent and comprehensive process that would command the support of parties if they thought that, even when there was a finding against them, the response would be published by the process rather than independently of it.
I hope that I have done credit to the amendment from the noble Baroness. In any case, conversations are about to take place and I hope that, when we all come back to this, there will be even bigger smiles on their faces, metaphorically, than I have at the moment, having managed to achieve even this minor victory. In the mean time, I beg leave to withdraw the amendment.