Food Fraud

David Heath Excerpts

Monday 8th September 2014 Commons Chamber

[Roger Williams]

My hon. Friend makes a good point. Of course, because we are in the European Union we expect that all food that comes into this country will have been slaughtered, processed or manufactured to a standard that would be acceptable in this country. Food coming in from third world countries is another matter altogether. One issue that I concentrated on when I first became involved with the issue of food fraud was the smuggling of meat into this country from Africa. There were various types of meat, but the most serious were parts of primates, including gorillas, apes and monkeys, which certain ethnic communities in this country particularly value. It was obvious that there was no scrutiny of the safety of these meats or even what they were. There was a real concern that not only animal diseases but human diseases could be brought in by this means. Much of the meat came from west Africa. The problem of Ebola today shows that we might still face a real danger from this problem.

I certainly welcomed the final publication last Thursday of the Elliott review of the integrity and authenticity of the UK food supply. We waited quite a long time for the report, but it was worth the wait because it is a comprehensive and well set-out document. It demonstrates the UK Government’s commitment to improving the integrity and assurance of our food supply networks. Professor Elliott’s report highlights that the UK has one of the safest food supply systems in the world, with a great deal of work being done to ensure that food is safe to eat and free from chemical and microbiological contamination, and all those involved in the supply of food and those responsible for developing and enforcing legislation should be commended for what has been achieved.

More attention and more resources, however, need to be put into food authenticity and combating food fraud and food crime. At the beginning of the horsemeat problem, the important question arose about what was meant by adulteration and what was meant by contamination. As far as I am concerned, contamination is not the deliberate introduction into food of other substances—it happens by mistake or inadvertently—whereas adulteration is the deliberate introduction into food of mostly lower-priced commodities. That issue was certainly at the heart of the horsemeat scandal.

[Mr David Heath (Somerton and Frome) (LD)]

My hon. Friend will remember that I had some involvement in the problems at that time. It was important early on to establish a threshold for contamination/adulteration that made sense. Otherwise, we would have been in the absurd position of testing every piece of meat and finding that it was contaminated simply because somebody in the room might be shedding human DNA or because the meat had been sitting in a butcher’s shop where beef or pork sausages were not in separate airtight compartments. The level of the threshold, it seems to me, was one of the most important early advances we made in understanding the issue and ensuring that we were not attacking the wrong problem.

[Roger Williams]

I commend my hon. Friend for the work he did right at the beginning of the horsemeat scandal. He provided us with greater clarity about what was involved and about the difference between contamination and adulteration. Of course, contamination is not something that should be taken lightly in its own right. Halal meat contaminated by pork, for example, is a very serious matter for the religious beliefs of some of our communities. I do not in any way view contamination as of little interest; it is of great interest, but it must not be confused with the deliberate adulteration of food.

Food fraud is corrosive of consumer confidence, which has ramifications right through the food chain. The horsemeat contamination incident last year is an example of such a damaging effect on the food industry and on consumer trust. After “Horsegate”, a poll showed that only 56% of consumers were confident that the food they bought was what it claimed to be—a rather shocking statistic. This figure is far too high, and it is one of the reasons why it is so important that we are having this debate today.

Small businesses are especially vulnerable to food fraud, and according to the Elliott review, many have said they are struggling to stay in business because they are competing against those who cheat. That goes for farmers, too, as they grow the raw ingredients for the food industry and rely heavily on consumer confidence. It is essential to safeguard this industry.

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[Mr David Heath (Somerton and Frome) (LD)]

I congratulate my hon. Friend the Member for Brecon and Radnorshire (Roger Williams) on securing this debate, which is of critical importance to consumers, retailers, producers and everyone involved in the food industry. As I said earlier, I was Minister with responsibility for food when the horsemeat scandal broke, and I have to say that nothing has made me angrier than what was happening then. Not only was a deliberate fraud perpetuated on consumers who deserve better, but that fraud had a serious reputational effect on very good producers in this country who had no part whatever in what had taken place. Retailers who had good reputations were trying to do the right thing but were none the less affected. We must put in place systems that are as effective as they possibly can be to prevent such a thing from happening again.

I am unashamedly a fan of British food and British food producers. We have some superb production in this country, and we should be proud not only of the quality of the food we produce but of the standards that we maintain day to day, week to week and year on year. We should deal to the best of our abilities with anything that sullies that reputation.

[Huw Irranca-Davies]

I thank the hon. Gentleman and former Minister for giving way. He has great experience and knowledge of this area. One of the great things about Professor Elliott is the great emphasis he places on this safe haven of intelligence coming forward and on a strengthening of the powers around whistleblowing. When the scandal was kicking off, it astonished me that people were then coming forward and whistleblowing. Elliott is right to say that there is a cultural change in the industry. There are lots of good players out there, but there needs to be a cultural mindset change to encourage people to come forward.

[Mr Heath]

The hon. Gentleman is absolutely right. One of the earliest actions I took as a Minister was to convene a meeting—I remember it happening—at the Food Standards Agency with all the major retailers. I made it plain to them that they had a very real problem to deal with, and that that problem was not going to be resolved unless they were prepared to do the work that was necessary in terms of testing and of sharing information, which were not part of the culture of the industry at that point. I said that unless they were prepared to do that, it was impossible for the Government to take the steps that would help to restore the reputation of the food industry.

[Jim Fitzpatrick]

Let me reinforce the point that the hon. Gentleman is making. Every food retailer was affected by the scandal. Nobody was left untouched. The most diligent retailer was also being conned by unscrupulous dealers somewhere down the chain. Did the hon. Gentleman get a sense that they were going to invest more in their own testing, or were they looking to Government for that investment? What was the balance there?

[Mr Heath]

We made it clear that testing was the retailers’ responsibility. Retailers had not only a legal responsibility but a moral responsibility to their consumers to ensure that the material they put on their shelves was what they said it was. They were put in no doubt whatever that they had to up their game, and they did, and all credit to them. I have no criticism of the actions that the retailers took to meet the demands that we placed on them for this very comprehensive testing regime, which took place not just once but time after time to ensure that the incidents that had been identified had been eliminated and remained eliminated. I have one caveat, which the Minister may wish to address: I did not feel that I had the same level of commitment from the catering industry. I am worried that as a lot of food arrives unlabelled on tables across the country through the catering industry, that might perhaps still be a weak spot. I would like to think that continuing pressure will be placed on the catering industry to be as assiduous as I hope the retailers now are about composition, testing and ensuring the integrity of their systems.

[Zac Goldsmith (Richmond Park) (Con)]

I enjoyed my hon. Friend’s tribute to British food earlier, to which I completely subscribe. Does he share my hope that we will do everything we can to maintain the high standards of British food as progress is made in the transatlantic trade and investment partnership? As negotiations continue, there is tremendous pressure from US agribusiness to try to weaken our resolve to avoid unlabelled GM food, beef treated with hormones and poultry meat that has been contaminated with chlorine, and we should do everything we can to resist that pressure and to maintain the standards that he has just praised, which I totally support.

[Mr Heath]

I see no reason to compromise on high standards of quality. There are areas that I think we can quite properly discuss with the United States in which the answer is labelling and letting consumers make the choice rather than simply having bans. Some of the areas the hon. Gentleman mentions fall into that category; others do not. I have no interest in hormone treatments being used in this country and think that it would be a very great shame if that were standard practice in our dairy herds. We have been down that road before; I remember having exactly that conversation 30 years ago when I was leader of the county council and American Pharmaceuticals proposed to bring in bovine somatotropin to increase yield in our dairy herds. As a Somerset representative, I would say that we simply do not want that. It will be bad for our cattle and for their welfare and it will also be bad for the industry as regards consumer acceptance of a very wholesome product. I have a lot of sympathy with what the hon. Gentleman says.

[David Simpson]

I neglected to apologise for my late arrival when I intervened earlier, so if I was repetitive I apologise. A number of the complaints I received in my constituency from commercial companies concerned the fact that although we welcome an open border policy for free trade within the European Union, it has its downside as regards free movement, and there were not the border checks that there should have been. There is paperwork, and we can do many things with that, but there are not the necessary physical checks. I am sure that the hon. Gentleman heard that complaint when he was a Minister.

[Mr Heath]

I did hear that complaint and I must say that what was coming into our ports from outside the EU was a great concern of mine. I do not think sufficient precautions were in place, although they have improved since. Within the EU, although there were theoretical paper trails, when they were examined in the context of the horsemeat scandal they were found to be relatively easy to falsify. That cannot be acceptable and we need co-operation on that between member states.

The paramount responsibility of the Food Standards Agency and of Government is to maintain the safety of food. I do not want anything to be done in terms of the composition that takes away from the primary responsibility of ensuring that when consumers eat something, they are safe from infection or poisoning. That is not to say that composition is unimportant. It gives consumers something other than what they think they have bought. As we have heard, for some communities that is of very great significance, particularly those that have religious requirements about what they eat, but everybody is entitled to be sold what they think they are buying according to the label that the product bears. If people are deliberately setting out to sell something other than that, there is a very simple word for it, and that is fraud. The title of today’s debate is “Food Fraud” and the significant point is the fraud, not the food. It is a crime, and one that needs to be treated as serious. We need the apparatus to ensure that we interdict when it comes into the country and that we ensure prosecution when people involved are in this country.

[Miss McIntosh]

I am following my hon. Friend’s elegant words very closely indeed. The Secretary of State when he was the Minister responsible for farms and food, my right hon. Friend the Member for North Shropshire (Mr Paterson), promised that the perpetrators of this crime would be brought to book. It must be a source of great disappointment and regret to my hon. Friend, as it is to me, that no convictions or successful prosecutions have been brought.

[Mr Heath]

I find it enormously frustrating because, frankly, the then Secretary of State and I did absolutely everything we could to mobilise and energise enforcement agencies across Europe to try to ensure that the problem was traced. I can say now because I am free to do so—the Minister may feel more constrained—that I believe that at the root of this was large-scale, European-based organised crime and that more could and should have been done by other member states to get the bottom of it.

It was a very convoluted story—we know that—and it was not easy, but I felt that having raised the issue very effectively in European Council meetings, obtained the involvement of the Commission and persuaded other member states to take it seriously, there was a palpable feeling once the press and media furore had died down that some member states were suggesting, “Let’s not push it too hard, shall we, chaps? Let’s not remind people that we had a problem and let’s just hope it all goes away.” I do not think that is good enough. I do not think that the UK Government took that view, but I am not convinced that others did not feel that once the storm had passed, it was easier simply to carry on as before. The trouble is that that meant that those people who were making an awful lot of money—we are talking about huge sums across a European nexus—continued to do so, which means that the problem will arise again.

We in this country and manufacturers and retailers across Europe made the situation worse because of the complexity of the supply chain. That has been mentioned time and again, and the more we looked into it, the more extraordinary seemed the number of different hands that some of these products went through across so many jurisdictions in Europe. One only had to look at the price of the finished product and the number of people who were supposedly making a profit to realise that that could not possibly be done in a legal way. Some of our big retailers, which have very sophisticated procurement offices, perhaps had some responsibility to ask more questions. They do now, but they should have been asking at an earlier stage about how so-called beef could travel all the way around Europe only to be sold as eight burgers for less than £1 on a British supermarket shelf. It could not be done legally.

[Huw Irranca-Davies]

The hon. Gentleman is making a fantastic contribution to the debate. Does he agree that one of the strongest recommendations in Elliott is that part of the due diligence, for want of another term, from here on must be that when those in the supply chain see an offer that is too good to be true, they must ask why. When horsemeat was being sold at a quarter the price of good beef, anybody looking at it should have asked what on earth was going on.

[Mr Heath]

They should indeed. People should also be aware—the hon. Member for Tiverton and Honiton (Neil Parish) made this point in an intervention—that the more price wars we have in our supermarkets, the more dangerous it is for good, honest suppliers, and the greater the propensity for those in the middle to try to scrape an extra margin through unfair practice. That is why I worry when our major retailers engage in food price wars, because although it may seem that that is in the interests of consumers of modest means, it is not, because those people are just as entitled to get good-quality produce for the money they spend as those paying much higher prices.

Although they are beginning to do this, retailers need to raise the status and increase the independence of those they employ to carry out testing throughout the supply chain. That will mean that if the testers suspect that something is wrong, they can say, “This has to be looked at,” and the matter will be considered at board level so that appropriate action can be taken. I do not want to start a hare running or to suggest that something very wrong is happening in the catering industry, but I worry that the quality of products that sometimes find their way into catering establishments is not as high as those sold on retail supermarket shelves.

The Food Standards Agency has a crucial role to play, but one of the difficulties that I faced as a Minister—the current Minister will face the same situation—was that I had no responsibility for the agency, so I had to answer questions in the House that were strictly speaking nothing to do with me, in the sense that the FSA had an independent role. The distinction is important, because the food industry’s sponsoring Minister should not also be its regulator, and we saw many years ago that if that happens, the public lose confidence in the regulator. However, it is important that there is the greatest possible co-ordination between DEFRA and the FSA. We had that, and I pay tribute to the agency and its officers for the work that they did with me and for their help, which I appreciated. It is important that such co-ordination take place at a high level.

I worry that local authorities do not always play their part. We need a comprehensive local authority testing system. Some local authorities are very good, but others, frankly, are not. It is easy for anyone to say, “Oh, it’s about resources,” but there is no direct correlation between the resources available and whether an authority does a good or bad job. It is more a case of whether an authority recognises that it has an essential and primary responsibility to keep people in its area safe. Just as central Government have a responsibility, so does local government, so local authorities need to carry out testing. There is a question about the laboratory service—the recommendations on the laboratory and public analysis services are crucial aspects of the package—but I do not accept that local authorities should be let off the hook if they say, “This is a low-priority area and we want to spend our money elsewhere. It’s all the Government’s fault.” That is not the case, and local authorities must recognise their responsibilities.

[Jim Fitzpatrick]

I take the hon. Gentleman’s point that resourcing is no guarantee of local authorities providing good services, because there are some very good authorities and others that are not so good. The practice of various local authorities shows that this is not a party political issue either. However, one of the Elliott report’s main recommendations is that there should be an examination of what is happening in local authorities so that we can identify the good guys and those who are not doing such a good job, find out what is best practice and how it can be achieved, and then share that information.

[Mr Heath]

I entirely agree, although I suspect that the Food Standards Agency knows an awful lot of that information already because it works directly with local authorities from day to day and will know of the results it receives from local authority analysts.

We must not set out rigid structures for the FSA that impose testing regimes for no benefit. The system must be based on intelligence and proportionality. Earned recognition, if appropriate, is an important way of redirecting resources effectively but, as Professor Elliott says, that must be coupled with spot checks to ensure that what one thinks is going on is actually going on. Nevertheless, it would be foolish to redirect FSA resources, which are always under pressure owing to the extent of its responsibilities, to testing that serves no useful purpose.

I understand exactly what Professor Elliott says about the concept of a food crime unit, but I have a concern. Food crime and fraud cover a wide spectrum of offences, ranging from low-scale inadvertence and very minor adulteration—frankly, it is not difficult to pick up and prosecute such practice, and it should be well within local authority or FSA officials’ power to take appropriate action to deal with it—to the large-scale fraud that the horsemeat scandal revealed, which I think is based on organised crime. Such fraud might require action at a much higher level, such as through the National Crime Agency, and to deal with that sort of organised crime, we need a sophisticated approach and co-operation with counterparts throughout the world, such as Interpol and Europol. I worry that if we are not careful, the food crime unit could fall betwixt and between those two ends of the spectrum, and we might have something that is ineffective at dealing with the big guys, but over-designed for the little guys. The Government need to give serious thought to the terms of reference and composition of the food crime unit, as well as to how it reports and feeds into the gangbusters in the NCA.

The one thing that worried me enormously when I was a DEFRA Minister—it still worries me enormously, and I think it will worry me more and more—was the resilience of the Department itself. DEFRA is a good Department. It does an awful lot of good work and has to cover a huge number of contingencies, but its funding and resources are now such that it would find it difficult to deal with a major incident. I hope that the Treasury and leaders in government recognise that if we have a major incident to which DEFRA is unable to respond, the consequences could be enormously damaging. I am not saying that we are at that point yet, but we must be cautious that we ensure that we do not stretch what is already a thin line—a thin blue line, red line or whatever; let us think of a colour—

[Huw Irranca-Davies]

Green.

[Mr Heath]

I am grateful to the hon. Gentleman for coming up with a suitable colour on the spectrum. We must not stretch the thin green line so taut that we are unable to deal with an act of God, or an act of wicked men, that might cause our nation enormous problems, but I just feel that we are getting close to that edge.

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[Huw Irranca-Davies]

Let me put it back to the hon. Gentleman: when the coalition Government entered office in 2010, one of their first decisions in DEFRA was to split away authenticity testing. At that point, did they think it was appropriate to increase investment in it? We could go back and forth on this issue, but authenticity testing was still happening at that time, even if it had been reduced. I am interested in the detail, but it was continuing.

[Mr Heath]

It is very important to distinguish between the testing regime that remains within the province of the FSA and local authorities, which continued according to their priorities, and the policy developed by civil servants, which was moved to DEFRA in order to inform Ministers who were having to deal with very complex European issues of labelling and composition. That was perfectly logical. If there was confusion, it was not at the level of central Government; it may have been elsewhere.

[Huw Irranca-Davies]

After the horsemeat scandal erupted in February 2013, the National Audit Office looked at the contributory factors to any delay or confusion. One of the things it pointed fairly and squarely at was the confusion about who was doing what. It pointed the finger at the machinery of government changes. The hon. Gentleman, who was a Minister, may be saying that he was not confused, but there was certainly confusion between local government and Whitehall, as well as within Whitehall, as to who was doing what. I agree with Troop and with Elliott’s interim findings that it should be put back together again, but we will have to differ on that. The question for the Government is: can they make this work if they are not going to do that?

One of our criticisms relates to the fact that just before we left government in 2010 we published what was at the time a ground-breaking, comprehensive food strategy, “Food 2030”, which followed on from our previous work on “Food Matters”. It mapped out a comprehensive and long-term strategy to ensure the provision of safe, nutritious, affordable and sustainable food, but it has been left on the shelf. Where is this Government’s overarching strategy to pull everything together? The answer is: there isn’t one.

Labour welcomes and supports fully all the Elliott report’s recommendations, and we will continue to urge the Government for full and speedy implementation. Professor Elliott sets out a new Government-industry partnership, some aspects of which will require a culture change in Government and in industry. He makes sound recommendations for a new food crime unit and a whole framework for national food crime prevention, encompassing Government, the FSA and industry. He calls for—it is interesting that he deals not just with the mechanics—a new mentality to meet the challenges of sourcing from complex international supply chains, and a zero-tolerance approach to food crime. He also fashions detailed proposals on whistleblowing, intelligence-gathering and co-ordinated laboratory and testing services, and stresses the need for leadership at all levels, including in Government. Most of all, he stresses—he puts this top and dead centre—the need to put the consumer first, and we agree.

Labour supports the report and all its recommendations. We believe that the industry is ready to drive the culture changes that Elliott demands and that the consumer and the public deserve. I say to the Minister, however, that we have reservations: we do not have the same confidence that the Government are serious about these changes.

Make no mistake: the Elliott report is not only a series of sound recommendations, but is an expert analysis and critique of the coalition Government’s policy on food governance and food crime. Since 2010 under this coalition Government we have seen the fragmentation of food governance; an ideological fetishism for stripping out regulation for the sake of it, whether that regulation is good for the consumer and industry or not; and front-line cutbacks in inspection at national and local level and in food-testing capabilities.

The Government have also been asleep at the wheel, reacting only when disaster happens, realising too late that cutting the brake cables and unscrewing the steering column was not a good idea. In 2010, one of this Government’s first actions was to split the responsibilities of the FSA, an agency that was, as I have said, previously regarded as the gold standard of consumer protection and industry regulation. It was deliberately fractured, which hampered clarity and leadership in food governance in the UK. It is not just me saying that; others are saying it, too.

The horsemeat scandal was the slow-motion car crash that showed how crazy that decision was. The NAO stated that when a prompt response was required to the breaking horsemeat scandal, there was confusion between, and lack of leadership in, Whitehall Departments and confusion between Whitehall and local government.

Similar, repeated concerns about the mishandling of the FSA and food governance have been raised for some time by the EFRA Committee and many other industry and food policy experts. Labour raised those concerns from the word go.

The interim Elliott report made it clear that the FSA responsibilities should be brought back together. That would deal with the NAO view that fragmentation had led to needless confusion and additional complexity. The final report has stepped back slightly, but it is still commendably forthright on the need to put rigour and reach back into the FSA.

On that and many other issues, the report carries implicit and sometimes explicit criticisms of this Government’s approach to food policy and food crime. It calls for a more robust FSA, retaining its independence, and for far greater co-ordination, which has been lacking, across government and industry. It highlights the absence of high-level round-table meetings between the chair of the FSA and the Secretaries of State for Health and for Environment, Food and Rural Affairs, which seems to me to be a shocking omission and a glaring fault bearing in mind the fragmentation of responsibilities since 2010.

The report cites evidence from recent local authority testing that appears to show high levels of failure, particularly in meat authenticity testing, which possibly indicates fraud or the criminal adulteration of food. That is deeply worrying when set against a near halving in the number of DEFRA officials working on food authenticity since 2010, as revealed by an answer given to me by the Minister in July. It is even more worrying in the light of the immense pressures on local authorities, which have led to severe cutbacks in local food inspections.

Professor Elliott does not pull any punches. He states on page 49 of his report:

“Enforcement activity is…very vulnerable when local authority services are cut to the bone.”

He also draws attention to the average 27% reduction in the number of trading standards officers dealing with food matters, and to the 40% cut in overall trading standards services during the lifetime of this Government. Concerns for consumer protection and for the reputation of the industry are heightened when, as Elliott notes, the number of public analyst laboratories has been reduced from 10 in 2010 to six today. I simply say to the Minister that he has his work cut out if he is to explain how, against the background of cuts in front-line FSA inspection, front-line local authority inspection and laboratory facilities, he can do what Elliott asks and put the consumer first.

Given that we are now four and a half years into this Government, the Minister must explain why the UK has been behind the curve and behind European counterparts in establishing a food crime unit. That led Elliott to note that the Dutch crime unit could find no one in the UK—whether in a crime unit or anywhere else—to speak to when the horsemeat scandal happened. Had the Government’s reluctance to place any burdens on industry given them an aversion to being proactive in such a way? Had Ministers looked at the threat of food adulteration and food crime since taking office? I understand that the Minister was not in office for the whole of that time, but I am sure that he has discussed it with his officials.

One month after the horsemeat scandal erupted, a survey by the consumer organisation Which? found that six in 10 shoppers had changed their shopping habits, and that trust had fallen by a quarter. A year after the scandal, an Ipsos MORI survey showed that 95% of consumers remembered the horsemeat scandal. As has already been mentioned, the latest polling by Which? has shown this month that 55% of people are worried that a food fraud incident will happen again, that a third of them do not have confidence that the food they buy contains what it says on the label—by the way, that goes up to half for people who have takeaways on a Saturday night—and a quarter maintain that they have changed the type of meat they buy. Seven out of 10 consumers have told Which? that more action needs to be taken. The damage is lasting, so we need to get this right.

Let me ask the Minister some initial questions; in the months to come, we will return with more. As the hon. Member for Thirsk and Malton suggested, will the Minister publish a detailed timetable for the implementation of every recommendation in the Elliott review so that the Government’s warm words can be measured against actual implementation? Will he give assurances that the resources for the new crime unit and the crime framework to go with it can be found from within existing FSA funding?

Will the Minister now apologise on behalf of the Government for the decision to fragment the responsibilities of the FSA, or does he continue to ignore the argument that that decision damaged its power, authority and independence? Does he accept the Elliott proposal that the FSA should continue as a non-ministerial department so as to retain its necessary independence from the Government? How does he answer critics who believe that the FSA has gone beyond the necessary close co-operation with the industry and is now too close to the industry to be a useful and critical friend? The recent decision not to publish campylobacter rates is one such example.

Bearing in mind the need for a more robust and rigorous FSA based on the report’s proposals and the need for the FSA to have the effective and independent leadership identified by the Elliott report, will the Minister give us an update on the search for a new chair? Will he confirm that the person shortly to be proposed as chair will appear before the Environment, Food and Rural Affairs Committee before final confirmation in post?