Groceries Code Adjudicator Bill [Lords]

Ian Murray Excerpts

Tuesday 16th April 2013 Commons Chamber

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)]

I beg to move, That this House agrees with Lords amendment 14A.

Hon. Members may be surprised to see the return of a Bill to which we bade such a fond farewell not very long ago. It returns to the House for two reasons. First, we had such an enjoyable time during its passage through the Commons that we could not resist one further go. The second and by far the most important reason we tabled this amendment in the other place was a recommendation from the Delegated Powers and Regulatory Reform Committee in its sixteenth report of the Session.

As hon. Members will recall from our discussions, the adjudicator must consult on her guidance. This will allow her to make a recommendation to the Secretary of State about the maximum level of the fine or the basis for determining that amount. The Secretary of State will then need to lay an order before Parliament setting this maximum level or the method for determining it. The Delegated Powers and Regulatory Reform Committee has recommended that such an order be subject to an affirmative resolution rather than the negative procedure provided for in the Bill when it left the Commons.

There are already safeguards around the use of the power. It can be exercised only after a recommendation from the independent adjudicator, based on her consultation, and the Delegated Powers and Regulatory Reform Committee recognised that this would usefully serve to inform the exercise of the power by the Secretary of State. However, the Committee advised that as the upper limit of the penalty is not on the face of the Bill, the power to fix those limits should be subject to a significant level of parliamentary scrutiny. This is in line with its recommendations in other cases in which the maximum penalty is not stated on the face of the Bill.

We think that the Committee’s comments are reasonable and we are happy to heed the voice of Parliament on this issue. Our amendment provides only that the order will be subject to the affirmative resolution procedure, ensuring that Parliament will be able to scrutinise and positively approve the order. I trust that this increased level of scrutiny will be to the satisfaction of hon. Members, and I urge them to support this minor amendment to what I think we all agree is an excellent Bill.

[Ian Murray (Edinburgh South) (Lab)]

It is strange that an hour has been allocated for this debate when it is obvious that it will take only a few moments. Given that the Agricultural Wages Board has been abolished by the unelected House of Lords and this House was not able to have a debate on that, the timetable today is a bit disappointing.

For my sins, I have often said in Delegated Legislation Committees in the past few weeks that I agree with the Minister, and this is another demonstration of the fact that when the Government do the right thing, we will agree with them. In this case, the Minister is certainly doing the right thing.

It is worth returning to the introduction of this Bill. It was a fairly ordinary Bill to start with, but it was strengthened substantially in the other place with the addition that trade associations and third parties could seek redress from the adjudicator. Importantly, on Second Reading in this House, we had a robust debate on whether fines should be included in the Bill. We disagreed on that point, and the Minister vehemently and robustly defended their omission. We are delighted that provisions on fines were added in Committee, which made the Bill all the better.

The amendment we are considering is significant because it shows the power of this House. The Select Committee has had a pre-appointment hearing for the adjudicator, and we congratulate her on her appointment. She will be a very good adjudicator and we look forward to her getting stuck into some of the important work that has to be done on this issue. We have also had a lot of cross-party consensus on the Bill on the Floor of the House and in Committee. It is a testament to the power of the Select Committees and the Committee system—not to mention the other place—that we started with a fairly weak Bill, but it will leave this House today much stronger.

Many people deserve credit for that improvement. As well as the Minister, they include the hon. Member for St Ives (Andrew George) who is in his place, my hon. Friend the Member for Ynys Môn (Albert Owen) who I do not see in his place, and my hon. Friend the Member for Ogmore (Huw Irranca-Davies), who was my wing person in Committee.

We do not disagree with the Lords and will be agreeing with the Minister in this particular case, but I will just make this point. We had arguments in Committee about ensuring that the Select Committee on Business, Innovation and Skills and the Select Committee on Environment, Food and Rural Affairs in particular had time to look at these issues, and the Minister defended robustly the other Committees of this House. Now that provisions on fines are in the Bill, and the Secretary of State will be putting forward an order to determine their amount, it is right that that statutory instrument should be before the House for affirmative resolution. We can then debate it to ensure that it is in the interests not just of the suppliers covered by the groceries code adjudicator, but businesses and supermarkets too.

[Sir James Paice (South East Cambridgeshire) (Con)]

I will make a brief contribution because, like the Minister, I am happy to support the Lords amendment. I just wanted to make the point that, in considering the fines structure and the levels at which they will need to be set, I hope that my hon. Friend the Minister and the Secretary of State will consider the magnitude of the businesses involved. A fine that to most people would seem substantial of perhaps a few thousand pounds, would be totally insignificant—a few minutes’ trading—to a major supermarket.

I do not pretend to have the answers. This is a subject on which I have wrestled in my own mind and discussed with the adjudicator, because it will be extremely difficult. That is one reason I was always a bit dubious about the need for fines—the reputational issue will be far more valuable. It is clear to me that if a fine is to be levied, it will have to be at a level that is likely to lead to the behavioural change of the relevant supermarket that all of us who support the Bill desire to see. That means it will be very significant. I am sure that if my hon. Friend the Minister comes forward with figures, there will be accusations that they are completely disproportionate to the issues. The proportion, however, is to do not just with the issue, but with the scale of the business and the behavioural change we want to see—clearly, that is not going to happen unless the business has been in serious breach of the code.

I am grateful for the opportunity to make the point to my hon. Friend, and to hon. Members in all parts of the House, that when the statutory instrument comes back to the House we will have to consider this wider issue. It is not simply a penalty for a small offence, but something we need to ensure is a genuine penalty for breach of the code and a deterrent. It will therefore have to be of a very large magnitude indeed.