Groceries Code Adjudicator Bill [HL]

Lord Browne of Ladyton Excerpts

Tuesday 24th July 2012 Lords Chamber

[Lord Browne of Ladyton]

My Lords, I welcome this amendment and I am grateful to the Minister who, as she indicated in her introductory remarks, had said that she would bring such an amendment forward. It is relatively simple and I am grateful to her for being as good as her word and achieving this before the Bill leaves your Lordships’ House.

I am also grateful that she recognised that this arose from my worrying away at the arbitration provisions of the Bill. I was aided and abetted by the inestimable Michael Clancy, who is the law reform director of the Law Society of Scotland. I think we should call this the Clancy amendment, actually, because his work uncovered this lacuna in the Bill, which the Government have graciously recognised and corrected.

Of course, this provision anticipates that the Competition Commission will amend the order. The very process of amending the order, in the light of the next amendment that we come to, is a mouth-watering prospect and creates a great opportunity for the farmers of the United Kingdom to have some sort of step taken that protects their livelihoods for the future.

I do not want to anticipate that amendment, but we now know that the order will need to be amended because of this simple provision. I am grateful to the Minister for the way in which she has conducted herself throughout the consideration of this Bill, and her willingness—and the willingness of her Bill team—to listen to arguments for change to the Bill, and to allow them. I entirely support this amendment.

Amendment 1 agreed.

--- Later in debate ---

[Lord Knight of Weymouth]

Yes, I am moving an amendment. But it is also a way to allow the Government to resolve an uncertainty around the role of the groceries code adjudicator, which is the subject of the Bill that we are hoping to pass today. I beg to move.

[Lord Browne of Ladyton]

My Lords, I was not present at this weekend’s negotiations, so I rely upon the reporting in farming publications and on the BBC for what took place. My understanding is that, as a result of those negotiations, it was agreed that an order was necessary to cover the issues that had arisen in the pricing of milk provided by suppliers to processors. We understand that the Government intend to assist in the negotiation of an order similar to the groceries code order which is at the basis of this legislation. I also understand—it was covered liberally in the media—that the farming Minister, Jim Paice, told all and sundry that he would consider whether that order required an adjudicator. We are legislating for an adjudicator in this area and setting out the framework for the adjudicator to operate. As the Competition Commission will now have to amend the order at the basis of this Bill, could it be persuaded, once an order is negotiated, to incorporate this agreed order into the new order that it promulgates? By that simple stroke, we would get an order that covered this area and the adjudicator that the Minister apparently wants. Is that possible?

[Baroness Wilcox]

My Lords, the relationship between this Bill and the groceries supply order is evidently an important one. The noble Lord, Lord Knight, has proposed a technical amendment to ensure that references to the groceries supply order will refer to the order as varied, if that order is subsequently varied. There is no general rule of construction as to whether references to an instrument include references to any future variations of that instrument. This depends on the details of the context and the drafting in each case. In this case, the Government are confident that the current drafting of the Bill would already have the intended effect, which is that references in the Bill to the order include any future variations made under Section 161 of the Enterprise Act. It would not make sense for the adjudicator to exercise his or her enforcement and compliance functions by reference to a version of the order which was different from the version binding the retailers at the relevant time.

As further evidence of this position, perhaps I might also direct the noble Lord towards Clauses 16(4) and 21(5), which contemplate amendments to the groceries supply order. This makes it clear that the references to the groceries supply order are also meant to include any future variations in this case.

I will now turn briefly to the other issue which the noble Lord has raised and on which I am happy to give him the reassurance he wants. The Government share the natural concerns of noble Lords about the situation of dairy farmers. In light of the obvious interest in this matter, my noble friend Lord Taylor will be making a Written Statement tomorrow. However, I would like to give some reassurance on this issue, although I emphasise that these discussions are not within the remit of the amendment. I have not spoken to Jim Paice over the last few days, but I am sure we will have such discussions in the future. The remit of the groceries code adjudicator is clearly defined and will remain so. The proposed code for dairy is voluntary and any adjudicator for that code would be a separate person.

Our adjudicator will, of course, be able to intervene to address any instances of supermarkets breaching the groceries code in their dealings with their dairy suppliers. Dairy farmers who are indirect suppliers will also be able to bring issues to the attention of the adjudicator, for instance if they believe that an intermediary processor who is being treated unfairly under the code might in turn pass pressure on to them. Colleagues in the Department for Environment, Food and Rural Affairs are deeply concerned about the situation of dairy farmers and are considering a range of ways to help them. We will of course continue to listen carefully to any concerns raised by farmers themselves or by colleagues in government or Parliament. I cannot comment further on the specific points raised by the Minister of State for Agriculture and Food, as these statements were made only recently and he has not yet made any suggestions to me or my department.