Groceries Code Adjudicator Bill [HL]

Lord Curry of Kirkharle Excerpts

Tuesday 26th June 2012 Grand Committee

[Lord Razzall]

My Lords, perhaps I may respond to the remarks made by the noble Lord, Lord Borrie, by saying that I entirely agree with him. However, given the preliminary comments by noble Lords, one thing ought not to be forgotten—we are not starting here from scratch. This proposal emanated from the previous Government and has been heavily consulted on across all relevant parties. I know that your Lordships tend to take the view that what was in party manifestos does not necessarily bind your Lordships, but all three political parties included the creation of the adjudicator in their manifestos, and we should have that on the record before the debate goes a lot further.

[Lord Curry of Kirkharle]

My Lords, I very much support the Bill. I should like to pick up on a phrase used by the noble Viscount, Lord Eccles. He said that the current code appears to be working. I should declare that I am a farmer in Northumberland and I do not produce milk. I was also responsible for a report in 2002 in which we recommended that the OFT should monitor the recently introduced voluntary code, which later became the GSCOP.

The OFT has been monitoring the code and, as far as it is concerned, it may well be working because it has not identified any serious abuses of power that could not be resolved by negotiation. The problem is that there are many concerns about abuses of power by suppliers that have not been brought to the notice of the OFT. Many companies in the supply chain are fearful of the consequences of drawing attention to what they believe is a trading relationship which may be terminated if they are open and transparent about their concerns. From the OFT’s point of view, the code appears to be working. For many within the supply chain it is not working, which is why this Bill is so necessary.

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[Viscount Eccles]

My Lords, I am grateful to my noble friend and to all noble Lords who have taken part in this short debate. My father wrote a book called Half-Way to Faith. The noble Lord, Lord Borrie, is halfway there, so we have plenty of time to persuade him to come the rest of the distance.

The climate of fear was mentioned just once by the Competition Commission in its report. If people can find it referred to more often, I would be grateful to know about it. It was not mentioned in the summary or in the findings. I am quite sceptical about it, but that is not really the point. The point is that if it is true, the adjudicator will make it worse. If the supermarkets have the power to create all this fear and they find out that a supplier has approached the adjudicator or that a trade association is doing so on behalf of a group of suppliers, I am afraid that the messages will be a lot sterner than they are supposed to be under a climate of fear. I am sceptical about it because I do not see any justification for a climate of fear for Waitrose, for goodness’ sake. Indeed, I do not see any justification for any of the leading quoted British supermarkets. Their shares are at the bottom of their 12-month spread and they are all in trouble with their shareholders. There is absolutely no reason why they would want to make their lives even more difficult. They will want to do the best they possibly can with their suppliers.

[Lord Curry of Kirkharle]

Perhaps I may intervene to say something I should have said earlier. I chair the Leckford Estate for Waitrose, so I have an interest in Waitrose which, uniquely, supports the code and is very much in favour of it. I have certainly never used the phrase, “a climate of fear”, and I would not do so. However, I am deeply concerned about trust and confidence within the food supply chain, and I believe that this is an important factor in creating more confidence.

[Viscount Eccles]

I am grateful to the noble Lord for his intervention, but I doubt whether a state-appointed sole corporation will generate more confidence.

There are all sorts of problems. I used to supply power steering pump casings to Delphi in Strasbourg on a schedule. One week it would be three container loads and the next week it would be one, then suddenly in the middle of the week it would be four, but the following week it would be none. That is the way that just-in-time supply works. There is no escape from it, and it does not matter whether it is the supply of lettuces or steering pump housings, where we were the only people who made them for Delphi.