Lord Knight of Weymouth
Main Page: Lord Knight of Weymouth (Labour - Life peer)Groceries Code Adjudicator Bill [HL]
Lord Knight of Weymouth Excerpts
Lord Browne of Ladyton
My Lords, as I explained on the first day in Committee, having set out to legislate in language that is,
“intended to be easier for everyone to understand”—[Official Report, 22/5/12; col. 761.]
that is, in plain English—it is arguable at least that the Government have failed that test in the first effective sentence, which is in the third line of the Bill. It reads:
“There is to be a Groceries Code Adjudicator”.
As I argued on the first day in Committee, I know no one who speaks plain English who uses that construction. This is not the most important issue that we will discuss in relation to this Bill but it gives your Lordships’ House an opportunity to discuss this issue of plain English, which occupied us intermittently throughout our debate in Committee. Unfortunately, we did not find a comfortable way in which to deal with all aspects of this and some of them may recur in our deliberations on Report.
In order to make my point, I attempted to improve this sentence by simply amending it to read, “There will be a groceries code adjudicator”. I was told by the Minister that that changed the meaning of the sentence and that the construction I had chosen was a prediction and not a statement of fact. However, she graciously agreed to take this matter away and to think on it. Perhaps I may say that that was not surprising because, arguably, the sentence:
“There is to be a Groceries Code Adjudicator”,
also appears to me to have an element of prediction about it.
However, the Minister having graciously offered that opportunity, I grasped it. I too have thought about this sentence. With the assistance of a conversation with the Bill team, I now propose an amendment which reads:
“A Groceries Code Adjudicator is established”.
Now neither of us is in the prediction business. We are in the present tense and this Bill will now establish a groceries code adjudicator, which I hope will find favour with the Government. At this stage of my short life in your Lordships’ House, I should be delighted if I were able to improve a piece of legislation. This is an opportunity for the Government to accept this amendment. I beg to move.
Lord Knight of Weymouth
My Lords, this side is entirely supportive of my noble friend’s amendment. I simply ask the Minister if she could briefly update us on her conversations with the noble Lord, Lord True, and his concerns about plain English and the sense of the preambles in the Bill, which were raised in the last moments in Committee.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)
My Lords, the issue of plain English was raised at Second Reading. It was revisited at some length in Committee. The Government have considered this further. Noble Lords will recall that we discussed the possibility of saying, “There will be an adjudicator” or “There shall be an adjudicator”. I am glad to say that the proposal in the amendment in the name of the noble Lord, Lord Browne, is consistent with previous Bills and, I hope, clearer for those reading the Bill. In the spirit of this, and having heard the positions of several noble Lords in Committee, I would be happy to accept the amendment in the name of the noble Lord, Lord Browne.
As to an update on my conversations with the noble Lord, Lord True, I have a fulsome response for him later in the proceedings. Perhaps the noble Lord, Lord Knight of Weymouth, will kindly leave it until then for me to respond.
Lord Knight of Weymouth
I am struggling with the Minister’s argument that the amendment in my name and the names of other noble Lords jeopardises the independence of the decision-making. All we are seeking to do in Amendment 2 is have a review by the Office of Fair Trading. There is no presumption about what the outcome of the review would be; we are just suggesting that there should be a review. And in Amendment 26 all that is being suggested is a slight change in emphasis. I respectfully suggest to the noble Baroness that it ought to be a happy compromise for the adjudicator to report annually on the effectiveness of the code. If the adjudicator independently thinks that the code is working fine, he or she should say so. If he or she thinks that there is a problem, he or she should say so, every year.
Baroness Wilcox
I hope that I have not been too wordy in my response. It is just that there was a real point of principle here. I felt it was worth going over the ground to make sure I had made it clear that we did not feel that these amendments were relevant at this time. I repeat that responsibility for oversight of the code lies with the Office of Fair Trading under Section 162 of the Enterprise Act, not with the adjudicator, as Amendment 26 would have it, nor with the Secretary of State or Parliament, as Amendment 2 seems to set out. Equally, it is for the competition authorities to decide whether to amend the code, not the Secretary of State, as the noble Lord, Lord Whitty, proposed. I hope that I have clarified the Government’s position.
Lord Knight of Weymouth
My Lords, the amendment in my name and that of my noble friend Lord Grantchester relates to the role of Parliament in respect of the new office of the groceries code adjudicator. In pushing the amendment which we discussed in Committee and bringing it before the House today, we do so, believe it or not, in the spirit of the coalition agreement. I remind noble Lords that the coalition agreement stated:
“We will strengthen the powers of Select Committees to scrutinise major public appointments”.
In Committee, I reminded noble Lords that that followed manifesto commitments from both the Conservative Party and the Liberal Democrats at the election.
Since we met in Committee, a letter from the noble Baroness’s ministerial colleague, Norman Lamb, to my colleague in the other place, Ian Murray, has to some extent further clarified the Government’s position. Mr Lamb writes that,
“the Government believes that posts which should be subject to pre-appointment hearings will generally be senior non-executive roles which either: play a key role in regulating Government; play a key role in protecting and safeguarding the public’s rights and interests particularly in relation to the actions and decisions of Government; or where it is vital for the reputation and credibility of the public body in question that the post holder, and is seen to be, independent of Ministers and Government”.
I think that the Government need to reflect on whether the BIS and EFRA Select Committees should have a role in confirming the appointment of the groceries code adjudicator, given what the Government are saying. The new office that we are establishing in the Bill is important. It is something which has to have a certain reputation and credibility, and which has to be independent of Ministers and government. I think that this office passes the tests that Mr Lamb sets out in his letter to Mr Murray, although I know that the Minister himself does not agree. He goes on to say:
“The Government does not consider that the groceries code adjudicator, though very important to the groceries sector, would fall within these categories”.
I think that the Government need to reflect on this. I am not going to push this to a vote today, because this is the sort of concession that the Government should want to make to the other place as it is their Select Committees that will have a role in confirming the appointment. However, I would strongly advise, if the Minister is willing to take advice, that this amendment is entirely in the spirit and wording not only of what the coalition agreement, her party’s manifesto commitment and her coalition partner’s manifesto say, but of what, in effect, at least one of the tests that Mr Lamb sets out in his letter to Ian Murray says. I therefore beg to move, for the sake of the debate.
Lord Borrie
My Lords, I support my Front-Bench spokesman who has just introduced this amendment. I hope I am right in thinking—the Minister will no doubt correct me if I am wrong—that the Bill currently going through the other place requires that the head of the proposed Competition and Markets Authority should be appointed by a Minister with the approval of the appropriate departmental committee. If that is so, and I am glad to think that it will be so, it emphasises the point that the Minister made in relation to the last amendment—namely the need to firmly establish the competition authorities’ independence of Ministers. She kindly said that this followed the Enterprise Act of the previous Government in their efforts to emphasise the independence of the competition authorities. It seems to me unduly subtle to say that the head of the Competition and Markets Authority, which is to be created shortly, is of a higher calibre of significance and importance than the groceries adjudicator. It is true that the groceries adjudicator’s role is narrower than that of the Competition and Markets Authority but, none the less, it is significant in its field. Indeed, the Government’s whole introduction of the Groceries Code Adjudicator Bill is based on the notion that, in a certain area of significance to the consuming public—supermarkets—the independence to be achieved by the appointment of this adjudicator is of some importance. I therefore hope that the Minister will agree with my noble friend who has introduced this amendment.
Baroness Wilcox
My Lords, before I get any further I would like to thank the noble Lord, Lord Cameron, for supporting me, and I will of course respond to the noble Lord, Lord Knight, as well. First, however, I would like to respond to the noble Lord, Lord Borrie, by saying that the role he mentioned is much more significant to the economy as a whole; whereas this role, as he acknowledges, is much more specific, and as such we do not feel that the same type of scrutiny is required. I say to the noble Lord, Lord Knight, that I still feel that it would be inappropriate to lay down in primary legislation a requirement for Select Committee oversight. The procedure for pre-appointment scrutiny was clearly set out in the document published at the time of the previous Government and involves discussion between the Secretary of State and the chair of the relevant Select Committee, not primary legislation. As for whether the adjudicator is a significant enough office to warrant pre-appointment scrutiny, I consider that, despite its importance to the groceries sector, it is not significant enough according to the criteria set out by this Government. However, as any scrutiny would ultimately take place through a committee in the other place, I am sure that if the other place feels strongly enough on this topic then there will be further discussion on the issue at a future stage there. For the moment, I ask the noble Lord to withdraw his amendment.
Lord Knight of Weymouth
My Lords, the noble Lord, Lord Cameron, clearly has a relatively low opinion of MPs, which may be shared by others. I would not wish to test that for one moment. The Minister is probably right that it is up to the other place to try to assert the reputation of Members of Parliament, perhaps by shifting on this issue. The noble Baroness said that it is not general practice to set out Select Committee oversight in primary legislation. I am comfortable enough with that. If her ministerial colleague Norman Lamb is happy, when the Bill reaches the other place, to stand up and say, “Let’s please not put this in primary legislation, but we will refer it to the relevant Select Committees for confirmation”, that will do me. If the noble Baroness does not want this to be in primary legislation, that is fine. On the basis that the proposal lives to fight another day elsewhere, I beg leave to withdraw my amendment.
Lord Borrie
The noble Viscount, Lord Eccles, seems to have forgotten that the whole requirement in this Bill is that the investigation can properly go ahead only if there is a reasonable suspicion on behalf of the adjudicator that an investigation is required. That is the essential requirement in the Bill and I do not think it appropriate, for many of the reasons mentioned by the noble Lords, Lord Plumb and Lord Whitty, and others, that it has been so difficult up to now because of the difference in bargaining power between the suppliers and the retailers. In addition to the requirements that are already in this clause, there is no need to establish that the information should be made public, for example by the NFU.
Lord Knight of Weymouth
My Lords, I was ready to give an impassioned speech to try to persuade the noble Lord, Lord Howard of Rising, that he was wrong, but I think we have heard enough really good arguments from all sides of the House, so I will not delay the House by doing so. I will simply use the opportunity to thank the National Farmers’ Union, the Food and Drink Federation and the Federation of Small Businesses for their robust position on this, in saying that we should oppose these amendments.
Baroness Wilcox
My Lords, the question of who should be able to complain to the adjudicator has been discussed extensively: in consultation, at pre-legislative scrutiny, at Second Reading and in Committee. Along with most noble Lords who have spoken on this issue, the Government consider that the adjudicator should be able to consider evidence from any relevant source when deciding whether to commence an investigation.
The ability of the adjudicator to consider evidence from any source has been described by supplier groups as essential to the adjudicator’s operation. Furthermore, it simply makes sense. If the adjudicator has reasonable grounds to suspect a breach of the code, he or she should be able to initiate an investigation, no matter where the information came from.
My noble friend Lord Howard of Rising has explained that his concerns are motivated in part by the possibility of vexatious or malicious complaints and that is the issue behind Amendments 19 and 20. The Government certainly have some sympathy with this concern. No one wants to see the adjudicator’s time wasted or businesses put under a burden due to vexatious complaints. However, it is important that in the wording used we take into account what is customary as well as the need not to scare off legitimate complainants. As I said in Committee, this is intended to be a strong test directed at irresponsible complaints rather than simply erroneous or weak ones. I note also that the discretionary power to recover costs currently applies to the recovery of costs from both retailers and complainants. There seem to be few grounds for strengthening the requirement on one side without similarly strengthening it on the other. In either case the Government consider that the discretion provided by the word “may” allows the adjudicator to treat each case on its merits. The Government therefore consider that the Bill as it stands provides a necessary deterrent against vexatious complaints. The adjudicator can consider imposing costs on a complainant whose complaint is vexatious or wholly without merit but we do not think it should be mandatory or near-mandatory.
Regarding the amendment to produce an additional annual report, that would be an unnecessarily burdensome piece of bureaucracy. In paragraph 15 of Schedule 1 the adjudicator is already required to keep proper accounts and prepare a statement of accounts each year. These accounts would need to include any costs recovered from retailers or complainants. The application of the power to recover costs could be included in the annual report prepared under Clause 14. I therefore ask the noble Lord to consider withdrawing his amendment.
Lord Knight of Weymouth
My Lords, we consider Amendments 15 and 18 to be consequential to Amendment 11A and therefore, if the House passes Amendment 11A, it should be aware that it would also be voting to pass Amendments 15 and 18. I am grateful to the noble Lords, Lord Curry and Lord Cameron, for their support for those two amendments. Amendment 11A specifies that the adjudicator has the power to fine in any circumstances that he or she sees fit as soon as Clause 6 is commenced. That is, it gives the right to fine from day one. It therefore follows that Amendment 15 to Clause 9, which deletes those powers being introduced by order of the Secretary of State, and Amendment 18, which deletes Schedule 3 detailing the order-making process by the Secretary of State, should also be agreed to.
The question of whether the adjudicator should have the power to fine from day one concerns what makes an effective regulator. We have seen regulatory failure in recent times in respect of banks—much as I applaud the action of the FSA in exposing and then fining Barclays over the LIBOR scandal.
How much better would it have been if we had had an effective Press Complaints Commission? Perhaps the grotesque scandal of phone hacking could have been prevented if there had been a regulator with more teeth than just the ability to name and shame. Clearly, the powerful forces of the media have not feared their regulator or the threat of a statutory regulator with real power.
I welcome the Government’s conversion to the principle that the adjudicator may need the power to fine. They listened to the Select Committees, and that is good, but this is not a wholescale Damascene conversion. If they are coming back down the road, it is with no great conviction, as they are not offering those powers from day one of the operation of the adjudicator.
Of course, that should be no great surprise, as it is arguable that the Bill is full of lukewarm commitment. There is no sign of wanting to keep the code alive and updated as circumstances change, as we have discovered. The Bill to establish the adjudicator includes the power to abolish the office by ministerial diktat, as we will debate later today. The concession to allow complaints by third parties was also given in response to the Select Committee, but along with a clause to allow the Government to change their mind back again by another order. The charge of foot-dragging is reasonable.
If the Government were truly listening to the Defra and BIS Select Committees in the other place, the power to fine would be available from inception. The Government said in response to the Select Committee's recommendation:
“If there is evidence of significant non-compliance with the Groceries Code and the existing regime seems not to be sufficiently effective, there is the prospect of a swift introduction of financial penalties, without the need for primary legislation”.
That is their main argument for the way the Bill is currently constructed. The key phrase here is “swift introduction”. Even with the concessions on adjudicator guidance that we will debate shortly, it will still take a long time.
As things currently stand, first, the adjudicator will get up and running and run investigations following complaints. Then, when a significant breach is found, the retailer is named and shamed. It is hard to see that taking less than a year. Then, after a reasonable period, more complaints and another investigation, there may still be significant non-compliance. That will take another year. The adjudicator then decides to use that as evidence of the need for powers to fine and recommends accordingly to the Secretary of State. I find it hard to believe that the decision to fine in principle would then take less than three months for the Secretary of State to consider. Then there will be a consultation on that decision in principle for it to be confirmed and the process of moving orders through Parliament to begin. That will take not less than six months. Then, the adjudicator has the powers and can launch another investigation following a further complaint and then use the powers to fine.
No one can seriously believe that all that can be done sooner than three years after the adjudicator was established. So much for swift introduction. The National Farmers’ Union has always supported fines, but now appears to concede reserve powers because it does not want to delay the Bill. I respect its concern. We have listened carefully to it throughout, but if we decide today to improve the Bill by allowing what others, such as the Federation of Small Businesses, still want, there need be no delay. The FSB has e-mailed me to say:
“We remain concerned that without the ability to impose significant financial penalties, the Adjudicator will find it difficult to be fully effective. While powers contained within the Bill, particularly the ability to name and shame, are important, we believe that the Adjudicator will need a full range of penalties available to it as soon as it is set up to ensure that it is able to deal with the complaints it may face”.
I also refer your Lordships to the campaign on this Bill led by ActionAid, which includes an extraordinary alliance of organisations, as diverse as the FSB, the Country Land and Business Association, Unite the Union, the World Wildlife Fund, WSPA, Friends of the Earth, the Church of England and the Campaign to Protect Rural England—not necessarily normal bedfellows as a group. They say that Parliament should ensure that the adjudicator can,
“launch investigations on the basis of credible evidence provided by third parties, such as business associations, NGOs, trade unions and MPs”.
They add that they should be able to do this from day one. The Government have already agreed in Amendments 16 and 23 that the adjudicator may upon appointment begin drafting guidance on the use of fines, and that concession is welcome. However, that means that, unless the Government decide to dig in their heels and change the Bill back in the Commons, if your Lordships’ House is minded to agree these amendments now there need be no delay. On this side of the House, we are absolutely committed to this Bill making rapid progress. That is why we took it quickly through Committee in the Moses Room, with an extended day; that is why we are progressing relatively quickly today; and that is why we have delivered on our side to the commitment to conclude Lords’ consideration of all stages of the Bill by the Summer Recess.
I would like to add one more thing—on listening. As we have heard from the noble Lord, Lord Plumb, and my noble friend Lord Grantchester, feelings are running high in the dairy sector about how exploited liquid milk producers are. When discussing this crisis with these producers, I tried to reassure them that Parliament was listening and legislating through this Bill, but too many have given up on us and do not believe that we will make any difference. Without the power to fine from day one, they may be right and another chance to rebuild trust in this Parliament will be lost. However, I am pleased that some retailers are listening to these producers, including some supermarkets. I take this opportunity to mention a welcome initiative by Sainsbury’s. In April, the farmers who supply Sainsbury’s milk voted to move to an industry-leading cost of production-based supply model. Following their first pricing review of dairy costs, they increased the price they pay farmers for milk by 0.26p to 30.56p per litre from 1 July. That is a marginal amount, but it is welcome and I am happy to pay tribute to the fact that there are some supermarkets that want to make progress.
Not all large retailers are acting voluntarily, however, so we need to push them down the road of responsibility. It all comes down to whether the adjudicator should grow teeth or be born with them. We are in the process of bringing a guard dog into the world to protect the groceries supply code. Currently, our hound will be able to patrol the perimeter, to sniff out and investigate intruders or potential intruders. The beast will be able to bark if it finds anything, in the hope that someone will notice or that the intruders will think someone will notice and therefore voluntarily back off. However, if the intruders persist, they will do so in the knowledge that the dog has no teeth; it is all bark and no bite, all name and shame and no fines. I hope our guard dog never has cause to bite, but I do want potential intruders to worry that it might and that it can take a chunk out of their profits straight away—not in the future if we decide later perhaps that it needs teeth. We need effective regulation of overmighty vested interests. Retailers making multibillion-pound profits are very mighty indeed. Their suppliers need protection from an effective regulator, and that regulator needs the power to fine from the start.
Baroness Randerson
My Lords, I am surprised at the noble Lord’s ferocity on this given the record of the previous Government, which although well-intentioned was hardly decisive and swift on this issue. I think his judgment that it would take three years to bring in fines is very speculative. However, I am sympathetic to his argument. Certainly, I have been listening very carefully to the idea that we need fines from the start.
For that reason, I am very pleased to see Amendments 16 and 23 from the Government in this group, which will ensure that financial penalties can be brought in quickly. Bearing in mind the Government’s philosophy, which is light-touch regulation, I can see that this fits in with that philosophy.
Baroness Wilcox
My Lords, I do not want anyone to think we are lukewarm. We introduced this Bill as a priority and did so as soon as possible in this Session. Ever since we started discussing the establishment of an adjudicator, people have been concerned to know whether the adjudicator will have teeth. Central to that discussion has been financial penalties: should they be available at all, should they be a reserve power and how easy should they be to introduce? We are discussing now whether they should be introduced from the beginning. These are of course important questions.
We have carefully considered the sanctions available to the adjudicator and are convinced that this is indeed a Bill with teeth. The wide information-gathering powers, the ability to recover costs from retailers and the ability to raise a levy in a way that causes offenders to pay more all mean that no retailer will want to risk breaching the code. These aspects all ensure that those who breach the code will face a real cost.
However, more important is the sanction of “name and shame”, or the requirement to publish information as it is more properly known. I can assure you, as someone who has worked in this sector directly supplying supermarkets, that this will be an important deterrent, for reputation is extremely important to our biggest retailers. My noble friend Lord Howard of Rising has just spoken from his own experience in support of this. No retailer will want to be publicly named and shamed as having breached the code or having been found against for an action that does not appear to be fair or right. Every customer who goes into that shop will know that this has happened. Furthermore, every retailer will know that financial penalties are in reserve and that, with the amendments the Government tabled last week, they can be brought in very swiftly. Clearly, all retailers will want to avoid this.
I have shown that the adjudicator has teeth. I have shown that the existing powers and sanctions are sufficient to hold retailers to account and give them a clear incentive to obey the code. However, that is not enough. It is not sufficient to show that introducing fines from the outset is not necessary, since people could justly say that we might as well give the adjudicator the power just in case. However, if the power to impose financial penalties is granted, it is very likely to be used. Obviously, each case will be treated on its facts but enforcement authorities will tend, over time, to use the full range of sanctions available to them. That is why I would like to set out why the Government believe that introducing financial penalties from the outset is not only unnecessary but actively undesirable. The reasons for this are twofold. The first concerns proportionality and the second concerns culture.
We must remember that this is a very difficult time for business and our economy is going through a troubled period. Although regulation is sometimes necessary, we must strive to ensure that it is proportionate, so as not to impose unnecessary costs on business. We must also remember that the large supermarkets do a great deal of good for our country, as was confirmed by the Competition Commission in its report. As well as providing employment, their fierce competition has provided unprecedented choice for consumers and driven down food prices in recent years. Currently, with many ordinary families feeling the pinch of both wage freezes and inflation, the big supermarkets’ contribution to keeping prices down is particularly important. The fact that they have to compete with each other publicly, for us all to see, is equally important and another reason why being named and shamed in the middle of all this is not going to please any supermarket group.
Of course, the Competition Commission also found problems in the use of buyer power with respect to suppliers—that is why we are introducing this Bill. However, this is a sector that is fundamentally working well, and that is why we should strive to regulate it in as moderate a way as possible, unless and until it is shown that this is not effective. If compliance with the code can be achieved through “naming and shaming”, that will be far better than imposing fines, the cost of which might ultimately be borne by the consumer anyway.
The second reason for preferring a regime without fines concerns the culture that we are trying to create. The issue of culture was discussed very helpfully in Committee by the right reverend prelate the Bishop of Wakefield and is something I would like to return to. The goal of this Bill, and of the great majority of us in this Chamber, is to encourage retailers to comply with the code. It is not to punish them—that helps no one. It is to make sure they treat their suppliers fairly. The question is how best to encourage that culture of compliance.
The Government believe that the best way is through a proportionate, regulatory regime, focusing on advice, guidance, investigations and name and shame, backed by the threat of financial penalties in reserve. In such a way, the retailers will be encouraged to comply with the code. A punitive, adversarial culture, such as that which would be created by financial penalties, could also work—but much more slowly and at a much higher cost.
I ask noble Lords whether they would prefer that the adjudicator carries out four investigations a year, in each one identifying breaches of the code and correcting them, or that he or she carries out just one, imposes a financial penalty and then gets bogged down by a lengthy court battle as the retailers fight appeal after appeal? Make no mistake, if fines are needed, they will be brought in. The Government are very clear on this. The amendments I have tabled, which noble Lords will be discussing shortly, demonstrate our intent. By removing the double layer of consultation and by allowing the adjudicator to publish guidance on fining prior to being given the power to impose fines, we have ensured that fines can be brought in swiftly if necessary. However, we should first give the more moderate regime a chance.
One might expect the suppliers would push for the retailers to face the maximum penalty. That is their right. However, they have also acknowledged the need to be proportionate. I cite the briefing of the British Brands Group, which has said that fines are “not essential” and of the NFU, which has said that it will not be arguing for the Bill to be amended to allow fines from the outset, provided the Government’s amendments to streamline the process are accepted. If the suppliers are being so measured, should not the Government and Parliament also take a proportionate approach and decide on the most proportionate remedy that will be best for both the country and the economy as a whole?
This is already a Bill with teeth. I therefore ask the noble Lord to withdraw his amendment.
Lord Knight of Weymouth
My Lords, there we have it. The Minister started off by saying she was not lukewarm but then spoke with passion as to why the supermarkets should not be fined right now. That was lukewarm about fining supermarkets if ever I heard it. I am grateful to noble Lords who have spoken in this debate, all of whom, with the notable exception of the noble Lord, Lord Howard of Rising, supported fining in principle. I would urge the noble Baroness, Lady Randerson, and her party to vote with their principles rather than with the lame excuses that they have been given. I say to the right reverend prelate the Bishop of Newcastle that the Bill itself sets out how the powers to fine would be introduced, and it is perfectly clear that allowing the powers to fine from day one would not delay the passage of the Bill and the establishment of the adjudicator. However, if we do not pass this amendment, the adjudicator will begin without the powers that he wants and without the teeth that we need as the threat to make sure that people abide by this code. I would like to test the opinion of the House.
Lord Knight of Weymouth
My Lords, I am grateful to the noble Baroness for the concession which results from our debate in Committee. I would also like to take this opportunity to ask again the question that her noble friend Lord Plumb asked in the previous debate. Assuming that the adjudicator has consulted on the guidance around using the powers to fine, how long will it take, once the Secretary of State has made the decision, for these powers to be introduced?
Baroness Wilcox
My Lords, I would like to propose government Amendment 28. I am sure that noble Lords will agree, whatever their perspective on the adjudicator, that it would be appropriate and helpful for a copy of his or her annual report to be laid before Parliament. This should improve scrutiny of the adjudicator both here and in the other place. I hope that noble Lords will welcome this, whether they look forward to taking the opportunity of the report being laid to bury the adjudicator or to praise him. I therefore beg to move.
Lord Knight of Weymouth
My Lords, I am going to mark this one down as a victory for us as we moved a very similar amendment in Committee. I would not want my noble friend Lord Browne to think that he had got two and I had not got any at all, so I am very grateful to the Minister.
“( ) An order under subsection (2)(a) or (b) is subject to the super-affirmative procedure (see Schedule (Super-Affirmative Procedure)).”
Lord Knight of Weymouth
My Lords, in moving Amendment 30, I shall also speak to Amendments 43 and 44. As we interpret the letter that I referred to earlier from the Minister’s friend in the other place, Norman Lamb, to Ian Murray, regarding Select Committee confirmations of the appointment of the adjudicator, it did not show in a good light the Government’s esteem or priority with regard to the adjudicator. However, unlike the Government, we think that this is a significant new public body doing a very important role that people have long campaigned for, not just in the countryside but across the supermarket supply chain.
We therefore think that the process by which this body could be got rid of should mirror what we came up with in this House in the Public Bodies Act. Noble Lords will remember that when the Public Bodies Bill first started here it was not a great piece of legislation, with widespread use of Henry VIII powers, and the relevant committees of this House tore it to shreds. As a result, I am pleased to say the Government listened and we had a much improved Bill by the time it left this House, including introducing the super-affirmative procedure—which we have merely replicated in Amendment 44—for getting rid of public bodies that were listed in that Act. I am simply proposing that we should use the same process for the groceries code adjudicator. It is entirely logical. I suspect that the Minister will resist this amendment, although I would be delighted if she did not. Could she confirm in her reply that it is a cross-government policy that the super-affirmative procedure is particular to the Public Bodies Act and as new public bodies are created by the Government, they will use the affirmative procedure and not the super-affirmative procedure? If that is now cross-government policy, it would be helpful for your Lordships’ House to know, so if the Minister could help in that respect, if not by agreeing to the amendment, that would be wonderful. I beg to move.
Lord Cameron of Dillington
My Lords, I am all in favour of sunset clauses for quangos and for posts that are created. I believe it is right that such posts and bodies should be reviewed from time to time to see whether they are fulfilling their purpose or their effectiveness. However, it is also right that they should be reviewed under a proper procedure and consultation with all the relevant parties including Parliament, in spite of my perhaps slightly rude remarks about professional politicians earlier. Clause 16(2) provides for a very inexplicit kind of review for the Secretary of State to carry out. It does not say anything about what sort of review this is. Are we talking about the Secretary of State’s kitchen cabinet or the Treasury? What sort of review is this? Something definitely needs to be clarified. I believe that Amendment 44, albeit with its rather longwinded, legalistic caveats, is probably as good as one can get in terms of clarification. However, I will wait and hear what the Minister has to say about this.
Baroness Wilcox
My Lords, I fully understand the sentiments behind these amendments. All three parties have expressed their agreement that an adjudicator is needed, and the Government have no wish to enable the abolition of the adjudicator without proper parliamentary scrutiny. I remind noble Lords that the intention of Clause 16 is to bring the Bill into line with the broader policy on sunsetting and review, and the need to ensure that regulations and regulators can be removed once there is no longer a need for them. It does not indicate intent to abolish the adjudicator or transfer their functions, but is simply standard practice.
The noble Lord, Lord Knight, suggested that the Government intended to set a precedent for the abolition of new public bodies by affirmative order. It may be the case that it is appropriate to require the abolition of some public bodies by super-affirmative order, but one must consider this on a case-by-case basis, depending on the nature of the body or office. In the case of the adjudicator, first, the adjudicator will not be a “body” in the usual sense of the word but an officeholder, with only a small number of staff who will be seconded rather than directly employed. The adjudicator’s powers will extend to only one area of the economy: the groceries sector. Furthermore, he or she will have a tightly defined role: to enforce the groceries code.
Furthermore, as I said in Committee, the Delegated Powers and Regulatory Reform Committee scrutinised the Bill carefully. The committee is dedicated to the inspection of the procedures for delegated powers, and the Government take its recommendations very seriously. Given the purpose of the Bill and its specificity regarding the functions of the adjudicator, the committee decided that the affirmative procedure would be satisfactory and proportionate in this case.
I thank noble Lords for drawing our attention to the important issue of parliamentary scrutiny. However, one must also consider the issues of parliamentary time and efficiency. The investment of resources required for the super-affirmative procedure would not be proportionate to the functions of the adjudicator. In accordance with the recommendations of the Delegated Powers and Regulatory Reform Committee, we are satisfied that the affirmative procedure is the most appropriate.
The noble Lord, Lord Cameron, asked about the Secretary of State’s review. It is referred to in Clause 15 and would require full consultation with retailers, suppliers and other stakeholders. Finally, the noble Lord, Lord Knight, indicated the importance of listening to committees of the House during the passage of the Public Bodies Bill. We are listening to the relevant committees on this Bill. Given these explanations, I hope that noble Lords will feel satisfied and will not press their amendments.
Lord Knight of Weymouth
My Lords, that was a brief but interesting debate. I am most grateful to the noble Lord, Lord Cameron, for his support. The comments of the Minister are now on the record—another demonstration of a somewhat lukewarm view of this body. I do regard it as a body rather than an officeholder. The super-affirmative procedure was used in respect of the Commission for Rural Communities, which was largely an office of the rural advocate. This is one of the many examples in the Bill of where the super-affirmative procedure is used.
This will be a very powerful body—much more powerful than some of the bodies that are being abolished using the super-affirmative procedure. The Minister talked on some occasions about the power of name and shame. On others, when it was convenient, naming and shaming was described as a less powerful ability. I disagree with her. However, given the oddity of the Bill—as my noble friend Lord Browne set out, the Government could get rid of the code without even coming to Parliament—I will not press this, because if they chose to do that without even the “by your leave” of Parliament, we would have a referee without any rules and it would be a straightforward matter to get rid of the post. I am happy to withdraw my amendment.
Lord Knight of Weymouth
My Lords, as I indicated in Committee, I think the noble Lord, Lord True, has a point. At Second Reading I said that I did not find these “folksy” headings—as the noble Baroness, Lady Byford, called them—offensive. I think they are fine, but the noble Lord, Lord True, is right that we here in Parliament should have the ability to amend them. He made mention of the responsibility of the Bill Minister in respect of these headings; of course there are also Private Members’ Bills, where you have to trust the individual parliamentarian to get it right. You could have a campaigning parliamentarian bringing forward Private Member’s legislation who would use the fact that Parliament cannot amend these sub-headings to say some quite odd things.
As the noble Lord, Lord True, says, if we are going to go down this road, the Government and the parliamentary authorities need to give some consideration to how we in Parliament can have some say over these sub-headings and not just leave it to informal chats with whoever is responsible for the Bill.
The Duke of Montrose
If the Government feel that they need these interrogatory questions put in print, are the Explanatory Notes not also available online, along with the Bill? Could these questions not be laid out in the Explanatory Notes rather than in the Bill itself?
Lord Teverson
My Lords, I support my noble friend’s amendment. It seems to me natural justice that when retailers have to pay a levy, the levy should be related to their culpability, the nuisance and aggravation that they have caused and their contraventions of the code. It is absolutely right that the levy should reflect that and that, in the case of those organisations which have not crossed the adjudicator’s desk, an invoice should not cross theirs either.
Lord Knight of Weymouth
My Lords, I am supportive of all the amendments in this group. I suspect that a concession is coming the way of the Liberal Democrat Benches. While I have disagreed with virtually everything that the noble Lord, Lord Howard of Rising, has said on this Bill, he has made a valuable contribution to it and I think that he has got a point here. A graceful concession from the Minister on this one, too, would be wonderful.
Baroness Wilcox
My Lords, the amendments tabled by my noble friends Lord Howard of Rising and Lord Eccles are ones that we have discussed before. As I said in Committee, the Government’s intention to fund the adjudicator via a levy is clearly set out in the Bill and in previous policy statements, so I see no need to require an order to be made first.
Regarding the suggestion of consultation on any increase of the levy, my worry is that this would add unnecessary bureaucracy and inflexibility. The adjudicator’s workload will vary depending on the number of complaints received. In some years, it may have very few, in which case the levy needed would be small. In other years, it may carry out major investigations requiring considerable resources, and I remain convinced that the safeguard of requiring the Secretary of State’s approval is the best way to balance flexibility and accountability.
On the subject of flexibility, my noble friends have also tabled an amendment regarding the returning of any unused funds to the retailers. While I believe that “may” adds helpful flexibility, I can assure them that any unused funds would certainly be taken into account when calculating the size of the next levy, so that no more was raised from the retailers than was absolutely necessary. I would therefore ask the noble Lords to withdraw those amendments.
With regards to the amendments tabled by the noble Lords, Lord Razzall and Lord Teverson, and the noble Baroness, Lady Randerson, in Committee, I indicated that the Government were sympathetic to an amendment along these lines. The Government have always stated that the intention should be that as soon as he or she has sufficient experience, the adjudicator should move to a differential levy. After consideration, it therefore seemed unnecessarily bureaucratic to require an order to be passed before this could be done and I am grateful to the noble Lords for bringing forward this amendment.
The fact that individual levies would still need to be approved by the Secretary of State will provide an adequate safeguard against abuse. Furthermore, the ways in which the levy can be raised are clearly specified. The levy must be the same for each retailer or else based on criteria broadly intended to reflect the expense and time the adjudicator expects to spend in dealing with matters relating to each retailer. It could not, for example, be proportional to turnover as that would not fit these specifications.
Noble Lords have said that they wish to see a system in which those who behave badly pay more. The Government concur with this sentiment and I am therefore happy to accept this amendment.