Groceries Code Adjudicator Bill [HL]

Lord Knight of Weymouth Excerpts

Tuesday 24th July 2012 Lords Chamber

Moved by

[Lord Knight of Weymouth]

2: Clause 22, page 10, line 8, at end insert “and as varied by any subsequent order made under that section”

[Lord Knight of Weymouth]

My Lords, after a good Report stage last Monday, when we were grateful to the noble Baroness, Lady Wilcox, for some concessions, particularly her generosity to my noble friend Lord Browne, I did not think that there was anything left for us to do today at Third Reading, because we want this to get on the statute book as soon as possible. I share the comments of my noble friend Lord Browne in respect of the way in which the Minister has handled the passage of the Bill through this House, and I am grateful to her Bill team and to those who have assisted me.

Naturally, I was disappointed not to have persuaded enough of your Lordships of the need to give the adjudicator teeth but I naturally respect the clear will of the House and hope that that issue can be addressed in the other place. I was also disappointed that we gained nothing on the issue of a living code, but I also regarded that issue as settled.

However, all that changed at the weekend, which is why we are revisiting an issue raised in an amendment that was not moved on Report by my noble friend Lord Kennedy of Southwark. The amendment is simple enough in ensuring in clear English that the groceries code supply order is defined to include, “any subsequent order made” by the Competition Commission under Section 161 of the Enterprise Act 2002. The Minister may tell us that that is unnecessary because any successor order would, as is usual, replace the 2009 order and the Bill would apply to the new order. If that is so, I would be grateful for confirmation.

I would also be grateful for confirmation of a few other things following the events of the weekend. Following the blockading of dairy processors by farmers, crisis talks were held at the Royal Welsh Show on Sunday, led by Mr Jim Paice, the Farming Minister. According to every news report I have seen, the Minister said that he would raise within government the possibility of a role for the grocery code adjudicator in providing a means of arbitration for a code governing the whole supply chain for the dairy industry. This means that the issue that we voted on last Monday is effectively being reopened by the Government. The Companion states at paragraph 8.146 relating to admissibility of amendments:

“The principal purposes of amendments on third reading are … to clarify any remaining uncertainties”.

I am mindful that the Companion goes on to say that an issue that has been fully debated and voted on cannot be reopened, which is why I have moved this amendment in relation to Clause 22.

I merely want the Minister to use this opportunity to clarify the uncertainty around the Government’s position. Has the noble Baroness spoken to Jim Paice about extending the role of the adjudicator since this weekend? On Report, she said:

“As the noble Lord, Lord Grantchester, has said, the specifics of the dairy industry are being considered elsewhere in government. The adjudicator is not intended to address every problem in the sector, and the adjudicator's role is clearly limited to the relationship between retailers and their suppliers under the groceries code”.

Is that still the Government’s position despite the position of the farming Minister?

The Minister also said that,

“it is for the competition authorities to decide whether or not to amend the code—not … the Secretary of State”.—[Official Report, 16/7/12; col. 17.]

Does that extend to Jim Paice? I know he does not know the price of milk but does he know about the independence of the competition authorities from Ministers? Is there any question of him now asking the competition authorities to extend the code or to come up with an additional one?

The Minister persuaded the House, including an impressive solid turnout from the Lib Dems, as ever, with their effective new Chief Whip, to defeat any notion of extending the code. This amendment merely seeks to be helpful in case Jim Paice is driving a policy on this from Defra rather than the noble Baroness or Norman Lamb driving it from BIS. I doubt whether the Minister will accept it but I would be grateful for answers to three simple questions. First, has she spoken to Jim Paice about this since the weekend? Secondly, is it still government policy that the code will apply only to the relationship between direct suppliers and large retailers? Thirdly, will the Government be asking the Competition Commission to revise or devise a code to cover prices across the dairy supply chain?

[Viscount Eccles]

Does what the noble Lord said mean that he is not really moving an amendment at all?

[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?

--- Later in debate ---

[Lord Plumb]

My Lords, I support the Minister’s response. I waited for her comments before I spoke because I was not sure of the exact position now. I tell the noble Lord, Lord Knight, that the negotiations did not take place on Sunday. They took place yesterday. I declare an interest: I was there—not at the negotiations but not far away—and I had a long talk with the Minister, Jim Paice, afterwards and with many of those present who are directly concerned with this issue.

Following the answer given by the Minister, I do not honestly see any need for the noble Lord’s concern or, in fact, the amendment. It would be advisable to wait for the Written Statement due tomorrow because, as my noble friend said, milk will not be left out of this package. Anyone who is appointed to a job as an adjudicator or is concerned with the grocery trade will realise that within it we have a voluntary code of practice that has virtually been agreed by all parties, and which we have been waiting for for some considerable time. Now that the code is there, the dairy trade will inevitably be not only included but prominent in the concern of any adjudicator or in any response that one might have after the appointment of an adjudicator.

I therefore feel confident that there is at the moment no need for the amendment. We should accept the statement made by the Minister here, and we look forward to the further report from the Agriculture Minister tomorrow on the whole situation of the dairy trade.

[Lord Knight of Weymouth]

My Lords, I am grateful to the Minister for her clarifications and to the noble Lord, Lord Plumb, who is never far away from where things are at on these matters and who always speaks with authority on them. I certainly have no wish to interfere with the negotiations or with the voluntary code that is being agreed. I very much applaud the negotiations and the agreements that are coming forward. Clearly, we had a job to do—to scrutinise the Bill—and there was some uncertainty I was looking to be resolved. I am surprised that the Farming Minister did not think it was appropriate to give the Bill Minister in the Lords a call regarding these things because it was fairly obvious these issues might come up today, but that is for the noble Baroness and her colleague to resolve. I think I heard her say correctly from a note that there would be a separate adjudicator if there was to be an adjudicator for the voluntary code. We would subsequently want to explore the efficiency of that arrangement and exactly how it would be drawn up and what status it would have.

We look forward to the Statement from the noble Lord, Lord Taylor of Holbeach, tomorrow. I respectfully ask that some consideration be given as to whether that could be an Oral Statement and not just a Written Statement, because Members of this House may have some questions they would like to be able to ask. Perhaps the noble Baroness could take that back and discuss it with the noble Lord, Lord Taylor, in their office. In the mean time, I am very happy to withdraw my amendment.

Amendment 2 withdrawn.