Water Bill

Mark Spencer Excerpts

Monday 6th January 2014 Commons Chamber

[Thomas Docherty]

I know that you are a fan of all things Yorkshire, Mr Deputy Speaker, and I will come on to Yorkshire Water in a moment, if the former Minister will bear with me.

As the hon. Lady said, among those who do not pay there are those who can pay. That is unfair on decent customers who meet their obligations and we believe the time has come for more robust action to be taken. Some 80% of those who do not pay are in rented accommodation. One of the challenges facing water companies is tracking down those who refuse to pay because they move homes far more often than the average person. The only way to track them down effectively is to require landlords to provide water companies with a list of tenants. Individuals moving property would not then disappear from the system and evade paying their debts.

The measure would be a simple step and it would not require a disproportionate amount of new bureaucracy to implement. It is estimated that approximately half of total bad debt falls into the category of “can pay, won’t pay”. The Select Committee, of which the Minister was previously a member, has unanimously backed the measure throughout this Parliament, so why the opposition from the Government?

[Mr Mark Spencer (Sherwood) (Con)]

I understand, and sympathise with, the point the hon. Gentleman is making, but there is no legal way to force a tenant to inform their former landlord of a forwarding address. How can a landlord know what information to supply to the water companies, so they are able to track former tenants?

[Thomas Docherty]

I am grateful to the hon. Gentleman, who I think is a recent addition to the Select Committee. I do not think he was a member of the Committee when we had this discussion, so for his benefit I will say that it is quite simple. As the water companies have said, they would be supplied with names and addresses. The onus would then be on them to carry out the necessary activity to match up the appropriate individual, and there would be no significant burden on the landlord, the local authority or social housing provider. The burden for that work would fall on the water company. He will recall from our time in Committee that I was not always the water industry’s biggest fan, but on this the Select Committee, the water industry and the Opposition are united, so again I come back to this question of why the Government are so opposed to the proposal.

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[Thomas Docherty]

I congratulate the Minister on stating the blindingly obvious. Of course, the landlord would have to provide that information, but it is not the longest list in the world, and it is information that landlords have anyway, so the Opposition, like the Select Committee, find it difficult to comprehend why it would be so onerous for landlords to provide a list of their tenants by property. If he has specific examples of hard-pressed landlords who have made representations to him, I am sure he will refer to them when he responds.

For the fourth time, I ask myself the question: why the opposition from the Government? The Secretary of State has had his usual Pavlovian reaction to a suggestion that the Government should take action. It appears once again that when Parliament, the Select Committee and the water industry ask DEFRA to do something, its knee-jerk response is to think of spurious reasons why it should not or cannot do it. Our new clause would be a pragmatic and efficient measure that would help to drive down costs on all decent households, help water companies to do their job and ensure that all customers meet their responsibilities.

Our second new clause—new clause 10—recognises that not all water companies have done all they can to tackle the problem of bad debt. As I mentioned earlier, although the average bad debt figure is about £15, there are wide variations across the country. As the hon. Member for Newbury (Richard Benyon) pointed out, that is because some, such as Yorkshire Water, have worked with customers and debt advice groups, such as Citizens Advice, to put in place measures to help customers genuinely struggling to access payment packages and programmes, but unfortunately that is not the case across the country. Too many water companies have come to the unsurprising conclusion that, because they can pass the cost of bad debt on to their other customers, they need not bother to do anything about it themselves.

That is why we have tabled new clause 10. We want to give Ofwat and water companies a clear and unambiguous signal that hard-pressed customers should no longer be treated as a cash cow by companies that cannot be bothered to meet their own responsibilities. Where the regulator and the Department are satisfied that water companies are not doing enough to pursue bad debtors, the cost should no longer be passed on to other customers. Taken together, not only would our two new clauses be practical measures, but they would send a clear signal that while we will do more to help those who are struggling, we expect all customers and water companies to do their fair share.

Our third new clause—new clause 8—would help to ensure that customers know about the help for which they are eligible. In 1999, the last Labour Government introduced WaterSure to help low-income metered households with high essential water use. WaterSure caps the bills of metered households in receipt of a qualifying benefit or tax credit at the average bill for that water company’s operating area. It applies to households with three or more children under the age of 19 living at home or where someone in the household has a medical condition that necessitates high water use. It is an important measure that at the time received cross-party support and which, according to the latest figures that the Minister gave us in Committee, has helped 70,500 households in England—I think a similar scheme has helped approximately 20,000 households in Wales. Although that is welcome, we believe that that level is unacceptable. Given that, as the Consumer Council for Water has said, only one third of eligible households are in receipt of the benefit to which they are entitled, the Government have been guilty of complacency.

The Minister previously claimed there was no need for the new clause because all the water companies already provided this information. For the benefit of Members who have not had a chance to look at the amendment paper, we are proposing that information about the eligibility criteria and how to apply should be included in all water bills. He believes that all water companies already provide this information, but unfortunately for him the reality does not match his statement. Not only do his own figures show that the current approach is not working, but our own anecdotal research shows that customers are not even aware that WaterSure exists. We want to make it clear to water companies that they must do much more to promote the scheme, and we want Ofwat and the Government to hold them to account if they do not. I hope he has reflected not only on the evidence we presented in Committee, but on his own figures and the evidence from the CCW, and will listen to common sense.

Finally, our fourth new clause—new clause 7—deals with the central problem of the failure of the voluntary approach to social tariffs. As we have set out, too few water companies are helping too few customers through social tariffs, and it is clear that left to their own devices many water companies, by their own admission, will never introduce such schemes. That is why we are proposing a national affordability scheme to end the postcode lottery and ensure national standards for eligibility. We would expect schemes to be funded by the excess profits of the water companies, not by other water bill payers. As I have said, last year these companies made an eye-watering £1.9 billion in pre-tax profits and paid out £1.8 billion to investors. The idea, for example, that Yorkshire Water, which paid out £240 million, cannot afford to provide support through social tariffs is clearly nonsense.

Enough is enough. Hard-pressed households need real help now, and these new clauses are four practical and simple measures that would ensure they get it. It is time for the coalition to match our commitments.

[Mr Spencer]

I want to make some brief comments that were too long for an intervention, particularly about new clause 3, tabled by my hon. Friend the Member for Thirsk and Malton (Miss McIntosh). I sincerely hope that, in summing up, the Minister will reflect on today’s debate, which has shown recognition across the House that consumers and our constituents are finding it very difficult to pay their household bills because of pressure on the household budget. It is worth saying that the Government recognise that challenge and are doing their best to assist, not least by turning around the failing economy that they inherited. Needless to say, a section of society will find it very challenging to pay their utility bills, and the Government have an obligation to try to assist and support them.

There is another group of people who are unwilling to pay, as a result of a frankly malicious intent to avoid paying the bill that is due to be paid. It is vital that the water companies have the power to decide which cases fit into which categories. Those who are clearly unable to pay should be able to receive assistance, support and sympathy from the water companies. New clause 3 goes some way towards assisting the water companies to identify people within the benefit and welfare support system, who may be in need of extra assistance.

I am somewhat sympathetic to new clause 8, too, which was tabled by the hon. Member for Dunfermline and West Fife (Thomas Docherty) and is designed to ensure that water companies put the neediest customers on “the lowest possible tariff”. Those who find themselves under pressure in the most challenging of circumstances are often those least able to identify from their bills which is the correct tariff for them to be on and least able to challenge the water companies to put them on a better tariff, allowing them to afford to pay their household bills. I hope that the Minister will give further consideration to that, if he is minded to do so.

Finally, I support those who have said it is difficult to understand why the Department for Work and Pensions or the Department for Environment, Food and Rural Affairs are unable or unwilling to supply the necessary data to the water companies. I hope that when the Minister sums up, he will be able to shed some light on those thoughts.

[Mr Redwood]

I hope that the Government will look at the issue of unpaid bills. Colleagues of all parties are right to draw attention to the problem—one of the many sources of excess cost in the water industry, which it would be good to reduce or eliminate. It is undoubtedly the case that we pay dearly for our main utility provision in this country, and I fear that the main reason why water bills are high and will stay high is that there is no competition. It is a great pity that this Bill will not introduce proper competition into water as into other areas, as it would make a lot of difference. The amendments are designed to deal with the situation of having regional monopolies that are in many cases unresponsive and have high cost structures. Then there is the particular problem of customers deciding—quite wilfully, when some of them are perfectly capable of paying—not to pay their bills. Clearly, more needs to be done on that.

There is some good in all the amendments before us this evening, but I am not persuaded that they take the trick. It might be helpful to know who the tenant was, but if the tenant cannot be traced to where they have gone, it will be impossible to get them to pay. It might be useful to know something more about the benefits and financial circumstances of individuals, although there are issues of privacy and the handling of data that could cause difficulties, but that then fails to enable us to come down hard enough on the people who can afford to pay, which is the real issue.

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I wish briefly to refer to aspects of the Flood Re scheme and the amendments that relate to it. The adaptation sub-committee, which advises the Committee on Climate Change, has, through its chairman, Lord Krebs, made various points about the importance of getting the scheme absolutely right at this stage rather than later on. In a letter that he wrote to the Secretary of State for the Environment, Food and Rural Affairs about the awareness of flood risk and the importance of taking account of rising flood risk levels, he said that there are at least five issues that the Government need to address but have not yet done so. Given that, as we heard earlier in the Secretary of State’s statement on flooding, we know that we are now going to get events of this kind far more regularly, it is incumbent on Parliament to make sure that the insurance scheme that is being introduced is absolutely fit for purpose.

[Mr Spencer]

I rise to speak to amendments 1, 2, 3 and 10, particularly amendment 1, which stands in my name.

There is enormous frustration in Nottinghamshire about the fact that when a new development takes place there is an obligation to connect and that often means that the public sewer, which is already under pressure, becomes flooded. Many Members will recognise that villages in our constituencies have grown over a number of decades. Often in Nottinghamshire, those villages have a working sewerage system but no one has developed a surface water system. That means that when somebody builds a new conservatory at the back of their house the local authority allows them to put the downpipe into the public sewer, and that puts pressure on an already pressurised sewerage system.

The problem is exacerbated when a new road is built. There is a good example of that in Nottinghamshire, where the Hucknall inner relief road, which has been permitted by Nottinghamshire county council, is about to go right through the town of Hucknall, and the plan includes dumping the surface water from that new road into an already flooding public sewerage system. That is unacceptable. To put it into Sherwood language, while we have got diggers on the ground digging up the whole town to put a new road in, it is not beyond the wit of man to put an enormous pipe underneath the road to take the surface water and not put it into the public sewer and flood the homes of people who are already suffering from sewage flowing through them.

[Neil Carmichael (Stroud) (Con)]

We have exactly the same problem in my constituency of Stroud in connection with Slimbridge and a relatively old sewerage system. The real question is how we manage to calibrate the capacity and quality of the systems, certainly some of the older ones, within the context of this Bill.

[Mr Spencer]

It is very difficult, but we can make sure that anything new that is built does not make the problem worse. We have an obligation to try to improve things as developments take place. What causes enormous frustration is that the bodies responsible, whether it is the sewerage company or the highway authority, pass the buck so that, in effect, the person who causes the problem does not take responsibility for solving it but it falls on someone else.

Another example is a small village in Sherwood called Farnsfield, where there is already flooding. A developer is applying to put a large number of houses and new roads at the edge of the village, and there is no surface water system. The poor people in the old village who are suffering with sewage flooding their homes are going to have that problem made much worse if the new development takes place and the surface water is put into an already overflowing sewerage system. I appeal to the Minister to see whether he can find a way to encourage, if not force, local authorities to take responsibility when they allow planning permission for a new highway or road and make sure that the highway authority that is developing the road, or the developer that is developing a new estate, picks up the cost of solving the problem that they are creating and disposes of the surface water responsibly rather than putting pressure on an existing, overflowing sewerage system.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

I want to speak to new clause 13, which I have tabled. It is headed, “Unlawful communications”. Several hon. Members have asked me about that, and I apologise because it is a little confusing. It does not deal with unlawful communications but unlawful connections, or, more colloquially, misconnections. The new clause would amend section 109 of the Water Industry Act 1991, and that is why it uses the word “communications”, which is used in that Act. It is exactly the same as an amendment that was included in the draft Flood and Water Management Bill of 2009 but sadly had to be dropped from the final Bill because of a lack of legislative time as we approached the 2010 general election. The reason for tabling the new clause is to find out why the provision has not been included in this Bill.

Misconnections occur when separate surface water and foul water sewers are wrongly connected by households or businesses. The reasons for this range from the over-enthusiasm of household DIYers to cowboy builders and plumbers connecting to the first and most convenient sewer, which is often the wrong one. The consequence is pollution of groundwater, watercourses, streams, rivers, and, in my case, a local lake. The problem comes to light only as a result of the visible pollution that we can see, which is sometimes accompanied by some rather unpleasant smells, as has affected local communities in my constituency.

The cost of tracking this down once it has been discovered is very difficult to quantify, because it is extremely difficult to find out where the misconnections have taken place. It is also very time-consuming. As a result, it is a significant problem, particularly in more densely populated areas. A large number of misconnections are occurring in parts of my constituency.

Thames Water estimates that one in 10 homes in its area are misconnected. The Department for Environment, Food and Rural Affairs estimates that 300,000 homes in England and Wales were misconnected in 2009 and, ominously, that the number will increase to 500,000 by 2015.

Part of the solution, of course, is better information about and greater awareness of the problem of misconnection. Some steps have been taken to try to address that. Thames Water has set up an industry strategy group, as have other water companies. My local authority has sent leaflets to areas particularly badly affected. Of course, we can do better, but the reality in my constituency and up and down the country—this is verified by DEFRA figures—is that, as current misconnections are dealt with, others are adding to the problem and it is getting worse, not better. I could cite instances in my constituency and I am sure that other Members have similar examples.

Part of the reason for the problem is that, although water companies can disconnect from the connected drains, they cannot redirect them into correct sewers; only local authorities have the power to do that. If, for any reason, the householder or business does not carry out the works, the local authority has powers to do so and to bill that individual or organisation for the costs. New clause 13 seeks to grant water companies the same enforcement powers as those available to local authorities. They could then deal directly—they already deal with other aspects of the problem—with misconnections.

Beef Cattle and Sheep (Carbon Footprint)

Mark Spencer Excerpts

Wednesday 26th June 2013 Westminster Hall

[Neil Parish]

The hon. Lady is right, because climatic conditions will make a difference. The amount of time that an animal takes to finish grazing to become fat also makes a difference, as does the time taken to finish an animal for meat production. All such things have to be taken into consideration. Of course there are a number of ways to measure carbon.

[Mr Mark Spencer (Sherwood) (Con)]

In my hon. Friend’s calculations, will he make reference to the transportation of meat once it has been processed through an abattoir? For example, moving beef from South America to Europe using aviation fuel enormously increases the carbon footprint.

[Neil Parish]

Indeed. When we import meat from South America, Australia or New Zealand, we should take into account the length of time that it takes to get here, especially if it comes by air. Of course, if it comes by sea, it is argued that the carbon footprint is not as large, but it is there none the less. That is why local home-produced food that travels very little distance to the abattoir and that is grazed nicely on good permanent pasture must be of great benefit to all the United Kingdom.

[Neil Parish]

I could not agree more with my hon. Friend. The purpose of this inquiry and report is to look at the benefits of producing grass-fed beef and lamb, to keep sustainable grass pasture and to produce very good meat. We would not necessarily want or be able to plough such land, and a huge amount of carbon is captured within the soil. We took some evidence that showed that over years of permanent pasture the carbon actually increases, so there are many good reasons for producing this high-quality beef and lamb.

I will, if I may, continue with my contribution. The footprint of sheep, according to the PAS 2050, is 11.86 kg CO₂ equivalent per kilogramme of live weight. The comparative figures for Wales were 7.51 kg CO₂ equivalent per kilogramme of live weight and 8.6 kg CO₂ equivalent per kilogramme of live weight.

As that has demonstrated, even within a country, there is significant variation in the statistics and no way to determine whether they were driven by different efficiencies or by different ways of producing data. That makes any form of comparative assessment of carbon footprint challenging and poses major difficulties for policy formulation. There is no international consensus on sequestration—the process by which carbon dioxide is removed from the atmosphere by pasture land through a process of absorption and deposition in the soil, which acts as a carbon sink. In essence, that is a natural form of carbon capture and storage.

The importance of including carbon sequestration is highlighted by Mr Bill Grayson, a producer who gave evidence to the inquiry. He ran four models on his farm’s emissions. The PAS 2050 model, which does not include sequestration, concluded that his farm was a net emitter. The other three methods, which include sequestration, put his farm as a net absorber of carbon. Evidently such significant differences make sensible policy development almost impossible.

[Mr Spencer]

My hon. Friend is being very generous with his time. I hope that he recognises that we need to view this matter globally. It makes no sense to allow UK farmers to plant trees and remove land from beef production to then allow South American farmers to tear up rain forests to produce beef and to ship it around the world, so that it sits on supermarket shelves next to UK-produced beef.

[Neil Parish]

My hon. Friend raises another important issue. I have visited Brazil, where people are ploughing up a lot of the savannah and planting soya bean and sugar beet and driving cattle towards the rain forests and allowing them to partly destroy the rain forests before people cut down the trees. So it is absolutely essential that we produce in this country high-quality beef and lamb, so that we do not need as many imports; that is absolutely clear. I will go on to talk a little more about those examples shortly.

I want to highlight the methodology used to produce the figures. Achieving consistency in the figures used should be viewed as one of the top priorities for the industry and the Government, who should work in partnership. We urge Ministers and officials at DEFRA to accelerate work at both the EU level and with international bodies, such as the Food and Agriculture Organisation, to seek global consensus in an agreed methodology.

For example, if we compare the impact of livestock in the UK and in France using nationally-produced data, our producers will be hugely disadvantaged because French data will include sequestration. It is not very often that I ask a Minister to look at a French system, but on this occasion I will. We urge him to look into this issue as a priority and—if we are to see greater co-operation between nations in our effort to respond to environmental and food challenges—to migrate to the model accepted in France. If the Government do not view this as a viable course of action, they need to make a robust case to say why not. The disparity built into the status quo is no longer acceptable in a global debate, because we debate carbon across the whole world and we need to measure it in a similar way.

The report also highlighted other weaknesses in the current life-cycle analysis in the model that DEFRA uses, in addition to its exclusion of sequestration. It is well documented and understood that grazing livestock plays a major role in the management of our landscape; I think that all hon. Members from all parties in the House would recognise that. That view is supported by the English National Park Authorities Association and Natural England, which rightly point out that the landscape value generated by upland farming has an economic benefit to the area, owing to the tourism and business revenue extracted, and that grassland management is important to maximise upland areas’ efficiency as a carbon sink.

Badger Cull

Mark Spencer Excerpts

Wednesday 5th June 2013 Commons Chamber

[Sarah Champion (Rotherham) (Lab)]

I spent the weekend talking to farmers to find out their position on the issue and I was shocked by the stress, the trauma and the cost that this illness is causing. I am hugely supportive of farmers and I want us to do everything we can to fight and destroy the disease.

I want to say a few words about the implications of testing for farmers. They have to pay for a vet to come, normally on a yearly basis. They have to bring all their stock in to be tested. If there is a reactor, within a couple of days when the vet comes back that animal will be slaughtered. That locks down all movement on that farm for 60 days. Yes, farmers get compensation for slaughtered animals, but not for the lock-down. If they were taking animals to be covered or if they were taking animals to market, all that would stop. Some 28,000 cattle are slaughtered, costing the taxpayer £100 million in compensation and costs. From last January to this January the number of reactors has gone up by 24.2%. Bovine TB is a dreadful disease and we need to stamp it out. However, I am against the cull.

I am against the cull for all the reasons set out by my hon. Friend the Member for Wakefield (Mary Creagh) so I will not rehash the same argument. I want to make three quick points. First, badgers are a protected species under the Protection of Badgers Act 1992. That is an important and powerful fact to remember. Secondly, for the cull to be effective, 70% of all badgers need to be culled. We do not know how many badgers there are. DEFRA estimated the population in the pilot area to be 1,300 in every 300 km area, but the randomised badger culling trials estimated the figure to be 3,000, so will the licence to kill be to shoot 910 or 2,100 badgers? The difference will be dramatic. I do not understand how a 70% target can be set without knowing what the total figure is.

Thirdly, and most important to me, are the logistics of a cull. If there is a badger sett in my back garden, does that mean that people can come and shoot the badgers in it? I do not understand the logic of that. If a farmer does not want a cull on his land, does he have the right to stop the cull, or will the animals be culled if he is in a TB hot spot? As was mentioned earlier, the public will be incredibly anxious if they see people at night in balaclavas going round with shotguns. The thought of that freaks me out.

[Mr Mark Spencer (Sherwood) (Con)]

The hon. Lady is summarising what is driving the enormous frustration in the countryside with some of the ignorant comments that she is making. No one is allowed to shoot a badger with a shotgun. It must be done by a trained person with a rifle. Badger setts very rarely appear in people’s gardens. Badgers like to live away from people. Some of these comments are so ignorant that they cause enormous frustration.

[Sarah Champion]

I find the hon. Gentleman’s use of language offensive and patronising. I do not like to be called ignorant. He has no basis for saying that.

Another thing that concerns me is that there is a budget of £500,000 for policing. Police often spend £500,000 to secure the safety of just one march, so that seems a tiny amount for the three culling areas. I believe the figure will be much higher. The Secretary of State mentioned that culls had been effective in other countries, but it is a lot easier to shoot a water buffalo with whatever gun it is than to shoot a badger. Badgers are by nature private, they are nocturnal and it is hard even to see them, let alone shoot them. My hon. Friend the Member for Bristol East (Kerry McCarthy) asked whether a clean shot could be guaranteed. I do not believe that it is possible in all cases. There is a risk, as was mentioned, of badgers going back into their sett and dying.

All these issues could be resolved, but even if they were and a cull went ahead, the estimate is that the reduction would be only 16% after nine years. That is a tiny amount, if all the objections could be overcome. Surely a better long-term solution is to put all our money and resources into a bovine vaccine. The Government cut the funding for research into and development of such a vaccine and the funding needs to be restored. The British Veterinary Association says that £1 billion will be wasted on TB over the next decade. Surely if a small percentage of that could be invested in research and getting the vaccine closer—[Interruption.] If so, that is brilliant, but let us chuck more money at research because in the long term it will save us.

The main argument against the vaccine is that the EU forbids it because it is not yet possible to distinguish between vaccinated and infected animals and the EU would ban all live exports. All the farmers I spoke to said that they were against live exports, so I do not think there is much strength in the argument. In the short term, I believe we should use a combination of vaccinating badgers, good husbandry and the existing controls, but we need to drive forward a bovine vaccine.

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[Mr Mark Spencer (Sherwood) (Con)]

Let me first draw the House’s attention to my declaration of interest, not only as a former dairy farmer and a licensed holder of an exempt finishing unit, but as a landowner with badger setts on his farm—badger setts of which I am particularly proud. We in Nottinghamshire have the healthiest, smartest badgers that anyone could wish for, and I want to keep them that way. They are something of which I am very proud, a heritage of our country which should be protected and looked after. I want my badgers to remain healthy and TB-free for as long as possible.

As we heard from the hon. Member for Scunthorpe (Nic Dakin), this debate has prompted a fair amount of emotion. I have to say, as a former dairy farmer, that it is impossible to describe what it is like to be present at the birth of a calf, to be there when it takes its first breath, to be there when it drinks its first milk, and then to take it all the way through its life; to choose the animal with which it will breed, and to trace its family tree back through your father’s to your grandfather’s generation. It is impossible to quantify the importance of that experience, emotionally, to farmers, or to quantify the extent of their attachment to their animals.

To be told by Opposition Members that when our cattle are killed—when they are slaughtered—it is our fault, because we did not look after the biosecurity of our farms, is something very powerful which causes an enormous amount of emotion. I believe that farmers have the highest biosecurity that they could possibly have on their units, and it is physically impossible to keep a grass field where cattle are grazing badger-free. It is important for us to deal with the facts of the case rather than with alleged misdemeanours. The hon. Member for Rotherham (Sarah Champion) talked of balaclava-clad gunmen with shotguns riding around the countryside, which is a complete fabrication. Some of what is said is quite shameful.

We must use every tool in the box to protect my badgers, to protect my cattle, and to protect people from a disease that is spreading across the countryside towards Nottinghamshire. We will use biosecurity measures, movement restrictions and vaccination when it is available, but we have to take out the infected badgers in other parts of the country, which will otherwise spread this terrible disease across the east midlands towards Nottinghamshire and destroy these cattle.

I urge Members to support the Government in this unfortunate but necessary act. I urge Members to support the cull and eradicate TB from this country.

Agricultural Wages Board

Mark Spencer Excerpts

Wednesday 24th April 2013 Commons Chamber

[Mary Creagh]

I will be talking in detail about the seasonal agricultural workers scheme. I just say to the right hon. Gentleman that 1,610 people in his constituency will be affected by the reduction in pay. I do not know whether he has read the Department for Environment, Food and Rural Affairs impact assessment that was conducted when he was the Minister; I certainly have. It states that 42,000 casual workers are likely to see their pay default to the national minimum wage when their current employment comes to an end. The cost to the rural economy that the Department for Business, Innovation and Skills impact assessment estimates—there are varying figures—are to do with the direct loss of wages, holiday pay and sick pay out of workers’ pockets.

[Mr Mark Spencer (Sherwood) (Con)]

Will the hon. Lady identify what is special about agriculture? Is it that farmers want to exploit their workers, or should there be protection for people in retail, catering and other such industries?

[Mary Creagh]

I am surprised that the hon. Gentleman, with 380 workers who will be affected in his constituency, is asking me what is special about agriculture; I believe that he is a farmer, so he might stand up and tell me. Agriculture is different because people are often living in rural isolation; they may have their home provided by their employer, which puts them in a uniquely vulnerable position; and, as the right hon. Member for South East Cambridgeshire (Sir James Paice) said, they are brought in from countries where English is not their first language—perhaps they do not speak English at all—and are not in a position to negotiate. Those are three reasons for starters, but I am happy to come back to that.

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[Mary Creagh]

That is right, and we all know that as we get older we are more prone to illness. A further reason why farming is different is that people are expected to work antisocial hours and long hours out in what can be very difficult conditions. We saw that with the flooding last year and when farmers and their employees had to dig lambs out of the snow in the very cold winter we have just had.

[Mr Spencer]

rose—

[Mary Creagh]

I will give way later, but I would like to make some progress.

The Government’s own figures suggest that up to £280 million could be lost over 10 years in wages and in holiday and sick pay—a quarter of a billion pounds taken out of areas represented mainly by the parties on the Government Benches, where the cost of living is estimated to be approximately £3,000 more than for those living in urban areas. Up to £35 million a year could be lost in wages alone—again, those figures are taken from the Department for Business, Innovation and Skills impact assessment.

I want to know what happens when money is taken from rural families on the breadline. Who will pick up the tab? People with children will have recourse to income-related benefits, such as tax credits, council tax benefit and housing benefit. Reducing rural workers to the poverty line will take money out of workers’ pockets and transfer it directly to their employers. We, the taxpayer, will pick up the in-work welfare bill. That will add to the deficit. As a strategy for rural growth and deficit reduction, this thoughtless abolition will be catastrophic.

My second point is that the abolition will be bad for the food industry; it goes against business needs. Britain’s biggest manufacturing industry, the food production sector, needs more skilled workers. Instead, the Government are encouraging employers to race to the bottom on pay. That will see skilled workers turn their backs on the industry—and become MPs instead!

There are 2.5 million unemployed people in the United Kingdom, 1 million of whom are young people. There are 25 million unemployed people in the European Union, yet the horticulture industry still says that it needs to bring in workers under the seasonal agricultural workers scheme because it cannot find reliable British workers. It simply defies economic logic to suggest that a race to the bottom on pay is the way to attract the skilled new entrants that the industry needs.

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[Pat Glass (North West Durham) (Lab)]

The Agricultural Wages Board is important in constituencies such as mine—rural communities where there is already much poverty, and wages are low. Established by the Attlee Government in 1948, the board has served us for the last 65 years, setting a minimum wage and terms and conditions of employment for workers employed in agriculture. It costs the Government little to administer; I am told that it will probably cost more to abolish than to maintain.

It appears that the decision to abolish the Agricultural Wages Board is not based on financial evidence. It is yet another decision from a Government who spurn concepts such as data and evidence in favour of ideology and dogma. Once again, their adherence to ideology and dogma will have an impact on one of the hardest working and least well paid groups of workers in our rural communities.

The Government were intent on abolishing the Agricultural Wages Board from day one. The original announcement was made in July 2010. The leading party in the coalition Government, whose MPs include members of the wealthiest landowning families in this country, hardly had time to get their well-heeled shoes under their new shiny Government desks when they made their initial announcement. However, before the Government could take the final abolition decision, I understand they were told that they needed to carry out a consultation of interested parties or face a judicial review that they would probably lose on the grounds of insufficient consultation, and that they needed the consent of the delegated Welsh authorities to abolish the board.

[Mr Spencer]

Given that the hon. Lady knew about the decision in 2010, has there not been adequate time between then and now to consider all the options?

[Pat Glass]

I am not the Government, so I cannot respond to that question. Had I been the Government, I would have stuck to their rules and standards for consultation. They did not.

What did the Government do? Did they conform to Cabinet Office standards for consultation? Did they carry out an extensive 12-week consultation, avoiding main holiday periods, and making extensive efforts to ensure that all those affected, as well as all those with an interest, had an opportunity to take part? Did they carefully consider the outcomes of consultation in their final decision? Did they consult the Welsh Government, whose agreement was needed for abolition? They did none of those things; they came up with an extremely shabby plan to get round them.

The Government redefined the Agricultural Wages Board as a “regulatory reform” to avoid the necessity of even trying to get the co-operation of the Welsh Government, and they cobbled together a four-week consultation that failed to meet their own standards on consultations, issued by the Cabinet Office. Even then, 63% of those who responded to that sham and shameful consultation disagreed with abolition, so they were simply ignored.

Having failed to carry out a proper consultation, the Government decided to attach an amendment to the Enterprise and Regulatory Reform Bill and pushed it through the House without debate. When the Government hold something that is clearly a sham consultation over four weeks instead of 12, ignore their own standards, and then ignore the results of the consultation, is it any surprise that people question, and are suspicious of, any public consultation?

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[Andrew George (St Ives) (LD)]

This is a difficult debate, and I am grateful to the Labour Opposition for having brought it forward. In a point of order after the debate on Lords amendments to the Enterprise and Regulatory Reform Bill last week, I said how strongly I opposed our having had neither a debate or a vote on this significant matter. As I indicated earlier in an intervention, we had only limited opportunities to discuss the abolition of the AWB, among a large number of other measures, in our debates on the Public Bodies Act 2011. We were reassured throughout those debates that the House would have ample opportunity to debate the issue and come to a conclusion on it at a later stage, when a specific proposal was brought forward under the powers in schedule 1 to that Bill. I come at this debate on the basis of a significant disagreement with how the Government have handled the matter and frustration that we are shutting the stable door after the horse has bolted. Nevertheless, it is important to have the debate.

I listened carefully to my right hon. Friend the Secretary of State and did not get the impression that the AWB was being abolished because it was holding back wages and conditions for agricultural workers. In fact, I still have a strong impression that the opposite is true. I know that there has been a lot of speculation about the outcome of the abolition, but I am clear that it is not happening to enhance agricultural workers’ pay and conditions.

I also find it difficult to understand the impression that the Government are giving, given the slogan “We’re all in this together”, which they adopted in their first Budget and which I approve of entirely. One good proposal from the European Commission on the common agricultural policy is to cap the single farm payment at €300,000 and disburse the money saved in different ways. That could have been on the agenda under the previous Administration 10 years ago, but we are where we are. On the one hand, the Government are content to pay cheques of more than £1 million to large farmers who, frankly, usually do not need it. On the other hand, I fear the abolition of the AWB will mean that more public funds need to be deployed to pay the wages of agricultural workers who find their conditions and wages cut, or to pay benefits to those whose standard of living falls below a certain level. In both cases, a lot of public money is involved, in one case enriching large farmers and in the other subsidising poverty in our rural areas. I am not content with that contrast, and I will draw conclusions about it at the end of my comments.

The abolition of the AWB was not in the Liberal Democrat manifesto. It was in the Conservative party manifesto, however, and indeed the NFU made it clear in the lead-up to the last general election that it was very much in favour of the abolition of the AWB. That was certainly the case in my area, so my experience contrasts with that of the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart) on that point. One of the NFU’s key asks was the abolition of the AWB, yet when I raised the issue with farmers, I found that a significant number of them were opposed to that policy. They were opposed to it for the reasons the hon. Member for Wakefield (Mary Creagh) has outlined, such as that it would leave them in the position of having to negotiate individually. The collective approach through the AWB provided them with a framework that enabled them to avoid considerable embarrassment and difficulty or having to buy-in human resources consultants to resolve things. My hon. Friend the Member for Westmorland and Lonsdale (Tim Farron) is right: few small-scale farmers employ agricultural workers, but those who do will encounter great difficulties if they have to negotiate these arrangements with their workers.

I have regularly worked with the NFU over many years, not least on the creation of the groceries code adjudicator, on which the Government must be warmly congratulated. I have worked with it on a wide range of issues, and often agree with it and stand shoulder to shoulder with it—but not, I am afraid, on this issue. Regrettably, on matters such as this the NFU tends to resort to becoming a large farmers’ union, rather than an all farmers’ union; I have accused it of that to its face, so I am not saying this behind its back.

Many pertinent issues have already been raised in our debate, and I shall not repeat the concerns expressed about the impact this move will have, and about the Government simply saying, “We have the national minimum wage, so we no longer need an AWB.”

[Mr Spencer]

Can the hon. Gentleman define for me what a large farm is? Is an intensively farmed three-acre poultry farm a large farm? Is a 200-acre dairy farm a large farm?

[Andrew George]

The hon. Gentleman might be drawing me into a different debate, but he knows about standard man days—I do not want that to be interpreted as a sexist term—and the number of jobs a holding generates, or requires in order to be maintained. That is calculated irrespective of the acres covered, because as his question implies, especially in less favoured areas—some of which fall within my constituency—there are geographically very large farms that have low productivity. As the hon. Gentleman rightly says, some farms that are small in acreage are intensively farmed and have high levels of productivity. He makes a good point, but the point I was making about larger farms was in the context of the fact that some—although admittedly very few—receive hundreds of thousands of pounds, or even over £1 million pounds, in public subsidy. He cannot deny that that is the case. Those sums are given to a very few large farms as a result of the arrangements through the single farm payment.

I regret finding myself in this position. I know the Minister of State, my hon. Friend the Member for Somerton and Frome (Mr Heath), has been handed a hospital pass with this issue since taking up his post, and I am enormously grateful to him for the work he is already doing through his conversations and meetings with people in the sector. Despite this regrettable decision, he is working with them to try to identify opportunities for voluntary agreements within the sector. I hope that will serve to provide some of the protections which I fear will be lost to agricultural workers as a result of this Government decision.

There is something further that I regret. Normally, I feel enormously disappointed by Opposition day debates, because they usually degenerate into rather tribal, finger-pointing and teasing events, in which it is not possible to take the Opposition line on an issue because of how the debate has been handled. I regret that on this occasion—partly as a result of how the Government have handled the matter so far, by not giving us an opportunity for a debate or a vote—after a considered debate, I will be voting against the Government in the Division.

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[Mr Mark Spencer (Sherwood) (Con)]

I am grateful for that guidance, Madam Deputy Speaker. Let me begin by drawing the House’s attention to my declaration in the Register of Members’ Financial Interests.

We should recognise the progress that agriculture has made over the last 70 years. We are now well fed as a nation, without the worry of food security. We should recognise what a good job agriculture, agricultural workers and farmers have done in feeding the whole of Europe during those 70 years since the second world war, and, when we compare the industry of today with agriculture in the 1940s, we should recognise how different it is now, and how different are the relationships of agricultural staff with their employers.

The first argument that we heard from the Opposition—that abolishing the Agricultural Wages Board would not save any money—wholly missed the point of the debate. This is not about saving cash for the Government; it is about recognising the changing dynamic of agricultural work in the United Kingdom in a modern setting, and recognising the safeguards that have been introduced by other Governments and other parties. The minimum wage established a floor for the wages of all workers and has given them wage security, while changes in the legislation governing gangmasters have protected agricultural workers who are employed by them. The Agricultural Wages Board has become redundant. It is no longer a necessity because there are other safeguards, irrespective of the changes in the dynamic of agriculture.

Let me draw a few comparisons. If an agricultural worker who is charged with the responsibility of driving quarter of a million pounds’ worth of combine harvester makes a mistake in setting the sieves, much of the crop may go over the back of the combine. For the farmer, it is vital that the right member of staff, with the right skills, is sitting in that seat to protect his crop. I do not understand why a warehouse worker driving a forklift truck for Amazon does not need extra protection, but the combine harvester driver does.

A potato harvester can probably harvest £50,000 worth of crop, so damage to just 10% of that crop could cost a farm business £5,000 a day. Again, for the farmer it is vital that the right member of staff is driving that tractor and helping to ensure that the business is well looked after. If the right member of staff with the right skills is to sit on that seat, the farmer must pay him the right amount. The farmer must give him the right terms and conditions, or else he will walk off to another farmer.

The market for skills of that kind is driving agricultural wages to a much higher level than was provided for by the Agricultural Wages Board. Agriculture as an industry has changed dramatically since the 1960s. The House must recognise that.

Another argument we heard was that agricultural workers are particularly vulnerable because they live in tied cottages. I do not understand why the Opposition do not make the same argument for public house managers who work for a brewery and whose home is the public house itself. Why do they not require the extra protection farm workers supposedly have from the Agricultural Wages Board? The manager of a post office often has a flat above the business. Their accommodation is tied, so why do they not require extra protection? Double standards are in play.

Agriculture has moved on. The key question is whether the Opposition would overturn the abolition if they were in power. They were challenged on that point several times during the debate and on three occasions they refused the opportunity to answer. There is some cynicism on the Government Benches. Is it a political game? Is it about making a political point rather than a genuine one about improving the lot of people working in rural communities?

As a number of speakers want to follow me, I shall keep my comments as short as possible. I hope that in summing up, the Opposition speaker will address some of the points I made.

Oral Answers to Questions

Mark Spencer Excerpts

Thursday 7th March 2013 Commons Chamber

[Richard Benyon]

The hon. Gentleman makes a very good point about the extremes of weather we have experienced in the last 12 months. We were facing a real problem with drought, and there was a 3% chance of getting a sufficiently wet summer to alleviate it, yet it happened. However, it has of course brought huge other problems. I do not accept the hon. Gentleman’s point about the level of spending—I refer him back to my response to the previous question—and I can assure him that we listen very carefully to experts in the EA. When we asked its leadership what further projects it could bring forward if we found extra money, it told us and we got the money; that was announced in the September statement.

[Mr Mark Spencer (Sherwood) (Con)]

What can the Minister do to assist residents who live near small tributaries and who cannot understand which authority is responsible for them? There seems to be confusion between highways authorities, the EA, local councils and county councils as to who has responsibility for clearing the waterways around tributaries.

[Richard Benyon]

My hon. Friend makes a very good point. This matter was discussed at yesterday’s EA board meeting and we are in close touch with the EA and other organisations. There is a degree of confusion. That was brought out in the Pitt review. Some effort has been put in, and some progress has been made in addressing the problem, but I absolutely concede we are not there yet and there is still confusion about who is responsible and what the priorities are. We want to make sure that the priorities are protecting people and their properties and the environment.

Groceries Code Adjudicator Bill [Lords]

Mark Spencer Excerpts

Tuesday 26th February 2013 Commons Chamber

[Philip Davies]

No, I do not agree with that at all. I will come on to this point in a bit more detail soon, but the hon. Lady is forgetting something. The big supermarkets, without a shadow of a doubt, are massive companies that have hundreds of stores in their chains. By definition, a viable supplier to a supermarket chain has to be a very big company as well, otherwise it would not have the wherewithal to supply all the supermarket’s branches. When I get to the detail of my new clauses, I will talk about the thresholds that the Bill should apply. She will see that far from it being the case that vast supermarkets are being awful to very small suppliers, many of the suppliers are bigger than the supermarkets that they are supplying. She ought to bear that in mind.

[Mr Mark Spencer (Sherwood) (Con)]

My hon. Friend misunderstands the whole supply chain in the UK. There are organisations that provide hubs to supply supermarkets, but those hubs are supplied by very small primary producers such as family firms. Those firms are microscopic in comparison with the supermarkets.

[Philip Davies]

My hon. Friend makes a good point. If he has a big problem with the middleman, so to speak, for example in the dairy industry, he should pursue his complaint with the middleman, rather than having a go at the supermarket.

The hon. Member for Alyn and Deeside (Mark Tami) made a point about special offers. There is a view that supermarkets have been forcing suppliers against their will to do special offers, such as buy one, get one free or buy three for two. Let me tell the House, as somebody who has worked in this environment, what happens in the real world, rather than in the invented world that people want to talk about.

My hon. Friend the Member for Fylde (Mark Menzies) is here and he will know what happens as well as I do because he worked for Asda at the same time as I did. He will recall that, before I left, Asda decided that it did not want to do special offers any more and that it would have no special offers in its stores. It did not want any buy one, get one frees or three for twos. It asked its suppliers instead to just sell it the product at an everyday low price and to put what they would have invested in a promotion into providing that price. It was not companies such as Asda that were forcing suppliers to do buy one, get one frees; suppliers were falling over themselves to do special offers in the supermarkets and to get their products in the promotional areas.

Some of those firms have massive marketing budgets. They have marketing budgets that supermarkets would love to have. They use that budget to do offers such as buy one get one free or three for the price of two. They are trying to persuade people who buy Daz for their washing, for example, to move to Persil. To persuade people to do so, they give them a buy-one-get-one-free offer.

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[Philip Davies]

As ever, my hon. Friend is eagle-eyed. The amendments are the same, but the purpose of tabling two was to give the House a choice, because as it happened, I envisaged the interventions that the hon. Member for Alyn and Deeside (Mark Tami) has made.

At Asda, we found huge reluctance on the part of suppliers to stop special offers. They lobbied Asda for ever to do more and more of them to promote their brands, and an everyday low price did not offer them the same marketing opportunity.

[Mr Spencer]

I applaud my hon. Friend’s campaign to get his whites whiter, but he must recognise that there is a fundamental difference between a supplier of a brand of washing powder and a supplier of a cauliflower, carrot or parsnip, because it is not possible to brand a carrot or a cauliflower.

[Philip Davies]

I am grateful to my hon. Friend, and again, I take his intervention as a signal that he will support my amendment. That brings us on to the nub—

[Philip Davies]

I am grateful, Mr Speaker, and you are absolutely right, as ever. My hon. Friend the Member for Sherwood (Mr Spencer) seems to indicate that he is prepared to support new clauses 1 and 2, and I will be grateful to him for that. It seems that the longer we go on, the more support I am garnering for my case, so I am encouraged to go on a bit longer.

[Mr Spencer]

My hon. Friend will recognise that putting a figure on turnover as suggested in the new clauses would mean that there was a difference between somebody supplying a low-value product such as a carrot and somebody supplying a high-value product such as a bottle of champagne. If we were to put a firm figure in the Bill, as time and inflation moved inevitably forward, that figure would become smaller and smaller in real terms and small and medium-sized enterprises would be dragged over the threshold.

[Philip Davies]

My hon. Friend appears to be indicating that he prefers new clause 2 to new clause 1, which further persuades me that I should seek to press new clause 2 to a Division, if you allow me to do so, Mr Speaker.

The Bill was sold to people on the back of what I believe was a false premise—the idea that supermarkets are screwing suppliers into the ground remorselessly and hoping that as many of them as possible will go bust. It is a completely nonsensical argument.

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[Philip Davies]

My hon. Friend makes a good point, which strikes at the heart of new clauses 1 and 2. We can argue about the necessity of the Bill, and as far as I am concerned it is not only unnecessary—as my hon. Friend the Member for North Swindon (Justin Tomlinson) made clear, there are no complaints about the existing code, so it is a solution looking for a problem—but the most unconservative-minded thing that we could possibly see. I have no problem with the Liberal Democrats supporting it, because of course they are always a left-wing tribe, but I am worried that members of my own party are supporting this intervention in the free markets.

Two companies, free to make their own decisions, are making agreements and signing a contract, and then we in the House think that we should intervene in that contract that they have both entered into freely and say, “By the way, we don’t think you should have signed that contract.” I have always thought that companies are more than capable of deciding those things for themselves.

[Mr Spencer]

Again, my hon. Friend misunderstands the concept of what the groceries code adjudicator is intended to achieve, which is related to exactly the point that he has just made. When an agreement has been made between two parties, if both sides stick to it there is no problem, but there is a problem when one side tries to change that agreement and goes back on it at a later date.

[Philip Davies]

My hon. Friend makes a good point, and he seems to make the point that the Bill is totally unnecessary. I am not a lawyer—my hon. Friends the Members for Christchurch (Mr Chope) and for Bury North are, and I will happily bow to their expertise—but it seems to me as a layman that if two sides sign a contract and one side then breaks it, there are already laws in place to ensure that the matter can be seen through in the courts. The courts ensure that contracts entered into voluntarily are honoured, so we do not need to do that. The Office of Fair Trading already looks after the groceries code, which deals with these matters anyway.

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[Philip Davies]

This is a red letter day for me, because I now have another volunteer to support my new clause 1 and new clause 2, which I will come on to in a second. The hon. Gentleman may well not have read them and therefore may have intervened inadvertently, but when he actually finds out what is in new clause 1 and new clause 2—if I am ever allowed to get on to that—he will find that he agrees with the point I am making. I do not agree with the principle of the Bill; I am the first to make that clear, and that relates to the purpose of new clause 3. On new clause 1 and new clause 2, the Bill was sold on the premise articulated by the hon. Gentleman—we have big supermarkets that are in a vastly preferential situation to very small suppliers, and that the House should be looking after those very small suppliers where they face problems. That is the premise of the hon. Gentleman’s point, and that is what my hon. Friend the Member for Sherwood is indicating. That is how the purpose of the Bill was sold.

I believe the Bill is totally unnecessary, but I am the first to accept that that is a minority view and that it will go ahead. My new clauses seek to ensure that the Bill hits its given purpose—to look after the small suppliers that my hon. Friend the Member for Sherwood is rightly keen to look after. I do not disparage him for that. Currently, the Bill will not just look after the small suppliers that my hon. Friend and the hon. Member for Corby (Andy Sawford) are so concerned about; it will give an avenue for complaint to all suppliers of supermarkets, whatever their size. All I can do is reiterate the fact that the vast majority of suppliers to supermarkets are huge companies in their own right, and that some of them are bigger than the supermarkets they supply.

Let us make no bones about it. One way or another, the suppliers—whether in terms of special offers, deals or whatever—hope that ultimately the adjudicator will deliver a benefit to their bottom line. Suppliers hope, through whichever avenue, that this will ensure that they have a healthier bottom line.

[Mr Spencer]

My hon. Friend must also recognise that the role of the groceries code adjudicator is as a referee. If a large corporation—we all know they exist—is in a trading disagreement with a supermarket, then the supermarket could use the groceries code adjudicator to make sure that it gets a fair deal from that large supplier.

[Philip Davies]

My hon. Friend makes his point. As it happens, I am a Conservative. I know it is an old-fashioned view these days in the Conservative party, but I believe in the free market. Companies such as Asda, Tesco, Morrisons and Sainsbury’s are big enough to look after themselves. They do not need a referee to look after a contract on their behalf against any supplier; big companies are more than capable of doing that themselves. My hon. Friend may take the point that it is the role of Parliament to intervene in every contract negotiation between two companies.

--- Later in debate ---

[Mr Spencer]

Again, my hon. Friend is misrepresenting the role of the groceries code adjudicator. When a deal is done between two suppliers, whether large or small, as long as it is stuck to, there will be no role for the adjudicator. Those large companies can do their negotiations, and those deals will stand fast. The adjudicator would get involved only when the supermarket goes back and tries to change the original agreement. That is its role.

[Philip Davies]

So my hon. Friend does not think that Procter & Gamble is big enough to look after itself. He thinks poor little Procter & Gamble—that poor mite—needs a state adjudicator to intervene on its behalf because it might find itself at the wrong end of an unfair negotiation with a supermarket.

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[Philip Davies]

My hon. Friend makes a good point. The Bill would still allow Walkers to screw the potato suppliers—who provide the raw materials—into the ground as much as it liked, but it would prevent Asda, for example, from trying to negotiate the best deal with Walkers for its crisps.

I have mentioned Coca-Cola. I also wonder whether Heinz Ltd would really need to take a complaint to an adjudicator. Is Heinz not big enough to look after itself? Why on earth are we passing legislation to intervene in disputes between big supermarkets and big suppliers such as Heinz, Diageo, United Biscuits, Kraft Foods, Nestlé, Premier Foods, Fullers Foods, Britvic Soft Drinks Ltd and Mars? Are we really saying that the House must set up a state regulator to intervene in negotiations or disputes between massive multinational companies? Those companies have recourse to the courts if they feel that a contract has been breached. Are we really saying that Heinz does not have the wherewithal to take a case to court if it feels that a supplier has dealt with it unfairly? Does anyone want to stand up and say that Heinz does not have the wherewithal to take such a case to court? Who wants to make that point?

[Mr Spencer]

rose—

[Philip Davies]

My hon. Friend does.

[Mr Spencer]

I will happily challenge my hon. Friend on that point. Those large companies have the ability to negotiate deals, and those deal will be stuck to. The groceries code adjudicator will not get involved in those kinds of negotiations. The adjudicator will have a role to play when a supermarket tries to go back on a deal and change it at a later date.

[Philip Davies]

We all know that that is the case, but my point is that if companies such as Heinz, Walkers, Nestlé or Coca-Cola feel that a supermarket has breached a contract with them, they can take the case to court. We do not need the state to set up an adjudicator to decide which side is right. As it happens, I am quite relaxed about supermarkets trying to screw those big suppliers into the ground to get the best possible deal. Those suppliers are making massive profits, and I would prefer to see that money benefiting my constituents rather than adding to the bottom line of those multinational companies.

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[Mr Spencer]

I shall not detain the House for long, but I want to make some general comments about some of the amendments and new clauses.

I rise with an enormous amount of frustration, because in my opinion a number of Members seem not wholly to understand the role of the adjudicator and how they will fit in to the grocery supply chain in the United Kingdom. There has been an enormous amount of debate on new clauses 2 and 3, tabled by my hon. Friend the Member for Shipley (Philip Davies), which I would like to explore. I understand his motivation in trying to ensure that the adjudicator deals with smaller companies, but I think he misunderstands how the grocery supply chain works.

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[Philip Davies]

My amendment does not seek to restrict the remit only to very small suppliers but to suppliers with a turnover of up to £1 billion; surely my hon. Friend cannot argue that a supplier with a turnover of £950 million is a very small supplier.

[Mr Spencer]

I am grateful to my hon. Friend for his intervention, as it allows me to clarify that that is my exact point. At no point will there be such a negotiation, as this is not a David and Goliath situation. We are talking about two Goliaths, so the adjudicator will have no role. My hon. Friend has made a career of criticising unnecessary legislation and it seems strange that he should now want to introduce an unnecessary clause into a Bill. I hope that he recognises that new clause 2 would not be necessary simply because the adjudicator will not have a role in negotiating between two Goliaths.

[Justin Tomlinson]

Surely the new clause will send a crystal clear message to the adjudicator, when they take on the role, about where they need to focus their efforts.

[Mr Spencer]

Again, there is a misunderstanding of what will happen. We are talking about very large companies that are negotiating with very large companies. They both have an equal amount of commercial muscle, so no one party will be able to bully the other. That is quite important. The adjudicator is meant to get involved as a referee and negotiate when one large party abuses a smaller party and uses its commercial muscle to push something through.

[Andrew George]

I support the arguments that my hon. Friend is making. He knows that this is a dynamic and creative market in which a number of intermediaries and subsidiaries have been created with a turnover of more than £1 billion, which could be used as a means of sidestepping the legislation if new clause 2 was accepted.

[Mr Spencer]

I recognise that. I pay tribute to the hon. Gentleman, who has worked on this matter since before I became a Member. Perhaps that is something that the adjudicator could look at as we move forward. There is this ability to put a film between parties and cause an issue. That comes back to small suppliers, who supply the middlemen.

New clause 3 would cause the Bill to expire after seven years. It would be disappointing if it did so. Using the analogy of a football match, if we get to half time and the referee has not needed to issue a yellow card, no one suggests that we do not need a referee in the second half.

[George Eustice (Camborne and Redruth) (Con)]

We have had plenty of time to understand how supermarkets deal with their suppliers and it is precisely because of that that everyone who has looked seriously at this issue has concluded that we need an adjudicator.

[Mr Spencer]

I am happy to agree with my hon. Friend and I pay tribute to the work that he has done to bring the legislation to this point.

[Mr David Nuttall (Bury North) (Con)]

Does my hon. Friend agree that, regardless of whether there have been complaints, the existence of the adjudicators office will bring a cost so it would make sense to bring the whole thing to an end if it is not proving worth while to the consumer?

[Mr Spencer]

My hon. Friend makes an interesting point. We could make the same argument across government; if crime starts to fall in an area, do we withdraw the police because they are not necessary? We have to have a referee to make sure that the rules are being obeyed. The groceries code adjudicator will be a great referee and will have the teeth to make sure that the Goliath does not bully the David. That is something that the Government should be proud of and take forward to bring a little parity and common sense to the market.

[Huw Irranca-Davies]

I am pleased to speak in this debate and I welcome the speeches that have been made so far. I did not expect it to be as sparky as it has been, but I welcome that because it allows us to flush out the arguments about the amendments and new clauses, as well as the fundamental principles of what we are trying to achieve.

I did not intend to speak to new clauses 1, 2 and 3, but I wish to reiterate the comments made by the hon. Member for Sherwood (Mr Spencer), the right hon. Member for South East Cambridgeshire (Sir James Paice) and others. A great deal of discussion in Committee focused on the fact that the adjudicator’s office will intentionally be small, mean and lean. It will not be some behemoth, as the hon. Members who spoke to new clauses 1, 2 and 3 suggested it would be. It is supposed to be an intelligent organisation that does not go on fishing expeditions but responds to good intelligence. I suspect that if there are no cases to follow, the report will be very slim indeed. I suspect that the adjudicator will not respond to Procter & Gamble or anyone else if they are asked, “Please look at the power relationship within the supply chain and how we are being disgracefully abused.”

The hon. Member for Shipley (Philip Davies) spoke to new clauses 1, 2 and 3 at great length. New clause 3 gives the reality to the mission, which is at a set moment in time to get rid of the adjudicator, which would fly in the face of the advice that has come down over years from the Competition Commission and others that there is a need for such an adjudicator. Lean and mean, yes, but the hon. Member for Shipley should have some faith in the adjudicator and, having advertised the position and given her the power and set up the office on a lean, mean basis, he should allow her to decide where to investigate to achieve a good, efficient supply chain.

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[Ian Murray]

I will be quick, but let me start by returning the thanks to the Front-Bench team—the Minister of State, Department for Environment, Food and Rural Affairs, and the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire (Jo Swinson), who I recall on Second Reading stamped her authority and said that we would not have fines in the Bill. We now have fines. They stamped their authority in Committee and said that they would not send the appointment of the adjudicator to the BIS Select Committee because it would be a dereliction of their parliamentary duty and was not an important enough position to be subject to a Select Committee pre-appointment hearing. I am delighted that Ministers have come round to our way of thinking. I am also delighted that they came round to the way of thinking of the other place by putting trade associations into the Bill. The Bill is far better now than when it first entered the House, and the Ministers listened to some close analysis and persuasion from the Opposition.

Let me right a wrong that happened in Committee. It is traditional at the end of Committee proceedings to thank all the officials, the Chair and everyone who has been involved in the Committee. I forgot to thank one person—my hon. Friend the Member for Ogmore (Huw Irranca-Davies)—when I was wrapping up the Committee. He has done more in the House than many to get us to where we are today, and I would like to right that wrong by putting on record my thanks to him for everything that he has done and, of course, for his wonderful speech earlier today.

I have tried twice to thank the hon. Member for St Ives (Andrew George) both in the Chamber on Second Reading and in Committee. Just before thanking him, he popped up and threw a wobbler at me of some description. I am delighted that I have been able to thank him today without him doing that.

Of course, my hon. Friend the Member for Ynys Môn (Albert Owen) first brought the matter to the House in his private Member’s Bill, and it should be a proud moment for him today as we send the Bill to the palace for Royal Assent. The last two thanks are to everyone who served on the Committee. We had lively debates. I am disappointed that my hon. Friend the Member for Vale of Clwyd (Chris Ruane) has not taken the opportunity to be in the Chamber. The Under-Secretary of State for Business, Innovation and Skills, had been on her feet for only about 20 seconds in Committee when my hon. Friend popped up and suggested that we should call the new adjudicator Oftrolley. I could not let the moment pass without putting it on record that I am disappointed that he is not here.

We have used a lot of terminology such as “toothless tiger”, and there was a danger that the Bill would be that. The Bill now has teeth. There are still some things that Opposition Members would have added to the Bill, but unfortunately that has not come to pass. We hope that the Ministers will be amenable to changing the way in which the adjudicator works as the process beds in. There are problems with the code itself. The hon. Member for—is it East Bedfordshire?

[Mr Spencer]

Sherwood.

[Ian Murray]

Sherwood, of course. I was not even in the right part of the country. The hon. Gentleman used the example in Committee of the dairy farmers dispute. In fact, that dispute would not have been covered even if the adjudicator had been in place, because there had not been a breach of the code. That example was interesting in terms of trying to keep the code live and make sure it is as responsive to the industry as possible—not just to the suppliers. The hon. Member for Shipley (Philip Davies) made some important points. It needs to be responsive to the supermarkets. They make such a considerable contribution to our economy, and we must not forget the role they play. The code has to be responsive to their needs too.

We set three tests for the Bill at the outset, and we have met all of them. We are a little disappointed on intermediaries and supply chain issues, and I hope that Ministers will reflect on those. I gave a commitment on Second Reading and in Committee that we would work constructively with the Government to make this a better Bill. We have done that and we have got a better Bill. Everyone who has been involved in this process for far longer than I have been should be very proud tonight that we will have an adjudicator and, I hope, a far better supply chain and a far better supermarket market.

[Mr Spencer]

I shall just take 60 seconds to add my congratulations to those on the Front Bench for introducing this Bill. I also pay tribute to the hon. Member for Ynys Môn (Albert Owen) who, before I was a Member of Parliament, had pushed this issue forward through a private Member’s Bill. It is worth noting that it took a change of Government for the Bill to receive Government support, and the coalition should be proud that it has managed to introduce legislation that will level the playing field.

All hon. Members can support fair play, and it is worth reminding everyone that the Bill is not about an adjudicator poking their nose into a private deal or relationship between a supplier and retailer. It is about ensuring that, after they have done the deal, they all stick to the rules and play by the book. I am very proud that the coalition Government have introduced the Bill and will get it on to the statute book. I look forward to fair play in the retail sector.

Horsemeat

Mark Spencer Excerpts

Tuesday 12th February 2013 Commons Chamber

[Kerry McCarthy]

Exactly. I raised that very issue with the Secretary of State for Environment, Food and Rural Affairs yesterday, and I have to say from his response that it looked as if it was the first he had heard of it; he simply said that we rely on scientific advice, which I think is scandalous.

I am just halfway through my description of the process involved in producing pink slime. The recovered beef material is then processed, heated and treated with gaseous ammonia or citric acid to kill bacteria. It is then finely ground, compressed into pellets, flash frozen and shipped for use as an additive. There was a public outcry over this issue a while ago, and we saw Jamie Oliver appearing on American TV decrying its use. There was a real backlash, and companies such as McDonalds, Burger King and Taco Bell announced that they would discontinue its use. There was also an outcry about it appearing in meals in the public sector, and promises were made that that would no longer happen. Once consumers knew that there was pink slime in their food, they did not want it and wanted the meat industry to stop producing it.

There is also a substance that has become colloquially known as “white slime” in meat products. It is officially known as “mechanically separated meat” or “mechanically recovered meat”. This is the product most likely to be used in highly processed meat products such as burgers or pies. It is a paste-like product produced by forcing beef, pork, turkey or chicken under high pressure through a sieve to get every last little scrap of meat off the bone. Questions have been raised about its safety and some have argued there should be limits on how much of it should be used in a food product—for example, no more than 20% is allowed in hot dogs. The fact is, however, that consumers do not realise that this is in their hot dogs. Finally, there is advanced meat recovery, which separates meat from bone by scraping, shaving or pressing the meat from the bone—again, typically used in hot dogs.

Let me quote what John Harris said in an excellent article in yesterday’s The Guardian—it may sound a bit of a cliché to keep quoting this newspaper, but it is not particularly fond of vegetarians generally. He said that EU regulations insist that if a product is to be called “meat”, it has to be

“skeletal muscle with naturally included or adherent fat and connective tissue”.

He said that our Food Standards Agency insists that economy beefburgers must contain at least 40% of this product, which must come from cows. That is not very reassuring; I think people expect their beefburgers to have beef in them, not cartilage, fat and connective tissue.

In talking about the relentless search for profits from cheap food, John Harris cited a Financial Times article saying that Findus products came from a factory in Luxembourg, which was supplied with meat by a company in south-west France, which had acquired frozen meat from a Cypriot trader that had subcontracted the order to a trader in the Netherlands—who was then supplied from an abattoir and butcher located in Romania. As John Harris says, how messed up has our food system become? All this is a far cry from the sort of meat that many Members praised during yesterday’s statement on horsemeat. The advisability of buying local meat from a local farm sold by a local butcher was highlighted, where the path from the pasture to the plate is a matter of public record. Indeed, I have heard people saying that they take local sourcing so far that they even know the name of the cow they are consuming.

It is very easy to say that, and in ideal world, people would be looking to buy organically reared locally produced products, but that is very expensive. Yes, it can be said that people should try to cook their own food and source it locally instead of buying ready-made meals, but I am sure many MPs grab a ready meal from Tesco or Marks and Spencer on their way home after a vote. We should not be too judgmental about people who turn to value ranges and ready-made meals, as my hon. Friend the Member for Hackney North and Stoke Newington (Ms Abbott) said. If someone has only a couple of pounds left in their purse and there is a £1 lasagne ready meal or an eight-pack of Tesco economy burgers left in the shop, they will buy one of those rather than buying the mince, the sheets of pasta, the flour, the butter, the tomatoes, the herbs and the cheese that they would need to make lasagne from scratch. Many people do not even have the necessary cooking facilities in any case. I have seen single men in my constituency living in bedsits with just a microwave for cooking.

[Mr Mark Spencer (Sherwood) (Con)]

This should not seem like rocket science to the hon. Lady. If I told her that I could flog her a cheap telly, she would think to herself, “There must be something wrong with that TV.” It does not strike me as much of an extension of that argument to suggest that if those processed meat products are so much cheaper than other products, their quality will not be the same.

[Kerry McCarthy]

Sometimes people simply do not have a choice between buying the slightly dodgy knock-off cheap telly that has probably come off the back of a lorry and going to one of the high street shops and buying a top-of-a-range brand. That is the point that I am trying to make. People may well know that what they are eating is not as good as the organic produce that is sold in, for instance, The Better Food Company, an organic supermarket in Bristol, but they do not have the option of going there. As I have said, even if people had enough money to buy more than one day’s food and could plan ahead and try to cook their own meals, they would still not be buying premium “best of British” mince. They would be buying the sort of mince that was mentioned just now by my hon. Friend the Member for Brent North (Barry Gardiner), and about which I asked the Secretary of State yesterday. If the Government manage to find their way around European Union regulations, that mince could be up to 50% fat and collagen, and other substances that are not meat, without the consumer’s being any the wiser.

We need to get the message across to Government Members. We are living in a world in which people’s cost of living is being squeezed from all sides. Their incomes and benefits are being cut, their rents are going up, and fuel prices, fares and food prices are rising. Obviously they will buy the packet of eight Tesco value burgers for £1, because they have no other option. According to statistics released last week by Mintel, the market research company, some 30% of consumers now buy budget ranges, as opposed to just one in five back in 2008. We cannot insist that everyone should buy the premium, locally sourced, top-of-the-range products, because some people simply cannot afford to do that. The important point, surely, is that all food should be of a decent quality, and all consumers should know what is in their food.

--- Later in debate ---

[Mr Mark Spencer (Sherwood) (Con)]

It is a great pleasure to follow the hon. Member for Brent North (Barry Gardiner). Although he represents an urban constituency, he speaks with great knowledge and experience about the food industry, and has a reputation for doing so. May I also draw attention to my declaration in the Register of Members’ Financial Interests?

This topic has not suddenly emerged over the past two and half years; the problem we are talking about today has been a long time coming, and therefore some of the comments from Opposition Members stick in my throat like a dodgy burger. They speak as if this Government have created this problem, but the entire situation has been changing since the second world war, when the proportion of cash an individual spent on their food bill was much larger than it is today. Then, families would have spent 60% of their income on food, but today that figure is much smaller and as such we have lost the context of how valuable our food is.

I drew an analogy with television, but we could say the same about car tyres. A person would never buy second-hand car tyres from someone offering them on the cheap, because they would instantly recognise that their individual safety could be at risk. However, we as consumers seem to have got into a position where we are happy to see the price of food fall and be driven down. We have lost the concept of how valuable our food is, and that has led us to the position we are in today.

The hon. Member for Brent North referred to the fact that the Education Secretary plans to reintroduce cooking and food to the curriculum, which is a great step forward. Two generations of consumer have lost contact with how food is produced and with how to cook raw product, and again, that is to the detriment of our food industry. If the Government can do anything, more education about how to cook food and deal with raw products will mean that consumers are able to buy better quality food for the same money if they learn to shop about and source food from the right places.

Today, UK agriculture finds itself in a different place from the rest of the world, but that is no fluke and comes from bitter experience. The BSE crisis in the UK taught the beef industry valuable lessons about consumer confidence and how the consumer needs to understand, know and have confidence in a product. Today we know that if we go to our local butcher, not only will they be able to sell us a very high-quality cut of meat or processed beefburger, but they will be able to identify the animal that the beefburger came from, as well as its mother and father. That is the level of traceability in the UK butchery industry today, and UK consumers should understand that. Certainly, when that is compared with some of the points made by the hon. Member for Bristol East (Kerry McCarthy) about the processed meat industry, and with some of the products sold as meat that normal people would not recognise as such, there is a strong message to deliver on behalf of the UK meat industry.

This is not rocket science: the shorter we make the chain, the easier it is to have such traceability, and labelling will be important as we move forward. We heard from the Opposition about how the labelling of our products should be more prominent, yet when they were in power, there were several private Members’ Bills and lobbying by the then Opposition to try to improve labelling and ensure that consumers understood where and how their food was being produced.

[Simon Hart]

On that point, does my hon. Friend agree that in this instance there was nothing unclear about the labelling? It said beef but in fact it was horse.

[Mr Spencer]

Absolutely, and that is fundamental. Frankly, that could not happen in the UK because environmental health officers and trading standards officers are checking a paper trail that goes right back.

[Pat Glass (North West Durham) (Lab)]

I agree with much of what the hon. Gentleman has said, but surely the issue is about criminality, which is international. If a criminal changes the label, it does not matter whether the meat is British or comes from abroad; consumers will not have confidence.

[Mr Spencer]

I acknowledge that position, but my point is that given the traceability in the UK industry, the opportunity to change those labels is simply not there. Registered vets in every abattoir in the United Kingdom are watching the line and checking that the carcases are stamped and marked. They cannot be changed. When one buys what is basically a block of frozen meat from an international buyer, it is easy to pull off the label that says “beef” and slap on one that says something else, or reverse that process. That is a sad state of affairs.

Consumers want to know exactly what they are eating, but today we are in a position where I could set up my own little factory, buy in Brazilian chicken, make chicken pies in my kitchen, and sell them as Nottinghamshire chicken pie. We need to look more closely at the labelling process so that the industry tells consumers exactly what they are buying and where it has come from.

In the end, the consumer has the power and can choose where they source their products. They can choose to go to a supermarket or to a local, small and independent high-street butcher. They can shop around and make those decisions. I acknowledge that that becomes challenging right at the bottom, where people are struggling to make ends meet and to find the cash to buy those products. That is why we need a regulatory system that they can have confidence in, that they can support and that they acknowledge.

My final message is that this weekend, when people are thinking about what they want to have for dinner, they should go to their local butcher, look him in the eye and say, “Where has this animal come from? Tell me about it.” People will then be able to eat that dinner with confidence, knowing that they are buying good-quality, locally produced meat.

[Neil Parish]

(Tiverton and Honiton) rose—

Horsemeat (Food Fraud)

Mark Spencer Excerpts

Monday 11th February 2013 Commons Chamber

[Mr Paterson]

The hon. Gentleman has, I think, missed the point. The Irish had local intelligence of a local problem in Ireland, which is why random testing was done in Ireland. On his other question, I have discussed the issue with the chief executive of the Food Standards Agency, and she is clear that, with her organisation having made some sensible efficiencies, she can certainly deliver everything we ask.

[Mr Mark Spencer (Sherwood) (Con)]

May I draw attention to my entry in the Register of Members’ Financial Interests? Given that the problem is with international processors, can the Secretary of State reassure us that any change in legislation or regulation will not fall on the shoulders of small independent butchers and retailers?

[Mr Paterson]

My hon. Friend raises an important point. There has been a lot of acknowledgement around the House about the benefits of local production, but sadly in recent years we have seen the closure of a large number of small local abattoirs. Such abattoirs are of real value—there are animal welfare and food-quality benefits—so we should be judicious in any moves we make and value small country abattoirs.

Groceries Code Adjudicator Bill [Lords]

Mark Spencer Excerpts

Monday 19th November 2012 Commons Chamber

[Jo Swinson]

I will happily confirm the reference in that clause:

“When carrying out an investigation the Adjudicator may consider any information that it seems appropriate to consider and is not limited to considering the information mentioned in subsection (1)”—

subsection (1), of course, lists a range of places from which information could be provided. The point of that phrasing is to ensure that the adjudicator has flexibility in considering information from whatever source. That includes, but is not limited to, information from trade associations, as the Chair of the Select Committee mentions, from a whistleblower, or others who might have concerns or evidence of malpractice about compliance with the code. We do have—

[Mr Mark Spencer (Sherwood) (Con)]

Will the Minister give way on that point?

[Jo Swinson]

I am still responding to the earlier question, but if the hon. Gentleman will have a little patience I will come to his intervention shortly.

On the other point raised by the hon. Member for West Bromwich West (Mr Bailey), there will obviously be a regular review of the adjudicator. That is appropriate in ensuring that it functions as it should and that any necessary changes can be made, but we will not prevent the adjudicator from properly considering information before the initial review is produced. I want to make a little progress and then I will take an intervention from my hon. Friend the Member for Sherwood (Mr Spencer).

The adjudicator will be funded by a levy from the 10 largest retailers and will have the power to investigate breaches and to impose sanctions against supermarkets found to have breached the code. Some Members have previously criticised the Bill as being anti-business. What is anti-business about ensuring that the grocery market works as well as it can, without being distorted by anti-competitive and unfair practices?

[Jo Swinson]

I will make a little progress, and then I will give way.

The direct or indirect suppliers who are among the potential beneficiaries of the Bill include fresh food intermediaries and food and drink manufacturers. That is why the Bill is supported by major business groups, including the Food and Drink Federation, the British Brands Group, the Association of Convenience Stores and the National Farmers Union. A fair market is one in which suppliers and supermarkets are free to innovate, expand and offer the widest possible choice to the consumer without fear of being disadvantaged by unfair dealings elsewhere.

[Mr Spencer]

The Minister refers to blacklisting, when suppliers will be disadvantaged by coming forward. Can she reassure the House about how she will achieve that when, for example, the number of suppliers in the east midlands for a specific vegetable will be limited, and it will be quite easy to identify which one is supplying that product to a particular supermarket?

[Jo Swinson]

Clause 18 provides that there is a duty on the adjudicator to protect confidentiality. That goes beyond not allowing publication of the name of the individual or supplier making the complaint. As my hon. Friend rightly says, there are circumstances where an investigation could, in effect, give away who had made the complaint. In that circumstance it would be possible for the adjudicator to undertake a slightly wider investigation in terms of geographic scope or the types of vegetable being investigated, so that it would not be possible to identify which individual or supplier had come forward and made a complaint.

--- Later in debate ---

[Jo Swinson]

Absolutely. Morally, it is incumbent on anyone who comes across evidence of appalling crimes, such as human trafficking, to ensure that it is presented to the appropriate authorities so that they can take action.

Even without fines, there are financial consequences for retailers who breach the code. There may be internal costs of complying with an investigation, such as the cost of sending senior executives to give evidence to the adjudicator. The adjudicator will have the ability to make a retailer who has breached the code pay the costs of the investigation. It is also our intention that the retailers who cause the adjudicator the most trouble should pay a greater share of the levy. Taken together, those factors will reward good behaviour and discourage non-compliance.

[Mr Spencer]

Will the Minister give way?

[Jo Swinson]

If the hon. Gentleman will forgive me, I will make a little progress, because he has already intervened.

It benefits no one to reach straight for fines before we have exhausted the other options. We seek to impose a proportionate and effective solution. A move straight to fines would risk creating an unnecessarily adversarial environment, which would ultimately detract from our key objective of achieving long-lasting change in the culture of retailers.

--- Later in debate ---

[Ian Murray]

That should be in the hands of the adjudicator. We are asking the adjudicator to do a job to assess whether someone has breached the code. The adjudicator should therefore be given the power to determine the sanction. If the sanction is to seek recommendations, then that is the sanction. If the sanction is to name and shame, then that is the sanction. If the sanction is a fine, we should leave that in the hands of the adjudicator to determine. That could be a debating point in Committee. The Minister is chuntering from a sedentary position, but the argument is whether financial penalties should be in the Bill. If they are, the Secretary of State could then propose that fines be within certain parameters, or up to the adjudicator, or a proportion or a multiple of the loss achieved by a particular supplier. There are a plethora of ways for an adjudicator to determine a financial penalty. [Interruption.] The Minister says, “I don’t know,” but the Government have not told us what they would propose. Yes, we do not know how much the fine should be. That would be up to the adjudicator, within parameters applied in respect of the Secretary of State, to determine how much a fine should be, and that should be in the Bill.

[Mr Spencer]

Does the hon. Gentleman agree that those charged with the responsibility for spreading the message of the naming and shaming will be the same publications taking the advertising revenue? I wonder how much enthusiasm to naming and shaming there will be from those publications, when that might put their own advertising revenue in jeopardy.

[Ian Murray]

That is a wonderful point, and I think we now have our second candidate for the Committee—or given that helpful comment, perhaps not. The hon. Gentleman is right: there is a conflict of interest. The hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) mentioned the large full-page adverts that supermarkets produce relating to fair trade. Indeed, if it is about advertising revenues, there will be a conflict of interest, and I hope that the adjudicator would take that into account. If fines were included in the Bill, an adjudicator could balance up what would be the best punishment for a particular crime and deal with it in that way. By hamstringing the adjudicator from day one on fines, we are merely pushing down some of those routes by which questions would have to be answered.

Let me run through some of the issues relating to the adjudicator potentially being toothless, which is why we are calling for fines to be available to the adjudicator from day one. We are not the only people who are calling for that. In January 2009, the hon. Member for Somerton and Frome (Mr Heath)—the current Minister with responsibility for agriculture and food, who has been chuntering on about fines for the past few minutes—said, when he was an Opposition spokesperson all those many months ago, that there must be “an ombudsman with teeth” to ensure that farmers get a fair deal. I wonder whether he and his colleagues will support our amendments in Committee to give the adjudicator such powers, because they did not support them in the other place. He is not the only one. The hon. Member for Tiverton and Honiton (Neil Parish) said last year:

“I agree with my hon. Friend and other Members that the adjudicator must have real teeth so that they can take action to stop abuses.”—[Official Report, 5 April 2011; Vol. 526, c. 240WH.]

Just this weekend, a host of stakeholders wrote an open letter to The Sunday Telegraph. It is worth my quoting from it, because it touches on the crucial part of the Bill:

“Sir, Having got the Groceries Code Adjudicator Bill this far, the government will be scoring an own goal if it denies the supermarket watchdog the one tool that will make it effective: the power to levy fines from the outset. The evidence of supermarkets’ unfair treatment of suppliers—which includes farmers both here and in developing countries—is all too clear. Watering down the bill so that penalties only go as far as ‘naming and shaming’ will not be a sufficient deterrent and the Adjudicator risks failing in its job to hold supermarkets to account.”

That letter was signed by ActionAid UK, the National Farmers Union, the Federation of Small Businesses, the Campaign to Protect Rural England, the National Federation of Women’s Institutes, Traidcraft, the Tenant Farmers Association, the Country Land and Business Association, the Independent Fruit Growers Association, the Catholic Agency for Overseas Development, Friends of the Earth, War on Want, RedOrange and Great Glemham Farms. Clearly, then, there is a great movement to provide for fines in the Bill, and I cannot understand why the Government have not listened to the letter.

We are in danger of creating this toothless tiger—I have “tiger”, but it could be a dog, I suppose. Let us imagine an old-fashioned circus act. Where is the fear in a circus clown putting his head into a tiger’s mouth, only to have his neck viced by the tiger’s gums? There is no way we can put fear into the hearts of the supermarkets with an adjudicator that does not have the power to fine. Providing for fines in the Bill does not mean that fines should be imposed on retailers randomly—I hope there would never have been sufficiently serious breaches to require the invoking of the power—but allowing the adjudicator to have the power easily to hand might influence the retailers’ actions and go some way in preventing serious breeches of the code.

Clause 9 gives the adjudicator the power to fine retailers, subject to permission from the Secretary of State. Even if the adjudicator decided that the power to fine was necessary, several considerable hurdles would have to be jumped. First, the adjudicator, who would be best placed to decide whether fines were appropriate, would have to publish guidance in deciding the amount of financial penalty—a point that goes back to the Minister’s intervention. Secondly, once that had been given to the Secretary of State, he would have to consult stakeholders on the guidance. Finally, a statutory instrument would have to be presented to Parliament and passed by affirmative resolution. This hugely drawn-out process will do nothing to instil much-needed confidence in farmers and small businesses that might have been severely affected by a breach of the code by a retailer that the adjudicator thinks merits a fine.

We must trust the adjudicator to issue remedies fairly. By not providing in the Bill for the power to fine, the Government are in danger of scoring an own gaol, as said in The Sunday Telegraph letter from ActionAid. Indeed—if I may continue with the footballing analogy—a red card could be issued. It would be available to the adjudicator in the case of a penalty, but it would not be in its breast pocket, where it could be issued fast and effectively against the offender if necessary. Essentially, we are saying in the Bill that if the referee wants to issue a red card, he will have to ask the Football Association, after which the FA will consult on its use and then pass a new law to allow it to be used. I much suspect that the match would have finished many months before the decision is made.

The Business, Innovation and Skills Committee and the Environment, Food and Rural Affairs Committee have also said that the power to fine should be provided for in the Bill. Furthermore, in a recent joint statement, the Grocery Market Action Group, ably chaired by the hon. Member for St Ives and made up of 23 organisations from across the farming, international development, environmental and small business lobbies, called on the Government to give the adjudicator the power to levy fines. I ask the Minister, again, why she is not listening to the entire industry when it comes to fines.

I turn to the intermediaries. At the bottom of all this lies the nagging doubt that many of the alleged abuses will not be resolved even by the presence of a perfectly functioning adjudicator, because the problem is in the code itself, not its implementation. Central to this idea is the code’s limited scope—this point has been raised by voices across the sector—as much of the bad practice occurs at the level of intermediaries not covered by the code and therefore the adjudicator. For example, let us imagine that a supermarket has a ready meal supplier, but decides it wants fewer carrots in the ready meal and goes through the proper GSCOP processes to remove carrots. The supermarket can do that legitimately under the code, and that is only right. However, the ready meal supplier will buy those carrots from a carrot supplier, and could therefore dismiss one of its suppliers of carrots or change the terms of the contract without any recall to the groceries code. In that example, nothing would have gone wrong according to the groceries code, so we could see suppliers further down the chain being harmed quite considerably by the decision of an intermediary.

Equally, that binary view of the market seems inappropriate when the supplier is a huge manufacturer of branded goods, such as Unilever, Kraft, Nestlé or Coca-Cola, whose turnover may exceed that of even the retailer. We are protecting the relationship rather than the carrot producer further down the chain. The adjudicator will be required to recommend changes to the code to the Office of Fair Trading, yet the British Retail Consortium claims that the OFT has taken no action to offer feedback on the annual reports that its members have already submitted under GSCOP on their implementation of the code or even to publish them.

Many farmers and growers are currently not covered by the code, as they do not directly supply the 10 largest retailers. Nevertheless, they are often the ultimate victims of unfair behaviour and the transfer of risks and costs. We hope that ensuring that retailers comply with the code will resolve those issues. If, despite the adjudicator’s best efforts, those problems persist, primary producers will continue to struggle to make a fair return for their enterprises and consumers will continue to suffer from the subsequent lack of investment. That is why it is critical that the adjudicator should have the power in the Bill to keep the code live, to enable such issues to be dealt with if the adjudicator deems that to be necessary. May I ask the Minister what consideration she has given to those concerns and whether she will come back to us in Committee with an assessment of the issues affecting intermediaries?

Finally—

--- Later in debate ---

[Mr Bailey]

My hon. Friend makes an important point, which I was going to come on to. An individual’s shopping habits are determined by all sorts of factors. I do not know what evidence there is, but I would guess that the perception of value for money at different retailers is an important criterion. Other factors are accessibility and personal habits and traditions. I do not see that the publication of an adverse report by the groceries code adjudicator about a particular retailer would affect many people’s shopping habits and, therefore, the bottom line of that retailer.

[Mr Spencer]

Does the hon. Gentleman recognise that the opposite might be true, in that a supermarket whose brand is built around price point might gain kudos from squeezing its supply base so tight that it can deliver the lowest prices to the consumer?

[Mr Bailey]

The hon. Gentleman makes an interesting point. I am sure that one could develop an argument along those lines. I hesitate to do so because I have an innate faith in good will and do not believe that a supermarket would be so unscrupulous as to do that. Perhaps he does not share my innate faith in the good will of supermarkets.

--- Later in debate ---

[Andrew George (St Ives) (LD)]

It is a pleasure to follow the Chair of the Business, Innovation and Skills Committee, the hon. Member for West Bromwich West (Mr Bailey). It was interesting that in his introduction he declared an interest as a Labour and Co-operative party Member. It has been my privilege over many years to chair the Grocery Market Action Group, which has been mentioned in this debate. Reflecting on the discussion about naming and shaming, I should perhaps name and fame the stores that indicated that they would support the measures proposed in the Competition Commission’s report of April 2008 when we wrote to the stores that would be affected. Marks and Spencer, Waitrose and Aldi were the three stores that indicated that they would support the measures, with some reasonable conditions. In spite of my efforts to talk to the Co-op, I was surprised that it was not prepared to sign up at that stage. However, the regulation has been in place since February 2010, and there are opportunities now for all those stores to reflect on that.

Like others, I want to commend many people who have been the architects of this extremely welcome measure. The hon. Member for Ynys Môn (Albert Owen) has already been mentioned—indeed, I mentioned him in an intervention. His private Member’s Bill did a great deal to pave the way for the measure. Former Members, too, made significant contributions. In 1998, Colin Breed, the former Member for South East Cornwall, made a valiant effort to put the matter on the agenda. He undertook an inquiry, which stimulated a further inquiry by the Competition Commission, entitled, “Checking out the Supermarkets”. He stimulated much activity, which is reaping the appropriate reward today on the Floor of the House. The former Member for Stroud, David Drew, was also a significant contributor to the debate, as was the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski), who is not in his place, but was present earlier. I have had many conversations with the hon. Member for Tiverton and Honiton (Neil Parish), who has been a strong supporter of the proposal for a long time. I also commend the Minister for an excellent exposition of the purpose of the measure, and the Government’s strong support for what is now Government primary legislation, even though its origins were a private Member’s Bill under a previous Government.

I do not need to repeat much of the background to what we hope will be legislation in perhaps weeks—certainly not many months. It is worth reflecting on the fact that, when I was originally involved, and certainly when the former Member for South East Cornwall engaged in the work, there was no party political support for regulation, even among Liberal Democrats, who subsequently adopted the proposal in their 2005 manifesto. In those days, the proposal that there should be any regulation was advanced only against all the odds. Even the National Farmers Union proposed a buyer’s charter and set its face against regulation, even though I and others had proposed it. It has therefore taken many years and a glacial pace to achieve progress. To be in the position whereby the proposal had all-party support at the last general election was remarkable. The larger parties clambered on board at the last minute, only months before the election. However, we had almost created a “who blinks first” scenario as we went into the general election, and all parties came on board and supported the proposal.

Significant commendation should be given to Peter Freeman, chairman of the Competition Commission, and the whole commission, for an excellent inquiry, which commenced in 2006 and concluded in 2008. It considered all the evidence that many of us had been encouraging the competition authorities to scrutinise for many years. It reached the telling conclusion that, in some cases, as the Minister said, the supermarkets were guilty of transferring excessive risk and unexpected costs to suppliers, with the consequent detrimental knock-on effect on not only suppliers and their capacity to continue trading, but consumers and, indeed, innovation in the retail sector.

I do not approach the matter from the position that supermarkets are wicked. Their activities are entirely rational. Had all of us been in the same position, and we had not maximised all our market muscle to advance the interests of our company, and we had therefore lost market share in a cut-and-thrust market, we would have failed in our duties. However, the question is, “When does effective, clever and successful use of power become abuse?” The Competition Commission rightly identified that we have long passed the point at which that use of power has become abuse, as the many examples that have been given today show.

The previous Government rightly supported changes to the common agricultural policy, which forced farming to become much more market facing. Price support policies were done away with, the protections that farming was so used to in this country were no longer in place, and the industry needed to live or die by the marketplace. However, how could farmers and growers succeed or survive in that climate? I appreciate that many growers, pig farmers and others struggled to survive long before those changes. Nevertheless, leaving that aside, how could farmers survive when, as Prime Minister Tony Blair said, the supermarkets had got them in an arm lock? One could argue that they had got them in an even more painful position at times. The supermarkets were able to control market conditions, which was a conclusion of the previous Competition Commission report.

What are we trying to achieve? It has always been my view that if supermarkets have nothing to hide, they have nothing to fear from embracing the Bill. I have said to the supermarkets that, if they are clever, they should embrace the proposal and see it as something good. The hon. Member for Camborne and Redruth (George Eustice) suggested that there should be a panel to review the supermarkets’ success in applying the code. My view is that, if the supermarkets are prepared to embrace and invest in the proposal, there would be a fair trade regulator, which could give a mark to each supermarket to show whether it was a fair trader and grade it accordingly. Supermarkets could then perceive the code as a promotional tool rather than a stick with which to beat them.

Fining has predominated today’s discussions and will doubtless do so in Committee. After all these years, I do not want to risk any further delay in implementing the proposal. I would not like any amendment to the Bill to cause such delay. Will the fear of reputational damage be sufficient to persuade supermarkets to apply the code effectively and not to engage in the sort of practices that got us into the current position? Of course, I am on the side of those who want fining on the face of the Bill, but I believe that reputational damage has an impact. I remember the days when genetically modified technology was introduced and available to the supermarkets. Non-governmental organisations undertook a lot of campaigning, which dissuaded the supermarkets from putting GM products on their shelves. If there were adverse reports, the campaigning bodies—if they were doing their job—would draw the attention of customers and the public to the failure of those supermarkets.

[Mr Spencer]

On that point, there cannot be a more passionately felt issue than animal welfare. Does the hon. Gentleman acknowledge that the British pork industry had much higher standards of animal welfare than its counterparts in Europe, but that that made no difference to whether consumers bought British or foreign pork?

[Andrew George]

There is evidence and evidence to counter it on all sides, and that takes us to a point that the hon. Member for North Antrim (Ian Paisley) made earlier. Providing that customers who are buying British are reassured that it genuinely is British and not some kind of subterfuge, the point about animal welfare is relevant. Customers understand that significantly higher animal welfare standards have been in place in the UK for many years, particularly in the pig industry, and that is one of those reassuring messages. I agree, however, that it does not always work, particularly when the message becomes confused.

When I intervened on the Minister, I said that there was likely to be a lot of evidence of contraventions of the code from the time it was first put in place on 4 February 2010. My concern is that the position of adjudicator will be such that they will operate for only one day a week from the Department for Business, Innovation and Skills, and when they are fully operational, they will work three days a week with three or four members of staff. I also understand that the Gangmasters Licensing Authority already wants to present 1,000 pieces of evidence to the adjudicator, and I am concerned about whether sufficient resources will be in place to deal with all the work, cases and evidence that may be brought forward.

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[Mr Mark Spencer (Sherwood) (Con)]

Let me first draw attention to my entry in the Register of Members’ Financial Interests. As a farmer, I am in the fortunate position of not supplying one of the major supermarkets, but I do, of course, know plenty of people in that position, including many of my constituents.

I broadly welcome the Bill. It is fantastic, it is timely, and the Government should be congratulated on the way in which they are addressing the current problem. It was with some frustration that I listened to the criticism from the Opposition Benches that it had taken two and a half years for legislation to be presented, given that, when in government, they presided over the rise of the supermarkets and the power that they gained.

[Fiona O’Donnell]

Rather than referring to “criticisms”, perhaps, in this new atmosphere, we could refer to suggestions for improvements—which, in all fairness, have come not just from Opposition Members but from Government Members.

[Mr Spencer]

I shall be talking about possible improvements. I think that there is a fair amount of cross-party agreement on the way in which the Bill can be improved. However, I also want to talk about some of the good practice that we see out there. We have heard a great deal of criticism of supermarkets and the way in which things work, but there are plenty of examples of supermarkets and farmers working closely together to improve the supply chain, add wealth to both businesses, and bring employment to rural areas. I think we should recognise that there is more to be celebrated than there is to be criticised, although we need to ensure that when things go wrong, there is a way of stepping in to sort them out.

When I embarked on my business career, my grandfather told me that the definition of a good deal was “a bit for me, a bit for you, and then another deal”. I think that we have reached a stage at which the supermarket sometimes wields too much power in the relationship, to the extent that I almost feel obliged to make it absolutely clear that some of the practices that I intend to highlight bear no resemblance to the activities of any of my constituents. There is a genuine fear out there of blacklisting and being removed from the stocking lists of supermarkets, such is their power.

I think it worth examining the practices that have gone on in the agriculture industry and its relationship with supermarkets. The first that springs to mind, which no one has mentioned so far today, is the operation of payment terms, which the supermarkets have stretched to a point at which big business is being financed by little business. That applies not only to agriculture, but to many other UK industries in which little suppliers are delivering products to big suppliers. The big suppliers do not pay for more than 90 days, and the smaller producers are forced to borrow from their banks in order —in effect—to lend the money to them.

One of the most shocking practices, to which other Members have referred, is the practice of rejecting loads of products when the price of the market goes through the roof, when there is over-supply, or when the weather changes, as in the case of the strawberry industry. There is real abuse of the system when supermarkets are able to reject a load that is perishable and cannot be returned without giving any recompense to the primary producer.

I am told that when a contract is being negotiated with a supermarket, the first line of the negotiation relates not to the retail price, the production price or even the wholesale price, but to the margin that returns to the supermarket. The primary producer must guarantee that margin. That cannot possibly apply to any other relationship between supply and retail. Whether the product is cauliflowers, carrots, plimsolls or widgets, if the supermarket decides to arrange a promotion and reduce its retail value, the primary producer will lose out while the margin of the supermarket will be protected and never squeezed.

[Huw Irranca-Davies (Ogmore) (Lab)]

Does the hon. Gentleman agree that those margins are seen not only in the direct relationship between producers and major retailers, perhaps on contract terms, but throughout the supply chain? Sometimes a retailer will say “Well, it’s nothing to do with us, guv”, but somewhere along the line an intermediary will be saying, “We want those margins.”

[Mr Spencer]

That is a valuable point. There have been a number of references to the dairy industry, and to small dairy farmers all over the United Kingdom. It should be borne in mind that very few small dairy farmers deal directly with the supermarkets. They nearly always negotiate through a dairy producer, someone who is making cheese or yoghurt, or even a bottling plant. The hon. Gentleman has made an important point, and we shall probably need to consider it once we have sorted out the Bill.

Another important topic is that of promotions. Many consumers will no doubt think that “buy one, get one free” offers and other promotions show supermarkets’ generosity, as they must be shrinking their margins. The truth, however, is that it is the primary producers who pick up the tab for the reduced price of the product, and they are often also asked to increase the supply of that product.

Earlier in the year a series of adverts ran on TV promoting asparagus at half price. The weather had been so shocking that I do not think there can have been a single blade of English asparagus on the market at that time. I almost shuddered for our asparagus producers. Many of them had obviously signed a contract to supply a supermarket, and an advertising spot had been booked six months in advance, without regard to the weather. When that time slot in the calendar came, the adverts rolled out and asparagus producers were probably having to buy asparagus from Mexico or Spain to meet their contracts to supply that promotion. There is no flexibility in the system, or common sense from some supermarket buyers.

The worst practice, however, is backdating. A primary producer can supply a supermarket for two years, let us say, and then the supermarket can suddenly say to that producer, “By the way, we’re backdating the price of all that product you’ve supplied to us for the last 12 months, and you owe us £50,000.” That primary producer is then faced with the prospect of either finding that money from somewhere—borrowing it or taking it out of their bank account—or reneging on the contract and never being dealt with again. That truly is an abuse of power. I hope the grocery ombudsman will be able to stop such practices.

Key issues are what tools will be available to the ombudsman and how he will make sure the code of practice is adhered to. That brings us to schedule 3 and the subject that has been dominating the debate: if the adjudicator cannot fine supermarkets, will he have sharp enough teeth to ensure that the code is adhered to? I do not ask the Minister to commit to anything in his winding-up speech, but I ask him to assure us that he will have an open mind and will consider the Committee’s deliberations, and be willing to make an amendment if he feels that that is the right thing to do.

I reiterate that there is much more good than bad in this Bill and it represents a great step forward. With the will of the House and a fair wind, I think we can get to the right place for the primary producers, and also for our consumers, who want good quality food in our supermarkets at the right price, and, crucially, at a price that is sustainable.

Small dairy farmers begin the process of producing milk by choosing an animal to breed. They then breed that cow, which takes nine months, bring that heifer to full production, which takes two years, and then, finally, they get milk from that animal. It takes four years of hard work and investment to get to the point of supplying any milk, therefore. In that time, supermarkets can change their contract on an hourly basis. The whole of the risk is with the primary producer, and at present there are occasions when the whole of the reward is with the retailer. I sincerely hope that we can start to redress the balance in that relationship, to the benefit of supermarkets, primary producers and consumers.

--- Later in debate ---

[Neil Parish]

My hon. Friend makes an excellent point. Much work was done by the previous farming and food Minister, my right hon. Friend the Member for South East Cambridgeshire (Sir James Paice), to get voluntary dairy codes in place. The Minister of State, Department for Environment, Food and Rural Affairs, the hon. Member for Somerton and Frome (Mr Heath) is carrying on that good work. The hon. Member for Brecon and Radnorshire (Roger Williams) said that we need to be sure that the groceries code adjudicator will be able to look at the voluntary codes and contracts. I repeat that it is essential that a share of the money that the consumer pays for his or her product goes to the processor and the producer.

We are moving into a world of some 7 billion people. That world does not have oceans of cheap food. In many ways, that is a good thing, but it is also difficult for consumers across the world. There are people in this country who are struggling to buy food and it is essential that they get a good deal. However, in order to get a good deal, we must ensure that the producer, be it of milk, beef, lamb, carrots, potatoes or other vegetables, gets a return. If they get a return on their investment, they will produce more food and do so efficiently. That is the way to ensure that we can deliver products at a good price on the supermarket shelf.

Some of the ways in which large buyers and retailers have abused their position over the years have made food prices higher rather than lower. In the short term, when the supermarkets have a price war that drives prices down, it seems like the consumer is getting a good deal, but it drives many people out of business, meaning that there is less production than there was before.

Until now it has been possible to go around the world and bring in the extra product that is needed. However, to take the meat sector, where is the beef that is out there in the world? Forty years ago, the Chinese were eating 500,000 tonnes of beef a year. Now, they are eating 5 million tonnes of beef a year. The UK produces about 1 million tonnes of beef, so one can see that instead of eating half as much beef as we produce, China is now eating five times that amount. All the beef that used to be sloshing around in Brazil and Argentina, which could once be bought cheaply and used, dare I say it, to drive down the price of beef in this country, is no longer there. That is why it is important not only to get things right for the consumer and the trade, but to ensure that we will have reasonably priced food in the future.

In the summer, 3,000 dairy farmers protested outside Westminster, and we had a huge meeting. It was absolutely right for the farmers to protest. They had some of the worst weather that I have seen in my lifetime, and the cost of producing milk went up while the price went down. However, is it right that those farmers with family farms have to march up the hill every time and show how desperate they are to make a fair living? Is it right that we have to use social media to name and shame supermarkets? Again, the hon. Member for Brecon and Radnorshire made that point. It is not right. There is something wrong with the process of trade in this country, and that is why the groceries code adjudicator is so important.

We set much store by the Bill. Other hon. Members referred to the common agricultural policy and the single farm payments. All Members want farmers to get more money and more of their income. Farmers would much rather have more of their income from the market—from what they produce—than from what they receive in the single farm payment. They would thus not be so vulnerable to the politics of not only Britain, but the European Union.

The rising population, the need to produce more food from the same amount of land throughout the world, global warming, and the fact that northern Europe and Britain will need to produce much more food, mean that we should be able to get a good price for that food. However, if we have not got the market right, the price of food will not go back to the producer, and we will not produce the amount of food that we need.

There is a need for food security, and a moral issue about producing food. Some people in the world cannot afford to eat and it is therefore important that we produce more food—sustainably, and in an environmentally and animal-welfare friendly way. That is what our consumers want: to be sure that, when they go to a supermarket or a small retailer, they get they get a fair deal, and that that also applies to the producer and the grower, not only in this country, but in developing countries. Our supermarkets often do not give producers throughout the world a fair deal. Let us hope that the groceries code adjudicator can do that.

We have rightly talked a lot about the retailer and the producer today, but we must remember that nearly 500,000 people in this country are involved in food processing, and 80% of the food that they process is grown and produced in this country. The Bill is therefore good not only for the producer but for the processor and I believe that, in the end, it will be good for our supermarkets.

Much as one would perhaps enjoy a major war with the supermarkets and the big retailers, it is ultimately not a war that we want because where do 70%, 80% or even 90% of the population buy their food? They buy it in supermarkets—they want to shop there. We must be sure that, when they shop, the groceries code adjudicator will have enough teeth to ensure that the consumer, the producer and the processor—everyone in the food chain—get a fair deal.

[Mr Spencer]

Does my hon. Friend acknowledge that farmers need to bear some of the responsibility? Many dairy farmers, instead of selling to a co-operative, decided to trade direct. If they stuck together, they would be much stronger. Some farmers almost pay gate money to obtain those direct contracts, and steal contracts from other farmers, thereby contributing to their own downfall.

[Neil Parish]

I welcome my hon. Friend’s intervention. I often say that farmers’ great strength is their independence, although that can also be their great weakness. I welcome the deal between Milk Link and Arla Foods because this country now has a co-operative that controls some 25% of the milk, giving it real clout in the marketplace. It is right for farmers to come together and co-operate, and the Bill will help such co-operation within the farming, processing and retail sectors. As I said, no retailer has anything to fear from the groceries code adjudicator if they have the correct practices, and that is right. Finally, I say again that the Government welcome this Bill, but the Business, Innovation and Skills Committee and the Environment, Food and Rural Affairs Committee must look to put real fines in place so that those who abuse the grocery trade can be brought to book, and not only named and shamed, but properly fined.

Ash Dieback Disease

Mark Spencer Excerpts

Monday 29th October 2012 Commons Chamber

[Mr Heath]

That is absolutely right. We have actually allocated £8 million from existing resources for new research into tree health over the next four years, which I hope will go some way to supplementing what is already in place. There are question marks in the international scientific community over such things as the pathology of the organism and its means of transmission, which we need to explore more fully. The fact that those countries with a high level of infestation—Denmark, Germany, Poland and others in northern Europe—still do not have the answers to some of those questions indicates the complexity of the issue. It is not the case that Britain has not been playing its part; scientific research sometimes takes time.

[Mr Mark Spencer (Sherwood) (Con)]

Will the Minister assure the House that his officials are working with importers and nurseries to ensure that no affected stock remains that may be planted in the future, so that forests such as Sherwood stay not only clean and green, but great places to visit?

[Mr Heath]

We will continue the programme of inspection that has identified those saplings that may be a risk and destroyed them. The ban has been in place on a voluntary basis—it is now on a statutory basis—to ensure that nothing came into the country over this summer and therefore was not available for the next planting season. We can be reasonably assured that infected trees will not be planted this winter—at least those from commercial sources—but we need to maintain vigilance, which we certainly will do. We will also work closely with the industry, which understands how dangerous the disease is and wants to co-operate. I am grateful for the help it has given to the Department in identifying and dealing with the threat at an early stage.