Groceries Code Adjudicator Bill [Lords]

Roger Williams Excerpts

Monday 19th November 2012 Commons Chamber

[Jo Swinson]

I thank my hon. Friend for his contribution. He makes his point forcefully.

I believe that the threat to supermarkets of recommendations and requirements to publish details will be enough to drive cultural change. Hon. Members should note that imposing a financial penalty would confer a full merits right of appeal, which would potentially be costly and time-intensive for all parties. It is important that the adjudicator is able to focus on investigations, rather than being distracted by appeals. I am sure that all constituency Members recognise that where there are appeals procedures, such as in planning, they tend to be used. We do not want the groceries code adjudicator to be tied up in appeal after appeal, but want them to be able to get on with their investigations. That is why we think that it is helpful to proceed with the range of sanctions in the Bill.

[Roger Williams (Brecon and Radnorshire) (LD)]

I welcome the Bill’s focus on the role of the adjudicator in enforcing the groceries code. If the adjudicator, in carrying out that work, came across evidence of serious criminal offences, for example in the field of competition or human trafficking, it would surely be up to them to refer that evidence to the appropriate authorities.

[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.

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[Albert Owen (Ynys Môn) (Lab)]

It is a genuine pleasure to follow the hon. Member for St Ives (Andrew George) on this issue. As many Members have rightly said, he has been a long and steadfast campaigner for a supermarket ombudsman—I will call it an ombudsman in my remarks, because I think that would have been the correct title.

I also pay tribute to Members of the previous Parliament who sponsored and helped me with my private Member’s Bill. The legislation that I put through Second Reading and Committee was supported by Members not only from the larger parties, but from some of the smaller parties and across the United Kingdom. Support came from the Social Democratic and Labour party and the Unionist parties in Northern Ireland, and from the SNP, Plaid Cymru and Members from the larger parties. The Bill had cross-UK as well as cross-party support, which was important when taking it forward. I know, Mr Deputy Speaker, that you took an interest in that Bill—I will refer to that shortly when you are not being disturbed. You may recall, however, that you actually sat on the Bill’s one Committee sitting. I do not know whether it was a record, but I managed to get that private Member’s Bill through in one Committee sitting with almost total agreement.

As right hon. and hon. Members will know, private Member’s Bills are an important vehicle and people become extremely popular when they are drawn in the top 10 in the ballot. As my hon. Friend the Member for Hayes and Harlington (John McDonnell) will testify, one receives hundreds if not thousands of letters and e-mails—he has done it twice so he will speak from experience. People probably become more popular than if they go out to the jungles of Australia, so Members should persevere and get into the ballot for a private Member’s Bill if at all possible.

I welcome the Bill—it would be churlish not to, having promoted a private Member’s Bill the main tenets of which are still contained in the Bill under discussion. However, as the hon. Member for St Ives said, there was not a lot of enthusiasm for this measure when I successfully won that ballot. In fact, I was popular not just with outside organisations that wanted me to take legislation forward, but with those in the Whips Office who had a number of Bills they wanted me to promote. As you know, Mr Deputy Speaker, I have never done anything the conventional way in this House—or, indeed, in my life—so I resisted the charm of the Whips Office at the time, and pursued this legislation because I thought it was the right thing to do. It brought together a broad coalition of farmers, suppliers, non-governmental organisations and many farming unions, and I pay tribute to the Farmers Union of Wales and the National Farmers Union in Scotland and England for their work. It has been difficult for any party to ignore this issue, and each of the larger parties put this legislation in their manifestos.

This Bill has been a long time coming. I remember gathering support from other parties when I was pursuing this legislation through Parliament, and there was a division in each party between spokespeople from the Department for Environment, Food and Rural Affairs who were keen for the Bill to proceed, and those from the Department for Business, Innovation and Skills who were less keen to get it through—that is a nice way of putting it. When we were able to get all parties to concentrate their efforts on the Bill, they started to bid for who would take the legislation through Parliament the quickest once there was an election. I remember Conservative agriculture spokespersons of the time going to fairs, which all hon. Members go to in their constituencies, and saying that a supermarket ombudsman would be a priority for the next Conservative Government. I know they are in coalition, but I see no reason why the Bill was not introduced much sooner—all parties agree and there is a broad coalition of support.

The Minister of State, Department for Environment, Food and Rural Affairs, was a very good supporter of my private Member’s Bill and he is now a supporter of the Bill. If he were less conventional than he is, and if he, like me, was not a Minister, he would probably say, “I agree the Bill needs more teeth. I agree we need fines in the Bill.” He will not say that now—possibly for good reasons—but I see no good reason for not including fines in the Bill.

That is the argument I want to develop. Many groups have lobbied for fines to be included. Had the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire (Jo Swinson), taken an intervention, I would have had the opportunity not only to congratulate her on her promotion and new post, but to ask her to come clean and name the individuals and groups who have lobbied against including fines. It would be difficult for her to name any apart from those inside the British Retail Consortium. It is wrong that the Government have capitulated—they have not struck the balance—and not included fines in the Bill.

I do not believe that naming and shaming will be an adequate deterrent, for the reasons that hon. Members have given. A fine would appear on a company’s financial accounts, to which shareholders’ and ordinary members’ attention is drawn at annual general meetings. The large supermarkets might still make large profits, but shareholders’ attention would be drawn to a fine on those accounts, even if it is insignificant compared with the profits. That would be enough for many of the shareholders to say, “We need to do things better, and to work with the adjudicator.” In that way, the supermarket would not just sit back and wonder whether the news that day would mean that they would be named and shamed in a newspaper headline, or a retail magazine, which not everybody reads. I should like to concentrate the Government’s mind on that—the suggestion comes not just from Opposition Front Benchers

Although my hon. Friend the Member for Edinburgh South (Ian Murray) made a good, detailed speech on the measures in the Bill that the Opposition support, he also spoke about the differences between the Government and the Opposition. He did not do so for the sake of having differences, but so that we get the measures right at the first opportunity and legislate properly. We want a fair Bill, and we want an adjudicator, referee or ombudsman who has the tools from day one to do their job. They should not have to come cap in hand to Parliament for another measure.

The reserving of fines is nonsense. As the Minister said, they could take up to six months to set up, in which time there might be other priorities, as there have obviously been in the two and a half years when the Bill was not introduced, or there could be a lack of will on the Government’s part. The House has the opportunity to table an amendment in Committee. After the pressure of this debate, the Government may introduce a measure to give the adjudicator the ability to fine.

[Roger Williams]

The hon. Gentleman has a proud record. He condemns the Government for being slow to introduce the Bill, but does he agree that Governments are very often criticised for not having pre-legislative scrutiny? In this case, that has taken place, probably to the benefit of the Bill.

[Albert Owen]

The hon. Gentleman is a supporter of pre-legislative scrutiny, but he does not believe it delays Bills for two and a half years. The Government have not had a heavy work load on Bills. If we compare the number of legislative days in the House with the number in other Parliaments, we see that the Government have had a lot of time to introduce the Bill. With respect to the hon. Gentleman, I want to move on to whether we should have a fine or naming and shaming.

The only difference between the Government and the Opposition is on whether we have adequate sanctions for the big 10 supermarkets. Has the Minister or the Government considered not only the big 10, but the major suppliers in the chain, which are as big as the supermarkets? Will the adjudicator have the ability to name and shame them? That is important. Some of the major suppliers are multinational organisations, and put a lot of pressure on our growers and farmers. Will the Minister respond on that? I would have pushed for such a measure in my private Member’s Bill, because I want fairness right through the supply chain, and not just among the top 10 supermarkets, which have the ability to self-finance the measure so that all are treated equally. The supermarkets should also have the ability to complain to the adjudicator or ombudsman. That is important if we are to have a fully open system of recourse through naming and shaming. The supermarkets should be able to put their side of the argument if the boot is on the other foot, although that would not happen often. I should like the Government to take that on board.

The measure has popular support, not just in the House, but in the country. As I have said, it has brought together non-governmental organisations, lobby groups, and farmers and growers throughout the UK, because there has been an injustice in how the grocery market has operated. The Government and the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire, who is the third to take up the role in less than three years, have an opportunity. Her predecessor but one, the right hon. Member for Kingston and Surbiton (Mr Davey), who is now Secretary of State for Energy and Climate Change, said only last week at the Dispatch Box that it was essential to use sanctions to fine energy companies, which are alleged to be ripping off their customers. We must have consistency. The same should apply to large supermarkets that are alleged to be ripping off suppliers and consumers—at the end of the day, consumers pay the higher prices that filter through.

Rather than naming and shaming, we need fines in the Bill, and a real commitment to fairness in the system. The Bill will help, and I support it, but I hope that hon. Members on both sides of the House will vote for including fines in the Bill rather than just make speeches about it. The eyes of the consensus that the Bill has gathered will be on us, and we should show that we speak with one voice. Although the Under- Secretary would not take an intervention from me, I will take one from her if she wants to say who has lobbied her and why we should not include fines in the Bill. She has tried to make the case, but she does not want to take the opportunity I am offering her. Many of the supermarkets I have spoken to would not be that bothered if fines were included in the Bill, which has also achieved consensus among all the bodies I have named. As the hon. Member for St Ives has said, two or three supermarkets have come out in favour of the Bill. It will not be long before there is consensus among the top 10 supermarkets.

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[Roger Williams (Brecon and Radnorshire) (LD)]

It is a great pleasure to follow the hon. Member for Banff and Buchan (Dr Whiteford), who speaks with great knowledge of and expertise in agriculture, and she knows the contents of the Bill. Her comments about pillar one were particularly well made. The subject has received poor press, but it is absolutely essential to the well-being of many farmers who farm on hill and other remote areas of these islands.

I declare an interest, as I am still responsible for an active farm that sends most of its products to a major supermarket via a slaughterhouse operated by Vion which, as we have heard, announced today that it was going to pull out of the UK. It employs nearly 1,000 people in the constituency next door to mine, and many of the farmers I represent use that facility to market their livestock. I hope that the Minister will take note of that, because it is a particular issue for us.

I commend and congratulate the Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for East Dunbartonshire (Jo Swinson), on how she moved Second Reading. She did it with enthusiasm and panache. Not only is she able, but she is lucky, too. She was in the right place at the right time to pick up the Bill, which has support across the House and is one we have been waiting for for a very long time. She is not only able and lucky, but standing on the shoulders of giants who have taken the business forward in the past. Mention has already been made of Colin Breed, a former Member of this House, who was the first person to produce a report that put in print what many people believed—that is, that supermarkets, because of the way in which they had grown and now dominated the marketplace, were taking an unfair advantage. That led to the first Competition Commission report on the subject.

This is a failing market. Many of us believe that if markets are working properly they need light regulation, but this is certainly an example of a failing market in which the people making the purchasing decisions are so large and dominant in the market that they can adversely affect it to the detriment of the small producers. We need regulation, and I believe that the Bill is a fine piece of legislation that will contribute to resolving the problems.

Let me make a few suggestions about what we could consider in Committee when the individual clauses are debated. Mention has already been made of the ability of the adjudicator to implement fines. I certainly support that and would support a debate on the subject in Committee. It seems to me that just because an adjudicator could impose fines, fines would not necessarily be imposed or have to be imposed. The fact that the power was available to the adjudicator would make the job a lot easier and would put pressure on the supermarkets to take every opportunity to ensure that their dealings with their suppliers were fair.

Naming and shaming can have a big effect on supermarkets. I have been told that during the summer, when the dairy industry was in turmoil, the straw that broke the supermarkets’ backs, making them increase the prices they paid to farmers and enter into the voluntary code that a former Agriculture Minister was so instrumental in introducing, was the huge Twitter and Facebook campaign about the supermarkets that were the worst in abusing their suppliers. That was the turning point. Obviously, the farmers were protesting on the streets, but the campaign among consumers made a difference. Naming and shaming has a powerful impact on supermarkets, but the ability to impose a fine would give extra power to the adjudicator.

One question that has been asked is what role the adjudicator would have in the voluntary code that the supermarkets have entered into with their suppliers, which is something that the Minister should consider. I know that a number of people have written to the Department and not received an answer. Are we dealing just with the grocery code or with other codes that have been entered into voluntarily by the producers and the supermarkets?

Food chains are rather complex, and rarely does a farmer supply a supermarket directly. That does happen, but it is not the usual way in which food moves along the chain. Often, there are other people between the producer and the retailer. In the milk industry, farmers supply dairies that either bottle the milk and send it off in liquid form or produce dairy products such as cheese, yoghurt and so on. In the meat industry, the chain will often include slaughterhouses and meat processing plants. There are also other parts of the food chain, such as wholesalers and distributors. The systems are very complex, and I hope that the Bill will ensure that their complexity will be considered by the adjudicator and that the adjudicator will be able to intervene when he thinks the market is failing.

All in all, I believe the Bill addresses many of the problems that small producers have experienced over the past 20 years in dealing with massive purchasing organisations such as supermarkets. The Bill can be improved, and I ask the Minister to consider the ability to impose fines as well as whether the adjudicator will have a role to play in any codes that are entered into voluntarily between producers and supermarkets.