Groceries Code Adjudicator Bill [Lords]

John Bercow Excerpts

Tuesday 26th February 2013 Commons Chamber

[Philip Davies (Shipley) (Con)]

I beg to move, That the clause be read a Second time.

[Mr Speaker]

With this it will be convenient to discuss the following:

New clause 2—Supplier turnover—

‘Suppliers are not allowed to refer cases to the Adjudicator and cannot have cases referred on their behalf if their turnover exceeds £1bn per annum.’.

New clause 3—Sunsetting—

‘This Bill will expire in seven years from the date it receives Royal Assent.’.

New clause 4—Supplier headquarters—

‘Suppliers are not allowed to refer cases to the Adjudicator and cannot have cases referred on their behalf if they have their principal headquarters outside the European Union.’.

New clause 5—Supply source—

‘The provisions of this Act shall not apply to any supplies which are produced, manufactured or processed, in whole or in part, outside the European Union.’.

Amendment 28, in clause 12, page 4, line 32, at end insert—

‘(a) the nature and type of arbitrations to be conducted under section 3 including:

(i) the law applicable to an arbitration; and

(ii) where the arbitration should be conducted.’.

Amendment 3, in clause 13, page 5, line 18, at end insert—

‘(2) The Office of Fair Trading shall be required to publish a response to the Adjudicator on the recommendations set out in subsection (1) explaining whether they will be acted upon or not.’.

Amendment 30, page 5, line 18, at end add—

‘(3) In assessing changes that could be made to the Code, the Adjudicator shall give due consideration to—

(a) the territorial extent of the Code, especially in relation to activities of large retailers outwith the UK, including work done by subsidiaries of large retailers;

(b) whether intermediaries in the supply chain should be covered; and

(c) whether commercial pressures or criminal activity pose risks to consumer interests by potentially compromising standards of food safety, hygiene and food authenticity.’.

Amendment 33, page 5, line 18, at end add—

‘(3) In assessing changes that could be made to the Code, the Adjudicator shall give due consideration to—

(a) the territorial extent of the Code, especially in relation to activities of large retailers outwith the UK, including work done by subsidiaries of large retailers;

(b) whether intermediaries in the supply chain should be covered.’.

Amendment 34, in clause 14, page 5, line 31, at end insert—

‘(4A) The report must include details of any incidents that have come to the Adjudicator’s attention during the reporting period in which breaches of the Groceries Code or commercial pressure on retailers have led or may have led to actual or potential cases of compromised—

(a) food safety;

(b) food hygiene; and

(c) food authenticity.’.

Amendment 35,  page 5, line 34, at end add—

‘(c) the Food Standards Agency.’.

Amendment 27, in cause 25, page 11, leave out lines 7 to 12 and insert

‘This Act shall come into force two months after Royal Assent.’.

[Philip Davies]

New clause 1 stands in my name and that of my hon. Friend the Member for Bury North (Mr Nuttall).

I do not want you to think, Mr Speaker, that my speech would be better suited to a debate on Second or Third Reading, but it is important that I give some context as to why new clauses 1, 2 and 3—which all stand in my name—are important.

I do not have any interest to declare, but I do have considerable experience that is relevant to the Bill. Before entering Parliament in 2005 I spent the previous 12 years working for Asda. I spent four years working in-store and eight years working at the head office in Leeds, so I have first-hand knowledge of how the supermarket industry works. To be perfectly honest, it works in a completely different way from the way in which people might be forgiven for thinking it works if they listened to previous debates on the matter. We have been given to believe that terrible, shocking, awful, nasty supermarkets care nothing about their suppliers, that their only role in life is to screw their suppliers into the ground and leave them destitute—bankrupt, if we are to believe previous debates—and that the only way to prevent that from happening is to have this ridiculous adjudicator, which is the Bill’s premise. That argument is complete and utter nonsense—that is not how it works at all.

--- Later in debate ---

[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—

[Mr Speaker]

Order. I do not wish to interrupt the hon. Gentleman for any length of time, still less to be discourteous to him, but above all I would not want the House to be inadvertently misled. He has no amendments in this group, but he does have a series of new clauses tabled, if memory serves me, in his name and that of the hon. Member for Bury North (Mr Nuttall), namely new clauses 1 to 3, on which I know the House will now focus with beady eyes.

[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.

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[Philip Davies]

I am grateful to my hon. Friend. We were told that that was exactly the purpose of the Bill in the first place. When it was being sold to us, nobody said it would benefit Procter & Gamble. As has been rightly said, if we want the adjudicator’s time freed up to look after the small suppliers, we do not want its time being taken up by these big multinational corporations.

As it happens, I am going to say something that might seem controversial, but to be perfectly honest I do not particularly care. If supermarkets are going around screwing Procter & Gamble into the ground to get the cheapest possible price to pass on to their customers, I say, “Good on them!” Procter & Gamble’s profits will not be massively impacted on by the supermarkets. I want supermarkets to negotiate robustly with big companies in order to get prices down for my constituents. The Labour party is supposed to support the working person—the people on fixed incomes—but the early indications are that its Members will vote to protect Procter & Gamble’s interests over the interests of their constituents. What on earth has the Labour party come to, when it sides with Procter & Gamble?

It is not just Procter & Gamble, however. We have Harvest Energy, Green Energy Fuels, Imperial Tobacco, Arla Foods and Gallaher—the top suppliers to supermarkets. The naive people who think that the adjudicator will not empire build are living in cloud cuckoo land. If they think that the adjudicator will not look into all sorts of things, they obviously have no experience of these matters.

[Mr Speaker]

Order. I am slightly concerned that the hon. Gentleman has been diverted from the path of virtue on which he embarked some minutes ago. He was talking specifically about his new clauses, but he has since taken a series of interventions that, in a sense, have caused the debate to elide into a Second Reading consideration of the merits or otherwise of adjudicators and so on. I know that he will want to return to the terms of his new clauses, on which, of course, he can expand at such length as he sees fit, as I am sure he will. I call Mr Philip Davies.

[Huw Irranca-Davies]

rose—

[Mr Speaker]

Just before that, I call Mr Huw Irranca-Davies on a point of order.

[Huw Irranca-Davies]

On a point of order, Mr Speaker. It might be of some help to the hon. Member for Shipley (Philip Davies) and to you, as Speaker, to be aware that the new clauses refer specifically to the groceries supply code, but many of the elements that he is introducing into his speech have no connection with the groceries supply code. The companies to which he refers might supply supermarkets, but they do not fall within the remit of the groceries supply code.

[Mr Speaker]

I am grateful to the hon. Gentleman. I am sure he is seeking to be helpful, but I thought I had myself made the point perfectly adequately that the hon. Member for Shipley (Philip Davies) would wish to return to the terms of his new clauses, which are themselves entirely orderly.

[Philip Davies]

I am grateful, Mr Speaker, but people ought to be aware that the Bill leaves great scope for the adjudicator to decide what to do. People should not have too much faith. The Bill deliberately gives it massive power and freedom.

--- Later in debate ---

[Andrew George]

The hon. Gentleman is, in truth, arguing for the abolition of all the competition authorities. That seems to be the direction that his argument is taking. In fact, clause 4 makes it clear that the decision to investigate would be made if the adjudicator had reasonable grounds for suspecting a breach of the code, and clause 10 makes it clear that any supplier who brought a complaint that was “vexatious or…without merit” would be required to pay some or all of the costs involved. Paragraph 48 of the Competition Commission’s final report stated that it envisaged that the groceries code adjudicator

“would prioritize the resources of its office to focus on those disputes and complaints concerning suppliers without market power over and above those concerning suppliers of major branded products that have market power.”

It is clear that such decisions must be made by the adjudicator, and I am perfectly content that the Bill has the capacity to ensure that that description—

[Mr Speaker]

Order. I am loth to interrupt the hon. Gentleman in mid-flow, but interventions seem to be becoming progressively longer. There is no problem about their frequency, but there is about their length. We must now hear from Mr Philip Davies.

[Philip Davies]

I am grateful to you, Mr Speaker.

The hon. Member for St Ives (Andrew George) misreads the Bill, but I will come to the point about the recovery of investigation costs when we debate the other groups of amendments. The Bill does not say that those costs have to be recovered in that way; it says that they “may” be recovered. He seems to have huge faith in allowing the adjudicator to do just as it pleases, but I do not want it to do just as it pleases. I want it to follow strict rules that will prevent it from empire building, and that is part of the purpose of my new clauses.