Clause 23 — Orders

Groceries Code Adjudicator Bill [Lords] – in the House of Commons at 3:58 pm on 26 February 2013.

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Amendment made: 9, page 10, line 35, after ‘section’, insert ‘15(10A) or’.—(Jo Swinson.)

Third Reading

Photo of David Heath David Heath The Minister of State, Department for Environment, Food and Rural Affairs 4:23, 26 February 2013

I beg to move, That the Bill be now read the Third time.

Before I go any further, I wish to thank hon. Members on both sides of the House for their help in shaping this Bill, which is important to my Department and to the Department for Business, Innovation and Skills, where my hon. Friend Jo Swinson is Under-Secretary. It is something of a cliché on these occasions to say that the Bill has been improved by debate, but I genuinely feel that that has been the case with this Bill. It has also been helped by the sense of common purpose in the House for making progress on it.

Photo of David Heath David Heath The Minister of State, Department for Environment, Food and Rural Affairs

Of course I will. I was going to say something nice about the hon. Gentleman later, but he may prevent my doing that now—I hope not.

Photo of Adrian Bailey Adrian Bailey Chair, Business, Innovation and Skills Committee, Chair, Business, Innovation and Skills Committee

I hope that my remarks will not preclude that. In my capacity as Chair of the Select Committee on Business, Innovation and Skills I often need to berate Ministers for not doing what the Committee’s in-depth research has demonstrated to be necessary. On this occasion, although the Under-Secretary had concerns about some of our recommendations, on reflection she pretty much adopted whatever the Committee said was appropriate. Just as I berate Ministers on occasion, I want publicly to thank the Under-Secretary for her flexibility and reasonableness.

Photo of Nigel Evans Nigel Evans Deputy Speaker (First Deputy Chairman of Ways and Means)

Order. Before the Minister answers that rather lengthy intervention, bordering on a speech, I remind the House that this business must be completed by 4.45 pm. If any interventions are to be made, can they be short, please?

Photo of David Heath David Heath The Minister of State, Department for Environment, Food and Rural Affairs

Thank you for that timely reminder, Mr Deputy Speaker. I shall be brief in my list of thanks.

I thank Mr Bailey for what he just said. I also thank his Committee and the Select Committee on Environment, Food and Rural Affairs for their work on improving the Bill.

I want to start with my hon. Friend the Under-Secretary who, as the hon. Gentleman says, has done a superb job of listening to people as the Bill has made progress. She took up a baton that was already well on its way thanks to her predecessor, now the Secretary of State for Energy and Climate Change, to Mrs Spelman as Secretary of State for Environment, Food and Rural Affairs, and to my immediate predecessor, Sir James Paice. I can exclusively reveal that there was a conspiracy within government, of which I was part in my previous role as Deputy Leader of the House, to ensure that the Bill made progress whatever other priorities arose as we all felt that it was important.

I also want to mention the contribution of a few others who are not in government. It was a delight to find myself so often in the Lobby with my hon. Friend Andrew George, and he has campaigned vigorously for the measure as chair of the grocery market action group. I stood shoulder to shoulder with him when we were in opposition to make it a reality and his efforts have been appreciated. I hope he feels that they have been rewarded as the Bill reaches the statute book.

Albert Owen has long pressed for the adjudicator, including in his private Member’s Bill. His pleas fell on deaf ears at the time, but now all is sweetness and light and the Opposition are united with us in taking the Bill forward. I should add, as I am trying to be as consensual as possible, that I know from what my hon. Friend the Under-Secretary has said that colleagues on the Opposition Front Bench made debates in Committee enjoyable and that they made a genuine contribution. As they know, we have listened to what they have had to say and have on occasion been able to agree with them. That goes for Ian Murray and Huw Irranca-Davies, who often secretly agree with me but sometimes cannot express it openly—

Photo of David Heath David Heath The Minister of State, Department for Environment, Food and Rural Affairs

I could not possibly; it would embarrass the hon. Member for Ogmore too much.

Now that I have awarded bouquets around the House, I want simply to say that the Bill establishes an adjudicator to enforce the groceries supply code of practice. As recommended by the Competition Commission’s market investigation in 2008, the adjudicator will ensure that large retailers treat their direct suppliers lawfully and fairly. The adjudicator will be able to receive anonymous complaints from any source and may decide to launch an investigation if it is felt that there are reasonable grounds to suspect that the code has been broken. We anticipate there will be around two to four investigations per year and if the adjudicator is satisfied that the code has been broken, a range of sanctions will be available. The adjudicator can make recommendations to a retailer, require it to publish details of the breach, and, in the most egregious cases, impose a financial penalty.

We also announced our preferred candidate for the adjudicator last month. Christine Tacon has a wide range of experience in the groceries sector, has held senior corporate roles in retailers and direct suppliers and spent 11 years as managing director of Co-operative Farms, the largest farming operation in the UK. Members will be pleased to note that she will undergo her pre-appointment hearing with the Business, Innovation and Skills Committee tomorrow, although Ministers retain the final decision on her appointment. We are confident, and we hope that the Committee agrees, that she will be an excellent adjudicator.

We are satisfied that we have given the adjudicator sufficient powers to enforce the code effectively and during pre-legislative scrutiny we broadened our drafting so that the adjudicator could receive information from any source, giving us a good Bill. At the urging of hon. Members on Second Reading, we tabled amendments in Committee to give her the powers to impose fines from the outset. On Report we proposed additional safeguards in relation to clause 15(11) to cover the Secretary of State’s powers to restrict the information on which the adjudicator can start an investigation.

At every step along the way we have improved the Bill, and we now have a Bill of which the House can be proud. The Government have listened to the concerns of hon. Members from all parties to ensure that we create the most effective adjudicator possible, and we believe that we have now achieved that goal. I am delighted to note that a press release from the grocery market action group on 8 February announced in large letters:

Fair Trade campaigners say Supermarket Watchdog has teeth.”

My hon. Friend the Under-Secretary wanted a watchdog with teeth and even brought the visual aids to support that contention on Second Reading.

We have done our work. I believe that we have a good Bill. I commend it to the House. The sooner we get this adjudicator in place, the better it will be for our producers, consumers and retailers.

Several hon. Members:


Photo of Nigel Evans Nigel Evans Deputy Speaker (First Deputy Chairman of Ways and Means)

Order. Before I call Ian Murray, I should say that a lot of hon. Members want to speak, and the debate has to finish at 4.45 pm. No pressure on you there, Mr Murray.

Photo of Ian Murray Ian Murray Shadow Minister (Business, Innovation and Skills) 4:31, 26 February 2013

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, 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 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 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 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 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?

Photo of Ian Murray Ian Murray Shadow Minister (Business, Innovation and Skills)

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. 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.

Photo of Mark Spencer Mark Spencer Conservative, Sherwood 4:35, 26 February 2013

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 in 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.

Photo of Albert Owen Albert Owen Labour, Ynys Môn 4:36, 26 February 2013

It is a pleasure to follow Mr Spencer. The Minister was right to congratulate those he named in his speech, but he was wrong to say that my private Member’s Bill fell on deaf ears. It fell on some deaf ears among the Liberal Democrats, some in the Conservative party and, yes, some in my party. But I was able to build a consensus on the issue. The reason it did not reach the statute book—as you will recall, Mr Deputy Speaker, as someone who was on the Committee for its very quick single sitting—was that occupational hazard for Members of Parliament known as a general election. But before the election we were able to get all three parties—and some minority parties—to put it into their manifestos. So whoever became the Government would have taken the issue forward.

On Second Reading, I said that the Minister would go down in the folklore of the grocery industry for introducing the Bill. We needed a proper adjudicator. The code had been in place for some time, and nobody argued the need for it, but we had to argue the need for a referee. I single out Andrew George for his opposition to what was happening at the time. I worked closely with him on my private Member’s Bill, which he sponsored. Indeed, we had sponsors from the entire country.

The Bill is good for consumers, good for producers and good for supermarkets. The supermarkets will come to terms with it in the future and will wonder what the fuss was all about. The adjudicator will be fair, independent and give us all confidence in the future. I do not have time to go on, but I want to thank everyone involved, including my hon. Friend Ian Murray and others. This is a proud day for the whole industry and we can be proud that we have reached consensus and that the adjudicator will be put in place with the necessary tools to do the job.

Photo of James Paice James Paice Conservative, South East Cambridgeshire 4:38, 26 February 2013

I add my congratulations to everyone involved from the early days, including my hon. Friend Andrew George. The Minister said that it was a great pleasure to find himself in the same Lobby as the hon. Gentleman: for me it was more of a shock. Nevertheless, it was welcome and I am delighted that the Bill will now make progress.

Many people have portrayed the Bill as supermarket knocking or bashing. I hope that it is not seen as that. Supermarkets play a fantastic role. They have brought before the consumer a great range of products that might never otherwise have been available, in a competitive environment. However, there are people within the supermarket structures, as I touched on in an earlier intervention, who are perhaps acting with excessive zeal and, I am quite certain, going outside the terms of the code. I am not at all surprised if people much higher up the management structures are not aware of what is being done lower down by those who want to make their names as competitive buyers. I hope the Bill will be sufficient to ensure that such malpractices are stamped out, because I am sure they are not what most people want to see. As I said earlier, I feel particularly strongly about the fresh produce world, where these problems are most evident.

Finally, there is a long-held cynical view that any legislation that has all-party support is by definition bad. I hope that this proves to be the exception to that rule. There is some justification for that belief about many other pieces of legislation, but I believe the House is right to have approved this one with such a massive majority over and over again, and I look forward to it fulfilling all the hopes that people have of it.

Photo of Huw Irranca-Davies Huw Irranca-Davies Shadow Minister (Environment, Food and Rural Affairs) 4:40, 26 February 2013

I applaud the Minister of State, Department for Environment, Food and Rural Affairs, Mr Heath and the Under-Secretary of State for Business, Innovation and Skills, Jo Swinson, for their handling of the Bill. They gave way in areas where there was compelling evidence and pressure to do so; they resisted in areas where they felt it appropriate to do so. That is what Ministers should do while we keep pushing hard on issues that we think they should listen to and argue strongly against. They have been sympathetic. They have not given way on everything, but the Bill is improved and I commend them for the way that they have stewarded it.

Photo of Jo Swinson Jo Swinson The Parliamentary Under-Secretary of State for Women and Equalities, The Parliamentary Under-Secretary of State for Business, Innovation and Skills

I thank the hon. Gentleman for giving way in his thanks to me to allow me to put on the record my thanks to the officials Iain, Heeran and Richard, who have served us so excellently, and to thank them also for their Christmas present to me of some plastic teeth to go with the cuddly dog and tiger for my office.

Photo of Huw Irranca-Davies Huw Irranca-Davies Shadow Minister (Environment, Food and Rural Affairs)

I am glad I gave way to give the Minister the opportunity to convey her thanks to the officials.

I thank our Front-Bench spokesman, my hon. Friend Ian Murray, whose role has been significantly underplayed. He has worked extremely hard both on the Front Bench and behind the scenes to get us to where we are today. I thank the Committee members, many of whom volunteered to serve on the Committee because of their specific interest in the Bill. That is highly commendable. Tribute has rightly been paid to the contribution down the years of Andrew George and of my hon. Friend Albert Owen. It is a great day that they now see the Bill going on to the statute book.

The external organisations that lobbied so hard are too numerous to mention, but the British Retail Consortium, Action Aid, War on Want and all the farmers unions from every part of the United Kingdom all played a tremendous role, as did many others that I do not have time to name.

We wish the adjudicator well and hope they never have to name and shame, impose fines or carry out an investigation. We hope their very presence will instil a discipline within the supply chain, but if not, the remedy now exists.

Photo of Andrew George Andrew George Liberal Democrat, St Ives 4:42, 26 February 2013

Following the contribution from Huw Irranca-Davies, may I say that despite the consensus, which is often considered a weakness, the Bill is an excellent example of how a measure can be significantly improved during the parliamentary process?

In congratulating the many people who have been involved in the Bill’s progress, my hon. Friend the Minister of State may have left out the Minister of State, Department of Health, my hon. Friend Norman Lamb. During his brief sojourn in the Department for Business, Innovation and Skills, he introduced a very significant change, which enabled the adjudicator to initiate an inquiry on the basis of market intelligence.

I add my thanks to all those involved. Ian Murray has been very kind, and I hope I did not bite his hand off when he was offering those thanks. I should also like to thank the previous Member for South East Cornwall, Colin Breed, who highlighted the issue more than a decade ago. There are many more people who should be thanked. I have met the adjudicator-elect, Christine Tacon, and was very impressed.

If the supermarkets have nothing to hide, they have nothing to fear. They should embrace this, because I believe that the adjudicator can do something to improve fair trading in this country.

Photo of Philip Davies Philip Davies Conservative, Shipley 4:44, 26 February 2013

What a nauseating love-in! We have this ridiculous idea that the adjudicator will be good for suppliers, good for supermarkets and good for consumers —a painless panacea all round. We are told that suppliers and supermarkets will have money while consumers will pay less. What a lot of old guff. If anyone believes that, they will believe absolutely anything. Basically, this will—

Four hours having elapsed since the commencement of proceedings on the programme motion, the debate was interrupted (Programme Order, this day).

The Deputy Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83E), That the Bill be now read the Third time.

Question agreed to.

Bill accordingly read the Third time and passed, with amendments.