Clause 23 — Orders

Business of the House – in the House of Commons at 7:30 pm on 16th April 2013.

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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 7:30 pm, 16th April 2013

I beg to move, That this House
agrees with Lords amendment 14A.

Hon. Members may be surprised to see the return of a Bill to which we bade such a fond farewell not very long ago. It returns to the House for two reasons. First, we had such an enjoyable time during its passage through the Commons that we could not resist one further go, but secondly—and by far the most important reason—we tabled this amendment in the other place in response to a recommendation from the Delegated Powers and Regulatory Reform Committee in its sixteenth report of the Session.

As hon. Members will recall from our discussions, the adjudicator must consult on her guidance. This will allow her to make a recommendation to the Secretary of State about the maximum level of the fine or the basis for determining that amount. The Secretary of State will then need to lay an order before Parliament setting this maximum level or the method for determining it. The Delegated Powers and Regulatory Reform Committee has recommended that such an order be subject to an affirmative resolution rather than the negative procedure provided for in the Bill when it left the Commons.

There are already safeguards around the use of the power. It can be exercised only after a recommendation from the independent adjudicator, based on her consultation, and the Delegated Powers and Regulatory Reform Committee recognised that this would usefully serve to inform the exercise of the power by the Secretary of State. However, the Committee advised that as the upper limit of the penalty is not on the face of the Bill, the power to fix those limits should be subject to a significant level of parliamentary scrutiny. This is in line with its recommendations in other cases in which the maximum penalty is not stated on the face of the Bill.

We think that the Committee’s comments are reasonable and we are happy to heed the voice of Parliament on this issue. Our amendment provides only that the order will be subject to the affirmative resolution procedure, ensuring that Parliament will be able to scrutinise and positively approve the order. I trust that this increased level of scrutiny will be to the satisfaction of hon. Members, and I urge them to support this minor amendment to what I think we all agree is an excellent Bill.

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

It is strange that an hour has been allocated for this debate when it is obvious that it will take only a few moments. Given that the Agricultural Wages Board has been abolished by the unelected House of Lords and this House was not able to have a debate on that, the timetable today is a bit disappointing.

For my sins, I have often said in Delegated Legislation Committees in the past few weeks that I agree with the Minister, and this is another demonstration of the fact that when the Government do the right thing, we will agree with them. In this case, the Minister is certainly doing the right thing.

It is worth returning to the introduction of this Bill. It was a fairly ordinary Bill to start with, but it was strengthened substantially in the other place with the addition that trade associations and third parties could seek redress from the adjudicator. Importantly, on Second Reading in this House, we had a robust debate on whether fines should be included in the Bill. We disagreed on that point, and the Minister vehemently and robustly defended their omission. We are delighted that provisions on fines were added in Committee, which made the Bill all the better.

The amendment we are considering is significant because it shows the power of this House. The Select Committee has had a pre-appointment hearing for the adjudicator, and we congratulate her on her appointment. She will be a very good adjudicator and we look forward to her getting stuck into some of the important work that has to be done on this issue. We have also had a lot of cross-party consensus on the Bill on the Floor of the House and in Committee. It is a testament to the power of the Select Committees and the Committee system—not to mention the other place—that we started with a fairly weak Bill, but it will leave this House today much stronger.

Many people deserve credit for that improvement. As well as the Minister, they include Andrew George who is in his place, my hon. Friend Albert Owen who I do not see in his place, and my hon. Friend Huw Irranca-Davies, who was my wing person in Committee.

We do not disagree with the Lords and will be agreeing with the Minister in this particular case, but I will just make this point. We had arguments in Committee about ensuring that the Select Committee on Business, Innovation and Skills and the Select Committee on Environment, Food and Rural Affairs in particular had time to look at these issues, and the Minister defended robustly the other Committees of this House. Now that provisions on fines are in the Bill, and the Secretary of State will be putting forward an order to determine their amount, it is right that that statutory instrument should be before the House for affirmative resolution. We can then debate it to ensure that it is in the interests not just of the suppliers covered by the groceries code adjudicator, but businesses and supermarkets too.

Photo of James Paice James Paice Conservative, South East Cambridgeshire

I will make a brief contribution because, like the Minister, I am happy to support the Lords amendment. I just wanted to make the point that, in considering the fines structure and the levels at which they will need to be set, I hope that my hon. Friend the Minister and the Secretary of State will consider the magnitude of the businesses involved. A fine that to most people would seem substantial of perhaps a few thousand pounds, would be totally insignificant—a few minutes’ trading—to a major supermarket.

I do not pretend to have the answers. This is a subject on which I have wrestled in my own mind and discussed with the adjudicator, because it will be extremely difficult. That is one reason I was always a bit dubious about the need for fines—the reputational issue will be far more valuable. It is clear to me that if a fine is to be levied, it will have to be at a level that is likely to lead to the behavioural change of the relevant supermarket that all of us who support the Bill desire to see. That means it will be very significant. I am sure that if my hon. Friend the Minister comes forward with figures, there will be accusations that they are completely disproportionate to the issues. The proportion, however, is to do not just with the issue, but with the scale of the business and the behavioural change we want to see—clearly, that is not going to happen unless the business has been in serious breach of the code.

I am grateful for the opportunity to make the point to my hon. Friend, and to hon. Members in all parts of the House, that when the statutory instrument comes back to the House we will have to consider this wider issue. It is not simply a penalty for a small offence, but something we need to ensure is a genuine penalty for breach of the code and a deterrent. It will therefore have to be of a very large magnitude indeed.

Photo of Andrew George Andrew George Liberal Democrat, St Ives

It is a pleasure to follow Sir James Paice. I welcome the Lords amendment and do not oppose it. I am sure that that will be a great relief to my hon. Friend the Minister, whom I congratulate on all the work she has done on the Bill.

The key point addressed by the right hon. Member for South East Cambridgeshire is that the order, when it is brought forward, is couched in a manner that has the impact we all want. Whether fines will be a set figure or a proportion of turnover was debated at some length in Committee. A proportion of turnover for Tesco as opposed to, say, Waitrose, is significant. Certainly, in other areas of competition law this appears to be the case. I urge my hon. Friend the Minister to look at a proportion of turnover as an alternative to setting an absolute amount in the order. I congratulate the Government on accepting the need to provide for fines in the Bill. The fact that significant changes have been made shows the benefit of debate and scrutiny in this place. Without question, the Bill improved over time.

I echo the words of Ian Murray. I sat through the previous debate on the Enterprise and Regulatory Reform Bill and made a point of order about how we had not had an opportunity to debate the abolition of the Agricultural Wages Board. The groceries code adjudicator is being put in place to address some of the pressures on primary producers. It is a great pity, however, that we were not given the acres of time we have now—to debate this relatively minor issue—in order to debate an issue that will have a significant impact on the future of agriculture and agricultural workers in this country. The risk that this might become a race to the bottom or that the Gangmasters Licensing Authority might be the only body able effectively to regulate and protect workers in the agricultural sector is one that the House ought not to take. I hope that the House will reflect on the fact that the undemocratic House has introduced a measure without the democratic Chamber having an opportunity to debate it. We must ensure that such a thing never happens again. There has been no debate or vote in this House on an issue of great significance.

I shall return to the primary purpose of the amendment. I congratulate my hon. Friend the Minister. This is a welcome change and we look forward to the order being brought forward as quickly as possible, so that when the adjudicator begins her job, in the coming few weeks I hope, we will see this measure introduced effectively and a proactive adjudicator seeking vigorously to enforce the groceries code.

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

Thank you for calling me to speak, Mr Speaker. I am sorry to throw you by standing so late. I had not intended to speak.

I welcome the amendment from the other place and the consideration given to the Bill and the great input from both Houses. It has undoubtedly benefitted from it. I echo the comments of Andrew George. I, too, truly wish that we had also availed ourselves of the opportunity to debate the Agricultural Wages Board, on which we have had no vote or debate in the Chamber. In effect, it has today been abolished by an unelected Chamber. While welcoming the amendment and the thorough scrutiny given to the Bill now before us, I think that the House should reflect on earlier business, when we effectively bypassed this House entirely. It is a sad day for our democracy.

Photo of Neil Parish Neil Parish Conservative, Tiverton and Honiton

I rise to support other Members who have spoken, especially my right hon. Friend Sir James Paice, who has supported the Bill throughout and did a great job as Minister. I also echo what my hon. Friend Andrew George said about the Bill, although I do not necessarily welcome his comments about the Agricultural Wages Board—but I will not go into that debate.

I congratulate the Minister on listening throughout this whole process, including in Committee, in order to improve the Bill. I also thank the shadow Minister for his co-operation. The Committee and the House have worked extremely well to bring forward this Bill.

I again echo the words of my right hon. Friend the Member for South East Cambridgeshire, who said we have to consider a level of fine that is commensurate with the size of the company committing the felony. We have to be clear about that. It will matter, because this is not only about naming and shaming. If the public see that a large fine has been imposed on a large supermarket in this country, they will start to realise what kind of bad practices have been carried out. Many of our producers, farmers and growers have suffered so much abuse over the years, especially when it comes to perishable goods, whereby supermarkets and others have suddenly decided that they have enough strawberries or whatever and will not buy those crops, or they find some other reason not to buy them. Those crops then have to be destroyed, at a loss to the farmer or grower. That is an abuse by supermarkets and others of their power. We therefore very much welcome the Bill and look forward to seeing what level of fine will be imposed on the companies that abuse their powers.

I am hopeful that the fact that the groceries code adjudicator is in place will stop most of the abuses that have been committed. If that is what having the Groceries Code Adjudicator Bill achieves, that is far better than fining lots of companies. We want to see bad practice ruled out and good practice put in its place. I am hopeful that that is exactly what the Bill will do. I therefore very much welcome the Lords amendment, but I also welcome the fact that the Bill has made such quick progress through the Lords to come back here to the Commons. I therefore hope we can get it on the statute book as quickly as possible.

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 7:45 pm, 16th April 2013

I do not intend to detain the House for long, but I want to respond to the points raised in this debate.

Sir James Paice raised a perfectly fair point about the fines structure and whether it should take into account the size of the business being fined, in order to drive its behaviour. Let me reassure him that the adjudicator will have to undertake a consultation on her guidance on the maximum. As my hon. Friends who served on the Committee have said, we discussed that in depth in Committee, because she will want to spend a little time ensuring that she gets that right. I am sure that hon. Members will be interested in engaging with that consultation and giving their views on it.

My hon. Friend Andrew George talked about when the adjudicator begins her role. I am pleased to say that, as adjudicator-designate, she is currently working one day a week, enabling her to build some of the stakeholder relations that will be so crucial. Once the Bill is commenced and becomes an Act, she will have her full suite of powers and be working three days a week.

I thank Neil Parish for his kind comments. Indeed, this is an appropriate point to thank a few Members for the work they have done to get us to this position. They include my hon. Friend the Minister of State, Department for Environment, Food and Rural Affairs, my hon. Friend the Member for St Ives, who has campaigned for this measure for over a decade, Albert Owen, who built a lot of momentum on the issue through his private Member’s Bill, and the Opposition spokespeople, the hon. Members for Edinburgh South (Ian Murray) and for Ogmore (Huw Irranca-Davies), who have also campaigned on the issue and who worked hard with the Government to help to improve the Bill. I also thank the Chair of the Select Committee on Business, Innovation and Skills, Mr Bailey, and the Chair of the Select Committee on Environment, Food and Rural Affairs, Miss McIntosh, along with the Chairs of the Bill Committee, the hon. Members for North Thanet (Sir Roger Gale) and for Arfon (Hywel Williams), as well as the members of the Committee, the Whips and the Parliamentary Private Secretaries.

Together, we have managed to create an adjudicator with the teeth to ensure that retailers treat their direct suppliers fairly and lawfully. That is a legacy of which we can be proud. I commend the Bill to the House.

Lords amendment 14A agreed to.