Moved by Baroness McIntosh of Pickering
61: Clause 27, page 22, line 4, leave out “may” and insert “must”Member’s explanatory statementThis amendment requires the Government to provide regulations for fair dealing obligations of business purchasers of agricultural products.
My Lords, I rise in the absence of, and at his request and with his permission, the noble Lord, Lord Empey, who has been unavoidably called away and sends his apologies. His two amendments refer to Clause 27. They are minor amendments but would have significant consequences.
The clause relates to fair dealing obligations of business purchasers of agricultural products and enables the Secretary of State to make regulations in respect of them. The regulations may be sector specific or in general terms. As we learn from the Bill’s Explanatory Notes, the Bill provides the Secretary of State with the power
“to make regulations to introduce obligations that promote fair contractual relationships between primary producers, producer organisations, associations of producer organisations, produce aggregators and the business purchasers of their products.”
Obviously, there is a great desire for fairness and for protection from unfair trading practices.
At the kernel of the two amendments from the noble Lord, Lord Empey, is a wish to ensure a better relationship between the processors, the supermarkets and primary producers. I am sure that this is a concept with which all noble Lords agree. Rather than press his amendments at this stage, he seeks to ensure that we enable primary producers to make the investments they wish to make to meet the new responsibilities they face as set out in Clause 27.
The noble Lord, Lord Empey, went to great pains to state, and I am sure that he has reassured my noble friend the Minister of it, that rather than press the amendments to a vote at this stage, he is grateful for the opportunity to set out the views expressed in them and seeks an early meeting with the Minister if it would be possible. I beg to move.
My Lords, I had an exchange of emails yesterday with the noble Lord, Lord Empey, to make sure that I understood his amendments correctly. He basically put it to me that he wishes to place an obligation on government rather than for it to have a discretion, which is as the Bill is drafted, to make regulations on fair dealing. I have told him that I support the fair dealing provisions in the Bill—I said so in Committee—particularly with regard to food waste, which is often in effect forced on farmers, making them less competitive and environmentally more wasteful, by the requirements of supermarkets, which I do not think is fair dealing. I am all in favour of that, but I am less convinced about the placing of such an obligation on Ministers. However, these issues can be well discussed in the next set of amendments, about the role of the Groceries Code Adjudicator.
I thank the noble Lord, Lord Empey, for his amendments, for the significance in which he holds them as necessary for the Bill, and for leading the House in returning to Clause 27 on fair dealing obligations. I am sorry he has not been able to stay tonight to make his case due to personal circumstances, and I hope all continues well. Nevertheless, I thank the noble Baroness, Lady McIntosh, for stepping in and moving his amendment. I concur with much of what she said. The distribution of market returns from food between the primary producer and the rest of the supply chain, especially in regard to the retail sector, certainly appears unbalanced. The proportion returned to the farmer has steadily declined over many years.
That regulation is needed to ensure further provision to introduce a greater measure of fair dealing obligations on the supply chain is recognised in Clause 27. Following the establishment and workings of the Groceries Code Adjudicator, the specific task of monitoring relationships between the UK’s largest supermarkets and their direct suppliers has proved very effective. I would go so far as to say it has proved critical in delivering effective change down the supply chain.
We would not be able to support the noble Lord should he wish to press his amendment. The specific details of each statutory code are being developed in consultation with industry and will be set out in secondary legislation. It will be extended across all sectors of agriculture. This is already in progress.
My Lords, I am grateful to my noble friend Lady McIntosh for introducing this amendment on behalf of the noble Lord, Lord Empey. I confirm that my noble friend Lord Gardiner has agreed to meet the noble Lord, Lord Empey, at the earliest opportunity.
There is no doubt that the Government will use these powers. The introduction of fair dealing obligations is vital in the creation of a more equitable supply chain. This is a point on which there is wide agreement. However, the Government believe it is equally important that these obligations are appropriate and proportionate and produce the right outcomes.
To ensure this, the Government intend to consult industry before regulations are made, to ensure that they are properly tailored for the issues at hand. In this regard, a UK-wide consultation exploring contractual issues in the dairy sector has recently been concluded. The consultation invited a broad range of views about future regulations, asking specific questions about various issues. Some of these issues, such as contractual exclusivity, are almost unique to the dairy sector. The Government intend to repeat this approach for any future exercise of the powers in Clause 27, allowing the views from industry and other stakeholders, often about very detailed sector-specific issues, to inform final decisions.
The introduction of blanket obligations across the whole of UK agriculture would hinder the ability to reflect the specific nuances of each sector and potentially fail to address the specific problems experienced by particular types of producer. Also, given that certain agricultural sectors are far better integrated than others, comprehensive obligations could ultimately lead to provisions being introduced into sectors where they are simply not required.
I hope I have given sufficient reassurance and ask my noble friend to withdraw the amendment on behalf of the noble Lord, Lord Empey.
I am most grateful to those who have contributed to this debate and am sure the noble Lord, Lord Empey, is grateful for the opportunity to have put forward his views and the sentiments described in these two amendments.
My noble friend is absolutely right that the consultation with the interested parties that has just concluded will be crucial in the development and implementation of the regulations. It would be helpful to have confirmation that these responses will be available on the web so that we can look at them when it comes to implementing regulations before the House at that time.
Amendment 61 withdrawn.
I remind noble Lords that, other than the mover of an amendment or the Minister, Members may speak only once and that short questions of elucidation are discouraged. Any Member wishing to press this or anything else in this group to a Division should make that clear in debate.
Amendment 62 not moved.