Question proposed, That the clause stand part of the Bill. 

  It is a pleasure to serve under your chairmanship, Mr. O’Hara—I suspect it will be for the first and the last time. 

You are not that pessimistic, are you? 

I gave the Minister the opportunity and he could not resist taking it. 

I want to pick up on two aspects of Clause 12. The first relates to subsection (2), which states: 

“The aim of the Formula will be the calculation of each retailer’s contribution to the costs of the Ombudsman by reference to the proportion of complaints made and upheld against each retailer.” 

“will contribute more to the costs associated with the Ombudsman”. 

“The Ombudsman must investigate and determine any complaint or dispute which the Ombudsman thinks should be investigated,” 

Clause 12(5) indicates that the OFT must follow the ombudsman’s recommendation on how much retailers should contribute according to the formula for any particular period unless there is good reason to vary it. Will “good reason” be defined more clearly in guidelines? If so, what does the hon. Gentleman believe would be a good reason for varying the recommendation? We must bear in mind the importance of the need for the ombudsman to be independent and for it not to feel that it is being imposed upon by the OFT when making its judgments. 

Further to the point made by the hon. Member for Crewe and Nantwich, and in addition to the idea that the formula should reflect the number of complaints and subsequent penalties, I wish to point out that, in my survey of the grocery retailers that fall within the orbit of the grocery supply code of practice and the measure under discussion—in other words, those retailers that the Competition Commission defines as having a turnover of more than £1 billion—Aldi, Waitrose and Marks & Spencer indicated conditional support for the concept of an ombudsman at a relatively early stage. I had discussions with several retailers at various stages and, although some equivocated, it became clear that they wanted a fair system of penalties and rewards, as well as a formula that might also reflect the capacity of a retailer according to its size and turnover. 

I am grateful to the hon. Member for Crewe and Nantwich for raising those points. I must say that he has good links with Ynys Môn, while we are on that subject. He made a good point about the number of complaints and issues. Of course, we are following the guidelines and recommendations of the commission’s report and the idea that the provision needs to be varied at a later stage is exactly because it is new and there should be proper guidelines. We need to look at it and let it bed down to see how the formula is working. The formula is set up by the OFT, which is why I do not think that it breaches the independence of the ombudsman. In fact, there needs to be co-operation, which strengthens the argument about the cross-departmental workings of the ombudsman with the OFT. I understand what the hon. Gentleman is saying. I expect there to be strong guidelines once the formula is up and running so that everyone understands it clearly and openly. 

The hon. Member for St. Ives raised the fairness of the formula and the ombudsman’s being awash with money. I want to put on record that it is not my intention for the ombudsman to pay himself huge bonuses with any surplus money. Again, that is the reason for varying the formula at a later date. The clause is in the Bill for that purpose. Hopefully, there will not be much at all. That is the intent. If the code works properly, there will be no need for great fines, great moneys and the ombudsman’s being awash with money, but I have explained the reason why the formula needs to be varied at a later stage and why the OFT needs to work with the ombudsman. 

Question put and agreed to. 

Clause 12 accordingly ordered stand part of the Bill. 

Clauses 13 to 15 ordered to stand part of the Bill.