With this it will be convenient to discuss amendment 62, in schedule 1, page 12, line 8, at end insert—
‘(4) The Adjudicator’s appointment will also be subject to approval by—
(a) the Business, Innovation and Skills Select Committee; and
(c) their respective successor committees from time to time.’.
Now we will start on the line-by-line scrutiny and get to the crux of the Bill. Amendment 1 was tabled by my hon. Friend the Member for West Bromwich West (Mr Bailey) and the hon. Member for Worcester (Mr Walker). They are not on the Committee and are therefore not able to move the amendment, but their amendment is similar to amendment 62.
First, I pay tribute to the Business, Innovation and Skills Committee and the Environment, Food and Rural Affairs Committee—as they are meeting just through the wall, if I said that loudly enough, they may have heard it live. The amendments demonstrate a commonly held principle: Select Committees do an important job in scrutinising legislation, scrutinising the Government and producing their own reports and inquiries to influence the House’s thinking. We hope to persuade the Minister to allow the appropriate Select Committees to look into the appointment of the adjudicator because it will be one of the key roles created in this Parliament. That must bring confidence to the appointment, but that should be done under proper scrutiny, with other Committees of the House allowed to look into the appointment properly.
The hon. Member for St Ives has spoken already on the Bill, and I pay tribute to his work, as I did on Second Reading—although I did so reluctantly after being barracked by the Government side. He said that the Bill has cross-party support, and on that basis we believe that cross-party Select Committees should look at the appointment of the adjudicator. Lord Knight, the shadow Environment, Food and Rural Affairs Minister in the other place, put forward this amendment as well.
Ultimately, it is about the adjudicator’s accountability. We know that accountability breeds responsibility, and our amendment seeks to achieve that by ensuring that the Government’s recommendation for the important position of adjudicator is subject to confirmation by Joint Committee of the relevant departmental Select Committees. We propose to add to schedule 1, page 12, line 8 that the appointment will also be subject to approval by the BIS, EFRA and respective successor Select Committees.
I appreciate that the Minister may not want to accept the amendment, but perhaps if she were to come back on Report to propose that a cross-section—or any make-up—of those Committees would come together to approve the appointment, we would accept that. Crucially—the Minister may not know it in depth—the 2010 Conservative manifesto stated:
“To increase the scrutiny of quangos, we will give Select Committees the right to hold confirmation hearings for major public appointments including the heads of quangos”.
The adjudicator heads a quango, to all intents and purposes, so it seems to fit neatly into that. The coalition agreement, which may be closer to the Minister’s heart, states:
“We will strengthen the powers of Select Committees to scrutinise major public appointments.”
In mentioning major public appointments, the coalition agreement goes even further than talking about the heads of quangos. I encourage the Minister to set out clearly why such scrutiny would not take place in this instance.
I wrote to the Minister’s predecessor, the hon. Member for North Norfolk (Norman Lamb), on 9 July to ask him to consider whether the Select Committees might look at the appointment. He wrote back to me on 9 July:
“The Government supports the principle of suitable Parliamentary oversight of key public appointments.”
He went on to say that
“the Government believes that posts which should be subject to pre-appointment hearings will generally be senior non-executive roles which either”— it falls into three categories—
“play a key role in regulating Government, play a key role in protecting and safeguarding the public’s rights and interests…or where it is vital for the reputation and credibility of the public body in question”.
The letter goes on to say:
“The Government does not consider that the Groceries Code Adjudicator, though very important to the groceries sector, would fall into these categories.”
“I hope this explanation makes the position clearer”.
We are fond of the Minister’s predecessor and we spent many heady days and nights with him in Committee debating the Enterprise and Regulatory Reform Bill clause by clause and point by point. We were so fond of him that we bought him a copy of “Fifty Shades of Grey” at the end of proceedings, because it had been referred to five or six times in that Committee. I hope he has read it, and I hope he will be questioned on it at some point in the House. The proceedings of that Committee demonstrated the level of cross-party support for some of our amendments, and I hope that the current Minister will bring similar qualities to this debate.
I echo what my hon. Friend has said. The Government have shown that they are listening when it comes to the Bill, particularly because new Ministers are overseeing it. Regardless of the previous Minister’s answer to my hon. Friend, parliamentary oversight of the appointment is in the interests of open and transparent government. Given the importance of the groceries code adjudicator, Parliament should oversee the appointment not least to ensure that the candidate satisfies the seven principles of public life. I hope that the Government are listening, because by being open to our reasonable argument, the new Ministers would demonstrate a strong mark of independence.
I am grateful to my hon. Friend for that intervention, and I will say three things in response. First, the groceries code adjudicator will play a critical role, and given the controversy that even the suggestion of such a role has caused in some parts of the groceries sector, maximum parliamentary scrutiny of the appointment is important. Secondly, in the Scottish Parliament 400 miles away the Government are closing down committees, closing down scrutiny and closing down debate. That is resulting in very bad policy and very bad legislation, which shows that parliamentary scrutiny is worth while. Finally, the Government have instigated such scrutiny for other appointments, so we are not necessarily arguing about a principle. The Government set out in the Conservative manifesto and the coalition agreement that they would allow parliamentary scrutiny of appointments to all major public bodies, which established the principle. In the amendments, hon. Members are arguing on a cross-party basis that the Business, Innovation and Skills Committee should consider the appointment of the groceries code adjudicator.
Not being as familiar with the hon. Member for North Norfolk, I enjoyed hearing his correspondence with my hon. Friend. I agree with the hon. Member for North Norfolk that there are three important reasons why Select Committee scrutiny of public appointments is appropriate. Will my hon. Friend clarify which of those reasons are relevant to the groceries code adjudicator? As I understand it, the role would fall into two of those three categories.
Yes. I congratulate my hon. Friend on his wonderful election and his appointment to the House. Given that this is his first Committee I hope that he will be as enthusiastic a Member of Parliament at the end of it as he is at the start. He raises an important point. He is right. I do not think that anyone on the Committee could argue that the adjudicator will play a key role in regulating Government because that is not the role of the adjudicator. We could argue tenuously that the adjudicator is regulating a Government policy in terms of the groceries code, but certainly not regulating Government. My hon. Friend is right to say that the adjudicator probably falls into only two of the three categories. I hope that we are choosing the same two.
Will the adjudicator
“play a key role in protecting and safeguarding the public’s interests and rights particularly in relation to the actions and decisions of Government”?
The first part of that qualification is quite important. The adjudicator is charged with upholding the code and the code is in place to look after the direct suppliers of the large retailers. If he can look after the direct suppliers of large retailers we have lots of evidence from the Food and Drink Federation and other bodies that that will create innovation, which will hopefully drive down costs, make the supply chains more efficient and put a bit of certainty into the industry. So certainly the adjudicator plays a key role in protecting and safeguarding the public’s rights and interests.
Crucially, the third qualification put forward by the hon. Member for North Norfolk is
“where it is vital for the reputation and credibility of the public body in question that the post holder is, and is seen to be, independent of Ministers and Government.”
There is no doubt that the reputation and credibility of the adjudicator will be key, for the sake not just of the suppliers and the customers, but of the retailers—although the retailers would doubtless be happier if we scrapped the Bill tomorrow than if it went on to gain Royal Assent. It is crucial that there is confidence in the appointment of the adjudicator. That confidence could be underpinned by the Select Committee undertaking a proper scrutiny process of the individual involved. My hon. Friend the Member for Corby is absolutely right. The adjudicator falls under two of these points and tenuously falls under the third.
At the end of letter the hon. Member for North Norfolk says:
“I hope this explanation makes the position clearer”.
Given the context of his letter it has probably made the position slightly unclear.
Does the shadow Minister agree that the fact that the major retailers are not very keen, at the very least, for the adjudicator to come forward means that we need to get a very strong individual into the post given the power of these major retailers? One in particular, which I will not name here but everybody knows which it is, has 32% of the retail trade in the country. It seriously needs to be taken to task sometimes and it will need a strong adjudicator to do that.
That is an important intervention. All such interventions are welcome because “every little helps”. I have never been taken in by petty advertising as you can probably tell, Mr Williams. The hon. Gentleman said that we need a strong adjudicator. The adjudicator needs to be not just strong, but very knowledgeable. These are complex processes. He will need to know not only about the retail market but about the practices of the large retailers. This Committee should not simply bash retailers for the next six sittings. That is not what we are here to do. But I am sure the retailers themselves would agree that the adjudicator has a very important role to play and they would have more confidence in the adjudicator if he knew about the industry and how the supply chains worked. That will make the adjudicator better.
My hon. Friend is quite right to focus on the buying policies of individual supermarkets. Are we as a Committee aware of that? Do they buy locally, in what areas and at what prices? Is there any way that we can compare each supermarket, highlight, praise and thereby spread best practice?
My hon. Friend managed to get through an intervention without using the words “Off-trolley”, which is surprising to me and, I am sure, the rest of the Committee. However, he makes a critical point, because it is difficult to dig down into supermarkets’ pricing and supply chains. Indeed, a report by Which? from a few weeks ago showed that it is difficult to determine the actual cost of the average shopping basket despite all the comparison websites. We have seen issues around buy-one-get-one-free offers, labelling and proper pricing, and I am not sure whether anyone knows how to get to the bottom of them. I hope that the adjudicator, when dealing with some of the investigations that it may conduct, will be able to dig down into that, because there is no doubt that those kind of purchasing issues and offers have a direct impact on the supply chain. We have heard many stories from investigations by the Office of Fair Trading that high-level discounted offers, which allow the supermarkets to compete with each other, have an impact on suppliers. Indeed, the suppliers could be paying for those offers. We need a strong adjudicator that can look into those aspects of the system.
Such issues are nothing new, and, adding to what my hon. Friend the Member for Ogmore has already said, the Treasury Committee will have a confirmation hearing into the new Governor of the Bank of England. There is no doubt that the new Governor is a major appointment, but we should put the adjudicator on the same level. There are confirmation hearings for members of the Office for Budget Responsibility, and thank goodness that there are given how its figures for the economy have been roundly brought down over the past few Budgets and autumn statements. It is right that those individuals have a confirmation hearing.
An important aspect of the adjudicator’s role is the ability of the individual appointed to be trusted right across the sector, not just by primary food producers and the supply chain, but also by the grocery sector. The job description lays out clearly the range of experience that the individual will have, but trust is absolutely essential. That is why the Business, Innovation and Skills or Environment, Food and Rural Affairs Committees, or, as in amendment 62, any subsequent Committees, should be able to judge that individual not simply on their merits and qualifications, but also on whether they command respect across the industry to give impartial, but proactive, judgments on the sector.
That is the point that I have been trying to make. When the Bill receives Royal Assent and the adjudicator is appointed—hopefully through a confirmation hearing—I hope that they have no work to do. I hope that the supermarkets will comply with the Groceries (Supply Chain Practices) Market Investigation Order 2009, that they respect the adjudicator and that they think that the adjudicator has the power, the credibility and the teeth to be able to hold the supermarkets to account in a proactive manner, so that they do not have to investigate breaches of the code.
I agree that it would be ideal if the individual and their office had ostensibly no work to do, but another good reason to put them in front of a Committee is that the salary commanded is up to £120,000 a year. That on its own, from the taxpayers’ point of view, would merit some sort of hearing to judge their appropriateness and suitability for the role.
Given the amount of public money involved in the adjudication and given that large retailers will be paying the salary of the adjudicator, it is important to ensure that they are the right person for the job. I also hope that the adjudicator will pay PAYE and national insurance.
That is a very good intervention, and I mentioned that point at the start. Our amendment seeks to discover whether the BIS and EFRA Committees, or any successors, could hold separate hearings or come together for some special sitting. If the Minister will come back on Report with a formulation of how she thinks that might work, we would happily accept that. We tabled the amendment merely to say that, as a starting point, the BIS and EFRA Committees should look at this, either separately or together, and it is for the House to decide whether to go forward with that.
Again, it would be for the Minister to decide on the process. I would hope that the personal specification for the appointment of the adjudicator would be strong enough to bring forward candidates who were good enough to do the job. I would also hope that a candidate at a hearing of the BIS or EFRA Committees, or otherwise, would instil confidence in the Committees and the House in their appointment.
If we ended up with the Select Committees not giving their blessing to the appointment, we would have to go through a process of finding someone else, or deciding whether the original candidate could be brought back to the Committees after a period of training or with further information. Admittedly, that would lead to problems, but the very fact that the hon. Gentleman is raising the issue shows that the Select Committees should consider the appointment.
It is important to note that the two amendments are slightly different. The second is much more robust in that it would require approval to be sought. There is a precedent for that in other appointments that require the approval of a Select Committee. That is important in such a vital role, and I would be surprised if the BIS and EFRA Committees did not want to have that power to send a positive message to the Government that the individual was the right one or, as we have seen with previous appointments, that they were wrong and that the Government should think again.
Absolutely. We do not want to find that, three months down the line, the adjudicator has lost all respect and credibility with the industry, because we would be left with a lame duck adjudicator unable to uphold the code that is supposed to make the supply chain better.
The point is very well made by my hon. Friend that a range of organisations want a real assurance about the adjudicator’s teeth. I draw his attention to the remarks just last week by Harry Cotterell, president of the Country Land and Business Association, who welcomed the news that fines can be imposed and said:
“Now it is up to the adjudicator to ensure this works in practice and the supermarkets do not ride roughshod over the new system.”
That concern was clearly expressed earlier. The public, businesses, people in the countryside and farmers want that absolute assurance, and I am confident that the Select Committee process can add to that.
My hon. Friend makes the most critical point yet, because the other place has given, as will amendments that the Minister will move today or later this week, real teeth to the adjudicator. We could add to the adjudicator’s remedies a specification that they could shoot retailers at dawn, but if the adjudicator is unable proactively and efficiently to take forward an investigation, the remedies are irrelevant because the investigations will be irrelevant. The adjudicator now has real teeth to do something about that, and Harry Cotterell has made that point. We must ensure that now that we have remedies with teeth, we have an adjudicator with the ability to take those remedies forward.
Before the Minister pops up and says it is all very well talking about the Governor of the Bank of England and the members of the Office for Budget Responsibility, I mention again the Enterprise and Regulatory Reform Bill, which has just gone through this House and is in the other place. The specifications in that Bill are to merge the Office of Fair Trading and the Competition Commission to create the Competition and Markets Authority. The appointment of the chair of the CMA will be ratified by the BIS Committee. It seems to me that that post is very similar, in its level of responsibility, to the adjudicator. I cannot understand why that appointment will be ratified by the BIS Committee but that of the adjudicator will not be.
Lord Knight of Weymouth also proposed this amendment in the other place, where it was rejected. It seems to me a procedural matter that would be easy to resolve. The BIS Committee could have held the ratification hearing in the time it has taken me to propose the amendment. I do not think it would be an onerous process and it could be done fairly quickly.
The amendment aims to ensure proper due diligence. We cannot undertake due diligence after the appointment. We will not know if the adjudicator has the skills and knowledge to do the job properly until after the event. It would be in the adjudicator’s interest—something we have not spoken about yet—to have gone through a robust process, because it would give the individual personal credibility in saying to suppliers and large retailers, “I am the adjudicator refereeing GSCOP.” We want to ensure that it can be refereed properly.
To rewind to the start of the Committee, when my hon. Friend the Member for Corby quoted the hon. Member for St Ives on how long it has taken us to get here, I think that, given that lengthy period, we should spend just a little more time to allow the adjudicator appointment to be ratified by the BIS or EFRA Committee, or a combination of the two, to ensure that, having gone through the lengthy process, we now get it absolutely right.
The Government need not be unduly concerned. I will not be contributing to the Committee at length or frequently. However, as a past Chairman of both the BIS Committee and the old agriculture Committee, now the Environment, Food and Rural Affairs Committee, I have a vested interest in the amendment.
My message to the hon. Gentleman who moved his amendment so fluently—and at such length—is that the Committees are right to want this power. If they do not get it, they can take it anyhow. If the Government reject the amendment, the Committees can hold the hearing anyhow; they have the power to summon people and papers. Were I the Chairman of either of these two Committees, whatever the Minister says when winding up today and whatever is in the Bill at the end of the process, I would summon the adjudicator candidate and ask him or her to justify their appointment. It is up to Select Committees to assert their power in this place, not just to the Executive to give them the power.
Ian Murray rose—
The hon. Gentleman brings a great deal of experience to the Committee. We are delighted he is on it and look forward to his contributions. Surely, the point is that if the adjudicator is appointed and then the BIS Committee, having asked the adjudicator to come before it, decides it is a dreadful appointment, there is no mechanism for the appointment to be looked at, stopped or amended. If the adjudicator is in place and is called retrospectively by the BIS Committee, which concludes they are the wrong person for the job, there is no mechanism for the appointment to be changed.
The hon. Gentleman makes an important and interesting point. I think the knowledge that the Select Committee would declare in advance, irrespective of the Government’s candidate, that it would summon him or her, would be a powerful discipline on the Government and a real sanction on the appointment. An adjudicator who lost the confidence of the two relevant Select Committees would be ineffective. The Government would probably want to wait for the Select Committees’ decision once the announcement was made anyhow. Select Committees must assert themselves; they must take the power they can for themselves. They have the power to do that irrespective of the hon. Gentleman’s amendment. I give way to my hon. Friend the Member for City of Chester.
I am pleased to respond to the amendments moved by the hon. Member for Edinburgh South, one of which is also in the name of the hon. Member for West Bromwich West, the Chair of the BIS Committee. As ever, it is wonderful to hear from my hon. Friend the Member for Mid Worcestershire, and I will perhaps risk incurring the wrath of the Whips by saying that I hope his contributions are not rare. He has lot to offer and is possibly the best placed person to speak on the amendment given his former roles as Chair of related Select Committees.
Select Committees do a fantastic job. Whether it is Business, Innovation and Skills, Environment, Food and Rural Affairs or any other Select Committee, their scrutinising and challenging of the Government is absolutely vital. From my time as a member of the Environmental Audit Committee, I know how important that relationship is. It is vital that the Government take Select Committees seriously. We are committed to increasing transparency and accountability in the public appointments process and to strengthening how Select Committees can scrutinise major appointments where it is warranted. The issue here is about whether this appointment is of sufficient importance to warrant that level of scrutiny. I appreciate that the amendments give us the opportunity to have a good debate on the issue, but, in any event, it would not be normal practice to write such a thing into the Bill. I am not aware that the previous Government ever wrote into legislation what pre-appointment scrutiny is required, so I am not sure whether doing so would be the best way of achieving the amendments’ aim.
Accepting the argument that it is normally rare, but not unique, to have such a proposal written into the Bill, does the Minister have an alternative suggestion? Her Department is currently going through the process of appointment, and there is merit in pre-ratification—the minimal approach taken by amendment 1, rather than the maximal approach taken by amendment 62. Is there some way, through guidance or internal procedure, that that pre-ratification by one of the appropriate Committees could be sought?
I hear the hon. Gentleman’s arguments and will come to those points. He is right to draw the distinction between amendment 1 and amendment 62 and between scrutiny and confirmation hearings. The confirmation hearing is rightly reserved for the most important roles, such as the Governor of the Bank of England, and I will mention the significant differences. The hon. Member for Edinburgh South suggested that the role of adjudicator is on a par with the Governor of the Bank of England, but I would gently challenge that.
There is a difference between the confirmation and scrutiny hearings. Indeed, members of the Business, Innovation and Skills Committee already have experience of that difference in the slightly troubled scrutiny of the director of the Office for Fair Access, where the Select Committee played its role, but the Secretary of State none the less decided that the preferred candidate was the right person for the job. There are circumstances where it is appropriate for a Select Committee to take a view, but not necessarily to have a veto over a particular candidate. I hope that all hon. Members will accept that.
I am grateful to the Minister. I want to follow up on what my hon. Friend the Member for Ogmore said. It is striking that amendment 1 comes from the Chairman of the Business, Innovation and Skills Committee. Some Opposition Members may find amendment 62 rather strong. The Chairman of the BIS Committee is asking this Committee, through amendment 1, for the chance to have at least a look at the adjudicator.
Indeed. I echo the points made by my hon. Friend the Member for Mid Worcestershire. It is certainly up to Select Committees if they want to assert their authority, and the Business, Innovation and Skills Committee, in tabling amendment 1, has made clear its desire to be involved in the adjudicator’s appointment. Select Committees should be closely involved in the appointment of individuals to such positions by being able to summon them and ask them questions. Whether or not that means pre-confirmation hearings, I hope that whoever is appointed as the groceries code adjudicator will have a productive and close working relationship with Select Committees and be available whenever they are keen to see them for an update.
I want to tempt the Minister to go further. I think she has some sympathy at least with the spirit of the first amendment. The critical difference between that amendment and the approach taken by the former BIS Committee and the hon. Member for Mid Worcestershire, with his great experience, is that it is a clear and expressed desire of the BIS Committee to have pre-appointment hearings—not confirmation hearings. As my hon. Friend the Member for Edinburgh South said, it would be of benefit to the individual if in that pre-appointment—rather than post-appointment—hearing the Committee could validate, and say this is the right woman or man for the job.
I thank the hon. Gentleman for his intervention. I quite understand the distinction he draws between the approach outlined by my hon. Friend the Member for Mid Worcestershire and amendment 1. It would be helpful if I outlined to the Committee the procedure that is in place for making these decisions. It is a system that was agreed by the previous Government for working out and agreeing between Parliament and the Executive which public appointments would be subject to a pre-appointment scrutiny hearing. A document entitled “Pre-appointment hearings by Select Committees: Guidance for Departments”—a helpful title—was published by the previous Government in August 2009. The Government follow those guidelines.
Under that system the Secretary of State discusses and agrees with the Chair of the relevant Select Committee which appointments will have this kind of hearing and the Cabinet Office then publishes a list of those appointments. That current system works well and the Government do not think there is any particular advantage in formalising that process in legislation, and no real case for doing so in respect of individual roles such as that of the groceries code adjudicator. Obviously this is a role that did not exist back in 2009, and so it is important that those kinds of discussions can go on outside the list that has already been drawn up.
I sense that there may be some difference of view, which I hesitate to say given the unanimity on many points so far in the debate, on the importance of this post holder. The Minister is quite right to say that we would all agree that the post is not as significant in our national life as the Governor of the Bank of England. Nevertheless this post is very important to so many people. Could I draw her attention to the trade union perspective which is always worth listening to? The president of the National Farmers Union, Peter Kendall, said only last week:
“It is vital that parliament ensures the adjudicator is equipped with the full range of powers to do his or her job effectively.”
The reason I noted that comment was because he talks about Parliament rather than Government. That is critical here. Parliament has a vital role and that is why the Select Committee is so important.
I thank the hon. Gentleman. I do not think there is a difference of opinion about the importance of this role, except perhaps with the shadow Minister who places the adjudicator on the same par as the Governor of the Bank of England. But the hon. Gentleman accepts that there is a difference between those two roles and the place they have in our public life. The Government believe that this is a very important position, particularly within the grocery sector and those related groups such as the NFU, which is closely affected by everything that happens in that sector.
As set out in the letter from my predecessor, my hon. Friend the Member for North Norfolk, there are three criteria for determining which posts should be subject to pre-appointment hearings. The first are posts which
“play a key role in regulating Government”.
There has been general acceptance that that does not apply in this case. The shadow Minister attempted to make a tenuous link but I think he would accept that it does not apply. The second are posts which
“play a key role in protecting and safeguarding the public’s rights and interests particularly in relation to the actions and decisions of Government”.
Given that this is not about the actions and decisions of Government, that does not apply in this case. The third criterion is posts
“where it is vital for the reputation and credibility of the public body in question that the post holder is, and is seen to be, independent of Ministers and Government”.
That is where I think there is potentially some discussion to be had. I am happy to consider that issue and the arguments that have been advanced, but I just want to outline to the Committee why I think that there is a difference between this role and some of the other roles that have been mentioned. They include the Governor of the Bank of England, the head of the Office for Budget Responsibility and the head of the new Competition and Markets Authority.
Groceries code adjudicator is a very important role, but it is an individual office holder, focused on one particular sector and with a tightly defined remit within that sector, limited to enforcing the code that came out of the Competition Commission’s investigation. The powers of the post and its remit are significantly less broad than those of sector regulators such as Ofgem and Ofwat. The budget will be relatively small—about £800,000 in the first year—and there will be only a small number of seconded staff. It will have no direct impact on consumers or the wider public and has no constitutional role. It is a very important post in its sector. A comparison was made with, for example, the head of the CMA. The remit of that organisation applies across industries and it is about 50 times larger in terms of budget and staff, so there is a difference.
Does the Minister agree that the issue is not just the remit of the role in terms of breadth and so on, but the nature of the interests that the adjudicator will come up against? Those will be very powerful vested interests. We are talking about supermarkets. Those interests are hugely powerful, much more powerful than any one individual whom we here could give powers to, and therefore it is critical that we give this position as many teeth as possible. Like, I am sure, many other members of the Committee, I meet through my role many suppliers who just would not go to this person—even though it would be in their interest to do so—unless they felt that they really had teeth, because those interests are so powerful.
I thank the hon. Lady for her eloquent intervention. On the basis of that, I am sure that she will make a strong contribution to the House. She raises a very important point similar to that raised by my hon. Friend the Member for Tiverton and Honiton. He, too, outlined the importance of this individual being a strong person who can stand up to vested interests. There is recognition that this person needs to be able to command the respect of both supermarkets and suppliers. They need to know that this person will be fair, will have a good knowledge of the sector and will be an individual whom people can trust and have confidence in. That certainly is important.
I am sure that the hon. Lady does not mean to undermine the scope of this role, but just in case she is in any danger of doing so, I just want to point out that it is within a sector that is the largest employer in the UK. We are talking about food processing and food manufacturing, from the primary sector all the way through retail, manufacturing and distribution. It is the largest employer and one of the biggest economic contributors. If we get this right, the impact on consumers through efficiency in the supply chain will be massive, hence I suggest that there is a strong argument for something in the spirit of the amendments, even if the Minister just brings back something that would allow this appointment to be the subject of some predetermination by one of the Select Committees. I am thinking particularly of the BIS Committee, because of my comments on the importance of this to employment, manufacturing and growth.
I thank the hon. Gentleman for his intervention. He is right. I hope—I am sure that the record will show this—that I have not in any way undermined the importance of this position. It is also important that we do not over-promise in terms of what the groceries code adjudicator will be able to do, because this is about enforcing the groceries code, which is about supply arrangements. It is correct that there will be an indirect impact on consumers. After all, the Competition Commission found that there was consumer detriment as a result of the problems in the relationship between the big supermarkets and their suppliers. There was a lack of innovation, for example, which was leading to consumer detriment. However, that is an indirect link. The issues that the hon. Gentleman raises are more indirect, because this is about enforcing the groceries code.
I hear the arguments have been put forward. I am generally a great believer in transparency and the power of Parliament to hold to account not just the Executive but the role that it plays in our wider public life. That is very important, and I will consider very carefully the arguments on the third criterion—the independence of the adjudicator and the need for the adjudicator to be seen to be independent. While I do not think that there is a case for pre-appointment confirmation, I will consider whether pre-appointment scrutiny is something that Select Committees could do. I am not making any promises to the Committee, but I will consider that further. Perhaps we can return to this matter on Report.
I intervene only to be of assistance to the Minister and to seek some clarification. She heard the views expressed and showed once again that she is listening, but she does not want to over-promise. Is she suggesting that she may return with something of her own making on Report? We would be particularly content with that if it focused on the pre-appointment element.
I am not promising anything—I say that again—but I will consider those issues between now and on Report. Even if it is not in the form of an amendment—being overly prescriptive in a Bill is not necessarily helpful—I will look carefully at whether the issues raised on pre-appointment in terms of Select Committees can be resolved.
I thank the Minister for her helpful response. In the period between Committee and Report, will she seek counsel directly from the Chair of the BIS Committee to get his input on this? From his amendment, it is clear that there is a specific and explicit desire for his Committee to be involved in pre-appointment scrutiny.
In closing, I note that the hon. Member for Edinburgh South talked about a gift he gave to my predecessor, my hon. Friend the Member for North Norfolk. That set the standard, and it was not even near Christmas when that Committee concluded, so on the basis that I will consider the matter further, perhaps he will give me an early Christmas present by withdrawing the amendments.
Given the stereotype of a Scotsman, if the only present that I could give the Committee were withdrawing amendments, that would save the wallet a bashing, which is something that I would welcome at this time of year. The Minister said that she was feeling generous and in a good mood, but she would not accept the amendment. If she is not willing to accept amendments now, I fear for what will happen when she is in a worse mood and not feeling quite so generous.
Let me provide some clarity. In my contribution, I was not saying that the adjudicator would be at the same level as the Governor of the Bank of England or the chair of the Office for Budget Responsibility; I was merely highlighting that those two roles go to the Treasury Committee, a powerful Committee. More of a comparison can be made with the chair of the Competition and Markets Authority, and that similar role will go to a pre-appointment hearing at the BIS Committee.
The key to the two amendments—I agree with my hon. Friend the Member for Ogmore—is that amendments 1 and 62 are two sides of the spectrum, and somewhere along that spectrum there are points that could be looked at. That highlights some points made by the hon. Member for Mid Worcestershire. The very fact that the Chair of the BIS Committee tabled amendment 1 says that the Committee wishes to have a pre-appointment hearing, and also that it considers the adjudicator’s role to be worthy of its scrutiny. I do not think that the BIS Committee tabled such an amendment to the Enterprise and Regulatory Reform Bill with regards to the Competition and Markets Authority chair, so it must consider pre-appointment scrutiny of the adjudicator to be as important, if not more important than that.
The hon. Gentleman said, quite clearly, that the BIS Committee could call in the individual in any case, and any Select Committee that is doing its job properly in terms of scrutiny would do that.
Absolutely. The point has been well made that those Committees could do that. That is why I find it slightly strange that the Government will not accept at least amendment 1—just to put the pre-appointment hearing on the face of the Bill—not just for the sake of the very first adjudicator, but for any other adjudicator that may be appointed in the future.
Perhaps we could encourage the Chair of the BIS Committee to table, on Report, an amendment mentioning the EFRA Committee. I think we are discussing semantics now. The broad principle of allowing those Committees to carry out such scrutiny is quite clear.
If the Minister can assure the Committee that she will talk to the Chair of the BIS Committee, or, indeed, that she has already done so, that will certainly be a step forward. If it then transpires that the Minister has to table an amendment on Report, we would welcome that. We welcome the Minister’s assurances and the communications that will happen between her and the BIS Committee.
I aim to be of help to the Minister. She will no doubt have discussions on this issue between Committee and Report. Can I suggest to my hon. Friend that it would be of great help if the Minister were to share her considerations and any solutions she might propose in advance of Report? That way, we can consider them before we have to vote on them on Report.
The Minister has heard that request. If the request to the BIS Committee could be copied to members of this Committee that would be useful, and would give us the assurance that we require that both the BIS and the EFRA Committees are being properly consulted on this issue. Given those welcome assurances from the Minister, I beg to ask leave to withdraw the amendment.
We have started the Committee at breakneck speed, and are racing through the amendments; we have got past clause 1, that simple sentence setting up the adjudicator, and are now looking at some of the details of schedule 1.
This group of amendments is designed to give the adjudicator the independence they require. They need to be completely independent of Government influence. Under paragraph 9 of schedule 1, the adjudicator can make arrangements to second staff from
“the Secretary of State or any other public authority”.
Amendment 32 aims to dispense with any perception that the independence of the adjudicator might be curtailed through seconding staff. It is important that the adjudicator is completely free from any influence from the Secretary of State, and so we would like the secondment of staff from the Secretary of State removed from the Bill. The adjudicator ought to be able to appoint their own staff from wherever those staff are needed; that will not necessarily be by secondment of the Secretary of State’s staff.
Amendment 33 is to paragraph 11(2) of schedule 1, which allows the Secretary of State to appoint a deputy adjudicator. It is important here, as well, that we allow the adjudicator to make those sorts of decisions on their own, without reference to the Secretary of State.
Paragraph 11 applies only if both the adjudicator and the deputy adjudicator are unable to act because they have declared conflicts of interest. Does the hon. Gentleman really think it appropriate that somebody who has declared a conflict of interest should then appoint the person who will make a decision about the matter to which that conflict of interest is relevant? I do not; I think that the Secretary of State is probably the right person to make that appointment.
The hon. Gentleman makes a good point; however, we are trying, through these amendments, to make the adjudicator’s office completely independent. I appreciate what he says on conflicts of interest for the adjudicator and the deputy adjudicator, but we are looking at whether or not it must be the Secretary of State who appoints a replacement deputy adjudicator. Essentially, there must be a firewall between the office of the adjudicator and the Secretary of State to enable that office to operate properly; otherwise, quite rightly, retailers could suggest that any Government—not just this one—could have undue policy influence on the adjudicator’s office, when the role of that office is to referee the code. It would be clear at any point in that process if the adjudicator or the deputy adjudicator had a conflict of interest. I cannot foresee any circumstances in which that would happen, although the Minister may be able to provide some examples.
That reflects back to the first set of amendments, because such a conflict might be teased out at a pre-appointment hearing with the BIS or EFRA Committee. It is important for the adjudicator not only to be able to appoint the deputy, but to be in charge of the process. That would provide transparency and remove any concerns about conflicts of interest.
We witnessed a great deal of debate in the Growth and Infrastructure Bill Committee about the Secretary of State for Communities and Local Government sucking up powers, and we do not want this Bill to allow the Secretary of State for Business, Innovation and Skills to suck up powers away from the adjudicator. The adjudicator must be an independent body that can control what it wants to control, and surely it will be best placed to decide what is in the interests of the adjudication. I appreciate the hon. Member for City of Chester’s raising the matter, but I would have thought it wholly unlikely that both the adjudicator and the deputy adjudicator would have a conflict of interest. If the adjudicator felt that they had a conflict of interest they would pass something to the deputy, and vice versa.
Paragraph 11(1) states quite clearly:
“This paragraph applies if both the Adjudicator and the Deputy Adjudicator are unable to act in relation to a matter because of conflicts of interest.”
It applies only in that situation, even though it might be an unlikely one.
That is the point I have just made. It is very unlikely that both the adjudicator and the deputy adjudicator will have a conflict of interest. Will the Minister tell us whether the Department has modelled any circumstances in which that might be an issue? Although I appreciate what the hon. Member for City of Chester has said, the amendments are designed simply to tease out the independence of the adjudicator from the Secretary of State. This Bill and many others allow Secretaries of State to take powers as and when they want to, but it is important that the office of the adjudicator remains completely independent, and I hope that the Minister can assure us that that will be the case.
I thank the hon. Members who have tabled the amendments, which I take in the probing spirit in which they were meant. I agree that the independence of the adjudicator is important. Amendment 32 suggests that the adjudicator should appoint staff rather than relying on secondments, but I hope to reassure the hon. Gentleman that secondment has significant advantages over appointment. We intend that the adjudicator will have a pretty small office that carries out very specific functions, and we do not want the budget to become overblown with a large permanent staff. The advantage of secondments is that they give the adjudicator flexibility to increase or decrease resource quickly as the work load requires. The work load will fluctuate depending on the arbitrations and investigations that are taking place and the number of complaints that have been submitted to the adjudicator.
I am just wondering whether the Minister can explain which public body or intra-Government agency those staff are likely to be seconded from in different situations. As she has said, it will depend on the circumstances, but I am sure that she has some idea already where that core of three, four or five people will come from.
Absolutely, and there is a real advantage in the adjudicator’s being able to second staff who have specialist knowledge. The adjudicator will be able to bring in staff with the skill set or knowledge base that is relevant to each investigation. It is inevitable that the adjudicator will not have extensive knowledge of every part of something as large as the grocery sector, so bringing in people with the relevant expertise, where appropriate, makes a lot of sense.
That expertise can lie in a range of different areas, including the independent competition authorities, the Department for Business, Innovation and Skills, the Department for Environment, Food and Rural Affairs and other areas of the public sector. The shadow Minister said we would not want the adjudicator to rely only on the expertise of the BIS Department, and I quite agree. That is why paragraph 9(1) states:
“The Adjudicator may make arrangements with the Secretary of State or any other public authority for staff to be seconded”.
That means that a really wide range of people could be seconded, including from the sector regulators, which may have specific expertise. That will be very effective, particularly in short-term investigations.
There is a vital point about the expertise in a very small team and about the adjudicator’s ability to identify, seek and secure particular people. Under paragraph 9(1), the adjudicator can
“make arrangements with the Secretary of State or any other public authority”,
but who will argue for the adjudicator’s right to draw on those people, when—this is not a political point—all Departments and public bodies are, at this very moment and for the foreseeable future, under such stringent cost constraints that their heads are likely to argue to retain the best, most appropriate staff? Who will battle for the adjudicator?
That is a discussion between the adjudicator and the Secretary of State. It is certainly envisaged that there will be a close working relationship between the adjudicator and BIS, as the lead Department. The hon. Gentleman highlights a situation in which there could be a difficulty and some reticence. The adjudicator has a budget, which it will be expected to spend on staffing and other things, so it might be an advantage, where organisations’ budgets are stretched, for individuals to be seconded for a period to the adjudicator’s office.
It is also worth pointing out that this would be an opportunity for staff to gain additional experience in something a little different. They would return to their sponsor Department or public body enhanced by their experience with the adjudicator, so a secondment might be a personal development opportunity. There are therefore advantages to public bodies in complying, but, as I say, we will have a close working relationship with the adjudicator, and we will certainly be able to try to unblock any difficulties that may occur.
Let me reassure the Committee by emphasising that there is no intention that secondments will in any way compromise the adjudicator’s independence. Once somebody is seconded, they are under the direction and control of the adjudicator, not their home employer, so they are not there to do the bidding of the body they have come from. People can come from across the public sector, which reduces the possibility of independence being compromised.
That is helpful. This is the way Committees should work so that we can get real clarification. Paragraph 9(1) says:
“The Adjudicator may make arrangements with the Secretary of State”
—I will pause there for a moment—
“or any other public authority for staff to be seconded”.
Would such arrangements with the Secretary of State allow for secondments from a private sector organisation, such as the British Retail Consortium? My interpretation of the wording is that expertise would not need to be sought from within the Department, but from outside, including from industry.
I thank the hon. Gentleman for his question; he is quite right that it is important that the Committee can be clear about these things. It is not the intention that that expertise could come from a private sector organisation, and I can understand that there would be concerns if that were the case. I am happy to give the Committee that answer.
I appreciate that the best intentions in statute can amount to nothing. Will the Minister clarify the point, if not now, perhaps in writing? My interpretation of what she has just put on record is that the intention is clear: the expertise should not be from the private sector. However, my reading of paragraph 9(1) is that it actually allows for private sector firms to become involved in this area. That may or may not be a good or bad thing, but paragraph 9(1) says:
“The Adjudicator may make arrangements with the Secretary of State”—
I take out the bit about public bodies—
“for staff to be seconded to the Adjudicator.”
That would allow the Secretary of State to go to the British Retail Consortium, or to the National Farmers Union, or to the NFU Scotland, or whatever, and say, “Your person has got the expertise; we want to bring them in.”
I thank the hon. Gentleman for further probing this issue; I appreciate that he wants to ensure that there is clarity on it. I encourage him to look at the explanatory notes for the Bill, in particular paragraph 82 on page 15, which says:
“The Adjudicator is not permitted to engage staff but, under paragraph 9, may make arrangements for staff to be seconded by the Secretary of State or any other public authority. This would be on arms’ length terms and would be likely to be by agreement as to the identity of the individuals in question.”
As I say, I appreciate his expression of concern that there is not clarity on this issue, but I think that the explanatory notes provide further clarity on it. I am also able to give that reassurance to the other members of the Committee, but I have no problem whatsoever in writing further to members of the Committee to put that matter beyond doubt, if that would be helpful to the hon. Gentleman.
I am grateful to the Minister for giving way; there is still a good mood of generosity prevailing at this stage. My hon. Friend the Member for Ogmore has just raised the issue of where the adjudicator can second staff from. We are concerned about paragraph 17, entitled “Assistance from Office of Fair Trading”, although we did not table an amendment. There might be a slight conflict of interest for the OFT in the provision of staff, premises and facilities, given that it is the ultimate arbiter of competition in the sector, to the new Competition and Markets Authority. Does paragraph 9(1) allow the adjudicator and the Secretary of State to make secondments from bodies where there may be a conflict of interest but which are in the public sector? That concern is slightly different from my hon. Friend’s concern about the private sector; it is about possible conflict of interest in the public sector.
The hon. Gentleman makes a useful point. There is further information on page 16, paragraph 85, of the explanatory notes about the role of the OFT. That role is clearly intended to be helpful, particularly to the public purse, and the adjudicator could reduce costs by sharing premises with the OFT, again on arm’s-length terms and subject to the appropriate safeguards being in place to protect confidentiality, to avoid conflicts of interest and so on. The hon. Gentleman is right that it is important that any conflicts of interest are avoided, whether by the OFT or indeed any other body. In any secondment, we would want to ensure that safeguards were in place.
The fact that the appointments will be made with the agreement of the Secretary of State provides some accountability. It would be unhelpful to be more prescriptive within the schedule, because we would not want to have a situation whereby there might be a conflict of interest with one part of one body but a really excellent person could be seconded from another part of the body. We will avoid that problem, because safeguards can be put in place. We would not want to go further in the schedule, but the hon. Gentleman makes an important point about ensuring that things are done appropriately. Parliament can play a useful role in holding Government to account on any issues that arise. I hope that I have provided reassurance on the issue of the independence of the adjudicator’s staff.
Amendments 33 and 34 propose that the adjudicator should be able to appoint a deputy adjudicator rather than making a request to the Secretary of State. I appreciate that amendment 33 is a probing amendment, but we disagree on the issue. As my hon. Friend the Member for City of Chester pointed out, paragraph 11(1) applies only
“if both the Adjudicator and the Deputy Adjudicator are unable to act in relation to a matter because of conflicts of interest.”
We expect such a situation to be rare. We are keen to avoid conflicts of interest for the adjudicator or the deputy adjudicator, but it is worth ensuring that we have made provision if such a conflict did arise. On the rare occasions when there is a conflict of interest for one of those individuals, the other will be able to deal with the issue in question, but a conflict of interest for both individuals is not beyond the bounds of possibility. In that circumstance, it would be advantageous for the appointment to be made by the Secretary of State, because by definition, the adjudicator would have a conflict of interest.
Paragraphs 11(3), 11 (4) and 11(5), along with the explanatory notes, refer to an “acting Deputy Adjudicator.” The cause of the shadow Minister’s confusion may be that paragraph 11(2) refers to a “deputy Adjudicator”. Should that say “acting Deputy Adjudicator”, and if so, should that be added to the measure on Report?
I think that we are covered by paragraph 11(2):
“The Secretary of State must appoint a person to act as a Deputy Adjudicator”.
The phrasing—“to act as”—means that the person will be the acting deputy adjudicator. There is not a capital “A” in “to act as”, and I am quite a stickler for such grammatical issues, as my Department will attest—particularly around apostrophes. I think the phrasing fulfils what is required, but I welcome my hon. Friend’s eagle eyes, not only in spotting the flaws inherent in amendments 33 and 34 and expressing them so clearly, but in ensuring that we are covered for the rest of paragraph 11. The other advantage to the appointments being made by the Secretary of State in this scenario is that there is accountability to Parliament.
Again, this is on a point of clarification—it is helpful for the Minister to put her thoughts on record. We have begun to explore how the appointment of the adjudicator and the deputy adjudicator will be made; guidance is out there at the moment, and the Secretary of State will have oversight. In the appointment of the acting deputy adjudicator—or the deputy adjudicator in an acting position—would the same process apply? I ask because that relates to the time delay. The appointment would be in respect of a particular conflict of interest and a particular case that is being pursued, so will the Minister give us an idea of whether the same process would apply and what that would mean in terms of a time delay in pursuing that case?
The hon. Gentleman makes a good point. The rare situation that we are making provision for—and it is absolutely right that we do so—would be one where there is a requirement to take action quickly, because it would deal with one particular matter, as it is only one case where there would be a conflict of interest. We do not want a lengthy process that holds that up, as he rightly highlights. We would still want to ensure that we appointed the right person with the relevant skills and so on, but it would therefore be a quicker process. In relation to our discussions on a previous group of amendments that I endeavoured to go away and look at, I do not think that a full-blown process in quite the same way would be appropriate in such a circumstance.
Can the Minister again enlighten the Committee on what discussions she has had with her expert team on time scales? Would it be one month or three? Certainly not six months, I hope.
I would certainly not be looking at six months, nor do I think that we would want to delay for three. Equally, I would not want to be too prescriptive to the Committee. It is important that this is done properly, but swiftly, and if it took a month, that would be fantastic, but if it took six weeks, or if it could be done in a fortnight, that may be appropriate, too. In this rare occurrence, we would have to leave the matter to the discretion of the Secretary of State, acting on the recommendation that the adjudicator identified, and if there was a conflict of interest, that would need to be dealt with. If there was concern in Parliament about an undue delay or about something being rushed, I am sure that questions would be raised in BIS questions. If the matter was urgent, Mr Speaker has a tendency to be kind in granting urgent questions, so I am sure that there would be the opportunity for parliamentary scrutiny, if the time period that was used was not seen as appropriate. I hope that I have answered all the Committee’s questions on this group of amendments, and that I have provided the reassurance required to enable them to be withdrawn.
First, let me refer to staffing. We are reassured about private sector involvement and the Secretary of State’s ability to appoint.
On the Secretary of State appointing a new or deputy adjudicator when there is a conflict of interest, under clause 2, the adjudicator will appoint someone to arbitrate on such issues. Given that the Minister has said that that provision will be rarely used, I would hope that the Secretary of State’s involvement will be minimal, if not zero. We have discussed the adjudicator’s independence, and have been reassured about the appointment of staff and having a firewall between the adjudicator’s office and any other appointed office.
May I, through my hon. Friend, raise an important issue that has arisen from our discussions? The Minister has assured us that the use of secondments from the private sector is not the intention. I want to flag up for her attention the fact that there may be occasions when using a poacher turned gamekeeper is appropriate, and she may not want to rule out entirely independence outside the public sector and the Secretary of State’s gift. She may want to revisit that because sometimes, the best expertise lies with those who have been involved in the supply chain and understand where elements of mischief are perpetrated.
I suppose the best person to investigate a complaint is the skeleton that has been in the same cupboard. The Minister has heard the very good points that my hon. Friend the Member for Ogmore has made. We have been assured about conflict of interest, but closing the door on any organisation ever being part of the adjudication unit is a bad idea. We have had some superb and knowledgeable contributions from the National Farmers Union, Traidcraft, and ActionAid, which have all given evidence to members of the Committee. Someone who works for a large retailer may want to contribute to the adjudicator’s office.
I hear the point that the hon. Gentleman raises, but of course there are many occasions when people who have worked in the private sector subsequently work for regulators or in different parts of the public sector. We will still have the opportunity to access the expertise of a poacher turned gamekeeper when appropriate.