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Clause 8 - Investigations: enforcement using requirements to publish information

Groceries Code Adjudicator Bill [Lords] – in a Public Bill Committee at 4:00 pm on 11th December 2012.

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Photo of Ian Murray Ian Murray Shadow Minister (Business, Innovation and Skills) 4:00 pm, 11th December 2012

I beg to move amendment 43, in clause 8, page 3, line 9, at end insert—

‘(d) where it is to be published.’.

We are now moving at breakneck speed through the Bill as we get to clause 8. This is a very straightforward amendment that seeks to make it clear to the large retailer that when the adjudicator puts forward a punishment of naming and shaming the adjudicator can ensure that the punishment fits the crime, and is able to specify where those naming and shaming advertisements or publications should go. Naming and shaming is an important tool, now that the ability to fine will be on the face of the Bill. Naming and shaming will allow the adjudicator to make recommendations but then escalate the matter It should be an effective deterrent, but it must be a proper deterrent. We could be in a situation whereby, according to the Bill, the  adjudicator suggests that naming and shaming would be a proper punishment and the retailer, as specified in the explanatory notes on pages 8 and 9, is permitted to fulfil this naming and shaming requirement

“by press release, through the large retailer’s annual report or website, or through a newspaper advertisement.”

Let us bear in mind throughout the debate on the following clauses that the retailer has already been found guilty in one fashion or another, and so, looking at the remedies that will be put in place, we set aside the fact that the large retailer may not have been guilty or had inadvertently breached the code. I can see a situation whereby the adjudicator finds a large retailer guilty and says, “We will name and shame”. The wronged supplier could be Bob, it could be Ian, or any of the other hypothetical circumstances we have heard today. The adjudicator says, “You have breached the code, and therefore you will publish the breach on your own company website or on page 134 of your annual report.” That, in terms of natural justice, would seem slightly inappropriate for the breach that had occurred. What would stop the retailer from publishing the naming and shaming in the trade magazine, which will not really have any effect on the retailer? Or indeed let us imagine—a bit like “Have I got News For You”—the naming and shaming being published in some other publication related to the industry, but which has a very small circulation––page 17 of Tea Cosies Monthly perhaps. I know the hon. Member for Sherwood raised this on Second Reading to make sure that the remedy in place is indeed a punishment that fits the crime. Therefore, our amendment seeks to give the adjudicator the power to determine where it is to be published.

It could be that the retailer would have to pick up the costs of publication on page 7 of a Sunday newspaper with a large circulation. The adjudicator may suggest that the breach is so severe that, rather than moving to a fine, they would prefer the retailer to place a very prominent advert with regard to the breach in a newspaper or publication with a circulation of a certain size. That would allow for the retailer to be properly named and shamed. The only way naming and shaming will work as a proper punishment is if the supermarket feels that its reputation may be damaged by taking a course of action with a supplier that breaches the code.

This is a very straightforward amendment that the adjudicator may or may not use, but there may be severe circumstances when the adjudicator says, “Yes, there has been a breach and yes, we will take this forward to a certain size of circulation and a certain publication.” I hope that the Minister will support this sensible, straightforward, beautiful and simple amendment.

Photo of David Simpson David Simpson Shadow DUP Spokesperson (Communities and Local Government), Shadow DUP Spokesperson (Business, Innovation and Skills)

The Northern Ireland consortium of retailers has indicated that the retailers in this clause should have the full right of appeal for naming and shaming. What is the Member’s view on that?

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

That is a good intervention and something that the Minister may want to respond to. The British Retail Consortium raised exactly the same issue. Now that fines are in the Bill, there will have to be a legal mechanism for appealing, because of the financial element.  I would hope that the adjudicator, when coming up with a remedy of naming and shaming, would take into account the impact on the business, when determining the specifications to be put in place. I am unconvinced of an appeal to naming and shaming. The nature of appealing would probably put the matter into the public domain in any case, and may therefore be counterproductive.

The adjudicator must have the powers to say to a retailer, “You have breached the code, and that breach is of a severe enough nature for me to escalate this to a naming and shaming. Furthermore, you will not be on page 53 of a regional newspaper that only covers the north-east of Scotland when the breach happened in the south-east of England. I will make sure that you are properly named and shamed in a publication with a circulation that benefits that particular crime.”

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 the amendment and recognise the intentions behind it. I think we share the objective of making sure that the adjudicator is able effectively to name and shame so that is a real power that will deter retailers from breaking the code and encourage them to behave well. The requirement to publish is an important part of naming and shaming, so making sure that the adjudicator can specify how that is done is important. Where we differ is whether the Bill already achieves that, and I think it does. Clause 8(2)(b) lays out that the publication requirement is imposed by giving written notice to the large retailer specifying how it must be published. That gives the adjudicator the power that the shadow Minister seeks to introduce to decide when, where and in what place the information is published, so that it can be as effective a sanction as possible. He mentioned that we would not want things to be on page 7 of Tea Cosy Monthly or other publications we were unaware of until we watched “Have I Got News For You”. I think his bid to be one of the panellists on that programme has been well heard—we will look forward to his appearance, no doubt.

The information could be published online, in the national trade press, on retailer’s websites or in annual reports, and as he rightly outlined, it will be different depending on what the breach is. The adjudicator is best placed to specify; if it is a very serious breach, it may well be that national newspapers are the right place, or even on the homepage of the retailer’s website. If it is a more minor breach, it may well be that something in specifically trade press would be appropriate, but that is entirely up to the adjudicator to determine. In order to give the Committee some further reassurance on this, I draw attention to paragraph 44 of the explanatory notes on clause 8. It says:

“The Adjudicator will need to inform the retailer in writing of the information required to be published, the manner in which it must be published and the time by which it must be published. For example, the Adjudicator could require publication by press release, through the large retailer’s annual report or website or through a newspaper advertisement. The information could then be taken into account by those dealing with that large retailer in future.”

Photo of Ian Murray Ian Murray Shadow Minister (Business, Innovation and Skills) 4:15 pm, 11th December 2012

I do not want to sound as if we are getting into very detailed semantics, but the word “how” it must be published and indeed the explanatory notes can be read in the way the Minister is kindly giving us,  but it does not necessarily say where it should be published. Therefore, it could quite easily be argued that the adjudicator could state the manner and time scale in which it needs to be published, and say that it must be published through a newspaper advertisement, but that newspaper could be the Press and Journal in Aberdeen. The circulation of that particular newspaper would not properly name and shame the retailer.

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

That would certainly be complying if that was what the adjudicator wrote in their letter or e-mail to the retailer. If they said that it must be published in a newspaper, it would be complying with that if they published in the Press and Journal. If they wrote and said it must be published in The Times, The Independent, and the Daily Mail then—

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

Indeed. I do not wish to offend any other newspaper titles by not reading them out, so we will just assume for completeness that it could be any or all of the national newspapers. If those were specified in writing in the notification, obviously publishing it in the Press and Journal would not be compliant with that direction from the adjudicator. This is about the adjudicator having the ability to specify.

There is also the point that was raised by the hon. Member for Upper Bann. As well as the adjudicator having discretion over where the retailer should publish the information, it is important that they would have to be reasonable and proportionate when exercising that discretion. They would need to take into account the facts of the investigation that they have just undertaken, how serious the breach is, and the other issues that the hon. Member for Edinburgh South raised, such as the geographical location of where the breach occurred. That would be something else to take into account when deciding where would be appropriate to require that publication.

Regarding the query raised about the appeal mechanism, I can confirm that the Government do take the view that, although introducing fines would require a full merits right of appeal, these other sanctions would not, and they would retain the judicial review method for challenge, as is in the Bill.

Photo of George Eustice George Eustice Conservative, Camborne and Redruth

One of the points made was that there may be a situation where the adjudicator would insist on a supermarket taking out a paid advert in a newspaper. Will the Minister clarify whether that is something that she envisages, or are we really talking about press releasing it nationally? I would be quite concerned about an adjudicator having a favoured newspaper, such as the Sunday Times, for such adjudications in paid advertisements.

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 feel that the explanatory notes do make it clear when they say:

“The Adjudicator could require publication by press release, through the large retailer’s annual report or website or through a newspaper advertisement.”

It could well be through an advertisement. There is an advantage to that, as opposed to doing it just through a press release. Often, there is a desire to do that in addition. I am certain that when breaches occur, campaign  groups will be keen to ensure that there is significant media coverage of the findings, which is quite appropriate. One of the best tools to encourage compliance is not just the advertisement, but the general news stories, and it is unlikely just to be news stories. I can imagine circumstances in which there would end up being discussions. As I think I mentioned on Second Reading, campaigning that I have done previously has involved things being referred to the Advertising Standards Authority. When it has banned adverts, the media coverage has been very extensive and has included public phone-ins and all sorts of discussions. That is why the naming and shaming and the requirement to publish information can be very important and powerful.

The point to make to my hon. Friend the Member for Camborne and Redruth is that it would be noted if, on every occasion, there was one favoured newspaper. I am sure that questions would be asked. We would be encouraging the taking of action in a proportionate and reasonable way, so it might well be that certain publications would be more relevant and appropriate than others. I am sure that the adjudicator would not wish it to look as though they were biased towards a particular type of publication, but would want to show that they had thought carefully about the appropriate ways in which publication should take place.

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

The Minister is being admirably detailed in her response to the amendment. It seems, from what she is saying, that there will be specification of what information will be published, how it will be published, the time by which it will be published and, according to the interpretation of the explanatory notes, where it could be published as well. I appreciate that specific detail that the Minister has given. Why is this different from the previous discussion that we had? The Minister thought that it would be too prescriptive to articulate a time period for compliance when we were talking about clause 7. What is the difference?

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 do not think that there is a difference. I said that the adjudicator can mention a time period for compliance if they choose to do so, but that would not always be appropriate, so I would not want to force the adjudicator to do so. It is fair, if they are naming and shaming, that they are clear to the retailer about what it has to do in order to have complied. That is the difference. A recommendation may well not have a time attached to it, but if information is to be published, that clearly does need to have a time attached to it. As I think I mentioned—I appreciate that we slightly disagreed—it may often be helpful to attach a time frame to recommendations, but we want to ensure that there is discretion where that is not necessary.

Ian Murray rose—

Huw Irranca-Davies rose—

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

In looking at this amendment, the Minister has explained the position in detail. Her interpretation is that the issue is covered under clause 8(2)(b).  Can I ask that she brings forward her own amendment, which would refer to how “and where” the information had to be published?

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

Although the hon. Gentleman tempts me, I think that there is sufficient clarity in the Bill at the moment. The explanatory notes are very clear, and the position is explained. However, I have of course listened to the point that he has made and, as is the case with all the discussions that we have in Committee, I will be happy to reflect on the points that have been raised as we move from Committee to Report.

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

I cannot understand why the Minister will not insert the words “and where” if there is some confusion about the Bill. If she is saying that the adjudicator can say to a retailer that has breached the code, “You will publish a newspaper advertisement on Sunday 12 January 2013 in the Kirkintilloch Herald”—

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

It is. If the Minister is saying that that is indeed the purpose of the clause, I cannot see why she will not insert the words “and where”.

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 his intervention. He will have heard me tell the hon. Member for Ogmore that I will think about these issues as we head towards Report stage. I think he should be satisfied with that, but we can always return to this discussion on Report if he is still unsatisfied. With that, I encourage him to withdraw the amendment.

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

Given that I sense a moral victory, if not a victory on the amendment, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 8 ordered to stand part of the Bill.