(1 year, 2 months ago)Read Full debate
I will not, because, as I said, I want to deal with the substance of the clause.
The Government are clear about our approach to getting in place a new free trade agreement and a partnership. However, there are several other flaws with the amendment. First, we have to bear in mind that the impacts of a no-deal Brexit will vary from sector to sector; it is not possible to determine exactly what they will be. For instance, we know that the sheep and barley sectors export quite a lot of their goods to the European Union. However, we are net importers in virtually every other sector, so although there may be an impact on sheep, there would almost certainly not be on beef, because there will be less import competition.
I do not think it is wise to put this proviso into the Bill. The reality is that, if the terms on which we left the European Union—be that with no deal or any other circumstance that led to restrictions on trade—led to a severe disturbance in the agricultural market, and if that disturbance threatened to have a significant impact on agricultural producers, the power is already there to act. We do not need to artificially bring a current debate around the customs union into a Bill that is built to last for the long term.
The issue in all those circumstances is less about the customs union and more about border inspection posts. That is why we have outlined in our approach a commitment to a common rulebook on those areas that require a border inspection, so as to reduce or even eliminate the need for border checks, and then an agreement on equivalence in other areas of legislation. So the border issue is less about customs.
Let me give another example. Scotch whisky is currently our most successful export, and yet it is always sold as a bonded product in an individual national market, because you have different alcohol duties in national markets, even within a single market. We already have examples of some of our most successful exporting sectors having no problem at all dealing with variable tax rates within a market.
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There are many successful economies in the world that are not in a customs union with the European Union.
I come back to my point: if as a consequence of the agreement—or indeed of there being no agreement—with the European Union, there are market disturbances that have an impact on agricultural producers, the power is there to act. There is no need to try to define additional powers in the way that this amendment does.
Amendments 117 and 123 seek to downgrade the test from a severe market disturbance to a significant market disturbance. It is wrong to lower the threshold in that way, for reasons I want to explain. We had evidence from one of the academics that suggested we needed something akin to the old deficiency payments system in that famous 1947 Act. The world has moved considerably since that point, and in many sectors we are seeing the development of viable futures markets to help farmers manage risk. In some countries—notably the US, in places such as Chicago—they put in place legislation to deliver the transparency needed to get a functioning futures market that enables farmers to defend themselves against price fluctuations.
We also have some interesting projects being developed in the UK. We are world leaders in issues such as agricultural insurance. There are some interesting projects on forming mutual funds—effectively, mutualised risk insurance models—that help farmers to insure their margin and protect a given quantity of milk, for instance, at a given price. Moving these powers away from just intervening where there is catastrophic risk, and away from a “severe” to some sort of “significant” disturbance, is the quickest way to snuff out the development of those private futures markets and risk management models.
We are adopting an approach to agriculture policy that is all around investing in farmers to help them reduce their costs to improve their profitability and to reward them for the work they do for the farmed environment. Part four, starting with clause 17, which we are debating now, is all about intervention powers in exceptional circumstances. We have deliberately not defined what those are because there should be a strong element of discretion here, and the Government have to be able to move, decide and act in an expeditious way to tackle a crisis.
The hon. Member for Darlington mentioned this morning what sort of circumstances these powers might be used in. Bearing in mind that they have largely been borrowed from existing EU provisions, we know when the EU has used powers of this sort. For instance, it was possible when we had the dairy crisis in 2015 and prices slumped for a long period during the latter part of that crisis, for the EU to fall back on these exceptional intervention powers to make grants and payments available to farmers to reduce their production. That is the kind of example where it would be absolutely appropriate to use these powers. However, there are other times when we have short-term fluctuations in the market, and when it would not be appropriate to use the powers.
If that crisis in a third country led to a market disturbance here that had an impact on our producers, then yes, the power is there to do so. There is wide discretion in how this power could be used. In practice, the reality here is that when we have a crisis, we know what will happen. The Minister of the day will have representations from Back-Bench MPs who have met their farmers and he will have to make a judgment about whether this warrants declaring that exceptional market circumstance and taking action thereafter to address it.
This is a wide discretionary power, but I am certain Parliament will be plugged in to advocating that we should declare this exceptional market circumstance and act. It is right we enable it to be a flexible power that can be used in emerging crises that we cannot yet predict.
No, I do not think we are. We are largely replicating what already exists. It is already the case that if there was a crisis in the US, and the US intervened but the European Union chose not to, there would be some disparity—
We should deal with the situation in our market. The test we should apply before acting is whether there is a severe market disturbance that affects our agricultural producers. We should not be worrying about what other countries happen to be doing.
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I do not accept that. We learned from the exchange rate mechanism crisis in this country that floating exchange rates work, and work for our economy. The ERM caused a deep recession in this country, and it was only by leaving it and allowing our currency to float and find its correct value that we saw that boom. We know that the existence of the single currency eurozone is throttling growth in countries such as Italy and Greece and causing massive unemployment, particularly youth unemployment. We know, too, that, since the referendum result, sterling has eased back against the euro, which has led to the biggest boost in farm incomes for more than a decade. In the two years since the referendum decision, farmers have benefited from the pound’s slightly softer rate against the euro.
On the amendments, I believe that the issues have already been addressed or that they seek to constrain or fetter the discretion in the power, so I hope that the Opposition spokespersons will not press them.
As you know, the Chairman never makes mistakes, but on this occasion I did. Because the debate on this group started when I was a young man, or before lunch, I proposed the question on amendment 46 before lunch, but when Jenny Chapman sat down, I also proposed the question on amendment 97. If you wish to press it, you may; otherwise, withdraw it.
Amendment proposed: 97, in clause 17, page 12, leave out lines 39 to 44 and insert—
‘(2) In this Part “exceptional market conditions” exist—
(i) there is a severe disturbance in agricultural markets or a serious threat of a severe disturbance in agricultural markets, and
(ii) the disturbance or threatened disturbance has, or is likely to have, a significant adverse effect on agricultural producers in England in terms of the prices achievable for one or more agricultural products, or
(b) if, on the day after exit day, the United Kingdom has not entered, or secured an agreement to enter, into a customs union with the EU.”—(Jenny Chapman.)
With this it will be convenient to discuss the following:
Amendment 82, in clause 20, page 16, line 2, at end insert—
“(2A) Regulations under this section may not amend or repeal any part of retained EU law (within the meaning of section 6 of the European Union (Withdrawal) Act 2018) relating to—
(a) the protection of the environment, or
(b) consumer rights.”
Amendment 83, in clause 20, page 16, line 17, after “section” insert—
“may only be made following a public consultation and”.
This amendment would ensure that there are checks and balances on the use of Ministerial powers and that Ministers may not make regulations that deviate from retained EU law without consultation with industry experts.
I will speak to amendments 82 and 83. As my hon. Friend the Member for Stroud said, this argument is to some extent a rehash of the arguments we made earlier when we insisted that the Government should deprive themselves of the ability to amend regulations on the protection of the environment or consumer rights, which are so exceptionally important and valuable to the country that ideally they should not be watered down, dispensed with or altered by Ministers without the use of primary legislation—it should not be done by regulation.
In amendment 82, we seek to safeguard any part of retained EU law relating to the protection of the environment or consumer rights. Clause 20 allows the Secretary of State to amend regulations relating to marketing standards, including the power to amend or revoke standards set out in retained EU legislation. That is quite some power. Current EU legislation pertaining to marketing standards will become retained EU legislation in section 6 of the withdrawal Act. The Secretary of State obviously understands that this is a significant power because even the Government have said that they recognise that they will need to use the affirmative procedure. However, he wants to be able to change the legislation whenever he sees fit.
The Government ought to be aware of just how extensive that power is, and that Parliament will want to be involved and concerned about how the power will be exercised in future. It is welcome that the Government accept the need for the affirmative procedure, but we ask that they accept safeguards in the Bill so that we can be confident that, as a consequence, environmental protections and consumer rights cannot be watered down—or at least that it will be difficult to do so.
We have not debated those important issues as much as others such as support for farmers. We do not want these important measures to be diminished in any way through lack of insufficient debate during the progress of the Bill. The measures were the subject of considerable concern on the Floor of the House during debates on the withdrawal Act. Committee members may remember that many amendments were tabled along the lines of the ones we are discussing. There was great frustration and suspicion that future Governments would be able, through regulation, to make changes to these important safeguards, which have been copper-bottomed up until now because they have been part of EU law, much to the irritation of some Members.
I can see the argument that Members will be pleased when such safeguards can be changed by this Parliament, but that needs to be done in the right way. It is no good saying that things are protected just because power resides in Westminster with the UK Government or in a devolved Administration.
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I am grateful, Sir Roger. We are all learning as we go. The teamwork that you see on the Opposition Front Bench is seamless, but it requires us to get up in the right order.
I accept what the Minister said. His undertaking on having a consultation is welcome, and I look forward to holding him to it. I remain concerned about the subject of amendment 82. I hear what he says, but we are at a turning point, and we must to start as we mean to go on. The point we are making to the Government is that we want these things to be done properly and as transparently as possible, with as much involvement of MPs as we can manage, because that is how we involve wider society in our deliberations. These are matters of intense importance and I would like to test the Committee’s opinion on amendment 82.
With this it will be convenient to discuss amendment
New clause 15—Mandatory labelling of animal products as to farming method—
‘(1) The Secretary of State shall make regulations requiring meat, meat products, milk, dairy products and egg products (including those produced intensively indoors) to be labelled as to the method of farming.
(2) The labelling required under subsection (1) shall be placed on the front outer surface of the packaging and shall be in easily visible and clearly legible type.
(3) Regulations under subsection (1) shall (among other things) specify—
(a) the labelling term to be used for each product, and
(b) the conditions that must be met for the use of each labelling term.
(4) Regulations under subsection (1) may exclude from the labelling requirement products containing meat, eggs, milk or dairy products where the total proportion by weight of one or more of these items in the product is less than fifteen per cent.
(5) Regulations under this section are subject to affirmative resolution procedure.”
This new clause would strengthen Clause 20 to require the Secretary of State to make labelling regulations that require meat, milk and dairy products, and egg products, including those which have been produced intensively, to be labelled as to farming method. Eggs are not included as legislation already requires eggs to be labelled as to farming method.
Do we not live in a time when the make-up—the ingredients—of products changes so rapidly that relying on previous knowledge of whether a product is safe is not good enough? People need to check virtually every time a product is purchased.
I endorse what my hon. Friend says about amendment 118. There are so many calls now for better labelling of food and more information that we run the risk of getting to the point where the information is in such tiny print that it becomes meaningless, particularly for people who, like me, have reached the age where their eyesight is not as good as it used to be. It is important that consumers get as much information as possible.
New clause 15 would strengthen the Bill by requiring the Secretary of State to make labelling regulations that require meat, milk, dairy and egg products, including those that have been produced intensively, to be labelled as to farming methods. Eggs are not included in the legislation because they are already labelled. Surveys show that eight out of 10 consumers in the UK would like to know how farm animals are reared.
The Government have a role to play in ensuring higher animal welfare. We talked about that in the context of public money for public goods and the definition of higher animal welfare that will come out in 2020, and on that basis farmers will be rewarded, but the market also has a role to play. Consumers only shop around for the higher welfare products if they know what higher welfare is and is not. That includes how meat and dairy products are being reared.
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As I said a moment ago, we are currently reviewing this. We intend to publish the results and our thoughts on how the law should be changed in this area early in the new year. We can make the amendments we need through secondary legislation. Obviously, because there is now a food safety issue, given the problem with allergies, once we have decided what is necessary we intend to move quite quickly.
New clause 15 relates to another important area. The Government have already signalled that we are keen to look at this issue further. Before addressing method of production labelling, I draw the attention of the hon. Member for Bristol East to subsection (2)(d) and (g) of clause 20. Paragraph (d) refers to
“the presentation, labelling, packaging, rules to be applied in relation to packaging centres, marking, years of harvesting”,
and so on, and paragraph (g) stipulates
“the type of farming and production method”.
Taken together, those two provisions already give us the powers we need to do all the things the hon. Lady is seeking to achieve with her new clause. Although this is an important area, and one that we want to look at, I do not think that this specific new clause is necessary. I hope that it is a probing amendment, given that the Bill already covers this in subsection (2)(d) and (g).
However, I would like to touch on the substance of the issue. The debate that we have had, with its many interventions—as I said, the hon. Lady is here to lighten the mood of the Committee—highlights how important this is, but also how complex. There are lots of descriptors: we have “grass-fed”, which is not necessarily the same as “pasture-fed”; we have “pasture-fed systems”; we have “outdoor-bred” pigs or “outdoor-reared” pigs; there is “organic” and “free-range”—and often those terms mean different things. It is quite an undertaking to try to define all those in one bound. Probably the more likely thing would be to pick something, such as “pasture-fed livestock”, just as we have done for free-range eggs, where we can draw the criteria and roll out these types of descriptors on labels as we are ready to do so effectively, rather than bite off more than we can chew. The regulations would enable us to do that, so we could bring in schemes as we were ready to roll them out.
Another slight complication is the nervousness I have always had about going too far down the line on method of production labelling, because there could be unintended consequences. For example, at the moment there is a substantial market for outdoor-reared bacon, because people look for that on the packet. They are less inclined to do so if they are buying a pork pie, for instance. Some manufacturers of pork pies might buy from high-welfare farms parts of the carcase that are not used for bacon and that are maybe outdoor bred, but they might also buy pigs from other, more commercial producers.
We have to be careful that, by having onerous labelling requirements for some of those sectors where people are less inclined to seek out the descriptor, we do not create an unintended barrier to high-welfare producers accessing the market for parts of the carcase that they would not necessarily market on the high-welfare brand. I am attracted to moving in that direction, but there are complexities and difficulties around the definitions and potential unintended consequences. I hope that the hon. Member for Bristol East will agree that the intentions behind her new clause are already reflected in subsection (2)(d) and (g) of clause 20.
I beg to move amendment 56, in clause 22, page 16, line 30, leave out “to the Secretary of State”.
See explanatory statement for Amendment 59.
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That is certainly possible, and my proposal would allow for that possibility. Amendment 10 is odd; it is not clear why there should be no legal form defined for an entity in legislation. I hope the Minister can clarify.
I will not say very much; I just want to echo some of my hon. Friend’s points. I was involved with the withdrawal Act, and today I have been reading the latest common frameworks document, which was released earlier today. A lot of it is about agriculture and the progress that has been made on agreeing frameworks for the UK after we leave the EU. It says:
“Further detail on the specific arrangements that are subject to ongoing discussion in relation to agricultural support is available online.”
Unfortunately, the detail is not in that document, so I have not had a chance to look at it. It is important for the Minister to indicate where the Government are at with this to inform how we proceed on these issues.
I have a few more questions about that. Our deliberations about devolution issues took place on the Floor of the House, so many hon. Members here might have taken part in them. Devolution is very contentious and important, and every now and again it is used to make points not directly related to the issues under consideration. I have a few questions about how the amendments might work and what the Minister thinks of them, because I have some concerns about them.
The Labour party is fairly relaxed about the approach set out in amendment 59. We can see the logic behind it, but we would like to ask the Minister and the hon. Member for Edinburgh North and Leith how they see it fitting with the ongoing negotiations about the establishment of common UK frameworks. That is the document that I have just referred to. Where are we? This is a moving thing, and the Minister is asking us to make decisions about a process that is still incomplete.
Amendment 60 works in conjunction with amendment 59, and seeks to remove the role of the Secretary of State and replace him with
“the appropriate authority to which an application is made under this section.”
I assume that it is consequential, given that amendment 59 seeks to redesign the process by which an application is made. Again, we are reasonably relaxed about that.
Amendments 60 and 61 seek to ensure that Scottish Ministers have the ability to grant consent to applications made to become a recognised producer organisation. What effect do the Minister and the hon. Member for Edinburgh North and Leith see that having in practice? How would it actually work? The Labour party is not stuck on this; we do not mind it. In truth, and I hope the hon. Lady does not take this the wrong way—I say this as a neutral observer representing a town in the north-east—these amendments look a little like politicking, rather than serving a true purpose. Can she assure me about what impact the amendments would have on the capacity of Scottish Ministers to process applications?
Amendment 64 is unfortunately a bit problematic, as it goes further than the devolution settlement currently allows. I am not trying to be provocative. I do not want to get into somebody else’s fight. The sticking point, if I have understood the amendment correctly, is that it seeks to ensure that the consent of Scottish Ministers is required for all regulations under sections 22 and 23, which extend to Scotland. As I understand it currently, the devolution settlement from the Scotland Act 2016 says that Westminster will not normally legislate in areas where the Scottish Parliament has competence. Admittedly, the Government have not shown great respect for that principle with the passage of the European Union (Withdrawal) Act 2018 and, as noted previously, this is not an area where the Scottish Parliament or Scottish Ministers currently exercise competence. If that is correct, the amendment would go further than the devolution settlement does at the moment.
The word “veto” has been overused in these debates in the past, but given the contentious relationship—if I can put it that way—between the UK Government and the Scottish Government at the moment, I am raising a concern and would be interested to hear what others feel about this. Were amendment 64 to be agreed, the Scottish Government could refuse to grant consent for provisions that relate to Scotland, which would be in the vast majority, given that the amendment covers the UK as a whole. Then we could be in a constitutional deadlock, which is not something that anybody wants to see. This process is all about avoiding that.
Officials in the Scottish Parliament are quite clear that they are committed to not diverging in ways that would cut across future frameworks and they agree that this is a necessary approach to take. I do not want to see anything that we might agree here interfering with other processes. The important people in all this are the Scottish farmers and producers, and I cannot help thinking that they would be looking at this and wondering where they stand.
I would like the hon. Member for Edinburgh North and Leith to clarify whether this amendment is seen as consequential to the others that she has tabled, as this is not an area where the Scottish Parliament or the Scottish Government have jurisdiction, and therefore consent would not currently be required when regulations are made. I am not trying to be provocative or to insert myself in the middle of an argument between the Government and the Scottish Government, but we need to be mindful of the potential impact that any row might have on the lack of support for producers in Scotland, because they need to come first.
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There are lots of other conditions. Subsection (2)(e) requires that the constitution of the organisation meets certain requirements. There are other such provisions as well, so we do not have to define them as a body corporate in law in order to have express conditions that mean they would all be jointly and severally liable were something to go wrong.
I can tell the hon. Gentleman about that. I have had experience of the EU scheme in the past and there have been instances where, for instance, some growers have said to me that they would like to come together for a purpose other than just marketing, and they would like the freedom to be able to do that. That is quite restricted in the new scheme. On the amendments, the representations came from Co-operatives UK. After we published the Bill the co-ops told us that some of the provisions were unnecessarily restrictive and might stop some of their members from being able to have a recognised body for the purposes of clause 23, so we responded to those representations, which made salient points, and we were happy to acknowledge them and table the amendments.
Amendment 9 agreed to.
Amendment made: 10, in clause 22, page 16, line 39, leave out paragraph (d).—(George Eustice.)
This amendment removes the condition for applying to become a recognised producer organisation relating to the legal form of the organisation.
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This will be the last bite of the cherry, but if the hon. Member for Edinburgh North and Leith wishes to move amendment 62 I will allow her to do so. I do not think it is going to add greatly to the scheme of things.
Recognised organisations: competition exemptions and further provision
Amendment proposed: 62, in clause 23, page 18, line 30, leave out “the Secretary of State” and insert
“an appropriate authority (within the meaning given in section 22(11))”.—(Deidre Brock.)
This amendment would require the delegation of functions to require permission from the appropriate authority (as set out in amendment 61).
I can give the hon. Gentleman that assurance. We have been in discussion with Co-operatives UK, which raised the issue about eligibility and the fact that the requirements for a corporate body and to have all members from one sector could affect some co-operative working. We listened to that and addressed it.
I do not think that there is a spill-over of that problem—for want of a better term—in schedule 2, because that schedule is essentially all the technical clauses needed to disapply what competition lawyers call “the chapter 1 prohibition”. In essence, schedule 2 determines and sets out in some detail the process by which producer organisations can come together to collaborate and co-operate in a range of areas and co-ordinate their activities in a way that would otherwise be considered a breach of competition law.
In particular, paragraph 9(1A) of schedule 3 to the Competition Act 1998 lists activities such as planning production, optimising production costs, concentrating supply, placing products on the markets and negotiating supply contracts. Schedule 2 gives licence to a recognised producer organisation to do all those things and to disapply those elements of the 1998 Act.
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My understanding is that that is effectively an anti-avoidance provision to stop people from being members of several co-operatives and having a genuinely dominant market position that goes above and beyond what is envisaged by producer organisations. Under the current EU scheme, one producer organisation can have a market share of up to 33%, but if there were overlapping producer organisations, it could create market distortion. My understanding is that the provision seeks to address that.
In conclusion, I am a huge supporter of bio groups, co-operative working and collaborative working. We all know that one of the challenges we face in the agricultural industry, as we think about the future, is that it is sometimes a fragmented sector and sometimes does not have the clout it needs in the market or the ability to do joint collective buying to get those costs down. We want to facilitate collaborative working; this part of the Bill and the particular schedule that the shadow Minister has raised go some way to addressing that.
There is already national competition law set out in the Competition Act 1998, enforced by the Competition and Markets Authority. In the past, for instance, that famously led to the break-up of Milk Marque, which led to the situation we have today. There have been instances of that in the past under existing national provisions on competition law. I know the hon. Gentleman said he might come back to this on Report; I am happy to give an undertaking to look at this issue further and explain in further detail exactly what each of those clauses delivers. The clause that my hon. Friend the Member for North Dorset mentioned is an anti-avoidance clause—[Interruption.]
Yes. My understanding is that we have addressed the issues he has raised about the schedule, which are linked to the concerns that Co-operatives UK raised, through our earlier amendments.
Schedule 2 agreed to.
Regulations under sections 22 and 23
Amendment made: 12, in clause 24, page 19, line 7, after “unless” insert “section 29(4A) applies or”—(George Eustice.)
See the Explanatory Statement for Amendment 2.
Clause 24, as amended, ordered to stand part of the Bill.
Fair dealing obligations of first purchasers of agricultural products
With this it will be convenient to discuss the following:
Amendment 93, in clause 25, page 19, line 22, leave out “the first”.
This amendment would extend the fair contractual dealing provisions of Clause 25 to all purchasers of agricultural products through the supply chain.
Amendment 112, in clause 25, page 19, line 22, after second “of” insert “all”.
This amendment would ensure that powers to introduce sector-specific codes are not confined to certain sectors (i.e. not only those where voluntary codes have been unable to significantly improve contractual relationships) but to all sectors.
Amendment 65, in clause 25, page 19, line 23, at end insert—
“( ) Regulations under this section containing provision that extends to Scotland may be made only with the consent of the Scottish Ministers.”
This amendment would require that regulations containing provisions that extend to Scotland may be made only with the consent of Scottish Ministers
Amendment 94, in clause 25, page 19, line 24, leave out “the first”.
This amendment would extend the fair contractual dealing provisions of Clause 25 to all purchasers of agricultural products through the supply chain.
Amendment 66, in clause 25, page 20, line 24, at end insert—
“( ) Before making regulations under this section, the Secretary of State must consult persons—
(a) who are representative of—
(i) producers of, or
(ii) first purchasers of,
the agricultural products to which the regulations will apply, or
(b) who may otherwise be affected by the regulations.”
This amendment would ensure that before making regulations the Secretary of State be required to consult with representatives of the producers and first purchasers.
Amendment 95, in clause 25, page 20, line 28, leave out “first”.
Amendment 111, in clause 25, page 20, leave out line 30 and insert—
(a) an individual producer within or outside the United Kingdom,
(b) an entity within or outside the United Kingdom which sells agricultural products after they have been aggregated from more than one producer, and
(c) a business within or outside the United Kingdom operating a packhouse;”.
I hope to be fairly brief. I will address amendment 111 first, because it links directly to amendments 93 and 94. In the event that amendments 93 and 94 are unsuccessful, and therefore the fair dealing measures in the Bill cover only the relationship between a farmer and the first buyer, amendment 111 has been tabled to address a potential unintended consequence of imposing these obligations on first purchasers, namely that producers who act as aggregators for their neighbours could potentially be classified as purchasers.
It is common practice here and overseas that if one producer has the infrastructure, skills or time, they may collate the produce on behalf of local farmers. A farmer with a big barn or storage facility may aggregate apples in a packhouse for neighbouring growers in his or her part of Kent or East Anglia. A bean grower in Kenya may do the same for neighbouring farmers. Amendment 111 ensures that those aggregators will still be classed as producers, and that they are then within the scope of protection.
Amendment 112 is about the sector-specific statutory codes. We have been told that they will initially be introduced in sectors where voluntary codes have been unable to significantly improve contractual relationships. I know that in evidence it was suggested that dairy would be the first sector to have the code applied, because it is seen that the current arrangements are not working that well. There is concern that certain sectors will have priority and that the Government will never get around to actually bringing other sectors into the scope of the statutory codes, for example for the fruit and veg sector. There would then be powers to support fair purchasing in the dairy sector, but not other sectors. Amendment 112 is simply about ensuring that the codes are not confined to certain sectors but apply to all sectors. I have lengthy notes on the rest of it, but I think I will leave it at that.
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Although it might do so in a different way, it relates to competition law and is not an exemption from the chapter 1 requirements that we discussed earlier. The hon. Lady has not complained about the Groceries Code Adjudicator, which is administered on a UK basis and operates UK-wide; nor has she raised huge concerns about the way that the EU has always approached those matters, which is that they are a UK-wide competency and that switching on elements of the milk package is a UK decision and can be done only on a UK-wide basis. I hope that I have addressed the issues raised by the hon. Member for Edinburgh North and Leith about the role of Scotland in this reserved matter, and reassured the shadow Minister and the hon. Member for Bristol East that their amendments are unnecessary since they are provided for in part 2 of schedule 1.
We move on to amendment 86.
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No. I am sorry. We have taken the vote on the lead amendment. Well, to be more exact, we have taken a vote on another amendment.
With this it will be convenient to discuss amendment 87, in clause 25, page 20, line 9, at end insert—
“(aa) for an investigation to be launched where there are reasonable grounds to suspect that there is non-compliance;”.
This amendment would provide for investigations to be undertaken under the fair dealing obligations provided by Clause 25 where there are reasonable suspicions, but no complaint has been made.
The amendments are linked to a common sentiment that we hear from farmers. There is no doubt that a number of people will say that they fear reprisals, consequences of being delisted or losing business if they were to complain. That has been recognised for some time. That is why we made changes early on to the remit of the Groceries Code Adjudicator, to enable her to receive complaints anonymously and pursue investigations when she had reasonable cause to believe there was a problem with a particular supermarket, and indeed to allow a trade body such as the National Farmers Union to pass on intelligence about the conduct of a particular supermarket that could inform an investigation. Even within the GCA, which is predominantly a complaints body, we have found the scope for anonymous whistleblowing and for third-party organisations to pass on concerns.
I draw the hon. Gentleman’s attention to subsection (5)(a) and (b). The specific issues he raises can be addressed through regulations. Subsection (5)(a) makes provision for regulations
“for complaints relating to alleged non-compliance to be referred to a specified person”.
And, crucially, subsection (5)(b) states
“as to how those complaints are to be investigated and how an allegation of non-compliance is to be determined”.
It is absolutely within the powers set out in subsection (5) for us to introduce regulations that would guarantee anonymity and enable complaints from third-party organisations, when they can hand on intelligence or create the scope for a regulator to investigate, when there is reasonable cause to believe there is a problem. I hope the hon. Gentleman will recognise that we think the particular issue that he seeks to address in amendment 86 is already provided for in subsection (5)(a) and (b).
Finally, although we hear a lot about this, Christine Tacon from the Groceries Code Adjudicator says that one of the most powerful things that can be done is for people working for processors and dealing with supermarkets to have assertiveness training, because we can put in place all the right regulations and have all the abilities in the world for people to report things anonymously, but there is a point at which people have to take responsibility and be willing to say to a supermarket buyer, “You know I cannot agree to that, because it is a breach of the code and what you are asking me to do is in breach of the law.” She said that when the GCA has placed people from those organisations’ sales teams on to assertiveness training, they have learnt how to use the code themselves without having to always run to her for an intervention.
As I said, the GCA already has the powers to receive complaints anonymously and to investigate, where she has reason to suspect a breach of the code. That is already in place.
My point is not that this is not a legitimate issue—of course, as I said, the regulations can provide for anonymity—but that at some time we need people to have the confidence and courage to say, “I will not agree with that. It is against the code—you know it’s against the statutory code—and you shouldn’t be asking me to do it.” For such things to work properly, we need the farmers and sellers also to hold people to what is a legal requirement. They can play their part and, where they are willing to do so, that can make all the difference.
Amendment 87 is similar—it is about being able to launch investigations when there are reasonable grounds to suspect non-compliance, rather than when there is a complaint. Again, we believe that we can provide for that. It is important to note that whatever is set out as a legal requirement in clause 25(3) will be a legal requirement whether or not there is a complaint. Subsection (5) deals predominantly with complaints and how they are handled, we do not envisage the body as simply a complaints-handling one; we see it as an enforcement body that will enforce all the legal requirements introduced under the Bill, specifically clause 25. It will not only handle complaints and pass them on.
Break in Debate
The clause provides quite strong powers, including those to impose penalties for non-compliance on the first purchaser of agricultural products. If such a first purchaser happens to be a major retailer— perhaps one not currently covered by the groceries code, because it is below a certain threshold—it will be covered by the Bill. By addressing the problem from both ends of the telescope, we have a workable solution that means we can really deliver for the interests of farmers while not losing the successes of the Groceries Code Adjudicator model.
Having given that reassurance that the issues raised by the hon. Member for Stroud in amendments 86 and 87 can already be addressed through regulations under subsection (5), I hope that he will accept it and withdraw his amendments.
I thank the hon. Gentleman for his praise—as praise indeed it was—but, unlike him, I am happy with the Minister’s response and I shall be voting with the Government.