Groceries Code Adjudicator Bill [Lords]

Christopher Chope Excerpts

Tuesday 26th February 2013 Commons Chamber

[Philip Davies]

I am grateful to the hon. Gentleman, but again, I do not want to get on to parts of the Bill that are subject to amendments in future groups, so I will resist that temptation.

Supermarkets can operate properly only with the good will of their suppliers. There are often cases in which, for example, a supplier has a problem at short notice—we have seen that recently with the issue of horsemeat. Things have to be taken off sale at short notice and production dries up quickly. That happens when foreign bodies are found in certain products, which have to be taken off the shelves. A supermarket can operate only if it then has other suppliers that it can go to and ask to fill the void at short notice. It goes to another supplier and says, “We’ve got some empty shelves and a lack of supply. Can you come and help us out?” Do people really think that the supplier would help out a supermarket chain that was trying to bankrupt it or screw it into the ground? Of course it would not.

My hon. Friend the Member for Sherwood made the point that the limits in my new clauses may impede small business at some point in future. However, new clause 2 specifies a turnover of £1 billion a year, and all I can say is that, my word, supermarkets must be a force for good if they can turn small and medium-sized enterprises into firms with a £1 billion-a-year turnover. That should be something to celebrate, not to criticise supermarkets for. Suppliers would be delighted to be companies of that scale. I am not entirely sure which ones in his constituency he is thinking of, but if he has any examples of firms that he is worried may have a turnover of £1 billion a year, I would like to meet them to find out what their fears are.

[Mr Christopher Chope (Christchurch) (Con)]

My hon. Friend makes a good point. Can he illustrate to the House what he thinks would be £1 billion-worth of cauliflowers?

[Philip Davies]

My hon. Friend makes a good point, which strikes at the heart of new clauses 1 and 2. We can argue about the necessity of the Bill, and as far as I am concerned it is not only unnecessary—as my hon. Friend the Member for North Swindon (Justin Tomlinson) made clear, there are no complaints about the existing code, so it is a solution looking for a problem—but the most unconservative-minded thing that we could possibly see. I have no problem with the Liberal Democrats supporting it, because of course they are always a left-wing tribe, but I am worried that members of my own party are supporting this intervention in the free markets.

Two companies, free to make their own decisions, are making agreements and signing a contract, and then we in the House think that we should intervene in that contract that they have both entered into freely and say, “By the way, we don’t think you should have signed that contract.” I have always thought that companies are more than capable of deciding those things for themselves.

--- Later in debate ---

[Philip Davies]

My hon. Friend is for ever an optimist, but I am afraid that, in my experience, logic is not usually the great winner in these debates. Unless the Government come up with an idea themselves, they appear reluctant to accept anybody else’s amendment, simply because they did not come up with it themselves.

Do we think the Bill should be directed at Walkers snack foods? What about Coca-Cola? That is a poor, small firm that needs looking after when it negotiates with supermarkets!

[Mr Chope]

My hon. Friend refers to Walkers snack foods. Potatoes are among the raw materials that that company uses a lot of, but there is nothing in the Bill that would protect the suppliers of potatoes to Walkers.

[Philip Davies]

My hon. Friend makes a good point. The Bill would still allow Walkers to screw the potato suppliers—who provide the raw materials—into the ground as much as it liked, but it would prevent Asda, for example, from trying to negotiate the best deal with Walkers for its crisps.

I have mentioned Coca-Cola. I also wonder whether Heinz Ltd would really need to take a complaint to an adjudicator. Is Heinz not big enough to look after itself? Why on earth are we passing legislation to intervene in disputes between big supermarkets and big suppliers such as Heinz, Diageo, United Biscuits, Kraft Foods, Nestlé, Premier Foods, Fullers Foods, Britvic Soft Drinks Ltd and Mars? Are we really saying that the House must set up a state regulator to intervene in negotiations or disputes between massive multinational companies? Those companies have recourse to the courts if they feel that a contract has been breached. Are we really saying that Heinz does not have the wherewithal to take a case to court if it feels that a supplier has dealt with it unfairly? Does anyone want to stand up and say that Heinz does not have the wherewithal to take such a case to court? Who wants to make that point?

--- Later in debate ---

[Huw Irranca-Davies]

I thank the right hon. Gentleman for not tempting me to infringe the guidance you have given, Mr Deputy Speaker.

We had a great deal of debate in Committee on the ability of the groceries code adjudicator to comment on several issues concerning the supply chain. In fact, on both sides of the House, several hon. Members said that if the adjudicator were aware of abuses elsewhere they would expect the adjudicator to inform the relevant authorities. I shall be interested in the Government’s response to the amendment, but I would have thought that there was almost an obligation on the adjudicator to report any observed abuse in the management of the supply chain. That is what the amendment seeks to achieve. I agree with my hon. Friend the Member for Edinburgh South that amendments 34 and 35 are important, and we are convinced that the adjudicator should have an eye to this function as well as his or her core role on the supply chain.

[Mr Chope]

I support new clause 2. In most people’s eyes the Bill was designed essentially to protect the UK supplier, particularly of fresh produce, as my right hon. Friend the Member for South East Cambridgeshire (Sir James Paice) said. What the hon. Member for Ogmore (Huw Irranca-Davies) has just delivered is a scaremongering speech designed to undermine British suppliers of fresh meat and produce. That is extremely regrettable.

Last night I attended a speech given by the Minister of State, Department for Business, Innovation and Skills, my right hon. Friend the Member for Sevenoaks (Michael Fallon). His speech was entitled, “Deregulation for Growth”. I must admit to being slightly confused about what I have heard so far during this debate, because it seems to be about regulation. How, I ask the Minister, will the Bill be consistent with the Government’s growth agenda? Perhaps she will tell us when she responds.

The Minister last night said that there was a two-for-one principle—that for every £1 of additional burden imposed through regulation, £2 of savings of regulation had to be found. That brings me to new clauses 4 and 5, which are designed to highlight the fact that the Bill as drafted will embody the law of unintended consequences writ large. It will potentially benefit suppliers not only from elsewhere in Europe, but from right across the globe, when most people who support the Bill think they are doing so in order to help the farmer down the road in the United Kingdom. That is far from the case. What will happen is that the Bill will enable suppliers from overseas to exploit our system, at a time when our own suppliers and producers are not able to access overseas markets on an equivalent basis.

[Mr Bone]

I am sure my hon. Friend is going to explain new clause 4 in more detail. I am troubled by the way it is drafted, as it says

“if they have their principal headquarters outside the European Union.”

Why not outside the United Kingdom?

[Mr Chope]

My hon. Friend anticipates the argument that I am going to put. I was in discussion about whether an amendment referring only to “outside the United Kingdom” would be in order and selectable. On advice—obviously, I am responsible for deciding whether to act on advice—I decided that my new clause was much more likely to be selected if, instead of referring to the United Kingdom, I referred to the European Union. That is because of single market and European Union rules. Obviously, I wanted to ensure as far as possible that my new clause would be selectable, but my hon. Friend makes a good point. He is saying that the whole public debate is about why cannot we buy British—buy UK food and thereby avoid the risk associated—[Interruption.]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. May I gently remind Parliamentary Private Secretaries —[Interruption.] Order. A Member is speaking, and unfortunately every time a PPS walks past, it is at eye-level of the camera. The first time it is not too bad, but it is happening constantly. We all want to hear Mr Chope, and I am sure the PPSs would like to hear a little more from him.

[Mr Chope]

The only comfort that I take is that my remarks are evidently creating such confusion on the Front Bench that Ministers need an enormous number of messages sent to them from the Box. I take some consolation from that.

It is incumbent upon the Minister when she replies to explain how the Bill will help UK producers while not giving benefits and privileges to producers from the rest of the European Union, let alone from outside the European Union. I should like to give the Minister the maximum amount of time to respond to the debate.

Amendment 27 seemed to be warmly endorsed from the Opposition Front Bench. I do not understand why the Opposition did not table such an amendment themselves in Committee or on Report. The amendment proposes that the Bill come into force two months after Royal Assent. Then it would be clear on the face of the Bill when it would come into force. If this is such fantastic legislation, why do we not bring it in in the normal way—the whole Bill, two months after Royal Assent? I hope the Minister will respond to those points and particularly to the powerful argument advanced by my hon. Friend the Member for Shipley (Philip Davies) in relation to new clause 2.