Agriculture Bill (Tenth sitting)

(Committee Debate: 10th sitting: House of Commons)
Dr David Drew Excerpts
Tuesday 13th November 2018

(1 year, 10 months ago)

Public Bill Committees
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Department for Environment, Food and Rural Affairs
George Eustice Portrait George Eustice - Hansard
13 Nov 2018, 2:09 p.m.

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.

Dr David Drew (Stroud) (Lab/Co-op) Hansard
13 Nov 2018, 2:09 p.m.

One little snippet I learned last week is that the milk that makes Baileys Irish Cream goes backwards and forwards seven times across the Irish border. If there is not some sort of union—or agreement, as the Minister calls it—that will be catastrophic. Given that the backstop is the thing stopping us getting any sort of agreement, would he care to speculate on how he would overcome the downside of those movements not taking place?

George Eustice Portrait George Eustice - Hansard
13 Nov 2018, 2:10 p.m.

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.

Break in Debate

Different farm enterprises will have different appetites for risk. A farmer running a highly geared business of a very intensive nature with a lot of debt will often be working on quite fine margins and will not be able to withstand price fluctuations, so he will want to go into the market to insure that price and to protect his margin in that way. A different farmer, with no debt and lots of assets behind him, might take the view that he can ride the rough with the smooth and that he does not need to access such products. It will be different from enterprise to enterprise. All the people we have talked to—actuaries and experts in the insurance field—tell me that the quickest way to kill the development of these new, embryonic, market-based options to help farmers manage risk would be if the Government were always there to step in, because then nobody would take these matters up.

Dr Drew Hansard
13 Nov 2018, 2:16 p.m.

The Minister quoted the US a minute or two ago. I have some experience of the way in which the US operates its agricultural policy. Whenever there is any challenge to US farmers, it brings the Farm Bill out and openly subsidises its farmers—it is a straight subsidy. That is one of the problems I have with a free trade deal with the US: it is not a level playing field if we get rid of direct payments. I ask the Minister again: how do we defend against exceptional market conditions in this country when another country has already decided that it is going to defend its farmers by taking action through subsidising them?

George Eustice Portrait George Eustice - Hansard
13 Nov 2018, 2:16 p.m.

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.

Dr Drew Hansard
13 Nov 2018, 2:18 p.m.

The Minister is being very patient with me, but I want to get this on the record: if another country, which we may have a trading arrangement with, chooses to subsidise its farmers in extremis because of a particular circumstance, which may be—dare I say it—an act of God, or the market may just be in a difficult position, would we use this particular power to support our farmers?

George Eustice Portrait George Eustice - Hansard
13 Nov 2018, 3:10 p.m.

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.

Dr Drew Hansard
13 Nov 2018, 2:19 p.m.

I am sorry to intervene once again, but this issue is a minefield, because if a group of my farmers come to me, and I then go to the Government and say, “Well, this is an exceptional circumstance”, and the Government say, “No, it’s not”, but the United States has treated it as an exceptional circumstance, that will surely lead to all manner of legal actions against the Government. Clearly, farmers will defend their rights and their incomes when they feel another country that is trading with us is getting an unfair advantage. Is he not opening a can of worms?

George Eustice Portrait George Eustice - Hansard
13 Nov 2018, 2:20 p.m.

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—

Dr Drew Hansard

Well there you are.

George Eustice Portrait George Eustice - Hansard
13 Nov 2018, 2:20 p.m.

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.

Break in Debate

George Eustice Portrait George Eustice - Hansard
13 Nov 2018, 2:24 p.m.

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.

Dr Drew Hansard
13 Nov 2018, 2:26 p.m.

This has been an illuminating discussion. The Minister has done well with a bad set of cases. Farm systems throughout the world are subsidised; they might be subsidised in different ways, but they are subsidised. In the normal course of events, that is not a particular problem—we can deal with it, partly because we are in the EU and so have a bulwark. The difficulty is that the clause puts an enormous responsibility on the Secretary of State—I would not want it if I were Secretary of State—to decide whether something is an exceptional market circumstance. I would want to know with my Cabinet colleagues that I had the power to insist on action.

The clause will make it difficult for a Minister to make the right decision, because farmers, understandably, will say, “You have to support us—the Americans support their farmers,” but here it is at the Minister’s discretion. That has always been our problem, and it is why I will press the amendment to a vote. I think my hon. Friend the Member for Darlington will do likewise with her amendment.

This is the crunch point of the Bill that we are asking the Government to consider. We do not want to fetter a future Administration, but we would want that Administration to understand their responsibilities, and that can be more clearly spelt out in terms of a duty—not a power, but a duty—so that if exceptional market circumstances were affecting the operation of agriculture in this country, the Secretary of State, or whoever was making the decision in government, had to respond, because of how the legislation had been framed. That is why I will press the amendment to a vote. I want to make it clear that the Bill is deficient in that regard.

We have heard many other interesting things that we will read back over with the benefit of hindsight. The Minister needs a few more examples to give us certainty that what is going on is coherent. At the moment, this seems a woolly set of arguments. We are protecting British farmers. We are also protecting British landowners, who might also be affected, as we can sadly see in California at the moment. I referred earlier to President Trump. He was hardly on the front foot. In a sense, the amendment would help the Secretary of State because he or she would know they had to act and that it was the Government’s responsibility. We can argue about what exceptional circumstances are, but the action should be clear, and that is why I will press the amendment to a vote. I think that my hon. Friend the Member for Darlington will be so moved as well.

Question put, That the amendment be made.

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—

(a) where—

(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.)

Break in Debate

Marketing standards and carcass classification

Dr Drew Hansard

I beg to move amendment 47, in clause 20, page 15, line 18, leave out “may” and insert “must”.

This amendment would require the Secretary of State to make regulations for marketing standards, such as labelling, packaging, classification in Clause 20.

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.

Dr Drew Hansard
13 Nov 2018, 2:34 p.m.

I shall be very quick, because this is the same argument as I used earlier—we make no apology for bringing it back. Clause 20 may not seem to be the most important in the Bill, but the success of any farming operation nowadays depends on marketing. The measure will take effect in a number of different ways. Far too much discretion is allowed to the Secretary of State. These important responsibilities should be encompassed within duties not powers, which is why we make no apology for trying to make it a duty.

Amendment 47 is simple. We do not understand why the Minister has been reticent throughout the Bill to include duties so that successive Governments will know their responsibilities. This is a monumental clause that entails all manner of different requirements on the Minister: classifying different types of animal and plant variety, and how they are presented in terms of the way in which they are sold. Traceability is the issue that consumers feel most strongly about following the difficulties we went through with BSE and the cockle pickers. They want to know that what they are buying is produced in the manner best for animal welfare and that it is safe. They want to know where it comes from, and that the people who produced it have been paid fairly and are looked after.

This clause is important because it has all sorts of ramifications. We ask the Minister to consider when he will include duties if not in clause 20. This is about consumer protection as much as it is about the protection given to producers. My hon. Friend the Member for Darlington is going to follow up with other issues that are specified, relating to where we would be with our withdrawal from the EU, but this amendment is plain and simple. We are asking the Minister to put at least one duty in the Bill. That is crucial and would enable consumers to know the Minister is doing something because he has to do it for their benefit, and not doing something just because he wants to. I hope he considers clause 20 important and that he listens to us.

Jenny Chapman Hansard
13 Nov 2018, 2:40 p.m.

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.

Break in Debate

Jenny Chapman Hansard
13 Nov 2018, 2:50 p.m.

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.

Dr Drew Hansard
13 Nov 2018, 2:50 p.m.

We have had a number of votes on “must” and “may” so I will simplify this by withdrawing amendment 47, but we are happy to push amendment 82 to the vote.

Amendment, by leave, withdrawn.

Dr Drew Hansard

I beg to move amendment 118, in clause 20, page 15, line 30, at end insert—

“(da) the indication on any labelling or packaging of a product of any allergen that the product is known to, or might reasonably be expected to, contain.”

This amendment would explicitly provide for labelling regulations to cover the presence of allergens in products.

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.

Dr Drew Hansard
13 Nov 2018, 2:52 p.m.

This is something different, and again we are here to help the Government. Everyone will be aware of the allergen issues that have sadly affected a number of families, some of whom have lost loved ones. This is an opportunity that the Government should take, because we can insert in the Bill a provision that will at least put into law what many of us feel should already be in law, but has not yet reached the statute book. This amendment would insert a new short phrase

“the indication on any labelling or packaging of a product of any allergen that the product is known to, or might reasonably be expected to, contain.”

We are all aware of two specific cases, and the subject was debated through an urgent question put by my hon. Friend the Member for Great Grimsby (Melanie Onn) on 9 October. It is interesting that a Government Member, the hon. Member for Nuneaton (Mr Jones), stated in response

“These are tragic cases, and it is clear that the law needs to be updated. Will my hon. Friend tell us how quickly he expects the law to be changed in this regard? Will they also say more about what the Government are doing to provide guidance to retailers, to ensure that this type of tragedy does not happen again?”—[Official Report, 9 October 2018; Vol. 647, c. 127W.]

Here is the opportunity. By making this simple amendment, we could make sure that products containing allergens are properly labelled, and that if someone does not label a product properly or takes a risk with it, they will be held responsible according to the law. Sadly, at the moment they are not.

The two recent cases are but the tip of the iceberg. I am allergic to corn—as a vegetarian, that is not much fun, because corn is one of the staple replacements. I get terrible tummy aches, or stomach problems, if that is proper parliamentary language. I am also allergic to penicillin and I know that. Sadly, some labelling not very clear, and although you can go online and find out, these things should be known. It is like anything: the consumer should be aware and learn through mistakes to some extent, but for some people that is a tragic line to take.

Martin Whitfield Hansard
13 Nov 2018, 2:54 p.m.

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.

Dr Drew Hansard
13 Nov 2018, 2:55 p.m.

I agree. Perhaps we just know a lot more about allergens nowadays and people are more willing to be overt in coming forward to say what should happen. This is a simple amendment that gives the Government the opportunity. The Government, through the Minister, may want to say there is a different way of doing it, but here we have an Agriculture Bill that is about food production.

I will be interested to hear what my hon. Friend the Member for Bristol East has to say about her new clause, but clause 20 is a place where we could put a measure that will be immensely important to people who have allergies, so they know that they are being protected. We have various assurances from the Food Standards Agency that it is able to pursue cases; it is just not able to pursue cases because of the gap in the law, which should lead to criminal proceedings when someone been wilfully negligent.

Again, we are having to learn. In a post-Brexit situation—if we get to that situation—the British Government must have fool-proof security in how they deal with food standards and food safety. Given the a huge call on the Government to do this, I hope they will respond positively. If the Government will not remedy the problem at this stage, it would be interesting to know when they will act. Having stated that they intend to address a legislative gap, they are obliged to do so. Clearly, we cannot do this via a specific bit of legislation because we are waiting for Godot. You have to grab the opportunity when it comes around.

I hope the Minister will consider amendment 118 to be helpful. It will save lives, while also telling people who have lesser conditions but who want to know, if they are allergic to nuts or whatever, that a product has been properly labelled. If food is not properly labelled, the law should take its full effect.

Kerry McCarthy Portrait Kerry McCarthy (Bristol East) (Lab) - Hansard
13 Nov 2018, 2:57 p.m.

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.

Break in Debate

George Eustice Portrait George Eustice - Hansard
13 Nov 2018, 3:12 p.m.

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.

Dr Drew Hansard
13 Nov 2018, 3:22 p.m.

I am partly assuaged by what the Minister has said. I hope he will commit to ensuring that there is an overt process by which the statutory instrument comes forward, so that we can allay the fears of those who clearly now have worries. That is why it is so urgent, and why we have provided an opportunity to make this amendment. People literally do not know what to eat because of their particular allergens. The Minister says that nobody knows quite why this has taken off in the way it has. I suspect that it is because we have become more susceptible to particular foodstuffs. Maybe it is because we know a lot more about why people have difficulties when they eat certain substances. It is right and proper that we give them the protection they deserve.

I will not push my amendment to a vote, but I will hold the Minister to account on this. We seem to have a very busy end of the year, and all manner of things will be coming forward. My hon. Friend the Member for Darlington might wish to take a slightly different course of action; I think the Minister has given certain assurances, but we will not let go of this, because people’s lives are threatened. We feel that, at the very least, it is important for people to know that what they eat is safe and will not affect them adversely. I know from various correspondence that Government Members feel the sam.

I hope that the Minister has heard what I have said and will act on it, and that he will bring the SI forward as a matter of extreme urgency. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment proposed: 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.”—(Jenny Chapman.)

Question put, That the amendment be made.

Clause 20 ordered to stand part of the Bill.

Break in Debate

Deidre Brock Portrait Deidre Brock - Hansard
13 Nov 2018, 3:41 p.m.

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.

Dr Drew Hansard
13 Nov 2018, 3:41 p.m.

I will be brief because it is important to hear from the Minister. This is one of the real issues with the Bill. We have no schedule for Scotland; we do have a schedule for Northern Ireland, and I visited there last week to get some clarity on what they think it implies for Northern Ireland’s participation in the Act. Officials were clear that they see the schedule as a political decision-making requirement. As there is no Government in Belfast at the moment, they feel it inappropriate to support the Bill as it stands. They feel strongly that the current direct payment system will remain in place—they want their £300 million, by the way, Minister.

The Bill is very interesting, but, effectively, it is a Bill only for England and Wales. It is not a Bill for Scotland or Northern Ireland, yet these things are under the aegis of a Bill for the United Kingdom. It is a funny Bill, with two parts of the United Kingdom not participating in it.

Now, it might be a case of the officials misunderstanding. Clearly, we could move to direct rule, and the Government would then have to take decisions. I thought I had better check with the Democratic Unionist party spokesperson on agriculture. He reaffirmed that the DUP does not support the movement towards an environmental approach and it will, in due course, vote against it. The DUP believes that direct payment should stay in place as the only way for farmers in Northern Ireland to be secure. Having also visited the Republic, I am not sure that it will move, even though the CAP is up for redesign at the moment. There are indications that it will move towards environmental payments, but it is not there yet.

The hon. Member for Edinburgh North and Leith’s point is interesting, to put it mildly. I am unclear where the Bill stands as a United Kingdom Bill. To me, it is very unclear. The devolution settlement means that, effectively, Scotland and Northern Ireland can do their own things, because agriculture is a devolved matter. If it were not a devolved matter, we would be discussing the agriculture policy of the United Kingdom. However, we cannot and we will not, and we might get a nasty shock when we come to final votes on the legislation.

There may be some interesting alliances, because I do not think we have understood the degree of the problem. I will make some more points on this when we reach schedule 4. I am laying down what I think is a very big dilemma. We have assumed that when this Bill becomes the Agriculture Act it will carry the four countries. I do not think it will. It will not carry Scotland, and it is increasingly evident that Northern Ireland will not be carried. I would welcome the Minister’s response to that. How does he intend to overcome that huge hurdle?

Jenny Chapman Hansard
13 Nov 2018, 3:47 p.m.

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.

Break in Debate

George Eustice Portrait George Eustice - Hansard
13 Nov 2018, 4:11 p.m.

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.

Dr Drew Hansard
13 Nov 2018, 4:07 p.m.

My hon. Friend the Member for East Lothian has covered one of the points that I was going to raise. Can the Minister give us some examples of the actual changes that mean that he sees the amendment as necessary? I think I understood the original way in which it was placed in the clause, but what representations has he received, apart from the one he mentions? Are we changing the legislation because of one piece of representation or have others come up with cogent points for a necessary change?

George Eustice Portrait George Eustice - Hansard
13 Nov 2018, 4:13 p.m.

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.

Break in Debate

Question proposed, That the schedule be the Second schedule to the Bill.

Dr Drew Hansard
13 Nov 2018, 4:20 p.m.

We are getting there, slowly, Sir Roger. I want to pick up the point made by the Minister on clause 22 about how organisations will be identified. I am a Co-operative MP; I put that on the record. The Co-operative movement has been somewhat wary of this part of the Bill—whether it is clause 22 or, in this case, schedule 2, on which I have the opportunity to make these points.

I welcome the amendments that the Minister has moved, at least recognising that the Co-operative movement has been unhappy to be labelled as purely part of the competition arrangements, given that co-operation is a key part of the agricultural sector. Many farmers and farm organisations are, by their nature, co-operative: whether it is NFU Mutual, equipment changes or buying feed or pesticides, they tend to act in a co-operative organisation. I am raising the issue under schedule 2 to put on the record that there is still some unease. The Minister has recognised that, given the amendments that he tabled to clause 22. He has explained why he changed the wording, and I am very happy with that.

The issue is about the impact assessment on the Co-operative movement, given that the producer organisations, the associations of producer organisations and the inter-branch organisations—all lovingly acronymed —are by nature not just competitive organisations. They are also co-operative organisations. The Co-operative movement has felt that there has been increasing uncertainty and regulatory risk. Having agreed to the amendments that the Minister brought forward to clause 22, I am asking him also to say something in our discussion about schedule 2. That clearly relates to clause 23, given that one follows from the other.

Established co-operatives fear that they might find themselves outside the new settlement. They are likely to manage most of the uncertainty well, but they want to know that the Government have heard what they have been saying. In a sense, they want the Government to mount a robust defence of where co-operation comes within agriculture.

The biggest risk is where established co-operatives feel uncertainty about how the Competition and Markets Authority might interpret the joint selling arrangements. That is an important issue for those who want to protect co-operatives, one of whom is myself. At the very least, the additional challenge they might be faced with will put a cost obligation on them, increasing the transactional costs of collaboration. They want reassurance from the Minister about how they should handle the situation.

Will co-operatives be subject to those types of challenges, if the legislation is passed as it is currently drafted? Will it at least make farmers less inclined to co-operate, given that the nature of the Bill is to look at different ways in which environmentally-inclined changes could lead to new ways of working? This is a very old way of working, but it may be given an enhanced status if and when the Minister can clarify whether co-operation would be a key element of how the Competition and Markets Authority would see the matter. The co-operatives did look at various amendments. The Government have listened, and the co-operatives are happy with what they have done through amendments 9 and 11 to clause 22. However, they want further reassurance, as the same logic applies to schedule 2.

This is a probing amendment, but it is important because the message the Minister gives will reassure or cause further doubt in the minds of those who wish to look at new forms of business organisations in terms of how they do their agricultural trade. Will the Government at least look again at the issue and ensure that what they have done with clause 22 will apply to schedule 2? If the Minister can assure me that the Government will do that, I will certainly not press the amendment, but we may have to revisit it on Report if the Government have not done what they should to ensure that the CMA can incorporate co-operation as well as pure competition.

Again, that is part of the current common agricultural policy arrangements and its interpretation of economic efficiency within the acquis. We want to know that it will be rolled over into British legislation and particularly how it will be rolled over into schedule 2.

George Eustice Portrait George Eustice - Hansard
13 Nov 2018, 4:26 p.m.

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.

Break in Debate

George Eustice Portrait George Eustice - Hansard
13 Nov 2018, 4:29 p.m.

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.

Dr Drew Hansard
13 Nov 2018, 4:30 p.m.

The Minister makes an interesting point. I thank the hon. Member for North Dorset for getting my little grey cells working. Let us take Arla, for example—a co-operative that operates across a number of countries and that is not likely to fall foul of the CAP by being seen as a monopoly with more than 33%.

I do not have the current figures for the percentage of the milk supply that Arla processes, but if the Competition and Markets Authority took it as a purely national organisation and it fell foul of that 33%, could this new legislation mean that it ended up having to be broken up? I will need some assurance from the Minister before we go any further, because that is a good example of a co-operative that everyone would support, but which could now be in a disadvantageous situation if we take this as a national definition of its market control. Will the Minister clarify?

George Eustice Portrait George Eustice - Hansard
13 Nov 2018, 4:32 p.m.

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.]

Dr Drew Hansard
13 Nov 2018, 4:32 p.m.

It must be something we said—he has just left.

George Eustice Portrait George Eustice - Hansard

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.

Clause 24

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.

Clause 25

Fair dealing obligations of first purchasers of agricultural products

Dr Drew Hansard
13 Nov 2018, 4:33 p.m.

I beg to move amendment 48, in clause 25, page 19, line 21, leave out “may” and insert “must”.

This amendment would require the Secretary of State to make regulations for fair dealing obligations in Clause 25.

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—

“‘producer’ includes—

(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;”.

Dr Drew Hansard
13 Nov 2018, 4:33 p.m.

We are making some progress. I blame the hon. Member for North Dorset; he has been holding us up, but now that he has gone we are racing through. These are quite important amendments. I will not labour the point on “must” and “may”—I think the Minister will be keen on that—but I do want to talk particularly about amendments 93 to 95, which stand in my name and those of my hon. Friends. I know that my hon. Friend the Member for Bristol East also has amendment 111 in this group, so we will take a little bit of time going through this, because it is quite important.

Amendments 93 to 95 would remove the requirement restricting new statutory codes to first purchasers at the farm gate, addressing unfair dealings along the whole supply chain—beyond first purchasers—to ensure that that regulation applies to all stages of the supply chain not currently covered by the Groceries Code Adjudicator. I must say that we feel the Bill has been somewhat hurried here. We have made the point of who we did not hear evidence from, one of whom was the Groceries Code Adjudicator, whose powers we feel very strongly have been somewhat hamstrung by the Bill. We either value the Groceries Code Adjudicator’s work or we see it as fairly irrelevant.

This matters because it has been a bone of contention that producers can only ever take action through the Groceries Code Adjudicator relating to certain parts of the food chain, principally improprieties at the retail stage. I understand that the farming organisations have always wanted to extend those powers—powers, not duties—so that they can take action against intermediaries in the food chain. This is important, and we want clarity on this at the very least.

There is this thing about whether they are able to derive evidence of harm. The Government have noted that smaller suppliers—including the majority of farmers— growing our food, both in the UK and overseas, are vulnerable to abusive treatment by their buyers; that is why we have a Groceries Code Adjudicator in the first place. That behaviour can involve: paying invoices late, which is the classic one; changing orders at the last minute; cancelling orders, because we all have examples in our constituencies of particular producers feeling that they have been hung out to dry by the way in which certain buyers are able to manipulate the market; and charging suppliers unexplained fees to keep their food on the shelves.

We know that food supply chains are complex, with behaviour in one part of the chain obviously having an impact in another. Again, we want clarity here, because we think that this part of the Bill could be improved; we are trying to help the Government, not damn them. Limiting the clause’s focus to the relationship between a farmer and their immediate buyer sadly misses out what happens in the intermediary parts of the food chain. It will be interesting to know whether the Government see this as a role for the Groceries Code Adjudicator, or whether they are unhappy about it.

There was widespread support for putting the Groceries Code Adjudicator in place; it was a cross-party arrangement. It took longer than some of us would have liked, given that we started talking about it when I was last a Member, but eventually it came to fruition. The sad thing is that there is still a belief that the Groceries Code Adjudicator’s powers are too limited and that it is too constrained in where it might want to intervene to right wrongs. On these three amendments, we are asking the Government at least to be clear about what they see as the role of the Groceries Code Adjudicator in relation to the Bill.

At the crux of this are the circumstances in which the body might need to appropriate precise costs and take a more forensic approach when indirect suppliers request adjudication on a case in which unfair dealing had been perpetrated by other parts of the supply chain. It is about looking at whether we can improve the powers of the Groceries Code Adjudicator, and at the very least we want clarity on how the Bill will either do that or not. Again, we may want to revisit this on Report if we do not feel confident that the Government have listened and acted.

Regulations are about how this will be implemented in relation to the supply chain—of course, this is largely about statutory instruments—but the Government need to say something in the Bill about their priorities, and their willingness to listen and act on what many of our producers have identified as a serious issue. In terms of primary legislation, it is important not to leave out what those trading relationships are and could become if there was a more level playing field.

The enforcing body, which presumably is the Groceries Code Adjudicator, needs not only the powers to act but the resources. From talking to producers and from my knowledge of the Groceries Code Adjudicator, I know that cases are often not pursued because there are not the resources to do it. These are terribly complicated issues. Again, it is not something that the law has ever embraced, because it is so complicated. We set up the Groceries Code Adjudicator to get away from that particular legal quagmire.

It is worth noting that the EU, blighted as it might be, is currently passing a law that would set up an enforcement authority. At the very time that we are leaving the EU—supposedly—it now recognises that it has to take additional powers to deal with these unfair trading practices along the whole of the agriculture supply chain, from the farmer to the retailer. That received support from Conservative and Labour MEPs.

This is an important issue, which we make no apology for bringing up at this time in order to look at where we are in terms of the powers invested in the Groceries Code Adjudicator, whether those powers should be increased on the face of the Bill—something we could do here—and whether that would deal with some of the intermediary abuses that, at the moment, are not within the aegis of the Groceries Code Adjudicator. I look forward to the Minister’s response.

Kerry McCarthy Portrait Kerry McCarthy - Hansard
13 Nov 2018, 4:43 p.m.

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.

Break in Debate

George Eustice Portrait George Eustice - Hansard
13 Nov 2018, 4:58 p.m.

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.

Dr Drew Hansard
13 Nov 2018, 4:56 p.m.

I hear what the Minister says and he will be pleased to learn that I will not press amendment 48 to a Division, but I am very concerned that the Bill has not been as clearly and cleverly scrutinised as it could have been because we were not able to meet a number of the organisations. I would have liked to ask the Groceries Code Adjudicator how the Bill could have made the authority more effective, but we did not get that chance. I do not know why she did not come; perhaps we were not as enticing as we might have been, or perhaps she did not get the push from Government.

It is important: this part of the Bill is about competition, fairness and accountability, yet we are in the dark, hoping that some of it will be carried through. The Minister has kindly given way on timber and we might see that somewhere in a schedule on Report, when he has talked to his colleagues. We are somewhat less than impressed by the Bill, and we need to nail down the legislation, in that we have producers believing that the Groceries Code Adjudicator is not able to function as effectively as she could, yet when we get the opportunity with some legislation to allow her additional powers those powers are not forthcoming.

We will not press amendment 48 to a vote, but we will certainly press amendment 93. I beg leave to withdraw the amendment.

Break in Debate

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.

Dr Drew Hansard
13 Nov 2018, 5 p.m.

We will revisit it. The hon. Lady need not worry.

Deidre Brock Portrait Deidre Brock - Hansard
13 Nov 2018, 5 p.m.

Can we revisit it?

You can.

Dr Drew Hansard
13 Nov 2018, 5:04 p.m.

I beg to move amendment 86, in clause 25, page 20, line 9, at end insert—

“(aa) for the identity of any person who has made a complaint relating to alleged non-compliance to be held in confidence and not disclosed during any investigation into their complaint;”.

This amendment would provide for the confidentiality of persons who raise complaints under the fair dealing obligations provided by Clause 25.

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.

Dr Drew Hansard
13 Nov 2018, 4:56 p.m.

I hope not to delay us that much longer, because I think we are past the bewitching hour and we keep losing members—at this rate, the Whips are going to have to find someone non-existent to pair with—but it is important that we dwell on the issue for a few minutes.

Again, this amendment may not be that crucial to the Bill in the great import of things, but a number of organisations feel quite strongly about where this part of clause 25 is taking us. It is all about fair dealing and the obligations of the first purchaser of agricultural products. We have argued that that should not necessarily reside with the first purchaser, but should be across the food chain.

Amendment 86, which has the support of a number of non-governmental organisations, is about maintaining the confidentiality of complainants. That is vital, because they would not necessarily pursue a complaint without that confidentiality; evidence from the Groceries Code Adjudicator’s review highlighted that as an ongoing issue. The imbalances of power in many grocery supply chains create a climate of fear in which small suppliers are unwilling to speak out for fear of commercial reprisals. This reticence is understandable, because once a supplier is blacklisted regarding their ability to supply a particular food chain, that tends to become total and ongoing. Smaller players often rely on a single buyer for large proportions of their business—sometimes it is 100%. Even when a regulator is in place, suppliers still have concerns about coming forward. There is a need to ensure that there no single supplier is exposed to possible retribution by a more powerful mid-tier supplier and retailer.

Following an investigation, the new body should make relevant recommendations to deter poor practice, including penalising mid-chain suppliers or retailers found guilty of breaching the code. It is important to be clear that the confidentiality provided by this amendment is different from anonymity. We recognise that if the party bringing the complaint wants compensation regarding their specific case, they will of course need to be identified. It is not as though that confidentiality can be kept in place indefinitely, particularly where monetary compensation is required. The principle of the confidentiality of the identity of the complainants being waived only with their express consent is critical in ensuring that producers feel confident coming forward. That is exactly how the Groceries Code Adjudicator works, so we want to extend it along the food chain.

Amendment 87 would allow the enforcement body to undertake investigations without specific complaints, and again this is where we want to boost the power of the Groceries Code Adjudicator. An effective enforcement body must be able to hold the trust of suppliers and keep any evidence confidential until there might be some monetary arrangement, which would require going on the record. To achieve this, an enforcement body should also have the power to investigate potential transgressions under its own initiative, rather than require the submission of compelling evidence before it acts. My understanding is that that is what the Groceries Code Adjudicator has herself asked for. It would be surprised if she has not, because it completes her powers and responsibilities. The spotlight is taken away from suppliers and potential complainants, so it is on the Groceries Code Adjudicator herself to take those complaints forward. Without this clause we may see the enforcement body unable to identify issues that are either specific to one chain or one problematic behaviour activity, but where no single producer has been able to complain, directly for fear of delisting—that is a more appropriate term, I accept.

As I explained about amendment 86, there is a climate of fear. Therefore, we feel that proactive action by the regulator is vital. We want the Government to look seriously at this and use this legislation to enhance the powers of the Groceries Code Adjudicator, something that a number of us across the House have called for. We are seeking to use this legislation to do that because our producers feel that too often the Groceries Code Adjudicator is constrained by her inability to work across the food chain and to guarantee confidentiality and, when there is monetary consideration concerned, that this has been through due process.

I hope the Minister will give us the opportunity to consider how he can ensure that confidentiality is guaranteed, but also guarantee the enhanced powers of the Groceries Code Adjudicator. Again, this may not be the most important part of the Bill, but for producers who feel that they have fallen foul of the process and have, as my hon. Friend the Member for Ipswich said, felt bullied, intimidated or delisted from selling their products in the right and fair manner, we should use the Bill to put that right.

George Eustice Portrait George Eustice - Hansard
13 Nov 2018, 5:11 p.m.

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.

Dr Drew Hansard

I find this quaintly interesting, because my experience of the milk trade is that they lack anything but assertiveness. There are more four-letter words in their way of trying to do business than could be heard on a football pitch on a Sunday morning. Sadly, it is not just about assertiveness, but fairness and the way in which this can be taken up by the Groceries Code Adjudicator. That is why a number of organisations—as always, at the top there is a whole series of different bodies—feel strongly that this needs additional powers to be vested in the Groceries Code Adjudicator. I hope the Minister has listened to that and will act on it.

George Eustice Portrait George Eustice - Hansard
13 Nov 2018, 5:15 p.m.

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

George Eustice Portrait George Eustice - Hansard
13 Nov 2018, 5:17 p.m.

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.

Dr Drew Hansard
13 Nov 2018, 5:18 p.m.

I thought that the intervention made by the hon. Member for Brecon and Radnorshire was apposite. We are improving the legislative framework, including toughening up the powers of the Groceries Code Adjudicator, and specifically—in my amendments—we could ensure that people feel confident that there is a confidential arrangement between them and the Groceries Code Adjudicator so that they may pursue their actions.

As much as I like the Minister and hear what he says, this is how we improve legislation—we want to put something very important in the Bill. We know why so many producers do not choose to pursue a course of action against someone who has treated them unfairly: they are frightened. We will press the amendment to a vote—though we might not win—and the Minister is hearing from his own Back Benchers that this needs to be revisited on Report. We want to ensure that the Groceries Code Adjudicator can exercise all her powers, including along the food chain—because at the moment it seems to be very much a one-way street, which is why she is less effective than she could be. Also, producers feel that they are often let down, because they are not able to carry through regarding the unfair practices that they face.

This little amendment—it is very small—would dramatically change the power relationship. I hope the Minister will accept in good faith that we are pressing it to a vote so that he can reflect on it when it comes back on Report and strengthen this bit of the Bill.

Chris Davies Hansard
13 Nov 2018, 5:20 p.m.

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.

Dr Drew Hansard

Sadly—I thought we might have enticed the hon. Gentleman over to this side. It could have made all the difference, and the Government would have, in due course, thought that it was great that Back Benchers spoke for themselves and voted accordingly. One always has these hopes that might be dashed at a later stage. We will press the amendment to a vote, but we hope the Government will understand that we are willing and able to see how this can be improved on Report.

Question put, That the amendment be made.

Amendment made: 13, in clause 25, page 20, line 24, at end insert “(unless section 29(4A) applies)”.—(George Eustice.)