Peers try to give grocery watchdog more bite

Debate over the Groceries Code Adjudicator Bill began in the House of Lords yesterday, with opposition peers putting forward a series of amendments which they say will give the new ombudsman more teeth in the battle to ensure growers get a fairer deal.

The Government’s current plan is to give the new watchdog the power to ‘name and shame’ big supermarkets who fail to stick to an agreed Code of Conduct designed to end the exploitation of farmers by large buyers.

The power to issue fines, however, will be left in the hands of the Secretary of State for Business – currently Vince Cable.

Lord Knight, Labour’s spokesman on rural affairs in the Lords, warned this would leave the watchdog without the necessary might to force supermarkets to change their ways.

“It doesn’t go far enough and it doesn’t go fast enough,” the frontbench peer said, accusing the coalition of “foot-dragging”.

“We think it’s weak and pretty toothless. Expectations have been raised among the farming community, and we don’t want those to be dashed.

“Not giving the adjudicator the power to fine from day one is a bit like having a referee without a red card.”

The National Farmers’ Union is among several campaign groups who have backed called for the new watchdog to be given the power to issue fines.

Lord Knight said the process by which any fine could be issued would be painfully slow, requiring two separate public consultations and further Parliamentary manoeuvres.

“That whole process could take two or three years – by which time the people (involved) will have gone out of business,” he said.

Labour also warned the Bill contains a so-called “sunset clause”, which would allow the Government to easily abolish the adjudicator at a later date.

“If you read between the lines, the Government has got half a mind to set it up and then get rid of it in two years’ time when it reviews its operation,” Lord Knight said. “It’s almost as if they want to get the credit for setting it up, and then let it wither on the vine.”

The Labour peer also called for a new “innovation fund” to be established so that fines levied by the adjudicator could be used to help the food production industry, rather than simply being poured back into Treasury coffers, and for its reach to be extended to “middle-men” organisations who buy directly from growers to sell to supermarkets.

“We want to get this on the statute book, so we remain supportive of the bill as it stands,” he said. “But give it some teeth, give it a bigger range and let it innovate.”

There were indications last night that the Government may be prepared to simplify the process by which the Secretary of State can agree to levying fines on supermarkets.

But the Department for Business added that the “sunset clause” is a standard part of legislation involving new regulations, to ensure needless red tape is not created.

A spokesman said: “The adjudicator will have a wide range of powers available, including the ability to ‘name and shame’, which will have a strong deterrent effect in such a highly competitive market.

“It will also have the power to fine those that breach the code when other options are exhausted. We will consider further how to make sure this process is effective and not overly burdensome.

“The adjudicator is being set up to address how supermarkets treat their direct suppliers. In dealing with this relationship it will have a wider beneficial effect on the entire supply chain.

“The Government is committed to cutting unnecessary red tape and excessive regulation. The ‘sunset’ provision is consistent with this approach and means the adjudicator and its effectiveness will be reviewed every three years, and abolished only if considered appropriate.”