Agriculture Bill — House of Lords, 2020-09-17
Topic: Agriculture
Christopher Suenson-Taylor (Labour, Centre-left): I thank the noble Baroness, Lady Bakewell of Hardington Mandeville, the noble Lord, Lord Curry, and my noble friend Lord Whitty for adding their names to this amendment and to many of my following amendments, which introduce the office of the Groceries Code Adjudicator as the mechanism by which these fair dealing provisions under Clause 27 will be administered. At this stage I will mention that the noble Lord, Lord Curry, asked me to express his disappointment that he has had to leave tonight because of the late sitting of our proceedings; he cannot get home without leaving immediately. He would have liked to have been present to make his remarks on this important series of amendments to this clause. I introduced these amendments in Committee as probing amendments to draw out from the Government how they expected to take these provisions forward. As with many features of this framework Bill, so much of the detail and the governance arrangements are not being made explicit in the Bill That these provisions have been recognised as needed and necessary to the better conduct of a fair market is something that the Government can be congratulated on. The debate in Committee underlined how effective the GCA Act has been in setting out and policing business practice in the GSCOP, which now regulates the behaviour of the retail industry, which must abide by it in its relationships with its direct suppliers. There was universal praise for Christine Tacon on how she, as the adjudicator, successfully encouraged effective change to become embedded down the supply chain In response, the Minister explained that his department, Defra, would be the lead department in delivering these obligations. The Government intended to commence these regulations agricultural sector by sector, starting with the dairy industry. This has already started, with a consultation on the operation of contracts that is drawing to a close next week, as I understand it, on 24 September—that is, three months after the opening of the consultation in June. However, I may be corrected, as on a previous amendment the noble Baroness the Minister said that it has already closed. That it is on the cusp of closing or has already closed is regrettable in that we are not able to deliberate on the consultation in our considerations on the Bill I table these amendments again to give the House a chance to debate these important provisions and reflect further on the Government’s approach. I state again that Clause 27 is a very bold and ambitious step that the Government have taken. I express concern that, although the groceries code has proved very effective in stabilising fair dealing provisions in the retail sector, difficulties remain regarding whether this was the appropriate mechanism to cover the whole of the supply chain: the service sector as well as the retail sector, the widespread diversity of food products in the supply chain and how they are delivered across many forms of enterprise and business practice The Government are undertaking a huge task and care must be taken, as a one-size-fits-all regulatory regime may not fit all in the appropriate manner. The problems and solutions in one sector and the relative merits in the behaviour of various participants may not be suitable to be applied across the board to all sectors, each with differing market imperatives, regarding how the various markets may be made to work more effectively. That there is an imbalance in negotiating power between the primary producer through the processing, manufacturing and product development supply chain and the end market is not in doubt I shall not press these amendments tonight, nor support other amendments, including Amendment 87 should it be pressed. The Government have set out on the task and already started a consultation with the dairy sector. As I set out in Committee, I was concerned that these provisions had a narrow focus on contracts. Indeed, Clause 27(1)(a) specifically addresses contracts. Fair dealing provisions should examine the business relationship in its widest implication and interpretations that encompass many various circumstances that arise in primary production. However, it must be recognised that a first step is being taken, and it is starting at a very pertinent point—the contract In the interval between Committee and Report over the Summer Recess, I spoke to many in the dairy sector, especially those at the foot of the supply chain—the dairy farmer and his or her processor. I can tell the Minister that the department’s consultation has been widely promoted among the many sections of the industry: the farmer, the producer group representing the farmer’s suppliers, and the processing industry. Many have shared their submissions with me, and I am sure that the Minister’s department will receive a widespread response. Here and now is perhaps not the place to debate this further; I will add merely that the voluntary code of practice—VCOP—in contracts, introduced in 2012, has proved ineffective in improving fairness and transparency on a wider scale and, as has been experienced during this pandemic, urgency is needed to tackle the problem more extensively and in a comprehensive fashion I also note that this is a widespread problem throughout the industry that now extends across borders, with the overseas ownership structure covering the dairy industry in both the UK and Europe. The EU is also pressing on with its solutions, through directive 2019/633 on unfair trading practices in business-to-business relationships in the agricultural and food supply chains. Can the Minister make any comment, even though the consultation has barely closed, on the progress of the consultation, concerning the numbers, extent and general features beginning to become clear? Even in the immediacy of the lockdown, the retail relationship with the supply chain is today much better than it has been, due to the activities of the Groceries Code Adjudicator Will the department be separating out submissions from the retail sector and the service sector from this consultation? The consultation does not mention the wider farmer-processor relationship with the ongoing supply chain, and specifically with the retailer. Will the Minister give a commitment that further inquiries will be conducted as the submissions are considered? It may prove difficult to make immediate recommendations. Reflecting across other sectors in the industry, can the Minister give any indication as to when further consultations will be progressed? Which sector has the department next in mind? Furthermore, how might the various sectors combine to find comprehensive answers to this very difficult problem of fair dealing in the industry, a problem that is now being tackled by the Bill? I beg to move.