Select Committee on Food Standards First Report


Submitted by the Institute of Trading Standards Administration


  The Institute of Trading Standards Administration (ITSA) is the professional body representing the interests of trading standards officers in the United Kingdom. As the James Report notes, trading standards officers (TSOs) have a wide range of duties appertaining to the quality, composition, presentation and advertising of food. The James Report also acknowledges the inextricable linkages between other duties administered by TSOs which include animal feeding stuffs, animal movements, food and general product safety, trade descriptions and weights and measures.

  We note that these wider considerations are beginning to crystallise and are particularly pleased to see the emphasis given to animal feeding stuffs in Clause 28. This is an area of work in which trading standards officers can make a unique contribution.

  It is because of these unavoidable connections, and the emphasis given by the Government to restore consumer confidence, that we believe the Food Standards Agency should become actively engaged in working with other government departments to promote a comprehensive strategy for consumer protection. We would urge the Joint Food Safety and Standards Group to participate fully in the work currently being undertaken within the Department of Trade and Industry to draft a strategy for consumers. Joined up thinking and joined up action is what the public expects.

  ITSA values the work undertaken by MAFF's Consumer Panel and would seek an early commitment from the Agency to develop a forum, independent of the Agency, in which consumers could air their views.

  ITSA welcomes the opportunity to comment upon the draft proposals and looks forward to working with the Government to make the FSA the success we all want it to be.


  ITSA supports the basis upon the Agency is to be established namely:

    To strengthen the arrangements for dealing with food safety and food standards.

    To remove the conflict of interest evident in MAFF's remit of protecting consumer and promoting the interests of business.

    And to critically put the consumer first in all aspects of food safety.

  We seek clarification over the substitution of the reference in the White Paper to a Commission being established with a reference to membership of the Agency in the Draft Legislation (Clause 2). We are unsure as to the distinction between the choice of words and are consequently unclear as to whether or not this has any significance over the future management and administration of the Agency.

  We welcome the explicit reference to consider whether a person has any interest—including a financial one—which may prejudice their independence in serving the Agency. We support the need to make appointments to the Agency which are based upon a person's competence and experience. We would like to see at least one appointment to the Agency made from a person with experience of local authority food law enforcement. We believe that such a move would go a long way towards preventing grass root problems arising, as well as building upon the trust that is currently being fostered between central and local government.

  Clauses 9-11 go to the heart of the new Agency, namely to be open, honest and helpful in the provision of advice, information and assistance. The ability of the Agency to publish advice given to Ministers is an important step in establishing the credibility of the Agency in the eyes of the public. We are of the opinion that the overriding presumption should be to place the information in the public domain unless there are exceptional reasons for not doing so. The public interest must be paramount in all that the Agency does and not commercial sensitivity which gave rise to recent food crises, and in turn the need to separate out the functions of MAFF.

  ITSA strongly endorses the Agency's right to set standards and to monitor and audit the performance of local authorities. Food law enforcement, and consumer protection in general, has suffered in recent years. The only of arresting this decline will come through setting clear and achievable standards backed up by a determination to take action against authorities who are unwilling or unable to meet the challenges.

  Whilst it is important for local authorities to accept their responsibilities, it is equally important for Government to ensure that local authorities are adequately funded to discharge their duties. Where new money is made available, ensuring that it finds its way to front-line practitioners is a challenge that the Agency must respond to.


  The consultation paper states that without the levy, the FSA will not be viable. The fact that the Agency needs more money is something which we are not in a position to question—we would, however, have liked to have seen similar references made to the needs of local authorities. What is in question is whether or not a levy is the right way of raising any necessary income, and whether a flat-rate charge is the most equitable means of apportioning this burden on business.

  The principles upon which the levy scheme is based are:

    (i)  To transfer food safety work away from the tax payer and onto the food industry.

    (ii)  To be simple to administer.

    (iii)  To be fair to small business.

  These principles will be returned to later.


  The Paper considers three options:

    (i)  Whether the charge should constitute a flat-rate levy or a graduated one;

    (ii)  What, if any, exemptions there should be; and

    (iii)  Whether the levy should be collected nationally or locally.

  Before examining these options, ITSA believes that the Government ought to reconsider the opportunity to fund these new measures out of general taxation. After all, the Government is finding "new" money from general taxation to fund new—and laudable—initiatives in health and education which in some cases only benefit specific communities, Health and Education Action Zones for example. We all eat food. The £90 is, therefore, going to be passed on to all consumers. The way in which consumers pay for these new responsibilities remains the only bone of contention. ITSA believes that the most efficient way of raising an extra £41 million for the Agency is through general taxation.

  Many shire districts have less than one thousand food premises registered with them; some have as few as 3 or 400. These authorities will have to do much more than just maintain the Food Register: there will be three further demands placed on them namely billing, collection and recovery—including the use of bailiffs where necessary. These four tasks will be supported by systems and staff (which no one has costed) and arrangements will then need to be put in train to transfer what might amount to as little as £25-30,000 to the Agency. An added complication will be to ensure that County Councils receive some apportionment of the income for new responsibilities.

  The Paper says that the Government does not believe that there is a realistic alternative to applying a levy at the final point of sale. It says that the £90 will not create significant problems for the great majority of businesses. The paper dismisses ITSA's suggestion of the Non-Domestic Rates as an alternative to collecting the charge at a local level, as being complicated to manage. It is important for us to deal with each of these issues.

  Applying the levy at the point of sale will ensure that the tax treats imported and British manufactured goods equally. It will, however, provide an exemption for all food manufacturers, businesses who take a disproportionate amount of our time and who, arguably, could afford the tax the most (the village shop will pay £90 but Northern Foods, for example won't pay a penny).

  The statement that charging £90 will not create significant problems for business, fails to recognise the true plight of small village shops. How much "extra" turnover must a small shop make—one that is already facing extreme competition from the out of town supermarkets—in order to find this additional sum of money. The sum may equate to two days profit, at a time when most small shops are working seven days a week to make ends meet. What too of farmers selling bags of potatoes at the kerb-side, the Levy will surely put pay to their little side-line as well as the current attempts being made to establish farmers markets? The current exemptions would not exempt local authority establishments so every school and social services establishment providing meals would be subject to the charge. ITSA wishes to know whether the allowance made for local authorities to collect the levy would include the extra cost by councils having to pay many thousands of pounds in registration fees themselves.

  As for using district councils' food registration schemes as a basis for collecting the levy, not enough consideration has been given to the way in which this would be implemented and the associated costs. It is going to require over 400 councils investing in new technology, employing staff to administer it, plus the costs of sending out reminders, summons and so on. If the £90 levy is not paid within three months then it doubles up to £180 and the process of securing this civil debt through the local court, and the prospect of using bailiffs for non-payment of the debt looms. It is not surprising to find that some are already branding the levy as a "food poll-tax".

  The integration of the food levy with the non-domestic rating system would reduce start up costs: the system is already functioning and it would not take a great deal of ingenuity to put a marker against "food premises" to levy an extra charge against. The collection system is already in place and, more importantly, it lends itself to a graduated levy which is what is fundamentally required. The non-domestic rates is based upon rateable values of property which is more likely to take account of a businesses' ability to pay and would also widen the tax base to allow manufacturers to make a reasonable contribution towards the attention that they warrant from local authority enforcement staff. The logic that they should have been exempt from the flat rate levy of £90 because it places foreign competitors at an advantage shows a poor grasp of reality. Major national and international companies would not blink at handing over £90, unlike the local village shop.

  There is some mention of exemptions, but they are limited to occasional charitable sales and to premises that sell only wrapped goods, newsagents for example. It still throws up a number of anomalies like the market trader who operates from several market sites. Will that trader have to pay several levies because he operates from two or three sites in different locations?


  It is now appropriate to return to the three principles upon which the levy scheme is based, namely:

    (i)  To transfer food safety work away from the tax payer and onto the food industry.

    (ii)  To be simple to administer.

    (iii)  To be fair to small business.

  Starting with the first point, to transfer the cost from the tax payer onto the food industry. The assumption seems to be that the industry will simply absorb the cost. That may well be possible for the likes of the major supermarket chains but not for the majority of small and medium-sized food premises. The cost in these cases will be passed on to the consumer—the tax payer.

  Taking the second point, the ease of administration. Could anything be more difficult and less efficient to administer than 400+ districts creating new (and perhaps different) systems, to chase sums of £90 (this figure may in theory reduce as £12 million of the £40 million is set aside for start up costs over the first three years). The only winners are likely to be IT consultants, software manufacturers and bailiffs. It is interesting to note that in a recent local government publication Lord Bassam, Leader of Brighton and Hove Council went on record as saying that millions of pounds could be saved on housing benefits administration if district councils banded together. Brighton used their local arrangements with neighbouring authorities as an example of Best Value—isn't this one essential feature regrettably missing from the proposal for districts to collect the levy?

  The third principle seems to be a throw-away remark, one which does not appear to have been considered in any depth. Could anything be less fair to small business? To provide exemptions to the levy for national and international manufacturers who create a vast amount of work for local authority practitioners, whilst taking no account of the capacity of a business to pay is anything but equitable. What tax—direct or indirect—doesn't take account of different classifications of person, property or product?

  This tax—for which local authorities are to be allowed a modest amount towards the cost of administration—has little to do with raising standards. Charging the local cafe owner £90 will not improve his/her ability to do a better job, and they will not be de-registered if they continue to contravene food hygiene regulations. The emphasis of the levy is on using local authorities to collect revenue for the coffers of the new Agency.

  General taxation is the most equitable and efficient way to fund the Agency. The Non-Domestic Rates is the most efficient and equitable way of collecting the revenue on a local basis. Licensing is a better way than registration to improve standards. The local flat-rate Levy has none of these attributes. We would strongly urge the Government to think again about its introduction.

March 1999

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