Examination of Witnesses (Questions 360
TUESDAY 9 MARCH 1999
and MS JANET
360. I want to go on to food safety enforcement.
In the British Retail Consortium of all your members who sell
chicken up to a third of it will be contaminated with salmonella
and a substantial chunk of beef will be contaminated with E coli,
and if they sell raw milk that can also be contaminated with E
coli with very dramatic results. That is contamination in the
food when it is sold. Can you say how you envisage the Food Standards
Agency actually improving that and whether you think the measures
in the legislation are strong enough to get those contaminants
out of the food chain?
(Ms Nunn) It is one of the issues about the powers
of the agencies who go in and intercede and it will be very much
all eyes on the Agency as to whether it does that if ever there
is an outbreak. The first time there will be an outbreak all eyes
will be on the Agency to see precisely how it intervenes. Primarily
of course it will not have the right just to go on to the farms.
It will have the powers to intervene as necessary and MAFF of
course ongoing will retain powers to regulate the farm side.
361. So you see entry on the farms as being
one of the important factors?
(Ms Nunn) It could well be; that is right.
362. Do you think that the Agency should
have as a target elimination of salmonella and E coli from the
(Ms Nunn) Indeed. We have it ourselves as retailers
when we are working with the farming industry. Anything the Government
can do to help support that of course must be right for public
363. But why have not the retailers been
able to get those results, given that it has been possibly in
other countries, most notably Sweden?
(Ms Nunn) It has been possible to reduce. We have
got the incidence down to about 10 per cent.
364. That is not according to the figures
that were given to the Agriculture Select Committee.
(Ms Nunn) I think it is if you look at the evidence
given by Marks and Spencer and they are suppliers of high numbers
365. Certainly there were one or two of
the retailers who made a particular effort but in general terms
it was still up to 33 to 35 per cent for chicken.
(Mr Longworth) It is a rather complex area, the
issue of microbiological control in the food chain. It is a challenging
area for us all. It is challenging for Government and for traders
as well. We, as a business, have made huge strides to drive down
salmonella content and E coli content in our raw products at source.
Clearly there are products in our business that are ready to eat
and we expect there to be none whatsoever. That is a significant
point. Historically speaking there have always been food poisoning
bacteria in raw food, but people cook food in order to eliminate
them. That is why people cook food. That is how food has been
throughout history. It is arguable that it was far worse if you
go back many years, than it is today, but there has been a blip
and that does not detract from the object of driving it right
down. It is extremely difficult, with the best will in the world,
outside our business's food chain, in general trading terms to
eliminate it, and elimination, really depends on the action of
the Government agencies in this area because it is Government
agencies that regulate the supply of the raw material.
366. But you are saying that the legislation
is not clear enough about entry on to the farms and the control
of agricultural produce which is a very significant factor in
terms of both E coli and salmonella. Do you think that it should
be more stringent in terms of rights not just to observe on the
farms but to go on and take samples and treat them as food factories,
not just as farms?
(Mr Longworth) I hear what you are saying. The
farm end of the business is an extraordinarily important part
of the food chain in terms of control of micro-organisms. It is
very clear to me that the Government recognise that. the Ministry
have already got controls in those areas. Time will tell whether
they are successful. As time demonstrates this or not it may well
become transparent that the Agency itself will have to take the
role upon itself.
367. Tesco I understand is doing a lot of
work to prepare for the introduction of the Food Standards Agency.
That is what one of the local stores told me. Can you say a bit
about the way in which you are doing it so that the shops at local
level can deliver the kinds of requirements that the Food Standards
Agency is likely to set? Are there any loopholes in the law as
you see it?
(Mr Longworth) I am not entirely sure what you
mean by that question. In terms of our store operating standards
there is nothing that we need to do in order to accommodate the
introduction of the Food Standards Agency because we are already
doing it. What we have been doing however is working with home
authorities for enforcement in an experimental way, to look at
new ways of conducting enforcement, which may well be more effective
in the food industry generally. We have worked for example with
our home authority for trading standards in Hertfordshire to allow
them to do a systems health check on our business. We have really
opened our books to the home authorities so that they can check
our systems and give us a health check on one. We have done the
same, incidentally, with our lead authority for health and safety
on health and safety matters, that is, occupational health and
safety. The objective of this is to see whether there is a better
way in which food businesses can be regulated, allowing the enforcement
authorities to devote precious resource on to problem areas and,
having checked our business, they can then sample audit to test
whether those systems are operating effectively. We are trying
to help the enforcement authorities to free up resource.
368. Presumably quite a lot of the British
Retail Consortium members, and certainly Tesco, have international
experience because you have interests abroad.
(Mr Longworth) Yes, we have.
369. Can you say if you foresee any problem
from the Food Standards Agency being affected because of the restrictions
on what the British Government can do and how you regard what
will have to happen in relation to the world trade organisations
in the EU to see real improvements in food standards in safety
here and how the FSA will relate to all of that?
(Mr Longworth) We spend quite a bit of time considering
that. Taking the EU first, it is quite possible for the United
Kingdom Government to introduce safety measures into the United
Kingdom, within the EU regime. The Treaty of Rome allows for essential
safety matters to be dealt with by national legislation, if necessary,
so it does not remove United Kingdom rights to do that. The EU
regime of course is designed to provide safety and therefore,
within the EU context, that should be an acceptable regime and
at the boundaries, the EU will regulate imports into the EU from
other parts of the world. That is the regulatory framework. As
far as we are concerned as a business, we control our Tesco brand
products from wherever in the world they are coming from. We are
concerned to make sure they are safe and of a good standard and
we have a team of auditors, we have testing and so on, to ensure
that the consumer is getting a safe product. We are doing our
bit as well in that respect.
(Ms Stack) It does come back to what you were
asking about on salmonella and E coli because there are two areas,
are there not? There is what you can do within the law, within
the terms of EU laws, but there is also what you can do in terms
of policy. It comes right back to what was said about salmonella
and E Coli. To me they are both very much like what I was talking
about with nutrition. In order to get rid of salmonella and E
coli you would need everybody to be working together along the
food chain. This is a massive endemic problem and I know from
talking to my Swedish Co-operative colleagues that when they sought
to eradicate salmonella in the Swedish chicken flock, it took
a long time and everybody had to work together. What the Swedes
are worried about now is that chickens with salmonella from other
parts of the EU can come into Sweden. Yes, you could address these
problems but I emphasise: they are a policy, not a thing where
the Agency can just do this and that and solve it. There are EU
and trade connotations. Yes, you were right to ask the question,
but it is wider than what you can do within the scope of the law.
370. Would not irradiation help eliminate
(Ms Nunn) Yes, but consumers do not want it, so
there is no point peddling that one.
371. It might be something the Food Standards
Agency should look at.
(Ms Nunn) Yes indeed. It is actually a very good
process, very well scientifically understood, and tightly monitored
in this country, but hardly used at all except in some herbs and
spices because there is not the consumer support for it, so there
is no point going down that route as a solution.
372. You said earlier that all food is healthy.
If that is the case, why do you have to market a proportion of
it as being healthy?
(Mr Longworth) It is all to do with diet. There
are healthy diets and there are unhealthy diets. Having a range
of food that is healthy and this allows people to make healthier
choices as part of their diet. All of our customer information
explains that, because we recognise that it is all to do with
diet in terms of whether it is healthy or not. Of course it is
also to do with exercise and lifestyle and so on. There are a
whole range of issues that influence people's lives.
373. Can I move on to something that has
received a fair bit of criticism and that is the levy. The Minister,
Mr Rooker, has very strongly argued that the flat rate levy on
all food retailers was the most rational case for funding. I would
like your view about whether you think it is defensible, particularly
the view vis-a-vis, say, Tesco versus the Co-op, because it might
be seen that the Co-op have more stores with less turnover and
Tesco have bigger stores with possibly a greater turnover and
you may have a different viewpoint about a flat rate levy.
(Ms Nunn) It is thoroughly indefensible as a proposition.
It goes against what was in the manifesto pre-election when it
was talking about an independent agency. The work of Government
has always been funded through the public purse and it should
remain on that basis. It is a point of principle and food retailers
are united in pushing that. I would also point out that clause
23 is not proposing to cap this either, so it is not just a question
of £50 million as was first mooted. It can be very quickly
£300 million and that is only one part of the total cost
being put off now on to food retailers and other businesses. There
are meat hygiene inspection costs, fish inspection costs, egg
inspection costs we understand are coming on to the food chain
as well, as well as the wider costs being put on to business from
the implementation of other legislation, that is, the minimum
wage and so on. No, it is thoroughly indefensible and really for
the Agency to have integrity we would love for it to be launched
with full financial independence as well.
(Mr Longworth) It is extraordinarily important
for the food industry that the public have confidence in the people
who are regulating food safety and standards for the United Kingdom.
It is really important, because there are issues that are far
bigger than any individual business, issues like BSE, where public
confidence needs to be established and maintained. It is extraordinarily
important that the Agency is both competent and independent and
is seen to be both competent and independent. It needs to be well
resourced to be competent, but it also needs to be independently
funded in order to be seen to be independent. The public funding
of food safety, which is the right of every citizen, has to be
the correct solution.
(Ms Stack) You asked particularly about the levy
and what is proposed in the consultation document. I represent
nearly 2,500 shops. Tesco have roughly 600 shops.
(Mr Longworth) Around seven hundred shops.
(Ms Stack) Safeway have roughly 500. Asda have
200 shops, Marks and Spencer have 280 shops. On the £90,
and let us call it roughly £100, it leaves us paying £250,000
for our shops, Tesco paying £70,000 and Asda paying £20,000.
That is clearly inequitable and it is doubly inequitable because
of those 2,500 shops that I represent I would say 2,300 are small
and medium sized. Furthermore, where they are is in towns and
villages and mostly where they are was chosen 100 to 150 years
ago so we are still in the town centres, we are still in lots
of poor areas with very low turnover in our shops. The levy is
very inequitable as it stands. I have also to point out to you
what my colleagues have pointed out, which is that if you look
at 23(2) of the Bill, the £90 is a start-up cost. In the
description of the Bill the word "initially" is used
several times in relation to the £40 million. The £90
is directed at the initial costs of £40 million. Clause 23(2)
refers to the levy paying for "some or all of the following",
that is, the start-up costs. (b) the expenditure of the Agency,
that is, the whole expenditure of the Agency, and (c) the expenditure
of the enforcement authorities. This is a blank cheque. The cheque
is only blank in terms of the document you have here. There is
no sum put on all these costs. In the briefing notes that were
given out when the consultation was launched it does actually
say that taxpayers will continue to pay most of the range of the
food safety costs, but in total these are estimated to exceed
£250 million, that is, we may finish at £250 million
(you might like to ask officials), but what do (a), (b) and (c)
add up to? Supposing they add up to £250 million, the Co-op
gets a bill of £1.5 million, Tesco get a bill of just under
half a million, and Asda get a bill of £130,000. There is
inequity in the start-up but I do ask you to look at 23(a), (b)
and (c). That is a very serious open cheque and the inequity of
the start-up will lead to enormous inequities as the Agency goes
(Mr Longworth) Having said that, of course inequity
in start-up does not end there. It does not detract of course
from the fact that we believe it should be publicly funded for
very good reasons of principle, but even if it were not, we are
not levying on the whole of the United Kingdom food businesses.
The food industry is entirely exempt.
374. Is that what you would wish to see?
Bear in mind that the Government argue that there needs to be
some monies provided for the extra duties of the Food Standards
Agency and in fact Professor James yesterday made it quite clear
that he was in favour of the levy because of the involvement of
the activities. Are you then exhorting us to put the levy right
along the food chain?
(Mr Longworth) What I would exhort you to do is
have it publicly funded. However you divide this up there is going
to be some inequity, somewhere. Why should the businesses that
are scrupulous in maintaining food safety standards be the ones
that pay, for example? On the "polluter pays" principle
it ought to be the businesses that do not do that, who pay. Whichever
way you divide it up, it is going to be inequitable in some way
or other and it is also going to be an extraordinarily inefficient
and administratively burdensome way of collecting tax.
375. I take on board what you say. In order
to get an involvement there, what about a system where you have
a self-funding licensing system for all food outlets? The Chartered
Institute of Environmental Health argues that this should be linked
to enforcement of safety standards so that there is a licensing
system to raise standards, to have people involved, and it should
be for all food outlets from the little caravan on the layby to
Tesco, to Trust House Forté, whatever.
(Mr Longworth) It is a very administratively burdensome
and inefficient way of dealing with an issue.
376. But it does mean that you would have
a linkage between the money paid and the driving up of standards
which is what this Bill is all about.
(Mr Longworth) There is a huge amount of merit
in what you are saying about the linkage between funding and what
you get. I would not necessarily agree that that is the right
way to achieve that linkage. In terms of linkage between what
you pay and what you get, it is very important. To give you an
example of this, the way in which local government is funded currently
does not take any account of the number of food businesses in
a local authority area. It is very important for food businesses
generally, for food standards and therefore for the citizen, that
food authorities have adequate resources to deal with the businesses
in their area. There is a system in existence called the home
authority system where businesses' systems are in some way vetted,
not as intensively as we have explained to you in our Hertfordshire
experiment (although that is the way we would like to go), but
businesses are vetted and there is a point of contact for all
enforcement authorities nationwide, and that is the home authority
of the business concerned. The home authorities do not get funding
to provide for that, so you could have a very small authorityI
am plucking this out of thin airin, say, Lowestoft for
example, which has a huge number of businesses in it, or Westminster
which will have a huge number of food businesses in it, and the
funding for those authorities has nothing to do with the number
of businesses in the area. If you are going to have a linkage
between funding and activity there should be something done about
(Ms Nunn) May I make four quick points on that.
Businesses pay. They have costs in their own businesses for ensuring
they sell safe food. They also pay into the public purse through
the corporate taxes and business rates and so on. Having a licence
would do nothing to raise food safety standards per se. The registration
system is already there, so we can understand from that point
of view why that was looked at, but it is not complete. It leaves
out an awful lot of businesses further up the chain. If we are
going to go down that route therefore that will need looking at.
The point is that levying the food industry is going to hit the
poorer income households the hardest because you must be absolutely
clear on this point: the costs coming on to industry cannot just
be swallowed. There is no secret fund of money anywhere.
377. Neither is there within Government.
(Ms Nunn) Absolutely right; let us be honest about
it. It has to come from somewhere, but at least we would have
integrity by paying for the public activities through the public
purse because otherwise you are going to stymie the Agency from
the outset by having one industry pay for its own watchdog. It
cannot be right.
(Ms Stack) What we have never been offered, and
I would be interested to know if you have been offered, is a breakdown
of costs. A lot of the functions of MAFF are going to move into
the Agency. Clearly there are going to be start-up costs because
there always are, but what are the extra costs of the Agency?
Of course we want it to do more, but how much more and what is
that going to cost? If a large number of duties of Government
are moving into the Agency, the costs for those must be roughly
the same, so what are the additions? We have never been told what
those are. I beg you to understand: this is a blank cheque and
"blank" is the word for it.
378. Taking on board all your resistance
about the levy and the extra charge on business and the rejection
of a self-running licensing system, if the Government is going
to push through that we are going to have a levy from the industry,
would you like to put your minds round what kind of levy you would
like? Should there be one for instance on the basis of size of
turnover or those that are doing Sunday trading which are already
licensed for Sunday trading or those that are not?
(Ms Nunn) The one that would have integrity of
course would be through the public taxation system and that way
round you have your corporate tax, the ones who are making most
profit ultimately pay back in.
379. So it would be based on turnover?
(Ms Nunn) Yes. It should not be an extra levy
though because that is going to hit consumers hard.