Select Committee on Food Standards Minutes of Evidence

Examination of Witnesses (Questions 360 - 379)



Ms Keeble

  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 food chain?
  (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 health.

  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.

Dr Moonie

  370.  Would not irradiation help eliminate bacteriological contamination?
  (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.

Mrs Organ

  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 on.
  (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 authority—I am plucking this out of thin air—in, 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 that.
  (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.

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