Select Committee on Food Standards Minutes of Evidence

Examination of Witnesses (Questions 380 - 399)



  380.  I took on board your severe criticism of there being a levy and how this was an extra burden but, given that there will be, if there is one, what kind for levy should there be? Should it just be on retailers? Give your response to that. Or should it be up and down the food chain? Should it be on the bigger guys that are making more money or have bigger floor space or those that are doing Sunday trading?
  (Ms Nunn)  We want a risk based approach. Look at the food chain, see where the costs are coming and then target those on "the polluter pays" principle. Ask for those parts of the food chain to be putting in the money.
  (Mr Longworth)  Whichever way you divide up the levy there is going to be some inequity. There is no question about that. There are a lot of downsides to whatever measures you have. You mentioned turnover in this context. One wonders why successful businesses should be taxed more heavily than unsuccessful businesses. You talk about targeting tax in a way in which businesses that are very safe and really put a lot of resource and money into safe food should have to bear the majority of the cost of problems which are actually caused by others. Why should that be? Why should we have a levy situation where retailers and caterers pay the levy when the majority of food scares in the last 10 years have come from the medium sized manufacturers and farmers? There is a question to be answered there. My view is that whichever way you divide the levy up there is going to be some inequity. It really has to be funded through the public purse. Food safety is something for every citizen. We do not fund the police through a levy on businesses. Why should we fund food safety? It is a very strange thing to me.

  381.  Do you have a view about which way it would be?
  (Ms Stack)  We are in the fallback position mode. It has been said several times that the Food Standards Agency will benefit the food industry. Sorry; that is not true. The Food Standards Agency will benefit everyone. That is the other logic for general taxation. If we are in absolute fallback mode the whole of the food industry should pay and the levy should be graduated in some way.

Audrey Wise

  382.  In passing I would just observe that Mr Longworth has mentioned BSE. I draw your attention to the fact that your definitions of risk would not have included BSE, so you might like to think about that.
  (Mr Longworth)  Why do you say that? I do not understand that.

  383.  Because you said microbiological or chemical toxicity. I do not think that is covering BSE.
  (Mr Longworth)  We would include any pathogen or risk agent in that.

  384.  You are then getting nice and wide and more like I feel, but it is not what you said. However, back to the levy. It seems to me that the levy, as my colleague has shown, has two levels. Should there be a levy at all, and then there is: if so, what kind? Going back to should there be a levy at all, which you said was a point of principle, you mentioned independence. This is puzzling me. How can the payment of a levy compromise the independence of the agency?
  (Mr Longworth)  The really important point is how it is perceived. It has to be seen to be independent and there will always be a question mark over an agency that is directly funded. One of the areas of activity of Government that has been most questioned in relation to its inspection role has been the Meat Hygiene Service. The Meat Hygiene Service is directly funded by the meat industry. This is a potential problem in terms of public confidence. In fact, the matter of the Agency having public confidence is even more important to Government itself than it is to the food industry.

  385.  It seems to me that you are doing your best to ensure that public perception will be influenced to think that there is somehow a lack of independence if there is a levy. How could a payment of a levy by the industry affect the independence of the Agency?
  (Ms Nunn)  If you remember through the BSE crisis there was a time when the Meat Hygiene Service was set up and there were specific allegations of bullying in abattoirs by staff of inspectors to pass meat that was substandard. There is a very real challenge out there in the workplace very often. When you are being inspected and you are being paid as a worker perhaps for piecework, if the inspector wants to go outside to the lavatory you all have to stop work. There are very real issues here and it is far away beyond our control. It can come down to practical examples. The perception issue is really very important.
  (Mr Longworth)  It is to do with public perception. There is a general view amongst the public about this. I am not saying for one moment that it will be influenced by the funding regime but it is a question for public perception. There is always a possibility that people will say that it is influenced. That is not very good for us.

  386.  People like yourself.
  (Mr Longworth)  No, absolutely not. What I want is an independent Food Standards Agency that is seen to be independent. It is extremely important for us and even more important for Government that citizens have confidence in it.
  (Ms Nunn)  This is one for the extra costs coming through to consumers. One in four of our households nowadays is headed by a retired person. There are now more children living in poverty than aged people. This is something that needs to be looked at by consumer groups. It is only one of a whole raft of costs coming down the food chain on to our customers and we are concerned about it in that wider aspect.

  387.  So when you say the public purse you mean of course taxation. If corporation taxes are increased to pay for this will you say, "Jolly good show", or will you, as business usually does, complain bitterly about extra burdens and how you will have to shed staff or take some other action?
  (Mr Longworth)  In the overall context of taxes of course businesses do not like taxes. That is absolute fact because we have to run businesses. It is a cost to our shareholders or to the consumer, or to employment. That is what effectively business taxes are. They have to be paid somewhere by shareholders or employment or the consumer pays in the end, but it would be better if this were funded through taxes as are most other similar services in society, than if it were funded by some arbitrary choice of levy within the food industry.

  388.  You would be quite agreeable to corporate tax being increased to pay for this?
  (Mr Longworth)  Corporate taxes would be a better route than a levy on sections of the food industry.

  389.  With regard to who it should be on, we did get an answer on why it was not manufacturers etc. The answer was that if the levy was placed on manufacturers or food producers here, that would not catch imports. Do you think there is any validity in that?
  (Mr Longworth)  No, I think there is no validity at all. The suggestion that a huge, multinational manufacturer would in some way be competitively injured by having to pay a few hundred pounds for a few sites in the United Kingdom is absolutely absurd.

  390.  I do not think it was just about huge, multinationals being competitively injured; it was about people manufacturing food here and paying towards the Food Standards Agency whereas people of whatever size and wherever manufacturing outside our immediate shores were not having to pay towards the Food Standards Agency.
  (Mr Longworth)  It still comes back to the point I am making. We are talking about relatively small sums of money—very small sums of money, in fact—in terms of individual facilities. Do not forget we have large numbers of outlets. Manufacturers tend to have one or two. These are very small sums of money by comparison with overseas manufacturers. Taken in the context of overall costs of doing business in the United Kingdom and the choice about what standards you want in the United Kingdom to begin with vis a vis overseas areas of trade, it seems to be an absurd argument to be made. It should also be remembered of course that it is a rather odd thing that we, as a multinational retailer, should have to bear that cost in the United Kingdom. It is the same argument.
  (Ms Nunn)  Food produced elsewhere and imported—those businesses will have met costs where they are produced. They are inspected and surveyed either in the EU or other third countries. In one sense, I suppose, it would have been a double hit for them to be separately targeted, but the fact is, if they are being sold on this market, it is right for the government to ensure that they are safe anyway. They would need to be brought under the inspection regime.
  (Ms Stack)  It should be the whole of the food chain. There will also be issues of inequity within each section of the food industry. There are large manufacturers and I must honourably speak up for the small manufacturers who have just the same problems as small shops. The international commitments issue is a non- starter. They have a food committee in Sweden, presumably funded by taxation. They do not go on about it. This is an internal United Kingdom issue and there are equity arguments and they should be addressed.

Dr Brand

  391.  Can I ask Ms Nunn a very quick question about the exemptions to the proposed levy? Is there a risk that we are going to have shops which currently have a reasonable spread of snacks including some sandwiches and fruit and that sort of thing having to restrict their output to crisps and Mars Bars?
  (Ms Nunn)  Our concern is it seems that the exemption was well intentioned and perhaps let off the very small newsagents and so on. An awful lot of outlets that originally started off in those kinds of businesses have moved away from the ambient foods to the higher risk foods such as sandwiches or milk. We would argue that, to have integrity on this point, they should come within the remit of the levy if we are to go down the route of worst case scenario. It seems in the wording at the moment—it is not tightly worded—that such premises could be exempted which surely is not right from a food safety point of view.

  392.  They will only be exempt, as I read it, if they sell wrapped products.
  (Ms Nunn)  If you wrap a sandwich——

Dr Brand:  They have to be manufactured somewhere, have they not?

Mrs Organ:  If they are selling a sandwich, it is a food. Wrapped means wrapped sweets and crisps.

Dr Brand

  393.  Have you had any evidence from the feedback you have had from your members that people will reverse that, I think, desirable trend, where people should open out and give more choice because of the threat of this levy?
  (Ms Nunn)  No. If anything, I have had members comment that you can have food safety issues with a vending machine. You get mice going everywhere. In one sense, there is no logic in allowing any exemptions at all. That is the only specific comment I have had on that issue.

Ms Keeble

  394.  You have mentioned the need for the independence of the Agency. Do you think there are any potential pitfalls for the Agency's remit to act independently of specifically sectoral interests?
  (Ms Nunn)  Transparency is probably the key to ensuring that the public has confidence in the Agency. I can understand that there might well be very good reasons sometimes for keeping commercial information shared with government, say, on passing new foods before they go to the marketplace. That needs to be handled very carefully and opened out fully to whatever scrutiny committees are in place. We would urge that there be full transparency and ability for people to comment. It needs to be a very open, inclusive culture and that leads us neatly on to another of our main concerns about it. It is proposed to have a register, which is excellent, for any members or in due course I presume advisory committee members to declare interests. Yet it is clearly also intended from the notes that anybody with an interest would not then be a member. That would exclude not only food industry people, academics, consumer groups. You would be ruling out an awful lot of people who have practical experience and a very real, live contribution to make.

  395.  You have mentioned two bits of the independence and the credibility issue, which is what the independence is aimed to achieved. You have mentioned procedural integrity, but there is also an issue about personnel. You mentioned the composition. I think most people assume that independence means people who are not earning a living from the industry, selling or producing food, rather than people earning a living from being a consumer group. There is strong public feeling about not having it packed with people who are active in the food industry. Do you think that poses a problem if you have people who do not know enough about the industry?
  (Ms Nunn)  I think it is a weakness just to have academics or consumers, however well intentioned and well plugged into their own particular constituencies. I think it needs to be practitioners. The food retailers have seen some food scares and perhaps the way government in the past has assessed and managed risk would have been improved if some of the people involved in the day to day challenge of giving, say, foods to the market place had been there at that risk assessment stage.

  396.  There is a flip side to that as well. There are strong feelings about making sure the consumer interests are represented because consumer confidence is what has been missing from quite a lot of the food scares. In quite a few of the consumer organisations, the consumer is represented by the PR and marketing agencies and so on from some of the food companies. Can you name organisations that can best represent the consumer interest? How do you think that should be done? Personally, I do not find it satisfactory that it should be PR people from a big supermarket, however well intentioned they might be.
  (Ms Nunn)  As long as you know where they are coming from, I think they would have a very valid contribution to make. We are aware, as retailers, of the weakness that we have seen in the past decade or so in the way that consumers have fed into a number of advisory committees. For example, they have been involved with genetic modification right from the Polkinghorn Committee. There has been a constant consumer presence on these committees.

  397.  On the Polkinghorn Committee, that was looking at rather different issues, different from the ones that are currently surfacing. If you look currently at really big food scares, what has been missing has been a clear consumer voice. I do not see how we are going to get it on this FSA and I wonder if you have any suggestions.
  (Ms Nunn)  There is no one particular body that we think stands out above any other on this. Clearly, three or four high profile consumer bodies who have a very valid contribution to make——

  398.  Who are they?
  (Ms Nunn)  They are the National Consumer Council, the Consumers' Association, the National Food Alliance and the Consumers in Europe Group. They have some very valid pieces of work. They are good contacts to bounce ideas off but of course quintessentially no one person can represent the whole of the nation.


  399.  Could I just ask Jill Wordley if she would like to clarify the situation? Jill Wordley is from the Food Standards Group. We have a team of them sitting with us.
  (Ms Wordley)  I did just want to clarify one small factual point. Janet Nunn suggested that the notes on the draft Bill said that any interests would automatically debar anyone from membership of the Agency. I think it is important to be clear that the Bill does not automatically debar anyone with an interest. It requires the Secretary of State to consider interests and the explanatory notes say that the Secretary of State would need to consider whether those interests might compromise their position but they go on to say, "This does not necessarily mean that such interests will automatically disqualify a person from appointment as a member." Clearly, the issue is one of judgment as to whether it might compromise their ability to serve as a member of the Agency.
  (Ms Stack)  The issue of consumers on scientific and advisory committees was raised. My experience of talking to consumers in the Consumers in Europe Group—and I think Philip James did say it yesterday—is that there was a real change of culture in those committees because a consumer was there. The way we in the Co-op would see membership of the board of the Food Standards Agency is that consumers and independents would be in the majority but people with direct experience of the industry would carry out a very similar role to consumers in scientific committees. They would make people talk in a different sort of way. In the scientific committees, consumers no doubt make scientists explain why they are doing things and what they are doing. It would be a similar thing for the Agency. You do need both sides.
  (Mr Longworth)  It is a healthy challenge within the structure of the Commission to have that sort of interactive debate.

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