Select Committee on Food Standards Minutes of Evidence


Examination of witnesses (Questions 760 - 779)

THURSDAY 11 MARCH 1999

MR JEFF ROOKER, MP and RT HON TESSA JOWELL, MP  

  760.  Do you have any comment to make on something I noticed in the Financial Times today which seemed to hint that there were those who wanted to make sure that this was actually an arm of MAFF instead of a free standing agency and hinted that there are internal wars perhaps, or cold wars at least, rather than between the departments but within the departments? Do you have any comments on that?
  (Mr Rooker)  I saw that. All I can say is that it has been a Government policy, it has been a Labour Party policy, it was in the manifesto, for a Food Standards Agency that is independent of the day to day control of ministers. I always use that phrase rather than independent Food Standards Agency because it gets me into the difficulty of it being a free standing, creating its own agenda agency. That is a Labour Party policy, a manifesto commitment, and we are intent on delivering it. That was enunciated in the White Paper published in January of last year and since then it has been Government policy to have this independent agency set up in the way that the White Paper framework was. I have never seen any proposals for the Food Standards Agency remaining in MAFF. If that proposal was ever made, which I suspect it was not and one cannot believe everything one reads in the papers, it would have been contrary to the express wish of the Prime Minister who has gone out on more than one occasion to make it quite clear that he wants the Food Standards Agency, he said so in the last Queen's Speech and the one before. Therefore, I have to say that story is without any foundation so far as I am aware in my experience in MAFF.

  761.  Thank you. Finally, looking at Clauses 9 and 10, Clause 9 gives a duty to provide information to public authorities and Clause 10 gives a similar duty to provide information to the general public. I am not going into the detail of this but there is information to public bodies and information and advice to the general public. It has been suggested to us that it would be rather a good idea to have specifically included another responsibility to give information and advice to the food industry in the widest sense. It struck me as quite sensible because they are not public bodies and to think of them purely as the general public is not quite right. Perhaps you would like to comment.
  (Mr Rooker)  I have to say off the hoof I think that is an incredibly sensible suggestion which we will take on board during this period of consultation.

Audrey Wise:  Thank you.

Mr Paterson

  762.  How will you ensure that you keep to the requirements in Nolan and yet have people on the board, the 14 members, who really understand the production of food and who may still be involved in the production of food?
  (Mr Rooker)  You are quite right, there may be someone on the board who is still involved in the production of food. It is not unique, of course, in the sense that the Nolan principles and the new rules have been in play now for some time and it takes a while getting used to them, I do not deny that. In terms of the appointments, those are operating at the present time in Government appointments, they are operating in advisory committees and other quangoes, if I can use that short-hand term, where people have got expertise, knowledge, experience and, of course, interest. It is the job of the sifting process and the job of looking for people of integrity to make sure we get the best people. By being open and transparent that is really the key that underpins the Nolan principles because quite clearly one can go back ten years when it certainly was not open and transparent and there were examples of all kinds of people running agencies and you did not know even as an MP their daytime or nighttime job was something else or they had other interests or shareholdings or what their spouse did and things like that. Things have changed dramatically in line, in a way, with our own Register of Member's Interests which has moulded over the years. It is much more intrusive and we do not complain about that. I think that is part of the price you pay being in public life. The person or persons at the top of this Agency are definitely going to be in public life.

  763.  Very briefly, what sort of balance do you see between health and food safety pressure groups and producers on this board?
  (Mr Rooker)  None. Let us get this clear. Nobody is going to be on the board of this Agency representing any group. No group, no industry, no pressure group will own a place on the board. We will not take applications from pressure groups, industry groups, or whatever, it is individual people we are after. Individual people will apply and they will be appointed independently. If, because it is naturally bound to be the case, people come from academia, health, I do not know, a micro-biologist who happens to work in local government or a research institute, when that person retires the place they came from does not own that place. I make that absolutely clear. There will be no interests appointed to the board representative of organisations. They will be individual people—and I know this can be done—appointed for their experience, the skills they have got, the experiences they have had as well as their current experiences and they will in no way be appointed because they are representative of an organisation. I told the Local Government Association yesterday when they said they wanted two on the board, you can forget it, there will not be anybody on the board representative of local government. That is not to say there will not be anybody there who has never worked in local government or is currently in there but they will not be reporting back to any groups to which they feel accountable. There will not be that kind of arrangement and the way they are set up and the terms of reference will make that absolutely clear.

Chairman

  764.  Can I move on to the infamous levy, Ministers. Jeff, you told us when you were last here that its intention is to raise no more than £50 million a year for the next three years running alongside the Comprehensive Spending Review. Indeed, most of the evidence we have been given has been in and around the revenue that would generate in terms of a flat rate levy. I know that is not necessarily a fixed picture at this stage. You mentioned earlier the question of the explanatory notes. It says in the explanatory notes in relation to clause 23: "It is proposed that public funding of the government functions which will be taken on by the Agency will transfer with those functions." I think most of us understand exactly what that means. There will be money going over from the Treasury that is currently being spent in the areas that are transferred." The Government also intends, over time, to raise more of the costs of food safety works by means of a levy on the food industry." Looking at clause 23, section 2, if we look at the first part which is 2(a), that is about the expenditure of the Secretary of State or the Minister of MAFF incurred in connection with the connection with the establishment of the Agency. I have got in front of me the draft food standards factsheets that were used to launch the consultation process in relation to the levy. It says there in relation to 23 (2)(a) that it is about £40 million. Some of this levy money, as it were, may be for local authority initial costs as well. We estimate at this stage on the current proposals that it would generate a £90 levy for the retailers being outlined in the debate at this stage. If you go on to 2(b), the expenditure of the Agency, again referring to the factsheet, the expenditure of the Agency is some £120 million per annum. That is what they are expecting it will be. If you add those two figures together using the same basis of a levy, at the moment that levy would go up to roughly £300 a year on the retail outlets identified in this debate. If you then look at section 22 (c), which talks about the expenditure of enforcing authorities other than the Agency under the 1990 Act. Most of this is currently going into local authorities. The cost of that according to the factsheet is some £250 million. If we do the same calculation again that would mean something in the region of £600 a year for a levy as currently constituted on those food retail outlets. I know a lot of this is supposition——
  (Mr Rooker)  Yes it is.

  765.  But what it says in the clause is that a levy may be imposed under this section for the purpose of meeting "some or all of the following expenditure." In reality you will be asking Parliament, if this clause does not alter, to take up a position that no matter what the explanatory note says, that no matter what the intention of the current Government is in raising this extra funding and how it is going to raise it over the next three years, to put the right of raising money for food standards safety and for enforcement, the bulk of which is currently found from the Exchequer, down onto a levy of food retailers or whoever Government decided would pay that levy without necessarily coming back certainly for statutory legislation to change an Act of Parliament as opposed to an Order in Parliament. Do you honestly think that is something that we as parliamentarians ought to accept on the basis that public debate is about what a lot of people believe to be quite a small amount of £90 less tax rather than saying it could be £600 less tax? There is a hell of a difference there which may start to affect some very small retailers. I would like your opinion on that.
  (Mr Rooker)  It is a very fair question. It is a wide ranging clause but it is an enabling clause, of course, it is not prescriptive and it is certainly not the final word. Of course, paragraph six makes it quite clear that any figures involved have got to be done through an affirmative resolution procedure of the House, this is not something that can be slipped through by a negative SI, there will have to be a positive vote in the House under six operating this. It is true, it does say "for the purpose of meeting some or all of the following expenditure..." We have made it quite clear, and I think you read that out in the notes on the clauses, that it is the Government's intention over time, and I have no time limits or timescale on this, to move more of food safety and standards from the taxpayer to the industry. This is the position we are at. For the three years of the Comprehensive Spending Review, which we are just about to start in a few weeks' time in April, we will not seek to raise more than £50 million a year. Within that constraint, as it were, because it is a constraint obviously, the Government freely gave last July publicly, so it is not a new figure, the levy figure. What will happen after the Comprehensive Spending Review period, because the way the Treasury has got it organised in three year lots it will be reviewed after two years for the next Comprehensive Spending Review, is that will be when decisions will be made. With respect, and I do not think anybody is in a position to say, I cannot say what will happen then. You can criticise, because that is your right, the wide ranging nature of the clause but it has been done that way to give maximum flexibility to the Secretary of State so that we do not have to come back for primary legislation. It is difficult enough finding slots for primary legislation, as indeed has been shown by the delay of this Bill although, frankly, I think the delay will make this Bill a much better quality Bill than it would have been if we had pushed it through last year. Yes, it is wide ranging and we make no apology for that. There is no hidden agenda. We have not got a Government policy enunciated that it is our target to collect the lot, as you pointed out when you added all the figures up. There is no Government figure, there are no papers. We had all kinds of discussions last summer about how we fund the Agency. I am not saying that these kinds of discussions have not taken place, that would be misleading you. We did not just think it up out of thin air. In the first half of 1998 after the White Paper was published, because we gave an example in the White Paper that we would have to raise some new money, without the new money there is no Agency, we then had to say how should the Agency be funded. Should it be all taxpayer? These decisions were discussed. Should we raise more than the start-up plus the new money? Then we started to look at what kinds of figures would be produced and the consensus within Government was that we would go this far and no further, hence the publication of the levy proposals in the other consultation paper. I cannot go any further than that. Come a Second Reading this clause and probably a couple of others will be subject to as much scrutiny as the rest of the Bill put together. The access to premises and that kind of clause and Clause 18, the practicalities and objectives, will be subject to intense scrutiny as, rightly, so will be the charging clause by which time, of course, I suspect once we have consulted about the proposals for the levy we will be some way down the road before we have to make a decision. This clause allows us flexibility as to what we do with the results of this consultation paper. We are genuinely consulting and I am hoping in your report you will provide us with some choices and some options.

  766.  I think the Committee may do that. It will be a matter for the Committee at some stage. It just seems to me that this is a quantum leap in terms of the funding of food safety enforcement in this country from how it is currently. It might be the case that funding is not that clear nor consistent from one area to another and therefore maybe the enforcement is not that consistent, but from a funding point of view this is a quantum leap from what we have currently.
  (Mr Rooker)  Yes it is.
  (Tessa Jowell)  I was just going to add to that there are already powers in the Food Safety Act for enforcement authorities to recover their costs.

  767.  I am sure we are going to be looking at this issue of " some or all" perhaps not in our Committee but certainly as this Bill progresses through Parliament.
  (Mr Rooker)  The thrust of your question, because you have not mentioned it in the way that other colleagues have, impugns the independence of the Agency. For example, the Veterinary Medicines Directorate costs about £8 or £9 million a year. I think it fully funds itself from the costs it makes to those who do the applications. Nobody ever argues that the Veterinary Medicines Directorate is not robust and independent. In fact, we have lots of overseas companies coming to get registration under us because we are quality regulators. If you have gone through the British system it means something when you are selling abroad and people want to buy that service, if you like. As I said earlier on, the Meat Hygiene Service recovers the costs essentially for its meat inspection service. That is a European Union requirement. Nobody argues that it is not independent. People argue the other way; it is too onerous. You are quite right, it is new and it is right that this Committee and indeed the House itself as guardian of the vote, if you like, takes a good long look at the way the Government intends to fund this very important change in terms of the conduct of food policy.

  768.  The figure that we have in terms of the overall cost is £250 million, as it were, that this current mechanism would generate from this kind of a levy. It is only an estimate of what currently happens and what we think is spent in local authorities. I do not know how accurate it is in terms of its total sum. If the Food Standards Agency is to do what we hope it would do, which is to lessen the risk in terms of the food chain and elsewhere, then really we do not know the actual costs would be and what it itself would decide should happen in terms of enforcement and research and development and other areas as well over time. I could be here quoting figures that look massive and frightening to a small retailer but which could be miles away from the actual reality of what the Agency itself might decide it wants in years to come to do the job we hope it will doing.
  (Mr Rooker)  Yes, but Parliament will receive annual reports from the Agency. I have no doubt there will be business plans and it will be identifying the priorities that it perceives need attention. Clearly there is a diseconomy of scale in setting it up. We freely admit that given the fact the work is carried on within two government departments. For all I know, nobody can contradict me, it may find ways of enforcing food safety and food standards because it is a UK-wide Agency doing a unique management role that does not exist at the moment much cheaper but more effectively.

Mr Walter

  769.  Just very briefly about the politics of this because when we come to look at the Comprehensive Spending Review term in two years' time this will then be expenditure of the Department of Health. It will come under the Department of Health——
  (Mr Rooker)  It will not actually; it will have its own vote. It will be clearly stated in its own document that it will have its own vote.

  770.  Will it be a subheading under health?
  (Tessa Jowell)  No, no.

Dr Brand

  771.  Can I ask for some clarification. Is it the money that the Agency raises that will be subject to its own vote?
  (Tessa Jowell)  No, the whole budget.
  (Mr Rooker)  The overall budget. The House will be able to see like the other non-ministerial departments that it will have its own vote. In other words, there is no risk whatsoever, which I think is what is implied by your question, of the Secretary of State for Health thinking, "I need more beds I will raid the Food Standards Agency and no one will find out." Not true. Cannot happen.

  772.  But he can, of course, stop giving the research grant in three years' time and expect the Agency to pick that up.
  (Tessa Jowell)  No.

  773.  Is that written into the Bill?
  (Mr Rooker)  The Agency is effectively a non-ministerial department reporting to Parliament via the Secretary of State for Health. The Secretary of State for Health will not have hands-on day to day control of this Agency in the same way as I have said the Treasury does not have hands-on control of Customs & Excise, they have their own separate vote.

  774.  Minister, the Treasury has control over how much money this Agency is going to get.
  (Mr Rooker)  Parliament has that control because it is a separate vote.

  775.  Parliament may have the control but Parliament is influenced by ministerial decisions. There is nothing to stop the escalator that the Chairman was explaining actually being ratcheted up to extend and it would be very harmful if we are going to adopt the proposals that you have currently put forward. It is very important that it is spelt out quite clearly what the end objectives are rather than talking about the first three years. The solution to the revenue gathering will depend a little bit on what your end objectives are.
  (Mr Rooker)  No.

  776.  If you try to raise £90 from outlets most people could live with that but if you are talking about something much greater than that then you have got to specify a much wider or a more equitable way of raising these funds.
  (Mr Rooker)  I can only put it this way: we do not have a policy objective to go the whole way, there is no policy objective.

  777.  But you have the power within the Bill.
  (Mr Rooker)  I have explained the reasons why the Bill is drafted flexibly so that, in fact, there will be changes between this and the final Bill when it comes to the House simply because we are consulting separately on the nature. We genuinely are consulting about the proposal here. If it changes then the nature of Clause 23 may be required to change because it could be termed differently. It is not sewn up completely. The Chancellor has just delivered a Budget by the way. The Chancellor does not know what is going to be in next year's Budget. He knows what the Comprehensive Spending Review limits are on each ministry, we all know that, our job is to live within them. You cannot reasonably ask me or ask anybody else to second-guess what will happen in the second round of the Comprehensive Spending Review.

  778.  Except, Minister, you are asking us to second-guess on behalf of the people having to make these contributions. We all accept that it is going to cost money to run an Agency. At the end of the day it is the taxpayer who will be paying for it, either through taxes or through extra costs in prices passed on by the producers. It is very important for us to have some idea of what the balance of the take through tax is and the take through the levy, whichever way it is created, because it will determine the base on which the levy is going to be placed.
  (Mr Rooker)  Overwhelmingly the Food Standards Agency is going to be funded by taxation, Central Government taxation.

  779.  But it does not say that.
  (Mr Rooker)  No, but it is by definition because we have said we are not going to raise more than £50 million.


 
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