Examination of witnesses (Questions 760
THURSDAY 11 MARCH 1999
and RT HON
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
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
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
peopleand I know this can be doneappointed 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.
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.
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
(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.
771. Can I ask for some clarification. Is
it the money that the Agency raises that will be subject to its
(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
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.