Examination of Witnesses (Questions 260-277)
LORD WHITTY,
MR PAUL
ELLIOTT AND
MR JIM
DIXON
WEDNESDAY 10 JULY 2002
260. What evidence do you have for that statement?
(Lord Whitty) I think the National Consumers Council
and others would identify what they want is quality for quality
and they want the cheapest and they are not necessarily all going
to go to the lowest common denominator. Therefore the issues of
quality and provenance and the conditions in which it is produced
are important in some senses to consumers and in certain segments
of consumers they are very important.
261. How important is provenance actually to
the average consumer?
(Lord Whitty) I am not sure there is an average consumer.
I think part of the problem is there are segments of consumers,
if you take, for example, the growth of organic demand, there
is clearly a segment of consumers which wants to see—
262. Six per cent of consumers
(Lord Whitty) No, more than that.
263. That was the figure we were given in this
Committee.
(Lord Whitty) It is a different figure from the one
I have seen, it is less than 20 per cent.
264. Quite a bit less.
(Lord Whitty) That is a segment of consumers which
has led to a change in the supply chain and the way in which the
retailers promote their goods, quite a significant one. There
are other relatively small segments, but they all add up, which
are concerned with provenance in the sense of where has it come
from. Do they want British meat? A very large proportion of the
consumers will say "yes", they will then put in a slight
qualification of price but they would be prepared to pay some
premium for British meat and want to see British meat on the shelves,
for example. There is another sector which is concerned about
the conditions in which the animals are kept and want to see some
free range eggs, for example. All of these things mount up to
some dimension of quality concerns beyond price which a lot of
consumers have. It is true, also, that most consumers know about
nutrition to varying degrees. One of the sad reflections, if you
like, on our population is that the FSA survey shows 80 per cent
of people know, broadly speaking, what they should be eating and
only 20 per cent do.
Chairman: Is that not wonderfully reassuring.
Mrs Shephard
265. I think so. In a sense the Minister is
making my point. The point I am trying to make—and we got
very unsatisfactory answers from the retail consortium to be honest
and from the individual retailers who were clearly making their
pitch for their caring qualities—and what I am interested
in is quantifying how much interest there is in provenance as
opposed to price? How much interest is there really? What percentage
are we talking about of people who are interested in rearing conditions
and all those sorts of things as opposed to price? Certainly the
retailers did not give me satisfactory answers and I wondered,
given your answers are quite vague but optimistic, you seem to
have some notion, is there any satisfactory quantification?
(Lord Whitty) There is not an overall satisfactory
quantification. There are a lot of surveys by the retailers themselves,
by the manufacturers as well, mainly by the retailers though,
by the FSA and by the National Consumers Council, all of which
point in the direction of saying there is some significant element
which goes beyond price in making a decision. I think part of
the problem, in fact, is that one day we do and one day we do
not. It is not as if there are 20 per cent of the population who
are looking for high quality good provenance goods but when we
are rushing at a lunchtime meal we take one decision, we go for
the cheapest and most convenient, and when we are organising a
dinner party on a Saturday night we take an entirely different
view. I do not think there is a totally segmented area of the
population. There is one area that we do have to pay particular
attention to, which in a sense is segmented, which was referred
to in the Curry Report and more particularly by the Consumers
Council, which is the very low paid groups which (a) probably
do have to go by and large for price and (b) probably live in
areas where a range of choice is not accessible anyway. I do think
there is a social dimension to this but in general people behave
differently at different times. Therefore it is not easy, like
"who are you going to vote for", you behave differently
from one day to the next.
266. I think that is a realistic answer. It
would be nice if we had more of them, not only from Ministers
but from all those who talk about the future direction of food
production and interests and fortunes of food consumers in this
country. Of course we want consumers to demand the best and to
demand British produce but nobody has yet been able to give me
any evidence which has satisfied me that they do. I have another
question which is this. The British Retail Consortium calls for
further definition of DEFRA's role as food retail sponsor to promote
clear mutual understanding between food retail in Government and
whatever. What is DEFRA's role as a food retail sponsor?
(Lord Whitty) We are the first line Government Department
for concerns about Government policy as a whole for the retailers
to come to. In that sense, again, we are no different than the
Treasury sponsoring the insurance industry or DTI sponsoring the
engineering industry. We are their first port of call in Government.
The nature of our sponsorship will vary a bit across the sectors
but depending on the degree of regulation, the degree of international
trade and so on. Essentially it is no different but it is one
which has been—because of the specific ministry—closer,
even though the food end of the chain generally deny it, than
has often been the case between the broad bulk of manufacturing
and retail with the DTI but that is one of mutual understanding
rather than any particular quality indications.
267. There appears to be a conflict between
your role as a food retailer sponsor and your role as a sponsor
of food producers, if you like. We were given one of the most
striking statistics on this Committee that really impressed all
of us and it was this: five years ago only four to five per cent
of all chicken consumed in this country was imported and now it
is 40 per cent. How do you resolve that conflict between your
role as a food retailer sponsor, and that is clearly the desire
of the retailers, and the chicken producers? Is there a conflict?
What do you do about it? Does it matter? Especially given the
assertions, and you have only mildly joined in on them, that people
are very, very concerned about provenance.
(Lord Whitty) I think that there is a conflict within
the food chain and one that if part of Government policy is to
ensure that we have production facilities for most areas of domestic
agriculture retained then it is one that we think should be addressed
by the food chain as a whole, which is why we are backing and
trying to generalise the Code of Practice that the OFT introduced
for the large supermarkets, to make that more general, and looking
at toughening it up if necessary. That is why we are also looking
at the inefficiencies within the food chain. At the end of the
day there are some economic realities here. If, on the one hand,
British farmers are not getting a price which allows them to survive
and, on the other, the retailers are able to get chicken to the
same standard coming in from abroad, which is a separate point,
then we know what is going to happen. There are two answers to
that. Our answer is we try and improve the quality of British
production and encourage British producers to go into the value
added markets. We will not be able to compete if we treat chicken
as a commodity without adding various forms of value to it and
the farmers will not either. There is a degree to which we have
to focus. If I take the analogy of engineering again, by and large
we have had to focus in those surviving areas of engineering on
the high value added products. I think there is a lesson there
in relation to farming and food production as well. At the near
commodity market we will not in the long run compete in Britain,
nor indeed in Europe as a whole, so we have to go a bit upmarket.
That is not an immediate answer but that is the sense of direction
we have to give to the primary producers. In getting there we
also need—I think I would not mind using the term "equitable"—a
more equitable relationship between the primary producers and
the big processors and the big retailers and, indeed, the big
caterers. We tend to target the supermarkets but actually 40 per
cent of our food comes through catering and institutional food
which tends to be of a higher import content and probably lower
quality. It is there that there has been a big squeeze on our
primary producers. This is partly what the Curry Commission was
referring to and why we have set up the Food Chain Centre and
why we have looked at better collaboration between farmers and
other elements in the chain because you have to change the economic
balance within the chain a bit as well as trying to get rid of
the inefficiencies within the chain. There are some quite difficult
points here which Government would like to give a steer to but
at the end of the day the industry is going to have to sort it
out. We will give a bit of help to farmers and a bit of help on
the transparency of it and a bit of help in ensuring we are dealing
with quality but at the end of the day this is an industry problem
that Government can do relatively little to determine and influence.
268. I am interested that you come to that conclusion
at the end because if that is the case and that is your view and
this is the situation with the poultry sector, which after all
is not a subsidised sector, what is the point? As far as I can
see almost everybody we have taken evidence from has been mouthing
these platitudes about people being interested in provenance and
the quality and all of this stuff but they are not, that is it,
and you have not been able to answer the question in any way.
(Lord Whitty) If we go back to that, that is not incompatible
at all. If they are looking for a decent bit of chicken, they
are looking for—
269. They are not asking how has it been reared
and has it travelled 5,000 miles.
(Lord Whitty) Some of them are.
270. They self-evidently are not.
(Lord Whitty) Some of them are and some of them are
occasionally.
271. Where is the proof? If five years ago we
imported four per cent and now we import 40 per cent surely that
drives a coach and horses through what you are saying.
(Lord Whitty) No, it does not because there is still
a decision to be taken every day when you go into the supermarket:
are you going to go for the top of the range chicken or are you
going to go for the cheapest bit? If you are looking at the cheap
range then you are going to take the cheapest of the cheap. If
you are looking at the quality range you are probably going to
take the cheapest of the quality. In some cases that will be British
and in some cases it will not. People take different decisions,
different people take different decisions and the same people
take different decisions on different days.
Mrs Shephard: The statistics speak for themselves.
Chairman
272. I am going to take a couple of decisions
in a minute. Two last questions, Lord Whitty. What are your priorities
on research?
(Lord Whitty) DEFRA is the second biggest Government
spender on research and there is a real question as to what the
balance of that should be. I think some past decisions are questionable
in that respect. One of our priorities, which is generally agreed,
would be to do more horizon scanning research and try and look
at where technology and industry and production are going to be
in ten or 20 years' time and how we ought to get the industry
in a regulative structure to that position. We do need to shift
more into that long-term research. We also, regrettably but necessarily,
will probably have to ensure a very adequate level of research
to avoid disasters, or at least to make us better able to cope
with disasters, and obviously the most acute of that is animal
health. There are other areas of environmental problems where
more research is needed in terms of being able to deal with the
problems of potential disaster. Neither of those are obviously
financed from the private sector and, therefore, there is a big
Government role in that area. I think because of the nature of
the agriculture sector and the horticulture sector and its largely
fragmented role there is still a role, probably a reducing one
over time, for trying to support that industry in keeping up with
world technology because I think any individual firm is unlikely
to be able to finance it and we do not yet have the collective
mechanisms for the private sector financing it. I think that will
be a diminishing role over time. If you are talking about scientific
areas then I think there are some important centres of excellence
issues we need to keep up: climate change, horticulture and botanical
research, because we are responsible for centres of excellence
in those areas, and there are other areas where the changing technology
means that we are going to have to perhaps fund more research
in those areas and less in the traditional production areas in
future. Some of those are social. We have very little research
based on the rural communities, the rural economy.
273. The 250 million figure is slightly misleading
because about half of that is monitoring, is it not?
(Lord Whitty) Yes, it is monitoring. There are two
sorts of monitoring. Some of it is monitoring directly in relation
to regulatory powers and some of it is monitoring our disease
status or our flood status or whatever in our management of disasters
role, if you like, or avoidance of disasters preferably. Some
of that scientific effort is directly for those purposes. It is
still a big proper research budget and it is still one that we
need to look at carefully as to how we change the balance and
also probably how we deliver it.
274. But it is important that your research
expenditure should be directed towards the delivery of your broad
policy aims, is it not?
(Lord Whitty) Indeed.
275. That it should be joined up, to use a well-known
phrase.
(Lord Whitty) It is also important that one of our
policy aims is to maintain an excellence of science in these areas,
some of which is funded directly by us, some of which goes through
the universities and private sector.
276. A final question. If you look at your annual
report there is an absolute constellation of quangos and bodies,
many of whom have been around for quite a long time. Do you not
think that now and again there should be a systematic policy of
culling and reorganising, deciding whether they are still serving
any purpose whatsoever, that there should be a ministerial order
that says every year at least ten per cent should be abolished?
How often do you review to see whether they are still doing what
they are supposed to do, whether they are constituted to do what
they are supposed to do, whether they are engineered to do what
they are supposed to do and whether what they do is satisfactory?
(Lord Whitty) Well, at the moment, of course, most
of them are agencies so we review them every five years and most
of the NDPBs as well. Of course, that does tend to look at them
as individual entities rather than, if you like, look at the constellations.
I think there is something in the view that certainly we should
look at all the scientific agencies and quality agencies together,
which we are doing now, and likewise probably we should look at
all the countryside and related areas together as to how we deliver
our objectives. That does not necessarily mean that the objective
is to reduce the number, it is to reduce the overlap and focus
the effectiveness of them. There may be some conclusions that
at present the present status is not necessarily the most appropriate.
In some ways MAFF is slightly behind the rest of Government in
the way that it deals with some of its agencies.
Chairman: Mr Jack wants a final sting in the
tail, as it were.
Mr Jack
277. You have developed, if I may say, Minister,
a delightfully conversational way of answering many of our questions
which indicates what you would personally like to see. You said
in response a second ago to the Chairman's question "Well,
yes, I think we should look at these agencies". Are these
"we shoulds" that you have given us in many of your
quite candid answers to us going to be crystallised into something—now
the Department is, if you like, coming out of the implications
of foot and mouth and can see with a year or so under its belt
more clearly where it is going—with the sharpness that we
might be seeking to turn these aspirations into plans? You have
produced, for example, recently two documents full of some wonderful
phrases, high minded aspirations. What we are searching for are
the specifics. Is there going to be volume three with the "this
is what we are going to do" answers in?
(Lord Whitty) I trust there will be several volumes
in the areas of policy, not too lengthy volumes but which will
say exactly that, what we are intending to deliver and what we
have delivered. I think it is important that we do focus on delivering
those. Very much the developing DEFRA programmes, management performance
priorities within DEFRA and Minister's priority is to turn this
into delivery. In so far as you related that to the previous question
then in relation to assessing the science agencies, we are engaged
already in that process.
Chairman: Lord Whitty, gentlemen, thank you
very much indeed, we have had a couple of hours, longer than that
really. You have padded up with great effectiveness, and I come
from the county of Boycott. You have been extremely helpful to
us and we are most grateful to all three of you.
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