Examination of Witnesses (Questions 140
- 146)
MONDAY 14 JULY 2003
MR NICHOLAS
SAPHIR
Q140 Paddy Tipping: You mentioned
timescales, but what are the timescales? If these markets are
going to go bust, how long have they got?
Mr Saphir: An interesting situation
has recently developed—If you look at the history, markets
went into terminal decline in the 1980s as supermarkets went direct.
They were rescued at the beginning of the 1990s, the middle of
the 1990s, by the tremendous increase in catering, eating out,
affluence, et cetera. Catering during the 1990s has been very
much about success, innovation and change. If we look at it today,
there is a plateau in the catering world. We have reached a point
at this moment in time where, for many reasons, caterers are having
a harder time. They are beginning to consolidate. They are beginning
to look at costs. They are beginning to address the whole issue
of how they get their supplies. At this moment in time no single
catering firm has more than 4% of the business, which is amazing,
but I think in five years' time we will find a significant consolidation
on catering. Unless we have composite markets that begin to address
those issues in the widest sense, the big catering firms will
increasingly go direct, as did the supermarkets, the game will
be over and we will be into decline again, and we will be managing
decline.
Q141 Paddy Tipping: So your view
is that we have got to resolve this matter within five years?
Mr Saphir: I truly do believe
so. Remember, in resolving this matter over the next five years
we are talking about a project that is going to take three to
four years to actually bring about because you cannot just switch
on a major change in investment and everything else, it needs
planned change, and it needs taking the industry along with it.
Q142 Paddy Tipping: But you cannot
operate a twin-track approach within five years, can you?
Mr Saphir: I do not think so.
Q143 Paddy Tipping: Because you have
got to make your mind up whether you are going to try and get
the final negotiated solution or fairly soon say "Tough,
this is not going to work, we are going to have to bring in legislation".
Mr Saphir: Or let the balls fall
where they fall and we see that economics will take over and maybe
the markets will survive and maybe they will not.
Chairman: You presented your report to
Defra, subsequently have you had any meetings with ministers to
discuss its findings or has it all been done on the basis that
you sent the report and they paid the money?
Q144 Paddy Tipping: Have they paid?
Mr Saphir: I am tempted to say
at half normal consultancy fees. I have presented the report to
both the Corporation and to Defra. I have had meetings with both
of them to discuss it. We then went into the consultation period
and there was significant input in terms of consultation from
people. I have talked to Defra subsequently about what might be
the issues. I have spoken to some members of the Corporation as
well in terms of what might be the issues. Have we had a formal
meeting subsequently to the consultation period where all sides
have come together? The answer is no, we have not. Not with me
present anyway.
Q145 Chairman: Would I be right in
saying that effectively this Select Committee's inquiry is the
first formal opportunity that all parties have had to put their
two pennyworth forward since your report was produced?
Mr Saphir: I can only answer that
question in terms of my position. This is the first formal opportunity
I have had to put it forward, although I had a meeting with the
three parties prior to consultation.
Q146 Chairman: In the remaining few
moments, is there anything you would like to put to the Committee,
apart from the "We need to get it sorted out in the next
five years" view, as some words of advice to all of the parties
in their efforts to try and find this magic piece of common ground,
because I think your evidence has given us a clear indication
that there are for all concerned some very big issues and, indeed,
for Defra itself a fundamental question as to whether it should
still be in the market position? Is there anything that you would
like to put on the record by way of some sage advice to achieve
that end objective?
Mr Saphir: If this was a purely
commercial situation, and in many respects I believe that it is,
we have two landlords, one of whom wishes to exit and the other
one who seemingly wishes to carry on at the least cost possible—not
an unusual situation—I would argue that it is probably going
to be necessary, if those parties are going to come together,
to come to some very innovative ways of valuing, paying for and
developing the necessary sites. I believe that the Corporation
is right in believing that Billingsgate is right for moving first.
I believe that the Corporation is wrong in saying that it should
all be moved to Spitalfields. I think that is part of the pressures
on the Corporation and of a negotiating position, if I may say.
I believe that the Government is clearly in a difficult position
in dealing with Nine Elms, which needs investment and which needs
to be offloaded. I believe the sensible parties will get round
the table and find some form of deferred consideration for the
site that would reflect its success, in other words staying in
there with some sort of "skin in the game" to be able
to benefit from the development over a phased basis. Failing that,
and I am again taking a commercial view that it probably is the
only possible way to break the logjam, we carry on the way we
are progressing at the moment with Nine Elms challenging, Nine
Elms seeking alternative finance and the Corporation having to
decide what it wants to do outside of that situation. I think
my sage words, if I may say, Chairman, would be to say to the
two parties: "You have one more chance really before Nine
Elms finds alternative finance to agree an innovative way of dealing
with the problem and it should be possible".
Chairman: Thank you very much indeed.
The one thing you cannot do is take away that which you have said,
but if upon leaving here there is anything else you want to put
before the Committee there is always that further opportunity.
May we thank you most sincerely for coming and giving your evidence.
Thank you very much.
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