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Mr. Christopher Chope (Christchurh) (Con):
As always, my hon. Friend is putting forward a brilliant analysis. Does he accept that in dealing with the protection of consumers, the Government -and the Opposition, for
that matter-would be much better exercised if they attacked the common agricultural policy, which adds the best part of £1,000 a year to the food bill of a family of four?
Philip Davies: My hon. Friend is absolutely right. We have this ludicrous situation in which the parties are trying to bring in measures supposedly to help suppliers and consumers, while on the other hand the Government are party to the common agricultural policy, which puts great costs on consumers, while producers and food suppliers are facing more and more regulations that are probably a bigger problem than anything that supermarkets might do to them.
Mr. Pelling: I am enjoying the hon. Gentleman's speech. Is there not a danger with this new scheme of failing to recognise that the suppliers can be quite strong and are sometimes large international corporations themselves? It may well be that the new system benefits only the likes of Unilever or, to mention the company that I am associated with, Nestlé.
Philip Davies: The hon. Gentleman is right. I was going to come on to that point, but I shall touch on it now. The fact of the matter is that the biggest supermarket chains in the country, on which the efforts of the new ombudsman will be focused, have big suppliers by definition, as those suppliers are the ones who can produce the stuff in sufficient quantity to get it across the country. By definition, then, big supermarkets tend to have big suppliers. Many of those suppliers are huge multinational companies in their own right.
In fairness to my hon. Friend the Member for Arundel and South Downs (Nick Herbert), he has recognised the issue and wants an ombudsman to look at smaller suppliers rather than suppliers per se; I give credit to my hon. Friend in that regard. However, we could end up with a ridiculous situation in which an ombudsman intervenes on behalf of a huge multinational food company that is actually bigger than the supermarket. In many cases, we should congratulate supermarkets on being hard-nosed in making big multinational companies reduce their prices for the benefit of the consumer rather than building up even bigger profits for themselves. Some pharmaceutical companies, for example, are massive and have huge marketing budgets.
Another myth is that supermarkets persuade suppliers to do special offers and make the supplier pay for them. The fact is that suppliers fall over themselves to provide special offers for supermarkets. They say to the supermarket, "Please can we do a 'buy one, get one free' offer on our product?", because it is part of their marketing budget. They use those huge budgets to urge supermarkets to make such offers, and they are quite happy to pay for them, because it helps to build their market share. In my time at Asda, I might add, we used to say to suppliers, "Rather than you coming to us with 'buy one, get one free' or 'three for the price of two' offers, why not just have a long-term reduced price?", so that rather than the people who buy the product in that particular week or month or families of five or six benefiting, every single customer benefits from an overall lower price. It is not supermarkets that force suppliers into these deals; it is often the suppliers themselves who are insistent on those special offers. It is another misapprehension.
Mr. Paice: I hesitate to intervene on my hon. Friend-clearly, we are not going to agree on all fronts-but I entirely share his view that if a supplier wants to do a "buy one, get one free" offer, it is a matter between the supplier and the supermarket. My concern, however, is where the supermarket goes to the supplier and says, "We have decided to do one of these offers and you are going to fund it." Does my hon. Friend think that that sort of retrospective impact on a supplier, which the code of practice is designed to get rid of, is fair? Another issue is the principle of retrospective discounts, where at the end of the financial year-I know this from first-hand experience of businesses in my constituency-supermarkets decide that they have paid suppliers too much for potatoes, onions and carrots over the year, so they demand big cheques, some of which have run to seven figures.
Philip Davies: I am genuinely sorry that my hon. Friend has come to that conclusion. What he is proposing is an ombudsman to rule on contracts and deals between two private enterprises-on one side a supermarket, on the other a food producer and supplier. I am not at all surprised that the Labour Government would want to stick their noses into every contract entered into between private businesses, as that is their rationale in life-the state has to stick its nose into everything. I am not surprised either that the Liberal Democrats follow the same tack, as they think that there might be three extra votes for them in Cornwall, and anything that generates three extra votes anywhere will find favour with them. I am genuinely not surprised that those parties are jumping on this particular bandwagon, but I am genuinely disappointed that the Conservative party has reached the conclusion that the best way to proceed is for the state to interfere in private arrangements between one private company and another.
Where will it end? I might look at many contracts entered into by one company or another and think to myself, "Why has that clause been allowed in a contract. If it was my business, I wouldn't have allowed it." It is a matter for them. Will we start interfering in every contract between one private company and another to ensure that we think it is fair to both sides?
Andrew George: The hon. Gentleman makes a decent point with regard to the relationship between larger suppliers and the supermarkets. I would like a code of practice and its enforcement to cut both ways. Wherever evidence of unfair dealing exists, that should be rooted out, whichever direction it goes in. From my experience in the food production sector, particularly farming, I am well in touch with what is going on, as he is from his experience with Asda. Will he acquaint himself with the Roger Clarke report, which states that the remedy proposed is
"likely to lead to more choice, better quality products and lower prices in some cases. Even very small price reductions and other benefits are likely to result in consumer benefits far outweighing the modest cost of the Ombudsman"
The hon. Gentleman may take the view that if he reads something in a report, he must agree with it. I do not take that view. I think that the quote he has just given is utter drivel. He might be taken in by
any report, written by anybody. The fact that something is in a report does not make it any more sensible than if somebody down the street said it without any evidence whatever; it is still drivel. I thought that he was going to say that I had a good point about the Liberal Democrats saying something just for three extra votes in Cornwall, but he disappointed me on that.
The proposal is ludicrous. It will have no benefit whatever for the consumer-quite the reverse. If we think about it for a second, the UK grocery market is worth about £130 billion a year. If the ombudsman managed to extract from supermarkets an extra 1 per cent. in payment for suppliers, an extra £1.3 billion a year in costs would be passed on to consumers. If people want consumers to have that extra bill, and if they think that it is a price worth paying to have the ombudsman, let them at least have the decency, courage and honesty to stand up and say so. What I cannot stomach is the idea that we can promote painless panaceas and that more regulation will benefit consumers, supermarkets and suppliers. Clearly, that is ridiculous; it will not happen. Although it comes as no surprise that the Government and Lib Dems have gone down that line of state intervention, I am genuinely saddened that the Conservative party believes that that is the way forward.
Mr. Andrew Pelling (Croydon, Central) (Ind): I am grateful to the hon. Member for Shipley (Philip Davies) for giving me seven-I want to give the Minister time to respond-of the remaining 28 minutes available for this debate. As a confirmed Heathite, I naturally recoil when he rises to speak, but he has nevertheless highlighted some real difficulties with GSCOP. However well meaning government is, sometimes its good intentions are not only not delivered, but have malevolent unintended effects.
As the hon. Gentleman has said, GSCOP could end up strengthening the hand of large international corporate suppliers against the supermarkets. A great deal of work remains to be done on the code of practice and the role of the ombudsman, but it is important that we are reassured that that will not be the result. There are some good reasons for Government intervention, however, one of the most fundamental being food security. The Government's consultation on "Food 2030" recognised that as an important role for government. We must therefore hope that they realise the importance of watching the financial and agricultural markets. At the beginning of the recent equity rally in the City, huge amounts of money were invested in agricultural products, which had a hugely distorting effect on the markets, compromising food supply in certain parts of the third world. There is an important means of intervention in that area.
There is a recognition that what we eat is what we are. In that regard, government has an important role in monitoring what goes into our food system. The hon. Member for North-East Bedfordshire (Alistair Burt) raised the important issue of trans fats. In relation to that, obesity is an issue of concern. Many people suffer from that condition in my constituency and in Croydon, South, and they are unable to get effective operations from the NHS to deal with it.
My constituency has only one farm, so it can hardly be said to have a farming interest. Nevertheless, it has significant food interests. Nestlé UK, which is based in Croydon, is by far the biggest employer in the constituency. I am sure that the prospects for Nestlé are greatly enhanced by the unfortunate situation of Cadbury, a debt-free company that believed strongly in philanthropy, which has been bought at a price that will not prevent asset stripping from greatly damaging it. Nestlé, however, is an extremely good citizen in Croydon and takes very seriously corporate responsibility. The company has been the subject of great criticism in the past, and, amazingly, was attacked by my predecessor as Member of Parliament for Croydon, Central. I believe, however, that it has very high standards and is a typical triple A company.
Croydon has important food interests in other ways. It has a large black and minority ethnic community and their involvement in importing many products from abroad has an important food role and is an important part of our economy. On the London road just across the constituency border in Croydon, North, the diversity of products available means that one can shop the world.
For Croydon, food is also an important green issue. The Heathfield ecology unit and other community activities strongly push the importance of community foods. Food is seen as an important part of securing status for New Addington as an eco-town. We also benefit from many good fish and chip restaurants, especially McDermott's and Top Fryers.
If we are to have competitiveness in our food industry, we can no longer afford, under the aegis of the European Union, a wasteful and expensive common agricultural policy, or a fisheries policy that causes appalling environmental damage. We should move away from the current EU fishing policies to the effort-based ones of the Faroe Islands, where fisheries bid for an amount of fishing time. That would avoid a situation in which huge amounts of fish are thrown back into the oceans.
From the point of view of the consumer, the "buy one, get one free" approach is extraordinarily discriminatory against those in small families and particularly the elderly. It is unreasonable that they see in shops that if they buy a smaller amount they will suffer a significant financial loss compared with others. We also need to consider the strength of large organisations-for example, Tesco-vis-à-vis local authorities. They are often dominant, and through use of section 106 agreements they can dominate their way into communities. In New Addington, there was a great deal of controversy over a development that would not have been in keeping with the area, although I am sure that, despite pulling out of New Addington several years ago, Tesco would be welcome with a more modest scheme.
Tesco's moves into corner-shop territory sometimes compromise good business in the shape of small providers, typically south Asian families. In Woodside Green in Croydon, the branch of Londis run by Mr. Patel is threatened by the establishment of a Tesco Express only about 500 yards from the nearest one. Supermarkets should exercise balance and discretion.
I recall a most enjoyable visit to New Covent Garden with the Minister and the Secretary of State to inspect regional British foods. We should celebrate the added value that can be provided by the specialisms of British
food manufacturers, and we should also bear in mind the importance of regional foods in reducing the number of food miles. We should pay attention to what is put on our plates here in London. The Minister was, of course, an excellent Minister for London.
Many regional food businesses provide employment for my constituents. We may have only one farm, Heathfield farm, but many of the wineries that have grown up in Surrey provide important employment as well.
Jim Fitzpatrick: I am grateful to the hon. Member for Croydon, Central (Mr. Pelling) for allowing me time to respond to some of the issues that have been raised, and, indeed, to his own observations on "Food 2030". I, too, recall the recent celebration and promotion of the best of British regional food at New Covent Garden, and I know that Members in all parts of the House would endorse his comments on that. He also raised genuine concerns about the Cadbury-Kraft situation. I hope that my earlier remarks reassured him that, as my right hon. Friend the Prime Minister said yesterday, the Government are taking the closest interest in looking after the well-being of the business, its staff and, indeed, UK plc.
The hon. Member for South-East Cambridgeshire (Mr. Paice) began by asking when we last debated these issues in Government time. During my first week as Minister of State, we had two agricultural debates, one in Government time and the other on an Opposition motion. I assure the hon. Gentleman that such debates happen, and hopefully we shall have opportunities for further debates before the general election.
The hon. Gentleman suggested that "Food 2030" represented an acknowledgement by the Government that we had got it all wrong before. That is not, of course, the case. What "Food 2030" says is that the world has moved on. We have experienced the food price spike of 2008, climate change has been taken more seriously and population change has featured, among other factors. "Food 2030" is the first major food strategy document in, I believe, 60 years, a period that encompasses a good deal of Conservative as well as Labour Administration time.
We have discussed the honesty of country of origin labelling before. As the hon. Gentleman knows, we have supported the recommendations of the pigmeat taskforce, more accurate labelling by retailers of the products on their shelves and the European Commission's attempts to improve country of origin labelling. We have discussed developments in Europe as well, and, as we know, there has not been a European vote on the issue. Last year, the French suggested compulsory labelling of non-processed
foods, but the suggestion was a bit unclear and woolly. We will continue to support the Commission's efforts in Europe.
Total UK public spending on food and farming research amounts to about £350 million. I should be interested to know how much the Opposition parties think it ought to be and whether they are committed to a larger sum, but in any event we will increase our spending over the next five years.
The hon. Gentleman asked about the banning of battery cages by 2012. As I think I said at the most recent DEFRA Question Time and will, I suspect, say again on 1 February, we fully support the 2012 ban and will continue to press the Commission on it. We will do what we can to protect the British egg sector against any fall-back by the Commission. As far as we know, there has been no formal application for non-implementation of the ban, and we will work to ensure that it is implemented.
The bronze level of the healthier food mark still requires meat and meat products to meet Red Tractor or equivalent standards, although other products, such as dairy products, fruit and vegetables, have been moved to the "potential" list, because those running the healthier food mark scheme considered the Red Tractor standard to be too complex and costly to implement. A consultation on the Red Tractor healthier food mark will begin shortly, but it is not strictly accurate to say that the scheme has been dropped.
The draft Bill on responsibility and cost-sharing will be published soon, and the advisory group chaired by Rosemary Radcliffe will give its view at the end of the year. We are keen for there to be as much scrutiny as possible, because we recognise the issues that are at stake.
I believe that the Secretary of State has made a written statement about the infected Romanian horses, but if that is not the case I will write to those on both the Opposition Front Benches to ensure that they are aware of the facts. Because the situation arose only this week and is still developing, it is possible that no formal position has yet been outlined.
Mr. Deputy Speaker (Sir Michael Lord): It will be for the convenience of the House if the amendments relating to the Manchester City Council Bill [ Lords] be debated together with those relating to the Bournemouth Borough Council Bill [ Lords].
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