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Supermarkets: Payments to Suppliers

2.46 p.m.

Lord Mackie of Benshie asked Her Majesty's Government:

Lord McIntosh of Haringey: My Lords, as a result of the Competition Commission's detailed report on supermarkets in 2000, the largest four supermarkets signed legally binding undertakings to comply with a code of practice governing relations with their suppliers. Last week, the Office of Fair Trading announced that it was embarking on a review of the code and would write to suppliers' organisations and the supermarkets themselves, requesting views on how the code has worked in practice. If any supplier has evidence that a signatory to the code of practice is not meeting the requirements of the code, he or she should approach the Office of Fair Trading.

Lord Mackie of Benshie: My Lords, I thank the Minister for that expected reply. The code of practice states that the supermarket should pay "within a reasonable time". That is open to a little interpretation, but 100 days is outwith the normal practice, especially as the farmers have waited for over a year to sell their goods, whereas the supermarkets place them on the shelves and get their money the next day.

Does the Minister think that there is a case for the Competition Commission to consider again the position of farmers relative to the supermarkets? They recommended the break-up of Milk Marque, which was to the great detriment of the farmers.

Lord McIntosh of Haringey: My Lords, it is difficult to define what reasonable payment should be. The only safe thing for us to do is to say that it is a matter of a commercial contract between the suppliers and the supermarkets. There is, however, the Late Payment of Commercial Debts (Interest) Act 1998, which says that, in default of any other agreement, the payment period should be 30 days. I am sure that the noble Lord, Lord Mackie of Benshie, would welcome that as an alternative period to the 100 days that he cited.

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The Lord Bishop of Durham: My Lords, will the Minister take the opportunity to commend direct selling from the farmers to the public, through the farmers' markets and the like that take place in many of the northern dales that I know? That system requires no credit.

Lord McIntosh of Haringey: My Lords, I do not know that I am in a position to commend that system as a Minister, but, as an individual and a user of farmers' markets wherever they can be found, I think that they are a good thing.

The Duke of Montrose: My Lords, I declare an interest as a farmer. Does the noble Lord agree that, in most sectors, the supermarkets are supplied by processors? Nowadays, they take almost all of a processor's production and call that a "partnership". It is a strange sort of partnership.

Will the Office of Fair Trading look into the number of processors that have ceased to be public limited companies because they can no longer offer the financial returns that make them attractive to investors? Similarly, the processors do not have a margin to pass back to the farmers.

Lord McIntosh of Haringey: My Lords, if that is part of the code of practice, it could well be part of the review that the Office of Fair Trading is to undertake, which I just announced. I see no reason why it should not be part of that review.

The Lord Bishop of Hereford: My Lords, in view of the difficult financial situation in which British farmers find themselves and the problems with supermarkets to which the noble Lord, Lord Mackie, alluded, is DEFRA paying promptly all the moneys that it owes to farmers in compensation for bovine TB, for example, and for arable area payments and so on? There is a great deal of unease in farming communities that DEFRA payments also are being unduly delayed.

Lord McIntosh of Haringey: My Lords, as one who, when I was in the private sector, used to complain about government departments being very slow in paying private suppliers, I have much sympathy with the question. I cannot give an unqualified undertaking that any department is, in all circumstances, paying with a reasonable amount of delay, but there has been a substantial crackdown on late payment by government departments.

Baroness Miller of Chilthorne Domer: My Lords, when the Minister last replied to my question on this issue, he kindly subsequently wrote to me to correct the implication in his answer that the code would be reviewed every six months. For the reasons highlighted by my noble friend Lord Mackie, it is obvious that the code is not working very well at the moment, so will the Minister ensure that a review does take place every six

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months? Will he further ensure that the specifications of items that supermarkets make to their suppliers are not unreasonably changed?

Lord McIntosh of Haringey: My Lords, I said that a review is about to start. Any subsequent interval will be decided in due course. It is not necessarily a good thing for a review to take place every six months. One of the issues that the review will have to deal with is the reluctance of suppliers to come forward to make complaints. It is a serious matter. That is why the Office of Fair Trading has made it clear that it will accept complaints from suppliers' organisations rather than from individual suppliers, which will be able to make their complaints to those organisations in confidence. That is a significant step forward. It will help the code of practice to work better than perhaps it has done in the past.

Home Office: Correspondence

2.52 p.m.

Baroness Knight of Collingtree asked Her Majesty's Government:

    What steps they are taking to improve the way the Home Office deals with correspondence.

Lord Bassam of Brighton: My Lords, the Secretary of State for the Home Department and his ministerial colleagues attach the highest importance to the speed and quality of replies to all correspondence. A number of important initiatives, led by Ministers, have helped to drive up performance. These include the development of a new, computer-based correspondence tracking system, which is currently being piloted. This will radically change the way in which the department handles letters and help it to produce more timely responses.

Baroness Knight of Collingtree: My Lords, I am grateful for that Answer. When dealing with this issue, will the Minister look particularly at the length of time that the Home Office takes to answer letters? Is he aware that since last November I have had no fewer than three different communications from the Home Office? The latest communication is dated 14th January 2003 and refers to a letter of mine of 18th December 1992. Is not that a little too long to wait?

Lord Bassam of Brighton: My Lords, if it is 1992, it is indefensible. My noble friend has reminded me that we had a Conservative government back in 1992. But these matters are above politics. I understand that there is a particular glitch in one of the computer systems which turns back correspondence and dates it from 1992. A few unfortunate replies have been sent with that date on them. The noble Baroness has probably received one or two of those.

The Home Office is well aware that it has been a poor performer in terms of responding to correspondence. The good news is that over the past year there has been

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a measured improvement. I understand that in 2001–02, for instance, the number of ministerial replies drafted and dispatched within 10 days was 63 per cent; last year it was 74 per cent. More importantly, the public are getting their correspondence responded to on a target of 90 per cent within two working days. That is a cumulative performance figure. So there have been improvements on previous years. The department takes this issue very seriously and it is for that reason that it has introduced the correspondence tracking system.

Lord Dholakia: My Lords, the noble Baroness is right, there is a serious concern about delays. If the Government can set targets for removal in failed asylum and immigration cases, would it not be possible to set targets for such cases to be dealt with before the people are removed? There have been cases where replies have been received after the people have been deported. It would be much easier to deal with cases before the people leave these shores.

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