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I was trying to make the point that we quickly get into the realms of making lists about which organisations should be consulted in particular circumstances. I am always deeply reluctant to do that. It is appropriate that my noble and learned friend consult where he feels appropriate, no doubt with good advice. That may or may not include a variety of people. We should hesitate to put that into the Bill.
My noble friend Lord Brennan and others raised international concerns that have come forward. I know from discussions over the past couple of days that issues are being raised, particularly in Germany and possibly in France. It is important to think about
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The noble Lords, Lord Hunt of Wirral and Lord Borrie, raised issues about the powers of direction and whether the chair should be a lay person. It is a requirement that the majority of board members be lay; there is no reason why eminent lawyers should not be appointed on merit to the board as well. We have set out in paragraph 3 of Schedule 1 the experience that the board must have for us to make sure that it is representative, in the best sense of the word. It must have a broad range of experience that allows it to carry out its functions effectively, including the power to direct. As a lay person, I have no difficulty with the chair being a lay person. From my perspective, it feels that too often you have to have a legal qualification to do things, so at last there is a job that I can go for when I finish being a Minister. It is an important issue of confidence as well, concerning the messages that we send out. We will be fortunate when we find the right person to take on that role.
The noble Baroness, Lady Butler-Sloss, and the noble Lord, Lord Kingsland, raised the question of whether we ought to have a threshold condition in terms of the adverse impact on the objectives. She used substantial; others have talked to me about using significant. As noble Lords who have dealt with legislation before know, the trouble is that there are issues about the definition of substantial or significant in terms of being clear what we are trying to do. Substantial would also be difficult because it might mean that the board could not take action where it was required. If you have a regulator regulating a small number of people, the impact may not be substantial even where they are not meeting the regulatory standards. So by requiring the board to act in accordance with the principles of proportionality and accountability, we will get to the same point that noble Lords seek. No doubt we will discuss that in Committee.
The noble Lord, Lord Thomas of Gresford, asked about government solicitors. We do not think that we need to consider them within these provisions; they can still be disciplined if necessary. The cost of including them would be £800,000, which would have to come out of general taxation. We do not think that that is appropriate, but we do think that we have the right framework for them.
My noble friend Lord Whitty and other noble Lords were concerned whether the compensation levels for the OLC were too low. Ultimately, that can be varied by order. We think, recognising the current situation, that we have the balance right, but I know that my noble friend and consumer groups have raised the issue with us. I am sure that we will debate it during the Bills passage. I say to my noble friend Lord Brennan that it is not just a re-badged consumer complaints service. It will be located in the West Midlands, but it will be outside Leamington Spa, as I understand it. It will take advantage of a good existing skills base but will be very differentwhich I think is what my noble friend was looking for .
We had some work on costs done by PricewaterhouseCoopers and the assumptions in the report were its, not ours. We are broadly content with the projections but will of course continue to work with stakeholders to refine them as we implement the new arrangements. As noble Lords will know, PwC believes that there is a saving to be had within the projected costs for the new body.
I am grateful for the work that my noble friend Lord Bach did on the committee and for his support of the Bill. He was concerned about the contribution which the Government might make particularly in starting up the new body. We believe that the cost should be covered by those who are being regulated. One could do a cost-benefit analysis about what might happen to those organisations when the provisions come into force. They will have increased confidence and it is very possible that the new system could reduce vexatious complaintswhich I will return to in a moment. We recognise the importance of having the flexibility to differentiate, and the Bill has the capacity to do precisely thatto waive fees in certain circumstances and to differentiate the fees in others. We hope that that power will enable those issues to be dealt with appropriately.
Perhaps I may interject on a point here for the benefit of the right reverend Prelate the Bishop of Chelmsford lest he should think that I had forgotten him. He mentioned the year 1533which I think proves that we do not rush into change. But we agree entirely with his reading of the situation. I am grateful that he described the situation so succinctly, as it saves me having to repeat anything, and for his support for the Bill.
I shall begin with the role of the Bar on complaints and the questions raised by noble Lords on delegation. It is right that the number of complaints against the Bar is 560, compared with 18,299 for solicitors, which is perhaps largely explained in terms of numbers. A third of the complaints against the Bar were forwarded to the Legal Services Ombudsman compared with 10 per cent of complaints against solicitors being forwarded to the Law Society. So, factually, without putting any spin on this, one-third of complainants were not happy with the way that the Bar dealt with their complaints. That issue is worthy of consideration. However, the issue on which I wish to focus is the importance of consistency and clarity for the public.
Providing for different levels of service and different assumptions would send completely the wrong signal. We should regulate very clearly and very precisely, and that is not a reflection on the Bar. In Schedule 15 we allow expertise to be brought in, which would include the expertise of the Bar. There is no desire to do anything other than that, but it is important to make the system clear, straightforward and consistent.
A number of noble Lords including the noble and learned Lord, Lord Lyell, my noble friend Lord Brennan, the noble Lord, Lord Kingsland, and the noble Baroness, Lady Butler-Sloss, were concerned that if we do not delegate complaints, we might end up with unnecessary delays and concerns about what kind of complaint would be dealt with. When an ombudsman receives a complaint that he considers to contain service and conduct issues, he will send a copy of the complaint to the relevant professional body. So such complaints can be considered in parallel and there should not be a delay for consumers. I would argue that that is a much better outcome than having to wait until a finding of misconduct is made before any redress can be considered.
The noble Baroness also suggested that different conclusions might be arrived at. It is technically possible that someone not in breach of what was required by a regulator might be considered to have provided a bad service. In a sense, so be it. That will be for them to define very clearly.
Baroness Butler-Sloss: My Lords, forgive me for interrupting. I am much more concerned about situations where the facts are seen one way by one board but differently by another. So they come to two different conclusions, like two referees on a football pitch.
Baroness Ashton of Upholland: My Lords, the noble Baroness makes a point. We do not believe that that is likely but we will certainly look at it and consider how the noble Baroness might suggest we should tackle it without moving away from all the principles that we have established.
Noble Lords have raised the issue of vexatious complaints and the question of what we have described as the polluter pays mechanism. We have clearly stated the principle of who pays both in the Clementi proposals and again in the White Paper. We expect that a substantial proportion of the complaints that reach the OLC will be of some merit because otherwise they would have been dealt with at an in-house level. We hope that that will be an incentive to deal effectively with complaints in-house. There will of course be a handling fee if they end up with the OLC. It is right that those against whom complaints have been made, rather than the profession as a whole, should contribute to the cost of processing. But noble Lords are right to say that there are circumstances where it would be unfair to charge those who are subject to complaints, especially if they
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The noble Lord, Lord Kingsland, asked about Clause 38 and judicial review. The grounds in Clause 38 are similar, as the noble Lord said, to traditional review grounds. So we think that we have covered that, but we will discuss it with the noble Lord. The noble Lord, Lord Maclennan, asked whether we had considered Article 6. Indeed we have. We believe that the system that we have set out in the role of the ombudsmen and the role of judicial review fits with Article 6.
Finally, and briefly, I turn to alternative business structures. I am a huge fan of what has happened over the last while in financial and banking services; I have undoubtedly benefited from it as a consumer. I hear what noble Lords say about ensuring that we do this properly and appropriately. Indeed, the noble Lord, Lord Hunt of Wirral, supported by the noble Lord, Lord Maclennan of Rogart, has thought very carefully about how that would come into practice. The legal disciplinary practices will be allowed before Part 5 takes effect and, as noble Lords know, the bodies will be composed only of lawyers. Other practices will be permitted the mixture of practice only when the LSB is satisfied that there is a suitable regulator in place.
Noble Lords have occasionally asked me, and have asked today, whether there should be a difference in terms of geography or sector. It is difficult to think about that while bearing in mind how business is now done not least through the internet and advertising. We believe that we have achieved the step-by-step approach that has been looked for. It will be for the licensing authorities to decide who can be part of an alternative business structure. I think that that is the appropriate way forward.
Finally, noble Lords asked about commercial interests conflicting with consumer protection. These firms will be subject to robust safeguards to protect the consumer and will be accountable to the licensing authority. They will also have specific duties to maintain ethical and financial standards and have monitored compliance. We think that in the Bill and the regulations which will follow we have the ability to ensure that consumer protection is taken forward and that commercial interests and conflicts of interest are dealt with appropriately.
I apologise that I have not had a chance to respond on a number of points. I very much look forward to our Committee deliberations. I commend the Bill to the House and I am grateful for the warm welcome that it has already received.
Lord Willoughby de Broke rose to move to resolve, That this House calls upon Her Majestys Government to revoke the regulations laid before the House on 17 October (SI 2006/2787). 47th Report from the Merits Committee (Session 2005-06).
The noble Lord said: My Lords, I am grateful for the opportunity this evening to bring this sorry matter to the attention of the House. I will explain why I believe that these regulations are both disproportionate and unnecessary and should be revoked. First let me establish the purpose of these regulations. They will ban, with immediate effect, a product that has been on sale for hundreds of years and which, until the European Commission stuck its oar in, was, one must assume, competently and properly regulated by our own Food Standards Agency without any problem.
What are curds? They are that part of milk that is turned into cheese, the remainder being the whey. We are dealing with a healthy and historic product. I remind noble Lords of the redoubtable nursery rhyme character, Little Miss Muffett, who,sat on a tuffetEating her curds and whey.
One of the curd producers in this country isor wasa small firm called Bowland Dairies, based in Lancashire. On 3 January this year, the dairy was given its annual inspection by the local environmental health officer, who asked for only minor changes. On 12 June, the Food and Veterinary Office of the European Commission inspected the dairy and raised concerns about Bowland accepting milk that had been subjected to what is called a rapid test for antibiotics. On 14 June, the Commission circulated a rapid alert notice stating that Bowland's products were unsafe. On 20 June, the Food Standards Agency carried out a full audit of the dairy and approved continuing production of curds on 26 June, after Bowland had made changes in procedure that were agreed with the FSA.
However, on 4 July the Commission stated that because the milk used by Bowland had tested positive in the so-called rapid test for antibiotics, it did not comply with EU legislation and should not be used by Bowland for further testing and processing. The FSA stated that there was confusion over the type of milk that Bowland accepted and used, and that Bowland did not accept milk that was suspected of contamination.
The FSA also issued an alert advising member states that Bowlands products and systems were clear and that its products were fit for market. The Commission
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Bowland reacted by going to the European Court of Justicein this case, the court of first instanceon 8 September. The court of first instance found in Bowland's favour and ordered the Commission to withdraw both the rapid alert that it had earlier issued and its comments about Bowland Dairies. The Commission twice refused to obey that until 12 September, when the president of the Court ordered the Commission to stand aside. I have a copy of the court order with me. Typically, the Commission attempted to massage its defeat by appending its own statement to the court order, claiming that it had lost on a mere technicality. The Court instructed the Commission to strike this out, which it did. The president of the Court, Judge Vesterdorf, went so far as to say:
Let us be absolutely clear about this; the court order meant that Bowland could resume trading and, of course, that it was safe for it to do so. The Court is the ultimate arbiter of EU legislation, not the Commission. It is significant that the Commission could have appealed against the court order but chose not to do so. It carried out a two-day audit of Bowland Dairies on 26 and 27 September, which found no major failings. In fact, Bowland was informed by the Commission auditor who carried out that inspection that any findings would be classed as non-emergency.
However, on 6 October the Commission issued Article 53 emergency measures, with the effect that all Bowland products were recalled or banned from use within the EU. The Commission also announced that it would begin legal proceedings against the UK food safety authorities for failing to protect the public against contaminated milk; never mind the fact that the FSA had consistently given Bowland the all clear and the court of first instance had agreed with it.
The result is that Bowland's reputation was ruined, its factory closed and 26 people have lost their jobs. Yet it has done nothing wrong. I remind noble Lords that Bowland has always met the requirements of the UK Food Standards Agency. The European Court of Justice found that Bowlands produce presented no food safety risk and that the Commission had acted beyond its powers. The FSA has repeatedly stated that it disagrees with the Commission's interpretation of its scientific tests.
So where is the beef? Could the Minister please tell the House why the Government have panicked and introduced emergency regulations that are specifically designed to put Bowland Dairies out of business? The regulations are entirely specific to Bowland Dairies. Regulation 3 states:
Why has Bowland been selected for carpet-bombing like this? Why have the Government and the FSA refused to defend the Commission proceedings and why did they cave in to a Commission line of attack that has been rejected by the European Court of Justice? Is it because they think that curd cheese from Bowland is a health hazard? That cannot be the case because Bowland has always complied with FSA requirements. If the Ministerif I can have his attention for a momenthas any evidence that Bowland's products have ever poisoned anyone, or even that a single sample has been found to be unsafe, I would be pleased to have it. Is it because the Government want to prove their communautaire credentials? That cannot be the case eitherBowland's case has, after all, been vindicated in the European Court of Justice. Or is it because the Government want to deflect the Commission's audit of the UK dairy industry, and busting Bowland is seen as their Get out of jail card?
When the Minister replies to these questions, I hope that he will do rather better than the Minister in the other place in the debate on this subject on 7 November. In his winding up, Mr Barry Gardiner, who I understand is a Defra Minister, simply repeated the European Commissions allegations that Bowland had used contaminated milk. For the record, Bowland has never used products that were not tested and pasteurised as fit for purpose; Bowland did not sell mouldy or contaminated cheese and it did not sell floor waste. But it has been put out of business. Why? I beg to move.
Moved to resolve, That this House calls upon Her Majestys Government to revoke the regulations laid before the House on 17 October (SI 2006/2787). 47th Report from the Merits Committee (Session 2005-06).(Lord Willoughby de Broke.)
Lord Greaves: My Lords, I thank the noble Lord, Lord Willoughby de Broke, for bringing this Motion to the Floor of the House. It is an important matter and the questions that are raised about the regulations are a source of great disquiet. In many ways, the situation is extraordinary and bizarre because, as the noble Lord made absolutely clear, paragraph 3 refers to only one small company in Barrowford in Lancashire; it does not refer to anybody else anywhere else.
That seems to me arbitrary and discriminatory. If that company was breaking the law in how it made curd cheese, the law should be pressed and it should be taken to court under proper legal action. If the laws of this country are not sufficient to enforce European legislation on food standards, we should have a statutory instrument that applies to anybody and everybody who deals with the particular product. It is unsatisfactory to have a statutory instrument about one small company, employing 22 or 25 people in a part of Lancashire.
I live a few miles away from the companys base at Fulshaw Head Farm in Barrowford, and if I can do nothing else in this debate, I can teach your Lordships how to pronounce Barrowford, with the emphasis on the last syllable.
I have no connection with the company. My only connection is that I am a member of Pendle Borough Council, which is the environmental health authority that has been involved in enforcing the statutory instrument and in inspecting the company over the years. The company, which has operated for 10 years, and which has been built up to an £8 million business, has been closed down overnight.
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