I beg to move,
That this House has considered the matter of food industry competitiveness.
Let me begin by congratulating the food sector on its progress as a successful industry that provides us with a wide range of tasty and healthy foods. The industry contributes more than £80 billion to our economy and is our largest manufacturing sector; the food and farming industries employ 3.6 million people. The industry contains high-tech and innovative companies and is well placed to meet the challenges of the future: producing more food, for more people, while minimising its environmental impact on the planet, adapting to a low-carbon future and continuing to make more efficient use of resources.
To meet these challenges, the Government’s food strategy, “Food 2030”, which we published on 5 January, sets out our vision of what the food system should look like in 2030. The industry welcomed this vision; I thank the National Farmers Union, the Food and Drink Federation and the British Retail Consortium for their words of support. A thriving food sector will be better placed to invest in the changes necessary to deliver that vision. The Government are committed to fostering competitive markets that work in the best interest of consumers, and the groceries supply chain is no different. By looking for ways to help make markets work better, we can enable businesses to compete freely and fairly, giving UK consumers more choice and better value.
With that in mind, when will the Government bring forward legislation on the supermarket ombudsman or support the private Member’s Bill promoted by my hon. Friend the Member for Ynys Môn (Albert Owen)? The hon. Member for St. Ives (Andrew George) and I, among others, want that to be done in this Parliament rather than waiting for a future Parliament.
I am grateful to my hon. Friend for his question. If he will bear with me, I will come to that when I discuss in some detail the Government’s announcement that we are in favour of an ombudsman following the conclusion of considerations by the Competition Commission, which has made a number of recommendations. The Office of Fair Trading also has a role to play. I know that he and many other Members in all parts of the House have been lobbying for this initiative for some considerable time, and it has been welcomed pretty much across the piece.
I will give way to my hon. Friend, but I am limited to 10 minutes and I want to get my remarks across so that as many colleagues as possible can contribute and I can respond in due course.
In advance of my Adjournment debate on Tuesday on Cadbury, and because I have to leave for a constituency engagement, may I take this opportunity to ask the Minister what lessons the Government are learning from the hostile takeover of Cadbury, which has meant that a well-run, debt-free company is now saddled with billions of pounds-worth of debt while those who have no interest in the long-term health of that company or any other industry have made a huge killing?
As my hon. Friend knows, that is a matter primarily for the Department for Business, Innovation and Skills, and my noble Friend Lord Mandelson and his ministerial colleagues are examining it closely. We want to ensure that the best interests of the UK economy, UK production and UK workers are to the fore in the consideration of the takeover. I am a West Ham United supporter and, having followed the football club’s recent takeover, I know that anybody who is interested in any takeover of a commercial operation wants to ensure that it is as successful as possible. I know that the Cadbury-Kraft issue will evolve in the weeks and months ahead, and my hon. Friend and many other Members will take a keen interest and wish everybody success.
As I said, there has been mounting concern over recent years among various industry and lobbying groups about the power of the major supermarkets and the impact that that has on the supply of groceries, including the ability of local producers to access markets. The Government and the Office of Fair Trading shared those concerns and asked the Competition Commission to investigate the groceries market and see whether supermarket power was detrimental to consumer interests. We welcomed the commission’s final report, published last year, and thanked it for its work.
The commission found that in many respects, competition between supermarkets was strong and working effectively. Competition in the groceries market provides consumers with diverse choice, good value and low prices, and that is reflected in the numbers of shoppers who choose to buy their groceries in supermarkets. However, the commission identified two adverse effects on competition—areas in which the market structure does not work in the best interests of consumers.
The first finding was that in some areas local groceries markets were dominated by single retail chains, restricting the choice available to shoppers. We are still considering our response to that. The second finding was that certain supermarkets’ practices passed unacceptable risks or costs on to suppliers—mainly food manufacturers and processors—creating high levels of uncertainty about their income and so limiting their ability to invest and innovate.
The commission proposed a number of remedies and recommendations to address the adverse effects on competition identified. They included a new groceries supply code of practice—GSCOP—for all supermarkets with a turnover of more than £1 billion a year. The Office of Fair Trading will play an important role in overseeing its implementation. Additionally, the commission recommended that the Government establish an ombudsman, as my hon. Friend the Member for Stroud (Mr. Drew) mentioned, to monitor GSCOP and arbitrate disputes between suppliers and retailers.
That is a complex issue, and we have considered the recommendation carefully. My hon. Friend the Minister for Further Education, Skills, Apprenticeships and Consumer Affairs announced on 13 January that he agreed with the Competition Commission that there was a need for a body to enforce the code of practice independently, to prevent retailers from being able to pass excessive risks and unexpected costs on to their suppliers. To support that, it was decided that the ombudsman should also have the important power of hearing anonymous complaints.
The revised code of practice is a great improvement on the current regime. However, the power that large grocery retailers remain able to wield over their suppliers can still create pressures on small producers, especially in these difficult economic times. Ultimately, that may have an impact on consumers.
Does the Minister not accept that the best ombudsman is the customer? I have no idea about the Minister’s experience of working in the supermarket industry, but does he not agree that for any supermarket to succeed, by definition it has to have good relationships with its suppliers?
The hon. Gentleman makes a very good point. It is important that the retail sector has good relationships with its suppliers, and by and large that is the case across the piece. However, in the course of the investigations into the relationship between supermarkets and producers, processors and the farming industry, it became clear that there had been some abuses. For example, sometimes there were no written contracts between the retail sector and the producers and processors, which seems very strange in this day and age. Also, prices were being changed after the event, which meant that the price that a producer or processor expected was not reflected in the cheque that came through the post from the retailers. Those abuses were taken into account, which was why the strengthened code of practice was produced and why all parties concluded that an ombudsman of some description would be appropriate to oversee the application of the new code. We were not convinced that the system was working as effectively as it could have done.
I give way to the hon. Member for Arundel and South Downs (Nick Herbert), who leads for the Opposition. If the hon. Member for Westbury (Dr. Murrison) will allow me a couple of minutes, I will give way to him if I can get through my remarks.
I am grateful to the Minister. Does he agree that the Competition Commission was clear that the absence of action would have meant suppliers innovating and investing less, and that crucially, that would not be in the interests of the consumer and could lead to higher prices in future? The chairman of the commission said recently that the economic downturn was a reason for action, not inaction.
The hon. Gentleman makes a very important point. Processors and producers needed certainty that the payment agreements and contracts that they had entered into would be honoured, allowing them to project what their future investment in their business or farm should be. That was not happening across the piece, and the uncertainty could have led to a number of businesses and farms going under. As he said, that could ultimately have acted to the detriment of the consumer.
I am wasting time explaining this, but if I can give way—
On a point of order, Madam Deputy Speaker. The Minister is making a very interesting speech that we are all following closely, but I am not convinced that he is aware of the extra time that he gets for allowing interventions. I wonder whether you might be able to enlighten him.
I inform the hon. Gentleman that the Minister does not get time for each intervention in these debates. He gets one minute of additional time, but it is still up to him to determine whether he will take an intervention.
I am grateful for your explanation, Madam Deputy Speaker. I can tell the hon. Gentleman that I have had the additional time that I was allowed for the first two interventions. I have since taken two or three others, and as I said, if I have time I will certainly give way to him. However, I am not sure whether I will get through my remarks. I will have to run through them at pace.
GSCOP will come into force on 4 February, and we will quickly follow that up with a consultation on how best to enforce it, including on the structure of the ombudsman and what powers it could have. We do not anticipate that a significant impact on consumer prices or staffing levels in retail will result from the creation of an enforcement body. We will consult not on whether a body is needed—we have decided that—but on exactly how that body will operate. We will consult on its nature and role, to ensure that all interested parties can make their views heard and that informed decisions are made.
The new, tougher code and proper enforcement will mean that the grocery supply market works in the long-term best interests of consumers. The new ombudsman will help strike the right balance between farmers and food producers getting a fair deal and the interests of supermarkets. That will enable consumers to get the high-quality British food that they want at an affordable price. Helping our farmers produce as much as they can, while using fewer resources, is at the heart of the Government’s food strategy, “Food 2030.”
I have previously commented in the House on the relationship between retailers and farmers. GSCOP will be for companies that supply produce direct to retailers. Most fresh produce is supplied to retailers through intermediaries such as packers, processors and fresh food wholesalers rather than by farmers. Although most farmers will therefore be outside the direct scope of GSCOP, the limited value of direct purchases by grocery retailers from farmers understates the closeness of the trading relationship between primary producers and grocery retailers. As farmers may be members of, or shareholders in, intermediary businesses that market their produce to grocery retailers, in that respect GSCOP will provide them with some certainty.
As I have said, the industry contributes more than £80 billion to our economy and is our largest manufacturing sector. Through our “Food 2030” strategy, we will work to help ensure that it can thrive as an innovative, competitive and resilient sector, and as a sustainable source of growth and jobs. The Government are supporting the food industry not only through funding for innovation and skills but through our public procurement policies, through our “Love Food, Hate Waste” campaign to reduce waste, and by supporting the development of small and medium-sized enterprises and promoting regional foods.
In the circumstances, why are the Government proceeding with a further period of consultation? Office of Fair Trading referrals to the Competition Commission on this matter go back to April 1989 and the supermarkets will want to string the process out for as long as they possibly can. There have been inquiries and consultations enough. Why not simply implement the policy now?
The hon. Gentleman makes a fair point about the impatience of many of us regarding progress on this matter. However, as the hon. Member for Shipley (Philip Davies) said, there are still differences of opinion about the operation of an ombudsman. The Conservatives made a proposal on that recently, the Government are clearly outlining a different structure and responsibilities, and I am sure we will shortly hear the views of the Lib Dems from the hon. Member for St. Ives (Andrew George). The consultation will offer certainty that after the election campaign there will be an ombudsman and that all three parties will have had the opportunity to say in detail what shape and powers the ombudsman should have. They will also have the opportunity to say whether the ombudsman should be inside the OFT or an independent entity. That is what the consultation will be about.
In conclusion, the new code and its enforcement, which are the result of two intensive investigations by the Competition Commission, will ensure that markets work effectively in the interests of consumers.
May I remind the House of my interests, which are declared in the register?
I welcome the fact that at last we are having a debate on food and farming in Government time. I cannot remember the last time that happened, but I congratulate the Government on it, even if they have hung the debate on a very small hook—the one action they have taken that they believe to be in the interests of agriculture.
I shall address the issue of the ombudsman later, but the Minister began by referring to “Food 2030”, which the Opposition welcome. After nearly 13 years in office, the Government have recognised that they got it wrong in their previous 12. The two previous Secretaries of State—the present and previous Foreign Secretary, indeed—repeatedly said that domestic food production was unnecessary and that our food security could be achieved by importing from several different countries. In that time, pork production went down by one third, and bacon and ham by a quarter. Production of poultry, vegetables, milk, eggs and most of our commodities also declined before the Government saw the error of their ways.
Does my hon. Friend agree that one advantage of having domestic suppliers is that it guarantees the quality of the produce and helps substantially to encourage local economies?
My hon. Friend makes a very important point. Local sourcing guarantees provenance. Of course, it does not always guarantee high quality, but it certainly enables the consumer to know where a product comes from and to check the quality, which we strongly support.
My hon. Friend knows of my interest, albeit amateur, in the pork industry. Does he agree that for consumers to exert choice they need to know from where a product is sourced? Does he share my concern that certain supermarkets are in the habit of claiming that pork is sourced in the UK, but when one looks on their shelves, one finds that their bacon is produced anywhere but the UK? Does he agree that the ombudsman needs to look into that as a matter of urgency?
I have never known my hon. Friend to do anything amateurishly, and I will come to the issue of food labelling in a few moments.
The real issue with “Food 2030” is not what is in it, but what is not in it. There are no substantive proposals to restore the prosperity of our food supply industry, and therefore assure us of food security. The first thing must be to ensure that consumers are properly informed. We must have proper, honest country-of-origin labelling, initially in the meat sector. Even the Government have come round to that, but they have blocked four different private Members’ Bills that would have provided such labelling. While the Minister and the Secretary of State have been declaring their support for country-of-origin labelling, we have it on record that Food Standards Agency officials have been voting against it in meetings in Brussels. There is not a lot of substance there.
“Food 2030” says that agriculture must be supported by first-class research and development, yet the Government have been cutting funding on agricultural research for most of the past 12 years. The fundamental objective of the document is that the demand for food should be met by profitable, competitive, highly skilled and resilient farming—fish and food—businesses. It refers to the market and sharing risks, yet the Government have taken two years to respond to the Competition Commission report.
We wholly support the new code of practice—GSCOP, as it is being called—and as we announced before the Government did, we support the idea of an ombudsman. Some think it odd that the Conservative party supports an ombudsman.
I know that at least one of my Back-Bench colleagues takes that view. My hon. Friend is an aficionado of Adam Smith and he will recall that Adam Smith actually says that a true free market is one in which there are an equal number of buyers and suppliers, which, of course, is patently not the case in the grocery market. The ombudsman is about addressing a market failure, not about interfering in a free market. However, we welcome the Government’s albeit belated decision to respond.
The hon. Gentleman says “albeit belated”, but he is quoted as saying at his party’s conference in October:
“There needs to be a code of practice properly enforced, but whether that requires a freestanding ombudsman which would be a new bureaucracy is not clear.”
It would therefore be fair to say that the change in the Conservative position is also belated.
That is absolutely astonishing nonsense. We have done exactly what I said at that time. We have said that we will appoint an independent ombudsman, not in a separate office with all the paraphernalia—a reception and a new set of office rates and so on—but within the OFT. We want an independent, discrete unit within the OFT in order to keep the costs of providing an ombudsman down, but he would none the less be independent.
I would be interested know whether the hon. Gentleman supports the principal spokesman for the Liberal Democrats on such matters. The latter says that we should have not an ombudsman but a price regulator who would fix prices, which would be totally contrary to European Union and World Trade Organisation law. The hon. Gentleman is completely deceiving farmers in this country if he believes that a Liberal Government—God forbid that one should ever exist—could actually fix the prices that supermarkets paid farmers for their milk or anything else. I look forward to his response to that.
The “Food 2030” document refers to the need for better and more friendly regulation. That from a Government who introduced national muck-spreading day and put in statute the date when farmers may go and spread their muck!
The Department for Environment, Food and Rural Affairs has a target to reduce its administrative burden by 25 per cent. by May, but it will not hit it. The expectation is that at best it will reach 20 per cent., but even so, that is 20 per cent. of the wrong target, because targeting administration costs completely ignores the capital costs on businesses of meeting DEFRA regulations. The nitrate-vulnerable zone storage regulations cost tens if not hundreds of thousands of pounds to each and every livestock farmer in the country. The cost of regulation is still huge. Even if the Department declares in a few months’ time that it has decreased the administrative burden by 20 per cent., I do not expect many farmers to have noticed the difference.
I am most grateful to my hon. Friend for mentioning NVZs and the increased capital costs faced by farmers, particularly dairy farmers. However, the milk industry is clearly part of a chain where the market is not working properly. Farmers cannot sell milk for a greater price than it takes to produce it. What is the answer to the problem of reviving the dairy industry in this country?
I obviously do not have time to retail a long list. We have two debates on the dairy industry in the House and Committee next week, when my hon. Friend might want to go into a bit more detail. Many dairy farmers are making a profit: part of the problem is the 6p or 7p a litre difference between the highest and lowest prices paid. The other issue is the cost of production. In a market in which the Government no longer—rightly—set prices, they are bound to do what they can to reduce the input costs, and that is part of what I am addressing, especially on regulation.
On the issue of regulation, can the Minister bring us up to date on the situation with battery cages? We are hearing many stories of backing down on the 2012 ban, and we know that most European countries have hardly begun to introduce the enriched cages. What will the Government do to protect our industry and those farmers who have made significant new investment, but face egg imports from countries that have not done so?
The Minister also referred to public sector food procurement. He mentioned improvement, but there has been precious little of that. This country should be predominant in supply of orchard fruit, given the industry in Kent and parts of the Welsh marches, but domestic supply fell from 46 per cent. in 2006-07 to 30 per cent. in 2007-08. The Government are consulting on a pilot healthier food mark, but does the Minister agree that that should involve the Red Tractor, or is it true that they propose to drop it from their proposals?
Animal health is critical if we are to compete with other countries, especially in the grazing sector. The Government have announced their responsibility and cost-sharing proposals and appointed Rosemary Radcliffe to look into the issue and produce a report in November. However, we will have a draft Bill this month or next. What can be in that Bill if we will not have the substantive proposals from Ms Radcliffe until November? We cannot talk about increasing production and ignore the fact that some 40,000 head of cattle were culled last year because of bovine tuberculosis, up from 3,000 head a year when the Government took office.
Can the hon. Gentleman confirm that Conservative policy is to cull badgers in England?
Conservative policy is to attack this disease with a comprehensive strategy using all available measures and, yes, that does include recognition that will require selective culling in certain hotspots, but not across the whole of England, as the hon. Gentleman implies. We will continue to study the science as it develops over the next few weeks and months. A vaccine that is of any use—an oral vaccine, in other words—will not be available until 2014 and, at the current rate of expansion anything between 80,000 and 100,000 head of cattle could be slaughtered each year by then. I suggest that we cannot wait until 2014 for any improvement.
With your indulgence, Madam Deputy Speaker, I wish to ask the Minister about another animal health issue not directly related to food—at least not in this country. It relates to the outbreak this week in Wiltshire of equine infectious anaemia in two horses imported from Romania. My understanding is that EU law has, since 2007, required testing prior to export. I hope that the Minister can tell us what has gone wrong, whether those animals were tested and how they got to Wiltshire before being detected.
The Minister also referred to energy and waste reduction. He may not be aware that over the past few weeks I have tabled questions to every Department about food waste and only the Department for Environment, Food and Rural Affairs has been able to give me any figures. Almost every other Department has said that it does not collect those statistics. I suggest that the Government start leading by example and collecting those statistics. The Government talk about spending £10 million on anaerobic digesters as demonstration plants, but that ignores the fact that many are already in place and running, based on renewable obligations certificates. We now find that the Department of Energy and Climate Change proposes to renege on those certificates and there will be no grandfather rights for existing plants. However, DEFRA proposes more regulations on the size of store that will need a licence—another difficulty for anybody who wants to set up an anaerobic digestion plant, even though this country is already way behind in that area and needs to improve.
When it comes to the Government’s document, rarely can there have been so much hype over so little substance. The Government seek credit for admitting that they have got this issue completely wrong for the past 12 years, because domestic food production does matter. That is in the face of the fact that the farming and food industries have been saying for years that the Government’s policy was wrong. The Conservative party has consistently called for food security, but the Government rubbished it. The Conservative party called for honest labelling and country-of-origin information, and the Government blocked that. The Conservative party is committed to public procurement, but we have a pale imitation of that from this Government. We are committed to an ombudsman, and all we have from the Government is a consultation. For years, the real interests of the countryside, farming and the food industry have been pursued by the Conservatives, not by the Government. For years we have been setting the agenda that the Government are belatedly beginning to follow—
Order. The hon. Gentleman’s time is up.
Like the hon. Member for South-East Cambridgeshire (Mr. Paice), I am pleased that the Government have provided time to debate this important issue. I welcome the Government’s belated statement on 13 January. I should also declare an interest as someone who has chaired an organisation called Grocery Market Action Group for the past four years. It has cross-party support and representatives from the National Farmers Union, the National Farmers Union of Scotland, Friends of the Earth, ActionAid, Traidcraft, the British Brands Group, the Association of Convenience Stores, the British Independent Fruit Growers Association and several other organisations with an interest in a competitive and effective food industry in the UK and in fair trade with suppliers in developing countries.
It is important to note that those organisations and others, who have watched how this sector has developed over the past 11 years of various inquiries by the Office of Fair Trading and the Competition Commission, and the original voluntary supermarket code of practice, are not criticising the supermarkets and their behaviour as being in some way criminal. Indeed, their activities have been entirely rational. It would be surprising if anyone in the position of the Sainsburys, Tescos and Asdas of this world did not take the fullest possible advantage of their impact on market—the OFT has described them as able to dictate market conditions. They are in a very powerful position and their behaviour is entirely rational. The issue that the competition authorities have considered over the years is whether those firms’ use of power in the marketplace has turned from effective and clever into an abuse. The important work of the Competition Commission in an excellent report published in April 2008—and the length of time since then is one reason why people are getting frustrated—demonstrated that we are talking about a level of abuse. The Minister himself in his opening remarks referred to the transfer of excessive risk and unexpected costs, and that has been clearly demonstrated by the thorough inquiry by the Competition Commission. The inquiry stated that it has
“an adverse effect on investment and innovation in the supply chain and ultimately on consumers.”
The last important point was left out of the Minister’s comments. It is important that we have a market working in the interests of consumers.
The hon. Gentleman is working on the premise that there are big, horrible, nasty supermarkets screwing poor, small suppliers into the ground. If that is the case, as he seems to think, and if his ombudsman is to deal with it, the only upshot will be that prices will have to go up for the consumer, because supermarkets pass on those savings to the consumer. How much extra is he happy for his constituents to pay in their shopping bills to meet his desire for an ombudsman?
That is a complete misapprehension and fails to understand how the market works. The Competition Commission has clearly shown that there are abuses within the supply chain and that suppliers are being pushed to the wall. That is during the deepest recession when the largest supermarkets are now posting record profits. It is not entirely unknown for the supermarkets to achieve record profits. Yes, there is a benefit for someone—and we all know where it is going. Whether that is, as the Minister said, the impact of retrospective changes in the unwritten contracts, the lack of notice in delisting, the holding of suppliers liable for losses due to shrinkage, or other overriders within the system itself, the fact is that the whole thing needs a serious review.
In January last year, we commissioned Roger Clarke of the Cardiff business school to undertake an independent investigation into the cost impacts on the supermarkets resulting from the application of regulation. He has since published a report for us. He made himself clear:
“While the creation of an Ombudsman will involve some cost (estimated at about £5-6 million per year) this is likely to be small relative to consumer benefits as a whole. As noted by the CC, the actual size of the food retail industry in the UK is £110. 4 billion and a 0.1 per cent. price fall for the largest 4 retailers is equivalent to a reduction in consumer expenditure of £80 million a year”.
He also stated that
“the costs are likely to be minor compared to the benefits for consumers that arise.”
Does the hon. Gentleman agree that there might be some benefits for the British food industry in, for example, labelling, which supermarkets currently use in an adverse way? I mentioned the pork industry in my earlier intervention and the fact that the implication to consumers is that some products are British-sourced when in fact they are not. That clearly needs to be sorted out. Had supermarkets done that already, and not behaved as I am afraid that they have, perhaps some of us would be less enthusiastic now for an ombudsman to sort it out.
I am grateful for that extremely helpful intervention. One of the knock-on effects of the proposals would be greater transparency through the groceries supply chain, which would be to the enormous benefit of suppliers, and I think the supermarkets are now waking up and recognising that it would be in their interests as well. While there remains this uncertainty and while supermarkets continue to be accused of treating their suppliers in an adverse manner, the existence of an ombudsman would be of clear benefit to the supermarkets, because it would give them a clean bill of health—if there were no findings against them in a particular year. There would be a big benefit to them.
I know that the supermarkets have expressed concerns about a slippery slope and explained that it would result in further regulation. However, I do not think that that would be the case. I am concerned that the Government are opting for further consultation after 10 years. Clearly the supermarkets want to string this out for as long as possible. To reassure the hon. Member for South-East Cambridgeshire (Mr. Paice), this is not a price-sensitive initiative. Although my hon. Friend the Member for Westmorland and Lonsdale (Tim Farron) will continue to float ideas, I welcome the measure and hope that we can introduce it as soon as possible.
I am delighted to have the chance to speak in this debate. I echo the comments made by my hon. Friend the Member for South-East Cambridgeshire (Mr. Paice). It is good to have such a debate in Government time and to welcome this belated food strategy. Many of the component parts, and certainly several of the good component parts, follow long-standing policy initiatives and issues set out by my hon. Friends on the Front Bench, in particular by my hon. Friend the Member for South-East Cambridgeshire, who has done such a tremendous job in his position over the years and speaks with knowledge and great integrity.
I would like to set out the background to this debate. As we know, British agriculture has had some difficulties over the years and trends in self-sufficiency have been poor. We reckon that we have lost self-sufficiency in indigenous food of about 9 per cent.—from 82 per cent. in 1998 to 73 per cent. in 2007. Most of us who represent rural and agricultural areas know of the problems with livestock, the declining numbers of beef and dairy cows, and the pig industry. Many Members will remember the lobby by the pig industry a couple of years ago, which tried to alert the Government to the issues and problems, including the loss of 40 per cent. of the national herd between 1997 and 2008.
The background to the problems with food, farming and agriculture are well known to us and have over the years caused great distress to those who represent these areas. However, I would like to demonstrate the resilience of all parts of the food chain by looking at one particular constituency—my own—and seeing how, in many aspects of the Government’s core objectives in the food strategy, my own constituency illustrates what can be done. It is simply a symbol for other areas that can do the same.
I start, however, with a matter that is particular to my constituency. I am lucky to have Peter Kendall, the National Farmers Union president, as a constituent of mine. He farms a well-known family farm in Eyeworth—a popular family and a popular man—and has been a far-sighted leader of the NFU. He has done some terrific things to accentuate the positive aspects of farming and to get the farming industry and farmers to proclaim what they can do, instead of always being seen sitting on the sidelines saying what cannot be done.
I am pleased to put on the record my personal commendation of Mr. Kendall and to endorse the sentiments outlined by the hon. Gentleman. However, given that there is an NFU election at the moment, I would not want to prejudice Mr. Kendall’s chances or give any indication that there is a Government candidate in the election. I offer the hon. Gentleman an opportunity to say that this is a politically neutral election and that it is for the NFU members to make up their own minds.
The Minister has absolutely said what needs to be said. As Peter Kendall’s Member of Parliament, I am entitled to give a more rounded endorsement that will not be coloured by any sense that it comes either from the Government or the official Opposition. It is simply a recognition of a man who has been an outstanding farmer in his own area and has taken those skills to the national level.
I remember the first speech that Peter gave to the NFU dinner in his home area after he became NFU president and how proud people were of him. He picked out a series of points that he said he would major on over the following few years. They included an understanding of the global issues facing agriculture, the number of people who needed to be fed over the next 30 to 50 years and the disappearance of agricultural land across the world. Not only was that an issue in itself, but it required us to think again about science and the relationship between science and farming. There were some easy things that people could say, but some hard issues to be faced by people who needed food, not warm words. He was very conscious of the UK’s own food production and the issue to which I referred earlier—our self-sufficiency.
Above all, Mr. Kendall emphasised to the local NFU, to which I shall return in a moment, the importance of projecting a positive image of farming. I believe that he has done all those things. He was also keen to talk not only about UK farming, but about the EU, and to recognise the importance of the UK’s relationship with the EU and how important it was to think of the EU collectively, as well as in relation to our national interest.
That issue is particular to my constituency, given Peter’s position, but I want to illustrate how some of the companies and other businesses in the area work to fulfil the objectives of “Food 2030”. We have Jordans in my constituency, which puts Biggleswade on the map—a town that, as all hon. Members present will know, is a fulcrum in Bedfordshire. Jordans was innovative in realising many years ago that food tastes—and particularly breakfast food tastes—were changing. People wanted a different, healthier breakfast cereal and they wanted it delivered in a different form, through energy bars and cereal bars. The family went out and developed them, and they built an extraordinary business.
Jordans has a great relationship with farmers, as all food producers must. The company pays a premium to farmers to plant 10 per cent. of their land with nature-friendly habitats to conservation-grade standard. Jordans has been a pioneer, it works in healthy food, it is innovative, and it relates to its consumers. The current campaign on its website is about encouraging its customers to think about putting spare food into a compost bin at the end of day, instead of throwing it away. Jordans recognises the importance of the food chain right the way through.
As we are talking about vegetables and food waste, let me say that I recognise what my hon. Friend the Member for South-East Cambridgeshire said about the need to use energy, through the work of Biogen and anaerobic digestion. Biogen is one of the companies he talked about that is taking a lead on the issue, turning food waste into power. The company is based in Milton Ernest in my constituency. Through pig slurry and food waste, it produces 1 MW of electricity a year—enough to provide continuous power and electricity to 800 or 900 houses. That is a perfect example of small-scale microgeneration. When we hear the big arguments about onshore wind, for example, we say to people, “There may be an alternatives. Renewables are not all about wind farms. There are other ways to go about it.” Plants that use anaerobic digestion—the conversion of waste into methane and, ultimately, electricity—is a perfect example. I therefore share the concerns that my hon. Friend expressed about regulation.
I just want to clarify that the company to which I was referring in my speech was indeed Biogen, because it has contacted me—as I am sure it has my hon. Friend—to express its great concern that the Department of Energy and Climate Change is proposing to renege on its agreement on renewables obligation certificates. That means that the financial deal that the company entered into, and on the basis of which it made its original investments, no longer necessarily holds. Those investments would never have been made on that basis, and certainly none will be made in future.
I am grateful to my hon. Friend, in what might be the sting in the tail of this crafted speech, for illustrating what my constituents are doing. In that way we come full circle, to some of the problems that they are facing and how, despite the Government’s intentions, as set out in their paper, their actions do not always ensure the ends that they seek. They say one thing, but are doing things that make life more difficult for those whom they want to encourage. My hon. Friend has picked out a perfect example of that. I commend the Ibbett family and Andrew Needham at Biogen for all they are doing to pioneer renewable energy in that way.
Before we get on to vegetable waste, however, we start with the vegetables themselves. Bedfordshire, an area noted for the growing of vegetables, also has people who recognise that, with different shopping and working habits, we need to retail in a different way. My family and I get our vegetables every week in a veg box from Garden Friends. There is no unnecessary packing, and we get vegetables that are locally produced, where possible, and seasonal. The whole family get a chance to eat slightly different things and cook different things according to season, using locally sourced products. Garden Friends has now expanded, with a farm shop based in Roxton in my constituency. I commend Val and Mark for the work they are doing, but they are not the only ones to have pioneered that form of retailing, recognising the changing culture. They too are working hard to fulfil the Government’s objective of providing healthy food in a sustainable manner.
Right at the other end of the scale from Jordans, a national company with a strong export record, and Garden Friends, which operates on a small scale, is Unilever, the multinational. Unilever’s main food science research establishment is based at Colworth park in north Bedfordshire. It is a remarkable establishment, containing the most northerly tea plantation in the world—Lipton is the brand—and looking after such wonderful things as ice cream and so on. In the recent restructuring of Unilever, I was delighted that Colworth park remained in what is now a handful of world renowned research establishments. The work done at Colworth park fulfils the Government’s aim in key point six of their strategy, which talks about
“Increasing the impact of skills, knowledge, research and technology”.
Unilever is looking at how to take the bad fats out of food—the trans fats and saturated fats—and ensure that only the good fats remain, as well as how to present food in a healthier manner and how to take existing brands and make them better. Unilever also looks at new products to ensure that they are safe.
Colworth park is developing: it is becoming a science park. I am delighted to say that the Institute of Food Research will have a presence there from next year. That fits in with Bedfordshire’s overall strategy to be part of what we call the Oxford-Cambridge arc and—to use another geometric symbol—part of the golden triangle, of Oxford, Cambridge and Imperial college London, where science and technology is based. Unilever’s presence is therefore key; but again, in just one constituency, we have research and development, and the multinational, the local, the farmers and the growers. Despite the difficulties of food and all the problems over the years, we can see in just one constituency the people, the skills and the talent needed to combat them.
There is one final link in the chain: us eating the food. I pay tribute to the growing number of farm collectives that are being set up to market their produce. There is one in London called the Farm Collective, a deli in Smithfield where this morning I had a really good bacon roll and a nice cup of coffee. Everything is British-sourced—the provenance is there to see, and we can trace it through. [Interruption.] The hon. Member for Croydon, Central (Mr. Pelling) raised an eyebrow when I mentioned coffee. That point is tackled in a little note produced by the Farm Collective, which says:
“At the Farm Collective we represent a new movement in food. Our ingredients are sourced by us from British farms (ok, coffee is tricky but the award winning Square Mile Coffee Roasters take care of this for us).”
I think that the Farm Collective can be allowed a little leeway on coffee. I know all that from having my bacon roll and coffee there this morning with my son Mat, who is working there for a few months, and I thought that I would put it on the record. I hope that I do not have to declare an interest, Madam Deputy Speaker, as that young man begins to make his way in the world. All those examples show what can be and is being done in our food industry at all levels to deliver not only the Government’s objectives, but what the consumer is looking for.
Finally, let me return to my local NFU branch, which I met last week, because that is where the rubber meets the road. Despite everything that I have said about the positive attitude of farmers, what they want from the Government is to ensure that warm words are followed by action. To say that they are suspicious of the current Government is a bit of an understatement, as I am sure that the Minister would acknowledge. Farmers have been through a tough time, and after all that time they are not sure whether everything put forward in the strategy will be delivered. For example, there are conflicting messages. Farmers are being asked to produce more food, but the Government are still ambivalent about some of the pesticides and chemicals that can be used, and that worries them. We cannot take the science out of farming. Farmers need a clear lead on that issue. Why has it taken so long to get the supermarket ombudsman up and running? The issues between farmers and supermarkets predate the current Government—things have been exceptionally difficult—and they are worried that everything has taken so long.
One point that I did not have time to expand upon was about that very relationship. The proposal for a supermarket ombudsman deals only with the ultimate supplier and the supermarket. What is required under that proposal—I hope that the Minister will address this in his summing up—is something to ensure that issues can be investigated right through the supply chain, up to the farmer and the grower. Does the hon. Gentleman agree?
Yes, the hon. Gentleman makes a fair point. Part of the problem is that this process has had such a long gestation period, and we still do not know exactly how it will work. My hon. Friend the Member for South-East Cambridgeshire was kind enough not to suggest that we had prompted the Government into action with our own announcement just a few days before they made theirs in Oxford. Perhaps they had not thought the matter through at that point. The details need to be worked through, and I am confident about the contribution that my hon. Friend will make to enabling those details to become a practical reality.
Why has there been such a long delay on labelling? The problems with meat labelling raise serious issues for those who rear and produce food in this country. They have to abide by health regulations, and they face competition, but that is nothing new. It was not enough to hear a squeak from the Government just before Christmas to the effect that this matter was moving on to the agenda. It is no wonder that my friends in the local NFU are suspicious. They really want to see something delivered on this; they have been waiting too long.
Finally, when will the Government truly understand the problems associated with gold-plating directives? We hear all the talk on this. Indeed, I was questioned heavily by members of the NFU on my own party’s position on this, because they hear the same talk. They want a Government who understand the damage that gold-plating and over-gilding the regulations can do. Open Europe has estimated that the cost of regulation has tripled for the farming industry since DEFRA was formed in 2001. That tells its own story.
I am grateful for the time that I have been allowed this afternoon. I hope that I have managed to illustrate what one typical rural constituency can do, right the way through the chain from the largest company to the smallest, from those who work on an international scale to the individual suppliers, from research to growing, and from retailing to consuming and to dealing with the waste remnants in an innovative fashion. People are looking for a Government who will understand what they are about and work to help them and deal with the conundrums that I have raised, to which they want real answers. I am confident that, in a short time, they will have a Government who will do just that job.
I will try to be brief. I know that the hon. Member for Croydon, Central (Mr. Pelling) wants to speak, and I want to give him enough time to set out his stall as well.
I want to focus on the proposals for a supermarket ombudsman. I am afraid that the debate so far on this issue has been familiarly depressing. Debates in this place seem to follow the same old routine. First, an outside body makes a recommendation about something. In this case, it was the Competition Commission, but it can be Select Committees or other bodies set up by the Government. Whatever happens, we seem to take the view in this place that, whenever such a body produces a report, we all have to stand up and say, “Wasn’t that a marvellous report? We can’t think of anything bad to say about any of the recommendations, and everyone’s done a wonderful job.” We build up a cosy consensus in this place based on the fact that no criticism can ever be made of any report done by anybody about anything.
I do not share that view. Are we really saying that we are happy to give the Competition Commission a blank cheque, that we are going to agree with everything that it comes up with, and that it must be marvellous simply because the Competition Commission says so? That appears to be the nature of the debate that we have had on this matter so far. Everyone seems to have said, “This must be a good thing because the Competition Commission says so.” Some of us have thoughts and experiences of our own, however. I am not sure how much experience of the supermarket industry other hon. Members have had. I am one of the few who has spent a number of years working in it, and I would like to use the short time available to expose a few of the myths that have grown up around this subject in the House.
I do not know whether it is a particularly British disease, but we seem to have a need to knock every successful industry in this country. We try to knock down any industry that reaches a certain size and level. We should be incredibly proud of our supermarket industry. It employs hundreds of thousands of people. Indeed, it employs people in each hon. Member’s constituency, although I am not entirely sure whether some have any great desire to see those people in work. Supermarkets also provide a very good service to tens of millions of customers each week.
There have been two intensive investigations involving examinations and consultations by the Competition Commission, and the Front-Bench teams of all three parties concluded that there was evidence to suggest that something was wrong and that we needed a code of practice. We introduced a code of practice, but it did not work very well, so we tried to strengthen it. We have now all concluded that there needs to be a means of enforcing it. Does the hon. Gentleman acknowledge that he might perhaps not be right on this, and that there is another side to the argument?
I do not doubt that there is another side to the argument; that is the side that I am trying to give. We have only heard one side so far. The Minister might believe that, because there is a cosy consensus between all the main parties, everyone is right. In my experience, however, such cosy consensus usually means that everyone is wrong. I do not know whether you will allow me the luxury of giving the House a catalogue of examples, Madam Deputy Speaker. It would include joining the exchange rate mechanism and setting up the Child Support Agency. I could go on, but I will not. Just because all those on the three Front Benches agree on something, it does not necessarily follow that it is right. I am grateful to the Minister for letting me put the other side of the argument.
The supermarket industry is incredibly successful. Why is this? Everyone is so concerned about it being too powerful, but how has it got to the state that it is in? It has done so because it does something that we should encourage all businesses to do: it offers the customers who voluntarily go through the supermarkets’ doors—I am not aware of any that use a lasso to drag people in to shop against their will—a wide range of products that they want to buy at a price—
It has a big market share.
The hon. Gentleman will have an opportunity to speak, if he calms down. If he does not, I might have to go on for too long, so that he does not get a chance. I urge him to calm himself down for a second.
Order. May we have the debate conducted in an orderly manner?
Thank you, Madam Deputy Speaker. I am grateful for your support.
Will the hon. Gentleman give way?
Let us do this properly. Would it not be possible to argue that supermarkets go for a large market share and act in an oligopolistic manner, which might go against the interests of suppliers and, indeed, consumers?
If the hon. Gentleman will allow me to continue, I will come to the details in a moment. I want to address those issues as well. At the moment, I am merely setting the scene.
Supermarkets sell the products that people want to buy at prices that they want to pay. That is why they have become so successful. No supermarket starts out as a huge multinational company. All businesses start out as small businesses, as did all the supermarkets. They became big businesses by looking after their customers and their employees and, to a large extent, by looking after their suppliers.
One element that seems to have been conveniently forgotten in this debate is that supermarkets sell products, and that those products come from suppliers. If the supermarkets did not look after their suppliers and build up a good relationship with them, they would end up with nothing but fresh air on their shelves. They would have no business without suppliers. In the real world of retail, things can go wrong. A supplier could have a problem, perhaps as a result of a health scare, or of foreign objects being found in their products. Supermarkets desperately need to have a good relationship with their suppliers at such times, so that they can go to another supplier and say, “We’ve got a problem at that factory. Can you increase overnight the amount you can supply to us, because we’re in a bit of a pickle?” If supermarkets did not give a stuff about their suppliers, and if all they were interested in was screwing every single one of them into the ground as much as possible, they would never be able to rely on that kind of good will. Anyone here who thinks that supermarkets can not only survive but thrive without building up good, close relationships with their suppliers is completely misguided, and miles off the case. That is a ludicrous thought.
I worked in the food industry for more than 20 years. If the hon. Gentleman is correct, why do we get copycat products—own-brand products—with very similar packaging to the branded goods appearing on the supermarket shelves beside the branded goods? If the supermarkets want to keep a good relationship with their suppliers, why do they try to copy the packaging of the branded goods?
The hon. Gentleman may think that all of his constituents are stupid and cannot tell the difference between an own-brand product and a branded product. He seems to follow the theme of what this Labour Government think—that everybody is so stupid that the Government have to decide everything for them—but I actually have more faith in consumers. I think that my constituents, who I am not entirely sure are greatly different from the hon. Gentleman’s, are perfectly able to decide whether they want to buy an own-brand product or a branded product, as they can tell the difference between one that says Tesco on it and one that says Kellogg.
The hon. Gentleman’s language about my constituents being stupid is offensive, Madam Deputy Speaker, but I am used to him being offensive. If the supermarkets do not want to deceive, why do they do it?
I was not saying that the hon. Gentleman’s constituents are stupid; I was saying that he seems to think his constituents are stupid. I do not think they are, which is why I do not think that we need to intervene, as they are more than capable of distinguishing a packet that says Tesco on it from a packet that says Kellogg on it. The hon. Gentleman obviously does not think that they can.
I am going to press on, as I want to allow the hon. Gentleman time to elaborate his views later.
I do not accept the premise that supermarket businesses are built on screwing suppliers into the ground and on not having a good relationship with their suppliers. To my mind, that would be nonsense.
I will say in passing that the idea that we need an ombudsman to improve innovation in the food industry is laughable. We have a hugely innovative industry, so the idea that the ombudsman is essential to promote innovation in the industry is absolutely and utterly ludicrous. The ombudsman is being set up, it seems, on the premise that we have big, horrible and nasty supermarkets screwing their suppliers into the ground on price. The only possible upshot of a successful ombudsman, for those people who want to set it up, is that supermarkets will pay more to their suppliers for their goods. The only consequence of that is that the price to the consumer will go up.
I would not mind this so much if we had an honest debate in this House. If people stood up and said, “I believe in a supermarket ombudsman; the likelihood is that it will put prices up by x per cent. but, overall, that will be beneficial to the country as a whole”, that would be fine. I might disagree, but at least it would be an honest debate. Instead, we are offered something from cloud cuckoo land—I think Sir Alfred Sherman described that as politicians always offering “painless panaceas”, and here we have our latest painless panacea. The painless panacea is this: we can have a supermarket ombudsman, which has the support of all three Front-Bench teams, who looks after suppliers, makes supermarkets pay more money to them, but, crucially, the upshot will be a lower price for the consumer. I do not think that many people would have to study that proposal for very long before they knew that that is patently and utterly ridiculous. If people want supermarkets to pay more to the suppliers, that is a perfectly legitimate point to argue, but at least have the honesty to accept that the only possible outcome is to put up prices to the consumer.
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?
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.
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.
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.
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.
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?
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”
to the supermarkets? Surely he must accept that there are benefits to the proposal.
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.
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.
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.
I noted what the hon. Gentleman said about other Departments and food waste, and I will act on it.
We had a good discussion with the hon. Member for Shipley (Philip Davies) about the ombudsmen and costs. We do not believe—
One and a half hours having elapsed since the commencement of proceedings, the motion lapsed (Standing Order No. 24A).
Sitting suspended (Standing Order No. 20).