Question proposed, That the clause stand part of the Bill. 

I do not wish to detain the Committee unnecessarily, but I want to rattle off three quick points for the promoter of the Bill. 

First, in view of earlier exchanges, it would be worthwhile to revisit the definition of a supplier in the code, so that it is clear that not only the ultimate supplier to the supermarket may instigate an ombudsman’s investigation. A number of suppliers in the supply chain have a justifiable interest in being able to instigate an investigation. 

Secondly, I want to emphasise the point made by the hon. Member for Ynys Môn in concluding the clause 1 stand part debate, in response to the hon. Member for South-East Cambridgeshire: unfair or fair dealing cuts both ways. I would be glad of clarification from the hon. Member for Ynys Môn, but as I understand subsections (1)(c) and (2)(c), a retailer can instigate an investigation. It therefore cuts both ways. It is important that that principle is established. Unfair dealing, in whichever direction, needs to be driven out of the system, ultimately for the benefit of the consumer. 

Thirdly, finally and most importantly, the Bill needs to be strengthened to ensure that the ombudsman can operate proactively. The ombudsman appears to have only one mechanism for instigating their own investigations. Identifying complainants can discourage them from coming forward, as has been found under the voluntary code of practice, which small suppliers were simply not prepared to use for fear of reprisals. It is important that the ombudsman is able to instigate their own investigations. That could create a cloud so that a supermarket, for example, would not know where the complaint had come from. That would create a greater safety mechanism and allow complaints to come forward confidentially. 

Does the hon. Gentleman agree that the hon. Member for Ynys Môn may have received few submissions because people were fearful that, if they said that they wanted the ombudsman to crack the whip against the supermarkets, the goods that they supplied might have been stopped, which could have ended their livelihoods overnight? Therefore, what the hon. Member for St. Ives is suggesting now is eminently sensible. 

I am grateful to the hon. Gentleman for that intervention. All those involved in the Competition Commission’s investigations clearly identified the point made in the OFT’s report—published in 2002, I think—that unless there is an element of proactivity, we will lose the opportunity to ensure that the new grocery supply code of practice will be as effective as we hope in driving out unfair dealing. 

That is a very good point. I wonder whether the code will cover people who broker deals. Has the hon. Gentleman had any thoughts on that issue? Obviously, my hon. Friend the Member for Ynys Môn might have some, and he might refer to them when he sums up. 

The hon. Gentleman makes a very good point, and I am grateful to him for that intervention. I go back to the code itself, which of course has been enforced by the Competition Commission since 4 February. The Competition Commission has the power to enforce the code; it does not have the power to implement the ombudsman and that is why we are here today. Within the code, a supplier is clearly defined. The code primarily  identifies the supplier as the ultimate supplier to the supermarket. It does not mention brokers or other facilitators in the supply chain, as I recollect; I do not have the code with me at present. The identification and definition of a supplier is very important from the point of view of the sustainability of British agriculture, including farmers and growers. In addition, we all know that ActionAid, Traidcraft and a number of other organisations in this country have an honourable reputation for standing up for producers from the developing world. So fair’s fair; there should be fair dealing for their supply chain, too, particularly for goods that come from tropical climates into this country. 

As we travel round and talk to suppliers from industry or agriculture, I wonder whether we ourselves—Members of Parliament—might get a feeling that something is unfair in this sector. I gave an example about milk earlier, whereby it was costing farmers more to produce milk than they were getting from the retailer. We MPs might wish to refer a generalised case—for example, about the milk industry—to the ombudsman to investigate. 

Absolutely. However, I must caution the hon. Gentleman that we do not want vexatious complaints to be made mischievously, purely to stop or slow down the whole trading environment, or to make it very difficult to proceed with. Therefore, the code must be used appropriately. Of course, at the end of the day, it is down to the ombudsman to ensure at an early stage that their resources are well deployed. However, I hope that the hon. Member for Ynys Môn will accept my primary point about proactivity. In other words, the ombudsman should be able to instigate the inquiries, rather than just sitting back and reactively waiting for complaints. 

I am grateful to the hon. Member for St. Ives for the points that he raised. He was right to talk in his opening remarks about the entire supply chain. We are not just talking about the supermarkets and the major suppliers; we are talking about the whole ethos of fairness, too. Both he and the hon. Member for South-East Cambridgeshire, who is the Conservative Front-Bench spokesman, referred to overseas traders and various other things. It is important to deal with the whole supply chain. 

The hon. Member for St. Ives was right about the code. I do not have a copy of the code here either, but my understanding is that it deals with the direct suppliers. None the less, I believe that the spirit of the Bill cuts both ways. In his intervention, the hon. Member for Ribble Valley rightly asked about the role of MPs. I imagine that we could complain to the OFT, and if there was a trend, we could ask the OFT to take the matter forward. That would be one avenue. The three main avenues are the supplier, the retailer and the OFT. We do not want to open this up to people who make spurious complaints because they are not happy with the price that they are getting. 

Proactivity is not in the Bill, although that is its intended spirit. If the OFT brought to the ombudsman’s attention an issue with the milk industry, it could be looked into proactively. The ombudsman could say,  “We haven’t received a complaint, but we have a job to protect.” I am trying to bring everything together. Most importantly, we need to eradicate and remove that climate of fear. The purpose of having a strengthened code and an ombudsman is to ensure that we can all be open and transparent about what is happening in the grocery market. 

Our constituents are all consumers and they will go into supermarkets and specifically buy fair-trade bananas, coffee or tea, because they want to ensure that the people who have supplied those goods, mostly in developing countries, are getting a fair price for them. This measure may open up all sorts of opportunities for supermarkets to start to sell UK-produced fair-trade goods, which state that they are ensuring that the supplier gets a fair price. 

Yes, the hon. Gentleman is absolutely right. We dealt with that issue on Second Reading. The supermarkets and the major retailers have nothing to fear from the Bill; it will be good for the whole grocery market, because it will increase choice for the consumer in the long run. The contracts will be under scrutiny and there will greater choice for the consumer. 

Going back to the point made by the hon. Member for St. Ives, the intent of the Bill is to create a proactive ombudsman in whom everyone can have confidence. People must feel that they can approach the ombudsman in the knowledge that, if there are any issues, then he or she can look at them to ensure that they are dealt with. I agree with the hon. Gentleman, but I am responding from my memory of what the code says, so I am at a slight disadvantage. The spirit of the Bill is to ensure fairness and a proactive ombudsman who will look at the whole grocery market and the entire supply chain, as he suggests. 

Question put and agreed to. 

Clause 3 accordingly ordered to stand part of the Bill.