Agenda item 9 is our final evidence session on the Food (Scotland) Bill. I again welcome the Minister for Public Health, Michael Matheson, and his officials: Morris Fraser, the bill team leader; and Lindsay Anderson, a Scottish Government solicitor. Welcome to you all.
Minister, am I correct in thinking that you will not make an opening statement and that we can move straight to questions?
Yes, I am happy to move straight to questions if you wish to.
Good. Who would like to ask the first question?
Are there no questions for the minister?
Will I go back to my statement?
We nearly had to ask you to do that, but Nanette Milne has a question.
The financial memorandum to the bill says:
“The financial grant provided to FSS will exceed that currently provided to the FSA in Scotland by approximately £5 million”.
That increase in funding is to compensate for the extra roles that food standards Scotland will have. I presume that it takes on board the activities that will be taken away from the Food Standards Agency south of the border. Am I right in thinking that?
The financial memorandum goes on to say:
“The intention is to have this increase offset through a financial transfer from the FSA UK-wide budget to the Scottish Government to represent the activities which will now be delivered in Scotland rather than on a UK-wide basis.”
That confirms that I was right in my assumption.
The financial memorandum also states:
“The level of that financial transfer is the subject of on-going negotiations.”
Can you provide any information on how those negotiations are going? I have been told that they are proving a little difficult, although that is anecdotal. Has a time limit been set? What is the current situation?
The Scottish Government gives funding directly to the FSA in Scotland, but funding also goes into the United Kingdom central pot for performing functions for the Scottish ministers. Some of the negotiations that are taking place are about the repatriation of some of that money.
The negotiations are at a very advanced stage. I am confident that we will reach a point of agreement and a final outcome. Essentially, we are talking about moneys that have gone from the Scottish Government to fund aspects of the FSA at a UK level and the performing of certain functions for us, covering three office bases. I am confident that we will reach agreement.
I have heard that the negotiations have not been straightforward. Can you comment on that?
They have been straightforward in that they have taken place within the machinery of Government. I do not think that there have been any particular difficulties with them, other than the fact that the two sides have taken different positions, as we would always expect in such negotiations. I am confident that we will reach an agreement that reflects what we are satisfied is an appropriate amount to be returned to the Scottish budget.
Whatever the financial arrangements, we have heard in evidence—as you probably know—that the other important factor is not to disturb too much the existing networks, the exchange of information and the research that is currently carried out. The importance of that has been highlighted to us in evidence. How are you getting on with the task of ensuring that we do not cause too much disruption and that we can still use all the important networks, which we have been told should be maintained?
We are making good progress with that. We have had a very good working relationship with the FSA at a UK level from the outset, ever since we made the decision to establish the FSS and to maintain a good partnership with the FSA. There are aspects of the current arrangements that it is keen to maintain, because there are areas of research and expertise in Scotland that it wants to continue to be able to make use of, and we are keen to work with it.
Opportunities will be opened up for us at a European level that would normally be filtered through the London office and which the FSS will be able to tap into directly. There are potentially new opportunities for us in areas such as research.
We are also developing a memorandum of understanding with the FSA on accessing and sharing expertise and information among the agencies. In general, there has been a very cordial and good relationship right from the outset in looking to maintain and support access to relevant bodies of expertise in Scotland, the FSA and the rest of the UK.
11:00
On the opportunities, will we be competing with the UK agency for European research funding? Does that happen now?
That would be taken forward on a corporate basis by the FSA at a UK level. Obviously, there are areas of expertise in Scotland. For example, Scotland is seen as a leading authority in the world on shellfisheries. Quite a bit of that research was passed to the Scottish office to conduct on the FSA’s behalf.
From an operational point of view, there will also be an opportunity for the FSS to consider where it wishes to carry out other specific research and how it wishes to fund it, whether by using its own resources or by tapping into other international resources that are available to it, particularly at a European Union level. That opportunity will exist in a way that does not currently exist for the FSA office in Aberdeen because of the corporate nature of the FSA and the way in which it operates across the UK.
I wonder whether it would disturb the relationships if it was competing for European funds with the UK body.
I do not think that it would be a case of competing. It is about utilising expertise and areas in which the UK agency feels that it has expertise. Money is allocated on the basis of where expertise is and the quality of the research. I would not see it as being competition. The FSS will be allowed to look at areas in which it wants to build up its expertise and to apply for any funding that it thinks might be appropriate for that, as it sees fit. The approach is based on expertise and the quality of the research that will be undertaken.
We have heard constantly about joint submissions and that there is no single point of expertise in respect of how to pursue funding and which issues would be suitable for research. The main thrust was to keep the network pretty tight and that it was more about joint submissions. I do not think that we received any evidence that there would be an opportunity for people to go away on their own researching. We did not seem to receive that evidence.
There would be absolutely no reason why the FSS and the FSA could not make a joint submission for the purpose of pursuing research.
This is the first time that we have heard in evidence about the opportunities that may exist for our research institutions to work on their own. That was not in any of the written submissions; indeed, the evidence was the opposite of that.
I cannot comment on that. There would be no reason why, for example, a university in Scotland that wanted to do a piece of research with the FSS in a particular field would not be in a position to look at taking that forward with it.
The universities can do that now.
They can, but the type of work that they can do is more limited because of the corporate nature of the FSA and how it carries out its research.
I have a supplementary question on finances. We have received evidence that, as things stand, the financial memorandum is okay. However, there is scope in the bill to increase the duties of food standards Scotland—there was talk about nutrition, diet and the like. Will further resources become available if the scope of the agency is increased?
We have designed the bill in such a way that, if it were decided at some point that the FSS should have additional responsibilities, the legislative framework would allow that to happen. We are creating the footprint. However, there would have to be a reason for committing any additional responsibilities to the FSS in future. We would have to consider the evidence base and justification for doing that, as well as the cost implications, so due process would be followed before any additional duties were undertaken. Because we are not extending the role significantly, there is no need for any additional resource at present, but if that changed in future we would have to look at the financial implications of that.
We took evidence on the make-up of the board. There seemed to be general consensus around the fact that a board of three would be far too small. Have you had thoughts about the size and make-up of the board and about whether it should include industry representatives or whether, as many people have suggested, board members should be independent of industry? Should there be a place on the board for trade union representatives?
The board will have a minimum of four and a maximum of eight members, which broadly reflects the board make-up for other non-ministerial-led organisations of that size, such as the Office of the Scottish Charity Regulator and the Scottish Housing Regulator. Bigger organisations such as the Scottish Environment Protection Agency and Scottish Enterprise have a higher number, with a minimum of five and a maximum of 10 members. If the number of FSS board members dropped down to four, that would be too low. We would want to manage the numbers to maintain a higher level, as close to eight members as possible.
The FSS is a consumer protection organisation, so it is important that the board has a clear commitment to that responsibility and to the organisation’s objectives, and the board membership should reflect that. Rather than choosing someone from one sector or another, the choice of members should be based on people’s ability to contribute to achieving those objectives and on their expertise and knowledge, to assist the FSS in achieving its outcomes.
On trade union membership, the process for public appointments to a board of that nature is through the Commission for Ethical Standards in Public Life in Scotland’s public appointments process. I expect the FSS to have good industrial relations, as the FSA has, and to have in place a structure to allow union representatives to engage fully in the organisation’s processes.
Would a ring-fenced trade union place on the board not enhance trade union relations, and is that not commonplace on other boards?
No, it is not commonplace on other boards. The board has been constructed in the same way as that for any other public body. For example, health boards have employee directors who are trade union representatives with responsibility for engaging in the process. I would expect that the processes that the FSS board and chief executive put in place outwith the board structure will maintain and support good industrial relations and will ensure that trade unions have a strong voice and a role to play in helping to shape and manage the organisation. Once the board is in place, it can look at how best to achieve that.
Will you legislate to ensure that that happens?
It is not in the bill. We have constructed the organisation in the same way as other public appointment boards are constructed, and appointments will be made on the basis of an open public appointment process.
The bill says that food standards Scotland will have
“no fewer than 3 nor more than 7”
members, but you mentioned the figure four. Will that be written into the legislation?
Lindsay Anderson can clarify that.
That figure includes the person who is appointed as the chair. It will be three plus one, or seven plus one.
Rhoda Grant asked the question that I was going to ask, but I will explore it a bit further. I take the point about trade unions but if we really want the FSS board to have people from the sector that you talked about, such as environmental health officers or someone from industry, I take it that we will advertise and do interviews after the bill is passed. Who will select the board? Will it be officers or the cabinet secretary, or even you, minister?
The process will be the same as that which is set down by the Commission for Ethical Standards in Public Life in Scotland. An open and transparent process will be conducted, involving public advertisement, an interview panel and then recommendations to ministers about who should be appointed to the board. That is what happens with the board of the FSA. The FSA’s appointments are a shared responsibility. All four ministers who are responsible for the FSA in the UK have to agree to appointments to the board, and the FSS will use the same process. It will be an open and transparent process that fully complies with the Commission for Ethical Standards in Public Life in Scotland, and appointments will be made on recommendation from the interview panel.
I do not doubt that. However, during the past couple of evidence sessions, there has been a lot of interest in who will be on the board. At the end of the day, various firms do not want to see someone from another firm on the board. We have well-respected people who have been consulted on food issues in the past, such as Professor Pennington. Will the board members be people of a high standard who are there to ensure that the standards of Scottish food and drink, which are the best in the world, are kept up? We want to ensure that whoever we choose and interview, the best people are on the board. Is that your intention?
It is certainly the intention. Obviously, it is down to individuals whether they choose to apply to be a member of the board. As I said at the outset, the FSS will be a consumer protection organisation and the board members should reflect that type of approach by having the knowledge and expertise that will assist in achieving the FSS’s objectives, which will have to be submitted to Parliament.
I want the best possible people to be on the board. It comes down to who applies and to the interview panel, which will make recommendations to ministers with the objective of getting individuals who can achieve the objectives of the FSS as a consumer protection organisation.
A line of questioning was pursued that got some quite constructive answers from the industry. A representative from Tesco talked about the testing that those in the sector, particularly large supermarkets, would do. Following the horsemeat scandal, a number of large providers, including Tesco, are voluntarily putting much more of their testing regime into the public domain for everyone to see.
How consistent is that across all such players within the industry? Is the Government minded to have a voluntary code around that? At present, there is no statutory obligation in the bill to compel that. Where does the balance sit in working in partnership with industry and the sector not just to see the results of tests, but to provide support to ensure that an informed, risk-based approach to testing is being taken? It would be good to have more information on the voluntary basis of that, the potential for a voluntary code and the need for any statutory moves in that regard.
11:15
It might be helpful if I give a wee bit of background to the horsemeat fraud issue, as I was involved in dealing with that. Although it was a food labelling issue, not a public health issue, I was involved because of my responsibility regarding the FSA in Scotland.
One of the challenges was that, although retailers were conducting testing, the results of that testing were not routinely shared with the FSA at that time. During the horsemeat scandal, it was put to the retail industry that it would be helpful if the results of that testing were shared with the FSA so that it would have a clearer understanding of the findings. That was agreed on a voluntary basis and, when appropriate, that information was placed in the public domain.
Some retailers have a system whereby they give some indication of the outcomes from some of the testing that they conduct. It will be for the FSS to advise us on the policy and whether there should be a mandatory scheme. If the FSS advises ministers that we should move the system to a statutory footing, we will have to consult on that and consider how to take that forward. The FSS’s role will be the same as the FSA’s role at the moment, which is to advise ministers on what we should do in the area—whether the scheme should be voluntary or mandatory and what it should look like. We will respond to that advice and look to proceed with a consultation process.
Bob Doris raises an important point about the relationship between the industry and food safety bodies such as the FSA and the FSS. There is a decision to be made about whether that type of information is useful in driving forward consumer protection or whether there is a more appropriate way in which that can be achieved, and it will be for the FSS to advise the Government on how it should proceed. Its job is to advise and inform us openly, and if it says that the system should be put on a statutory footing we will consult on how we can take that forward.
Thank you. That is helpful. I would like to pursue another line of questioning, unless colleagues have other questions on the subject.
We have raised the matter of food inspection with some of our panels. We had an evidence session with fish processors when we visited Aberdeen, and they explained to us that the level of inspection for the various supermarkets is very high, whereas local authorities inspect maybe once a year. There is a lot of inspection, though, and we asked about the inspection and regulation that already goes on. The counter-view was about the importance of having independent testing and inspection, whether that is co-located in Scotland or whatever, rather than it being the responsibility of individual small councils. Do you want to comment on that, given that lots of local authorities have withdrawn their inspection and regulation services?
You raise a good point, convener. At present, the FSA, as the competent authority, works with local authorities and provides them with guidance and structure for some aspects of the testing that they should be engaging in, but there is independence at a local level in how they put that into practice.
Moving forward, testing would be an operational matter for FSS. There is an opportunity to explore how some of the testing regime is taken forward, whether there is scope for a greater element of testing at a national level and what aspects should be left to local responsibility. There is an opportunity to look at the relationship between the local level and FSS, once it is established, and at whether there should be an element of centralised testing, rather than leaving it to local discretion. The FSS would have to discuss and explore that with its counterparts in local authorities. That is an issue that merits further consideration, and I imagine that the new FSS would want to consider it.
Bob Doris and others have discussed with previous witnesses food hygiene and safety, food quality, the labelling regime and what happens when food is mislabelled. We got a strong message from Archie Anderson at one of our recent evidence sessions that we should not be wasting good food. We discussed the consequences of finding that something is mislabelled—it is pork, not beef, but there is nothing wrong with it—and how we dispose of it. Do you want to speak to any of those issues, which have been tested in our evidence sessions?
The food and drink industry is of tremendous value to the Scottish economy. It is in our interest to have in place a robust and clear regulatory regime for food safety and food quality, given that, in general, Scottish produce is seen as being of a high quality.
The reason that the horsemeat incident was not a public health issue is that it was about labelling. It was not the case that consuming horsemeat would do harm to someone’s health; the issue was that the label did not say that the products contained horsemeat. On that basis, it was fraud, because the product contained something that was not on the label.
Through the bill we are taking forward some of the recommendations that were made by Professor Jim Scudamore and his team, who reviewed the horsemeat incident. They made recommendations in relation to taking robust, appropriate and swift action if there is mislabelling. The regulatory powers that enforcement officers will have will allow them to deal with those types of things more robustly. There is a need to make sure that the public can have confidence that the labels on products actually say what the products contain. We have to balance a reasonable testing regime and the necessary enforcement powers to make sure that action can be taken quickly and robustly if there is an issue around the mislabelling of products.
We heard last week that European regulations are already in the system—the food information for consumers regulations. You do not intend to go beyond those regulations, do you? I see Mr Fraser nodding.
The bill goes a bit further than what is contained in the regulations. The enforcement point of the European regulations is not yet clear, so there is an issue around that timeframe. We are taking things a bit further with regard to responsibility: even if someone is not selling the product, they will have a responsibility to report it if they believe that there might be an element of mislabelling. That was recommended on the back of the horsemeat scandal as a way of trying to drive forward improvement and clearer responsibility for reporting when someone suspects that there might be mislabelling. You might not be the producer but if you are a distributor and you believe that there is an issue around mislabelling, you have a legal responsibility to report that.
So if something looks too good to be true, you have a responsibility to report it.
Exactly.
Would that go beyond the regulations?
That goes a bit wider than what is set out in the European regulations.
Are there any other elements where that is the case?
It is principally just that element. There is still a lack of clarity around the timeframe.
The timeframe is likely to be roughly the same as ours. There is not very much difference.
The committee may have heard evidence that there might be a perception of duplication, but there clearly is not. Our bill brings forward the duty for someone to report to the central authorities that they think that something is going on; that is an intelligence-gathering tool to try to clamp down on something. The food information regulation relates to situations in which someone who knows something ought to tell their supplier and those to whom the food is being supplied, not the authorities. There is no duplication.
The issue was raised in relation to the experience of some manufacturers. They produce pallets of prepared food such as fish, which go to destinations such as Norwich and all over the UK, and they were anxious that any changes in labelling requirements should not harm their business. You have given us the assurance that there will be no duplication.
There is perhaps one other thing to give assurance on. The authorised officers do not only have powers to detain, seize and offer the courts an opportunity to destroy; simple relabelling and recomposition can also be carried out. The food need not be wasted just because a label is found to be wrong. The authorised authorities have the power to ask people to take certain action, which might be just to relabel, so that the food will not be wasted.
There have already been answers to most of the questions that I was going to explore, and they absolutely nailed the things that needed to be asked about. However, I seek a little clarity in relation to cases of deliberate labelling fraud. Would there be an option to do more than just seize the food in such a case? I previously referred to something being wrongly destroyed—I was comparing a situation to having hooky goods, say, which may or may not be destroyed. Could an order be made to pass the food on to food banks or charities, for example?
I do not want to sound too heavy handed with regard to some elements of the industry—I am sure that those concerned are in a minority—but if someone is getting 500g of something for 50p rather than £4.99, that is blatant fraudulent activity. I do not mind if those concerned are not allowed to relabel that food; I would be quite content for that food to go somewhere else, as long as the move is commensurate with the scale of the fraud. Is there the power to redirect safe but fraudulent food elsewhere?
The enforcement officer has broadly two options. One is that they can enforce a fixed penalty. They can prevent the person from moving the food anywhere until they have done further investigations into the matter. The authorities might come back and say that the product must be relabelled to make it correct, because what is contained in the packet does not constitute what is on the label.
The other option is for the matter to be referred to the procurator fiscal. It would be taken before the sheriff court, which would determine what should happen to the food. Rather than us saying that the food should go to a food bank, it would be a matter for the courts to determine that, depending on the nature of the case.
The approach will depend on the nature of the food fraud and the type of product. For example, there is a very limited timeframe for perishable goods. As you know, food banks do not really use perishable goods to a great extent, for obvious reasons.
Bob, you can move on to enforcement, if you want.
That is exactly where I was going to go, convener.
I asked about this issue in one of our first evidence sessions on the bill. I apologise for concentrating on retailers, but they are the public face. We do not always see the food chain behind them. Let us take the case of a small independent retailer, with one or perhaps two shops. Whether what the retailer has done is deliberate fraud or otherwise—let us suppose that it is deliberate—there is a fines scale to cover it. Let us then pick Tesco. I have complimented Tesco on what it is now doing, so I pick it randomly—I am sorry for singling it out. We are talking about one similar infringement in one Tesco Metro, of which there are many right across Scotland. The footprint of Tesco across the whole of Scotland is far more substantial than that of the small independent retailer. Is the fines scale—or could it be in future—flexible enough to recognise the extent of the tradeable business across Scotland in cases of an infringement by a corporation?
An important point will be who has committed the fraud. If a product is found in a shop that is independent or part of a retail chain, an investigation will have to be carried out into who committed the fraud and where the responsibility lies. Obviously, appropriate measures will then be taken.
The Lord Advocate has told the committee that he is prepared to make available to the committee, prior to stage 2, information on the advice that he will give on the type of fine structure that should be put in place, which should reflect what the courts will do. Importantly, it depends on the scale of the fraud, who is responsible and the nature of it. That will be reflected in any fine or action in relation to criminal activity.
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I do not feel too bad for picking out that large retailer, as I complimented it earlier on work that it is now doing.
Last week, a retailers representative—apologies, but their name escapes me—talked about labelling and food fraud. That gentleman painted a picture of small independent producers presenting at farmers markets with things that are not labelled correctly, although perhaps not deliberately. My understanding is that the bill is not about setting up a “Yes Minister” bureaucracy on the finer points of labelling and is more about tackling overt or deliberate attempts to defraud the consumer.
Can you give reassurances that, in relation to labelling and food fraud, the bill is not trying to capture someone who has five ingredients on a label when there are actually six, where the sixth one has been omitted not because the person is trying to mislead but because of a minor technical or bureaucratic oversight? That is not what the bill has in its sights, is it? It is about the more blatant and obvious large-scale labelling fraud.
It is a question of proportionality. Where fraud has clearly been attempted or where there is a significant omission, appropriate measures will be taken and enforcement officers will inspect. Enforcement officers will have discretion to determine whether something is significant enough that they need to take some form of robust enforcement action. It is about achieving that balance. The way in which that is dealt with in practical terms will be an operational matter for FSS.
The aim is not to try to pick up small retailers who might have omitted one small point. However, if that one small point is a significant small point, that will clearly be reflected in the response from enforcement officers. The one point might be that the label says that the product has pork in it when it has beef. That may just be one point, but it is significant. Enforcement officers would use discretion in considering cases. For individuals in farmers markets, where there is a small technical infringement, I would expect enforcement officers to work on a proportionate basis.
I should put it on the record that, when enforcement officers and local authorities gave evidence to us, they took the view that much of their role is about supporting compliance rather than enforcement. I have no further questions, but it is important to put it on the record that that was teased out. The minister’s evidence backs up that approach.
I take it that FSS will be based in Aberdeen. I understand that the current head of the FSA in Scotland is moving to Australia. Will we be advertising for new staff? How many staff will be employed? I take it that staff will be based throughout the country. Can you give us a short résumé of what is intended?
FSS will be based in Aberdeen, at the current FSA headquarters. The FSA has staff who are based in locations across the country, such as the meat hygiene inspectors, and they will continue on that basis.
Charles Milne, the director of the FSA in Scotland, is leaving us to go and work in Australia. There will be an interim arrangement, which the FSA at UK level will wish to put in place. A process will be put in place for the appointment of a chief executive of FSS, although the important part is first to get the board structure in place, so that the process can be taken forward.
So there will be no reduction in staff and there may be—
There may be an increase in staff.
That is the very point I was going to make. There is the possibility of an increase in staff to retain the high quality of food for which Scotland has a reputation.
Yes. All of the staff will transfer to the FSS, in line with the Cabinet Office agreement, which protects their pensions and all their other entitlements. The transfer will not result in any detriment to the terms and conditions of the staff, and there is no need or plan to reduce staff numbers in the creation of the FSS. If anything, I would anticipate that there is likely to be a need for an increase in some staff. It depends on what happens once the FSS has set out its operational plans and how it intends to take its work forward.
I do not see any other questions from members. However, it would be remiss of the Health and Sport Committee not to say something about the ambition that food standards Scotland will have a greater influence on problems in Scotland such as diet and obesity. At the same time, we should bear in mind all of the bedding-in issues, such as duplication, and the concerns of retailers and suppliers. Does the minister want to put on record the ambition that the new body will have a greater influence on the diet and health of the Scottish population? Can we achieve that, while addressing the concerns of the retailers and manufacturers?
Since the recommendation was made to establish an independent food safety body in Scotland, I have been very clear that we should maintain the integrity of the work that the current body undertakes without compromising it in any way. That is why we have taken a relatively cautious approach. A lot of organisations out there have been saying that the new body should do X, Y and Z in addition to its current role. All of that has some merit, but the danger in creating the new body is that, if we add to the functions that it has to undertake, we may compromise some of its core responsibilities, particularly relating to consumer protection.
The approach that I have chosen is to protect the integrity of the consumer protection work that the FSS will undertake, while considering where we could add to its role. At present, the FSA feels that it has a greater role to play on the issues of diet and tackling obesity. What we are doing in the legislation is facilitating that opportunity. The FSS will not necessarily take the lead on that but the legislation will allow it to work in a co-ordinated way with the NHS and other organisations with a role to play in the obesity and dietary challenges that we face in Scotland. We will enable the FSS to take that role forward, which is one that the FSA feels is important.
As I mentioned, we have tried to draft the legislation in a way that creates a footprint to give the FSS responsibility for some of the other issues that have been raised, if there is a good case to do so. We can consider adding those functions to the FSS in the years to come. I do not have any preconceived idea that those functions have to be X, Y and Z. We want to create a body that can adapt and develop in future as necessary. I do not want to add lots of functions to the new body that could compromise it while it is trying to establish itself and to perform its important function of ensuring consumer protection and—particularly given the importance of the food industry to Scotland—maintaining public confidence in it. However, the legislation gives us the framework to add further functions as we go forward, as and when that is appropriate and subject to agreement.
There are no further questions. I thank the minister and his officials for being with us this morning and for the evidence provided.
11:39 Meeting continued in private until 11:52.Previous
Subordinate Legislation