Examination of witnesses (Questions 260-279)
WEDNESDAY 14 MARCH 2001
MR RICHARD ADAMS, MR DAVID BUTCHER, DR JOHN MANN AND MR MICHAEL CULVERWELL
260. Just for the record, at Spitalfields, are there any other activities other than those which are horticulturally based which are carried out?
(Mr Adams) Yes, there is some catering.
(Mr Culverwell) Yes, but it is still horticultural produce.
261. And Billingsgate, is that 100 per cent fish?
(Mr Butcher) No, sir, it never has been. We sell poultry and, to a limited extent, potatoes and sundries to service the fish industry. They had to be products which were ancillary to the fish trade.
262. So it is not quite one-stop?
(Mr Butcher) To use that expression one-stop, we probably provide a service to the retail fishmongers, as it was originally intended to do, and now that provides a service to fish and chip shops and so on which fry poultry. We have one poultry merchant and we have two potato merchants who supply chips. But that is it really.
263. Could I just point out that it was Mr Butcher who responded to that question and it was Mr Culverwell who responded to the previous one. I am sure your hour will come, Dr Mann.
(Mr Adams) Yes, I should have said that Mr Butcher is the Clerk and Superintendent of Billingsgate, Mr Culverwell is the Clerk and Superintendent at Spitalfields and Dr Mann is at Smithfield.
264. One of the things that intrigued me that came out of your evidence is that you have laid very proper and understandable emphasis on the substantial investment that you made both at Billingsgate and Smithfield to bring them up to current standards. If the conditions there are spot on, why should anybody want to leave your markets and go to Covent Garden?
(Mr Adams) I think that I said that the conditions there are not spot-on. They meet all the current hygiene requirements, which is where the cost has come in. I also said that I could not improve the location. It is an island site surrounded by busy roads and traffic. Because of the new airlocks that the lorries have to lock onto on the side of the building so that the meat does not come into contact with the air, lorries have to block the roads around the place. It is part of the financial centre and it regularly comes to a halt. It is not spot-on. If we were starting again, we would not put Smithfield where it is. There is no question about it.
265. But the question I asked is why would anybody want to leave. You give a very good illustration that at certain times of the day, there may be constraints as far as vehicles going in and out of the market are concerned.
(Mr Adams) That is when the market is working.
266. Right, but in terms of the traders in the market, given that being a market, many of the people there are long-standing and have a long tradition of being in the various markets, and I have visited them both and I know, I am just intrigued to know why they would be tempted to move away. I appreciate that Covent Garden may have some advantages but it is still at a very busy traffic junction when it comes to London?
(Mr Adams) It has the facility that vehicles can go off the road to service the market. That is one advantage. I am sorry that it sounds obvious but traders need customers and if the customers cannot get there or find it very difficult to get there, they will look for easier places to go.
267. You mentioned that you had recommended to the Minister that there should be an overview of the markets. What sort of person would you have in mind and what sort of form would that take? It is an interesting idea.
(Mr Adams) Clearly, the person has to be appointed by the Government or by a nomination of somebody because that is the only person who has the power to call people together with any certainty that they would turn up.
Chairman: Are you thinking of a Royal Commission?
Mr Mitchell: A tsar.
268. Do we not have an elected head of government for London? I am sure you would welcome his interest in this matter.
(Mr Adams) Yes, certainly, if he picked up the bill.
269. We will not go into congestion charges but this was just a general notion. You do not have a specific proposal?
(Mr Adams) No, we recognised the problem in February last year, which this Committee has clearly recognised, that there is a problem with over-marketing in London. It has been looked at in the past but when it came to it, nobody had the resources to do anything about it, or enough resources to do something significant about it. It needs a body with sufficient resources to make it even worthwhile doing it. Otherwise, everybody says, "We have looked after our bit. We have not got any more money and we are not prepared to do it".
270. On that same point, I would be interested to know exactly and explicitly the extent to which you feel markets are currently in competition? To what extent do you feel that the markets are in competition now and to what extent do you think that that may change?
(Mr Adams) I do not think that we regard Covent Garden as a competitor for Smithfield or Billingsgate. There is no question that it is a direct competitor with Spitalfields Market. The relationship between those two has reached a point which seems to work. Perhaps New Covent Garden cannot get as much out of it as it would like, otherwise, they would not want to experiment. If there were enough traders to go round both markets, I am sure that they would both be full. Clearly, our tenants like being at Spitalfields and we do not have vacancies there. But to that extent, it is not a damaging competitor with Spitalfields. We do not regard it as a competitor with the other two.
271. If your traders wanted to diversify, would you consider the competitive consequences on Covent Garden Markets?
(Mr Adams) Yes, we did when we changed at Spitalfields even, which was a direct competitor. We would look at the costs of it. Okay, coming back, it is a lot of money even for the Corporation to spend £50 million upgrading a building which is suitable only, really, for the sale of meat now. Not a lot else can be done with it. I do not think we could diversify on those sites, on Smithfield and Billingsgate sites, reasonably, and looking at diversification, we would say, "Hang on a minute. Is the cost and the hassle justified when we look at what else is about?"
272. What would be your decision-making process if you were to consider this?
(Mr Adams) The markets committees have the first say. If there were proposals to change, there could well be a conflict between the markets. At the moment, we have three separate committees, although that may change. It would then need to go to our policy resources to see whether that sort of money was justified and I have no doubt, having been bitten once, the Corporation would also insist that it went to the full council.
Mr Mitchell: You are beginning to relax now. I thought at first we were going to have a defensive loyalist exposition. It was almost like talking to Anthony Hammond, QC.
Mr Todd: You have not had that opportunity, Austin, have you?
273. Why are you so defensive about it? Is it because the Corporation has not made its mind up or is it because if it has made its mind up, it does not want to reveal its hand or is it because you feel that you are in a position of impotence, inability to decide the fate of London's markets because you do not have the overall power? I get the impression, from what you are saying, that markets are like Charles Kennedy's definition of a croft: a piece of land which is hemmed in by legislation. Since you cannot cut through that jungle, you really want somebody else to do the job. Which is the explanation for your guarded approach?
(Mr Adams) My first explanation is that I have managed to get through life so far without appearing in front of a Select Committee!
274. It is a treat that comes to all of us, you know. I think it was Warhol who predicted that everyone would have 15 minutes in front of a Select Committee.
(Mr Adams) If it were only 15 minutes, I would be delighted. Having got over the dry mouth part a little bit, the Corporation is in a position where it has not taken a decision. At the moment I can say as a fact that it does not have a policy to acquire any more markets. It finds that what it has done has been very expensive, very time-consuming. Who is to say whether it has all been worthwhile? But it has accepted that it is part of a service that it has provided for 1,000 years. The Corporation is looking forward and always has, which is how it has continued to be here. It is looking at alternatives. At the moment, it says, "We cannot do what we would like to do with what we have got because, as you say, we are hemmed in by legislation".
275. But you are in the position of a semi-monopolist, are you not, having control of three markets and possibly being in a position to buy a fourth? You said you would like somebody to take an overview, a Royal Commission or a market tsar, and I think that is a good idea. But are you handicapped by the fact that you cannot do that?
(Mr Adams) A monopolist could withdraw the service; we cannot. That is why we are not in a monopoly position. We are the only people left in the marketplace, if you like, because the others have tended to withdraw because they could not make it pay. Western International has recently decided to develop its market and its market will be two-thirds of the size of the present one. There will be a reduction in the capacity of wholesale markets by a natural effluxion and it has to be the stronger ones which survive to the end. Sometimes there is a downside to being the strongest one: that you are still there and picking up the bill.
276. If you were starting, not as a player, but looking at the situation rationally, it would be better if there was an overview and the number of markets in London were reduced or perhaps we went for something like the situation in Paris at Rungis, one big market close to the motorway. Would that be the better solution?
(Mr Adams) My colleagues will kick me hard if I go further than they would want me to because they are the experts who have been looking, they go and see the ones in France, Birmingham and elsewhere. There is a certain disadvantage in having a big market but also, there are advantages. Looking at London, its size, its complexity and so on, it is probably more likely that there would be, dare I say, two big markets outside London with, at the risk of advertising, perhaps I could refer to a sort of Tesco Metro in the middle.
277. That is to supply firms within the M25?
(Mr Adams) That sort of thing, yes. This is starting with a real luxury, with a blank sheet of paper with no restrictions. But I come back again to the fact that we do not actually start from there but it would be nice if somebody did. We know that we could rationalise our markets if we were given a free hand by running them differently from the way that they are currently running.
278. Can I ask what Mr Butcher thinks? He was nodding.
(Mr Butcher) I basically agree with what Mr Adams has said. My feeling, and it is only my judgment, I have to stress that, Chairman, it may not represent the views of my organisation but I was once invited to give a presentation to the World Union of Wholesale Markets on the location of markets in large cities. The theory that I expounded was that there should not be, in the case of London, because of its size and complexity, which Mr Adams has referred to, one market on the periphery, such as Paris as this would be a disaster because of the transport and communications problems. We were asked earlier not to refer to congestion charging but it is likely to be a fact of life that we have got to live with. The distribution complexities in London, which used to be my field before I took up this role, would mean that something located near the centre would be essential to deliver all commodities, perhaps, on one set of transport, for example, so that there is some synergy between the various trades in developing a transport network for their local deliveries. That would reduce pollution. It would answer a lot of, perhaps, problems and we may even be able to deal on that basis with the mayor on his charging scheme. But I think that one market in London would not work. I think there should be three markets, possibly located in the two extremes and perhaps one near the centre. That would perhaps answer the problem, given a blank sheet of paper.
(Dr Mann) There are two things, Chairman. We have no doubt that we need to look for best value for London and we all hope to organise our markets in that way. The problem is that if one market, if New Covent Garden goes off at a tangent and produces a one-stop market, I think it would damage my market. My tenants have a slightly different view. I think it would damage my market. If one market goes off at a tangent before the overview has been taken and any decisions have been made, then I think it will, in the end, be too late to do anything that is viable and worthwhile. And then we will just be in the position of the devil take the hindmost. We would wait to see what Covent Garden did and then we would wait to see whether to take them to court. That would cost everybody a lot of money and it would not serve any purpose. So we do two things: we either hold fire on Covent Garden at the moment until we have a plan; or we forget the plan and go for a straight commercial fight, if you like, to see who wins.
279. You say in your memorandum that there are merchants in fruit and vegetables who would like an opportunity to trade at Spitalfields but they cannot because the market is full. Covent Garden told us that they were receiving inquiries from traders who were not able to establish their business at Billingsgate because it was full. So how much room for growth is there in your markets?
(Mr Butcher) Could I just touch on the Billingsgate part, Chairman, because it was not necessarily because the market was full; it is the type of premises that are required. Because of the changing nature of the business of the fish industry, of which you will be well aware, Mr Mitchell, I know, and the greater volume of frozen products which is going through the market now, people need greater storage capacity and our premises are not capable of being adapted for that. In the case of one of the traders who located at Covent Garden, he needed a vast area to store lobsters and we could not offer it to him. It is better, I think, in the view of all market authorities, that people such as that, who are doing distribution in London to caterers, should be accommodated within a market rather than going outside and setting up elsewhere. So it was in that context rather than the fact that we did not have room per se that he was advised that he might be able to find another opportunity elsewhere.