Price controls on essential food items: consultation paper

Chapter 8: Monitoring and review

Capping the price of essential food items would be a novel approach for Scotland. As such we recognise that if a price cap scheme were to be put in place, then it will be vital that there is a robust framework to monitor the effects of the policy. Equally it would not be sensible to put in place a scheme without later assessing whether it is still necessary or whether any improvements are needed. This chapter briefly sets out our consideration of these issues and invites views on how scheme efficacy could be monitored and what reviews and evaluations would need to be put in place.

The relevant section of the illustrative draft provisions in Annex A is the entirety of Part 3 relating to review and expiry.

What is the proposal?

We propose a requirement for Scottish Ministers to carry out a review of how the legislation is operating after it has been in place for a period of time, prepare a report and for that report to be published and laid before the Scottish Parliament. Our initial suggestion is that these steps must be taken as soon as practicable after the end of a reporting period of no less than 4 years and no more than 6 years, starting on the date that the first price cap Regulations come fully into force. This is outlined in section 14 of the illustrative provisions.

The draft provisions also provide that the legislation would expire after a set period of time, unless Regulations were made by Scottish Ministers to continue its effect. This is commonly referred to as a ‘sunset clause’ and is contained in section 15 of the illustrative provisions. This is similar to the approach taken in legislation providing for minimum unit pricing, where there was a requirement to review the Act and a sunset clause. However we propose that this expiry be set at either one year after the publication of the statutory review report or eight years after the price cap provisions first take effect, whichever is earliest. This decouples the review process from any decision regarding continuation, ensuring that that decision can fully take into account the findings of the review report.

The proposal means that Ministers would have a year following publication of the report to decide whether to propose whether the legislation should continue, and if so, to lay Regulations to provide for that before expiry. However, the period of 8 years would act as a backstop expiry date to reassure that price caps could not continue in effect as a result of a failure to report timeously.

Discussion points relating to monitoring and review

Monitoring

While not necessarily part of any future legislation taken forward on price caps, we would be interested to hear about what should be monitored to evaluate any future scheme. This information would help assess whether a scheme is achieving the stated aims and objectives, and what consequences it might be having for consumers, business, the supply chain or any other groups or factors.

A set of core indicators linked to any price cap intervention would need to be created particularly around affordability of food for those on low-incomes and nutrition. It would also be important to be able to identify any problems that could arise in the supply chain for businesses or for particular goods, or any issues arising from cross-border trade. Wider outcomes could be assessed through periodic evaluation.

A baselining exercise could take place for any such measures along with an assessment of any desired performance target against them.

Evaluation

In evaluating any price cap ultimately put in place it would be necessary to consider the extent to which affordability of food, particularly for those on low-incomes, has changed and delivered a measurable benefit.

A secondary consideration would be the impact on the health of the population, particularly for those that purchase the price capped items – whilst this policy is not necessarily intended to result in improved measures for health it has the potential to have a beneficial impact and it would certainly not be desirable to have any unwanted effects resulting in poorer diets for example.

It is also considered desirable to evaluate any scheme in light of performance of the primary production sector in particular, taking into account other factors that are affecting this sector.

However, these cannot be the only measures of success. To ensure the benefit of a price cap scheme is proportionate, it would be important to consider any measure of the affordability of food against a number of other factors. These include the effect on retailers and the wider supply chain, how domestic food sales are impacted, environmental effects, and the animal welfare standards of commonly purchased items. Other relevant impacts would also need to be examined. Only a whole-system approach to evaluating a price cap scheme will ensure that it supports our Good Food Nation ambitions.

We would also welcome any views on the approach to reporting and review.

Consultation Questions

39. Is no fewer than 4 years, no more than 6 a suitable length of time for a statutory review period? [Yes. No].

• Please explain your answer.

40. What should Scottish Ministers consider when reviewing the effect of the legislation, and what evidence would be required to support the review?

• Please explain your answer.

41. Should interim reviews be conducted before the statutory review? [Yes. No].

• Please explain your answer.

42. Do you agree with the proposal to include a sunset clause in any future legislation? [Yes. No].

• Please explain your answer.