Farmers and small businesses in Britain and workers in the developing world will benefit if MPs support a private member’s bill to set up a supermarket watchdog, ActionAid said today.

The Grocery Market Ombudsman Bill, which has its second reading in Parliament today (Friday 5 March), would create an ombudsman to monitor the supermarkets and enforce a new Groceries Supply Code of Practice.

The Competition Commission has already recommended an ombudsman after a forensic two-year investigation found supermarkets consistently force excessive risks and unexpected costs onto their suppliers.

The government, the Conservatives and the Liberal Democrats have all publicly backed the watchdog. Yet despite cross-party consensus and a detailed proposal from the Competition Commission, the Department for Business is holding a further consultation on the ombudsman’s roles and powers rather than setting it up straight away.

Dominic Eagleton, ActionAid trade policy officer, said: “If given sharp enough teeth the watchdog will stop the big stores from squeezing small producers, both in the UK and overseas. It would help protect quality and choice for British shoppers whilst improving conditions for the farmers and workers who produce the food we eat.

“The government’s consultation gives supermarkets yet another opportunity to water down the ombudsman’s powers. By voting this bill through, MPs can take the initiative and set up a watchdog that will stop the rot.”

ActionAid said the supermarket ombudsman, if it is to be effective, must be able to root out abuses through unannounced spot checks and investigate complaints made by overseas producers.