The size of the levy sparked claims that food prices would be driven up in shops serving some of the poorest families. Ministers are preparing a tactical retreat which could almost halve the charge on small traders and leave supermarkets with the bulk of the pounds 60m- a-year bill for setting up the agency and paying towards its running costs.
The Prime Minister's office intervened after criticism from small shopkeepers over having to pay the same as supermarkets. Ministers were reluctant to compromise because of the complexity of producing a formula for graduated payments according to the size of the shop. But Jeff Rooker, the Agriculture minister, has told colleagues that one solution could be to use the same yardstick as stores for Sunday opening, leaving those covering roughly more than 3,000 square feet with a higher charge.
A lower flat rate would still apply to all food outlets, but would be pounds 50-pounds 60 a year. Small traders fear they could face increased charges in future, but ministers will try to reassure them that low inflation should keep them down.
The Government also faces embarrassment this week over a report by the special select committee considering the legislation to establish the agency. The Labour-led committee has proposed it should include a role for the agency over nutrition, which has proved controversial in Whitehall.
The draft legislation does not provide the agency with statutory powers over nutrition, after fears voiced by ministers that the Government would be accused of running a nanny state if the agency could order manufacturers to reduce sugar, salt or fat in their products. When Peter Mandelson was secretary of state for trade and industry he intervened to stop the agency being given power to interfere on nutrition. Agriculture ministers are confident, however, that the agency will be able to act on nutrition without it being spelled out in the law.
A role on nutrition was clearly included in the White Paper proposing the agency. It said: "The Government proposes the agency will be responsible for monitoring and surveillance of the nutrient content of food and the nutrient content of the diet."
It will not have powers to order manufacturers to stop putting high sugar or salt content in their foods, in spite of protests by consumers' groups over the sweeteners used to attract children to foods such as baked beans.
Ministers are adamant, however, that the agency will have the power to stop manufacturers making misleading claims such as "Virtually fat-free". Such vague claims are likely to be outlawed by the agency.
Manufacturers will be asked to change other misleading claims, such as "97 per cent fat- free" to show "contains 3 per cent fat" on the label.Reuse content