Small Business, Enterprise and Employment Bill

Lord Murphy of Torfaen Excerpts

Tuesday 18th November 2014 Commons Chamber

[Paul Murphy (Torfaen) (Lab)]

I rise to support new clause 2. It was interesting to listen to the hon. Member for Burton (Andrew Griffiths) and, for about two and a half seconds, I felt sorry for the pub companies. Are they really the great bastions of competition? No, of course they are not. They have lost the confidence of not only the landlords who are their tenants, but this House of Commons and the general public. That is why I congratulate the Government, particularly the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire (Jo Swinson), and her boss, the Business Secretary, on coming up with the pubs code of conduct and the adjudicator. I also congratulate my hon. Friend the Member for West Bromwich West (Mr Bailey) and his predecessors, the various Chairs of the Select Committee, all of whom agreed that change was absolutely necessary. On each of the three occasions we have debated this issue in this House of Commons there has been no vote against the basis of the debate: to ensure that there was change with regard to pub companies and how they treat their tenants.

On the new clause, the market rent only option was central to all those debates and to the reports of the Select Committees, because it highlighted the fact that the pub companies take far too much profit for themselves and leave very little for the tenants who run their pubs. The pub companies charge excessive rents and their beer prices are inflated and, as a result, their landlords are often impoverished. Is that competition? It is a cartel and a monopoly; it is nothing to do with competition—it is all about greed. The key principle outlined by the Select Committee reports and others is that the tied licensee should be no worse off than the licensee who is free of tie. That is central to today’s debate and to the decision this House of Commons must take within the next hour.

There are those who argue that new clause 2 would bring doom and disaster upon the industry, with thousands of people losing their jobs and hundreds upon hundreds of pubs closing. That is all scaremongering; it is all tactics to try to ensure that Government Members and some other Members who feel strongly about these issues should vote in a certain way within the hour. The hon. Member for Leeds North West (Greg Mulholland) spoke eloquently, as always, referring to the fact that new clause 2 would mean that the market rent only option would be introduced gradually; it would not suddenly fall upon the pub companies, but would happen in a piecemeal way, bit by bit and with sense.

Secondly, the new clause would not affect small family brewers. As we have all heard, it applies only to companies owning more than 500 public houses. Yet time and again in this debate people have been bringing up the idea that somehow or other companies such as Brains from south Wales, which is active in my constituency, will suddenly disappear from the face of the earth because of new clause 2, which does not affect them.

[Andrew Griffiths]

I am delighted that the right hon. Gentleman has mentioned Brains, because I understand that it does not support the free-of-tie proposal. Will he understand that although family brewers may not be encompassed by it, they will be affected by it, because they supply their beer to the pubcos and through their pub chains and distribution network? So it is not true to say that family brewers will not be affected; they are deeply concerned by these proposals.

[Paul Murphy]

The concern is not warranted. If new clause 2 came in and tenants were able to choose what beers and ciders they had in their pubs, perhaps in addition to the pubs in south Wales that currently serve Brains beers, other pubs that do not but that are linked into the pubcos could do so. Far from hindering the progress or in some way destroying the profits of Brains, this liberating measure would mean that public houses could serve Guinness, Brains and other local beers and ciders as well.

[Sheryll Murray]

My constituent, the owner of the fantastic St Austell Brewery, has recently told me that if new clause 2 goes through, he will be affected financially—that comes straight from the horse’s mouth. I do not know where the right hon. Gentleman has got his information from, but I have taken the trouble to go and speak to my family brewers and find out how the measure will affect them.

[Paul Murphy]

The hon. Member for Leeds North West made it perfectly clear—

[Andrew Griffiths]

Will the right hon. Gentleman give way?

[Paul Murphy]

No, I will not. The hon. Member for Leeds North West made it clear that the detail in new clause 2 was specifically designed to exclude small companies such as Brains and others. It is possible that those companies were frightened by the tactics of some hon. Members and others, or, worse, that they were frightened because the pubcos had told them that they wanted friends to defend their own position. I do not believe for one second that small companies in my constituency, or anywhere else, would be adversely affected if pub companies allowed their tenants and landlords to earn a living wage—what is wrong with that?—to have a variety of cheaper beers, including those of the small companies, and to ensure that the profits are shared. Nothing in that could be said to be anti-competition. On the contrary, it probably means that they would do better in their pubs if they were allowed to earn more, to share their profits properly and to sell beer and cider from the microbreweries that exist in many of our constituencies. No, this is all about scare tactics.

[Richard Graham]

May I ask the right hon. Gentleman a simple question? He has quoted Brains, a small brewer in his constituency. For the record, does it, or does it not, support new clause 2?

[Paul Murphy]

It has already been said that Brains has misgivings about it. I am saying—[Interruption.] Of course it has written to me. It has written to other Members in South Wales. I am saying that those companies are misguided—[Interruption.] Will the hon. Gentleman contain himself while I answer him? Brains and others believe— because they have been frightened into believing it—that new clause 2 will affect them adversely. That is not the case. At the end of the day, those companies will benefit from the new clause.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

I know that it is unusual for an Opposition Whip to speak in a debate, but Brains is actually based in my constituency, and I have had many conversations with it. Is my right hon. Friend aware that the major concern of Brains and many other family brewers is over the Government amendments, which reverse the gains that we made in Committee? That is the primary cause for concern.

[Paul Murphy]

That is a useful piece of information from my hon. Friend whose seat includes the headquarters and the brewery of Brains.

Finally, I understand the tactic that the Government are using. They think they will lose the vote today, because there are so many Members who believe in the things that we are talking about and who will join us in the Lobby. I am not sure that a review is the answer. A review will simply push the argument and debate further down the road. Oddly enough, those who oppose new clause 2 do not like the idea of a review, and those who support it do not much like it either. It reminds me of Aneurin Bevan who said, “When you are in the middle of the road, someone will knock you down.” I sincerely hope that the Government amendment will be knocked down and that Members from all parts of the House will support new clause 2, as it will have the greatest effect in every single one of our constituencies.

[Richard Fuller]

We have had a fractious debate today. The responsibility for that can be placed firmly at the door of the Secretary of State for Business, Innovation and Skills, who has treated the House in a very shabby way. He has brought forward last-minute amendments and asked this House to take on trust that he can singly make massive and sweeping changes to this industry and that we should just trust him that his word is sound. He is proposing to affect an industry that has long been a mainstay of economies up and down this country.

I have very little confidence that the Secretary of State understands the industry on which he singly wishes to intervene. It is rather a poor show that he has not come to this House, but has instead left a very capable, but nevertheless junior, Minister to outline why the Government are retreating on one set of amendments, and looking to make changes in another set of amendments. That is no way for the proposed changes to be put to this House.

I speak on behalf of family brewers when I say that it is incredibly important that the Government keep the promise that they gave at the start of the consultation that those brewers would not be included in respect of the pubs code adjudicator. I was very pleased that my Conservative colleagues, along with the Opposition and the Liberal Democrats, voted to oppose the Government’s attempts to impose those regulations on small family-owned breweries. Today, the Minister has offered half a loaf back. She has said, “Well, we won’t do it for those who own 500 or fewer. We will do it for those with 350 or fewer. Just trust me, we will make it happen in another House.” I am happy that she is not pressing amendments 41, 43 and 44 today, but I am still at a loss to understand why there is an in-principle difference between 500 and 350. If it is a fact that just three family brewers are impacted by that change, there is a very serious issue about whether this is ultra vires legislation that is being felt by certain family businesses but not by others. I think the Minister will find that she will also have severe problems in the other House.