Small Business, Enterprise and Employment Bill
Debate between Toby Perkins and Andrew Griffiths(9 years, 9 months ago)
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Toby Perkins
It is a great pleasure to speak on the amendments proposed by the noble Lords.
On 16 July, we debated the Second Reading of this Bill. It was interesting, in preparing for this debate, to re-read the contributions that were made then and those that have been made by Labour Members in both Houses during its subsequent stages. Though modesty would usually prevent me from quoting extensively from the contribution that I made, it would be strange not to reflect on how widely our critique of the Bill has been adopted by the Government. We said that it had the potential to make a real difference to small businesses but that the steps that it originally proposed were a collection of faint nods in the right direction of key issues that had emerged under this Government. We said that far more robust action would be needed if this Bill was to deliver on the steps small businesses required and to take action on things like abuses of the labour market and their impact on workers in every constituency in the land. On the subject of pubs, we said that a successful small business Bill—a Labour small business Bill—would have introduced a code with a market rent only option, which the Bill now indeed contains. It would be churlish not to recognise that the Government have ultimately acted in good faith on pub company legislation.
I should place it on the record that this is the last piece of legislation that the Minister will be bringing through in this Parliament. As we fast approach the general election, who knows when will be the next time a Liberal Democrat Minister will have the opportunity to bring through a piece of legislation? She has done a good job in reflecting the wishes of the House and has acted in good faith on pub company regulation.
Their lordships’ amendments broadly achieve the objective of striking the devilishly difficult balance between proper protection for pub tenants while not imposing an overly rigid straitjacket on the industry with the potential to discourage future investment. They are positive steps forward that have faithfully built on the spirit of the historic clause 42 proposed by the hon. Member for Leeds North West (Greg Mulholland). We recognise that some aspects of the proposals will sensibly need to be included in the pubs code through secondary legislation.
There remains the thorny issue of the right of the tenant to offer a substantial investment in their public house in exchange for giving up the right to use the next rent review period as a trigger to request an MRO assessment. The letter dated 16 March from the Minister, Baroness Neville-Rolfe, to the noble Lords Mendelsohn and Stevenson details the Government’s intentions with regard to new clause 43 and specifies that it must not be used to abuse the waiver. However, this will still leave those who fought this cause for many years with considerable unease that this creates the potential for too broad an exemption for too small an investment.
We entirely agree with the Government that encouraging future investment in the stock of public houses is a crucial element in the future success of the industry, but, over four months since the original victory for clause 42, that still leaves a huge unanswered question about the scale of investment that constitutes “substantial”. I think that my party’s record on this issue means that campaigners will have confidence that the statutory code that addresses it under a future Labour Government will be consistent with the approach—
Andrew Griffiths (Burton) (Con)
The hon. Gentleman mentioned his party’s position on investment. What scale of investment does he believe would constitute “substantial”?
Toby Perkins
That is an excellent question. The whole reason this issue is being placed in secondary legislation is that we recognise that there is a very difficult balance to strike. The formula needs to be dependent on the relationship of the investment to the value of the pub. For some pubs, a £30,000 investment might be substantial. For a town centre or city centre pub, a £200,000 investment might not be so substantial. There needs to be some sort of relationship between the rateable value of a pub, the amount that it turns over, and the amount of investment.
The hon. Gentleman is echoing my point, which is that this has been left very open. A great deal of work would need to be done. I assure the House that under a future Labour Government the principles laid out by Baroness Neville-Rolfe are exactly how we would see this. I anticipate that the same would be true of a Liberal Democrat-influenced Administration, although it would be good to hear the Minister clarify that. It would also be good to hear from the Conservative party whether its manifesto will follow the Bill’s principles, or whether it will take a different approach. The industry and campaigners have the right to expect that.
Small Business, Enterprise and Employment Bill
Debate between Toby Perkins and Andrew Griffiths(10 years, 1 month ago)
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Toby Perkins
The hon. Gentleman mentions planning and whether pubs can expand, and it is important that pubs have that opportunity. However, the biggest planning issue currently facing pubs is the fact that big supermarkets can come in and change a pub into a supermarket without any reference to planning law. In my constituency we have a significant campaign to try to save The Crispin—I was not going to mention it, but the opportunity now arises. A pub that currently operates perfectly successfully under Enterprise Inns will be closed because the lease has been signed to Tesco. Indeed, Labour’s planning proposals would increase restrictions on pubs that are turning into supermarkets, and deal with many of the concerns that I have already raised. Hon. Members gave many examples of pubs that are being closed to become supermarkets.
Andrew Griffiths
The hon. Gentleman has treated us to a tour of the country and listed some 30 or 40 MPs who have done something to save pubs. It has all been very interesting, but we have not heard what he will do to save pubs. Rather than packing his speech with such examples and filling time, will he get on with telling us what he is going to do?
Toby Perkins
Many contributions that hon. Members have made are important to their constituents and they will consider it pretty disrespectful for the hon. Gentleman to say that I am filling time. I do not think I am—this is a significant issue. We can all get the press release out or attend packed public meetings, and we can all rail against unfairness and talk about how a pub company sold a false prospectus and failed to consider the needs of the community, but today is the day for talking to finish and for us finally to act. People will reflect on whether, when given the opportunity to act, Members of Parliament stood up in the Chamber to complain about the situation or actually took action.
Business Rates
Debate between Toby Perkins and Andrew Griffiths(11 years, 1 month ago)
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Toby Perkins
The hon. Gentleman is making an important point about the significance of business rates for pubs. I am sure that he knows this from his perspective, but will he give us an idea of how many pubs have a rateable value of more than £50,000? I would think that there are very few, so virtually every pub would be able to drink to Labour’s business rate cut for all businesses below that £50,000 level. Will he support that policy for the sake of British pubs?
Andrew Griffiths
I am always prepared to listen to anything that might support the great British pub, but as the hon. Gentleman is from the party that introduced the hated beer duty escalator and the smoking ban, he needs to think long and hard about what he can do to support British pubs.
Pub Companies
Debate between Toby Perkins and Andrew Griffiths
Toby Perkins
I am grateful to my right hon. Friend for those comments, and he is entirely right. The potential exists for this to be a really significant moment, but I do not think we can go any further than that yet.
The Secretary of State’s call for evidence was certainly enthusiastically answered. He wrote to seven different organisations to ask for their views on how self-regulation was working, and he received 19 responses. That is a return rate of 271%, which is the sort of extraordinary and implausible statistical feat that we generally expect to see in a Liberal Democrat “Focus” leaflet, but there we have it, right at the heart of Government.
Before I get into the detail of how we can ensure that the Government’s announcement makes a meaningful difference, I will reflect briefly on why the debate is so important to so many Members, their constituencies and constituents and the economic and social fabric of our great country. Pubs are synonymous with our great island story, from fictional boozers brought to life, like the Rovers Return in “Coronation Street”, to pubs that have gone down in history such as Ye Olde Cheshire Cheese, famously frequented by Samuel Johnson and where Mrs Perkins and I had a very pleasant lunch just a few weeks ago.
In almost every village, town or city in the land, and indeed in every Member’s constituency, there will be pubs that make us proud of our localities and say much about our areas, and which our constituents wish to see thrive. Britain’s pubs are not only important as key hubs in the community, they are economically vital. Last year, beer and pubs contributed £21 billion to UK GDP, and the Campaign for Real Ale has estimated that the average pub employs 11 people and contributes £80,000 to the local economy.
However, CAMRA recently revealed that around 18 pubs are closing every week, and countless more are fighting for their lives. As we know, when pubs close the cost of failure is felt not just in social terms but in economic terms, at a time when our faltering economy can afford it least. There are now 2,582 fewer pubs than in 2010, equating to 200 jobs lost for each week of the year.
Andrew Griffiths (Burton) (Con)
I agree with the hon. Gentleman that 18 pubs closing a week is too many. He will know, however, that under the previous Labour Government pubs were closing at a rate of 54 a week—four times as many. Will he apologise for the Labour party having let down pubs so badly?
Toby Perkins
That is a frankly disappointing contribution from the hon. Gentleman. One key point that people may reflect on is that there are now 2,582 fewer pubs than in 2010.
Toby Perkins
I will give way to the hon. Member for Worthing West (Sir Peter Bottomley), and then I will give the hon. Member for Burton (Andrew Griffiths) another stab.
Toby Perkins
We absolutely can agree on that. I hope Ministers hear that message—it is precisely the principle of the motion on which we will vote shortly, and I welcome the opportunity to see the hon. Gentleman in the Division Lobby. He makes the point very well.
Andrew Griffiths
I recognise what the hon. Gentleman says—that the Business, Innovation and Skills Committee did not call for statutory regulation in its reports—but does he not think that the Labour Government needed to have done something in their 13 years in government, when more than 9,000 pubs closed?
Toby Perkins
Many challenges, to which I have alluded, faced the industry during the previous Government’s term. In the last two or three years of the Government, we had the recession and people were stretched, and in times before the recession, people’s habits were changing. Pubcos were operating in the way I have described, but the Labour Government attempted to give them the opportunity to put their house in order. I believe that the hon. Gentleman is of the view—I apologise if I am wrong—that the pubcos should have been given longer. That was his view when we debated pubcos about a year ago. Members on both sides of the House accept that pubcos were part of the problem and that the previous Government attempted to give them the chance to do things right, so it is difficult for him to criticise the previous Government for doing so.
Andrew Griffiths
I do not think that family supermarkets are an issue in this context.
My second point relates to the self-regulatory code. What the Government are proposing is a two-tier system, with the big boys in the first tier. There is some confusion over what they mean by tied leases. The British Beer and Pub Association, for instance, thinks that this applies to two companies, Punch Taverns and Enterprise Inns. If the Government are talking about tied and tenanted leases, that is not what they set out in their press release yesterday, and it is not what the industry thinks that they are talking about. There is a need for the Minister to clarify what the Government are talking about.
All tenants can now go to arbitration, but the arbitration system is funded by the industry as a whole, and large companies such as Punch Taverns and Enterprise Inns are paying the lion’s share of the cost of that self-regulatory body. Those companies will not be prepared to pay to be regulated twice: they will pay either for statutory regulation or for self-arbitration, but not for both, so I wonder what will happen to the self-regulation system. Have the Government talked to the industry about the implications of the big two or big six pulling out of funding the self-regulatory body? I also wonder how much pressure the industry will put on the smaller companies to sign up. I acknowledge that that is not such a big issue, but everybody has signed up to the self-regulatory code, and that pressure will dissipate if the Government’s new system is introduced. Legislation is being proposed in order to tackle one or two problem companies, but have the implications for the rest of the industry been fully thought through? I urge the Minister to address those concerns.
There is another problem that our pubs and landlords face: the beer duty escalator. The amount of duty that brewers and publicans are paying is killing pubs and breweries. The biggest single thing we could do to help the industry is scrap the beer duty escalator. We have had a bit of a love-in with Opposition Front Benchers this afternoon, but it would be remiss of me not to point out the record of 13 years under a Labour Government. They increased beer duty by 60%.
Toby Perkins
I have in front of me a document from the House of Commons Library which shows the amount of duty as a percentage of retail price for each of the last 12 years. In 2000, 14.5% of the retail price of a pint of beer was duty, whereas the proportion is now 15.4%, so it has hardly gone up at all.
Andrew Griffiths
The hon. Gentleman must be the only person who does not think that the last Labour Government increased beer duty and introduced the beer duty escalator, and crippled pubs and the brewing industry as a result.
My time is almost up, but I urge the Minister to think about what I have said.
Pub Companies
Debate between Toby Perkins and Andrew Griffiths(12 years, 11 months ago)
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Toby Perkins (Chesterfield) (Lab)
It is a pleasure to stand here at the culmination of this excellent debate, which has shown the House in a tremendous light. Let me start by congratulating my hon. Friend the Member for West Bromwich West (Mr Bailey) on securing and opening the debate. I congratulate also the hon. Members for Leeds North West (Greg Mulholland) and for Northampton South (Mr Binley) on their work on this issue. It is to the Minister’s shame that despite diligent research and the magnificent campaign fought by many interested organisations, we are debating how to put safeguards into a policy that was announced without proper consultation and in direct contradiction of assurances given by him.
I shall refer to the remarks of some Members during my contribution, but I must pick out specifically the brilliant and passionate speech of the hon. Member for Northampton South. He described how the Government have reneged on their undertaking, and pointed out that the problem was the major pub companies that have more than 500 pubs. The hon. Member for Leeds North West spoke brilliantly and exposed the shameful collaboration of the Government and the BBPA. That point was also taken up by the hon. Member for Southport (John Pugh).
My hon. Friend the Member for East Lothian (Fiona O'Donnell) talked about the impact on jobs. That is a vital issue: every week hundreds of people lose their job as a result of the number of pubs that are closing.
The hon. Member for Burton (Andrew Griffiths) spoke up for pub companies, but said that they were drinking in the last chance saloon—and my right hon. Friend the Member for Torfaen (Paul Murphy) rightly said that the last chance saloon sounded like a pub where time is never called.
Toby Perkins
I am afraid I do not have time.
The hon. Member for Bristol North West (Charlotte Leslie) felt that on balance there needed to be some regulation. She defied those who think that a Member cannot make a serious speech wearing a scarf—something that may catch on.
My hon. Friend the Member for Sheffield Central (Paul Blomfield) talked about how, because of their flawed business model, the big pub companies are squeezing out unreasonable returns. My hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) said that the Prime Minister was dodging his round at the bar. The hon. Member for Nuneaton (Mr Jones) reminded us of the role of the pub in uniting couples over the years. He reflected on the good fortune of Mrs Jones to have been drinking in the right pub at the right time.
There were interesting contributions from my right hon. Friend the Member for Torfaen and my hon. Friend the Member for York Central (Hugh Bayley). The hon. Members for North Swindon (Justin Tomlinson) and for East Hampshire (Damian Hinds) spoke about alternative ways in which pubs might choose to improve themselves.
Today we have heard a lot about the history of this issue, but it is worth reminding ourselves that we have had seven reports and there have been four inquiries by the Business, Innovation and Skills Committee. The Government’s response has many flaws, which other Members have exposed, but I want to talk about two specifically.
On the issue of pub closures, which was exposed by the hon. Member for Pendle (Andrew Stephenson), the Minister has swallowed the big pub company line that free-of-tie pubs are more likely to close. He must know that in general tied pubs do not close permanently, because, as the hon. Member for Brighton, Pavilion (Caroline Lucas) pointed out, they have a history of churning through huge numbers of landlords who try and fail—another business going under, another life unfairly ruined. One pub company had a churn rate of 65%, so although the hon. Member for Solihull (Lorely Burt) says that people should go into such arrangements with their eyes open, that does not reflect the reality experienced by many tenants and lessees. Like the hon. Lady, my hon. Friend the Member for Edinburgh South (Ian Murray) was previously a landlord—for Enterprise—and has strongly made the point that many people’s lives were ruined because they were not aware of what they had let themselves in for.
In March 2010, a Federation of Small Businesses survey found that 84% of tied businesses believed that their relation with the pubco did not allow them to compete effectively, 90% believed that the arrangements meant that they could not make a fair profit, and 87% indicated that they wanted to be free of the tie. Despite that evidence, the Government say in their response, as my hon. Friend the Member for Wrexham (Ian Lucas) pointed out, that the debate over tied or free-of-tie status is a distraction. We think that is entirely wrong.
The FSB is not the only organisation to study the issue. The Institute for Public Policy Research also questioned tenants and lessees, and its findings showed that free-of-tie landlords manage pubs longer, are more optimistic about the future, are less likely to be struggling financially, and earn more. According to that study, 46% of tied publicans earn less than £15,000 a year. The hon. Member for Cheltenham (Martin Horwood) noted that the IPPR found that 88% of publicans who claim to be struggling financially identified the beer tie as one of the most significant factors in their financial problems.
The Minister, in his written response, built a man of straw, claiming that the critics were calling for the tie to end completely. He must know that that is not the case. All the critics are saying is that if the traditionally tenanted arrangement is such a good deal, why can the big pub companies not offer both tied and free-of-tie options, and let their tenants decide?
The Select Committee discovered that at every turn the big pubcos had failed to take the actions they had promised. In desperation, the Committee said in March 2010 that it would give the industry a final chance to prove that self-regulation could work. It was supported by a sympathetic Government who promised to back its findings. When there is such knowledge and such commitment and when the industry has been given every chance to put its house in order, how can the Minister possibly write that the issue is more complicated than the critics realise?
What the critics may have failed to understand is not the issue surrounding pubcos but the developing relationship between the pubcos, the BBPA and the ministerial team. As the hon. Member for Leeds North West said, the save the pub group has discovered, through freedom of information requests, that throughout the process the referee was getting changed in the same room as one of the teams.