Pubs Code Adjudicator

Anna Soubry Excerpts

Thursday 10th March 2016 Commons Chamber

[Greg Mulholland (Leeds North West) (LD)]

(Urgent Question): To ask the Secretary of State for Business, Innovation and Skills if he will make a statement on the appointment of the first Pubs Code Adjudicator.

[The Minister for Small Business, Industry and Enterprise (Anna Soubry)]

As I announced to the House yesterday, Paul Newby has been appointed as the first Pubs Code Adjudicator. I hope the House will join me in congratulating him on his appointment. I pay tribute and say thank you to all those who applied for this important position. I also pay tribute, as I am sure the House will, to all the candidates in an excellent and very strong field.

Mr Newby will start his work full time on 2 May. He has actually already started work. He has been very helpful to my officials in making sure that we have the pub code up and running, and ready to come before this House. Paul Newby is a chartered surveyor with a particular expertise in valuation and arbitration, key skills for the Pubs Code Adjudicator. He has 30 years’ experience of the pub trade, working with pub company landlords and pub tenants. I think he will be an excellent Pubs Code Adjudicator.

[Greg Mulholland]

I am afraid that is not a view shared by tenants’ groups, who have been absolutely astonished by this appointment. Let us be clear, this is the appointment of someone who is a director of a company that derives the majority of its income from the very companies the legislation is intended to regulate. By his own admission—it is on his CV—he has been engaged by numerous managed and tenanted pubcos on rent review matters. In the past five years he has acted for Enterprise Inns, Marston’s and Punch Taverns. The very companies he is currently acting for are bullying and coercing tenants into signing away their rights or forfeiting pubs. His company is actively involved in selling off pubs. How can he possibly be trusted to be impartial, given that for 20 years his salary has been dependent on those he must now adjudicate on and potentially impose financial penalties on? There is a clear conflict of interest, which appears to render this process extremely dubious at the very least.

I must ask the Minister for urgent clarification. Did Mr Newby, as a director, declare how much of the income of the company he works for is derived from the companies he will supposedly adjudicate on? Will he be stepping down from his role as director of Fleurets during the four-year period? How can tenants have any confidence in this appointment? Why has a chartered surveyor been appointed, rather than someone from a legal background or an independent arbitrator? How was this process conducted? We do not know who was involved, how many candidates were involved or who made the final decision.

This is a very worrying appointment that once again demonstrates either complicity with pubco influence or an utter lack of understanding and knowledge of the issues and the conflicts in the sector. It is in danger of making a laughing stock of the adjudicator’s role. Tenant groups predict that if this appointment is allowed to stand, the statutory reforms will go the same way as the failed self-regulatory regime. It is a crass, complicit and clueless appointment, and it now needs to be properly scrutinised by the House.

[Anna Soubry]

That was an absolutely disgraceful set of slurs—[Interruption.] I would appreciate it if the hon. Member for Leeds North West (Greg Mulholland) would be good enough to listen. Paul Newby was appointed absolutely in accordance with the usual ways of public appointments, and I take very grave exception to any allegation that either I or anybody else has acted improperly or with complicity. As I said, Mr Newby has represented not just pub trade companies but tenants. He has 30 years’ experience effectively representing both sides. He is an experienced arbitrator, and the great skills he brings to this position do not just include his extensive experience of the pub trade industry; like many professionals, he has the absolute ability to be fair and to arbitrate fairly. The fact that he might be representing somebody does not mean he is in their pay; he can act independently.

[Greg Mulholland]

He is in their pay.

[Anna Soubry]

Oh no. The hon. Gentleman does not understand how professionals work, and many of us take great exception—[Interruption.] Opposition Members would do better not to heckle about somebody they do not even know. They have not looked at his antecedents. I made the announcement only yesterday in this place at about 7 o’clock. I have no doubt that Mr Newby’s considerable experience and ability to do the job are first rate, and I take great exception to the idea that there has been an impropriety.

[Peter Kyle (Hove) (Lab)]

Do you know him?

[Anna Soubry]

No, I don’t know him. I did not meet him until—[Interruption.] I met him at the end of the procedure, as the House would expect. His was one of three names put forward, quite properly, in a full, open and fair process, and I object very strongly, on behalf of Mr Newby, who will do this job with propriety. All things will be done properly.

[Sir Henry Bellingham (North West Norfolk) (Con)]

The Minister has behaved absolutely correctly and properly. Surely what matters is Paul Newby’s ability. Does she agree that he should look first at, among other things, the loophole that allows retailers and shop owners to buy a pub that does not require planning permission, whereas if it reverts to being a pub, it does require planning permission?

[Anna Soubry]

Yes. Paul Newby’s primary job, of course, is to implement the pubs code and make sure it is complied with. When people invoke the pubs code, his job will be to act as a fair arbitrator, and I have no doubt that he has all the necessary skills and experience of the pub trade. As I have said, he has experience of representing both pub companies and tenants, so he sees things from both sides; he has all the skills, and his appointment was made with great care and total propriety.

[Bill Esterson (Sefton Central) (Lab)]

The way the Minister announced the appointment yesterday—as part of the shambolic proceedings on the Enterprise Bill and Sunday trading—did not exactly inspire confidence. She announced it in an intervention—of all things—on Third Reading, after the Secretary of State could have mentioned it in his Third Reading speech. If nobody had mentioned the pubs code on Third Reading, the announcement would not have been made even then.

Turning to Paul Newby’s appointment as the first adjudicator, I certainly look forward to meeting him and to raising the concerns raised by the hon. Member for Leeds North West (Greg Mulholland) and, more importantly, by pub tenants about the relationship between Mr Newby’s employers and the large pub-owning businesses. I do not think that the tenants will be at all reassured by what the Minister has said. The challenge for Mr Newby will be in ensuring a level playing field between tenants and pubcos. How does she think that he can do that, given the concerns that have been raised by tenants?

There is a very real danger that someone who has acted for Punch Taverns, Enterprise Inns and Marston’s will be seen as continuing to act on their behalf, and the Minister must be aware of this very real concern, as she sits there, chuntering as usual. She will also be aware of concerns among tenant groups that the adjudicator should not be a chartered surveyor. Will she pursue concerns about the attitude of the Royal Institution of Chartered Surveyors about parallel rent assessments?

Labour raised concerns about the pubs code in the Lords and in Committee here, so will the Minister raise those concerns with the adjudicator about pubcos offering shorter leases to make it impractical for tenants to take up the market rent only option? Will she ensure an effective date of 1 June for tenants who wish to take up the MRO, rather than allowing a potential delay of six months—another of the asks of pub tenants?

The shambolic approach to the initial consultation on the pubs code undermined pub tenants’ trust, which is back on track after concerns were raised by pub tenants organisations—

[Mr Speaker]

Order. I think that we will leave it at that. Forgive me. I am extremely grateful to the hon. Gentleman. [Interruption.] On this occasion, I advised the principal actors on this stage that I would be quite insistent that the time limits be kept. To be fair, the Minister was well within her time, and the hon. Member for Leeds North West (Greg Mulholland) exceeded his by a small number of seconds, but he was closer than he has been in the past. No discourtesy is intended to the hon. Member for Sefton Central (Bill Esterson). I think that he has got the thrust of it across. But, please, we really must from now on stick to the limits; otherwise it is not fair to Back Benchers. I think that we are very clear what the hon. Gentleman has to say, and I thank him.

[Anna Soubry]

We are confident that the pub code will be in its proper form, laid at the appropriate time and up and running by 1 June. Yesterday, a press release was prepared for publication today. I took the opportunity, as you know, Mr Speaker, to tell the House first—I thought that was a courtesy to the House—and I did so in an intervention on the hon. Member for Leeds North West because I thought he had a proper interest in pubs and that he might be in some way grateful, but we live and learn.

[Andrew Stephenson (Pendle) (Con)]

I very much welcome the Government’s action on this issue. I represent a number of pubs that I have dealt with over the years that have had problems with the large pubcos that own them. Does the Minister agree that in appointing a fair and experienced adjudicator, it is important that we appoint someone who understands both sides of the argument and can therefore adjudicate fairly?

[Anna Soubry]

I absolutely agree. That is the joy of Paul Newby: not only is he a chartered surveyor, with all that that brings to the job, but he is an experienced arbitrator who has knowledge of both sides. I know that he will be fair. I have complete confidence in him. He is very good news.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

The pubs adjudicator is effectively classed as England-only, but, as with Sunday trading, the proposals on market rent only options could have an effect in Scotland, because pub companies might direct investment towards pubs in England and Wales. The Scottish Government are consulting on the effect of tied pubs in Scotland. Will the Minister ensure that the adjudicator takes cognisance of the consultation in Scotland and the possible effect of the proposals on Scottish pubs and Scotland?

[Anna Soubry]

I do not think there was a question there, but I am sure that we can have a chat about this afterwards and discuss all these things.

[Bob Blackman (Harrow East) (Con)]

Can my right hon. Friend confirm that this appointment has been made absolutely on merit, fairly and without interference from the Government? The most important thing is how the person does the job and implements the pub code.

[Anna Soubry]

I am grateful to my hon. Friend for his comments, and he is absolutely right. This is actually an insult to the civil servants and all those who took part in the process, because they exercise the greatest care in ensuring that the very best candidates are put forward as the final seven and then the next three who come to the Minister, often with a recommendation in relation to one of them. I do not take this personally; it is against not me, but against my civil servants and all that team. This is very good news: Paul Newby is fair and he knows what he is talking about.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

I have a recorded interest in pubs, and I chair the John Clare Trust, which owns a pub in which John Clare played and sang. It is not operating at the moment, but it will be. Let us depersonalise this issue. I work very closely with “pub is the hub”; pubs are central to our communities in Britain. I do not know this man, and I hope he does a good job. Unlike the supermarket adjudicator, however, I hope this man will have some teeth to do something about the vigorous brewing and pub industry in this country.

[Anna Soubry]

It is, of course, all about getting the balance right. I take exception, however, to what the hon. Gentleman said about Christine Tacon, the Groceries Code Adjudicator, who now has exactly the teeth that he would like. She has not held back in her criticism, as we saw only recently. She is doing a great job. She now has the power to impose fines. In any event, the most important thing is the naming and shaming. As the hon. Gentleman will know, that is sometimes the most powerful tool. The code adjudicator is just that— an adjudicator to ensure fairness. Paul Newby will do that.

[Tom Pursglove (Corby) (Con)]

What involvement, if any, have both sides of the industry had in this selection process?

[Anna Soubry]

I can assure my hon. Friend that there has been no influence at all. We sought somebody with the right skills set who could be an experienced arbitrator and who understood the trade and had the ability to see things from both sides. Paul Newby has all those skills and more.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

As Chair of the BIS Select Committee that initiated one of the earlier inquiries which informed this particular piece of legislation, I would not wish to prejudge the performance of Paul Newby, but I emphasise that there is huge disquiet among the tenants. Will the Minister consider that and review the adjudicator’s performance after a certain time, and keep up a dialogue with the tenants to ensure that their concerns are met? Otherwise, this issue will not go away.

[Anna Soubry]

I am grateful for the hon. Gentleman’s comments. I am pleased that he, unlike others, has an open mind. I think he will be impressed by Mr Newby. He is absolutely right in any event that, as with all appointments, if someone is not performing adequately, that is matter of concern and measures can be taken to rectify it. There are many tied tenants in pubs throughout England and Wales, so we must be careful to ensure that groups genuinely represent the voice of all tenants. We must not let a few dominate the debate. It is important to be fair to both sides and to make sure that all the tenant groups are involved; this is why I am a great fan of Campaign for Real Ale, which represents a large section of tenants.

[Craig Mackinlay (South Thanet) (Con)]

I echo the sentiment that the pub is at the heart of many communities, particularly in smaller towns and villages. I am hoping that the appointment of Mr Newby will normalise many of these relationships. I hope this will help to avoid what happened in the case of a pub near me, the Chequer Inn in Ash, which has suffered under an overbearing pub company. New tenants are tempted in and the pub runs well, but then prices escalate until they are forced to collapse and close, when we see a planning application for alternative use. I am really hoping that this will normalise these relationships.

[Anna Soubry]

I could not agree more with my hon. Friend. It is the change of culture that is so important. We have all encountered similar examples in our constituencies; I, too, have fought to keep local pubs open. Unfortunately, I was not successful in one instance, although I was in another. It is about changing the atmosphere and making sure that pubcos act in a sensible and responsible manner, not just towards their tied tenants, but to the broader communities.

[Jim Shannon (Strangford) (DUP)]

I understand that the Royal Institution of Chartered Surveyors failed to respond to the Government’s request for clarification on rent assessment guidance, and has clearly laid out its position that it is against a parallel rent assessment through which a tenant can compare their tied rents and rewards with the rents and rewards of those who are not tied. Will the Minister confirm how the adjudicator reconciles his position with that of a professional body such as the RICS?

[Anna Soubry]

I hear what my hon. Friend says—he is my Friend, as he knows—but I can tell him that Paul Newby is going to be his own man. I was a member of a professional body, and the Bar Council often had a point of view that I personally completely disagreed with. Paul Newby is a good man and he will be his own man. He will be fair, and he comes with a huge skill set.

[Mr Speaker]

I am bound to say that I am rather staggered by the fact that the hon. Member for Kilmarnock and Loudoun (Alan Brown) seems to have disappeared from the Chamber. The question is ongoing, and the hon. Gentleman is the Front-Bench spokesman for his party. He should not be toddling out of the Chamber in the middle of the exchanges. These courtesies really must be observed. This really will not do. Honestly!

--- Later in debate ---

[Mr Nuttall]

It is a brief question. The appointment brief for this role, which was issued in July last year, stated that the appointment would be announced in January. Can the Minister tell me why the announcement was delayed by two months?

[Anna Soubry]

If I am wrong about this I will apologise profusely, but if my memory is correct, it was because Mr Newby had to serve a period of his contract before he could give notice. I believe that the decision was made just before Christmas, but we could not announce it until now because of his relationship with his employer.

[Mr Speaker]

I call Liz Saville Roberts—[Laughter.] That is inexplicable to me, but I am sure that nobody is laughing at the hon. Lady, whom I take extremely seriously. I want to hear what she has to say.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

Thank you, Mr Speaker. In the Dwyfor region of my constituency, one brewery effectively has a monopoly, with 30 tied houses. This blocks local producers such as Cwrw Llyn from selling to pubs on their doorstep. More than 100 small breweries are in a similar position across Wales. Could the economic context of Wales be considered by the newly appointed pubs adjudicator?

[Anna Soubry]

I do not think that that falls within his remit. He is there to ensure that anyone who raises a complaint under the pub code will be able to be heard fairly and that the matter can be arbitrated in the right way. The hon. Lady raises an important point, however. We all know the huge importance of our pubs to communities, and it is absolutely the case that they should trade fairly.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

Can the Minister tell us how many years the initial appointment is for? If it is only for a short period, there will be understandable concern that the adjudicator will not want to burn their bridges with the pubco industry.

[Anna Soubry]

I have just been helped by those sitting in the Box—I nearly said “those who instruct me”—and the answer is four years.

[Tom Brake (Carshalton and Wallington) (LD)]

Is the Minister confident that this appointment abides by the principles of the Committee on Standards in Public Life?

[Anna Soubry]

Yes.