Draft Pubs Code (Fees, Costs and Financial Penalties) Regulations 2016

Bill Esterson Excerpts

Monday 18th July 2016 General Committees

[Bill Esterson (Sefton Central) (Lab)]

It is a pleasure to serve under your chairmanship, Ms Ryan. I join my hon. Friend the Member for Wrexham in welcoming the Minister to her post. She follows in some illustrious shoes. I have enjoyed debating with the right hon. Member for Broxtowe (Anna Soubry) over the past nine months or so, especially on the topic of the pubs code and the adjudicator, and on creating a level playing field and a fair arrangement between tied pub tenants and pub-owning companies. I welcome the Minister to that debate and to our attempt to create a fair market for pubs. Indeed, we debated the previous statutory instrument as recently as last Wednesday.

I am sure that the Minister, new though she is to the topic, will understand that it is important to get the measures right. It is quite right that we support community pubs not just because of all that they bring to the community, but so that we support small local business including the increasing number of micro-brewers such as Red Star Brewery from Formby, whose beer was in Strangers Bar not long ago. All hon. Members are able to get the beers of their favourite local brewers into Strangers if they apply.

The regulations need not detain us for too long, but I have a couple of questions for the Minister. I hope she can clarify what I have understood. She mentioned the adjudicator’s role in resolving disputes. I believe she said that the adjudicator sets the level of the fees and decides the nature, size and scale of any penalties that might be implemented in the case of complaints or breaches. Will she confirm that?

The Minister mentioned that the legislation includes a threshold of pub companies owning 500 or more pubs. We debated that topic in Committee for the 2015 Act. There are concerns about pub-owning companies possibly being split into smaller companies that own fewer than 500 pubs. Thereby, the pub-owning company would not be covered by the adjudicator. Will she keep an eye on that particular concern and challenge that has been raised in Committee and outside this place?

My final question is about enforcement. Will the Minister keep in mind concerns about the level of resources that the adjudicator will have, and about his ability to enforce penalties that he might wish to impose? How does the Minister envisage enforcement being carried out, and what is her view, at this early stage in her role, on ensuring that the adjudicator’s office is sufficiently well resourced to achieve what everybody wants, which is the proper balance between tied pub tenants and pub-owning companies? With that, I happily await the Minister’s response.

[Margot James]

I thank the hon. Gentleman for his kind comments. He asked whether the level of fees is set by the adjudicator. It is, in fact, set by the regulations, and the adjudicator has discretion within the regulated amount set out in the regulations.

The hon. Gentleman asked me to keep in mind the potential for pub-owning companies to fragment their business such that large sections fall just beneath the threshold of 500 or more tied pubs as set out in the regulations. In that respect, we will certainly keep the operation of the code under review. The adjudicator must report on cases of avoidance if he thinks that unfair practices are going on. There will be some protection by the fact that the level of fines—the 1% of group turnover—applies to the entire group, no matter how many small subdivisions the pub-owning company might establish.

Finally, the hon Gentleman mentioned the issue of resources for the adjudicator. I agree that there is no point having an adjudicator if he is not sufficiently resourced to tackle the many cases that might come before him. We think that the resources established will meet the likely demand, but that will be kept under review. I hope I have answered all the hon. Gentleman’s questions. If I have left one out, perhaps he would like to intervene.

[Bill Esterson]

indicated dissent.

Question put and agreed to.