Statutory Pubs Code and Pubs Code Adjudicator

Gill Furniss Excerpts

Thursday 26th January 2017 Commons Chamber

[Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)]

I congratulate the hon. Members for Leeds North West (Greg Mulholland) and for Tewkesbury (Mr Robertson) on securing the debate and for being real supporters and defenders of pubs. The pubs code came in after much wrangling in Parliament. It had been called for by many stakeholders in the industry. One of its most important objectives is to provide a level playing field for tenants, often in local pubs, so that they can compete fairly with pubcos in negotiations. This was mentioned by my hon. Friend the Member for Chesterfield (Toby Perkins). I congratulate the House on highlighting certain issues in the code, including the successful introduction of the market rent only option for tenants, which enables them simultaneously to seek the best deal for their pub while negotiating with one of the large pubcos.

The Government then set out to appoint a Pubs Code Adjudicator, and the decision was made to appoint Mr Paul Newby to the position, to oversee the running of the code, to provide information about the code and, when necessary, to enforce the code. In the midst of all this, there has been great tension between some groups in the pub industry, particularly around the role of the Pubs Code Adjudicator. My hon. Friend the Member for Chesterfield highlighted some of the issues around conflicts of interest; he made some sensible points. He and others have made eloquent contributions on that issue. They include the hon. Members for Leeds North West and for Tewkesbury, the right hon. Member for West Dorset (Sir Oliver Letwin) and my hon. Friends the Members for Hartlepool (Mr Wright) and West Bromwich West (Mr Bailey). I will not repeat the points that they have already so eloquently made.

The pubs code plays an essential part in moving towards a level playing field for pub tenants and the larger pubcos. In doing so, it provides an outline for protecting pub tenants against the very large pubco organisations. The market rent only option was successfully introduced to give pub tenants more flexibility in their operations, and it was welcomed by many stakeholders. However, as we have heard, there are serious questions about the effectiveness and implementation of the code, and about the role and conduct of the Pubs Code Adjudicator and the perceived conflicts of interest relating to him. The hon. Member for Dumfries and Galloway (Richard Arkless) used his legal background to explain clearly how that perceived conflict of interest could be a serious barrier, and said that the issue needed to be looked into.

Since the introduction of the code last year, 77 referrals have been put forward to the Pubs Code Adjudicator. Most of them have related to market rent issues, a crucial matter for many of the small operators in the sector. There is clearly a demand for arbitration via the code, and it is a matter of great concern to me and many others that not one of those cases has yet reached resolution. I recognise that the Pubs Code Adjudicator has been in post for only six months, but he should have made his mark on the industry in that time in order to try to gain the confidence of the market. It is essential that the process of referrals and subsequent decisions by any adjudicator should be seen to be fair and free of any conflict of interest. This is an issue that the Government need to address urgently, as my hon. Friend the Member for Hartlepool said.

The pub industry employs 850,000 people in the UK, mainly in the local pubs that form the hub of many communities. At this time of Government cuts to vital local services, we have seen community pubs stepping in to provide libraries and cafés to serve their communities. I commend the work being done by the not-for-profit organisation, Pub is the Hub, in this regard. It is crucial that the pubs code should work for everyone as the effective measure it set out to be and was expected to be.

This brings me to the points raised by hon. Members on the role of the Pubs Code Adjudicator. There have certainly been raised tensions in the debate over the appointment of Mr Newby as the PCA. As I have said, I welcome the points that hon. Members have made about the perceived conflict of interest issues surrounding Mr Newby’s former employer. I urge the Minister to look into the recommendations of the Select Committee, particularly those relating to the perceived conflict of interest and to Mr Newby’s shareholdings and the loan issues that have been raised today.

In my view, we should not hide away from serious concerns such as these. The Government must ensure that the role of the Pubs Code Adjudicator is truly impartial and independent, so that the pub tenants whom the pubs code is there to serve can be satisfied with the work being done. That is clearly not the case at the moment, as the hon. Member for Dumfries and Galloway pointed out. Only in this way will we ensure a fair and proper process and a focus on the real and important issues. I urge the Government to examine the role of the Pubs Code Adjudicator and to explore options that will increase transparency and fairness.

Over the past couple of weeks, I have had many meetings with representatives of pub tenant groups and of the larger pubcos. In all those meetings, there were recurring themes that appeared to unite all the stakeholders, one of which was business rates. We must focus on the issues that act as barriers towards a thriving pub industry. The pub is a long-established part of British life, and a visit to a pub is now No. 3 on the list of things to do for tourists coming to the UK. We must do everything we can to ensure that that continues.

The pubs code is there to help local pub tenants to get a fair deal when negotiating with the large pubcos, but we have already heard today that some in the industry are unconvinced that it is working for them. I strongly urge the Government to do what they can to ensure that the pubs code is properly implemented for everyone, but in particular for the tied tenants who have long campaigned for fair negotiations. Also, it is only fair to Mr Paul Newby that the Minister should review the way in which he was appointed and the matters that have arisen from this debate and from the Select Committee, so that we can move on and make progress towards ensuring that the pubs code is properly implemented and that everyone has confidence that it can work in the way that it was meant to do.