Pubs Code and the Adjudicator
Debate between Grahame Morris and Anna Soubry(8 years, 8 months ago)
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Grahame M. Morris (Easington) (Lab)
I appreciate you calling me early, Sir David, and it is a pleasure to serve under your chairmanship. I know that we should never start a speech with an apology, but may I apologise to the promoter and the respective Front Benchers? I am afraid that I will not be able to stay until the end of the debate. No disrespect is meant but I must be somewhere else in the House at 3 o’clock, so I do apologise. May I also acknowledge for the record that I chair the Unite group in Parliament? Many of our members work in the industry as tenants and in brewing.
I commend the hard work and terrific speech of the hon. Member for Leeds North West (Greg Mulholland), who set out the arguments in such a cogent and readily understandable way. Unusually for me—for the first time ever, I think—I found myself agreeing with the hon. Member for Peterborough (Mr Jackson), who I had always assumed was a free marketeer, but he seems to recognise that there are faults, whether by accident or design, that need to be remedied before the code can be implemented.
The Minister asked what we, collectively, are asking for. This is not necessarily a partisan issue, although obviously there are strong interests. I thank my union, Unite, and its pub landlords section. I also thank the GMB, Justice for Licensees, the Fair Deal for Your Local campaign, the Fair Pint campaign and Mr Simon Clarke, who has been a stalwart defender of the interests of licensees in ensuring that they receive justice.
The things that we are asking for are not unreasonable, given that Parliament has debated and considered this issue at length and, on a cross-party basis, has agreed a way forward. We want to see the legislation implemented and the pubs code reformed. The hon. Member for Leeds North West identified specific concerns about the adjudicator, to which I will refer in a little while. The Government have an opportunity: to enforce the legislation that was passed with such overwhelming support; to close the loopholes that have been identified by the hon. Members for Peterborough and for Leeds North West; to protect tenants from being coerced or browbeaten into giving up their rights; and to restore confidence in the office of the adjudicator.
I mean no disrespect to Mr Newby—like other Members, I suspect, I have not met him—and I do not mean to impugn his personal integrity. I am sure he is a lovely chap, but there are issues of confidence and of conflicts of interest that must be addressed if we are to enjoy the confidence of the whole industry, not just the pub companies but the tenants and the people who rely on the adjudicator to act impartially so that there are no real or perceived conflicts of interest.
We have had many years of consultations—the former Chair of the Select Committee on Business, Innovation and Skills, my hon. Friend the Member for West Bromwich West (Mr Bailey), and members of the Select Committee will, no doubt, elaborate on that—negotiations, debates and inquiries, but we would not be where we are without the co-ordinated efforts of the various organisations that have come together in the British Pub Confederation. Given that we are so close to the introduction of the new pubs code and the adjudicator, changes that have been long fought for, I am a little disappointed that Government Members have implied that nothing happened prior to 2010, which is not quite true. We had the first pubs Minister, and a lot of the groundwork was done in advance. I would like to think, although it is just supposition, that had the outcome of the 2010 general election been different, the pubs code and the adjudicator would have been implemented much more quickly. I cannot substantiate that but, having had conversations with many people in the know, I suspect that that may well have happened.
The changes have been a long time coming and, unfortunately, I regularly see figures in the trade press that 27 pubs a week are closing—that figure may be accelerating. Too many viable pubs and, indeed, working men’s clubs in communities such as mine have had to call last orders not just because of broader pressures within the economy but because of unfair and unsustainable rents, ties and profit-sharing arrangements, all of which should be addressed by the code and, if necessary, by referral to an independent adjudicator.
All we are asking, and it is nothing unreasonable, is that tenants should be able to secure a fair income. Given the time commitment that they give, it seems bizarre that the tenants of even very successful pubs—the hon. Member for Leeds North West mentioned the Eagle, and I know a number of others—that, on the face of it, are incredibly popular seem unable to secure a decent living. Many tenants are struggling. When their income is aggregated and divided by the number of hours they work, in many cases they are actually working for less than the minimum wage. I have met a number of former tenants and landlords whose mental and physical health has been absolutely broken by their experiences.
We all know that the repercussions of pub closures are felt across communities, which lose not only vital community assets but the jobs and the contributions that such businesses make to the local and wider economy. I do not denigrate that contribution. Many of my union’s members work in the pub sector—in the pubs, in the breweries and in delivery, such as on the drays—and I understand that the sector contributes £22 billion to the UK economy. Taking into account the multiplier effect, and not just the people working directly in the pubs, the sector sustains nearly 1 million jobs, particularly providing opportunities for younger adults to find employment, so the sector is important. Links in the supply chains include retail, agriculture and brewing.
The product is the essence of what we are about, of Englishness. Dare I admit it? Is it a secret that I love to have a pint of beer and to socialise? The problem is that the business model operated by the pub companies has weakened, rather than strengthened, the industry. Our hope is that the new pubs code and the adjudicator will address the inherent unfairnesses in the exploitative practice of the pub company model, but it should be a step that strengthens the industry, ensuring: that tenants receive a fair living reward for all their hard work; that viable pubs can remain open; and, hopefully, that we can halt the decline that has seen significant numbers of pubs close over the last 10 or 20 years.
I would like to think that the pub companies are acting in good faith but, as has been alluded to, there is evidence to the contrary and that they are working to circumvent the pubs code and the legislation even before it comes into force. If the Government and the Minister are not aware of that, I hope that she and her officials will make themselves aware of it by looking at the evidence that is out there. The appointment of Paul Newby as the Pubs Code Adjudicator has not endeared the Government to tenants or won any trust from them. Concerns remain that loopholes in the new draft pubs code could undermine the legislation, and if Parliament is to fulfil its promise to tenants, those loopholes must be removed before the final version of the code is implemented.
The hon. Member for Peterborough highlighted one particular loophole. The Government would undermine the fundamental principle of the pubs code, that tied tenants are no worse off than free-of-tie tenants, if they allow pubcos to force tenants to relinquish long-term leases should they opt for a market rent-only option. That is one specific thing that perhaps the Minister and her officials will take away. The loophole undermines the assurances offered by the Department for Business, Innovation and Skills that tenants who take the market rent-only option should not be subject to discrimination by the pubcos. The Government should also make it clear that if a tenant chooses a market rent-only option, they will be entitled to the same length of agreement, terms and conditions as their old tenancy—the hon. Member for Leeds North West raised that issue—otherwise the right to trigger the market rent-only option would be undermined and such tenants would be discriminated against by the very nature of the agreement.
Another loophole that I would like the Minister to look at is the market rent waiver in exchange for investment. The hon. Member for Peterborough also mentioned that, and it is a real concern. I do not want to labour the point, because I do not want to be repetitious, but I can think of a number of pubs in my constituency—I will not namecheck them—where the tenant has gone to their pubco and said, “I want to develop my business. I want to convert the rooms upstairs into a bed and breakfast and to knock a doorway in that wall”—not that wall, but a wall in the pub—“to create access to the beer garden,” and the pubco says, “Yes, that’s a great idea, but you’ll have to pay for it. When you’ve done that, we are going to increase your rent.” That cannot be termed investment from the pubco. In a way, it is coercion. We have to close the loopholes on the definition of investment and on what can and cannot be referred to the adjudicator.
I do not want to repeat points made earlier, but pressurising tenants to take up rent reviews, in advance of any scheduled review, before the implementation of the code is unacceptable. Coercing tenants to give up long leases and take up new five-year contracts with no market rent option at the end and no renewal rights is not acceptable either. It is unacceptable to effectively bribe tenants with short-term reduced rents—the hon. Member for Leeds North West referred to a 20% reduction—to sign new agreements with no market rent option, to seek to force tenants into five-year non-renewable tenancies or to threaten to offer only such agreements to avoid triggering tenants’ legal rights to the market rent-only option. The pub companies are doing so while telling us that they want to move forward and draw a line under past disagreements, and that it is not their intention to exploit their tenants. I am afraid that the evidence does not really support that, so I am rather sceptical about the assurances that we have received.
I will refer to Mr Newby, if I may. We must ask ourselves what his intentions are, for after he leaves his role as the adjudicator. If he intends to return to the industry where he has fashioned his career and undoubtedly been incredibly successful, would a reasonable person not assume that the decisions that he makes while in post will inevitably bear on his future employment prospects within pubcos? If that is not a potential conflict of interest, I do not know what is. I am concerned that because of those links, every decision in which he agrees with a pubco will be questioned, even when legitimate, as will the fairness of his judgment. That is likely to happen as a result of his long-standing connection to pub companies.
I feel sorry for Mr Newby. He should never have been placed in that position, whether by accident or by design; I forget the exact terminology. What is more concerning—the Minister must take some responsibility for this—is that throughout the entire appointment process, the Department for Business, Innovation and Skills has seemed oblivious to the reaction that such an appointment would create. I was in the Chamber when the Minister made the statement, and there was uproar in the House at the nature of the appointment.
Grahame M. Morris
I was there, Minister, with all due respect. I thought it was a rather heated and fractious exchange. The fact that it was not anticipated does not reflect well on the Department. If the Government insist on appointing Mr Newby, I fear that, intentionally or not, they will undermine the office of the Pubs Code Adjudicator from the day that he starts work.
Older Industrial Areas: Economic Disparities
Debate between Grahame Morris and Anna SoubryWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Minister for Small Business, Industry and Enterprise (Anna Soubry)
It is a pleasure to serve under your chairmanship, Mr Rosindell.
I congratulate the hon. Member for Easington (Grahame M. Morris) on securing this important debate on economic disparities in the older industrial areas. I want to make it clear from the outset that the Government’s economic ambition is to create a fairer and more balanced economy by supporting policies that grow the economy as a whole and generate new jobs and higher wages for everybody.
The debate has been interesting. I must confess that, as I was listening to some of the speeches by Opposition Members, at times I thought I had stepped back in history and returned to my old student union days in the 1970s. I am slightly concerned about the memories of some hon. Members.
Anna Soubry
One moment. I have not even finished this particular insight. With few exceptions, Opposition Members all seem to have completely forgotten that for 13 years we had a Labour Government. They now complain about things that they might have put right—but did not—during the 13 years of Labour Government. The policies, notably towards the end of that Labour Government—a Government that failed to save and fix the roof when the sun was shining, and continued, as some now recognise, to overspend when the world economy had suffered a crash—exacerbated things.
Anna Soubry
Obviously, I will take interventions, but may I give some advice to hon. Members? If they do not learn from the experience of what happened in May, they will be out of office not only for five years, but for a generation.
Grahame M. Morris
I am familiar with the standard response that Labour is to blame, but my job as the Labour MP for Easington is to hold the Government to account. I have specific suggestions that would help my area and the areas represented by my hon. Friends who are suffering similar problems. For example, the Government’s policy on further education college funding has had a huge, negative impact on East Durham College, because it concentrates on apprenticeship training for young people and does not provide funding for older workers to retrain. Specific proposals are identified in the report. Without being disrespectful, rather than a lecture about what happened years ago, addressing the issues in the report, which we raised in the debate, would be really helpful.
Anna Soubry
Of course, I am going to deal in detail with the situation in the hon. Gentleman’s constituency and in the constituencies of all those who have spoken, with the exception of the hon. Member for Chesterfield (Toby Perkins). I am more than happy to write to him to tell him about the advances that have been made in the past five years in Chesterfield. I want to put this matter into context. I, too, have had to sit listening not only to a lecture, but to a rewriting of history that even the most red historians would struggle to produce.
I want to talk about the industrial communities in the alliance’s report. Since the beginning of the 1970s, UK cities have experienced an ongoing historical shift in economic orientation, driven on the one hand by a process of sustained de-industrialisation, as we have heard, and on the other by a progressive rise in service and tertiary activity. The report focuses on old industrial centres that have been slower to replace declining industries. Former industrial centres that have moved on, such as London—we often forget that London used to be a heavily industrial city, but it moved on—do not appear in the list. Therein lies an important point: there is nothing pre-ordained about past or current trends continuing into the future.
Over the past three decades, some cities have experienced positive shifts of direction, or positive turnarounds, in their differential growth paths. Oxford is an example, as are Brighton, Ipswich and London. I recognise—I am an east midlands MP, as is the hon. Member for Chesterfield—that those cities are in the south of England, and much will depend on how different older industrial centres are able to attract and develop the growth sectors of the future.
Anna Soubry
In a moment. I want to turn to the economy in Easington, because the hon. Member for Easington is a champion for his constituency. We have all witnessed tremendous technological change in our lifetimes. I am certainly old enough to say that, given that I come from Worksop in north Nottinghamshire where there was a coalmine. The whole town depended on the success or otherwise of the Manton colliery and surrounding collieries, so I am familiar with pits.
Industries that did not exist 20 years ago are now the most productive in the world. In the constituency of the hon. Member for Easington, this change has been more apparent than most. Since the closure of the dominant coalmine in 1993, the area has undergone a tremendous change. The legacy of coalmining is still being dealt with, but great progress has been made in remediating the industrial pollution, for example. The Durham coast, as the hon. Gentleman has told us, is now home to one of the most stunning coastal walks in the United Kingdom, with the Durham heritage coast highlighting the great natural, historical and geological interest of the area with dramatic views along the coastline and out across the North sea, framed by magnesian limestone cliffs. I have not been to the area, but I would love to go to the hon. Gentleman’s constituency, and I hope to arrange a visit.
A former slag heap is now the site of one of the country’s most dynamic retail centres, with more expansion about to start at Dalton Park.
My officials have provided me with a note about the regional growth fund’s investment in Easington. We might think from the hon. Gentleman’s speech that there had been no investment in his constituency. On the contrary, eight projects in Easington have been awarded a total of £13.4 million. They are contracted to lever in a further £81.6 million of private sector investment and to create or safeguard 1,189 jobs. I hope the hon. Gentleman will welcome such great investment of taxpayers’ money.
Grahame M. Morris
I congratulate the Minister on an excellent brief and on the description of the Durham heritage coast. It was absolutely perfect; I cannot fault it. The problem is that we are not able to access the coast because of the lack of transport infrastructure and railway halts. On the regional growth fund awards, much of that is linked to the automotive supply chain, so doubts about our continued membership of the European Union cause considerable concern. Yes, there are positive things in relation to support for businesses, but my concern is that they are not as comprehensive as the support and expertise given by One North East. The reorganisation, as always happens whether it is in local government or health, caused a huge hiatus and a delay in taking forward investment for projects that would have benefited the area considerably.
Anna Soubry
I am not sure whether the hon. Gentleman is saying that the investment in his constituency is considerable and great. I have read out the figures. They are substantial. As I have said, the money is part of a contract, so it relies on securing the features that I have identified. I am more than happy to respond to what the hon. Gentleman has said in more detail in a letter, or by meeting him. I would also like to meet his local enterprise partnership, because I strongly suspect that it might have a different view of the situation in his area from the one that he has given us today. The projects include, for example, NSK Bearings Ltd, which was awarded £3.45 million in round three to assist with business expansion. The award by the regional growth fund was part of a £19.9 million investment that helped to safeguard 265 jobs. Again, I hope the hon. Gentleman welcomes that.
It should also be noted that unemployment in the constituency of the hon. Member for Easington continues to fall. There are 6,400 more people in work today than in 2010. Those people would otherwise be at home and on benefits, but they now have the benefit of a job. I find it difficult to understand why hon. Members do not welcome the fact that people are going into the world of work. Surely it is better to be in a job than to be sat at home on the dole.
On the northern powerhouse, the hon. Member for Chesterfield seems to have forgotten that the Chancellor has represented the northern constituency of Tatton in Cheshire for many years, so the idea that he is new to the north of our country is nonsense. The northern powerhouse has not been imposed on northern councils. On the contrary, councils of all political persuasions—I give them full credit, especially the Labour-run councils in Liverpool and Manchester—have not only trumpeted the northern powerhouse, but led the way on its creation. I am concerned that hon. Members in this place are not supporting their colleagues in those great councils, who have come together and are championing the northern powerhouse.