Oral Answers to Questions

Debate between Greg Mulholland and Margot James

Tuesday 14th March 2017 Commons Chamber

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

The Pubs Code Adjudicator Paul Newby failed to declare a much more fundamental direct conflict of interest than Charlotte Hogg, yet Ministers are ignoring it. Tomorrow, tenants will protest outside his office. How long will Ministers keep failing to do their duty and not face up to this situation?

[Margot James]

The hon. Gentleman knows that the Commissioner for Public Appointments stated that the panel considered there were no conflicts of interest in this case that would preclude Mr Newby from doing his job.

Oral Answers to Questions

Debate between Greg Mulholland and Margot James

Tuesday 31st January 2017 Commons Chamber

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

Last week, the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Stourbridge (Margot James), said that there had clearly been instances of the pubs code being flouted and that Members should bring such things to her attention. I have a case in her own constituency to bring to her attention, which also shows that the adjudicator is not doing his job. May we discuss this matter please?

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)]

I am very happy to discuss the case in my own constituency with the hon. Gentleman, but the Pubs Code Adjudicator is doing a good job. His line of inquiry has received 435 inquiries to date and 121 referrals for arbitration, but I will discuss the problem with the hon. Gentleman.

Statutory Pubs Code and Pubs Code Adjudicator

Debate between Greg Mulholland and Margot James

Thursday 26th January 2017 Commons Chamber

[Margot James]

I have great sympathy with the hon. Gentleman’s point, and I hope that it will be clarified by the Pubs Code Adjudicator in due course. The pubs code itself is not clear on that aspect, and it will be up to the Pubs Code Adjudicator to pronounce on it when he feels that he has enough evidence. I reiterate that I have considerable sympathy with the hon. Gentleman’s point.

Mr Newby has received a positive response from tenants, with the majority supporting his role. I accept that some tenants are deeply opposed to his role, and I could not have sat here for the past hour and a half without realising that, even if I had not known beforehand.

[Greg Mulholland]

Will the Minister give way?

[Margot James]

I will make some progress before giving way to the hon. Gentleman.

[Greg Mulholland]

Give us the evidence.

[Margot James]

I might as well have given way to the hon. Gentleman, because he is making his point anyway. I will shortly come to his point about tenants who support Mr Newby. Suffice it to say that the number of referrals that Mr Newby is getting bears witness to there being tenants who support his role.

Tenants are coming to the Pubs Code Adjudicator to seek the protections provided by the pubs code. In its first six months, the inquiry line set up by the adjudicator to provide information about the pubs code received 435 inquiries, 91% of which were from tied pub tenants or their representatives, which bears out the imbalance that these businesspeople have had to suffer over many years. In the same period, the adjudicator received 121 referrals for arbitration.

I will now respond to a few of the comments made in the debate. My right hon. Friend the Member for West Dorset (Sir Oliver Letwin) and others observed that the Pubs Code Adjudicator has a dual role in both upholding and enforcing the code and in adjudicating on alleged breaches of the code. The pubs code was introduced in law to bring greater protection to tenants and to strengthen their position on what was a very un-level playing field. The PCA’s role is therefore to uphold the law and not to interpret it in a way that is biased towards one party or another on the adjudication side of his responsibilities.

We have heard allegations of ongoing abuse by pub companies, particularly from the hon. Member for Leeds North West, to whom I listened very carefully, and my hon. Friends the Members for Warwick and Leamington (Chris White) and for Tewkesbury. Tenants seeking the market rent only option, it is alleged, are being undermined by tactics deployed by the pub companies that threaten to make the pursuit of a market rent only option unviable, in direct contravention of regulation 50. There have clearly been instances in which the code has been flouted, and hon. Members are right to bring those cases to the House this afternoon. The code is designed to root out those cases, and I urge hon. Members to refer them to the Pubs Code Adjudicator.

On the performance issues, the hon. Member for Chesterfield (Toby Perkins) rightly raised his concern that there have not yet been any adjudications. There is a clear appetite, shared by the Pubs Code Adjudicator himself, for adjudications to start coming out, and I have no doubt that they will start coming out without further delay. There is no doubt that the Pubs Code Adjudicator will start to form some views, based on the evidence that he is seeing, so that we do not indefinitely have a situation in which every single case takes the same length of time as the cases in the first few months of his deliberations. I concur with that point, and I have questioned him about it. He assures me that although the law is technical and is not clear on every point, he will most certainly issue guidance when he is satisfied that he is in a position to do so.

Of course, the Pubs Code Adjudicator has already made statements that should give comfort to the House. On 9 September he made a public statement in response to information he received from stakeholders, in which he reminded the pub-owning companies of their obligations and what he expected of them in relation to the code:

“I expect pub-owning businesses to act in a manner that does not inhibit a tied tenant from accessing their rights”.

He also said that pub-owning companies must make available all relevant information relating to rent assessments and proposals for tenancies, and that they must ensure that MRO tenancies comply with the code and do not contain the sorts of unreasonable terms that we have heard about this afternoon. It is clear from our investigations prior to this debate that at least one pub-owning company is still not complying with the code and is making life difficult for its tied tenants. That needs to be rooted out.

--- Later in debate ---

[Greg Mulholland]

I remind the Minister of her wonderful work when she was a member of the Select Committee and shared exactly its view. She must substantiate her statement that the majority of tenants support Paul Newby. Does she realise that the only organisations he cited in support are: the Association of Licensed Multiple Retailers, which has a regulated pubco as a member; the British Institute of Innkeeping, which is run by someone who used to be a boss of a former pubco; the Federation of Licensed Victuallers Associations, which is run by a former director of Enterprise Inns; and Enterprise Inns, which pays for licensees to sign up to membership? Those are the only people who have signed up, so will she correct the record? The majority of tenant-representing organisations oppose Mr Newby and always have.

[Margot James]

I do not accept the hon. Gentleman’s criticisms. I am sure that he has not interviewed all 11,500 tied tenants. From the representations that I have seen, the number of tenants that the British Pubs Confederation represents is open to question. It is all very well for the hon. Gentleman to be so critical of the Association of Licensed Multiple Retailers and the Federation of Licensed Victuallers Associations—[Interruption.]

[Greg Mulholland]

It was no criticism.

[Margot James]

Well, it is all very well for him to say what he said, but they are credible organisations. They welcomed the Pubs Code Adjudicator’s appointment and said that it is essential for the post to be held by someone with an in-depth knowledge of the market. When I visited the office of the Pubs Code Adjudicator in Birmingham and met the staff who work behind him, they were relieved that they had the leadership of someone who knew so much about the industry and the market.

Members raised other important issues, including the conflict of interest mentioned by the hon. Member for Hartlepool (Mr Wright). There have been two accusations against Mr Newby: that he has conflicts of interest through his financial interests in Fleurets and—I do take this seriously—that the perception that he is conflicted means that he is not able to carry out his role effectively. There is a delicate balance to be struck when saying that the perception is the reality, which can lead to opportunities to give further credence to the conflict of interest. However, as the Secretary of State explained to the BEIS Committee on 14 December, the appointment process for the post was run in full accordance with the code of practice for ministerial appointments to public bodies. It was a proper and rigorously followed process. The panel concluded that Mr Newby had no conflicts of interest that would call into question his ability to do the job.

The Commissioner for Public Appointments, Peter Riddell, also considered the matter and has confirmed his view that nothing was hidden and that there had been a proper, transparent process. He is also satisfied that the panel was entitled to conclude that Mr Newby has no such conflicts of interest. It would be wrong to deny the judgment of the independent figure responsible for overseeing such procedures. Mr Riddell is a man of great integrity who has a deep understanding of the principles of public appointment.

The Government do not agree that Mr Newby’s previous employment with and financial interests in Fleurets create a conflict of interest that could give rise to a reasonable perception of bias—[Interruption.] I am sorry that hon. Members are dissatisfied with that. We have heard the accusations that Mr Newby misled the BEIS Committee about his financial interests in his former company, but he has not attempted to disguise the nature of his financial interests in Fleurets. He answered the questions he was asked to the best of his ability at the time and there was no intention to mislead. He later became aware that some technical parts of his evidence were inaccurate and wrote to the Select Committee to set the record straight.

The request for early repayment was referred to by the hon. Member for Chesterfield, who was backed up by the hon. Member for West Bromwich West (Mr Bailey), whose speech I listened to with great attention having sat on the former Business, Innovation and Skills Committee in the early years of my time in Parliament when he was its Chairman. During his oral evidence, Mr Newby was open about the nature of his loan arrangements with Fleurets. In order to be helpful, he said:

“I could ask if it would be possible to be repaid more quickly, but that agreement was already in place when I left.”

Mr Newby took the opportunity to update them on that request when he wrote to the Committee. His willingness to seek to address the Committee’s concerns should not be construed as an admission that he is conflicted, nor that the Government think that that is the case.

In conclusion, the pubs code is important for the pubs sector. It is vital that Mr Newby is now allowed to get on with the job. Many adjudications are awaiting an outcome and I share the frustration that we have not yet seen any results. However, six months is not a long time, considering the burden of work associated with the role and the small team of nine people. It is therefore incumbent on us all to give Mr Newby the space to do his job properly over the next few months. I am sure that hon. Members will no doubt request a further statement or perhaps another debate, and I hope that we will be talking more about the outcome than the process. Mr Newby is doing a good job and has much important work to do. Through that work and his adjudications, it is important that the sector’s confidence is built up and, most important of all, that tenants in all our constituencies are protected as Parliament intended.