Statutory Pubs Code and Pubs Code Adjudicator

Richard Arkless Excerpts

Thursday 26th January 2017 Commons Chamber

[Greg Mulholland]

The hon. Gentleman is right. The only way to get such rights and fairness for Scottish tenants was for the system to be established in England first, and I was delighted that SNP Members supported that. I am also delighted that they are represented in the Chamber today, because it is simply wrong that Scottish tenants are discriminated against in comparison with their English and Welsh counterparts.

[Richard Arkless (Dumfries and Galloway) (SNP)]

I will, indeed, touch on some of the points that the hon. Gentleman and other colleagues have made during the debate. He has made an excellent case, and has outlined many of the deficiencies of the Pubs Code Adjudicator, particularly his conflicts of interest, which seem to have a causal link with the lack of real adjudication. However, I am slightly confused about why the hon. Gentleman is recommending the system to another jurisdiction given that, by his own admission, it does not seem to be working correctly?

[Greg Mulholland]

The hon. Gentleman makes an excellent point. It was made in the briefing that the British Pub Confederation and the Scottish Licensed Trade Association sent to him. I was with the delegation that met the Minister, Fergus Ewing MSP, and that told him—this is one of the exciting possibilities—that it could be done in a simpler, clearer and better way and in a way that is appropriate for Scotland, which is the challenge for the Scottish Government. The Scottish Licensed Trade Association and British Pub Confederation would be delighted to offer support in achieving the best possible result for Scottish licensees. We need to learn some of the lessons about what is going wrong in this country and about the sort of person who should or should not be the adjudicator, if Scotland chooses to follow the adjudicator model.

In conclusion, the reality is that the statutory pubs code is not working as Parliament intended when we voted it through, and it is not working as this Government intended when they drafted the pubs code. It has been routinely flouted and ignored by pubcos, and Mr Paul Newby—a wholly inappropriate choice for Pubs Code Adjudicator—is failing in his basic statutory duty to uphold and enforce the code. Tenants seeking to exercise their legal right to the market rent only option are being discriminated against, misled and bullied into accepting tied deals. The problems identified by four Select Committee reports and now by the British Pub Confederation report are simply not being addressed.

Two things need to happen. I must say that Ministers have so far ignored this matter and washed their hands of it, but they can no longer do so because the pubs code and the law are being flouted. First, they must intervene now and ensure that the pubs code works as they and Parliament intended. They must ensure that the office of the Pubs Code Adjudicator actually upholds and enforces the code. Secondly, having heard the reality of what has gone on in the six months during which the code has been operating, I am afraid that the Secretary of State must now accept the Business, Energy and Industrial Strategy Committee’s recommendation and reopen the appointment process for the Pubs Code Adjudicator. We need an adjudicator who clearly understands and properly fulfils this important statutory role. That will require someone who does not have the conflicts of interest that Paul Newby has, and someone who will carry out the role as intended, rather than seek to skew the role and undermine the code.

MPs, Ministers, civil servants and the Select Committee have put in a lot of time, but all their work is being thwarted and ignored, so the code must now be made to work, with an adjudicator who will enforce it and who can be held to the appropriate standards for someone in a quasi-judicial position. The law must be made to work, and the will of the House and of Parliament must be upheld.

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[Richard Arkless (Dumfries and Galloway) (SNP)]

I, too, congratulate the hon. Member for Leeds North West (Greg Mulholland), not only on securing the debate but on his tenaciousness, which has been documented. I suggest that he is indeed the pub champion of Westminster. At the very least, given the secondment of the hon. Member for Burton (Andrew Griffiths) to the Tory Whips Office, he has a clear run at that title now—and goodness me, our pubs need a champion.

I was brought up in a pub—thankfully, the right side of the bar. My parents owned a couple of pubs when I was a kid, which extended to a snooker club where I spent most of what some would describe as a misspent youth. If any Members would like to challenge me to a game on the green baize in a nearby establishment, the evidence of that will be there for all to see.

I have always thought of pubs not necessarily as places where people get drunk, but places where people meet one another. I have been fortunate enough to live in various places throughout the United Kingdom, and the first place where I would always go to meet members of the community would be the local pub. It is not only the place to get a drink and have a chat, but anyone looking for a plumber can find one there within 10 minutes, and even get seven or eight different reviews of that plumber from people sitting at the bar.

So pubs are crucial to communities. They bring communities together—they are not only about the pursuit of alcohol—yet they are struggling. Some 25% of our pubs in Scotland have disappeared over the past 10 years. There are social, economic and all sorts of other challenges that they face. People tend to drink at home now; they are reclusing inside their house instead of opting to go to the community-friendly pub. I think that is a great shame, so it is very heartening to have people such as the hon. Member for Leeds North West championing this cause. I wish him all success on the wider issue of bringing pubs back into communities.

The hon. Gentleman gave a detailed analysis of the problems we are facing with the Pubs Code Adjudicator. He and I have spoken on this issue a couple of times, and in particular on the conflict of interest position that the Pubs Code Adjudicator allegedly finds himself in. Being a former lawyer, I am acutely aware of what constitutes a conflict of interest. The word “perception” has been used many times in today’s debate, and I would suggest that a perception of a conflict of interest is indeed enough to create that conflict of interest. We cannot enter the controlling mind of that person and say whether in any given circumstances that particular financial interest is likely to cause them to make a different decision; the perception of that conflict is enough, and I cannot understand why the Government cannot see this. This is the clearest example that I think I have ever seen of a conflict of interest position, and something must be done as a matter of great urgency—perhaps not reopening the appointments process, but at least the Government should call Mr Newby before them to see whether that conflict of interest position is tenable. I cannot understand how anyone looking at this situation could fail to see a clear conflict of interest.

[Greg Mulholland]

Perhaps I should say, to help the hon. Gentleman on that point and to remind the Minister, that part of the problem is not only that these conflicts were not properly declared by Mr Newby, but that the right questions were not asked at the appointments process. So these things were not known, which is why we have the absurd situation of the Select Committee forcing him to publish his real conflicts of interest when he had been in the job for five months.

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[Richard Arkless]

I thank the hon. Gentleman for his intervention. If clear evidence is given to the Select Committee that that is indeed the case, surely that ought to compel immediate action from the Government. It is clear that there is a conflict of interest position here, and if the whole point of the adjudicator is to address the inequality of arms between big breweries and small, defenceless tenants, that matter needs to be addressed with the greatest urgency.

There have been many excellent speeches here today and I will run through some of the points made in them before I make some further comments on the position in Scotland, which has been alluded to in the debate. The hon. Member for Tewkesbury (Mr Robertson) outlined, as everybody did, some of the problems the Pubs Code Adjudicator process is facing, and he asked the Minister to answer some questions. I was particularly interested in the problem he outlined in relation to the renewal of tenancies. He asked the Minister to give some clarity on that issue, and I call on the Minister to do so. The hon. Gentleman described pubs as valuable community assets; given what I have said, I clearly agree wholeheartedly. I hope we can start campaigning to make the consciousness of the public turn back towards seeing pubs as community assets and places where communities can be brought together.

The hon. Gentleman also talked about awareness of the pubs code, which is crucial. If tenants do not know that they have a code and the right of redress, Mr Newby will get away with any conflict of interest position he puts himself into, because if people do not know their rights, they will not pursue them.

The hon. Member for Hartlepool (Mr Wright), Chair of the Business, Energy and Industrial Strategy Committee, made an excellent speech, and again touched majorly on the conflict of interest point; I can add nothing to his comments. He touched on the perception point, and I reiterate that a perception of a conflict of interest is indeed a conflict of interest.

Lawyers are acutely aware of conflicts of interest; we look for them in every single transaction we do. As a lawyer, I was taught by a partner how to identify a conflict of interest. He said to me, “If it looks like a duck, quacks like a duck and walks like a duck, chances are, Richard, it’s a duck.” So if it feels like a conflict of interest and it looks maybe like a conflict of interest, it is, categorically, a conflict of interest.

I listened with great interest to the hon. Member for Chesterfield (Toby Perkins), who admitted that the Pubs Code Adjudicator process had not made a great start; that was corroborated by Members across the Chamber. He provided useful historical context from the past 10 years, summarising the good work he did in the last Labour Government to initiate and bring about this change. He has been campaigning very successfully on this issue. I would politely add that he has been marginally more successful here than in his last campaign, where he was suggesting that supporters of the Scottish national football team should be singing “God Save the Queen” before matches, which even for the most ardent of Unionists would have been a bitter pill to swallow. That is a bit like asking Manchester City fans to sing “Glory, glory Man United” before City play.

[Toby Perkins]

I never made any such suggestion.

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[Richard Arkless]

If that is the case, I stand to be corrected, but the House was full of leaflets detailing this a number of months ago—but if I am mistaken, I would never attempt to mislead the House.

[Toby Perkins]

I will be brief, because I do not want to detain the House on this, but actually what I was proposing was that the English football team should have a separate national anthem from “God Save the Queen”, and that “God Save the Queen” should only be used when Britain was playing and England should have an English national anthem. I was not telling Scotland or Wales what to sing at all.

[Richard Arkless]

I will have another look at the leaflet to see if I stand to be corrected—and, indeed, I do not think we should detain the House on matters not relevant to this debate.

The hon. Member for West Bromwich West (Mr Bailey) talked about déjà vu. Again I do not think he was talking about a déjà vu experience that is positive, and we seem to be back here discussing some of the other problems that have occurred in respect of the Pubs Code Adjudicator. The fact that we keep coming back to these problems indicates that it would be a slavish policy for the Scottish Government to accept a system of a one-size-fits-all, broad-brush approach that clearly has problems.

I should make it clear that I am committed personally to fairness to pub tenants, and the Scottish Government are committed to making sure that inequality of arms does not persist. The motion

“urges parity for Scottish tenants”,

and clearly I would urge parity in fairness, but whether fairness exists within the current system, given the problems we have identified, is another matter, and I think the Scottish Government are right to take the approach they have taken, which I will outline in more detail now.

The Scottish Government introduced a voluntary code for pubs and landlords in 2015. Clearly, a voluntary code is not, potentially, as effective as a compulsory code, and we consulted from July 2016 and published a 77-page report in December of that year. It highlighted that the pub sector in Scotland has different facets and characteristics from the pub sector in the rest of the United Kingdom. Some 40% of pubs in the UK are tied, while only 17% are tied in Scotland. There is also a much higher proportion of longer leases across the rest of the UK than in Scotland. That is further evidence that a one-size-fits-all policy might not be the best suggestion, but that is not to say that we do not recognise that there are concerns.

The report stated:

“The evidence collected did not suggest that any part of the pub sector in Scotland was unfairly disadvantaged in relation to another. As a result, further dialogue between the relevant trade bodies, government, and other interested parties, should continue before making any changes to legislation”—

but that is not, I emphasise, ruled out.

The report continued:

“Based on the findings from the research, it is clear that there is more work to be done in ensuring that the relationship between Pub Companies and tenants is further strengthened and clarified.”

I think everybody would welcome that. The report added:

“Further clarification is also required on beer costs, the cost of entry into the sector and the value of…benefits.”

The report also stated:

“The contractor faced significant challenges in recruiting licensees and Pub Companies to participate in the research, created by an apparent unwillingness to engage on the subject at a detailed level. As a consequence, it is recommended that a further more detailed study should not be undertaken without a significantly increased level of interest and involvement from the wider industry.”

To put it bluntly, we feel more evidence is required before we can go down the road of having a compulsory pubs code adjudicator, and clearly there are lessons to be learned from the system implemented by this place. I do not think there is anything wrong with that; sometimes Holyrood will do things first and this place will learn, and sometimes this place will do things first and Holyrood will learn—[Interruption.] Yes, and of course, ultimately, Holyrood will, without question, do it better, but that is a very healthy process.

That concludes my comments, but finally I reiterate that we believe in fairness for pub tenants. We are not at the stage in Scotland yet where the evidence has been compelling enough to make us go down this road, but we are looking at the system, thinking about it and analysing the mistakes, and hopefully in the future we will devise a system that properly protects the rights and fair treatment of tenants of tied pubs.