Pubs Code 2016

Theresa Villiers Excerpts

Wednesday 24th January 2018 Westminster Hall

[Theresa Villiers (Chipping Barnet) (Con)]

It is a pleasure, Mr Robertson, to serve under your chairmanship, and I congratulate the hon. Member for West Bromwich West (Mr Bailey) on securing a debate about an issue that, as he has just pointed out, is so important to so many of the pubs that are of such great value in our constituencies and our communities.

The Chipping Barnet area, which gives my constituency its name, was once famous for its pubs and coaching inns, serving people travelling on the Great North Road on their way to and from London. At the height of the coaching era, there were probably more than 30 pubs in a comparatively short stretch of road along Barnet Hill and Barnet High Street.

Charles Dickens, whose meal at the Red Lion in Barnet was once cut short by the news that his wife was in labour, had Oliver Twist limping into Barnet and

“crouching on the step…wondering at the great number of public-houses (every other house in Barnet was a tavern, large or small)”.

Further back, in 1667, Samuel Pepys also dined at the Red Lion in Barnet, enjoying what he described as

“some of the best cheese-cakes that ever I eat in my life”.

And in 1762 the traveller William Toldervy commented positively on various Barnet pubs, including the Red Lion and The Mitre.

Only a handful of Barnet’s old pubs survive to the present day and those that are still open for business face some difficult challenges and circumstances, including the Old Mitre Inne, which attracted that good write-up by Toldervy some 250 years ago. It is a great pub that is very popular with my constituents. Unlike many pubs, it is primarily dependent on what I gather are described as wet sales—in other words, it has not morphed into a restaurant, although it serves some really excellent food.

The pub is run by Gary Murphy, who has recently been granted a Pubs Code Adjudicator arbitration in relation to his dispute with his pub company. It has taken eight months of correspondence, legal advice and hassle to get to that stage which, as the hon. Member for West Bromwich West has already suggested, is a demonstration that this process moves too slowly. We need to find a way to ensure that the pubs code process and the adjudication process can move more swiftly to deliver fairer outcomes for people running these much-valued and much-appreciated pubs.

When Mr Murphy asked to exercise his right under the code to move to a market rent only arrangement, the pubco asserted that that required a new lease, which is costly to negotiate, with legal fees to pay and stamp duty and so on. Moreover, the pubco proposed onerous new terms, including payment of six months’ rent up front in advance, and the obligation to redecorate the premises completely, inside and out, every three years. My constituent believes that the MRO arrangement could and should be delivered via the cheaper and simpler mechanism of a deed of variation, which we have already heard some points about this afternoon. A second problem is that the pubco refuses to accept that any final MRO settlement should be backdated, in accordance with the relevant backdating clause in Mr Murphy’s existing lease.

Those two issues mean that it could cost Mr Murphy well over £100,000 to get his MRO. That has to be against the spirit of the pubs code and it sounds like it is against the letter of the code as well.

I understand the very serious concerns that have been expressed by the hon. Member for West Bromwich West, many of which are echoed by the Campaign for Real Ale in the very helpful briefing that it has provided for this debate. However, I take a somewhat more optimistic approach. With the establishment of the code, we have seen positive steps in the right direction and now need to build on the progress that has been made. Nevertheless, it is clear that more needs to be done to ensure that pub tenants are given the protection that was envisaged by Parliament when it adopted the legislation on the pubs code.

As we have heard, the Pubs Code Adjudicator has started to make decisions and a number of them appear to have been helpful. For example, I gather that there have been cases where the PCA has declared that the pubco must offer better terms to its tenant than those that had been originally proposed. That includes cases where the conclusion has been that a deed of variation can be used and a new lease is not required.

Welcome as those decisions are, however, waiting for individual cases to determine general points of principle is part of the reason why this process is slower than it should be in coming to the aid of our local pubs. It would be very helpful if the adjudicator were to issue further general statements on how he proposes to approach key aspects of the code, including those covering some of the issues that have already been raised this afternoon.

I believe that that would mean that disputes between tenants and pubcos could be settled more quickly, and with less cost and less stress, than they are currently. I very much hope that the adjudicator will consider publishing statements of principle, in particular in relation to the two problems that have arisen in The Mitre’s dispute, namely deeds of variation and backdating clauses.

In conclusion, the pubs code and the PCA are capable of delivering fairer outcomes for tenants. In doing so, they could be a lifeline to the local pubs that so many of our constituents value. A few relatively simple changes in approach could achieve a great deal to ensure that the system works more effectively and more quickly to deliver the outcomes intended by Parliament when it adopted the legislation. I hope the adjudicator and the Minister will carefully consider the points made in the debate about how that might happen in practice.