Statutory Pubs Code and Pubs Code Adjudicator

Toby Perkins Excerpts

Thursday 26th January 2017 Commons Chamber

[Greg Mulholland]

The hon. Gentleman is absolutely right. I welcome the support that he is giving to his publican constituents. I have that quote in my speech.

Let me remind right hon. and hon. Members that the pubs code and the adjudicator were introduced in the Small Business, Enterprise and Employment Act 2015. The code came into force last year. It applies only to businesses owning 500 or more tied pubs in England and Wales, of which there are six, and governs their relationship with their tied pubs. The quasi-judicial statutory Pubs Code Adjudicator was created to uphold and enforce the pubs code so that it is properly implemented, and to act as an impartial arbiter when there are disputes on certain issues.

I wish to praise the current Government and the civil servants in the Department—formerly Business, Enterprise and Skills, now Business, Energy and Industrial Strategy—for their very hard and diligent work in bringing through the pubs code, which is a strong, clear document. At this stage, six months in, Ministers and civil servants should not have to intervene given that the adjudicator’s role, as laid down in primary and secondary legislation, is to implement and enforce the code. The role of Ministers should now be to oversee and scrutinise that activity, but I am afraid that they now have to intervene because the Pubs Code Adjudicator is not doing the job as laid down in the pubs code and in the law.

Regulation 50 of the pubs code specifically states:

“A pub-owning business must not subject a tied pub tenant to any detriment on the ground that the tenant exercises, or attempts to exercise, any right under these Regulations.”

This regulation is being routinely ignored and flouted by pub companies. Let me give some examples.

Pub companies are refusing to allow a simple deed of variation to leases if tenants suggest that they want to exercise their right to a market rent only option. This forces them to accept a new lease, which is offered only on unfavourable and clearly detrimental terms, clearly flouting regulation 50. Enterprise Inns is doing this systematically and then telling tenants that they will have to go to arbitration over what is clearly not an arbitration matter but a legal breach of the code’s regulation.

Tenants seeking the market rent only option are being presented with unreasonable charges and terms by pubcos, making it unviable to take or even pursue the option—for example, unreasonable and unaffordable demands for up-front, quarterly payments of rent, or unjustifiable and excessive dilapidations charges. Pubcos are also, as the hon. Member for Warwick and Leamington said, presenting so-called free-of-tie offers, sometimes calling them MRO offers as though they were the same thing as the market rent only option, which they are not; they are deliberately confusing the two. I remind the House that the market rent only option gives the tenant the right to an independent assessment of the market rent, and the right then to take the option on an existing lease with no other changes to the lease or the terms. Yet pubcos are insisting on shorter leases on detrimental terms, clearly breaching the pubs code. In addition, I can tell the House that that document being given to tenants is a Punch document.

Brigid Simmonds, the chief executive of the British Beer and Pub Association—the trade association of the pubcos—has said that it is “inevitable” that free-of-tie agreements would have

“terms that more closely reflect commercial rental agreements elsewhere in the marketplace”.

With the market rent only option, that is not allowed; it constitutes detriment. The lease has to continue on a free-of-tie basis, with the payment of independently assessed rent.

One thing that is putting people off is the fees proposed by assessors for carrying out that independent assessment. I have been sent a document from a surveyor that suggests that the fee can be up to £6,000. Under self-regulation, the maximum fee was £4,000, which was split into a maximum of £2,000 for the tenant and a maximum of £2,000 for the pub company. That was transparent and fair, unlike what the Royal Institution of Chartered Surveyors is presenting. Who is a member of the Royal Institution of Chartered Surveyors? Mr Paul Newby, the Pubs Code Adjudicator. It is a clear case of jobs for the boys, because the people demanding those unjustifiable and excessive fees are his former colleagues, associates and friends. I have to say to the Minister that that shows us again why a surveyor was a wholly inappropriate choice to be the adjudicator.

Pub companies are confusing and misleading tenants so that they miss their trigger point—the very limited window in which they can seek to take the market rent only option. Pub companies are putting pressure on tenants by sometimes bribing and sometimes bullying them into signing on the dotted line, so that they stay tied and do not have the chance to exercise their rights.

Returning to the adjudicator, I remind the House that Paul Newby, the director of pub estate agents and surveyors Fleurets, was appointed as Pubs Code Adjudicator and started work in March 2016, despite the majority of tenants’ groups objecting to his appointment, and despite the fact that he had ongoing financial links to the pubcos that he is supposed to regulate. Mr Newby failed properly to declare the conflict of interest when he applied for the role. As well as being a former director, which he did declare, he astonishingly —and completely unacceptably for someone in a quasi-judicial role—retains shares in Fleurets and has outstanding loans of more than £200,000 to it, with a repayment agreement that is set to last until 2023. That information had to be dragged out of him, and he published it only in December. Just to be clear, Fleurets declares that 20% to 23%—a fifth or more of its income—comes from the regulated pubcos.

To make matters worse, Mr Newby has been allowed to construct his own conflict of interest policy, and—surprise, surprise—it falls well below the industry standard for such documents. Surprisingly, it even falls well below the standards of his own professional body, the Royal Institution of Chartered Surveyors. The conflict of interest policy should be similar to that of the Groceries Code Adjudicator, but, unlike the GCA, the Pubs Code Adjudicator has chosen to publish a separate register of interests, along with an explanation of how his conflict of interest policy will be applied in relation to the register and, specifically, to his own conflict of interest. Mr Newby is setting his own rules to avoid having to disclose fully his conflicts of interest when he takes on cases.

The Select Committee was clear in July 2016 that not only was Mr Newby evasive, but he could not command the necessary confidence of pub tenants, and the appointments process should be reopened. Mr Newby also misled the Select Committee on important points, and has not responded properly to letters asking him for an explanation.

To return to the key point that the right hon. Member for West Dorset made, Mr Newby is the adjudicator, and his job is to uphold and enforce the pubs code. The Government state on the website:

“The Pubs Code Adjudicator (PCA) is responsible for enforcing the statutory Pubs Code.”

He is failing to act as an adjudicator; he is refusing to make rulings on important, basic matters such as the deed and variation versus new lease issue; and he is failing to uphold, never mind enforce, the code. Does he not understand the role—does he not properly understand the code and the legislation—or is this a deliberate attempt to undermine the whole statutory code, as many tenants now fear? The case-by-case approach that he is taking means that there will be no opportunity to look at many of the issues being raised repeatedly by tenants about the way in which pubcos are trying systematically to flout and thwart the code.

[Toby Perkins (Chesterfield) (Lab)]

I congratulate the hon. Gentleman on his campaigning on this issue over many years, and on securing the debate. What he is saying about the motives for the delay may well be true, but the feedback that I am getting is that the entire industry is frustrated about the failure to make any adjudications. The entire industry will benefit from the certainty that will come from the adjudicator’s getting on and making some decisions, and providing clarification on many of the important points that the hon. Gentleman is raising.

[Greg Mulholland]

I know that the hon. Gentleman had a meeting with Mr Newby the other day, and I would be interested to know what was said. I issue a word of caution to the hon. Gentleman to be careful who he listens to, and to listen to the licensees who are concerned about the cases being brought before the adjudicator.

The hon. Gentleman is right when he says that Mr Newby must make rulings. His job is not to horse-trade behind closed doors or to muddy the waters; he needs to provide clear guidance on what the code means and deal with breaches. The hon. Gentleman is right that tenants and pubcos need clarity, which Mr Newby is not providing. Let us be clear that his refusal to step in and stop those breaches, or to make general rulings on certain points, amounts to a refusal to perform his important statutory role. That is simply not acceptable.

The most extraordinary thing that I want to set before the House is the fact that Mr Paul Newby, in his role as Pubs Code Adjudicator, has breached the very pubs code that it is his statutory duty to enforce. Extraordinarily, he has breached regulation 38 of the code, which states that if a pubco and tenant cannot agree on the appointment of an independent assessor, the adjudicator

“must, within 14 days of the notification…appoint an assessor”.

Rather than doing so—that is clearly an important part of his role and laid down in legislation—he is passing that duty on to his colleagues in the Royal Institution of Chartered Surveyors dispute resolution service, who are demanding a fee. They have no right to do that; it is not in the pubs code, which the adjudicator has no right to ignore. That has been raised by the Pubs Advisory Service, which made a complaint because tenants were being charged the £250 fee. Mr Newby has said that tenants will no longer be charged, and that those who have been charged will be refunded, but he let that happen. He says that the fee will still be charged but will be paid from levies.

During the very strange period in which Mr Newby wrongly and illegally delegated his duty to appoint an independent assessor, RICS—with the adjudicator’s knowledge—appointed a surveyor called Barry Voysey for a tenant in a Punch rent case, even though Mr Voysey was acting at the same time for Punch Taverns in another rent case. The tenant was appalled at the obvious conflict of interest and refused to accept Mr Voysey or to pay his up-front invoices. The appointment of Mr Voysey breached RICS guidelines—it is defined as a red non-waivable conflict—but it happened under the nose of, and with the knowledge of, the Pubs Code Adjudicator, Mr Paul Newby, who is a member of RICS.

I want to refer to a couple more issues that are of importance to the House. The first is the proposed Heineken takeover of 1,900 of Punch Taverns’ pubs. That is of great concern to Punch licensees and is opposed by the Punch Tenant Network and the Scottish Licensed Trade Association. Star Pubs and Bars, which is owned by Heineken, has 1,100 pubs, so we would be talking about a pub company with 3,000 pubs.

It is clear—this is a worrying competition issue—that Heineken seeks to take over Punch so that it can insist on many more pubs stocking its product rather than that of its competitors. The Heineken bid document states that the company intends to

“improve visibility and increase sales of Heineken brands in high-quality pubs”.

It is clearly a bid to gain market share through the acquisition of pubs, which would, as people have said, create a monster tie and make it much harder for brewers of all sizes to get their products into pubs —that remains an issue.

It is surely time to look again at the maximum number of pubs that a brewery can own, to stop this sort of market dominance, and consider placing a limit on the number of pubs that can be owned by any company—unlike the flawed beer orders. They were flawed because Ministers caved in to lobbying from big brewers and agreed to the loophole that allowed the huge, non-brewing pubcos to emerge, dominate and create their own unfair model; and here we are today.

In relation to the role of the adjudicator, the concern is that Heineken will seek to force Punch tenants to stock only its products—despite the discussions, there is nothing in the code that says it is allowed to do so—but the adjudicator has so far refused to clarify that simple point, which is within his remit. This lack of clarity means that brewers may be able to use the current confusion to threaten legal challenges that could again be seen as putting off discussion of tenants’ rights under the code.

I must mention Scotland, which is just as important as England and Wales to the British Pub Confederation. The Scottish Licensed Trade Association, which is a member of the British Pub Confederation, does a lot of wonderful work in Scotland. Like the British Pub Confederation, the Scottish Licensed Trade Association supports having the same rights for Scottish licensees tied to pub companies. We have the absurd situation that people tied to the same company have certain rights on one side of the border, but a mile away across the border in Scotland, have none of those rights. Those rights should be extended to Scotland, and I look forward to hearing the comments of the hon. Member for Dumfries and Galloway (Richard Arkless), who will speak for the Scottish National party.

[Toby Perkins]

That is a very important point. In the process of passing the legislation, I believe I am right in saying that SNP Members voted with us in the victory on the vote that was predominantly about pubs in England, because they wanted same rights in Scotland in the future. It is a shame that the system has not been brought in there.

[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.

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[Toby Perkins (Chesterfield) (Lab)]

I congratulate the hon. Member for Leeds North West (Greg Mulholland) on securing the debate. He is a great pubs campaigner who speaks powerfully on behalf of tenant groups and the whole industry. I am pleased that we worked together to get the Government to introduce the statutory pubs code in the last Parliament and to ensure that a free market rent only option was a part of it. It is a great honour to take over from him as the chair of the all-party parliamentary save the pub group and I am sure that we will continue to work closely together on these issues.

The work we have done together in the past has taken us some of the way to where we are today. I hoped that I would be part of a Labour Government that would get to deliver the pubs code, but sadly that was not to be. The pubs code was a contentious and important battle to win. I recall campaigners’ tears of joy when we finally secured the victory that ensured that the free market rent only option was part of the code, after the hon. Gentleman tabled an amendment on Report. Many campaigners told me, “It’s too late for me—I have gone bankrupt as a result of the imperfections in the way in which the industry has been run in the past—but it is crucial to me to know that Parliament will bring such abuses to an end.” It is important that those campaigners, who spent many years getting the Government to recognise the power imbalance in the industry and the exploitation of that situation, have confidence in the pubs code and that we deliver the expectations expressed in those tears of joy.

The Labour Government of 2005 to 2010—this included excellent work by my right hon. Friend the Member for Wentworth and Dearne (John Healey)—looked at the issue and set a final challenge for the industry. The coalition Government who followed were wary of regulating a complicated industry and attempted to do everything in their power to give the industry time to put its own house in order. It was very much a last resort for the Government to introduce a statutory pubs code, and it came as a shock to them when we were able to get the House to include a market rent only option into the legislation.

Critics always claimed that we should not legislate because it would make matters worse, and pointed out that the beer orders did not turn out as expected. It is important that those people who have faith in the code get the impression that the Government are serious about ensuring that the legislation delivers what we intended. It is to the credit of the Government that following the election they stuck to their word and introduced the code that they had committed to, and it is now in the entire industry’s interest to ensure that the pubs code’s meaning is established, that all those in the industry have confidence in the rigour with which it will be enforced, and that the Pubs Code Adjudicator is, and is seen to be, impartial.

The motion—supported by the Chair of the BEIS Committee as well as the hon. Member for Leeds North West—makes it clear that those tests of confidence are not being met. We have heard at some length deeply concerning allegations about the conduct of pub-owning companies when tenants wish to avail themselves of the market rent only option. A key test of the adjudicator will be whether it offers clarity to tenants and pub-owning businesses on issues such as the appropriateness of deeds of variation as a tool for transferring from a tied to a free tenancy. I have not heard a convincing reason why that should not be appropriate in the majority of cases.

I will come in a moment to the appointment and performance of Mr Newby, but it is fair to say that, alongside my praise for the Government for introducing legislation, I have legitimate questions for them about its implementation. It might seem harsh to criticise them for being too slow and too hasty, but there is a reasonable argument that they were guilty of that. The issues facing the industry have been long discussed and are well known, and the Government could have come forward much sooner with a draft code, giving notice to the entire industry of what was in store, appointed an adjudicator earlier and allowed more time for the set-up process. Given the scale of the changes to the code, most of which I support, the lead-in time was rather short and left the adjudicator and industry with little time to establish the new rules of the game.

I am conscious of the Select Committee’s strong criticisms of the process that led to the appointment of Mr Newby, repeated by my hon. Friend the Member for Hartlepool (Mr Wright), and the question of whether his background opened him up to perceptions of partiality, and I sympathise with many of those sentiments. The hon. Member for Leeds North West mentioned my meeting with Mr Newby this week. I was happy to have that meeting. As always, my approach is to meet all parties involved. In the couple of weeks I have been in post, I have also met some of the campaigners my hon. Friend has met. I have not yet, however, met the British Beer & Pub Association, the Association of Licensed Multiple Retailers or the other organisations, but I will do, because it is important that everyone gets an opportunity to be heard. That is always my approach.

I said to Mr Newby that the focus on his background would continue while there are no adjudication decisions coming from his office and while the perceived conflicts of interest persist. We all want the adjudicator to get on and adjudicate and start answering questions about the interpretation of the pubs code. Once some initial decisions have been taken, tenants will have much greater clarity. As the right hon. Member for West Dorset (Sir Oliver Letwin) said, the adjudicator will then have the opportunity to represent the people he is there to represent—those we set up the pubs code to protect—and to say to the pub-owning companies, “We’ve met previously about The Red Lion, and now you’re coming back with the same issues with The Dog and Duck. Why are we still having these arguments?” The hon. Member for Leeds North West made the important point that there might be differences of interpretation and fact between individual cases, but themes have emerged that could be looked at and quickly processed to give clarity. Across the industry, on both sides of the argument, there is real frustration at how long it is taking for decisions to emerge, but Mr Newby has assured me that decisions will start coming out of his office within the next month. We all hope he delivers.

The motion refers to Mr Newby’s shareholding and loans to Fleurets. The Commissioner for Public Appointments reviewed his involvement in Fleurets and decided that there was no conflict of interest, but the fact that it is still being raised undermines his perceived impartiality. Mr Newby told me, as he told the Select Committee, that he had attempted but been unable to come to an early settlement of his loan to Fleurets. I will be writing to Mr Newby and Fleurets to urge them to recommence talks aimed at ending his involvement with the firm so that the perceived lack of impartiality might be addressed.

I call on the Minister to do the same: to ask Mr Newby and Fleurets to recognise that this perception is undermining his ability to be seen as impartial and to take every possible step to find an alternative source of money. I will not mention the amounts concerned on the Floor of the House, but in the context of the industry, they are not huge sums. It would pose a serious question about the stability of a company if it was unable to replace such a sum of money. It is significant enough, however, for it to be relevant—or at least to be perceived as being relevant—to an individual’s decision making. I said to Mr Newby’s face that the perceived relationship would undermine his decision making. It is important that the adjudicator be free to adjudicate on the basis of the evidence. If he knows that every time he makes a decision, people will say, “Well, he hasn’t based his decision on the evidence; he made it because of his interest”, it will undermine his decisions.

I know that campaigners have called for Mr Newby’s dismissal and the restarting of the process. I am anxious that restarting the entire process might push the prospect of resolution further away for many tenants who desperately need the certainty that the code adjudications will bring. The hon. Member for Leeds North West is right that people are already walking away from the process, either by settling, having lost confidence in the process, or having gone bust or been unable to carry on in the trade. If the Government are minded to agree with the motion, I would ask them to set out how quickly we can start getting some decisions. Much like Brexit, sometimes no deal and a bad deal are the same thing. We need to start getting some decisions. Mr Newby has been described to me as a “rabbit in the headlights”, afraid to make a decision that will ultimately need to be made, and the sense of frustration at the failure to start providing certainty is a strong and real one. The Government and Mr Newby should be under no illusions about the damage that further delays will pose to the entire process.

In summary, the pubs code and the adjudicator need to gain public confidence. This has not been a great start. The Government should do more to identify the cause of the delays and provide whatever support is needed to clear the blockage. They should also urge Fleurets and Mr Newby to sever their ties, which are comparatively small and should not be beyond the wit of man to overcome, and give the industry the certainty it is crying out for.

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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.

[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.

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

I congratulate the hon. Member for Leeds North West (Greg Mulholland) and my hon. Friend the Member for Tewkesbury (Mr Robertson) on securing today’s debate on the Pubs Code Adjudicator, and I thank all Members across the House who have contributed to the excellent and thought-provoking debate. Clearly this subject continues to attract strong views and passionate debate, and I want to reassure the House that the Government are fully committed to ensuring that tied tenants can operate in an environment that is fair and that allows them to thrive. That is why we introduced the pubs code. I pay particular tribute to the role that the hon. Member for Leeds North West played in bringing about that piece of legislation.

The pubs code regulates the relationship between around 11,500 tied pub tenants and the large pub-owning businesses that rent the pubs to them and sell them tied products. The pubs code applies to pub-owning businesses with 500 or more tied pubs in England and Wales. There are currently six pub-owning businesses that fall within the scope of the code: Admiral Taverns; Enterprise Inns; Greene King; Marston’s; Punch Taverns; and Star Pubs & Bars, owned by Heineken.

The two principles of the pubs code are: fair and lawful dealing by pub-owning businesses in relation to their tied tenants; and that tied pub tenants should be no worse off than if they were not subject to any tie. The pubs code should make sure that tied pub tenants: receive the information they need to make informed decisions about taking on a pub or new terms and conditions; have their rent reassessed if they have not had a review for five years; and are enabled to request a market rent only option to go free of tie in specific circumstances, including at a rent review or on the renewal of tenancy.

I will first address the appointment of Mr Newby and the performance issues raised in this debate. I am sure we can return to some of those important issues during my speech. We believe that he is the right person to ensure that the pubs code delivers its statutory objectives and, for reasons I will set out, we think he got off to a good start with his responsibilities.

Since his appointment, Mr Newby has made himself visible and accessible. He has attended at least eight conferences, various events and eight roadshows across the country, at which he has met many stakeholders, including several hundred tenants. He has also taken pains to pursue greater visibility for the pubs code and to raise awareness among tenants by appearing on various television programmes, including a pubs special of “The One Show” and “The Great British Pub Revolution,” with the aim of bringing the pubs code to the attention of a wider audience. I did not watch the programmes, so I cannot comment on their creative content, but they are a means of raising awareness with the target audience.

Through those appearances, Mr Newby has explained his role and responsibilities, and has shown his determination to help to create a fairer business environment for tied pub tenants that allows the pubs, which are so important to our communities, to thrive. Contrary to what we have heard, he has been raising awareness among tenants that under regulation 50:

“A pub-owning business must not subject a tied pub tenant to any detriment on the ground that the tenant exercises, or attempts to exercise, any right under these Regulations.”

It is important that he continues to make that case.

[Toby Perkins]

Will the Minister clarify that, in the context of that desire and regulation 50, a pub-owning business that moves from a tied model to a free-of-tie model will be able to do it with a simple deed of variation? That would make it the only change to the business’s terms and conditions, and all the other terms and conditions would not have to be reviewed as a result. Can she confirm that that is consistent with what she has just said?

[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.