Enterprise Bill [Lords]

Debate between Toby Perkins and Andrew Griffiths

Tuesday 2nd February 2016 Commons Chamber

[Andrew Griffiths]

I congratulate my hon. Friend on the work that he does to support pubs, not just in his constituency but in this Chamber, in standing up for British pubs and British brewing. He is absolutely right: this is a competitive business. Pubs are not just competing with each other for trade—for business—but with the likes of Starbucks. It is therefore absolutely essential that we allow them to invest in their estates. I will come on to that point later.

I have to admit that I was one of those who opposed the market-rent-only legislation when it first came in during the previous Parliament, because I was concerned about unintended consequences. We all want our to pubs to thrive, our pub estate to grow, and our pubs to be successful and pay a good living to the publicans who run them, but we must also be aware of unintended consequences. I warned of repeating the mistakes we made with the beer orders. I know, Mr Deputy Speaker, that you are not old enough to remember the beer orders coming before this House, but that mistake, with the Government intervening in the marketplace and sticking their oar in, led to the break-up of the successful breweries and, indeed, to the pubcos that we have today. We have to be very careful.

The debate on this subject has been contentious; there has been a great deal of heat, and sometimes it has become somewhat unpleasant. I congratulate the Minister on the work that she has done in finding a way through this. She has not only shown an immense interest in the subject in talking to both sides and properly understanding the implications of what we do as a Government, but has not been shy in standing up to both sides. We know that there is a famous tradition of female Conservative MPs handbagging people around the table in order to get the best deal possible, and that is what the Minister has done to find a way forward. We must not forget that pubs are not charities—they are businesses that employ 1 million people across our country and raise £21 billion for the Exchequer. We must therefore make sure that we have the right conditions to allow them to grow as businesses, and that is what the Minister is able to do.

My hon. Friend the Member for Weaver Vale (Graham Evans) mentioned investment. I am pleased that the Minister’s proposals allow publicans to opt out of—to waive their right to—an MRO for the purpose of significant investment. It is absolutely right that our pubs need to be the best offering possible. They need to have good facilities, nice loos, and good heating. They need to be pleasant environments if people are going to go there and spend their money. He is absolutely right that they are competing with the likes of Starbucks. If we want people to pump money into our pubs, we have to give them security in making that investment. Why would the likes of Punch in my constituency invest a couple of hundred thousand pounds, perhaps even £300,000, in a pub to renovate it if it was likely to lose control of it in just 12 months’ time? The simple answer is that it would not. The Minister’s decision to allow the opt-out from—the waiving of the right to—an MRO will give some comfort to the industry and allow such important investment to go ahead.

I am concerned about red tape. The adjudicator, when introduced, could potentially have to deal with some 14,000 pub tenants. There is therefore a real risk that the adjudicator could be swamped with complaints. I hope that the Minister will be well aware of that when she brings forward the secondary legislation on how this thing will actually work. I am also concerned about the amount of red tape when somebody signs up for a pub tenancy.

[Toby Perkins]

Given how busy publicans are, they do not want to spend their time at the adjudicator. They want to be serving punters and getting on with running their business. What does the hon. Gentleman think it says about the way the industry is currently working if the setting up of an adjudicator creates the likelihood that it will be swamped because all those publicans are so unhappy?

[Andrew Griffiths]

I do not think creating an adjudicator does that at all. Very few tenants come forward with complaints under the current voluntary scheme. But as in any other sphere, when a new way to complain is advertised, people will undoubtedly come forward. Some of those complaints will be valid, but many will not be. We need to make sure that we do not ruin a perfectly workable system by allowing it to be flooded with the wrong kind of complaints.

The requirement first set out by the Government would have meant that a pubco had to provide more than 80 pieces of information to somebody who wanted to sign up for a tenancy, and those would all have had to be checked off and a receipt accepted. That compares with about 10 pieces of information that have to be provided to somebody signing a normal commercial lease. I agree that we should make sure that tenants walk into the arrangement with their eyes open and with all the information, a business plan, advice from a financial adviser and a clear understanding of what that business is currently doing and what their earning potential is, but we should not make it impossible for a pubco to sign up a willing tenant who understands the business and understands what they are taking on.

On time scales, the suggestion is that the measure will come in at the end of May. Time is ticking and I hope the Minister will be attuned to the fact that this is a huge thing for tenants and pubcos to understand. Will she consider some interim measures to make sure that the measure can be introduced in a manageable way, and that the information does not swamp both tenants and pubcos?

Finally, I wholeheartedly support Sunday trading, as it would be good for the pub trade. The Association of Licensed Multiple Retailers and the British Beer and Pub Association say that encouraging people to come into our town centres on a Sunday to do shopping would also be good for our pubs. I entirely support that, but I remind the House of a letter that I received from Peter Hardingham, the manager of the Octagon shopping centre in Burton. Urging me to lobby for the important devolution to councils of Sunday trading regulation, he wrote: “Such a change in the law is critical to allow bricks and mortar retailers to compete with online retailers and to satisfy the customer demand that exists.” That is absolutely right.

The legislation, devolving the power to local authorities, giving our local councillors control over what is best for their high streets, will allow our shops to compete with online retailers. We can order from the internet on our phone and get something delivered on a Sunday afternoon. How can our shops compete with those retailers? The measure is a great idea and I hope the House will get behind it. I thank the Minister for her work on pubs. Please listen to our concerns, and I will be in the Lobby supporting Sunday trading.

--- Later in debate ---

[Toby Perkins]

I absolutely agree. We had long and very passionate debates about that during the last Parliament, particularly in the run-up to the Olympics, when the Government made what they said at the time was a short-term change to the Sunday trading legislation.

I have an interest in this matter in that my son works at Morrisons and is often there on a Sunday. One thing that will happen—I have had very few representations in favour of this—is that the supermarkets, finding that the others are opening, will have to start to open. That will not add any extra business, but it will extend or spread out the shopping week. It will mean that people have to work very late on Sundays, and people wanting to work during the week will find there are fewer shifts available during the week. No more business will be created; it will just be spread over a longer period. The period after 4 o’clock on a Sunday is vital to the convenience store sector, which is under incredible pressure.

[Andrew Griffiths]

I am listening carefully to the hon. Gentleman and I understand his concerns, but why does he think that the workers in Sainsbury’s and Tesco deserve to have their Sundays protected as special, but not the workers in Sainsbury’s Local or Tesco Express? They work for the same business, but one set of workers gets protection and the other does not.

[Toby Perkins]

The hon. Gentleman asks a legitimate question. All of those questions were debated at the time of the original legislation. As my hon. Friend the Member for Great Grimsby (Melanie Onn) said, a compromise was reached. The existing compromise is vital for the convenience store sector. The number employed in large Tesco, Morrisons or Sainsbury’s stores far outweighs the number employed in those other stores. I will not say anything more about that matter, but the exchange between the hon. Member for Strangford (Jim Shannon) and the Secretary of State entirely exposes the fact that many people do not entirely understand what they are being asked to vote for today.

I come to this subject as someone who ran his own small business for five and half years before entering this place and who spent the previous 20 years working in a range of medium-sized businesses—I was once a human being. I have also had the opportunity, as a shadow Business Minister, to debate many of the issues.

I was struck by what the hon. Member for Derby North (Amanda Solloway) said about the impact of late payments on small businesses in particular. Late payments beget late payments: when someone receives payments late from their customers, they end up being late payers to their suppliers, and so it goes on. She is absolutely right to say that action needs to be taken. She may want to research the amendments that we tabled to the Small Business, Enterprise and Employment Bill during the last Parliament. Those were far more powerful proposals, and I may encourage my Front-Bench colleagues to dust them off and have another look at them. Those serious legislative proposals would have outlawed late payment and removed the incentive for late payment.

When discussing late payments, we must understand why they exist. Payments are made late because businesses like to keep the money in their account for the purposes of cash flow. There will be an opportunity for a small business to go off to the commissioner and report their customer, but in the course of that process the big company may well have paid the small business. That will not get the small business paid any quicker; it just puts in place a bureaucratic process. The idea of a small business commissioner in itself is not a bad one—it may well deal with some of the disputes between suppliers—but the idea that it is the solution to late payments is entirely wrong. It will make very little difference to whether or not companies are paid late.

The hon. Member for Burton (Andrew Griffiths) spoke about major companies that are setting out with purchasing terms of 90 or 180 days. They are paying after 90 days and they are not even late. The Government may say that, if companies do not pay within 60 days, they cannot be classified as a prompt payer under the prompt payment code, but these are relatively small measures. They do not provide legislative protection against major firms in the way that the amendment I proposed in the last Parliament would have done. I urge the Government and all members of the Bill Committee to look at how we can strengthen the proposals, because this is a matter of real importance.

It always strikes me that the Secretary of State believes all regulation to be a bad thing. Recently, I met the UK Weighing Federation, which had a reception in Parliament. It said that the lack of policing of the regulations in the weighing industry leaves the UK market open to cheap foreign imports that are not compliant and that undercut good-quality British manufacturing.

I agree with my right hon. Friend the Member for Don Valley (Caroline Flint) that we do not want unnecessary burdens, but we do want a regulatory regime that protects not only the consumer, but British businesses that are doing things in the right way. A similar case was made by NAPIT recently in respect of the electrical competent persons register and the lack of policing of building regulations.

Part 7 includes measures on the pubs code. I was pleased to hear the Secretary of State say today that the Government have listened and learned from the discussions in another place, and that the four triggers that were originally put in place when the legislation passed in that famous defeat of the Government in the last Parliament will be retained in the pubs code. It is incredibly important that the code continues to operate in that way.

It is important to remind Members who were not here in the last Parliament why we decided to legislate for the pubs industry in a unique way; we have not used that for any other industry. There was a simple unfairness in the relationship between the major pub companies, with all the power they had, and the small individuals who owned a single pub, who often put their life savings into it, only to find that the information that they had going into the relationship was very misleading. As a result, those people often found that they were not in a position to get the deal that they thought they were signing up to. It was incredibly important that we came up with an arrangement where they had the opportunity, at certain trigger points, to say, “I don’t think this relationship is working for me. I’d like to take my chances on the open market and buy beers from wherever I can.”