Neighbourhood Planning Bill

Debate between Toby Perkins and Greg Mulholland

Ping Pong: House of Commons
Tuesday 28th March 2017 Commons Chamber

[Toby Perkins]

I am pleased to speak in support of Government amendments (a) and (b) in lieu of Lords amendment 22. I think they will make a material difference to the fortunes of many of Britain’s 48,000 pubs; give certainty to investors in the pub trade; and, crucially, put communities back in control of decisions that have a real bearing on their community. I speak as chairman of the renamed all-party parliamentary pub group, and as a real pub enthusiast.

I would like to record my appreciation of many people and groups in securing this important victory, including Lord Kennedy who tabled the amendment in the House of Lords and was very successful in ensuring such overwhelming cross-party support that the Government were persuaded to adopt the amendment in lieu. I also thank the pub-supporting campaign groups such as CAMRA and the British Pub Confederation, and my fellow members of the all-party parliamentary group on pubs, who held a really informative round table last week on the many different approaches across the country to using the planning system to save pubs.

I would also like to acknowledge, as did the Minister, the important work done by my predecessor as chair of the APPG, the hon. Member for Leeds North West (Greg Mulholland), who proposed the motion in Committee that was subsequently supported by my hon. Friend the Member for Oldham West and Royton (Jim McMahon).

I also think it right to acknowledge that the hon. Member for Bristol North West (Charlotte Leslie) originated the process with an amendment to a different Bill. Although the case she made was unsuccessful, it has proved important in bringing about this change.

As I said a moment ago, I am grateful to the Government for broadly adopting a motion to which there had been some hostility. It takes courage to change one’s mind. The Under-Secretary of State for Communities and Local Government, the hon. Member for Brigg and Goole (Andrew Percy), came to the CAMRA reception and assured us that the Government were listening, and the Government’s actions on this occasion suggest that he was as good as his word. All due credit should be paid to him.

There is nothing quite like the first visit to any British pub. I know that I am not alone in feeling that little frisson of excitement when I step through the door of a pub for the first time—pushing open that creaking door, and wondering what will be waiting for me behind it. It is, one might say, an adult and real-life version of an Advent calendar: behind every door is a different surprise.

As one of those doors creaks open, we wonder how the pub will be laid out. Will we be able to get a table? Who will be in there, and how many people will be in there? What will be on the walls, and what will the bar look like? Each pub is different. Will the bar steward’s face be a picture of welcoming joy—or maybe not? Will there be a log fire in the winter? Will there be a garden in the summer? Will there be a dartboard, a pool table, a pub dog or cat? Will a loudmouth be propping up the bar, commenting on topics on which he has assumed a level of expertise from a programme that he once saw on television? Will someone be commenting on the performance of his Member of Parliament and asking, inevitably, whether that Member of Parliament will be claiming his pint back on expenses? That one never really grows old.

Finally, of course, there is the question of what the pub will be serving. There is so much more to visiting a pub than having a drink, and that is the magic of it. I know my own favourite beers, and I can pop into Morrisons just down the road and buy as much as I like, far more cheaply than I can in many pubs. However, the drinks are just a fraction of the experience; the magic comes from the entire ensemble. Just as there is a magic to visiting any pub for the first time, there is a joy in having a local where you really feel at home, and where the characters, the beers, the landlord or landlady and the décor seem almost as familiar as if you were indeed in your own home.

We live in different times, and—let us be candid—in difficult times for the pub trade. The days when a single publican, running a single pub for decades at a time, was a staple of every high street are long gone. The long-standing publican is now becoming a rarity, and our communities are the poorer for it. However, many of those communities still have long-standing connections and relationships with their local pubs. Whether they are regular attenders or occasional visitors, the pub is a part of their community—one that we all too often take for granted, and a feature that is only really missed when it is under threat or gone.

Let me assure the House that none of us is suggesting that unpopular or poorly run pubs have a right to exist. Communities that do not back their local pub cannot assume that it will always be there. When I bought my house back in 1998 the Terminus was my local, but after a string of landlords within just a few years, it is gone. The only reminders of it are a plaque on the wall that reminds us where it once stood and the local bowling green, which is still called the Terminus Bowling Club although the pub from which it took its name is long gone.

In a small town like Chesterfield, I have to walk a mile to reach what you would call my local, and that, I think, is a comment on the times in which we live. If we do not get out and support our pubs, it is no good complaining when they are gone. Similarly, the industry knows that it is living in an ever more competitive world. The competition for the leisure pound has never been fiercer. From satellite television and a bottle at home to an array of takeaways and restaurants to suit every palate, the alternatives to a pint in the local are multitudinous.

Pubs will continue to close on occasion, but I think that it really sticks in the craw of communities when popular and well-used pubs—or even pubs that play a central role in a community—which may well be under poor management at a particular time are lost for good without the community having any say. The tenant in a pub is not just a business owner but the guardian of something precious in that community, and the duty of the pub-owning business to ensure that the guardians it appoints have the wherewithal to protect the precious assets that they are responsible for running is very important.

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

I thank the hon. Gentleman for his kind words earlier. The main purpose of the amendment that we are all supporting today is to tackle the scourge of predatory purchasing, especially by supermarkets. The Co-op is the worst in that regard. Does the hon. Gentleman think that it is time for CAMRA to look again at its agreement with the Co-op, and to say, “This must stop, because it has not worked”—as, hopefully, the amendment will?

[Toby Perkins]

I certainly support the amendment, and I agree that it is necessary because previous measures were not working. I met representatives of the Co-op recently, and their approach was pretty constructive. They said that they would be making a planning application in every case.

[Greg Mulholland]

It is interesting that the hon. Gentleman met those Co-op representatives recently. As he knows, last year the Save the Pub group was misled by the Co-op, which gave a clear assurance that it would not take pubcos’ view of viability as fact, but, as has been made clear by local CAMRA branches and the British Pub Confederation, it has continued to do so. The Co-op speaks with forked tongue, as the Save the Pub group has proved before, and I hope that the hon. Gentleman will stick with holding it to account.

[Toby Perkins]

We certainly will stick with holding it to account. If the hon. Gentleman has evidence that, since those reassurances were given, the Co-op is going down that road without seeking planning permission, I will definitely support him in what he has said.

In Chesterfield, we organised a huge public campaign which, although it does not relate specifically to the Co-op, is relevant to the issue that the hon. Gentleman has raised. We campaigned to save the Crispin Inn in Ashgate Road when EI Group, previously known as Enterprise Inns, wanted to sell it to Tesco. The campaign was won and Tesco pulled out, only for a new developer to come along and demolish the pub, and then start consulting on what should happen on the land where it had stood. Eventually, housing was built there.

In my previous role as shadow pubs Minister, I met so many groups all over the country who were fighting so hard to save the pubs that they loved and on which communities depended. It was wrong that a developer could turn a pub into a supermarket without planning permission, but could not do it the other way round. It was wrong that a building that was potentially a precious community asset could be knocked down before the community was even able to have a say. The coalition Government did take steps to reinforce the right of communities to have a say, but, although well intentioned, their efforts were a bit like trying to catch a flood in a cup.

The great attribute of the amendment proposed by Lord Kennedy and subsequently adopted, with further amendments, by the Government is that it gives certainty to everyone involved in the industry. We must never forget that Britain’s pubs are a business, an industry with investors who need certainty. The danger of going too far down the localism route was that when a business was considering an investment decision, it was faced with potentially dozens of different legislative approaches and hurdles across its portfolio. That approach also left councils at the mercy of aggressive legislation, and they were expected to incur the legal expense of defending the measures that they had introduced to protect their pubs.

The “asset of community value” approach has given some communities a precious opportunity to fight for the pub that they love, but it did mean that often the only way to save a pub was to agree to become its owner. There is some value in that sort of community activism, but it should not be necessary to be willing to buy a pub in order to have a view on it.

Last week, the APPG heard from the community team that had successfully bought the Antwerp Arms in Tottenham, having used the ACV legislation to save their pub. We also heard from Wandsworth Council, which had placed a requirement for article 4 directions on about 220 of its locals. It deserves credit for its efforts, but the danger of using article 4 directions is that the landscape is different in each local authority. That led to some publicans having to obtain planning permission just to paint or decorate their pubs, which is a positive disincentive to improving or investing in the pub estate. The approach that is being advocated today will bring the certainty and clarity that everyone connected with the industry needs, and it will not prevent the owners of buildings from adopting the needs of their buildings to maximise new opportunities.

--- Later in debate ---

[Toby Perkins]

Will the hon. Gentleman expand on his suggestion? Many of us share the concern, which I raised a moment ago, about a rush towards demolition. He proposes a moratorium, but is he proposing that the industry commits to such a thing or that the House passes something to bring it about?

[Greg Mulholland]

I am asking the Minister and the Secretary of State for Communities and Local Government. The Secretary of State’s name is on the amendment, so I take this opportunity to thank him because he has clearly listened and accepted the proposal. As he knows, I also go to pubs in his constituency because I have family in Bromsgrove.

It is for the experts in the Department to consider the possibility of introducing a moratorium, because there is no possibility of it being done externally. This is not a matter simply for the industry. The Co-op is probably the worst pub killer of all the supermarket chains, others of which have been pretty bad. The supermarket chains are not part of the pub sector, and they see pubs as fodder for imposing their unwanted stores on communities. The supermarket chains will clearly not jump to do this, and nor will developers that are seeking to exploit high land values in London, St Albans and other parts of the country. From that point of view, it would be great if the Minister said that there should be a moratorium and, in the spirit of this change, called on people not to pursue such conversions now that they are deemed by Parliament to be wrong.

This is not the end of the matter. Ultimately, it has not been about securing great protection for pubs; that is one of the things that has been rather misunderstood and misrepresented, sometimes by both sides of the argument. It is simply about giving communities a say and about removing absurd permitted development rights that created a loophole that has been exploited by large pub-owning companies and large supermarkets for too long. There will still be predatory developers, and pub companies will still seek to undermine pubs to secure development or to go through the planning process for building a supermarket.

As I have said, the assets of community value scheme remains important, but it is now time to consider strengthening it. Giving communities a genuine right to buy, as communities in Scotland have, is long overdue and would represent genuine localism. I have had a conversation with the Minister, and it is now time to consider a separate category in the planning and tax system for community pubs, which are the ones that we really care about. They are the ones that have the community value, which many Members have mentioned, in a way that other licensed drinking establishments do not.

CAMRA has so far said that it does not want to engage in this, but it is now time to crack the nut of defining a genuine community pub that does the things we have talked about and that has value to the community. The British Pub Confederation and Protect Pubs certainly wish to do so. If we do that, in addition to creating the extra layer of genuine planning protection for those pubs, and only those pubs, against predatory development, and only when the pubs are viable, we can crack the nut of having a different system of taxation, and we will never again see the disastrous headlines for the Treasury such as of one pub in York facing a 600% increase in its rateable value. I was in that very small pub, the wonderful Slip Inn, a couple of weeks ago during the Liberal Democrat conference. As I did at the meeting with the hon. Member for Bristol North West, I offer to work with the Minister to find a way of doing that, which could offer the security we need for our hugely important, viable community pubs.

This wonderful news is the start of a conversation, and I thank the Minister and all those involved. This is a hugely significant day in pub campaigning. As this is English Tourism Week, I know that every Member here today, and many more who are not, will want to raise a glass to this win for pubs and to the Minister for listening to all the campaigners who have helped to make it happen. They will want to toast this victory and the importance of the great English and great British pub.

Statutory Pubs Code and Pubs Code Adjudicator

Debate between Toby Perkins and Greg Mulholland

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.

Enterprise Bill [Lords]

Debate between Toby Perkins and Greg Mulholland

Tuesday 2nd February 2016 Commons Chamber

[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.”

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

Is the hon. Gentleman concerned that pubcos are misrepresenting their investments and seeking, via that loophole, to game the legislation and avoid the market rent-only option?

--- Later in debate ---

[Toby Perkins]

There is talk of substantial investment, but a substantial level of investment by a city-centre pub will be far greater than a substantial level of investment by a small pub on a street corner. Is it clear what the Government mean by substantial investment?

[Greg Mulholland]

It is not clear, and I do not believe that there is sufficient understanding of the reality of pub investment. I suggest that Ministers in the Department and other Members read an excellent article in The Publican’s Morning Advertiser by Robert Sayles, published on 6 January 2015, which exposes part of the myth that has been created by pubcos and their supporters. For instance, in 2015 Enterprise Inns invested £66 million—which sounds a lot, but only amounts to £13,200 per pub across the estate—and, interestingly, made a loss of £66 million at the same time, which it can offset against tax. Who is really investing in its pubs?

BIS has said that it will look at ways of preventing the pubcos from gaming the position. However, I want to deal with another myth. The last Conservative Government were right to introduce the Beer Orders in order to bring about competition. The fact that they gave way to industry lobbying and provided a loophole to allow the creation of the stand-alone pub companies was the problem, not the Beer Orders themselves. The Government must not do the same thing again. We must have a market rent only option that is triggered in the way that was intended in the legislation, and there must be no opportunities for the pubcos to game that, including abuses of the investment waiver. I look forward to continuing to work with the Minister and her team to deliver that.