Statutory Pubs Code and the Pubs Code Adjudicator
The Statutory Pubs Code and the Adjudicator. This is a debate pack for the Backbench Business debate on 26 January 2017. The Backbench Business Committee allocated time for the debate following the request made to it by Mr Greg Mulholland and Mr Laurence Robertson on 6 December 2016. It summarises the role of the Adjudicator and why it was thought necessary to create the Pubs Code. It also provides background material on the continuing controversy over the appointment of Paul Newby as the first Adjudicator and how the Code is perceived to be operating since coming into effect on 21 July 2016.
The Pubs Code came into effect on 21 July 2016. The Code only applies in England and Wales and affects approximately 12,000 tied tenants of the six largest pub owning companies.
The legislation creating the Pubs Code was contained in the Small Business, Enterprise and Employment Act 2015. The legislation only outlined the general principles of the Code and the role of its Adjudicator. The sponsoring Department, the then Department for Business, Innovation and Skills, revealed more details of the Code and its operation once it had analysed the responses to two consultation exercises it carried out in October and December 2015. The Code was laid before Parliament in July 2016 in the form of two Statutory Instruments .
It was thought necessary to introduce the Legislation creating the Pubs Code and its Adjudicator following several Select Committee investigations over a number of years. This was mainly due to the perceived disparity in negotiating power between individual tenants and the major pub groups. As the Bill progressed through Parliament Members succeeded in increasing the scope of the proposed powers of the Code. Probably the most important change to the Bill was to introduce the Market Rent Only (MRO) option. This gives tenants greater flexibility in how they operate their pubs by allowing them greater choice on the level of their ties to the pub owners.
The operation of the Pubs Code will be overseen by the newly created post of the Pubs Code Adjudicator (PCA). With a long history of distrust between some tied tenants and the pub owning companies it was recognised that the perceived impartiality of the PCA was crucial for the Code to operate successfully. Concerns were raised by some tied tenants and organisations when it was announced that Paul Newby had been appointed as the first PCA.
During his career as a Chartered Surveyor Mr Newby has personally worked on a number of projects with several of the major pub companies. Furthermore the partnership he worked for, and continues to have some financial links to, is likely to continue to work closely with these companies. Concerns have been expressed that this will create conflicts of interest is his new role when acting as an arbiter between tenants and these companies.
Both the MRO and PCA issues featured extensively in a Westminster Hall debate on 14 April 2016 and when the PCA appeared before the Department for Business, Innovation and Skills Committee on 10 May 2016.