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'Government takes pubs code very seriously' says Kelly Tolhurst MP

By Stuart Stone contact

- Last updated on GMT

Work in progress: Kelly Tolhurst MP has yet to confirm what format the review of the pubs code will take
Work in progress: Kelly Tolhurst MP has yet to confirm what format the review of the pubs code will take
In an exclusive Q&A with The Morning Advertiser, Kelly Tolhurst MP discussed the early stages of her work overseeing the enforcement of the pubs code.

Political career

As reported by The Morning Advertiser, ​Rochester and Strood MP Kelly Tolhurst replaced Richard Harrington MP​ as the minister responsible for overseeing the enforcement of the pubs code in November 2018.

Tolhurst has been the member of parliament for the Kent constituency since her election in May 2015 – having previously contested the seat in November 2014.

She was previously an assistant whip to the treasury between January and July 2018 before being appointed parliamentary under-secretary at the Department for Business, Energy and Industrial Strategy (BEIS).

Q: Prior to assuming responsibility for the pubs code and pubs code adjudicator, what experience and knowledge did you have of the pub industry in the UK?

A: I was appointed as Minister for Small Business, Consumers and Corporate Responsibility in July last year and took on responsibility for the pubs code and pubs code adjudicator in November. But going back further – before I became an MP in 2015 – I was a councillor and ran my own small business, and from that I got a great sense of the important role of pubs play in our local communities and economies.

I first got involved in politics after campaigning to stop a local recreation ground from being lost to development, so ensuring we all have social spaces in which we can live, socialise and enjoy ourselves is an issue very close to me. And we all know that pubs are very important parts of this local fabric. I think we all have fond memories of a local pub that’s brought us together with family or friends.

Of course, since becoming an MP, I’ve also frequently heard from pubs as part of my job representing them in my constituency, hearing of their opportunities and concerns. After becoming an MP, I joined the parliamentary select committee that scrutinises the department for business’s activity, so I was aware of BEIS’ work in relation to the pub industry before I became the responsible minister.

Q: How would you describe your role with regards to the pubs code and pubs code adjudicator?

A: I’m the minister with responsibility for the pubs code legislation (the Small Business, Enterprise and Employment Act 2015 and the pubs code regulations). The pubs code adjudicator (PCA) then enforces the code independently.

As minister, my role is not to second guess the decisions of the independent arbitrator and regulator, but I will lead on the statutory review of the effectiveness code and the PCA, which will soon be launched.

Q: What did you perceive to be the biggest challenges you’d face assuming responsibility for the pubs code and pubs code adjudicator?

A: Clearly, there are concerns being raised by tenants and their representatives around the application of the pubs code, such as the length and complexity of the market-rent-only (MRO) option process and the relatively low number of MRO agreements that have been concluded so far. There are also reports of tenants being in a stronger negotiating position securing better deals as a result, or following PCA decisions.

Readers will be aware of the mixed views that have been expressed in the pages of The Morning Advertiser​ and the challenge for the Government, and the PCA, is to get a fuller picture of how the relationship between tied tenants and pub-owning businesses is developing. The statutory review will throw some light on that as should the PCA’s MRO questionnaire and its 2019 tenant survey.

I am also grateful to the PCA and all the tenants and pub companies involved, who have agreed to waive confidentiality of arbitration decisions​ – this will help increase tied tenants’ understanding of what to expect when exercising their code rights and raise awareness of the decisions being made by the PCA and the behaviours of the pub-owning businesses.

Q: Since assuming responsibility for the pubs code and pubs code adjudicator, what level of interaction have you had with the pub industry?

A: Prior to becoming a minister, I was a member of the All-Party Parliamentary Beer Group. And between becoming a minister last July and assuming responsibility for the pubs code and PCA last November, I was already engaging with the pub sector through my responsibilities for small business and policies, such as the national minimum wage, and that has continued since taking on responsibility for the code. I will, of course, want to hear from all parts of the industry about the code as we undertake the review.

Q: Have you met and spoken to many tenants, and if so what thoughts and feedback have they given you regarding the pubs code and pubs code adjudicator?

A: Tenants and campaigners write to me about the pubs code and the PCA and, of course, in my wider role as small business minister they do contact me about all the things that make a difference to small businesses more broadly, such as late payments and business rates. Fellow MPs frequently get in touch with me to reflect the views of publicans in their constituencies, most recently in support of the Save Our Pubs​ campaign by the Campaign for Real Ale (CAMRA). I want to hear more from tenants and their representatives as part of the review.

Q: What reassurances can you give to pub tenants across the country that their interests will be represented fully during the upcoming review?

A: The format for the review is being decided, but I can assure tenants that they will be consulted, and their views considered. I am committed to ensuring the review is based on good evidence, which includes survey data, statistics and allowing all those who have an interest in the code to tell us about their experience.

Q: A large number of tenants have been frustrated in attempting to go free-of-tie under the pubs code – with a recurring complaint being the time it takes for decisions to be made by the pubs code adjudicator – what assurances can you give tenants that this issue will be addressed? Do you feel that the pubs code adjudicator is adequately resourced, and that the Government takes the pubs code seriously?

A: The Government takes the pubs code very seriously and has worked with the PCA to increase its staffing levels over the past year. I know that the frustration of having to rely on formal arbitration to enforce their code rights has been one of the main issues highlighted by tenants and campaigners. Arbitration should not be the default way in which tenants access their code rights.

Both the Government and the PCA want to see meaningful negotiation between pub companies and tenants becoming the norm, with arbitration very much the exception. The PCA has intervened to ensure that there is the space for negotiation and the ability to avoid arbitration. I would strongly encourage pub companies and tenants to make full use of this opportunity to negotiate in good faith and to avoid disputes.

The forthcoming review will take into account concerns raised by tenants and others about the process of going free-of-tie.

Q: With tenants’ frustrations in mind, and the latest figure on pub closures mentioned in the House of Commons (by Gill Furness MP) that33 pubs a week closed between April and September 2018, why should tenants trust in the pubs code and pubs code adjudicator to safeguard their businesses? What reasons are there for pub tenants and operators to be optimistic about the year ahead?

A: The pubs code and PCA are there to ensure a level playing field between the big pub-owning companies and their tenants and I want the pubs industry to feel confident in this system.

The Government is aware of the pressures on pubs, which is why in the most recent Budget we froze beer and cider duty and announced a business rates retail discount, which cuts bills by a third from April 2019 for two years for pubs with a rateable value below £51,000.

But it’s certainly not all doom and gloom, with the number of people employed in pubs and bars growing by 6% since 2008. Of course, we do not take lightly closures of our much-loved community pubs, which is why Jake Berry​ is doing such important work as community pubs minister, including investing in Pub Is The Hub and the More Than A Pub business support programmes.

There will always be a strong desire for social spaces – publicans thinking about how they can apply this to their local area will, I’m sure, find their business on a sure footing for a long time to come. I’d toast to that.

Q: We saw in a debate in the House of Commons on 8 January that you said you’d be happy to meet with Sarah Wollaston MP to discuss the 72 Pints​ campaign (number of 'saleable pints' from a firkin) – has this conversation developed further since then?

A: I’m looking forward to meeting Sarah to hear more about this issue. The PCA has, of course, just finished a consultation on this issue and I trust that will help meet concerns.

Related topics: Legislation

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