I totally agree. The process is opaque and would often appear to be perverse as well. There is a big case not only for revising it but for making it far more transparent so that anybody investing in their business can get a clear idea of what the potential financial penalty—if that is the word—would be on their investment.
I want briefly to touch on the pubs code and the Pubs Code Adjudicator, which my hon. Friend the Member for Chesterfield (Toby Perkins) mentioned. I am the former Chair of the Business, Innovation and Skills Committee, and a member of its predecessor Committees, and we examined time and time again the relative balance in power between the pub tenant and the pub owner, as well as the relatively low level of income that tenants running even the most successful pubs obtained from all their efforts, relative to the revenues accrued by the pub-owning business.
The pubs code was agreed by the Secretary of State for Business, Innovation and Skills in the previous coalition Government, and I give him credit for that. A Pubs Code Adjudicator was appointed to adjudicate
and to try to ensure that there was a fair balance of risk and reward between the two parties. It is fair to say that the appointment of Paul Newby was controversial, and a lot of concerns were raised. On the basis of the evidence we are getting back from tenants, those concerns were well founded. The changes do not seem to have affected the rate of pub closures whatsoever; indeed, the number of tenants who are still finding that the reward they get from all their efforts is totally inadequate does not seem to have changed either.
I welcome the fact that the Government are about to undertake a review of the working of the code and the adjudication. The essential thing is for the Pubs Code Adjudicator to act as an adjudicator and not just to enable negotiation between the pubco and the tenant, which actually reinforces the imbalance of power between the two. All too often, pub tenants find themselves negotiating against not only the pub company but their solicitors as well, and they are not in a position to have equivalent legal advice.
I conclude by saying that saving the pub involves two things: a radical transformation in taxation, but also the reinforcement of the legal protections for the pub tenant against the pub-owning business.
2.46 pm