Gas Market Fraud

Debate between Ed Davey and John Pugh

Tuesday 13th November 2012 Commons Chamber

[Mr Davey]

I am afraid that I am tempted to say that we are making amends for the failures of the last Government in this area. The hon. Gentleman talks about confusing tariffs, but the last Government took no action on them, and Ofgem—the regulator which, if I understand his question correctly, the hon. Gentleman wants to abolish—has put forward proposals to simplify and reduce the confusing number of tariffs, about which his party did nothing when in government.

[John Pugh (Southport) (LD)]

Energy markets, financial markets, grocery markets and the pub market have turned out to be flawed markets rather than free markets. What conclusion does the Secretary of State think we can safely draw? Is it time for a new Competition Act?

[Mr Davey]

I draw a conclusion that we need stiff competition powers. When I was the Minister with responsibility for competition, I looked at the competition framework, the institutions and the laws that we had inherited from the last Government, and I felt that they needed to be toughened and strengthened. I therefore hope that my hon. Friend will support the Enterprise and Regulatory Reform Bill, which this Government have put before the House to make those reforms to competition powers.

Pub Companies

Debate between Ed Davey and John Pugh

Thursday 12th January 2012 Commons Chamber

[John Pugh (Southport) (LD)]

I begin by paying full tribute to the Select Committee for its work, particularly for the sterling work done by the hon. Member for Northampton South (Mr Binley) and my hon. Friend the Member for Leeds North West (Greg Mulholland)—usually the quietest and most self-effacing of men. They have clearly been angered by this issue.

This seems to be a debate about two solutions to a commonly recognised problem—the unfair trading practices associated with the tie, and the relationship between tenants and the pubco. The problem is not one of competition, and it is not one of competition failure or consumer choice. It is connected with associated issues, which hon. Members have mentioned, such as the decline of community pubs, the decline of community cohesion and so forth—generally regarded as a social ill, except perhaps in temperance circles. What we are debating now is not necessarily connected with that problem, however, as free houses are also closing, disappearing and depriving their community of their benefit.

At its simplest, the issue is about the running of the tied pub and how it can be made uneconomic for tenants through unfair and non-transparent terms of trade. It has been suggested that this is not an unwelcome outcome so far as the pubcos are concerned, because they are short of capital and in some cases anxious to sell off. That the terms of trade are penal, non-transparent and arbitrary is simply not in dispute anywhere in the Chamber. It has been demonstrated by the turnover of tenants, who are coming and going all the time, by the Select Committee’s reports, and by the Government’s own undertakings to do something about what they have clearly identified as a problem. The issue that divides the House, if indeed it does divide it, is how to find a way out.

The Government are arguing for a non-statutory code, for fairly straightforward reasons. They dislike regulation in principle—they have said as much—they prefer effective self-regulation, and they believe that a non-statutory code represents a quicker fix. It clearly does not help that their favoured solution is also the favoured solution of the accused—the pubcos, in this instance—and that there has obviously been collusion in the refining of the suggestion, but that in itself does not invalidate the solution.

[Mr Davey]

My hon. Friend has made the serious allegation that there has been collusion with the British Beer and Pub Association. What evidence has he for that allegation?

[John Pugh]

I refer the Minister to the speech of my hon. Friend the Member for Leeds North West, who presented a fair amount of prima facie evidence that I think impressed the House. However, I want to do the Minister a favour here. It could be argued that the consent and co-operation of the pubcos will make any solution more workable—just as restorative justice is often preferable to sheer penal justice—especially if a self-regulatory code is given some legal significance, although, as other Members have pointed out, a statutory code would lead to more compliance and less legal recourse. That sounds pretty reasonable, apart from the fact that the Government clearly promised something else and have lost trust, and the fact that the pubcos have a dismal record of keeping to commitments, as the Select Committee’s report made clear.

Overall, the Government’s response represents the triumph of hope over experience, or of realpolitik over trust. There is a long and—as must not be forgotten—sordid history of a connection between politicians and the brewing industry over the ages, dating back to the time of Gladstone and before, with the tenant often perceived by the Liberals as the victim. Ultimately, this is the Government’s call. If they ignore the Select Committee’s advice, they will risk being considered untrustworthy; I think that that is inevitable now. They gamble on the good faith of the pubcos, but what if they are wrong? That is my main question to the Minister. If this is not a solution but in fact an evasion, statutory regulation must be the only conceivable answer.

Oral Answers to Questions

Debate between Ed Davey and John Pugh

Thursday 8th December 2011 Commons Chamber

[John Pugh (Southport) (LD)]

Will the Minister explain how revising TUPE will actually create more jobs, as opposed to facilitating outsourcing?

[Mr Davey]

My hon. Friend will know that there are mixed views in the business community about whether or not the current TUPE regulations are gold-plated, which is why we have called for evidence. We have not published a consultation with specific proposals as we want to have evidence from all stakeholders, so that when we make our proposals in a future consultation they will be well evidenced.