The Pubs Code Adjudicator should be replaced due to conflict of interest concerns, the Business, Innovation and Skills (BIS) Committee has said today.
Chair of the BIS committee, Iain Wright, has called on secretary of state Greg Clark to reopen the appointment process after concluding the current adjudicator, Paul Newby, will not be able to command the trust of pub tenants.
Wright has also urged the government to choose a candidate "who can attract the confidence of tenants as well as pub companies".
In May, Newby argued he had "genuinely seen [the pub industry] from all angles, responding to criticism his previous employment at big pub companies including Enterprise Inns and Punch Taverns would have an impact on his ability to mediate.
In a letter to Clark, Wright said:
While the Committee has no reason to question Paul Newby’s integrity or his qualifications for the job, his long-standing relationship with pubcos through his past work and a continued financial connection has created a strong perception of a conflict of interest.
The Pubs Code has the potential to significantly improve the embittered relationship between pubcos and many of their tenants, but it will only work if the Adjudicator is seen to be independent and is able to command the confidence of all the industry’s stakeholders.
The committee would like to see a new Pubs Code Adjudicator appointed from outside the sector, to ensure that this important role is – and is seen to be – completely independent and impartial.
Newby was appointed on 2 May to oversee the Pubs Code - a new regulatory framework governing the relationship between the UK's six largest pub owning companies (pubcos) and their tied tenants in England and Wales. The pubcos include Enterprise Inns, Punch Taverns and Marston's.
Under the code, which was implemented earlier this month, tied tenants now have the legal right to the Market Rent Only option under the code at rent review or renewal.
This means they will no longer have to comply with the beer tie, which is a 400-year-old system that requires tied tenants to buy beer and other agreed supplies directly from their landlords rather than on the open market.
Newby's appointment was criticised by Lib Dem MP and chair of the British Pub Confederation Greg Mulholland, as well as the Labour Party.
The British Pub Confederation have said Newby must now resign as his appointment is "untenable".
"It is now clear that Mr Newby failed to disclose his clear and ongoing conflict of interest both at interview and also to the Select Committee. It is also clear that Ministers and civil servants not only failed in their duty to appoint an appropriate person but were at fault for a seriously inadequate and flawed appointments process that has led to this situation," Mulholland said today.
"It is now clear that Mr Newby will never command the necessary confidence to be able fulfil this important statutory role, a position he had already shown he doesn't understand and based on his failing to declare his conflict of interest and misleading comments to the select committee, actually isn't fit to hold."
Brigid Simmonds, chief executive of the British Beer and Pub Association, said in response to the BIS committee: "The pub adjudicator appointment is a matter for the government, with pub operators rightly having no role in it - and we would always seek to work constructively with whoever is in the role."