Pub companies: follow-up - Business, Innovation and Skills Committee Contents

Examination of Witness (Question Numbers 120-139)



  Q120  Mr Hoyle: I did not quite hear an apology for the way the industry treated the Chairman and the way he had been intimidated. I know the witnesses have said they do not quite agree with some of those comments, but I think it would have been nice, Mrs Simmonds, if you had apologised on behalf of the BBPA for the treatment dished out to the Chairman. He should not have had to put up with that. I hope that will be taken back by you and will be recognised.

  Mrs Simmonds: I do recognise that. Having met the Chairman I certainly was not intimidating; I would not be capable of intimidating anyone.

  Q121  Mr Hoyle: Is that an apology?

  Mrs Simmonds: It is a complete apology for what has happened. We are here today to talk about how we move forward. I certainly apologise if we have in any way brought Parliament into disrepute.

  Q122  Chairman: I am unused to being unable to comment on my own reports for fear of litigation.

  Mr Darby: One must make a judgment as to whether or not to trust the industry and I am sure that judgment will be made in discussion in the fullness of time.

  Q123  Mr Hoyle: It leaves us with a bad taste.

  Mr Darby: I understand that. Having taken the role as chairman of the working party I saw it as my job to bring together a diverse group of people to stand by a harder, tougher code which will result in greater transparency in the conduct of business. I am absolutely committed to that. I believe that is commercially right and proper. One of the baleful consequences of this process, which is one reason why we are so keen to get it resolved urgently, is that it detracts from the time taken to visit pubs. All I can say is that if I have managed to visit 400 pubs in a year despite having spent two to three months in committees, writing reports and so on, I could have visited 700.

  Q124  Mr Hoyle: I look forward to seeing you at the Euxton Mills in Chorley.

  Mr Darby: I have been there; it is a very good pub.

  Q125  Chairman: Our ambition as a committee is to make sure the industry can get on with fighting its ordinary commercial battles by rebalancing the power between the small companies which we believe are being abused and the big companies that abuse them. One aspect of abuse is enforcement of the tie by flow monitoring equipment. This was a moment of spectacular inaccuracy in our evidence session with Mr Thorley. I am encouraged by some of the things the new code says about it, but I put some specific questions. Your agreement with the BII and FLVA calls for a protocol which would cover minimum standards for its operation and application. Will that protocol be enforced by you or the individual pubs?

  Mrs Simmonds: It is part of the BBPA code and therefore how that protocol is written is up to the individual company but it must be accredited by BII. It has to be transparent and above board.

  Q126  Chairman: The practice of assessing data, which is an art and not a science, and the arbitrary use of direct debits to take money out of lessees' bank accounts will end?

  Mrs Simmonds: I was not aware that that was practised, but if that is the case I am absolutely certain that will be the case.

  Q127  Chairman: It was a fairly widespread practice.

  Mrs Simmonds: I have talked to Brulines and Trading Standards have considered that their equipment should not be prescribed under the weights and measures regulations, which is probably one of the matters about which you intended to ask me. But they have had their system tested and set up a protocol with Trading Standards so it can be tested in the future, which I believe is important.

  Q128  Chairman: Frankly, I do not think that is enough, and there is also a dispute about this within the local authority sector. In June of this year I received a letter from a trading standards officer in which he said: "I am able to say that the equipment shown to me is definitely not legal for trade use. In addition, by your own admission since about 2003 following initial verification no further testing of the equipment has taken place. I have 40 years' experience as a weights and measures inspector and in my opinion such a long period of use without testing or verification of equipment is unacceptable to claim confidence in its accuracy." There are big questions about the accuracy of flow monitoring equipment.

  Mrs Simmonds: I do not know how recent is the information I have from Brulines about the discussion with Trading Standards. They have been told by Trading Standards that their equipment is not required to be approved for the purposes of trade.

  Q129  Chairman: That is a legal definition but not a politically acceptable one. I accept that legally that is the correct position, but the issue is about customer protection rather than small business protection.

  Mrs Simmonds: The other important aspect on which my colleague may be able to comment is how pub companies deal with that data. What you would not want—and is important in terms of the new code—is for the Brulines equipment to be the only way to deal with it.

  Q130  Chairman: There are two issues: the accuracy of the raw data and the interpretation of that data, which is the crucial point because at the moment one cannot distinguish between beer and water, though we were told one could. The question then is: is that sufficient evidence for buying outside the tie? Here you say that additional prima facie evidence must be provided. What is the nature of the additional evidence that will be required?

  Mrs Simmonds: In the annex we talk about the nature of some of the evidence required which would be third-party information as well as other considerations, for example being absolutely honest as to whether there are other kegs and casks available from another brewery. There is a whole range of things put forward in the annex to be taken into account, not only the Brulines equipment.

  Q131  Chairman: I am concerned by what you said earlier in answer to one of my questions, namely that you were unaware of the practice of direct debiting as instantaneous fines or punishments. It has been happening. Many thousands of pounds have been taken from lessees' bank accounts on the basis of just an interpretation of Brulines' data.

  Mrs Simmonds: I shall be honest and say I am probably too new to the industry.

  Chairman: I would appreciate receiving an assurance in writing following this meeting that the practice of automatic direct debiting will end immediately. That is unacceptable.

  Q132  Mr Clapham: I take you to PIRRS. Mrs Simmonds, earlier you began to explain how the scheme worked. I understand that this is an initiative across the industry.

  Mrs Simmonds: Yes.

  Q133  Mr Clapham: Where there is a dispute between the landlord and tenant there is an agreement to go to PIRRS and the tenant is able to choose a valuer from the scheme's list.

  Mrs Simmonds: Yes.

  Q134  Mr Clapham: On the face of it, it appears that that scheme would work independently, but a note received from Justice for Licensees reveals that it believes the scheme has to some degree already been tainted. They say that pressure has been applied and the integrity of the scheme has been influenced by pubcos. I am aware that PIRRS had a website which was then removed. Did that happen because pressure was exerted?

  Mrs Simmonds: No; it was just a technical reason. That website has been live in the past week. Two cases are in process and three went forward but settled before proceeding. Under the scheme nominations to be a surveyor on the group are received by the whole body. This includes the ALMR, the FLVA, the GMV and the BII. The lessee chooses one of those surveyors to hear the case. The pub company has absolutely no say in who is chosen.

  Q135  Mr Clapham: It is one issue that takes us back to the discussion about independence and the way in which we may see the code of practice operating. In this example of PIRRS a mandatory scheme may well be a great help in deciding how to move forward. But when we get to that point does the licensee need representation? If so, obviously a cost is involved. Are there any ideas in the industry about how that cost will be met?

  Mrs Simmonds: Most of the work is done by correspondence although it is possible to have a hearing where they have 20 minutes. We do not anticipate that there is any cost whatsoever in having professional representation in the scheme. It is not looked at in that way; it is done in writing and, if necessary, by a meeting. If the system does not work we can review it, but that is how it is envisaged it will work at the moment.

  Q136  Mr Clapham: Initially it is dealt with in correspondence but should there be a need for a face-to-face meeting that can take place?

  Mrs Simmonds: Absolutely.

  Q137  Mr Clapham: I understand that this kicked off in December.

  Mrs Simmonds: It began a few days ago.

  Q138  Mr Clapham: Does it appear to be working?

  Mrs Simmonds: I think the fact that three of the cases were settled before they even got to that stage means it has worked. I see no reason why it should not work. It is something we must all support. Every member of the BBPA, plus anyone outside its membership, will be paying for the cost of doing it. It is an industry scheme and involves the individual in low cost, and that is the way we wish it to work.

  Q139  Chairman: The BII told us that the scheme was legally binding in the same way as the code; it becomes part of the contract between the pubco and lessee?

  Mr Darby: It is captured within the revised BBPA code that we will fully support and we will abide by PIRRS. I am aware that we have to confirm the legal basis of the BBPA code in separate submission, but PIRRS is captured within the code.

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