I support the highest standards of animal welfare and agree with you about the importance of protecting these gentle, sensitive creatures. The Animal Welfare Act 2006 makes it an offence to cause any unnecessary suffering to animals, or for a responsible party to fail to provide for their welfare.
The statutory Code of Practice for the Welfare of Horses, Ponies, Donkeys and Their Hybrids, which you mention in your letter, includes advice on how to tether these animals where necessary in a manner that meets their welfare needs. As you say it outlines that tethering is not suitable for long-term use, but it can be used exceptionally in the short term on suitable animals given an appropriate site and equipment. Any failure to adhere to the Code can be used in court to demonstrate neglect.
If anyone is concerned about the way a horse is tethered, I would urge them to report it to the local authority, which has powers under the Animal Welfare Act to investigate such matters. The RSPCA and World Horse Welfare can also investigate.