Westminster Hall
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Future of Pubs
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Karen Bradley (Staffordshire Moorlands) (Con)
I am grateful for the opportunity to speak in this debate, Mr Benton, and it is an honour to serve under your chairmanship.
I want to begin debate by thanking the Backbench Business Committee, which gave the all-party save the pub group the opportunity to debate this very important issue. I was about to apologise for the absence of my hon. Friend the Member for Leeds North West (Greg Mulholland), who chairs the group—hon. Members may have noticed that I am not the hon. Gentleman. However, he has now arrived, so I will not apologise for his absence.
The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill)
Just his presence.
Karen Bradley
I am taking the role that my hon. Friend was due to take, because he was participating in the important debate that is under way in the main Chamber.
The all-party save the pub group secured this debate and it is therefore incumbent on me to set out the group’s purpose and mission, which is to bring together Members of the Houses of Commons and Lords who want to add their voice to the efforts to preserve and protect the British pub. Pubs are now closing at an estimated rate of 39 a week. The group shares the profound concern that pubs up and down the country are being closed for a variety of reasons, often when they do not need to close, and that more must be done to offer support and make legislative changes to address this problem.
The group shares a belief that the British pub is an important part of this country’s history and heritage, and that pubs are hugely important to the communities they serve as a focus for community, social, sporting and charitable activity. The traditional public house also provides a sociable and controlled drinking environment, which is important to encourage responsible sociable drinking.
The group campaigns on a number of issues, including calling for changes in planning law properly to recognise the importance of pubs and to offer more protection to pubs faced with closure; calling for reform of the current model of the beer tie as operated by some of the big pub companies, which makes it impossible for some licensees to make a living and leads to pub closures, for example by making some pubs unviable that would be viable if they were free of the tie; calling for fairer levels of beer duty; challenging the Government to look at supermarket beer pricing, to stop below-cost selling in the off-trade, and to create a more level playing field between the on-trade and off-trade; calling for a change in the law to outlaw the practice of restrictive covenants, whereby companies sell pubs on the basis that they are prevented from continuing as pubs, thus denying a community a pub simply to benefit a company’s commercial interests; calling on the Government and local authorities to do more to support community pubs, including using the means of taxation and rates; campaigning to give local communities the right to buy pubs that are planned for closure, and supporting “The Pub is the Hub” scheme.
Mr Greg Knight (East Yorkshire) (Con)
Does my hon. Friend agree that members of the previous Government bear a large share of the blame for the predicament that many pubs now find themselves in, first because of the overly bureaucratic Licensing Act 2003, which means that many pubs are now unable to provide live entertainment, and secondly because of the implementation of the heavy-handed smoking ban?
Karen Bradley
I acknowledge my right hon. Friend’s comments. Although I do not believe that we want to make this a terribly party political debate, I think that he has made some very valid points.
I will cover some of the issues that I have already raised and on which the all-party group campaigns, and I am sure that colleagues will make their own contributions to the debate. It is incumbent on me to declare my own personal interest in this particular issue. For the last 43 years, my family has run a pub. My grandparents, my parents and my brother have been landlords of the same community pub. My aunt and uncle have also run pubs, so my family has had a long interest in the pub trade.
The pub that I grew up in was originally a tenanted pub belonging to one of the big brewers. It was then granted a long lease, following the beer orders of 1989. It was then bought out by one of the big pubcos. Finally, just over 12 months ago, my family, after 42 years of running the pub, were able to buy the freehold and buy out the beer tie, meaning that for the first time in all those years they were at last in a position where everything that they worked for was for themselves. So, I clearly have quite an interest in this issue. I want to explain what is unique about pubs.
Andrew Griffiths (Burton) (Con)
My hon. Friend clearly points out the benefits to her excellent family business of buying the freehold of their pub and running it for themselves. However, does she agree that many pub companies offer a great product to the public, that they provide an opportunity for people to start their own small business and that, in many cases, they play a very important role in their community?
Karen Bradley
I thank my hon. Friend, and I note the points that he has made. My own personal experience of pub companies has perhaps not been favourable. However, I fully accept that they have a place and a role, as do brewers, and it is important that we have the pub industry working in a way that supports all types of pubs.
Greg Mulholland (Leeds North West) (LD)
I thank my hon. Friend very warmly for taking over this debate from me at short notice. Does she think it striking that small pub companies and indeed small breweries are doing exceptionally well and opening pubs, while the largest pub companies, which have very different business models that have been a cause of concern for the Business, Innovation and Skills Committee, the previous Government and this Government, are in trouble, in debt and having to get rid of pubs every week?
Karen Bradley
My hon. Friend makes a valid and important point. That issue is part of the debate—again, we should not over-generalise and say that all pubcos and all brewers are bad. They are not bad; they are doing a job in difficult economic times. However, it is clear that the smaller ones are perhaps having more success than the bigger ones.
I would now like to explain what is so unique about a British pub. Pub closures are an issue that affects every single Member in this House; every constituency is affected by it. Running a pub is unlike any other business. It is a way of life, not a job. You live on site, and your home is a public house; people come into your home at all hours of the day and night, and expect to be welcomed into your home. Landlords—I apologise for using that generic term, and I want to make it clear that I mean landlords and landladies—have a civic responsibility to provide the heart of the community, and it should not be surprising to anyone in this country that the longest running TV programme in Britain, which today celebrates 50 years on our screens, is based, and has always been based, around the community pub.
Landlords have a responsibility to look after their customers, both in the pub and when they leave the pub. There are very few other businesses where the retailer can be held responsible for the behaviour of customers after they have left the premises. We do not often see a situation in which a supermarket gets into trouble if a customer uses a product that they have bought at the supermarket and then, let us say, disposes of it as litter; the supermarket is not held responsible. However, the pub landlord is held responsible when the customer leaves and engages in antisocial behaviour. Landlords also have a duty to the local community, to work with residents and authorities, such as the police, to ensure good behaviour. In my view, however, the most unique element of the pub business and one of the reasons why I think we are seeing so many pubs struggling is that no two pubs are the same, because pubs are absolutely dependent on the building in which they are located.
Simon Kirby (Brighton, Kemptown) (Con)
As someone who has run some 40 pubs in my time, I agree with my hon. Friend that pubs are absolutely essential as the heart of the community. She is absolutely correct in saying that they are all different—all special, but all very different at the same time.
Karen Bradley
I agree absolutely, and that is a very good contribution to the debate.
It is not possible to take what works in one pub, move it to another building and make it work. Pubs have different clienteles, they are in different locations and they have different layouts. I accept that there are some pub chains that have a sort of homogenous generic feel, but I would assert that almost all the successful ones have not moved into existing pubs, but have taken other premises, such as old banks and shops, and turned them into pubs. What works in one community pub cannot be moved to another building and made to work there.
As we know, some pubs are based on food sales, and they can be successful, but other pubs are drinkers’ pubs. I know from experience that a drinkers’ pub cannot be changed into a food pub. It simply does not work. Customers who come for the drinking will leave if they think that it is a food pub, and others will not necessarily be attracted.
Andrew Griffiths
I agree with my hon. Friend’s comments. Does she accept that the smoking ban was one major reason why so many wet trade pubs, which focus predominantly on selling beer, closed? Many local pub customers left because the smoking ban was introduced. Although not many people in the industry are calling for the ban to be overturned—I do not think that that is what people want—does she recognise that those pubs have been hit particularly hard?
Karen Bradley
I do not dispute that some pubs have closed as a direct result of the smoking ban, but I do not think that the industry wants the ban to be rescinded. The pubs that have closed as a result of the smoking ban would not reopen if it were rescinded. The wet pubs that are successful have adapted to the smoking ban and compensated for it.
Dependence on a building makes a pub unique, but it is also at the heart of many problems that pubs face. As for pub companies and the beer tie, the beer tie has a long history. It dates from the time when brewers ran their own pubs and wanted to ensure that their pubs sold their beer, which is a sensible business model. Brewers had a vested interest in ensuring that their pubs were well run, and self-employed tenant landlords ran the pubs for them. Again, that is a good business solution. People were given the chance to run their own business and, as long as they paid their rent and continued to sell the brewers’ beers, the brewers could leave the landlords to it. Brewers had a guaranteed and responsible drinking outlet; clearly, they wanted to ensure that their landlords sold responsibly.
In those days, landlords bought directly from the manufacturer, cutting out middlemen and their margin. However—I remember it well—the industry moved to gain more security of tenure for tenants, who often had 12 or 18-month tenancies, as well as the option for landlords to sell guest beer, which is lucrative and allows them to make a significant profit for little extra effort. As a result of that pressure, the beer orders were introduced in 1989. No doubt the intention of the orders was good. They were meant to increase competition by reducing the size of brewers’ estates. Offering tied landlords the option to sell guest beers was a good move that allowed them to make more profits. The orders also gave tenants the security of 20-year leases. My parents were some of the first to benefit from the changes when they took out a 20-year lease and introduced a guest beer. At the time, the industry was positive about the changes, and welcomed them.
As is often the case, however, the problem with the legislation was its unintended consequences, by which I mean pubcos. Under the beer orders, only brewers are restricted in the number of pubs that they can own, and pubs owned by non-brewers, which do not sell only one brewer’s beers, do not need to offer guest beers. Pubcos became the middlemen, buying beers from a range of brewers and selling them to their tied landlords, who lost the right to offer guest beers.
The pubco business model is certainly clever and innovative. I am a chartered accountant—that is probably another interest that I should declare—and I must say that I have always admired the pubco model and thought that some clever financial whizz kid came up with it. Pubcos raise finance to buy large estates of pubs from brewers by securitising future rental income, which is the only asset that they have. Some of those pubs are tenanted, some are leasehold and some managed houses. The pubco makes money from its margin on selling beer to tied landlords and from its rental income. If a pubco wants to increase its profits, it must increase either margins on beer sales or rents, or both, which leads to landlords being squeezed twice.
Rents are based on barrelage, or sales, not rateable value or any other measure that I would consider sensible. Rents increase in line with the retail prices index, even when pubs are struggling, and are reviewed upwards if sales increase. Even if a self-employed landlord is successful and increases beer sales, their rent will go up and the profits of all their endeavours will be given back to the pubco.
Simon Kirby
I do not intend to interrupt my hon. Friend too often, I promise. Does she agree that many landlords suffer a penalty of tens of thousands of pounds for having tied leases? They must compete not only with pubs that are free of ties, but with managed houses. The price of a 36-gallon barrel of beer is often hundreds of pounds cheaper free of tie than it is with the tie.
Karen Bradley
I am coming to exactly that point. The margin on beer is the pubco’s other source of income. When my family bought out their beer tie last year, the pubco from which they bought the tie told them that the average additional amount that it charged per barrel under the tie was £185. A 36-gallon barrel of Carling Black Label sold under the tie was £369, compared to a free trade price of £227. Imagine us allowing any other industry to disregard free-market pricing so blatantly.
Pubcos have clearly accepted that many pubs are closing. That is not in their interests, so they try to help landlords who are struggling, which is undoubtedly a laudable aim, but they do so either by over-managing or by giving with one hand and taking with the other. For example, they might install monitoring equipment, ostensibly to help landlords see what is selling well and what is failing to sell, but the equipment is then used to establish whether the landlord is buying out of tie. The monitoring equipment sees how much beer is travelling from the cellar to the pump; the pubco then says, “That is more than you are buying from us. You must therefore be buying out of tie,” perhaps forgetting that it is in all our interests for the pipes to be cleaned regularly, which involves liquids other than beer going through them. The feeling—I accept that some of this is anecdotal—is that it is “them and us”, and that the landlord is guilty until proven innocent. The two parties should be working together to run a successful pub for the sake of the community, but instead they are fighting each other.
Greg Mulholland
I thank my hon. Friend for her generosity in giving way again. As we have not had a meeting recently, she might not be aware that both the all-party save the pub group and the all-party group on beer recently received a copy of a letter from the Fair Pint campaign to Enterprise Inns that raises serious issues about the Brulines system and Enterprise Inns’ use of that equipment. It is important to put that on the record. We await with interest developments in that case.
Karen Bradley
I was not aware of that letter, so I thank my hon. Friend for raising that issue. I look forward to reading it.
A pubco area manager might also suggest that a landlord adopt a practice that has worked elsewhere, such as showing live football. However, a one-size-fits-all approach does not work. Pubs are all different. Just because one pub succeeds in selling more beer after installing equipment to show live football, it does not mean that a neighbouring pub will do so as well, and it must be borne in mind that under leasehold agreements, the landlord is responsible for buying all the equipment, fixtures and fittings and entering into an arrangement with the sports provider. Landlords can therefore be left with significant outgoings and future liabilities, but no extra revenue. If they do make extra sales, their rent will be reviewed and increased the following year.
Andrew Griffiths
I am sorry to interrupt my hon. Friend again—she is making a strong case—but speaking as a Member who represents the constituency in which the country’s largest pub company, Punch Taverns, is based, I must urge her to accept that there are many pub companies in this country that support their tenants in a positive way. As a result of the actions of pub companies, there are many people in business who would not have thought about going into business without having that help, support and expertise. Although there are examples of practices that we should not be content with, the reality is that many people benefit greatly as a result of being an employee or tenant of pub companies.
Karen Bradley
I hope that I am not giving the impression that I am completely opposed to pub companies, because I appreciate that they have a place in the market, but it is important to put on the table some of the practices that are making it difficult for pubs to survive. The debate is about the future of the British pub, so it is important that we understand how pub companies and practices could be improved to save even more pubs.
Another area where pubcos may offer concessions on prices to tied landlords is in return for the landlord giving up the right to take income from, for example, gaming machines, pool tables and other such things. Gaming machines are a really important part of the landlord’s income, but many landlords find that they are forced to accept the loss of that income. The problem is that they have lower-priced beer, which they sell at a lower price so that more is sold. Their barrelage then increases, their rent goes up, and they end up no better off. It is important that we ask pub companies to look at how the rents are set, so that we can reach a point where it is in landlords’ interests to take the offers from those companies and work with them to make everyone better off.
I want to mention the Fair Pint campaign, which represents the interests of tied publicans across the UK. It has found that 67% of tenants earn less than £15,000 a year from their pubs, and that includes 50% of pubs that have a turnover of more than £500,000 a year. I can assure Members that one has to work very hard to sell £500,000 of beer a year—at £3.50 a pint, that is nearly 150,000 pints a year, or around 400 pints a day. I think that £15,000 a year is little reward for working that hard. It is no coincidence that most pubs that close are owned by pub companies, especially when one considers the effort involved and the fact that, no matter how hard one works, someone else can end up benefitting as a result of the contractual arrangements. As I have said, I accept that pubcos are here to stay and hope that, with a little action from the Government, we can make the system work better for all.
I ask the Minister to consider looking at basing rents on rateable values, or at some other system that does not penalise successful, responsible landlords. I also ask him to look at the beer tie to see whether a system could be developed that would allow a guest beer or some such incentive to be introduced. Good, well-run pubs encourage sensible drinking, so I hope that the Government will look at the sources of binge drinking, which largely are not pubs. Although I accept that there is a need to look at how policing is paid for, it will be little help to the pub trade if the responsible landlord has to make a contribution while the supermarkets and off-licences that sell at below cost price make no contribution because they close before midnight. Unlike many Government Members, I support the current licensing laws and ask that, instead of introducing new laws, the existing ones be properly enforced to ensure that those guilty of encouraging anti-social behaviour and binge drinking are targeted; that is preferable to a blanket restriction being imposed on everyone.
Roger Williams (Brecon and Radnorshire) (LD)
I congratulate the hon. Lady on the way she is taking the debate forward. She will be aware of the current consultation on licensing. In my constituency, while many pubs are run well, temporary event notices are causing concern. Good pubs often seem to fail on that one little hurdle, so does she have any thoughts on how we should respond to the consultation with regard to that matter?
Karen Bradley
I absolutely agree. The point is that we should help the responsible landlords who encourage responsible drinking rather than binge drinking and anti-social behaviour, and we should use the law to clamp down on those landlords—we all have these cases in our constituencies—who flout the rules, encourage anti-social behaviour and are happy to sell at below cost price. As we know, people are going to supermarkets and off-licences to buy alcohol and are getting hideously drunk before they even go out. The pubs are getting the blame for that and it is not their fault. I accept my hon. Friend’s point and think that we should look at the consultation and make a robust response to it.
Finally, I ask the Minister to look at the planning laws to see how we can support the many communities across the country that rely on their local pubs and do not want to see them join the many others that have been shut. As I said earlier, the building is the most important part of the pub business, and we need to protect it to preserve that great British institution.
Mr Joe Benton (in the Chair)
Order. I intend to start the wind-ups at 5 o’clock so that the Minister has time to speak before the vote in the House. Many Members have indicated that they wish to speak, and we will do our best to get everyone in. I ask Members to be as brief as they possibly can be.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
It is a pleasure to serve under your chairmanship, Mr Benton. I declare straight away that although I am not a pub landlord, I am a member of the Campaign for Real Ale, and so often associate the words “beer” and “pub”. I thank the Backbench Business Committee for granting the debate and the hon. Member for Leeds North West (Greg Mulholland) and my hon. Friend the Member for Staffordshire Moorlands (Karen Bradley) for making a compelling case and securing the debate a couple of weeks ago.
Everyone knows that the pub is the heart of the community, especially in our rural parishes. I grew up in a city and so have a different relationship with and memory of the pubs I visited there, but in the parish, the pub is truly the place where one goes to get gossip, beer, often food, and companionship. I used to live in Hampshire, and even now I can say “pub” to my dog and she knows that we are going to the pub. Dogs are mainly welcome in rural pubs, which is another reason why they are a good place to be. I am sure that for many of us the most important feature when organising our election campaigns was the choice of which pub to go to at lunchtime and in the evening as part of our rest time.
Of course, going to the pub for the first time is a rite of passage. In the main Chamber today we heard about the rites of passage that some of our young people go through, but turning 18 and going for that first legal drink in a pub is an important one in this country. Anyone who has ever been to Epcot, a theme park in Florida where every country from around the world is represented by a particular village, will know that the bit that represents the United Kingdom is the pub, which shows the international recognition of that institution. Even Madonna was keen on her Friday night drinks when she lived in London.
However, the debate is not about rites of passage, or recognition that the pub is the heart of the community, but about the future of pubs. The statistics seem rather gloomy. The number of pubs closing each week seems to be increasing. We recognise that there are financial difficulties, partly because people are tightening their purse strings and deciding how much they want to spend, and partly because of the increasing duty that pub landlords and landladies face when selling their goods and because of the rent for the lease, which may have been fixed in the good times, but still has to be paid in the bad times.
The difficulties pubs face can also be the result of a lack of support and a lack of customers, perhaps because of changes in lifestyle. I think that another Member plans to talk about changes in permitted practice, particularly the ban on smoking indoors, which some have indicated has led to a drop-off in the number of people attending pubs. Anecdotally, I recognise that to be true. As most landlords will confirm, the smoking ban has led to a lack of drinking because people are outside smoking, so there is an element of transactions falling as well.
To be honest, there are some awful pubs in our country, but there are some terrific ones as well. Pubs are so much about the people who run them and the customers who go there. Like any small business, they have to be excellent in order to thrive, but we, as politicians, need to ensure that they have the conditions in which they can thrive. As any business knows, it is all about footfall, average transaction value and costs, and the first two can be increased only with a great business leader, and a great landlord and landlady.
There are about 54,000 pubs. About one third of them are free houses, which leaves a significant proportion of the trade tied and managed. I could be wrong on this, but I believe that there are more pubs than churches in our country, which reflects how important they are. Like churches, many of our pubs are tied to one religion—or one brewery. There are some excellent breweries. The brewery in my constituency, Adnams, has a significant number of excellent pubs. It promotes the community and has community awards—that is an important part of running an Adnams pub. I should also refer to the other excellent Suffolk brewery, Greene King, which also has a number of excellent pubs around the country.
Neil Carmichael (Stroud) (Con)
I am a great fan of pubs, as many pub landlords in my constituency know perfectly well, not just by what I say but by what I drink. I want to mention microbreweries, which perform a valuable function. Does my hon. Friend agree that it is a good idea to encourage microbreweries? I have done so by having a brew made called “Neil’s coalition brew”, which is proving popular. That underlines the role of microbreweries.
Dr Coffey
I hope that there is not too much froth on the beer when it is pulled—I am sure there is not. I am sure that the beer has a good head and a stout body. [Interruption.] He will bring us a bottle—excellent.
Of course, I recognise that there are restrictive practices. My hon. Friend the Member for Staffordshire Moorlands referred to the tie, and how it can be damaging to a landlord who wants to experiment with extra guest beers and so on. They can be told that they cannot do something. They can actually be told by the brewery, or by a landlord of a different kind, that they are not allowed, for example, to show football anymore. It can really kill a pub if the landlord has decided to branch out into a particular area and is then told that they cannot. I believe that sometimes that is done deliberately to try to run down the custom of a pub and lead to its closing. Why would someone do that? The reason has already been alluded to: planning. Let us be honest: sometimes the land, the building or the pub garden could fit in six or 10 houses, which would provide a great deal more instant income for a landowner than keeping a pub going in a particular area.
Options are coming forward. I am delighted that the Minister with responsibility for pubs is here to give us answers about community right to buy. Pubs are not small things to take on, but at least communities will be given the powers to take them on if they wish to, and that is good news.
My hon. Friend the Member for Selby and Ainsty (Nigel Adams) has introduced the Protection of Local Services (Planning) Bill, which he sees as a way of trying to restrict the change of use of certain amenities such as pubs, community centres and shops. I do not think that that is necessary. I cite Basingstoke and Deane borough council, where I used to live some time ago. Its planning policies were very restrictive. In fact, they virtually ruled out change of use of any community facility, including pubs. If a pub or shop is lost, they are gone for ever; it is almost impossible for them to return. We should encourage our local councils to look at examples of good practice where that element has been restricted without the need for primary legislation.
Looking forward and trying to be much more positive, pubs with the right ownership and freedoms have a safe future in our country. They need stronger freedoms. My hon. Friend the Member for Staffordshire Moorlands referred to guest beers, and my right hon. Friend the Member for East Yorkshire (Mr Knight) referred to relaxing laws about, for example, live music. I will name my landlords, but this will be the only time, Mr Benton. Rick and Jennie Powling run the White Horse in Westleton, which is the fine hostelry that I frequent every Friday night. They are paranoid whenever someone brings in a guitar. They almost leap on them and say, “You can’t play that here. You can play it outside, just not inside.” That is ridiculous and crazy. Music in pubs—not just specialist music pubs—is important. The community should be able to enjoy fine songs such as “Wild Rover”, and talk about beer, money and landladies to their heart’s content.
There are many people who want to speak today, so I shall come to a halt. The future will be brighter for our pubs if they are freer to operate—if they are set free from unnecessary regulation. Other Members will speak about pricing, but I would like to remove the distortion in the market that makes it cost that much more to drink in the pub than at home, where people can drink beer that they have purchased at below cost price. This is about planning, and encouraging our councils to be more restrictive and protective of their precious assets in villages, towns and cities across the country.
We must also encourage other income streams; I think of what is happening with post office essentials. If a pub is open from 11 until 11, there is no reason why one cannot buy stamps and get driving licence forms and so on there. There are also aspects such as the internet hub. We have the digital village pump, and I know that schemes are afoot already to try to ensure that it is near the pub, so that people can use the internet there as well. Of course, we had the endorsement of His Royal Highness Prince Charles in 2001, when he spoke about the pub as the hub. On that note, I raise my glass and toast the future of British pubs. Cheers, everyone.
Mr Andrew Turner (Isle of Wight) (Con)
Thank you, Mr Benton, for the opportunity to speak in this debate. I congratulate my hon. Friend the Member for Staffordshire Moorlands (Karen Bradley) on securing it.
I would like to raise awareness of the problems facing local pubs. In recent years, there has been a steady decline in the number of pubs. Last year, local pubs across the country were closing down at the rate of 52 a week. There are many reasons for such closures. Obviously, some will be unavoidable. If a pub becomes financially unviable due to major competition, that cannot necessarily be handled. However, we have a large problem with pubs facing closure due to private investors buying them, not to run them as pubs, or with the intention of investing in them to help them become successful businesses, but with the intention of closing them to renovate them and turn them into numerous flats, which can be sold on to make some quick money.
I saw that with a local pub in my constituency on the Isle of Wight. The Partlands was a popular pub that was turned into flats. Such closures are having a negative effect on local communities up and down the country. The pub has traditionally been a focal point for local communities. Closing local pubs is killing village life.
Andrew Griffiths
I recognise my hon. Friend’s concern about pubs closing, but does he also recognise that many other buildings are being converted into pubs? In my constituency, an ex-high street bank has been turned into a pub. One sees many commercial premises being reinvented as drinking establishments. We should not get particularly hung up about the building, but should instead consider the facilities that it offers.
Neil Carmichael
Frankly, that is a very important point, all the more so because the Minister with responsibility for planning is listening to this debate and will, no doubt, respond to it. The point is that we need to introduce a localism element to encourage communities to start new pubs, and to ensure that they thrive and prosper. There is plenty of scope, I trust, in the decentralisation and localism Bill for that to happen, and this debate will strengthen that case.
Mr Turner
My hon. Friend is certainly right there. It is true that pubs open and close, and some pubs close and open. One on the island was the Sun Inn, Hulverstone, which reopened as a pub after people tried to get planning permission to make it a home. They failed to get that planning permission, and the property was pushed back to being a pub. It is a very successful pub.
Caroline Nokes (Romsey and Southampton North) (Con)
After many closures, one additional problem is that people can seek planning permission for many years. In villages, in particular, that can leave a gaping hole in the heart of the community, as properties remain boarded up for years, and I can think of many examples in my constituency. If we are too restrictive about planning permission, I worry that nothing will ever happen. However, I am pleased that the Minister with responsibility for planning is here, and I encourage him to find ways, through the localism Bill, of bringing such premises back into use, preferably as pubs, because, more than anything, I hate to see a gaping hole in the heart of a community.
Mr Turner
My hon. Friend is right. We must do what we need to in each village, and what is needed in one village might be different from what the next village needs. We must do that in a way that takes note of pubs, wherever they are.
The developments that I have described can lead to communities fraying, and to their members losing contact with each other. They can also lead to the scenario faced in many large cities, where people have little contact with their pubs. We must protect pubs from that threat, and the best way to do that is to restrict investors’ ability to buy pubs with the intention of closing them. That is the worst kind of purchase, and we must reduce the ease with which planning permission is granted for such changes.
We must also look at the fact that local pubs are becoming increasingly expensive and their competitiveness with other pubs is being reduced through compulsory ties. Such ties involve landlords renting pubs at high prices from large companies that then include in the contract clauses that force the pubs to buy their drinks from specific breweries. That forces landlords to raise their prices to cover their costs and to ensure that the pub is still profitable. However, that then leads many people—especially those feeling the effects of cuts and job losses—to avoid such pubs. We must therefore do more to help landlords maintain pubs and to reduce the burden that large companies, supermarkets and the law put on them.
Greg Mulholland (Leeds North West) (LD)
I thank you, Mr Benton, and Mr Speaker for understanding and accommodating my somewhat challenging situation, in that I have to speak in two debates at the same time. If I start going on about student fees, I hope that you will forgive me and put me back on track.
I thank my hon. Friend the Member for Staffordshire Moorlands (Karen Bradley)—when I say “Friend”, I mean it literally—for her excellent introductory speech, which showed a depth of real knowledge drawn from personal experience. I have had the great pleasure of meeting her parents, who, as publicans, have done such a good job in their community for so many years. I am absolutely delighted that they have now got their hands on their pub, that they own it and that they can run it as they like. We would, I hope, all agree that those of us who believe in small businesses and localism should want as many of our pubs as possible to be in the hands of those who run them, and the save the pub group certainly wants to campaign for that.
My experience of pubs is slightly different from that of my hon. Friend, in that it relates largely, although not entirely, to the other side of the bar. I have worked in some pubs, but I have spent an awful lot more time on the other side of the bar. A little over 18 months ago, however, I decided that we needed a save the pub group in Parliament because the British pub faced such a crisis and, as hon. Members have so eloquently explained, because the pub is central to our communities. As my hon. Friend mentioned, the pub is iconic to us as a nation. Pubs are unique to this country and are part of our heritage, history and culture, and we lose them at our peril. Sadly, we are losing them in great numbers.
The biggest scandal, which some organisations, companies and developers try to cover up, is that we are losing viable pubs every week. Some of those pubs are actually profitable when they are closed. As the hon. Member for Isle of Wight (Mr Turner) so powerfully said, that is happening simply as a result of the greed of developers and individuals who see an easy way to make money, and that is not acceptable.
I ask those hon. Members who are concerned that we do not go down the route of having more planning restrictions to accept that the community has the moral ownership of community pubs—pubs that have been in the community for years and years. Legally, of course, those pubs will go through certain hands, and as my hon. Friend said, they will have passed through the hands of breweries and into the hands of pub companies. Although the simple reality is that those organisations legally own the building and the business, the moral ownership is surely with the community that the pub has served for many years. That is not, however, reflected in planning law.
Andrew Griffiths
My hon. Friend has a great record of standing up for the great British pub in this place, and we all applaud him for that. I absolutely agree that we need to do all we can to preserve pubs, but one difficulty is that many people are put off making the large investment involved in buying a pub—purchasing a pub is a heck of a financial commitment. However, somebody who has attempted to run a pub and been unable to make it viable may be prevented from realising that asset if we introduce restrictive requirements for the sale of pubs. Does my hon. Friend share the concerns of those who say that the unintended consequence of that might be that we put people off investing in pubs and becoming landlords or publicans in the first place?
Greg Mulholland
I agree with the hon. Gentleman on many things, but I am afraid that I simply cannot see his logic on this occasion. Let me explain the position of the save the pub group to make it absolutely clear. If one pub business fails, he would surely agree that another pub business should have the opportunity to attempt to make the pub a success. At the moment, people are prevented from doing that simply because the owner says that they do not want the building to be used as a pub any more. Even if the entire community wants it to be a pub, even if it is viable and even if it makes an awful lot of money, the community has no say.
I am delighted that the Prime Minister has chosen, a little belatedly, to appoint a Minister with responsibility for community pubs, whom I had the great pleasure of welcoming at the save the pub group’s British pub week event a few weeks ago. That appointment is very positive, and it is handy that the Minister is also a Planning Minister. I therefore say to him that although we are looking forward to the upcoming decentralisation and localism Bill, it must give communities the right to have a say, through the planning process, in the future of community pubs, which we all say are so important.
Dan Rogerson (North Cornwall) (LD)
Like others, I congratulate my hon. Friend on the huge amount of work that he has done on this subject. He talks about developers converting pubs and denying others the right to make a success of them. Are there not also examples, however, of owners who sell a pub on and, even though they do not wish to convert it themselves, make it clear by means of covenants and so on that they wish to prevent anyone from running it as a pub in the future?
Greg Mulholland
My hon. Friend raises an important point. I was coming to that, but I will cover it now. I have already raised with the Planning Minister some companies’ continued use of restrictive covenants, in which the company says, with no thought to the community’s rights, that a pub must never be allowed to be a pub again. That is a scandal. The previous Government said that they would outlaw that practice, which was a hugely welcome step. I am disappointed that the right hon. Member for Wentworth and Dearne (John Healey) is no longer here, because I worked closely with him and I commend him on his work to support pubs. I ask the Minister to give us the good news for which we have all been waiting—CAMRA, in particular, has campaigned for this for many years—and to say that he will outlaw this totally anti-free market and anti-community practice once and for all.
Let me return to planning. I hope that I can address the concerns of the hon. Member for Burton (Andrew Griffiths)—Burton is, of course, one of the most famous centres, if not the most famous centre, for brewing in the country. The save the pub group says that we need to include two things in the planning process for community pubs. First, we need a genuine period of community consultation, which some councils have and some do not. Secondly, there needs to be a viability test. If a small business is viable, it should have the opportunity to continue as a small business, and should not simply be closed because someone can make a large killing by closing it, as my hon. Friend the Member for Staffordshire Moorlands said.
Simon Hart (Carmarthen West and South Pembrokeshire) (Con)
Does my hon. Friend accept that in some communities it is not only the pub that performs an important social function, and that there are examples of viable shops and filling stations that have also been sold by people who want to make a quick buck? How does he recommend that the Government should overcome that problem, with planning changes related simply to pubs? Would the changes not have to extend to other community functions that might, to some people, be just as important?
Greg Mulholland
The good news for my hon. Friend and, indeed, the Minister is that I have exactly the answer to that very point. It is not my original idea. Being a politician, I may sometimes take the credit for things, but I will not on this occasion. A Bill has been proposed by CAMRA, and is, I am delighted to say, being promoted by my hon. Friend the Member for Selby and Ainsty (Nigel Adams). The Protection of Local Services (Planning) Bill will have its Second Reading in the new year. The save the pub group officially backs it. The Bill would do precisely what my hon. Friend the Member for Carmarthen West and South Pembrokeshire (Simon Hart) has described; it would give councils the power to extend planning permission to local services that they designated. It would cover certain particularly important shops, post offices, pubs and perhaps petrol stations—the things that a community would identify for itself as important. Perhaps I may reassure my hon. Friend the Member for Suffolk Coastal (Dr Coffey), who is passionate about pubs and beer, about this—I enjoyed a glass or two with her at the Great British beer festival earlier this year. We should support the Bill; it would not do what she fears. It would simply give councils the power to adopt those practices if they wanted to, and to extend the planning permission in question. The provisions would be flexible and decentralising, but would not impose anything.
Dr Coffey
My hon. Friend is right to praise the aims of the Bill. I support them. I simply wanted to point out that I am not sure that primary legislation is required. I think that councils already have powers. I cited Basingstoke and Deane as a good example of somewhere that has used those powers in its planning process and policies.
Greg Mulholland
I thank my hon. Friend for that point, but she is lucky. Clearly her council appreciates the importance of pubs, but many councils do not, and I am afraid that Leeds city council is one with a poor record of defending them.
Greg Mulholland
I am pleased that my hon. Friend raised that point, because I have had the same experience in Leeds, with planning officers telling councillors on the plans panel that the pub had no status and that viability could not be a planning concern, while at the same time councils around the country have taken the action in question. There is confusion, so we want to give the message, and empower councils. We want to give them the opportunity to take such action where they think it is important. I urge all right hon. and hon. Members to support the Bill, and the community pubs Minister to take those points forward if the Bill should fall, which I hope it will not.
Mr Knight
Does my hon. ally agree that the viability test must be objective, with an element of independence about it? There is a pub in my constituency the owner of which wanted to use the building for something else. Two years before he closed it, he deliberately stopped serving food, which was one of the most profitable aspects of the business, so that he could try to con council officers that the pub was not viable, although the whole village knew that it was.
Greg Mulholland
I do not think that I have ever taken part in a debate in which the interventions were so accurate and helpful. My right hon. Friend and ally is right that there is a scandal going on, with pub owners—whether individuals, pub companies or brewers—who have decided that they want to do something else with the pub deliberately running it down. Often an inappropriate person is picked to run it. That has happened in Leeds and, I am sure, around the country. It is a scandal, and takes us back to the fact that communities have no say in the process.
I hate to see boarded-up pubs. One of my local pubs, the Summercross, remains boarded up after we were conned by a company that told us it would quickly build a care home there. That was more than two and a half years ago, and it is still a huge eyesore in a very pleasant part of Otley. The surrounding community has no power. I agree that there should be powers to stop people land banking derelict buildings that could and should be used. However, we must not let that become an excuse for it to be made even easier for people to lose their pubs.
I welcome the community right to buy that the Government have proposed and look forward to hearing more about it from the Minister. It fits very well with the idea of the big society and with our passion for empowering communities, decentralising power and giving communities a voice. However, I have one note of caution to sound for the Minister about something I have raised previously. Although it is incredibly welcome that communities are to be given the opportunity to see whether they can take over ownership of their pubs, that will not solve the problem of popular, wanted and viable pubs closing. In some areas the community will be unable to take a pub on, or will not want to; but it will still want the pub to continue. I have seen many cases in which a good small pub company, small brewery or individual wanted to buy or take on a pub; but they can currently be prevented from doing so. Unless we include in the planning process a right for communities to have a say in a process, that gap will not be plugged. I ask the Minister to consider that.
I now turn my attention to the model of the beer tie operated by pub companies, which my hon. Friend the Member for Staffordshire Moorlands has already outlined. It would be useful to give the House an update on the current position. I look, once again, to the Opposition Benches, because, after a long campaign fought by several organisations, the previous Government listened and acted. That was extremely welcome and I was delighted when the present Government, through Business Ministers, said that they would follow the process that was put in place by the previous Government. That was extremely important and positive.
I shall not go through the figures and the issue of the tie, but the present position is that three recommendations were made by the previous Government and adopted by the present one, and they come within ministerial responsibilities. The first is that the industry should ensure the accuracy of flow-monitoring equipment. We have already had mention of that. The second was the implementation of a code of practice; and the third was that Ministerial action should follow a failure to do those things and establish a code of practice that addressed the concerns of the Select Committee on Business and Enterprise. That is crucial. In addition, Ministers would consider the matter and would be minded to refer the matter to the Competition Commission if reform was not forthcoming.
I raised concerns with the Minister’s colleague, the Secretary of State for Business, Innovation and Skills, to whom I was perhaps a little less kind in a previous debate, about the merging of the Competition Commission with the Office of Fair Trading and its implications for the process in question. That is in the light of the fact that the OFT came up with the extraordinary decision that, although it admitted that tenants were not treated fairly and beer prices to the customer were higher, there were no competition issues. I look forward to hearing about that.
So far the result of the process is that only two companies have established an accredited code by the deadline, which was 1 July 2010. The deadline for implementation was 1 October. Therefore 28% of British Beer and Pub Association members failed to meet their obligations. The BBPA framework on which the codes are based deliberately and explicitly excludes the commercial issues that constituted the problems highlighted in the ministerial response. Crucially, no company code offers a genuine free-of tie option to lessees and few offer a guest beer option. The reality—I have to make this clear—is that so far those companies deemed to be operating unacceptably to the previous Government and the Select Committee, and to this Government, are still doing so. Unless that changes significantly, Ministers will have to act.
I have to mention the codes of practice, some of which are now being produced. Hon. Members may not be surprised that I will mention specifically the Enterprise Inns code of practice, a glossy document that starts:
“Our new Code of Practice sets out our commitments to you”.
However, it generally sets out the tenants’ obligations to Enterprise Inns. Tenants are being pressed by Enterprise business development managers to sign the certificate of acceptance in the manner of a door-to-door window salesman. I ask the Minister’s colleagues in the Department for Business, Innovation and Skills to look at that, because not only are the codes—particularly that one—not delivering what they were supposed to deliver but there is a danger that they will make the situation worse, will put more onus on the tenant and are doing nothing to address the problems in that business relationship.
I shall mention something now that will upset deeply my colleague the hon. Member for Burton although he may wish to comment on it in his speech—I hope that he does. The largest pub company, Punch Taverns, is in a desperately parlous financial position. It gives me little pleasure to say so. There is a crisis in the biggest pub companies, which are in eye-watering debt. That is the biggest threat that the British pub faces at the moment. Hon. Members have said that that is because of bad business decisions—the sort of gambling that gave the bankers a bad name—including over-valuing their estates, and now they are in vast amounts of debt to creditors. Pubs are being sold and closed continually to deal with that. Enterprise has just raised another £9 million from auction.
There is concern that Punch is teetering on the brink. I hope that that is not so, because the last thing that we want is many pubs suddenly coming on the market and many of those being converted to other uses. That goes back to what I said before. We have to get something in the planning process that stops people simply getting rid of pubs for what they can get.
I come now to my final question to the community pubs Minister. It gives me great pleasure to call him that. The Minister is a fan and a friend of the pub and I look forward to chatting with him, perhaps over pints in pubs, as we move forward and work together with his team and the all-party save the pub group. Are the Government committed to a below-cost selling ban? I think that all hon. Members would support that to stop the scandal of supermarkets selling beer below cost. It is not a price-fixing measure or thinking that is against the free market; we are simply saying that supermarkets should not be selling beer below cost to get people into their stores. If they want to do that, they can do it with chicken or bread, or things that are useful to people, but they should not undermine pubs and sell irresponsibly.
Rory Stewart (Penrith and The Border) (Con)
I would not encourage supermarkets to underprice other goods, such as dairy products, for the sake of beer. I strongly support the hon. Gentleman’s saying that they should not underprice beer, but we should not encourage them to underprice bread or any other commodities, either.
Greg Mulholland
I was not suggesting that they should do that. If they really want to attract people to their stores in a moral way, they should do so with things that are of value. I am not for one minute suggesting that people should be under-cutting. I am one of many people—I am sure that colleagues have campaigned for it—who would like a supermarkets ombudsman and fair pricing for dairy farmers, for example. I reassure the hon. Gentleman on that point.
I have asked the Leader of the House about below-cost selling, which was not in the policing Bill last week, although many hon. Members thought that it would be. Can the community pubs Minister give us some news about when that will come forward? I hope that this is the last Christmas that we see irresponsible promotions that do damage to pubs, which also rely on Christmas.
Duty is a challenge. I congratulate the Government on not increasing beer duty again, because it has gone up too high and has been damaging. I hope that that message has got through, even in this difficult time, because putting too much duty on beer will have a detrimental effect, particularly on smaller and medium-sized breweries that come above the progressive rate relief, which incidentally we must keep for microbreweries that a colleague, who is no longer in place, so correctly mentioned.
My final challenge to the Minister is not for his Department, but is one that he should pass on. We must find a way to help pubs by allowing a differential rate of duty. That is a challenge with regard to European law, but we can face that and should not keep using it as an excuse. There are ways of doing that. One way, which has been raised, is to have a differential rate of VAT for pubs, which is worth putting on the table. Another way would be to have a differential rate for draft beer, which at the moment is believed not to be possible through EU law.
Another solution was given to me by the head brewer at Fuller’s in London. There may be a way to have a different rate of duty on real ale, specifically cask ale, which is our great national drink—our Burgundy and Bordeaux—of which we should be prouder and about which we should make more noise. Every barrel and cask that leaves a brewery has an allowable duty-free element, because it is a sedimented product. If that provision could be unified, it would remove all the bureaucracy of checking at the gate and the different rule per beer and there might be a way to allow a different rate of duty perfectly legally within EU rules. I put that challenge to the Minister.
I thank all hon. and right hon. Members for attending this important debate. It is great to see such a wonderful turnout and I know that they are all passionate. I look forward to working with all of them, and with the community pubs Minister and the all-party save the pub group, to do as much as we can to support and save our great British institution.
Jack Lopresti (Filton and Bradley Stoke) (Con)
I have long been of the view that the local pub is an essential part of the social fabric of our communities and that it plays an important role in the social cohesion of areas. Just to make it clear, I am talking not just about city centre pubs and clubs, which the journalist, Simon Heffer, called “impersonal drinking factories” in an article in The Daily Telegraph in June, but about local pubs that serve their own local communities in both rural and urban areas.
I regularly visit two pubs, both of which are within walking distance of where I live, and I will mention their names, because it is relevant to the debate. The Stokers pub in Little Stoke is a 10-minute walk away. Eddie Benjamin, the landlord and a friend of mine, and I have discussed his struggle to remain open. Eddie has run the Stokers for 15 years, but now under present circumstances he is struggling to keep his community pub alive, viable and in business. It made a small loss last year. He has had to endure a doubling of the business rate, from some £16,000 to £34,000—an increase of nearly £18,000 a year on a pub that made a small loss. Sky Sports charges are linked to the pub’s rateable value, and that cost has increased from £9,200 a year to £13,500 a year, an increase of roughly a third. As has been discussed often and at length, the smoking ban probably affects all pubs throughout the land.
Overall, the smoking ban has been positive. It has improved the environment of pubs no end, especially for those that rely on serving food as a key part of their business, and it makes for a much more pleasant experience for most people who are non-smokers. It has also made pubs more family friendly. But there needs to be a re-think on having a dedicated smoking area inside buildings, with extractor fans, where no children would be allowed and no food would be served. I realise that this would not be possible in every case, but it would allow many pubs to utilise extra space or even have a smoking bar and non-smoking bar or room/lounge—whatever—and end the practice of smokers being thrown outside in all weathers at any time of day or night, with the problems that can be caused with disturbance to local residents who live close by. That would generate a significant increase in business for pubs that are currently struggling and it could make the difference between a pub staying open or closing.
Although in a commercial world we have to make hard-headed decisions based on profit and loss, let me give specific examples from my other local pub, the Beaufort Arms in Stoke Gifford, which does fantastic work in the local community. Yesterday, I rang the landlord, Jason, and told him that I intended to speak in this debate. He gave me examples of where the pub really was reaching out to the local community. For example, it funds the transport costs of the local Filton brass band, and it is having a big draw just before Christmas, with the money raised going to local charities. I have attended functions of the Stoke Gifford branch of the Royal British Legion at the pub. The Beaufort has been a great supporter, and is a great focal point for the local community.
Another pub in my constituency—I will not mention its name—has offered to open its doors to help to facilitate a postal service in the village. When the local post office closed down, we were looking for avenues to provide a temporary service, and the pub offered its services, which would benefit the whole village. The landlord of the Beaufort was anxious to ensure that, although binge drinking receives much bad press in the media, we do not allow all pubs to be stigmatised. My experience is that real local pubs promote sensible drinking.
I support the Government’s suggestion of local communities being given the opportunity to take over local pubs under new powers in the localism Bill, perhaps funded by the big society bank. But we must ensure that as many functioning pubs as possible remain open.
Dr Thérèse Coffey
I welcome my hon. Friend’s support for community pubs. Will he consider the Plunkett Foundation, which supports community shops and pubs, and particularly the right to buy that he referred to?
Jack Lopresti
Absolutely. I thank my hon. Friend.
The Government must also encourage further co-location of services in pubs. There are examples of post offices being set up in pubs, and delicatessens and small shops being incorporated into pub design. Thus the public as consumers can take responsibility to support, enjoy and encourage others to experience the hospitality and pleasure gained from a trip to the pub, and to inform others what the loss of such valuable community hubs would mean for quality of life and social cohesion in our local areas.
Andrew Griffiths (Burton) (Con)
I welcome the community pubs Minister to his position, and congratulate him on his elevation. Few Members of the House have done more to support brewers and the British pub industry. The coalition Government’s commitment to the pub trade is demonstrated by our pubs Minister being pint-sized, and I am sure that he will be stout and resolute in his support for the industry—[Interruption.] And never bitter.
I thank my hon. Friends who arranged the debate. It is testament to the House’s commitment to the pub and the beer industry that so many hon. Members are giving up their valuable time to contribute to this substantial debate on a day when such an important discussion is taking place in the main Chamber. That is hugely encouraging.
I also welcome colleagues from the Campaign for Real Ale. Everyone will agree that it has done a huge amount of work to develop real ales, and to support British pubs, and we should commend its work. Long may it continue to strive and to develop. The manifestos of all the main political parties at the last election included a commitment to the British pub. The Liberal Democrats, the Conservative and Labour parties all had a section pledging their support for the British pub and brewing industry, but the pub trade is still in a perilous state. My hon. Friend the Member for Isle of Wight (Mr Turner) said that 56 pubs were closing every week. I am pleased that the statistics that I was given recently showed that that number has slowed to 30 pubs a week, although we all recognise that that 30 is too many.
Karen Bradley
Perhaps the rate has slowed down because there are fewer pubs, so the stock of those that can be closed is smaller.
Andrew Griffiths
That is absolutely true. Last night, I hosted the all-party beer group’s Christmas party. We sampled 25 brews from some of Britain’s best brewers. I was pleased that Marston’s was represented, and I am told that it will open 20 new pubs this year, which is encouraging, but we recognise that the pub estate has shrunk dramatically, and every pub lost is a community resource that will be missed. If we are to stick up for the commitment that all parties made at the general election, we need action, not just talk and fine words, to deliver meaningful support to the British pub and brewing industry.
It is important to examine why we are in this situation. There is no doubt that the smoking ban had a dramatic impact on many pubs throughout the country. Many pubs that were reliant on the wet trade were unable to find alternative income when drinkers who had used their pubs for many years decided that if they could not enjoy a cigarette with their pint they would stay at home with a can of lager and sit in front of the television to smoke. That is regrettable, but we all recognise that the time to overturn the smoking ban has passed.
Glyn Davies (Montgomeryshire) (Con)
My hon. Friend is right to say that there is no chance of overturning the smoking ban, but I like to think that there may be a chance of introducing legislation to allow smoking somewhere inside pubs. Overturning the smoking ban is not realistic, but it is a realistic ambition for people to have the opportunity to smoke in pubs somewhere where other people do not have to go.
Andrew Griffiths
I understand my hon. Friend’s concern, and many people support his suggestion. The danger is that if we lose sight of the real problems facing pubs and focus on reintroducing smoking in them, we may lose our focus on the more pressing problems that lead to pubs closing.
Greg Mulholland
I thank my hon. Friend for giving way. I apologise, Mr Benton, that I did not explain earlier that at the request of the Speaker I must return to the main Chamber after his speech.
The save the pub group does not have a position on the smoking ban, but we called for a review of its impact on pubs and clubs. That was promised by the previous Government, and it is disappointing that the response by the Department of Health to the save the pub group was that it would not go ahead with that review. We believe that it should take place.
Andrew Griffiths
I thank my hon. Friend for that intervention. His commitment, effort and determination to stand up for the British pub are laudable. I was fortunate to spend a few hours with him at the British beer festival, and there is no doubt that he is a big supporter of the brewing industry.
There is an elephant in the room that we have not yet discussed. We debate the impact of the tie, and whether it is good or bad to have so many pubs in the tie. My hon. Friend the Member for Leeds North West (Greg Mulholland) referred to Punch Taverns, and I am delighted that Burton is the home of brewing. It is where Bass, which used to be the world’s No. 1 brand, was developed, and we are still the home of Marston’s Pedigree and Carling Black Label. We even brew Cobra for anyone who likes beer with their curry on Saturday night. It is the home of the National Brewery Centre, and I urge anyone who has a spare hour to come to Burton and enjoy the delights of that reopened centre, which gives a fantastic insight into our brewing heritage and history. Burton has a proud heritage of brewing, and we are what we are because of our brewing history. However, we want the brewing and pub industries to have a bright and exciting future.
Punch Taverns has been through many difficulties over the years. I recently met Ian Dyson, the new chief executive who has just taken over. I was reassured to discuss his plans for the future of Punch Taverns at some length, and in particular his desire to work with his tenants, support them and focus on their needs. The company has learned many of the lessons that other pubcos perhaps still need to learn. Because of that, I hope for both Burton and Punch Taverns that the future is bright.
What we are missing is a change in people’s drinking habits. Hon. Members may be surprised to learn that 70% of all alcohol sold in this country is sold through the off-trade and supermarkets, and we cannot ignore the impact that supermarkets have had on our drinking habits. The smoking ban is a problem, and there is no doubt that supermarkets have capitalised on that and used their might to drive down the price of alcohol on supermarket shelves, particularly beer. That has had a major impact on the viability of pubs. Let us be honest: pubs will survive if publicans can make a fair living.
Mr Marcus Jones (Nuneaton) (Con)
My hon. Friend makes a good case on behalf of the pub industry. Does he acknowledge that in addition to the difficulties caused by low-cost selling and the special offers by large supermarkets, the huge increase in beer duty under the Labour Government—around 26% over the past two years—has had a very detrimental effect on the pub industry? That has widened the gap between the purchases that people make in off-sales and those they make at the local pub.
Andrew Griffiths
My hon. Friend, as always, makes a valid point. In fact, the figures are worse than he suggests. Under the previous Government, duty on beer increased by 60%, while the increase on spirits was just 15%. That differential has had a huge impact on the viability of the British brewing industry. It is no surprise, as hon. Members from all parties will realise, that as a result of 13 years of Scottish Chancellors, the Scotch whisky industry has not, unfortunately, suffered the same increases in duty as those suffered by the British beer industry. I hope that the new Chancellor and the coalition Government will be more supportive of the brewing industry and our pubs.
It is encouraging that last week the Treasury announced innovative and well-thought through proposals on what I call “smart taxes.” The idea is to increase tax on bad things and reduce it on good things. Reducing taxation on lower-strength beers and spirits and increasing it on higher-strength drinks would support the vast majority of the British brewing industry and help to nudge people—we all know the phrase “the nudge approach”—towards choosing a more responsible and healthy drink when they go out for a tipple on Friday or Saturday night.
We must do something about the change in people’s behaviour and their drinking habits. When I was elected, one of the first things I did was spend a Friday night with the local police in Burton. I was with them from 6 o’clock in the evening until 3 o’clock in the morning. We walked the streets and I went out with them as they dealt with the consequences of people who had had too much alcohol in what the Daily Mail likes to call “Drink-fuelled Britain”.
I am not a young man, but I am not an old man. I remember when I used to go out with my friends for a night on the town, a night on the pull. [Laughter.] We were more successful at drinking than we were at pulling, unfortunately. We would go out for a night on the town and we would probably meet at about 8.30 pm. We would have a couple of drinks and then head to a nightclub to try our luck with the ladies of Dudley. The nightclub would close at 2 o’clock, and that would be the end of our evening.
As hon. Members will know from their own high streets, young people now go out much later. I saw that they were not going out on the streets until 10 or 11 o’clock in the evening and when they arrived, they were already half-cut. As the phrase goes, they had “pre-loaded”. While at home, they drank alcohol that they had bought from supermarkets at cheap prices. That is the heart of the matter and something we must address if we are to offer real support to the pub trade.
While there is a vast differential between the off-sale price and the price at which pubs are forced to sell their drinks, people will always drink at home. If one can buy 24-packs of strong lager, or a can of lager in the supermarket that is cheaper than a can of Coca-Cola, that is the biggest nudge of all.
Jane Ellison (Battersea) (Con)
On that point, perhaps I could read out a letter that I received from Mr Geoff Dennis, manager of The Goat in Battersea:
“We have all seen the results of young people ‘pre-loading’ on cheap alcohol in preparation for a night out, which can often lead to alcohol-related crime and disorder and only causes problems that we as pub managers then have to deal with later on in the evening. Below-cost selling of alcohol directly threatens the future of pubs which offer not only a focus for community life but also provide a safe and supervised place…to drink responsibly.”
Andrew Griffiths
My hon. Friend and Geoff from The Goat make a point of which we must all be aware. Not only do pubs suffer as a result of the price differential, they have to deal with the consequences. Although Tesco might sell a bottle of Lambrini for £1.90 for the young ladies of Dudley, Burton, or wherever, to drink before they go out, pubs have to deal with the supervision that involves not only the doorkeeper on the door, but those inside who must ensure that they do not serve alcohol to people who are already drunk. Over many years, we have seen the full cost of regulation being borne by the publican, but the supermarkets that have led to much of the unsupervised drinking do not have to deal with any of the consequences.
Simon Hart
Does my hon. Friend acknowledge that some supermarkets, including Asda, have changed their policy and introduced minimum pricing and limits? That indicates some positive moves in the right direction.
Andrew Griffiths
I thank my hon. Friend for raising that issue. That is true. I have met Asda and Tesco and some of the other supermarkets. It is important to realise, however, that the devil is in the detail. When we talk about below-cost selling, we need a proper definition of what that means. Asda advocates a below-cost selling method of duty plus VAT. That would be the equivalent of a bottle of wine being sold for £1.90 or a can of lager for 42p. I do not know about my hon. Friend, but I think that that is too cheap. If someone can tell me where I can buy a bottle of wine for £1.90, I might be interested to go and sample some of those wares—responsibly, of course.
Mr Andrew Turner
I am grateful to my hon. Friend for letting me intervene again. Does he accept that many years ago there were things called off-licences? Off-licences seem to have controlled things rather better than supermarkets. What is different?
Andrew Griffiths
My hon. Friend makes a good point. The difference is bulk buying, and the power of supermarkets to drive down the price for the brewers is the crucial factor. Earlier in the debate we heard about the methods used by supermarkets to force down prices paid to our dairy farmers, and we have seen a drastic reduction in the price that they receive at the farm gate.
Karen Bradley
The issue is not just the power of the supermarkets in buying, but the fact that they use alcohol as a loss leader to get people into the supermarkets, where they buy other goods. The supermarkets offset the profit that they make on other goods against the loss that they make on alcohol.
Andrew Griffiths
As always, my hon. Friend is spot-on. We cannot allow a situation in which the supermarkets are fuelling the phenomenon of binge-drinking, which we see all too often on our streets. I am not trying to hype that or to scaremonger. The fact is that the irresponsible pricing by supermarkets has led to an increase in consumption. The facts speak for themselves. In 1992, 527 ml was the average for alcohol consumed at home; in 2008, that increased to 706 ml. In 2000, 733 ml was the average for alcohol consumed away from the home; in 2008, it was 443 ml. It is cause and effect. Cheap, irresponsible pricing by supermarkets is changing people’s drinking habits and leading to unsupervised drinking.
Glyn Davies
I thank my hon. Friend for allowing me to intervene again. I agree absolutely with what he is saying. I have been involved in discussions of this type and I am quite often asked, “Well, what precisely would you do about the issue?” My natural instinct is to oppose the idea of regulation, which leads me, in dealing with the issue of rural pubs and prices in supermarkets, to be a bit reluctant to say, “We’ll just pass a law to enforce this.” I just think that we need to explore what we might be able to do to raise the price charged in supermarkets.
Andrew Griffiths
As always, my hon. Friend’s inner conservative core comes through. I do not want to interfere in people’s lives. I do not want to interfere in the pricing, but the reality is that either way, society is paying for the impact of irresponsible pricing by supermarkets. We pay for it in the social toll that it is taking on society, we pay for it every Friday and Saturday night in increased policing costs, and we pay for it in the impact on accident and emergency units throughout the country when people have drunk too much alcohol.
Rory Stewart
Would my hon. Friend tax it more? Is that not the way to deal with the matter?
Andrew Griffiths
That is a suggestion. I think that with the new coalition Government, there is now recognition that something needs to be done. My right hon. Friend the Home Secretary, in numerous speeches, has made the commitment to ban below-cost selling. My hon. Friend the Member for Leeds North West points out that we were expecting that last week in a Bill. It did not arrive. It is incumbent on us to press the Government to deliver on their promises, but if we cannot come up with a solution—a method for identifying what is below-cost selling that works—we should go down the taxation route. Exploring the idea of an off-sales tax would be interesting. Such a measure would help to level the playing field between the supermarkets, which have no responsibility for the after-effects of drinking, and the pubs, which, in contrast, have to pay for and deal with the implications when people drink too much alcohol.
I will finish my remarks quickly, because I have spoken for some time, but the industry does have to bear a little responsibility. It has not yet coalesced around a definition of what below-cost pricing means. There is an element of interference from Brussels that prevents us from clearly targeting it. I am referring to European competition laws. However, it cannot be beyond the wit of man for civil servants, the industry and retailers to get together and come up with a solution for below-cost selling that takes into consideration the cost of production, that leads to an increase in the price of alcohol on the supermarket shelves and that will begin to redress the balance and support our pubs.
I say to the Minister that although not many Opposition Members are present, there is a strong commitment on both sides of the House to support pubs and to tackle below-cost selling. We look to him not only to do what he can within his area of responsibility in the Department for Communities and Local Government, but to be a pocket rocket for the brewing industry and the pub industry, to be our champion across Whitehall and across Departments to ensure that we can say that this coalition Government, for the first time, did something to help British pubs.
Mike Weatherley (Hove) (Con)
I congratulate my colleague, the hon. Member for Leeds North West (Greg Mulholland), on securing the debate. It is with some trepidation that I follow the eloquent speech made by my hon. Friend the Member for Burton (Andrew Griffiths). We have heard that the problems facing the pub sector are of great concern to the House. Pubs play important roles as community hubs in many constituencies throughout the country. Accordingly, we need to consider how they can be protected and helped to flourish in future.
I want to draw attention to the way in which live music, in particular, can contribute very positively towards supporting pubs and their future earnings. Last year, PRS for Music worked with the British Beer and Pub Association to conduct research, which showed that pubs with featured music take 44% more money than pubs without featured music; more than 80% of pub managers thought that music would help them to survive the recession; and, on average, pubs without featured music are three times more likely to close than pubs with featured music. In response to those findings, PRS for Music worked in partnership with the BBPA and the Musicians Union to launch a music makeover campaign to encourage pubs to use more music to benefit their businesses and help bring communities together. We should applaud the efforts of PRS for Music, which will be sending advice to 45,000 pubs on how to use music to maintain and grow their business.
We should not lose sight of the fact that the relationship between pubs and music is broadly symbiotic. The music industry is well aware that pubs can provide a platform for new musical talent to develop. Small or secondary venues are very important to the long-term health of the music industry and play an important part in the development of new artists and minority genres of music, adding to the general diversity of cultural entertainment available to the public.
In Hove and Portslade, which I represent, and in the wider Brighton area, we are fortunate that we are reasonably well served by music venues. That adds greatly to the local economy and area. We need to ensure that we can maintain that great asset for the city, which encourages the local music scene and helps musical talent to develop. Music is integral to my area, as is witnessed by: the success of colleges such as the Brighton Institute of Modern Music, which is in my constituency; industry events such as the Great Escape conference; Brighton and Hove being a destination on the touring and gigging circuit; and, of course, the success and future success of home-grown talent. Pubs such as The Prince Albert, in Brighton, offer a venue to unsigned and up-and-coming bands. The excellent Neptune Inn, in Hove, is a key small venue and a marvellous pub. Similar venues include the Latest Music Bar, which offers young songwriters and performers a chance to perform. We jeopardise these pubs and essential music venues at our peril.
The Government have an important role to play in removing unnecessary regulation. The previous Government brought in the Licensing Act 2003, along with a big promise that live music would flourish as a result of the change in the law. In truth, the Act has made it difficult, costly and administratively time-consuming to make live music a part of the licence for premises whose main business is not to provide music.
The 2003 Act had four fundamental objectives: the prevention of crime and disorder; public safety; the protection of children from harm; and the prevention of public nuisance. None of the primary objectives, and in particular the objective on crime and disorder, has ever been substantiated as a concern with regard to live music. Furthermore, there is no evidence that high levels of background music—live or otherwise—in pubs and bars can lead to customers drinking faster or being disorderly.
One of the major challenges of the 2003 Act is that although a majority of local authority licensing committees have adopted a professional and sensitive attitude to requests to promote live music, unfortunately too many have paid too much attention to the views of a vocal minority. Unfortunately, residents are encouraged to object to, but not to support, applications to promote live music. Licensing committees should give live music the benefit of the doubt. The Licensing Act 2003 allows for conditions relating to live music to be added to a premises licence, where necessary, at a review, but the Environmental Protection Act 1990 is also used to prevent noise nuisance. Sometimes an authority’s interpretation could be said to be a little draconian. I salute the work of the Noise Abatement Society, based in Hove, and its “Sound Approach” scheme, which helps to facilitate good relationships between responsible venues and those living nearby.
We have a commitment in the coalition agreement to reduce red tape and promote live music, which I very much welcome. I urge the Minister to bring forward the necessary changes to the Licensing Act 2003 at the earliest possible opportunity. We should be able to exempt venues with a capacity of 200 persons or fewer from the need to obtain a licence for live music. An exemption enabling venues of any size to put on a performance of non-amplified music would also be welcome.
I would like to highlight a problem that may be on the horizon. The Police Reform and Social Responsibility Bill is due to have its Second Reading next week. Although I appreciate the need for licensing authorities to be able to impose specific conditions on premises licences and temporary event notices in limited circumstances, we should enable the application system to be as quick, easy and cheap as possible, with limitations on rejections unless there are very good grounds for preventing an event. We should not make it easier to stifle live music performances; rather, we need to find ways to allow live music to flourish. If we do that, we can, in an incremental way, help our pubs to remain open and at the heart of our communities.
Simon Hart (Carmarthen West and South Pembrokeshire) (Con)
Given the time and the nature of the debate, I shall restrict my comments to championing proudly the small rural pub. In the old days, rural communities had the post office, the bank, the shop, the garage and the pub. Then, the community had just a few of them, and then even fewer, and now, if we are lucky, it might have only a pub. We are losing pubs at a rate of 40 or 50 a month, as we have heard. That is more than a shame or a mild inconvenience to the communities who depend on them—in many cases, for most of their lives. We can only remove the beating heart from a community once, and yet over the past few years we seem to have done it time and again, and we are then surprised when that community withers and dies.
Hon. Members have made passionate speeches about their areas, and each constituency will have its list of fantastic pubs and institutions. I will be no different, because I want to highlight precisely what this issue means to me. There is a little place in Carmarthen West and South Pembrokeshire called Cresswell Quay with a pub called the Cresselly Arms, run by a great and old friend of mine. In that pub we used to gossip, talk, commiserate, celebrate and do almost everything other than drink and smoke—those were the least of the services the pub provided. Without a shadow of a doubt, it was the one place to which everybody turned at any time of year, for various reasons.
My hon. Friend the Member for Staffordshire Moorlands (Karen Bradley) mentioned the value of the landlord and, indeed, the landlady, and I cannot overemphasise the importance of that appointment. They were more than people who pulled pints and dished out the odd bag of crisps; they were our friends, advocates and advisers. They told us when we were doing things well or badly, if our neighbours were ill, or if the dynamics of the village were changing. They gave us advance warning of things that were important to our communities.
Karen Bradley
I thank my hon. Friend for giving way. He is powerfully making the point, which perhaps has not been made so far, that there is a human cost of pubs closing. Those pub landlords and landladies have put their all into their pubs. They have, perhaps, put their life savings into the pub, and if that pub fails, they lose their home and their savings—they lose everything. We have to remember that human element and cost when we see pubs close.
Simon Hart
My hon. Friend reflects my view. The example I cited—and I cited it because I know that everyone has an equivalent example—completely epitomises everything that a local pub stands for. My landlord—my friend, Mr Cole—has probably carried more coffins than the local undertaker. He is a pillar of the community. He is the pioneer of the big society. He started talking about the big society while we were still babes in arms. Somehow, we have managed to get ourselves into a position where all of that is at risk. We have allowed these institutions to be strangled by red tape and regulation. We have allowed them to be strangled by increased alcohol duty and by layer upon layer of increased planning restrictions, which constrict the ability of businesses to grow.
I make a special plea to the Minister: will he spare a thought for those institutions that have to operate in national parks? I have made a few speeches recently that may lead to me being accused of being anti-national park. I am not, but I hope that national parks across the UK see it as their duty to enable good local community institutions and businesses to grow. Their job, in my humble opinion, is not to stop growth but to enable it in a way that is sympathetic to the park.
Andrew Griffiths
My hon. Friend makes a very good point. I can give him the example of a hard-working pub in Dartmoor with a small derelict barn, which the landlord wanted to convert to offer more food facilities. The planning application was turned down. An application to knock the barn down was made, and that, too, was refused. The planning regulations are preventing that business from being successful.
Simon Hart
I thank my hon. Friend for his intervention. I am afraid that his story is just another in a long line of examples of bureaucracy strangling rural communities. We somehow have to reset the default position that certain planning authorities seem to have, which is: “Whatever it is, the answer is no.” Rural communities are about people. Of course they are also about landscape and buildings, but the landscape and buildings are worth nothing unless there is a rural community to inhabit, embrace and love them.
I will keep my comments brief and conclude with four questions, which may verge on statements. When proposals come along, perhaps through the localism Bill, will the Minister please, please ensure that there is just a little paragraph somewhere saying, “Rural-proof”. If a measure has a downstream implication that may disproportionately affect rural communities, please bear that in mind. The previous Government’s introduction of the concept of rural-proofing was worth while; the only problem was that they did not apply it. It was a good idea that was not applied. The Rural Advocate was a good appointment, but the position was not properly used. The principle behind it is that no matter which Department is passing legislation or why, it should always check how it applies to rural communities down the line. Does the legislation have a disproportionate effect on them? If so, how can we minimise the damage from that disproportionate effect?
I completely embrace the suggested inclusion in the localism Bill of measures to empower local communities to pick up and run with failing pubs. I am tempted to mention a compelling example of that in Penrith and The Border, but I will not because I have a feeling that someone else might. We must stop the inequality between tenants and freeholders—the beer tie has been mentioned. We must overhaul the licensing system and temporary event notices, which were mentioned by my hon. Friend the Member for Brecon and Radnorshire (Roger Williams), and we must reform the planning system to enable co-location of other services that local communities need and that landlords and their families might wish to introduce.
I should give a big thumbs-up—we should probably say “bottoms up”—to two pubs. The Jolly Farmer in Reigate was able to overcome all obstacles to create a food emporium, which is available to the community as long as the pub is open. It competes with supermarkets on opening hours, and is doing fantastically well. It has tremendous local support and has focused a little attention on the supermarket competition in the area. The Plough in Wigglesworth, Skipton, confronted the problem of a closed post office by converting its old taproom into one, thus enhancing the role of the pub in that area.
Many hon. Members have made important speeches in this important debate about the value and future of the local pub. That is why I want to restrict my speech to just the far-distant corners of Britain, where the pub is more than just a convenient place to go for a pint, and where its closure is a great deal more than a minor inconvenience.
Neil Carmichael (Stroud) (Con)
Thank you, Mr Benton, for allowing me to go to the main Chamber for the other debate, in which I have yet to make a contribution, though I hope to. I have made two interventions in this debate so far. One was to underline my new “Neil’s coalition brew”. I forgot to say that it will be available next week, for those who wish to sample it. The other point I made has been picked up by other speakers, and it was about localism and the importance that the localism Bill will have for local pubs. I would like to add to that point and say: let us encourage our councils to be bold and imaginative.
I have picked up a theme from one or two of the speeches: councils sometimes think that no is the best answer because it is the easiest. We want to see local councils setting out a vision—an agenda that matches people’s aspirations and, in this particular case, matches the desire for good local pubs. That requires the empowerment of local councils. Another important point about local councils is that they have to learn to enforce matters more rigorously and effectively. Enforcement is the other side of the coin to making decisions. That is a point that needs to be emphasised with regard to pubs.
There are too many restrictions. In my constituency, I have a problem with signage. Unbelievably, some pubs are having difficulty making their wares and services known, because the highways authority is not best pleased with signs on pavements and roads. That has to be handled in a more flexible way. Otherwise, we will drive past places without knowing that they are there or what they do. I make a plea to local authorities generally and to the Government in particular to encourage a sense of fair flexibility.
There are loads of pubs in my constituency; hundreds of them are very good. I have several favourites: The Woolpack in Slad—“Cider with Rosie” records activities in Slad valley—The Ram Inn in Woodchester, an excellent pub, and The Old Spot in Dursley. I could go on, and probably should, because there will be some who say, “Why did you not mention me?” I picked those three because they use their imaginations: they do things beyond what is normally expected of a pub. That is one characteristic of pubs that we need to encourage. If the Minister or hon. Members see a pub that is going further down the road of inventiveness, encourage it and allow that to happen. That would be useful to the industry.
Hon. Members have talked about supermarkets. We have to recognise the cartel problem, as regards both supermarket pricing and the ownership of pubs. We have to think carefully and astutely, with our minds on what business wants. We cannot stand in the way of business, but we must allow business to operate in an environment that is competitive and enabling. The Government need to go back and think carefully about cartels and the capacity that they have to disrupt a perfectly good business.
I want to finish there, because I think most of the other points have been well made. If people want to do something, they should not just say it is a good idea; let us do it. They have to follow it through. The Government have a great opportunity to do that.
Jane Ellison (Battersea) (Con)
I am delighted both to take part in this debate and that my hon. Friend the Member for Leeds North West (Greg Mulholland) secured the opportunity to hold it. As we can see, it has attracted great interest. I would like to put on record my support for the pub as an institution and to raise a number of specific concerns on behalf of landlords and proprietors in my constituency, which I hope the Minister will consider.
My right hon. Friend the Member for Witney (Mr Cameron) launched the big society at Battersea power station in April. I am not sure he thought that they would later be talking about it in the Eagle Ale House, a great community pub in my constituency, just a few miles away. I was honoured to be asked by Mr David Law, one of the landlords of the Eagle, to write an editorial for its summer beer and music festival programme, about the role of the pub in the big society. I was delighted to do so, as great pubs have always been at the heart of what is best about Britain, and we have heard about some fantastic examples in the debate. If the big society is partly about bringing people together to do things for themselves and others, the great British pub is already at the heart of the big society, as has been mentioned by other hon. Members.
The kind of festival put on by the team at the Eagle several times a year takes a lot of effort—the staff make that effort because they want to, not because they have to. We may call it the big society in action or we can call it something else, but it is fantastic, and it was a pleasure to support that beer festival—several times—as it is a pleasure to support so many of the excellent pubs and bars in my area.
However, the Eagle and other pubs are struggling under the combined weight of regulation and the tie. Several hon. Friends have covered that in great detail, so I will not repeat it. However, when that landlord offered me the prospect of writing for his festival programme, he also raised his grave concerns about the Brulines measuring equipment that was installed in his pub at the time, and how it was being used. Those concerns were explored by the Select Committee on Business, Innovation and Skills when it reported on the matter earlier this year, and it expressed some concern. When I made enquiries of my local trading standards officers, it was clear from their reply that they also had concerns. The subject has been raised already in the debate, and I hope the Minister will comment on the trading standards protocols in this area.
Moving on to the new mandatory licensing code for alcohol retailers, passed as part of the Policing and Crime Act 2009, which has been applicable from 1 October this year, the specific requirement is
“to ensure that customers have access to free tap water so that they can space out their drinks and not get too intoxicated too quickly”.
The penalty for non-compliance with this condition of the code is a fine of up to £20,000 or six months’ imprisonment—or both. The initial response recommended to local authorities is a review at least by the licensing authority of the premises.
A freedom of information request earlier this year revealed that, although that was a Home Office measure, backed by the Department of Health, when the various Government Departments were consulting, it was opposed by the Department for Culture, Media and Sport and by the Department for Environment, Food and Rural Affairs. Although the Department of Health backed the idea, the DCMS objected to the proposal to include free tap water, partly because it said it veered into the health objective territory and was therefore inappropriate for a licensing code. The DCMS argued in its response to the consultation:
“This is not proportionate—we need to see evidence that this is necessary, especially given that refusal could lead to loss of licence etc. Do publicans really often refuse to provide water to customers who have purchased and consumed any kind of drink or food? There are also laws to stop the sale of alcohols to drunks and purchase on behalf of them etc, so this measure, in effect, is unnecessary.”
DEFRA gave evidence along similar lines.
I raise this because there is an example in my constituency, and I am sure that there are others. I have received a communication from Sylvia Rushbrooke, who is the proprietaire of Le QuecumBar and Brasserie, which is London’s
“world premier Gypsy Swing venue”
and a noted Battersea venue. Le QuecumBar is an all-seated venue with live music every night and table service for drinks and food. The consequence of the relevant part of the licensing code and its draconian penalties is that people drinking free tap water can occupy a seat that would otherwise go to a paying customer. In a lot of other countries, even if customers want to order just water, they have to pay a cover charge.
I am aware from informal conversations that the licensed trade’s response to the consultation on free tap water was mixed. However, I cannot believe that hard-working proprietaires such as my constituent were meant to suffer a loss of trade as a result. It is a completely disproportionate response to a problem that it does little or nothing to solve. I quote some of the less critical parts of Ms Rushbrooke’s e-mail:
“This is just another nail in the coffin…we are being forced to give away an unlimited amount of a product that costs me money—water. Forcing a business to give away something that it pays for is immoral and costly. How many man hours were wasted thinking up this banal law? We have enough problems just surviving.”
I ask the Minister to consider that aspect. I fear that it is an unintended consequence, but it is a bad one.
I end by associating myself with the comments of my hon. Friend the Member for Hove (Mike Weatherley) on live music. With a fantastic team of people, I co-founded the Mill Hill music festival in north London in 1995, and we enjoyed huge co-operation from people in many local venues, including pub landlords. Of all the things that I have done, it is the one of which I am most proud. The festival was a great community activity, but such are the barriers to providing live music in pubs that I wonder if we could do it again today. It is wrong that we should not be able to do so. I congratulate my hon. Friends on securing this debate, and I look forward to the Minister’s response.
Glyn Davies (Montgomeryshire) (Con)
This issue is of huge importance to my constituency. Like my hon. Friend the Member for Carmarthen West and South Pembrokeshire (Simon Hart), I shall focus on rural pubs in isolated villages. In truth, my constituency has nothing but small villages. There is nothing else there.
The rural pub has played a huge part in my life—and, indeed, in the lives of all who have lived the same sort of life as me. I left school when I was 16. I joined my father on the family farm because he was ill, and I became an active member of the local young farmers club. It was incidental that the local pub was a place to drink; it was the social centre of my life. The young farmers club would sometimes meet there, or sometimes adjourn there after its meeting.
We probably did not go for the purpose of drinking to the Horse Shoe, the Lion or the Talbot—nor the Nag’s Head, which sadly closed but which I am delighted to say is on the point of reopening. We would probably have gone out four or five nights a week, and the pubs would have been full, with a huge amount of activity.
Many people do not appreciate the importance of darts and dominos in small villages. Almost everyone in our village plays darts or dominos. I hesitate to say that visiting the local pub so often was the ideal training for becoming a Member of Parliament, but there is an element of that. For example, there is the sheer pressure of playing dominos when the entire pub is looking on to see what you drop. Members have told me of the sheer awesomeness of making a maiden speech, but that is nothing compared with my experience of playing for the Wellington B team in the final of the Richards cup at Welshpool; it was standing room only, and a message was passed to the other room about the wrong domino that I dropped when we were two-all and I was No. 5. The point is that the rural pub is important to small villages.
Before becoming a Member of Parliament, I was involved in various activities, including being president of the Campaign for the Protection of Rural Wales—I say this because I want to put the rural pub in a slightly wider context—although I gave up that post when I became a Member, as I felt that there was a degree of conflict, as well a problem with time. The dominant issue when I became president a few years ago was onshore wind farms. Everyone thought that that was the only thing that we wanted to discuss. However, if anyone asked me what was the most important issue for the organisation during my years as president, I always said that it was rural services. That was far and away the most important matter in rural villages in Wales, and it was probably the same in rural England.
We know of the pressures on small schools, which continue to close in my constituency and in that of the hon. Member for Brecon and Radnorshire (Roger Williams); our education authorities are inextricably linked. Many of our local shops are closing. In the last year or two we have seen a significant number of post offices closing—and we consistently see small rural pubs closing.
In an intervention, I expressed my antipathy towards, and discomfort with, new laws and regulations, and that is an instinctive part of my politics. However, if we thought seriously about what we should do about the disappearance of local services, we could not say that we should not resort to regulation if appropriate. We have to take a common-sense position; we should act proportionately and be prepared to do things that we may instinctively dislike. If we are serious about retaining our local services, we will have to do so.
A number of concerns have been mentioned today, but in some ways it is about our attitude. Several of my hon. Friends spoke about the planning process. I can speak with some freedom, because many planning matters are devolved in my constituency, so I shall not be at variance with what the Minister might say. We need a different frame of mind. We need to be willing not always to work with a book of rules and laws and consider every application exactly in line with them. We need common sense. We see applications being turned down when everyone knows that it makes no sense to do so.
This is to do with the whole gamut of rural services, not just local pubs. I look forward to the Protection of Local Services (Planning) Bill, which will receive its Second Reading in the new year. It will be a really interesting Bill for all Members, as it will show what we are prepared to do to protect rural services. It will be a philosophical debate.
Chris Skidmore (Kingswood) (Con)
I am enjoying my hon. Friend’s speech. Many rural pubs are historic institutions, which have been around for centuries, often in listed buildings. They are hubs of the community.
We have spoken of the willingness not to resort automatically to legislation and regulation, but I wonder what my hon. Friend’s views are on using preservation orders for the historic buildings of country pubs if there is a change of use or if they close temporarily. The White Hart in the village of Bitton in my constituency has lain empty for two years, and Punch Taverns has sold off the freehold to many pubs. There is a risk that such pubs will be transformed and put to a completely different use. It may be against our instinct, but we should use legislation or regulation to preserve rural pubs that have been in use for centuries.
Glyn Davies
I sympathise with my hon. Friend’s proposal, but I cannot be precise in my opinion. We have to approach the Protection of Local Services (Planning) Bill and other legislation with common sense. It is certainly a valid view if the pub plays a significant part in the local community. Pubs sometimes close not because they are not viable but because they have been made unviable by people who see an opportunity to make more money out of them. That is what I meant by considering not only pure planning policies. I know of the difficulty of making certain that every decision is taken with a view to what an inspector might say. However, I believe that as parliamentarians we have to use common sense and flexibility in delivering what we want, and retaining public services in rural areas is incredibly important.
I want to touch on two other issues that matter to me. Attitude is important. I was a Member of the National Assembly for Wales when the smoking ban was passed. My libertarian instincts are such that I was one of only six Members who opposed the legislation. Although I do not want to criticise another parliamentary body, I must say that when we initiated a debate about wanting to retain a smoking room, or a place in which people could smoke without affecting anyone else, there was a comprehensive antipathy towards the whole idea. Although I felt that we were arguing on a rational basis—I thought that the case that we were making was bombproof—it was almost as if there was no willingness at all to compromise or to look at common sense, and it is that attitude that we need to change.
I should like to go into the supermarket issue, but I will not, because it has been covered so extensively. Diversification—or co-location or amalgamation of services—is a crucial way in which we can retain rural services. I can cite some superb examples from the area in which I live: two community shops have just opened and two pubs have taken on post office business. We have wonderful new community shops in Trefeglws and in Llanfechan; I officially opened one of them and went to the opening of the other fairly recently. We need to see such developments if we are to retain local services. Planning authorities and local authorities need to support such enterprises and give them every encouragement.
As I have earned my living through farming, I understand the problem with supermarkets selling goods at a lower price. It will be incredibly difficult to resolve that. Taxation is one way in which we can deal with it, but the levies that would be imposed would have to be very high indeed. The agriculture industry has an ombudsman who looks at the position and can say to the developer, “Oh, you are being unreasonable”. There are many good examples, but there are also many bad examples, and we must find a way in which to highlight them if we want to defend our local services.
Mr Joe Benton (in the Chair)
I remind hon. Members that I intend to start the wind-ups at 5 o’clock, and there are still a number of Members who want to speak. Please bear that in mind, and try to be as brief as possible.
Mr David Nuttall (Bury North) (Con)
It is the first time that I have had the pleasure of speaking in a debate chaired by you, Mr Benton. I congratulate my hon. Friend the Member for Leeds North West (Greg Mulholland) on securing this debate and my hon. Friend the Member for Staffordshire Moorlands (Karen Bradley) on opening it so well.
My hon. Friend the Member for Staffordshire Moorlands mentioned the fact that the building was the most important part of the pub industry. Although I agree that it is an important part, I submit that it is the customer who is extremely important, and that the lack of customers is the root cause of the problem in the pub industry. I am conscious of what you have said, Mr Benton, and I will try to share the time that is left before 5 o’clock and not take it all up myself. I will also try not to cover the points that have already been made by others.
I, too, must declare an interest. Although I am a member of CAMRA, I do not subscribe to everything that it campaigns for. My interest in the pub industry is purely as a consumer and not as an owner or manager of a public house.
The pub is the centre of the community in many television soaps—the Rover’s Return in “Coronation Street”, the Queen Vic in “EastEnders” and the Woolpack in “Emmerdale”—which has led many people to believe that it is fairly easy to run a pub. In my previous life as a solicitor, we were often called on to advise people who had a lease to run a pub that ran to dozens and dozens of pages. At least some of them came to us before they had signed the lease. One of the problems with the pub companies and the prospective lessees is the inequality of bargaining power. I submit that one way of dealing with the problem, without a great deal more red tape, is simply to require that a prospective lessee signs a document to say either that they have been properly advised about the nature of the document that they are about to sign or that they have taken a conscious decision to ignore the dangers of signing such a document. A 20-year lease can indeed be a benefit in that it gives security of tenure, but it can also be a burden when it comes to trying to sell the lease.
Why are pubs closing so quickly? I submit that it is because our way of life is changing, as are social trends. Some 30 pubs close every week, which is 1,500 a year. In the average constituency, a dozen pubs will close before the next election if it is in five years’ time. The problem is that we have had not too little red tape and regulation on our pub sector but too much. Very often that results in unintended consequences. Members will know that I introduced a ten-minute rule Bill on 13 October to give landlords the freedom to decide whether or not to have a separate room in which people could smoke provided that no food was being served and proper ventilation was in place. The Bill was defeated, but it is time for the Government to review the operation of the smoking ban.
The way forward must be diversification. We must ensure that pubs are used for more than just a few hours in the evening. We have gastro pubs, sports pubs, real ale pubs and music pubs, but we must use them in the day as well. We could use them as libraries, post offices or parcel collection points. They could also be ideal meeting places for groups. I am talking about pubs not just in rural areas but in the suburbs. Very often, when a pub closes, it is the last focus of a community—whether that be in a small rural village or the outskirts of a large town or city.
I am conscious that I have used up my six minutes, so I will close my remarks.
Rory Stewart (Penrith and The Border) (Con)
I, too, will be brief. Is there just one more Member to speak?
Rory Stewart
My apologies. I will limit myself.
This is an enormously interesting debate partly because—rocks hitting the building aside—it is a debate that we would not have had in the past. When Winston Churchill tried to talk about pubs, it was an incredibly controversial subject. When he was a Liberal, he ran his entire campaign attacking the Tory Government on the basis of the open hand at the Exchequer and the open door at the pub. In my own constituency, pubs were a taboo subject. This whole debate would have been like arguing for a larger salary for Jonathan Ross. It would have been a suicidal debate in this Parliament before the second world war.
So I am grateful that this debate is happening and I am grateful to the Members of Parliament who have spoken so eloquently about the glory of our pubs. For example, my hon. Friends the Members for Filton and Bradley Stoke (Jack Lopresti) and for Carmarthen West and South Pembrokeshire (Simon Hart) spoke in an extraordinary way about what a pub means to us. It is not just about the young farmers’ club—I have also cycled from pub to pub with the young farmers’ club—but about what pubs mean for the broader economy. In my own constituency of Penrith and The Border, pubs are important for tourism. For example, the George and Dragon at Garrigill is an absolutely essential pub for tourists on the coast-to-coast route and the Pennine way. People need to stop and eat. Pubs are essential to the broader economy.
I represent the most sparsely populated constituency in England. We have 280 pubs in the Eden district alone for 50,000 people—a density of pubs that is more than six times higher than the national average. That reflects the nature of our communities and the nature of our identity.
However, the problems that these pubs face are not problems that we can belittle or try to micro-manage from Parliament. Structural issues across the country have meant that, since 1997, 2,200 schools, 550 clinics and hospitals, and 330 police stations have all closed. The pubs are part of that broader movement of the stripping-out of rural services. These are structural issues. In France, they are fighting to protect the French bistro. France has lost 6,000 bistros. So we cannot imagine that these events are simply accidents of pricing or smoking policy; instead, they are a whole shift in culture.
The small solution that I want to propose in the limited time that I have available is community pubs. The community buy-out of the Crown at Hesket Newmarket was, of course, the first in the country. Cumbria is now repeating that fourfold. However, these are very difficult things to do. The problems that communities face in buying out pubs are the same problems that they face with everything: problems with financing; problems with organisation; problems with regulation, and problems with landlords who refuse to sell. As Members of Parliament, we have a unique role to play on behalf of communities, convincing landlords to sell and convincing communities to come together and find financing, through the Plunkett Foundation or the big society bank.
In the end, however, two things remain. The first is that communities know more, care more and can do more than people in Westminster, and the second is that we need to recognise that, with all our orthodox attachment to the free market, this sector is an example of where it may be necessary to have subsidy and regulation, to protect something that cannot be quantified simply—a value that spreads into the deepest recesses of English civilisation.
In a room such as this one—a wooden hall—one of the very first elements of law saw King Edgar the Peaceful introduce legislation on the licensing of alehouses in 965AD. It is with that point that I conclude—and with a great testimony to the introduction of music. Let us say, as Churchill and our other predecessors could never have said, “Let us sing, let us eat, let us drink, let us be merry, for tomorrow we die.”
Dan Rogerson (North Cornwall) (LD)
Thank you, Mr Benton. I will obviously be brief.
I congratulate my hon. Friend the Member for Leeds North West (Greg Mulholland) on securing this debate and the hon. Member for Staffordshire Moorlands (Karen Bradley) on introducing it so thoroughly and persuasively, by framing the issues that face us. I should also declare myself as a member of the Campaign for Real Ale, as others have done before me.
Last Saturday, I had the honour of reopening the Masons Arms in Bodmin. It is a free house and a pub that I may owe a great deal to, given that it was my parents’ local before I was born. Perhaps, therefore, my very existence may be in some way connected with that pub.
The Masons Arms has gone through the journey that has been described by many other hon. Members today. It was a very successful free house; it was built up and extended, a restaurant was put in by the owners, and then it was bought up, with an offer that the owners could not really refuse from a pubco, which paid silly money for it. It was then run into the ground over a number of years by various tenants. The kitchen was stripped out and sold off. Then the pubco had to put it on the market for much less than half the amount that it had bought it for. It was a crazy model for the pubco and it was very destructive for the people for whom the pub was their local. However, I am delighted to say that a local businessman has bought it and a local couple have taken it on and reopened it. I am sure that it will be a great success.
Other Members have also mentioned the use of pubs for a range of purposes in their communities. I would like to mention the Tree Inn at Stratton, where a couple of years ago the local post office, which had been closed because the owner wanted to sell the building off and turn it into flats, was taken on by the couple who run the pub and it is very successful now in that location.
Given the limited time available to me, I will just say that I absolutely echo the points made by the hon. Member for Hove (Mike Weatherley) about live music. Live music is hugely significant and part of what we enjoy about our pubs. We need to protect live music in our pubs and make it far easier for pubs to encourage local musicians and so on to carry on.
I also echo what hon. Members have said about tax and duty. The Government may be able to look at those issues, to protect real ale in particular but also to protect community pubs in general.
The Minister who I know will do a fantastic job for the pubs industry, is also the planning Minister, as has already been mentioned. I would say to him that the issue of planning is crucial. The hon. Member for Romsey and Southampton North (Caroline Nokes), who is no longer in her place, was concerned that imposing restrictions might lead to more boarded-up pubs, but I would argue the opposite. It is the hope that companies have that, at some point in the future, they might be able to turn pubs into flats that leads to pubs being boarded up. If it is absolutely clear that a pub will be used only as a community pub or that type of community facility, it will have to remain as a pub and whoever owns it will have to make preparations for passing it on to somebody who thinks that they can make a success of it.
I do not think that it is any accident that the pubcos are suffering, because their business model does not seem to have worked. What is a good-news story, however, is that many of the pubs that have been owned by pubcos and that have failed, for example in the town of Bodmin, have come back on to the market. In the last few years, I can point to three or four pubs in my area that have now been taken on by local people who are running them as free houses, and they seem to be functioning successfully, despite all the other factors that we have mentioned this afternoon.
So I think that there is a very positive future for the pub. Community pubs are crucial, doing a wonderful job for our communities in urban and rural settings, and I am certain that this coalition Government will do all that they can to ensure that those pubs have a very successful future.
Andrew Jones (Harrogate and Knaresborough) (Con)
Thank you, Mr Benton, for the opportunity to speak today. I will be as brief as possible. I know that you want to finish with Members’ contributions in a few minutes.
I simply want to draw the attention of Members and the Minister to an organisation based in my constituency, which has been referred to earlier. That organisation has been doing excellent work to help pubs to change, thrive and survive, and through that process underpin rural communities. The organisation is called Pub is the Hub. It is a national organisation. It does not just work in Harrogate; Harrogate just happens to be its home. It is almost 10 years old and it was initiated by His Royal Highness, the Prince of Wales, in his role as president of Business in the Community.
We have talked about how rural communities are facing major challenges. We have seen rural pubs disappear and pressure put on village schools and post offices. The key idea behind Pub is the Hub is to provide support for rural communities by maintaining the viability of the local pub at the heart of the community. The organisation does that by promoting diversification, as other Members have mentioned this afternoon. It especially promotes diversification into providing some of the important services that might not be provided otherwise. So it achieves two goals; it maintains important local services and it prevents the diminution of rural communities by underpinning the ancient tradition of the pub.
Pub is the Hub is a simple idea and, as with lots of simple ideas, it works. It has achieved 360 or so successful projects and it has been involved in a further 220 projects that have also been successful. Each project is different; each pub and each community is different, with different needs, and the services that each pub provides are different, too. The pubs involved provide everything from allotments to village shops, and from cooking school meals to providing a local post office, which Members have talked about. I know that the organisation is also talking to some county councillors about the provision of library facilities.
Twenty communities have taken over their local pub entirely and a further 12 communities are in the process of taking over their local pub. Across all the schemes, the economic impact is extremely positive. The average result is that four part-time jobs are created. However, the economic impact is a little broader than that, as the projects frequently have a positive effect on local suppliers.
Other people have mentioned case studies. I was going to highlight some case studies myself. However, for people who may not have much knowledge of the Pub is the Hub organisation, it has a very good website, which details the projects, as well as some of the costs and where the different sources of funding for projects have come from.
A pub is basically helped in two ways. First, the sharing of the overheads creates a more stable financial platform for the pub. Secondly, the pub is placed at the heart of the local community. Help for licence holders in supporting community services is about to be developed further. In January, a community champion programme will be launched in several parts of the country including my own, north Yorkshire. As pubs diversify, we must be careful that we do not penalise landlords with huge hikes in business rates. In rating assessments, we must be sensitive to the different types of activity taking place in one establishment.
Pub is the Hub is a voluntary, not-for-profit advisory organisation and its running costs are met by donations from breweries and pub companies. Its independence has helped it win involvement from different partners; it is clearly not run for its own financial gain but in order to secure the strengthening of rural communities, the provision of services and the future of pubs as viable businesses. Communities work together, as do the public and private sectors. It is an excellent example of the big society in action.
Mr Joe Benton (in the Chair)
Before we commence the winding-up speeches, I should inform hon. Members that the vote in the main Chamber will be held at 25 past 5.
Jack Dromey (Birmingham, Erdington) (Lab)
It is a pleasure to serve under your chairmanship, Mr Benton. I congratulate the hon. Member for Leeds North West (Greg Mulholland), who has a passion for the pub, on initiating this debate. I also congratulate the hon. Member for Staffordshire Moorlands (Karen Bradley) on putting a powerful case for the pub. I agree strongly with the hon. Member for Penrith and The Border (Rory Stewart) that one of the great strengths of Westminster Hall debates is that they enable us to focus on what matters to communities all over the country. Pubs are the centre of such communities. I congratulate the all-party save the pub group and the all-party group on beer.
This has been a fascinating debate, with esoteric contributions ranging from the Churchillian to tales of misspent youth, but all contributions have pointed in the same direction. They have recognised that responsibly run pubs are the hub of local communities all over Britain, provide a safe and sociable place for people to go, including with their family, and are the centre of local community activities. Pubs are a quintessentially British institution.
The Lad in the Lane in my constituency is one of the oldest pubs in Birmingham. Anyone who goes there on a Sunday morning will know how wonderful it is to see the pub packed with families out for a good day together. At The Bagot Arms, one can see workers from the local industrial estate, including from Jaguar Land Rover. The Yenton is one of the oldest pubs in the Erdington area. The New Inns, which takes me back to my misspent youth in Irish pubs in Kilburn, is a great pub for a great night out. I have long had association with other institutions related to the pub industry, including the Workers Beer Company.
Some 27% of adults go to a pub once a week. The economic impact of pubs and the pub industry is massive, contributing £28 billion to our economy. The benefits for the Exchequer are enormous: £1.14 for every pint drunk in a pub, compared with 55p per pint drunk at home. Therein lies a problem to which I will return later. The pub industry directly employs 540,000 people, and 380,000 are employed in associated trades. I know from my experience as deputy general secretary of Unite that the industry employs excellent people, from brewery workers to members of the National Association of Licensed House Managers, which became part of the old Transport and General Workers Union. Moreover, 90% of what is sold in pubs is produced in the UK. Pubs are good news for our economy as well as being the centre of our communities.
The hon. Member for Leeds North West has said on previous occasions that Britain’s biggest pastime is going to the pub. In terms of tourism, every year, more than 13 million people who come to our shores visit pubs. Our Government took some welcome steps—but. The welcome steps included enabling pubs to spread the payment of the inflation uprating of business rates over three years. The business payment support scheme run by Her Majesty’s Revenue and Customs benefited many pubs, and other support was given through low-cost loans and advice on energy efficiency that enabled many pubs to save on energy bills. But—let me be the first to acknowledge it—the simple reality is that since the 2008 Budget, 3,500 pubs have closed, and it is estimated that the pub industry will lose 112,000 jobs by 2012.
The hon. Member for Burton (Andrew Griffiths) put it well when he said that all parties went into the 2010 general election recognising both how valuable pubs are and that those in the Government must act. My right hon. Friend the Member for Wentworth and Dearne (John Healey) spelled out three aspects, in particular, of a 12-point plan. The first was a £4 billion programme of business support, including help for communities to buy into local pubs. The second, crucially, was a strengthening of councils’ powers to intervene to allow communities a greater say, including about change of use, and a planning regime that facilitated and encouraged pubs to branch out, as has been discussed in this debate, into everything from selling stamps to becoming gift shops. The third was our support for the position—on which the hon. Member for Northampton South (Mr Binley), with whom I have had the pleasure of working over the years, admirably led—taken by the Select Committee on Business, Innovation and Skills, when it identified the problem of pub tenants with beer ties having to buy everything from pubcos and recommended greater freedom for tenants to buy local to support local economies. We were right to support the Select Committee’s message that if the industry did not clean up its act, legislation would be necessary.
Andrew Griffiths
The hon. Gentleman is describing all the things that the previous Government did to support the pub industry and the brewing trade. Does he think that increasing the duty on beer by 60% was a positive or negative thing to do?
Jack Dromey
I have acknowledged that the increase in duty contributed significantly—although it was not the only factor—to a trend that led to 3,500 pubs closing.
There is a range of threats ahead of us. If the economy has a rocky year in 2011, that is likely to exacerbate the trend of stay-at-home drinking. The combination of reduced consumer spending and ever-rising costs—including the VAT increase from January 2011—is bound to have an impact. So, too, is the continuing trend, of which we have seen evidence in the past 12 months, of pub prices rising slightly while prices in supermarkets fall. Below-cost selling is a growing threat.
To return to what the hon. Member for Burton rightly said, there is substantial common ground in this debate. We would like to work with the Government on a range of issues, which I shall identify. First, action is necessary on below-cost selling, and that includes having an adequate definition of what that is. It is true that Asda has taken welcome steps in the right direction. My experience of Asda is that it has acted in a socially responsible way on other issues as well, including on labour market standards in its supply chain. I welcome that. Having said that, I find it hard to see how to deal with this issue other than through Government acts. If the industry is incapable of dealing with the issue, the Government will have to act. The hon. Member for Penrith and The Borders was right when he said—he did not say it in this way, but I will put it in my own way—that he hoped that hon. Members would not get out a clove of garlic in one hand and a cross in the other at the very mention of regulation.
That was my first point. Secondly, will the Minister respond to the comments from the excellent CAMRA on the differential rate of duty imposed on on-sales and off-sales? Thirdly, given that the sale of food is becoming ever more important in pubs, does he recognise that the increase in VAT from January 2011 comes at a difficult time for the pub industry and will have an impact? Fourthly, I think that there is a case for the late-night levy, but only 2% of pubs and clubs have late-night licences. The big problem is the 44,000 hotels, the 1,700 supermarkets, and the sale of below-cost alcohol. Pubs often have to deal with the consequences when people arrive already having boozed. We are in favour of the late-night levy, but pubs are entitled to feel aggrieved about the impact that it sometimes has on them.
Fifthly, the planning regime is crucial in the ways that I have addressed, and I hope that the Government will act on that. Sixthly, on the crucial issue of beer ties, we would like to propose a pub summit that would bring representatives of the industry together. We should tell the current beneficiaries of beer ties that if they are unable to change an unacceptable practice that is having serious consequences for those who run pubs up and down the country, the Government will act.
There was one point made in the debate that I think should be disregarded. It was absolutely wrong to resurrect the issue of the smoking ban. I say that for numerous reasons, but in particular because, having represented the union members concerned, I knew people who contracted cancer and died as a result of working in licensed premises. I think that that debate should rightly remain closed as we move on. In conclusion, the Minister is a man who is giant in stature. I know that he has heard the contributions from all parties represented here today, and I hope that he will respond positively.
The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill)
It is a great pleasure to see you in the Chair once again, Mr Benton. I thank all the Members who participated in what has been a positive debate, particularly the hon. Member for Leeds North West (Greg Mulholland), who has been a doughty champion of pubs, and my hon. Friend the Member for Staffordshire Moorlands (Karen Bradley), who introduced the debate in an exceptionally well-informed and persuasive manner. The debate has been remarkable in two respects: it has been unusually well attended for a Westminster Hall debate; and those who participated clearly have direct and personal experience of the subject, which we do not always see in our debates.
I say to my hon. Friend the Member for Burton (Andrew Griffiths) that I have had the pleasure of visiting some of the public houses in his constituency. I cannot pretend to have visited every public house mentioned in the debate, but I was pleased that the Eagle in Battersea was mentioned, as I used to visit it in my past life. It will not come as a complete surprise to Members to hear that it is quite possible that I will find myself in a public house in my constituency at some point over the weekend. Unlike my hon. Friend the Member for Staffordshire Moorlands, I did not grow up in a pub, although my mother sometimes thought so.
We face a range of important issues, as the hon. Member for Birmingham, Erdington (Jack Dromey) rightly said, and I welcome the constructive approach that he adopted. The Government are more than happy to work with all parties to find constructive ways forward to support what is a fundamental and great British institution. I hope to address most of the points that have been raised but apologise if I do not, as the time available is limited. I am sure that I will be able to write to Members and keep them informed about other matters. I will make no comment on my reaction to being asked to take over this job, other than to say that it was not a great struggle. As for the appropriateness or otherwise of my stature, they do say that good things come in small packages.
I have already met a number of representatives of the sector and am aware of the issues that have been raised, so I will address them first. The Department for Communities and Local Government is undertaking considerable work focusing on the ownership and running of community assets, and my hon. Friend the Member for Penrith and The Border (Rory Stewart) and others referred to that. The pub is part of the big society in a very positive way, and I was delighted to hear about the work of the big society vanguard in Eden valley that he is involved in. Pubs are a key part of that. My hon. Friend the Member for Carmarthen West and South Pembrokeshire (Simon Hart) made the same point strongly, and it has resonances for many of us.
We recognise that pubs, like village shops and community centres, can be invaluable assets in helping to strengthen community relationships and encourage social cohesion, so we intend to address that in order to make progress. The localism Bill, which I promise will be introduced to the House very shortly—I hope that it will make good Christmas reading for all those concerned—will demonstrate our determination, because we want to provide people and community organisations with a fair chance to take over facilities and assets that are important to them. We will use the Bill as a vehicle to address that and certainly envisage that it could include local pubs, where appropriate. As the Bill has not been presented, I cannot go into the detail, but I can assure Members that we have taken on board the issue of community rights to acquire and to challenge, which link to that in relation to some other services.
My hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones) rightly referred to the work of Pub is the Hub in that context. I had the pleasure of meeting representatives of that organisation in a pub in Yorkshire not long after my appointment, and we are keeping in touch. That is another good example of how a number of services could be pulled together to keep both the pub and the village viable, so we are taking the appropriate steps to address that.
Planning will involve two pieces of work: we are determined to give local communities greater power through the localism Bill to shape their own visions for planning; and our proposals for the creation of neighbourhood plans will give local communities exactly the opportunities to say what sorts of developments are part of their vision, and under what circumstances. We will need to talk through the detail, but that raises some of the opportunities that have been mentioned and some of the impediments and perverse consequences of the existing bureaucratic system. That is the opportunity and the vehicle to deal with that.
Members will know that much of planning policy in this country is made through guidance, rather than primary legislation, and that remains the case. We intend to consult fully and widely on the whole national planning framework that we are providing, which can include the national steer. That will give context to the community plans that we will enable through appropriate legislation. The opportunity to do that arises exactly in that context. That also takes on board the need, which I am conscious of, to recognise diversification.
I have come across the example of the George and Dragon in Hudswell in Yorkshire, which was taken over by local people using community shares to raise funds. The Government remain committed to exploring the idea of using more social finance to leverage in the opportunity for communities to raise funds and to get them on to a level playing field, because access to finance is sometimes an impediment to such initiatives. I happen to know that one of the shareholders of the George and Dragon is my right hon. Friend the Foreign Secretary, so that commitment runs right through the Government.
I am also conscious of the importance of diversification and creative thinking in that regard. There are many types of business activity that can be linked to pubs, as has been said, and we should take those on board.
I understand what was said about the impact of VAT. I will be honest. In a difficult economic situation, it is not possible to deal with all these issues. We want to give pubs not so much a hand-out as a level playing field across the piece for them to work on. For example, we have introduced a more generous small business rate relief scheme with effect from October, which will be a benefit to many pubs. We are also considering proposals to give councils power to levy discretionary business rate discounts, which could be used to support particular types of business or activity, and of course a pub could qualify under those circumstances.
Members will know, too, that we are committed to a comprehensive local government resource review of the whole picture of business rates. That will move quickly, starting in January and finishing in June next year. In a short period, there will be the localism Bill, that resource review and the consultation on the national planning framework.
The matter of the restrictive covenants placed on pubs was raised. I know that it is important, and it is also important to local authorities. In fact, three local authorities—Newcastle, Ryedale and Darlington—have requested Government action on the matter under the Sustainable Communities Act 2007. I am sure that hon. Members are aware that the Office of Fair Trading recently ruled that there was no competition issue in respect of covenants. However, it also made it clear that their use
“has the potential to harm consumers”.
It is, therefore, an issue that is worthy of greater investigation, and the Government will make a formal announcement on how we intend to do that along with our other 2007 Act responses later this month.
I am with the hon. Member for Birmingham, Erdington on the smoking ban. I know that some hon. Members have misgivings about it, but the fact is, as my hon. Friend the Member for Staffordshire Moorlands rightly said, that this is not a debate that will focus on the most important priorities for public health. I respect the views of those concerned, but I think that there are other ways to make progress more swiftly and constructively. That is why we are working on things such as sustainable financing, the big society, and using funds in dormant bank accounts to support social enterprises. There was a reference to the Protection of Local Services (Planning) Bill, which is the private Member’s Bill promoted by my hon. Friend the Member for Selby and Ainsty (Nigel Adams). I have met him once already, and my officials will be meeting him again shortly. I understand what his Bill seeks to do, but, like my hon. Friend the Member for Suffolk Coastal (Dr Coffey), I think that the question is whether its underpinning objective of preventing unwanted demolitions and loss of buildings necessarily requires primary legislation. I therefore would like to look at the context of our broader planning reforms to see whether we can achieve a proportionate response, given that any planning legislation has impacts on proprietary rights which must be balanced in the equation. I believe that that would be the right vehicle to deal with that matter.
Other Departments are engaged as well. The Government are committed to introducing proposals to implement the ban on sales of alcohol at below cost. As hon. Members have observed, one of the keys is finding a workable measure by which we can capture that concept. We are working at present with retailers and other interested bodies, and we hope to make a formal announcement on the issue shortly.
The Treasury’s review of alcohol taxation, which aims to balance the need to tackle problem drinking without unfairly penalising the majority who are responsible drinkers, or ignoring the economic and social importance of pubs, is under way. In consequence, from autumn 2011, the Government intend to introduce a new additional duty on beers over 7.5%—the ones that can be more of a problem—but at the same time to reduce duty on beers at or below 2.8%.
Hon. Members will have seen the Home Office response to the consultation on rebalancing the Licensing Act 2003. We want people to enjoy a drink without that becoming the driver of the crime that many town centres, including my own in Bromley in the past, have seen when people abuse the enjoyment of alcohol. We must get the balance right.
The Department of Health recently published its White Paper, “Healthy Lives, Healthy People: Our strategy for public health in England”, which sets out a bold vision to make wellness central to all that we do. Clearly, I must read it at some point, if only from personal interest, as I have decided to lose some weight over Christmas.
This debate involves a raft of issues. I see on the monitor that the Division bell is ringing, although we cannot hear it. I will happily write to hon. Members to pick up further points. I hope that they can see from what I have said that there is a clear element of work being done. On the beer tie, we will follow the advice of the Business, Innovation and Skills Committee, and review the position in June 2011. If a voluntary framework is not in place and workable, we will consider revisiting the issue.
Question put and agreed to.