Pub Companies

Debate between Lord Bellingham and Vince Cable

Tuesday 21st January 2014 Commons Chamber

[Vince Cable]

As I will say later—we have covered the matter in earlier debates—we did try to encourage self-regulation. We drew the conclusion that the action had not been adequate, which is why we moved on to proposals for statutory regulation on which we are now consulting. We have been down that road; we have tried that.

[Mr Henry Bellingham (North West Norfolk) (Con)]

I agree with the Secretary of State that it is important that we get this right. I must impress on him that there is a degree of urgency now with the forthcoming Queen’s Speech. Does he agree that we should recognise the fantastic job that local organisations, such as the Campaign for Real Ale group, are doing? In my area, CAMRA has pioneered a number of pub salvations, working with the community to ensure that the King’s Arms at Shouldham and the Dabbling Duck at Great Massingham were able to survive.

[Vince Cable]

My hon. Friend is right to remind us that this is not simply a top-down campaign. It involves not just Parliament, but an enormous grass-roots campaign. I am talking about community organisations, and I will go on to develop that point in a moment.

--- Later in debate ---

[Vince Cable]

That is a truly awful case. I hope to see the details of that example, because although we have a lot of cases, it seems to be a particularly bad one. I guess that would be one of the factors that led the Government to conclude that the voluntary code approach was not satisfactory, as presumably it has already been used.

The voluntary approach did have some positive outcomes, such as the Pubs Independent Conciliation and Arbitration Service and the framework code, but the conclusion we came to at the beginning of last year was that the changes had not gone far enough and that problems persisted. To us, the essential point is best captured in the work done by CAMRA that suggests that 57% of tied tenants earn less than £10,000 a year. If we apply that to 35-hour week, 48 weeks a year, we are talking about less than £6 an hour, which means that people are working for considerably less than the minimum wage. Since many work much longer hours, that means that this is a very low-paid industry. Many publicans are struggling. In contrast, only 25% of those who are free of tie are on at the same income level. There is a striking disparity, which is at the heart of the question.

[Mr Bellingham]

The Secretary of State is being very generous in giving way. Does he agree that many of these disputes need to go to adjudication? Does he share my view and that of many colleagues that getting an adjudication system in place as soon as possible is essential?

[Vince Cable]

Indeed. That was the objective of the consultation. Let me briefly reveal the history, as we have been talking about it implicitly throughout these exchanges. We announced last January that it was time for the Government to step in and the consultation was launched along the lines envisaged by the Select Committee on a statutory code of practice and an independent adjudicator. That was the framework of the Government recommendation. We included an open question on the mandatory free-of-tie option with open rent review and we tried to underpin a specific intervention with a framework, a philosophy, a set of principles, the overarching fair-dealing provision and the core principle that a tied tenant should be no worse off than a free-of-tie tenant.