Small Business, Enterprise and Employment Bill

Adrian Bailey Excerpts

Tuesday 18th November 2014 Commons Chamber

[Greg Mulholland]

My hon. Friend is absolutely right. Every pub is a story about a community, and a story about the people who are running it. There have indeed been many tragedies. I had one in my constituency; a pubco tenant died of a heart attack a week after closing his pub. There are awful stories of human misery here. It comes down to the simple problem I outlined at the beginning: the over-charging. These companies continue to take more than is fair. It can often be 70%, 80%, 90% or even 100% of the pub’s profit, meaning that licensees cannot make a living.

Most revealing of all, I have asked Punch Taverns—in writing, and to its representatives’ faces—four times why it is so afraid of the market rent only option, the simple option to give tenants the right, at certain trigger points, to be offered a fair commercial market rent, and it has failed to answer four times. That, Mr Deputy Speaker, tells you all you need to know. It tells you that this business model is precisely based on taking more than is fair and sustainable. The only solution is the market rent only option.

Let me deal finally with the Government’s suggestion of a compromise: “Perhaps we can include a reference to the market rent only option or the Business, Innovation and Skills Committee option being built into the Bill, but only after a review two years after the statutory code comes into force.” I understand why this is being said, because the will of this House is clearly in support of the market rent only option, with 90 coalition MPs signed up to the Fair Deal for Your Local campaign, which calls for that option. I understand why the Government Whips are getting so worried: they realise that they might lose this vote today.

Let me say clearly on behalf of the campaign and all the organisations that have expressed this view that the last thing we need is yet another review. We have had four exhaustive Select Committee reports. In 2011, when the Government were supposed to act, we had a Department for Business, Innovation and Skills review, and BIS decided not to act. What was supposed to be the last chance became a second-last chance for the pub companies. When people realised that nothing had changed, there was a further review. We have had four reports and two reviews. The simple reality is that we need action and need it now. I ask you, Mr Deputy Speaker, to grant a vote on new clause 2; I think that you will agree that it is the will of the House to vote on it, given the support for it.

The simple message from all the Fair Deal for Your Local campaigns, thousands of tied publicans, and all who believe in pubs, publicans, communities and fairness is “No more delays, no more reviews, no more excuses.” Please let us solve this problem at last, properly, once and for all. Please let us all vote for new clause 2 today.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

I have a sense of déjà vu as I rise to speak about this subject yet again. I shall confine my remarks to new clause 2, because that very well-researched clause is consistent with nearly 10 years of successive recommendations from the Business, Innovation and Skills Committee, and because I feel that it will address an issue that all the other proposals have failed to address: the unfair relationship between the pubco and the tenant. That unfairness, and the need to redress it, were spelt out to me in a letter that I received from a tenant, who wrote:

“The pub company wins all the time, they get a share of the Games Machines, the pool table, the Rent and they also put £30-£50 on top of each barrel so we pay a lot more for our beer than buying it off a wholesaler or warehouse.”

I realise that the Minister and the Government have moved a long way in the last two years, from insisting that a voluntary code would be sufficient to deal with the problem to recognising, following a long consultation, that it was necessary to introduce a statutory approach. However, I feel that, in its current form, that approach is lacking.

Let me begin by responding to the Minister’s reference to a possible Lords amendment postponing the implementation of the Government’s proposals until after a review and a ministerial decision. I oppose that course of action for a number of reasons, some of which were mentioned by the hon. Member for Leeds North West (Greg Mulholland). The industry has already been consulted to death. As the Minister said, the Government’s last consultation received an enormous number of responses, and it took them a long time to reach their conclusions. I therefore see no grounds for any further consultation.

The issue here is the deeply entrenched position of the British Beer and Pub Association, which represents the pub companies and which, over the years, has consistently paid lip service to the BIS Committee recommendations for the introduction of a voluntary code while dragging its feet and procrastinating at every stage of the procedure. Indeed, our last report referred to “glacial” progress. There is no reason to believe that any further consultation over the next two years will make any difference whatsoever.

[Richard Graham]

Does not the history of pubs and beer in this country show that the unintended consequences of legislation over the years have frequently proved almost disastrous?

[Mr Bailey]

I understand that argument, and I have some sympathy for it. However, the hon. Gentleman referred to unintended disastrous consequences. I think that many people would describe the closing of 27 pubs a week, which is happening at this moment, as a pretty disastrous scenario. I do not pretend that all the closures are a direct result of the beer tie or that all the pubs are owned by pub companies, but those are undoubtedly major factors in a high proportion of the closures. Given the current rate of closures, if we delay for two years the industry will have been greatly slimmed down even within that time.

--- Later in debate ---

[Andrew Griffiths]

I absolutely agree with my hon. Friend. As he says, some people are desperate to get a pub. They have a dream of being a publican, and there have been instances of pubcos waiting for the next sucker to come along and take on a tenancy. There has also been an element of rinsing—of passing people through the system. I do not support that; it is wrong and we should stamp it out.

[Mr Bailey]

The hon. Gentleman is being incredibly indulgent to the queue of Members trying to intervene on him. May I take him back to his point about the brewing orders? They undoubtedly had unforeseen consequences, but the proposals in new clause 2 are nothing like the proposals in those orders. The new clause proposes a graduated, incremental approach that would give the industry a chance to adapt and to see how the new arrangements were working.

[Andrew Griffiths]

rose—

[Mr Bailey]

I haven’t finished yet. My other point is that the new clause—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order.