Pub Companies

Andrew Bridgen Excerpts

Thursday 12th January 2012 Commons Chamber

[Mr Binley]

They borrowed against the value of the properties, and rental income is very relevant. That is absolutely correct. Therein lies the unsustainability of the model, when we bear in mind that the breweries built up their estate over a 200-year period.

Sadly, tenants are the victims of that unsustainable structure. In many cases they face prices higher than those on the open market, exorbitant rents and a quart-measure of misleading information. To make a pub work, individuals have ploughed in their savings on the back of distorted information, and as a consequence they have gone to the wall. Most publicans are dedicated and hard-working people. We should take note: they are influential opinion formers in our communities and many of them have been badly treated. All I seek is fairness on their behalf.

Following the Committee’s 2010 inquiry, there was a clear understanding that the industry would have a year to get its house in order, or a statutory code of practice would be introduced. I questioned the previous Government and received that assurance. I questioned the current Secretary of State, who confirmed that he would continue with that promise, but the Government have sadly reneged on that undertaking. I find that very sad indeed.

The Government’s proposals for a legally binding voluntary code are not good enough. They have performed a volte face on this issue and it is incumbent on them to explain why their proposals are superior. How will a voluntary code work? The Minister’s argument seems to be that the level of protection will be comparable to that provided by a statutory code, but why is a voluntary code preferred when it has failed in the past? If the answer lies within the industry, why has it taken so long to make such desultory progress? Why should this Minister have any more faith in the industry than his predecessors, who had similar confidence? What is the cost of the voluntary code? How does it compare with the certainties that statutory regulation would bring? How much will it cost tenants, when they are in trouble, to pursue an action under the voluntary code? Those answers I demand from the Minister today. Concerns about the future of the industry abound. Why should small tenants be made to pay the price? They have suffered enough. Were they not persuaded to take on these pubs under false pretences, under an unsustainable structure? Does not all the Committee’s evidence prove that to be true?

I want the Government to support the entire industry, including the tenants. That means that in companies with more than 500 pubs—that excludes the small businesses—tied tenants should have the option to become free of the tie.

[Andrew Bridgen (North West Leicestershire) (Con)]

Does my hon. Friend agree that the current relationship between many tied pub tenants and large pub chain owners is almost feudal, and is neither fair nor sustainable?

[Mr Binley]

I agree, and I am grateful to my hon. Friend for making that point.

We need an opportunity for an independent, open rent review within the terms of the tenancy. Those who choose to stay tied need to have the option of selling a guest beer. We need to give tenants more freedom to decide the style and structure of their business. Those things are not available within the pubcos at present. Those are fairly simple requests. I do not believe that they can be achieved without an independent ombudsman to monitor compliance—history and practice are on this side of the argument.

I do not know why the Government have sought to back away from their own commitments. I recognise the need to compromise in the way that the Chairman of the Select Committee has explained, but if we want, as I do, a virile and vibrant pub industry that is strong for the future, we need to deal with the cancer that is undermining it and putting its very existence under threat. That, Mr Minister, means that we need to change the proposals that have already been made. I expect the explanations I have asked for, and I expect the Minister to be compliant and say that changes will be made—