Pub Companies

Caroline Lucas Excerpts

Thursday 12th January 2012 Commons Chamber

[Caroline Lucas (Brighton, Pavilion) (Green)]

I congratulate the hon. Member for West Bromwich West (Mr Bailey) on securing this important debate and commend the excellent Business, Innovation and Skills Committee report.

It is deeply worrying that the pub market in the UK has become so dominated by just a handful of companies. Tenants are being ripped off by those companies, which can overcharge for beer because the tenants are tied to them. The pub tie has been instrumental in hundreds of successful local pubs going to the wall, which continues.

Lessees can currently buy only a limited range of beer, often at inflated prices, which restricts pub goers’ choice, prevents small local brewers selling to such pubs and remorselessly accelerates the number of pub closures. That scandal must stop. The Chair of the Committee has reminded the House in both his motion and his speech that the Secretary of State promised action to save our pubs if the industry did not get its house in order, but neither the industry nor the Secretary of State has delivered. That is why this debate is so important.

I welcome the introduction of a new arbitration service, and requirements to follow rental guidelines and to publish national wholesale price lists, but the package as a whole will do little to stop pub closures or to provide meaningful support for sustainable local community pubs.

[Greg Mulholland]

Apart from concerns about the misrepresentation of PICAS, does the hon. Lady share licensees’ concerns that although PICAS is set up to be an independent arbitrator, it will be funded and controlled by the British Beer and Pub Association, and therefore the pub companies?

[Caroline Lucas]

That is a good point. I was trying to find something positive to say, but the hon. Gentleman is right that there are concerns about that aspect.

The Government’s response has failed to address the key issues of providing lessees with a genuine free-of-tie option. It will therefore not rebalance the relationship between struggling licensees and large pub companies. I am also concerned that even the limited package that has been announced will not actually be delivered, given the pub companies’ history of broken promises and abandoned commitments.

As other hon. Members have said, pubs are central to our communities. Chris Beaumont, the landlord of The Greys in the Hanover area of my constituency, tells me that his is the only pub in the area that has not closed and reopened in the last nine years. The London Unity has had three owners in two years, The Geese has changed hands four times in six years, and the Horse and Groom recently closed and reopened. In the pub trade, such closing and reopening is known as churn. Churn matters, because it means ruined livelihoods for the individual landlords and their families. It also means instability for our pubs and our local economy. It takes years to build up a great community pub. A high turnover of pub landlords as pubs regularly close and reopen sends out a negative message that times are not good and that it is difficult to survive in an area, which clearly does not help other local businesses. The tied scheme was a significant factor in all the closures I mentioned, but the pubcos would prefer that we did know about it: the data on pubs that close do not tell of pubs that close and reopen.

The other thing that pubcos are less than honest about is that when they sit down and negotiate with lessees, they claim that lessees can always be free of tied options, yet often fail to mention that they must pay a premium to qualify for that. On wines and spirits, the charge is between £4,000 and £5,000 extra per year. It is a similar amount for bottled beers. To put that into context, the typical annual rent for a pub tenant in Brighton is around £25,000 a year. Pubcos are therefore essentially extorting an additional 20% increase on the rent to free landlords from the tie. Furthermore, pubcos do not generally offer an untied option on draught beers or lagers.

The Government must listen to lessees such as Chris and the many others in my constituency represented by the Brighton & Hove Licensees Association. They are all deeply worried and believe as I do that it is high time the Government acted to protect community pubs and lessees. Pubs are pivotal to the economy and the tourist industry, so the health of the sector has a particular resonance in my constituency.

[Mrs Anne Main (St Albans) (Con)]

The headquarters of the Campaign for Real Ale is in my constituency, and we host the annual beer festival. I completely concur with the hon. Lady on the importance of tourism and pubs together. Tourism and pubs mean not just casual drinking, but major economic activity in the local area, and she is right to highlight that.

[Caroline Lucas]

I thank the hon. Lady for her intervention. I agree that pubs are good not just for the community, but for the local economy—in fact, they are often essential to it.

In Sussex, for example, we have an impressive range of local breweries, including micro-breweries. If they are to thrive, we need to change the situation that has arisen with ties. We must not allow big business to continue to wield such unfair power over pub lessees by restricting access to locally produced ales. We must make it possible for local brewers to sell their beers to local pubs. Without statutory regulation to ensure fairness, a huge part of the potential market for our local ales is closed off.

If the Government act to protect and promote real community pubs, they could begin seriously to promote a strategy to encourage responsible drinking and the enjoyment of local ales, ciders and other drinks.

I fully support CAMRA’s championing of functioning and well-run community pubs. An effective approach to reduce alcohol-related harm must involve support for good community pubs, which provide a safe and responsible place for people to drink. Therefore, parallel to the statutory code of practice described in the motion, our community pubs should be supported with a policy of minimum pricing of alcohol in supermarkets. That would begin to tackle seriously the problems caused for our pub trade, and indeed for wider society, by the off-sale of cheap alcohol, which is often low quality. I accept that is a topic for another debate, but it is not unrelated to the intention behind today’s motion, which is to protect our community pubs.

In conclusion, I fear that the Government are being cavalier in rejecting the recommendations of the Business, Innovation and Skills Committee and instead putting their faith in the very companies accused of malpractice to put their house in order finally. The future of community pubs is at stake, so, in common with many other Members, I call on the Government to eschew the grasp of the large pub companies and instead to champion, protect and increase the number of local pubs. The tied pubs in Brighton, Pavilion want to know when the Business Secretary will keep his promise. We need a statutory solution that better reflects the wishes of all publicans and pubcos, as well as the careful work of the Business, Innovation and Skills Committee.