Pub Companies

Charlotte Leslie Excerpts

Thursday 12th January 2012 Commons Chamber

[Charlotte Leslie (Bristol North West) (Con)]

I congratulate the Backbench Business Committee on bringing the debate forward. It is massively important, because as I think we all agree, pubs play an incredibly important role in our society. If we are to talk about the big society, we should recognise that an awful lot of charity ventures and community groups and activities involve a pint, whether of beer or orange juice, at the local pub at some point.

The subject is massively important also because pubs are a place for social, intergenerational drinking rather than the isolated drinking that very cheap supermarket alcohol can often encourage or the antisocial behaviour caused by preloading—kids drinking a lot before they go out. Pubs are important for all sorts of reasons, as I know we all agree.

The issue of the beer tie is one part of the equation that is leading to many of our pubs closing. Although we must recognise the importance of that, we must also recognise the other factors in the closure of pubs, which have already been mentioned. Cut-price supermarket alcohol is a massive one and social changes are another, and there may also be things that we can do about business rates and licensing to help to create a level playing field for pubs.

[Greg Mulholland]

Of course there are a number of factors affecting pubs, but when we compare a tied pub and a free-of-tie pub, we see that the fundamental difference that shuts a tied pub is the pubco’s unreasonable terms.

[Charlotte Leslie]

I thank my hon. Friend for that, and I am just coming to the role of the pub tie and the pub companies.

It is a shame that there seems to be a lot of distrust among the various factions about how the Government’s response to the Select Committee has come about. I know that figures have been put forward stating that non-tied pubs close faster than tied pubs, but those figures are in dispute because tied pubs tend to be sold to developers before they close down, so they are not listed as tied pubs by the time they close down. There is also the issue of large businesses reporting business failures. There are therefore doubts about the statistics on whether a pub is better off being tied or non-tied.

[Greg Mulholland]

To be clear, the CGA Strategy figures, which no one disputes, show that between December 2008 and June 2011, the number of tied pubs fell by 3,216, and that in the same period the number of free-of-tie pubs increased by 425. Does the hon. Lady agree that it is baffling that the Department for Business, Innovation and Skills simply accepted the British Beer and Pub Association's misleading representation of those events, which, as she says, omitted transfers that happen, in some cases deliberately to distort the figures?

[Charlotte Leslie]

It is very obvious—this is crucial to the debate—that there is a strong feeling that the response was unilaterally informed. I am not in a position to say whether that is the case, but it is difficult for the Government’s response to have authority, particularly on such an important issue, when there are allegations that it was overly unilaterally informed. I take my hon. Friend’s point. The dispute over the figures is very much a case in point. Another result of the beer tie is the substantially lower earning of the publicans who try to manage those pubs.

That is statistics, but anecdotally—we are all very aware of the limitations and strengths of anecdotes—we hear of people opting out of the beer tie to find their rent increasing. Publicans who have been in the business for a long time and who took on pubs under big companies 20 years ago report how much more restrictive pub companies have become in recent times. Given the upward slope that pubs face in making themselves viable, that seems a counter-intuitive direction for pub companies if they want pubs to succeed.

Other areas of distrust that are not at all helpful to the debate include disputed membership of the Pub Independent Conciliation and Arbitration Service, which my hon. Friend the Member for Leeds North West (Greg Mulholland) also mentioned.

I shall vote for the motion. Given the lack of success of self-regulation in the past, there is a question mark over whether it will work in future. I am not one to run for more regulation—there are lots of unintended consequences.

[Mr Binley]

Is it not true, however, that there is no regulation, because the voluntary code is supposed to be put into practice in its entirety? The argument that a statutory code means more regulation simply suggests that the voluntary code is not being followed.

[Charlotte Leslie]

My hon. Friend makes a good point. One issue at stake is the efficacy of a voluntary code. Although there might be problems with the timing of a review, a review of the kind of voluntary code that the Government have suggested would be extremely valuable—it will set in place many of the issues that we are discussing.

I do not want to take up too much time because lots of hon. Members want to speak. As a Conservative on the Government Benches, I do not believe that regulation is always the answer, but it is sometimes. It must be looked at—it cannot be dismissed out of hand out of religiosity. I also believe that if a business model is not sustainable, it must be allowed to fail. However, the key thing is that pubs face an uphill struggle—it is not a level playing field—in so many aspects of their operation. Looking at the relationship between pub companies and publicans is just one factor in levelling out that very uneven playing field, which has devastating effects on community cohesion not only in rural communities, but in communities all over the country.