Pub Companies

Fiona O'Donnell Excerpts

Thursday 12th January 2012 Commons Chamber

[Fiona O'Donnell (East Lothian) (Lab)]

I congratulate my hon. Friend the Member for West Bromwich West (Mr Bailey) on securing today’s debate. It is about so much more than a fair deal for publicans; it is about the vital role pubs play in so many of our communities, particularly rural communities. In the village where I live in East Lothian, the pub is one of the few remaining facilities. It is where local community groups and organisations meet and where a newcomer like me goes to get to know the locals and find out what is going on in the community. Pubs are also vital employers in rural communities, but that is being hit hard by the Government’s failed economic plan. The flexible working and shift patterns often fit well for women and provide them with vital employment opportunities.

We need to give publicans a fair chance to make a decent living, and as a new Member I have been amazed at the scale of the problem and at the number of publicans who have come to me to seek help. I am regularly copied into correspondence that extends to dozens of e-mails between them and the pub companies, and I cannot begin to imagine the stress that the situation causes publicans as they try to negotiate a fair deal. In that process, they often manage to negotiate a fair deal in one area, but then the pub company raises costs or reduces income in another. It really is time for the Government to do something about the situation.

[Glyn Davies (Montgomeryshire) (Con)]

Will the hon. Lady give way?

[Fiona O'Donnell (East Lothian) (Lab)]

I am afraid that I will not, because I am aware that many Members want to contribute.

Indeed, in my constituency one publican, Mr Laurence Brunton, contacted me when he heard the Government’s response to the Business, Innovation and Skills Committee report, and said that the

“government’s lame response to BIS committee recommendation makes a laughing stock of a hard working publican who is earning £10k a year.”

Has the Minister had any conversations with the Chancellor about how much the taxpayer is having to pay out in tax credits to subsidise the way in which many of our publicans are being ripped off?

The problems that I hear from publicans in East Lothian are about pubco-packaged beer prices, as well as those for alcopops and soft drinks, being almost 100% more expensive than the wholesale price. They describe rent negotiations as totally one-sided, and they feel like they are being bullied. The correspondence that I have seen certainly seems to back that up. Pubcos are often slow to carry out repairs or they do not carry them out at all, and that affects a publican’s ability to generate income and to achieve the targets that the companies set them. Many publicans survive only because of their family’s help, often paying the minimum wage to family members in order to keep the business running.

The hon. Member for Leeds North West (Greg Mulholland) described the Prime Minister as talking about a fair system of capitalism, but actually the Leader of the Opposition has been leading that debate. It is good to see the Government catching up, if a little belatedly, but this is an opportunity for them to take some action to redress the imbalance in the pub industry.

I should like also to make some positive suggestions to the Minister and, indeed, to invite him to my constituency to see some different pub models that are fairer and give something back to the community.

Does he have any plans to encourage mutual pub models? The Prestoungrange Gothenburg pub in Prestonpans is an example of a pub giving back to the local community. It has recently won prizes and awards from the Campaign for Real Ale, as the best new enterprise in East Lothian, and, just last year, as Forth Radio’s pub of the year. Its website describes just what the Prestoungrange Gothenburg does. It is

“under the management of the East of Scotland Public House Company Limited which trades wholly within the original Gothenburg Principles its founders established. After a 5% pa cumulative return on the capital employed in the enterprise, all further surpluses are Gift Aid granted to the Prestoungrange Arts Festival which is a charity devoting all its resources to using the arts to stimulate and encourage the economy of Prestonpans and its vicinity.”

I should like the Minister to come to Prestonpans; I will even buy him a pint if he does. I hope to welcome him there soon.