The Future of Pubs

Debate between Greg Knight and Greg Mulholland

Thursday 9th December 2010 Westminster Hall

[Greg Mulholland]

I am pleased that my hon. Friend raised that point, because I have had the same experience in Leeds, with planning officers telling councillors on the plans panel that the pub had no status and that viability could not be a planning concern, while at the same time councils around the country have taken the action in question. There is confusion, so we want to give the message, and empower councils. We want to give them the opportunity to take such action where they think it is important. I urge all right hon. and hon. Members to support the Bill, and the community pubs Minister to take those points forward if the Bill should fall, which I hope it will not.

[Mr Knight]

Does my hon. ally agree that the viability test must be objective, with an element of independence about it? There is a pub in my constituency the owner of which wanted to use the building for something else. Two years before he closed it, he deliberately stopped serving food, which was one of the most profitable aspects of the business, so that he could try to con council officers that the pub was not viable, although the whole village knew that it was.

[Greg Mulholland]

I do not think that I have ever taken part in a debate in which the interventions were so accurate and helpful. My right hon. Friend and ally is right that there is a scandal going on, with pub owners—whether individuals, pub companies or brewers—who have decided that they want to do something else with the pub deliberately running it down. Often an inappropriate person is picked to run it. That has happened in Leeds and, I am sure, around the country. It is a scandal, and takes us back to the fact that communities have no say in the process.

I hate to see boarded-up pubs. One of my local pubs, the Summercross, remains boarded up after we were conned by a company that told us it would quickly build a care home there. That was more than two and a half years ago, and it is still a huge eyesore in a very pleasant part of Otley. The surrounding community has no power. I agree that there should be powers to stop people land banking derelict buildings that could and should be used. However, we must not let that become an excuse for it to be made even easier for people to lose their pubs.

I welcome the community right to buy that the Government have proposed and look forward to hearing more about it from the Minister. It fits very well with the idea of the big society and with our passion for empowering communities, decentralising power and giving communities a voice. However, I have one note of caution to sound for the Minister about something I have raised previously. Although it is incredibly welcome that communities are to be given the opportunity to see whether they can take over ownership of their pubs, that will not solve the problem of popular, wanted and viable pubs closing. In some areas the community will be unable to take a pub on, or will not want to; but it will still want the pub to continue. I have seen many cases in which a good small pub company, small brewery or individual wanted to buy or take on a pub; but they can currently be prevented from doing so. Unless we include in the planning process a right for communities to have a say in a process, that gap will not be plugged. I ask the Minister to consider that.

I now turn my attention to the model of the beer tie operated by pub companies, which my hon. Friend the Member for Staffordshire Moorlands has already outlined. It would be useful to give the House an update on the current position. I look, once again, to the Opposition Benches, because, after a long campaign fought by several organisations, the previous Government listened and acted. That was extremely welcome and I was delighted when the present Government, through Business Ministers, said that they would follow the process that was put in place by the previous Government. That was extremely important and positive.

I shall not go through the figures and the issue of the tie, but the present position is that three recommendations were made by the previous Government and adopted by the present one, and they come within ministerial responsibilities. The first is that the industry should ensure the accuracy of flow-monitoring equipment. We have already had mention of that. The second was the implementation of a code of practice; and the third was that Ministerial action should follow a failure to do those things and establish a code of practice that addressed the concerns of the Select Committee on Business and Enterprise. That is crucial. In addition, Ministers would consider the matter and would be minded to refer the matter to the Competition Commission if reform was not forthcoming.

I raised concerns with the Minister’s colleague, the Secretary of State for Business, Innovation and Skills, to whom I was perhaps a little less kind in a previous debate, about the merging of the Competition Commission with the Office of Fair Trading and its implications for the process in question. That is in the light of the fact that the OFT came up with the extraordinary decision that, although it admitted that tenants were not treated fairly and beer prices to the customer were higher, there were no competition issues. I look forward to hearing about that.

So far the result of the process is that only two companies have established an accredited code by the deadline, which was 1 July 2010. The deadline for implementation was 1 October. Therefore 28% of British Beer and Pub Association members failed to meet their obligations. The BBPA framework on which the codes are based deliberately and explicitly excludes the commercial issues that constituted the problems highlighted in the ministerial response. Crucially, no company code offers a genuine free-of tie option to lessees and few offer a guest beer option. The reality—I have to make this clear—is that so far those companies deemed to be operating unacceptably to the previous Government and the Select Committee, and to this Government, are still doing so. Unless that changes significantly, Ministers will have to act.

I have to mention the codes of practice, some of which are now being produced. Hon. Members may not be surprised that I will mention specifically the Enterprise Inns code of practice, a glossy document that starts:

“Our new Code of Practice sets out our commitments to you”.

However, it generally sets out the tenants’ obligations to Enterprise Inns. Tenants are being pressed by Enterprise business development managers to sign the certificate of acceptance in the manner of a door-to-door window salesman. I ask the Minister’s colleagues in the Department for Business, Innovation and Skills to look at that, because not only are the codes—particularly that one—not delivering what they were supposed to deliver but there is a danger that they will make the situation worse, will put more onus on the tenant and are doing nothing to address the problems in that business relationship.

I shall mention something now that will upset deeply my colleague the hon. Member for Burton although he may wish to comment on it in his speech—I hope that he does. The largest pub company, Punch Taverns, is in a desperately parlous financial position. It gives me little pleasure to say so. There is a crisis in the biggest pub companies, which are in eye-watering debt. That is the biggest threat that the British pub faces at the moment. Hon. Members have said that that is because of bad business decisions—the sort of gambling that gave the bankers a bad name—including over-valuing their estates, and now they are in vast amounts of debt to creditors. Pubs are being sold and closed continually to deal with that. Enterprise has just raised another £9 million from auction.

There is concern that Punch is teetering on the brink. I hope that that is not so, because the last thing that we want is many pubs suddenly coming on the market and many of those being converted to other uses. That goes back to what I said before. We have to get something in the planning process that stops people simply getting rid of pubs for what they can get.

I come now to my final question to the community pubs Minister. It gives me great pleasure to call him that. The Minister is a fan and a friend of the pub and I look forward to chatting with him, perhaps over pints in pubs, as we move forward and work together with his team and the all-party save the pub group. Are the Government committed to a below-cost selling ban? I think that all hon. Members would support that to stop the scandal of supermarkets selling beer below cost. It is not a price-fixing measure or thinking that is against the free market; we are simply saying that supermarkets should not be selling beer below cost to get people into their stores. If they want to do that, they can do it with chicken or bread, or things that are useful to people, but they should not undermine pubs and sell irresponsibly.