Pub Companies

Jim Shannon Excerpts

Tuesday 21st January 2014 Commons Chamber

[Vince Cable]

I thank my hon. Friend, who remembers such things from his time in the House, for his reminder. We have, I think, had four Select Committee reports under different Governments. The matter has been actively debated for something in the order of eight years, and we have moved quickly on it in comparison with what went before.

[Jim Shannon (Strangford) (DUP)]

The failure of the pub companies to self-regulate underlines the need for an adjudicator, as does the fact that a number of pubs are closing. Does the Minister not feel that there is a sense of urgency in relation to bringing in legislation?

[Vince Cable]

As I will say later—we have covered the matter in earlier debates—we did try to encourage self-regulation. We drew the conclusion that the action had not been adequate, which is why we moved on to proposals for statutory regulation on which we are now consulting. We have been down that road; we have tried that.

--- Later in debate ---

[Vince Cable]

As I said earlier, there were more than 1,000 individual responses to the consultation. Many described very similar stories to the one that my hon. Friend has just mentioned.

[Jim Shannon]

Will the Secretary of State give way?

[Vince Cable]

May I move on, as the hon. Gentleman has intervened once already?

Just as this is not primarily an issue about the rate of closures, I think we would all agree that it is not fundamentally an issue of consumer choice. Otherwise, the competition authorities would have been engaged a long time ago. It has already been shown that the share of microbreweries has increased over the period for which many pubs have been under a great deal of stress. The number of breweries now tops 1,000, the highest figure since the 1930s.

The conclusion that I think we have all reached is that there are issues with the beer tie, but that is not the fundamental problem in itself. The Business, Innovation and Skills Committee argued that it does not want to see the tie model disappear. Under proper conditions, it is a business model that can be used and it has been around in various forms since the 18th century. The abuses are a different matter and are due in part to the lack of transparency in the relationship between the pub-owning companies and their tenants, which is what I want to turn to.

--- Later in debate ---

[Paul Murphy]

Of course I accept that Labour could have done more when we were in government, but after three debates in the House of Commons during the last three years, and when the Government have already said that they want to take these matters into legislation, they are now using the excuse of a consultation being too burdensome to allow them to make up their mind. If we were at the beginning of a parliamentary Session, that would not be too bad, but we are not. We are 15 months away from a general election. We are possibly just months away from a Queen’s Speech. When my hon. Friend the Member for Chesterfield referred to the fact that this had been kicked into touch, perhaps he had a point. Unless the Government make up their mind relatively soon, time will run out and nothing will happen between now and the general election.

[Jim Shannon]

The right hon. Gentleman makes a very good case. With some 50% of pubco licensees reporting earnings of less than £10,000 and 26 pubs a week closing—a different figure from that mentioned by the Secretary of State—time is not on our side. Urgency is needed. We need to have the legislation in place before the next election.

[Paul Murphy]

The hon. Gentleman is absolutely right. The purpose of this debate is not to argue for or against the proposals, because last year the Secretary of State said that he agreed with them. He said that he did not believe in the voluntary system and that a proper system of regulation was needed, and I believe he genuinely believes that. He represents moderation in the Cabinet and, some might argue, social democracy.