Oral Answers to Questions

Debate between Laurence Robertson and Greg Mulholland

Monday 17th November 2014 Commons Chamber

[Mr Laurence Robertson (Tewkesbury) (Con)]

9. What her policy is on the continued prohibition of recreational drugs.

[Greg Mulholland (Leeds North West) (LD)]

12. If she will undertake an assessment of the effects of the Misuse of Drugs Act 1971.

[The Minister for Crime Prevention (Lynne Featherstone)]

The Government’s drugs strategy sets out a balanced approach to tackling drug misuse, including controls under the Misuse of Drugs Act 1971. There are positive signs that our approach is working, such as a long-term downward trend in drug use, and people going into treatment are more likely to free themselves from dependency than ever before. An assessment of the drugs strategy is under way.

Pub Companies

Debate between Laurence Robertson and Greg Mulholland

Tuesday 21st January 2014 Commons Chamber

[Mr Robertson]

Not exactly, no, because how do we determine what the market rent level is? Is it the level for those with a tie or those without a tie? What about a repairing lease or a non-repairing lease? These are all details that need filling out, but I am not aware that they have been properly addressed. I want to deal with them and to make progress, but I am not sure we are there yet.

[Greg Mulholland]

The hon. Gentleman will be glad to know that I can help him. BIS Ministers have a copy of the definition of a market rent only option, which sets out how it would work and when it would be triggered. In essence, it is about simply paying a rent, which would be independently assessed according to statutory guidelines, and then being able to buy everything directly from the market. He seems to be making a mistaken comparison. The pubco tied leases are generally “fully repairing and insuring”. One of the scandals was when, as part of a tied lease, all the responsibility for that was shifted. A market rent only option is exactly what I have set out, and I will send that definition to him.

[Mr Robertson]

I am grateful to the hon. Gentleman; perhaps I could now move on to how rents are assessed. As has been said, quite often they are assessed not on the turnover of a pub, but on the potential turnover, which takes in things such as food and non-tied products. There is therefore an unfairness in the way that rents are assessed now. If we can move to a better system, I will certainly support that.

As has been said, there is also the inflated cost of tied products. For example, certain pubcos will charge £130.70 for a keg of Carling when it can quite easily be bought—we have looked at these figures—for £95. That is a huge difference, which squeezes the profits of the landlord and makes the beer more expensive for consumers. To give another example, Stowford is sold for £112.70 when it can be sourced for £79.99. Those are just two examples; I could go on and on if I had the time. I think hon. Members realise that this is a problem.

My hon. Friend the Member for East Hampshire (Damian Hinds) and my right hon. Friend the Secretary of State both mentioned this, but this debate is not just about the rent and the tie. We make a huge mistake if we believe that. We can look at those aspects at the beginning of a contract taken out with a pubco, but the relationship goes on from there, and sometimes it is the behaviour of the pubcos that causes the problems. For example, pubcos have the power to install fixtures and fittings and charge an exorbitant amount to the landlord, but he will not get anything back for them. Basically, the fixtures and fittings rule, which has been in existence for a long time, is a con, I am afraid. I thought carefully about whether I should use that word, but I think that rule is a con. It is an additional rent that people have to pay, which again squeezes the profits.

When people go into a pub owned by a pubco, they often have to go on expensive courses run by that pubco, for which it can charge exorbitant amounts. The cost of carrying out electricity checks, for example, has doubled in one year at the local pub I mentioned. It is the same pub, so why has the cost doubled? These are the sort of extraordinary charges that pubcos sometimes make in the course of running their ordinary business.

Extraordinary decisions are sometimes taken. The local pub I mentioned needed about £100,000 of work carried out, but the electrics and the roof were not completed when that work was done. There seemed to be an obsession with putting up new wallpaper, which was not necessary and not at all important. The work needed to be done over a six-week period, yet the period covering the jubilee week of last year was suggested. That is unbelievable—the busiest week of the busiest year in memory was chosen, and when the landlord refused to have the work done then and asked why it could not be done in January, there was a startled reaction.

I am providing examples to show that it is not just about the rent or the tie; it is about the behaviour of the pubcos as they go through the period of the agreement. I do not know how best to assess and tackle the problem, which is as important as other issues discussed today.

I have had my 10 minutes. I would have liked to talk about more issues, but in summary, I believe it is important to be careful to get this matter right. I think we need to take a little longer—I suggest not years, but months. Sometimes Government interventions can make things worse; sometimes Governments can be the problem rather than the solution. As I said at the outset, I believe that there is a problem and that it needs fixing.