Pub Companies

Marcus Jones Excerpts

Thursday 12th January 2012 Commons Chamber

[Mr Marcus Jones (Nuneaton) (Con)]

Pubs are not just places we frequent to buy beer; they are vital community hubs that can be fundamental to our lives. I can say that, given that I met my wife in a pub called the Chetwynd Arms in my constituency back in 1997. Given that it was in 1997, I conclude only that it was probably the only good thing to come out of that year. Since those heady days, we have lost much of that community heritage that our pubs give. At the moment we risk the continuing demise of the good old British pub. Part of the demise has no doubt been exacerbated by the relationship between the pubcos and their lessees.

History tells us that the arrangements between pubcos, lessees and tenants, which emanated from the break-up of the estates of the large breweries back in the 1990s, were not initially dissimilar to the situation that obtained under the breweries. Where the model differs tremendously, however, is that the pubcos are middlemen—yet another middleman between the product producer and the end user of the product. That has necessarily added costs over a number of years. The costs seem to have been met quickly by the tenants and lessees who have seen many changes over that period: metered pumps, tighter reins on guest ales, loss of machine income, reductions in the will to help with refurbishments—these are probably only a few of the additional burdens that lessees have had to face. We need to be aware that much of that stems from 1980s legislation in the context of the fundamental shift towards the large pubco estates that we now have.

I welcome much of the work done by successive Select Committees on the practices of pubcos, but I think we should be careful about what we wish for as we look to legislate now. We could end up out of the frying pan into the fire, because we are in a very different world today than we were when the Select Committee first considered this issue in 2004. Back then, pubs were still in decline, but there has been a huge aggregation of issues since. We have had the smoking ban, increased regulation on alcohol sales, beer duty rising by 35% over the last four years alone, below-cost selling at supermarkets becoming more prevalent and, to top all that, we have suffered the deepest and longest recession since the 1930s. These factors have no doubt strained even further relations between pubcos and their lessees.

[Jason McCartney (Colne Valley) (Con)]

I thank my hon. Friend for giving way and would like to add to his list of other factors affecting our local community pubs. We heard about Performing Rights Society licences from the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop). There is also the cost of live television sport in pubs; one of my local landlords needs £800 a month to pay for that. My hon. Friend mentioned regulation a few moments ago. Does he agree that self-regulation of the pubcos is not working; will he join me and many other Members in supporting this motion and setting a timetable for the Government to look again at self-regulation?

[Mr Jones]

I thank my hon. Friend for his comments. I shall come on to the issue of self-regulation.

The relationship between pubcos and lessees has been exacerbated by external factors. That has not been helped by the fact that, as many hon. Members have mentioned, the pubcos are now greatly overleveraged. That leads me to be a little concerned about what we seem to be wishing for. The overleveraging of the pubcos makes the position very difficult for them in comparison with 2004, as the horse might now have bolted. Perhaps we should have done the legislating back then when the circumstances were different.

When it comes to the external factors I mentioned, there are many things—in addition to what the Select Committee report raised—that the Minister with responsibility for pubs and the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for Kingston and Surbiton (Mr Davey), who is to reply to this debate, need to look at and address. The Select Committee focused its mind on the relationship between the pubcos and lessees. That is important when we have reached a position in which the pubcos are looking at things in a different light, albeit not quickly enough for many lessees.

I believe that the voluntary measures put forward are positive and I welcome the industry framework code, which will be legally binding. I welcome PICAS, the three year accreditation code and the strengthening of the framework code. I particularly welcome having a new pubs advisory service. More advice, training and information is vital to potential lessees, who need to go into these businesses with their eyes fully open. Having the right training for the lessees going into them is important. Under the old breweries, most of the lessees coming into pubs as tenants had managed pub groups for many years. They knew their trade inside out. That is why they ran successful pub businesses. In that respect, there is a gap now.

Voluntary measures will be positive only if they are adhered to and only if PICAS has teeth and the pubs advisory service has more independence. That is why I fully support a review of these arrangements over direct, immediate regulation. I think we need to give more time to see whether the voluntary arrangements being put in place are going to work.

We must try to avoid making the mistakes of the past, which happened when the big breweries were broken up. Voluntary regulation is important. It must be monitored carefully, and we must not look to deal with this issue in a silo or depend only on this aspect to solve the problems that our community pubs face.