Pub Companies

Pauline Latham Excerpts

Tuesday 21st January 2014 Commons Chamber

[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.

[Pauline Latham (Mid Derbyshire) (Con)]

I was recently contacted by my constituent, Claire, who has been told by her landlords, Enterprise Inns, that the rent on her pub, the Pattenmakers Arms in Duffield, will increase by 42% in April. Claire loves her pub and has brought it from being a grubby and run-down pub to an award winner; she even worked while she was battling breast cancer. Does my right hon. Friend believe that the pub companies whose business practices force out committed publicans such as Claire will be dealt with effectively by some sort of adjudicator?

[Vince Cable]

That is a truly awful case. I hope to see the details of that example, because although we have a lot of cases, it seems to be a particularly bad one. I guess that would be one of the factors that led the Government to conclude that the voluntary code approach was not satisfactory, as presumably it has already been used.

The voluntary approach did have some positive outcomes, such as the Pubs Independent Conciliation and Arbitration Service and the framework code, but the conclusion we came to at the beginning of last year was that the changes had not gone far enough and that problems persisted. To us, the essential point is best captured in the work done by CAMRA that suggests that 57% of tied tenants earn less than £10,000 a year. If we apply that to 35-hour week, 48 weeks a year, we are talking about less than £6 an hour, which means that people are working for considerably less than the minimum wage. Since many work much longer hours, that means that this is a very low-paid industry. Many publicans are struggling. In contrast, only 25% of those who are free of tie are on at the same income level. There is a striking disparity, which is at the heart of the question.