Small Business, Enterprise and Employment Bill

Debate between Sheryll Murray and Grahame Morris

Tuesday 18th November 2014 Commons Chamber

[Grahame M. Morris]

The demise of the Club and Institute Union, and the working men’s clubs, is a huge issue, certainly for me. New clause 2 does not propose the end of the tie; rather, it seeks to make it work more effectively and fairly. If a pub landlord agrees to a tied arrangement in relation to the purchase of alcoholic drink from the pubco, they should get a lower rent, especially if they are paying as much as 70% over the top for those beverages. That is the way the tie should work. If the landlord does not want to be tied to a company in respect of beverages, they should pay the market rent, or have that option. I am not suggesting that the tied system should be done away with—just that it should work in a manner that is fair to both the pub company and the tenant. At the moment, it certainly does not.

Members have suggested that the impact is not huge, but there are lots of villages in my constituency of Easington, such as Hawthorn and High Heselden, where only a single pub is left. These communities are really feeling the effects. If landlords are compelled to pay as much as 70% more for their alcoholic beverages, despite what the hon. Member for Burton says, the tenant will be absorbing some of that cost, but when there is only a single pub in the village, it is basically passed on, and the customers pay a lot more than they need to.

It is no coincidence that thousands of pubs have closed in recent years. In some cases, profitable, popular pubs, beloved by local communities, have been sold off by big pubcos to developers and supermarkets. Pubcos have sought to cash in on the real estate or land value, with little or no thought for local people, or the effect of the loss of a community hub. As the hon. Member for Leeds North West pointed out, that is often because these pubcos have saddled themselves with huge debts. There is a suspicion that the rents they charge are deliberately high to get rid of landlords, so that it is easier for them to sell.

Those landlords who opt for the market only rent can purchase drink supplies from elsewhere, leading to better and fairer access to the pub market for smaller local brewers and cider producers. It would also increase the choice for all our constituents. I would like Members to support new clause 2 because it would help to deliver increased licensee profitability, increased investment in pubs, greater consumer choice and fewer pub closures. If avaricious pubcos are stopped from exploiting their tied landlords, hiking up rents and charging up to 70% more for a pint, the price of a pint can only fall. I am sure that I speak for all hon. Members on both sides of the House and their constituents—I certainly speak for myself and my constituents in Easington—when I say that such a move would be warmly welcomed. For that reason, for fairness and for the benefit of the economy as a whole, I commend new clause 2 to the House.

[Sheryll Murray]

I thank my hon. Friend the Minister for not pressing amendments 41, 43 and 44. However, I want to put on record my surprise that the amendments were tabled by the Secretary of State as recently as 14 November, and the explanation was:

“This amendment, and amendments 43 and 44, reverse amendments made at committee and bring pub-owning businesses with fewer than 500 tied pubs back into the scope of the Pubs Code.”

The Secretary of State has continually led the House to believe that it was his intention not to include small family brewers with fewer that 500 tied pubs in the statutory code. When the Bill appeared, it included those small family brewers, with top-heavy bureaucracy.

I thank my hon. Friend the Member for Newton Abbot (Anne Marie Morris), who is no longer in her place, my right hon. Friend the Member for Faversham and Mid Kent (Sir Hugh Robertson), my hon. Friends the Members for Bedford (Richard Fuller), for Burton (Andrew Griffiths) and for St Austell and Newquay (Stephen Gilbert), and the hon. Member for Chesterfield (Toby Perkins) and his colleagues on the Opposition Benches for seeing sense and supporting my amendment, which would simply have put back into the Bill what the Secretary of State has always led the House to believe he intended to have in the Bill.