Pub Companies

Simon Danczuk Excerpts

Tuesday 21st January 2014 Commons Chamber

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

I beg to move an amendment, to leave out from “House” to the end of the Question and add:

“welcomes the opportunity to debate the issue of fairness in the relationship between publicans and pub owning companies; notes the concerns, acknowledged by the Government in January 2013, about the failure of pub company self-regulation to rebalance risk and reward between the companies and their tenants and lessees; recognises the excellent work and the four Reports that the Business, Innovation and Skills Select Committee and predecessor Committees have produced over the years on this issue; further notes that the previous Government failed to take any position on this important issue until February 2010, just two months before the dissolution of Parliament and the end of its term in office; further notes that this Government held the first ever consultation to explore how best to protect tenants and lessees through a statutory code of practice backed by an independent adjudicator; further notes that this consultation received a very large response and that it is right that the Government carefully considers the huge volume of the evidence received as part of this consultation before publishing its response as soon as it can in 2014.”.

I welcome the opportunity to debate, again, fairness in the relationship between publicans and pub-owning companies, on which, at least on the broad principle, there is a wide measure of agreement. Perhaps I might thank the hon. Member for Chesterfield (Toby Perkins) for what, by his standards, must rank as a calm and consensual introduction. I wrote down the word “statesmanlike” at one point, but that was probably a bit excessive, so we will save it for another occasion.

My own approach to the matter is slightly coloured by the fact that I have only just stepped off an aeroplane from a part of the world where tasting alcohol is likely to lead someone into prison, if they are lucky. Indeed, I spent yesterday evening in a bar where the most potent drinks on offer were “mocktails”. At least in this country we do value our pubs, not simply for the drinks but for the fact that this is a major industry, with a large number of small and medium-sized companies. The people who run them are hard-working and not well paid. Hundreds of thousands of people work in the industry, which, as the hon. Gentleman said, makes a contribution to the communities in which we live.

The central issue in the debate is not about the principles, which we have debated before and on which there is a lot of common ground, but, “Why the delay? Why have the Government not given a formal response?” Let me explain the point. We received a big response to the consultation, which, let us remember, was the first Government consultation on a specific set of proposals in the long period, under both Governments, during which the issue has been considered by the Select Committee and others. We had a formal consultation, to which there was a massive response. We received about 9,000 responses, more than 1,000 of which were very specific—they were often written communications with nuanced arguments, which we must try to address. We are trying to look at the evidence in an objective way. The evidence may well point in one direction, but there are competing studies; the London Economics survey has been mentioned, but another good study has been done by the Federation of Small Businesses. Such studies do give different arguments, which we must evaluate.

Let us also remember that the industry is a complex one, and it was not a simple “yes or no” issue. The consultation also covered a set of other issues, including flow monitoring, guest beer and the gaming tie, each of which must be examined properly, not to mention its open question, which was about the mandatory free-of-tie option and open market rent review. Everybody concerned with the matter knows that that is the core issue, on which, although there was a strong opinion, there was less unanimity. We must respond to those issues and try to come forward with a proposal that carries the House and as many of the stakeholders as possible. I am very conscious of the legislative timetable, and I can assure the hon. Gentleman that there is no attempt to delay on those grounds. We want to see action, but first we must provide a thorough and proper response to the consultation. Of course we have already released the evidence.

[Simon Danczuk (Rochdale) (Lab)]

There is a lot of cross-party support for this matter, but I get the impression that the Government are taking for granted my good nature and that of other hon. Members. Will the Liberals go into the next general election having done absolutely nothing on this important issue?

[Vince Cable]

The simple one-word answer is no, but we will wait to hear the Government’s response.

--- Later in debate ---

[Chloe Smith]

I am grateful to my hon. Friend for pointing that out. I recently made the acquaintance of another landlord in his constituency who not only runs a good pub, but thinks that my hon. Friend is doing a good job as his local MP, which I think is very important.

The value that pubs can give to their communities has been quantified in various places. I want to mention a few figures which have a bearing on the debate. The industry is said to sustain 900,000 jobs nationally and each pub contributes £100,000 a year to its local economy. Crucially, about 30% of the industry is owned by the pub companies, and it is that segment that we are talking about. I support action to make that segment of the market fairer.

[Simon Danczuk]

The hon. Lady is making an important speech, but my point is about urgency. Twelve months ago, I raised concerns about the Hunters Rest in my constituency. Mary Spence, the landlady, said that because of the tie she was paying £500 a week over the odds, which equates to £26,000 a year. She threw in the towel in November. Does the hon. Lady agree that this shows the importance of the Government taking urgent action?

[Chloe Smith]

I have already said that I agree with the Government taking the action that they are correctly taking. The hon. Gentleman gives a solid example of one of the very human effects that we are talking about.

I want to note a couple of other ways in which the pub trade is being supported, including scrapping the beer duty escalator and a set of community rights. The community right to bid gives communities a fairer chance to bid to take over pubs, but there is an issue connected to this that I recently came across in my constituency. Residents were shocked to discover, at the very latest hour, that the Beehive in Sprowston had changed hands from regional brewery and pub company Greene King to the East of England Co-operative Society’s retail arm. I am the kind of MP who runs surgeries in pubs—I run a series called Politics in the Pub—and I am sad to report that I had never made it to the Beehive when this news broke. Now I may never have the chance to have a pint and some politics in the Beehive—unless I prefer a pint of milk, which is not necessarily the sort of thing I am thinking of.

On 6 January, the Co-op confirmed to the Norwich Evening News that it had exchanged contracts on the Beehive and would announce plans for a new community food store in the near future. Local residents then quickly organised and held public meetings, and local councillors and I met residents to go through the options for using the community right to bid. In this case, however, it was too late because information about the sale emerged at a very late stage. I have asked the Co-op to provide information about its plans so that it can engage with the community at an early stage. Understandably, the community is concerned not only about the closure and loss of a pub but the potential effect of a supermarket on other local businesses, as well as any intrusive aspects of the new premises that might arise from parking, lighting or similar things.

I know from experience that the Co-op’s retail arm is extremely keen to work with local communities, and I urge it to do so in this case so that the necessary issues can be properly addressed, despite the fact that planning permission is not required for a change of use from A4—which, as Members will know, is for pubs—to A1 for supermarkets. That feature of the planning system involves a very easy switch, which sometimes means that communities are not consulted on the concerns that can accrue when a pub closes.

I urge the Minister to look at this set of issues as it connects to pub companies. This is not only about the relationship between a tenant and their proprietor but the relationship of a pub to its community and the relationships that ought to be examined in the planning system—in other words, what citizens ought to be able to expect in a well-planned local area. These issues come down to wanting to keep the economy moving. I do not say that there should be stasis throughout the whole planning system, but there should be sufficient safeguards and community involvement in planning.

I support the Government’s amendment, because action has been taken to help pubs not only on the issues addressed in the consultation on an adjudicator and more, but in the field of community rights. That is very important, but, on behalf of my constituents, I am looking for the final element of fairness to enter into the debate.