Pub Companies

Debate between Toby Perkins and Laurence Robertson

Tuesday 21st January 2014 Commons Chamber

[Mr Robertson]

I am not at all surprised to hear that. I do not know the exact figure, but I do know that that is what has given rise to the problem, to the extent that it is one.

I recognise that there is a problem, and I want us to move on as quickly as we can, to help hard-working people who are keeping pubs going at the centre of communities. There are problems—I want to stress that point—but I want us to come up with a lasting solution that will not make matters worse. There are some benefits to the existing situation—I will come to the weaknesses in a minute. For example, a pubco can allow people who do not have a great deal of capital to enter the trade. They might be unable to afford to spend £300,000, £400,000 or £500,000 on buying a pub outright or to borrow that money. They also get their accommodation basically covered—certainly in most cases—while they run the pub, which gives them some security.

I do not recommend the tie at all, but I am concerned about what would happen to the rent if there were no tie. I am not speaking against reassessing the rent against a market level, but if we do that, what do we compare it with? If we are looking beyond pubs, we might look to McDonald’s, for example, or other franchise organisations. Is that a direct comparison? I am not quite sure how the proposal would work in detail—and of course, the devil is always in the detail. What about the repairing side of the lease? Will people with a fixed market rent be required to do more repairing of the fabric of the building than they are now? I am not throwing those questions out as stumbling blocks or trying to cause a problem, but they need answering.

[Toby Perkins]

I am happy to help the hon. Gentleman on that. The valuation would be done with transparency against the performance of other pubs. We need much greater transparency in the industry. Under the specific proposals that we have made today, the publican would be able to decide, knowing what a fair market rent was, whether they wanted to throw their lot in with the pub company, on the offer being made, or to opt out and buy their beer from wherever they chose. I hope that has answered his questions.

[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.