Pub Companies

Tom Blenkinsop Excerpts

Thursday 12th January 2012 Commons Chamber

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

I should like to praise the hard work of the hon. Member for Leeds North West (Greg Mulholland) on this issue over many years; it has been well documented. I also want to congratulate my hon. Friend the Member for West Bromwich West (Mr Bailey) on securing this debate.

Licensees in my constituency are getting a poor deal from exploitative pubcos, and the Government have to act. At present, on this issue the Prime Minister is dodging his round at the bar. Louise Gibben of the Huntsman in Guisborough in my constituency has told me that, after paying Enterprise Inns £20,000 a year in rent, plus her overheads, her business rates and her Performing Rights Society licence, she is left with next to nothing. That is not because of a lack of hard work, or because the pub is of poor quality. Indeed, new local customers have documented the fact on a website that her staff are “great” and that she has made

“every effort to make the pub a success”

by serving meals and making it a family-friendly environment. Unfortunately, however, the rep for Enterprise Inns has told her to try harder.

Sadly, this situation is not unique to Louise. She is not the only one who is struggling to keep her pub afloat despite the rent and contractual conditions imposed by a pubco. For example, nearly 30,000 tenants face the problem of being tied to a specific brewery as part of their tenancy. While tenants are struggling to survive and pubs are closing, pubcos are still reporting millions of pounds in profits. Enterprise Inns, for example, reported a pre-tax profit of £157 million last year, despite the harsh prevailing economic circumstances, yet its tenants in my constituency are struggling to maintain their livelihoods.

Large pubcos are not producing value; they are exploiting the small business people who, through their own endeavours, are trying to make a living. It is also obvious to everyone that they are not giving their tenants the respect that they deserve. The Government have to act to ensure that relations between the pubcos and their tenants are fair. The self-regulatory framework that the Government are proposing does not go far enough. According to the Fair Pint campaign, it will not require any concessions by the pubcos, and it will result in very little, if any, change to the wholly unsatisfactory status quo.

The Government’s measures might enjoy the support of the large pubcos, but I know that tenants in my constituency, as represented through the Independent Pub Confederation, feel betrayed and very disappointed by the lack of a genuine free-of-tie option accompanied by a review into open market rent. They feel that any self-regulatory framework will not help them to secure a fairer deal. We cannot trust these pubcos to regulate themselves. I urge this Government, for the sake of tenants and the future of pubs in my constituency, to ensure that any code of practice exists by statute rather than by the will of the people whom we wish to regulate.