Question

To ask the Secretary of State for Business, Innovation and Skills, if he will make it his policy to introduce a legal requirement for pubcos to offer a free-of-tie option in the public house sector.

The Small Business, Enterprise and Employment Bill, introduced to this House on 25 June 2014, does not include provision for mandatory free-of-tie. The Government recognises that some tenant groups and campaigners support this option, which might appear to offer a simple way of ensuring that tied tenants are no worse off than free-of-tie tenants. We looked carefully at this measure but have decided not to introduce it.

The responses to the Government's consultation on a Statutory Code and Adjudicator for the pubs sector raised concerns that mandatory free-of-tie would create uncertainty for pub-owning companies and have an unpredictable impact on the wider pubs sector which could even undermine the tied model. Even among the polarised views in the industry, there is strong support for the tie as a business model. What is important to the Government is that there are protections in place so that the tied model operates fairly. The reforms being taken forward in the Small Business, Enterprise and Employment Bill will rebalance the relationship between pub-owning companies and their tied tenants, without threatening the balance of the wider industry.