Labour forces U-turn on PubCos

Toby Perkins MP writes for

Toby Perkins MP: "the unfair relationship between PubCos and their tenants needs to be tackled"

Toby Perkins MP: "the unfair relationship between PubCos and their tenants needs to be tackled"

Whilst any politician would obviously prefer to be making decisions in government, an effective opposition can still achieve change in important areas. A perfect example came this week on the issue of pub companies.

Our pubs are amongst our most iconic national treasures. But whilst the Rovers Return and the Queen Vic might remain hubs of their fictional communities, too many local pubs across the country are closing and too many pub landlords are facing bankruptcy. Each of the eighteen pubs that close every week costs their community ten jobs and sees a loss of around £100,000 to the Treasury in tax revenues.

Pubs are struggling in these tough times. While factors such as cheaper supermarket offers to cash strapped punters saving their pennies have played a part in this trend, crucially the unfair relationship between pub companies (known as ‘PubCos’ – the large pub companies who own thousands of pubs and dominate the industry) and their tenants has gone on too long and needs to be tackled.

The cross-party Business Select Committee has produced four reports in recent years all of which called for a stronger statutory code to regulate the relationship between PubCos and licencees. 

Exactly one year ago the House of Commons voted unanimously for just such a code to be introduced and this move is supported by a broad coalition including CAMRA, the GMB and Unite trade unions, the Forum of Private Business and Federation of Small Business, as well as the All Party Save the Pub Group and the Independent Pub Confederation.

Despite all this the Tory-led government’s attitude has been, until Labour called an opposition day debate on the issue, to turn a blind eye to the problem. 

In answer to Parliamentary Question I tabled in February last year the then BIS Minister responsible, Norman Lamb, confirmed he would be taking no action.  In October, his successor and the minister now responsible for pubs, Jo Swinson, refused a meeting request from the Publican’s Morning Advertiser on the grounds that all the government’s commitments in its response to the BIS Select Committee had “now been achieved”.

So as recently as three months ago the government did not believe there was a problem or that any changes needed to be made.

Yet at BIS oral questions in November, when four Labour MPs pressed her on this issue Swinson announced that the government would look at how the self-regulatory framework was working – admitting for the first time that there were problems to be addressed.

Labour has been determined to continue to push the government on this and we called our first Opposition Day Debate of this year to discuss this important issue.

If I was a conspiracy theorist I might see a link in the government’s decision to announce a u-turn and introduce statutory regulation the day before this debate as more than coincidence, but in any case I am delighted that they have finally recognised that a voluntary code will not work.

However, whilst they seem to agree that there is a problem they have still not gone far enough to offer the solution that the broad coalition in the pub industry is calling for.

It is still unclear whether the government’s reforms will offer struggling landlords a free of tie option so they can buy their beer on the open market. A non-tied option for publicans was one of the key changes which the BIS Select Committee called for but the original BIS press release this week announcing Cable’s plans specifically noted that the new code “will not mandate, as some campaigners have suggested, a ‘free of tie option’ with open market rent review”.  A couple of hours later this sentence had been removed from the press release on the Department’s website, leaving campaigners scratching their heads as to where they stand.

The government is also refusing to consider a guest beer provision which would allow tied pubs to at least serve one guest beer at the bar. Again this was something heavily pressed for by campaign groups in the pub sector.

Finally, the government has not made clear how local pubs will be protected ahead of a new statutory code being prepared. Large pub companies could potentially see a window of opportunity to cash in on their assets whilst the new code waits to become law.

We have made it clear that if the government take the necessary steps to redress these concerns we will work with them to get it on to the statute book as quickly as possible. I will be using today’s debate to make just this case on behalf of Britain’s local pubs.


2 Responses to “Labour forces U-turn on PubCos”

  1. Chas says:

    The smoking ban was the start of thousands of pub closures. Before the ban even pubco managers/tenants were making a good living. The ban must have cost the Government and taxpayers many billions, not only in lost revenue but the huge amount paid in unemployment benefit.

  2. tperkins says:

    Thanks for your message.
    We recognise the smoking ban had an impact on some pubs, but the overall public health benefits have been positive especially for those working in the industry.
    The major issues which have arisen in recent years and damaged the trade are the rise in low cost supermarket ale and changes in leisure habits as well as the wider global recession and some pubcos treating their tenant-landlords unfairly.



I am Toby Perkins, Labour's Member of Parliament for Chesterfield. If you would like to get in touch with me, my office is open and can be reached by phone on 01246 386 286. I also hold regular surgeries so that constituents can meet me and I can take up their concerns. If you would like to make an appointment then please do contact my office. Thank you for visiting.

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