MPs slam efforts to self-regulate the pubco-tenant relationship

In an opposition day debate, called by Shadow Pubs Minister Toby Perkins before Tuesday's surprise announcement by Business Secretary Vince Cable,​ several members called for the Government to introduce a free-of-tie option as part of the forthcoming code.

However in a vote following the debate MPs voted by 311 to 246 not to support the motion which would have included that option in the plans.

Pubcos and banks​

During the lengthy debate Cable told Parliament he was not ruling out a free-of-tie option and said he hoped the six-week consultation on the suggested code and adjudicator, which is expected to launch in the Spring, would help Ministers make a more informed decision.

Cable also likened the position of the large pubcos to the banks.

"The pattern of behaviour we see in this area—where there is a serious imbalance between the contracting parties in the business relationship—is not unique to the pub industry.

"We see something similar with the banks and small business, as has been exposed by the derivatives scandal, and in the relationship between supermarkets and the farmers who supply them. In both cases, Parliament and Government have accepted the need to act to protect the weaker parties," added Cable. 

Six of the country's pubcos, each with more than 500 pubs, are thought to be impacted by the proposed code of practice.

Glacial​

Yesterday's announcement ended any hopes held by the large pubcos and a number of industry bodies, including the British Beer and Pub Association (BBPA), that self-regulation of a code of practice would be allowed to work.

The BBPA is believed to have been working on a sixth version of a voluntary code however several MPs chose the debate as a moment to criticise those who had backed self-regulation.

Andy Slaughter MP referred to the 'predatory activities' he claimed a pubco had shown in his constituency and asked if the Government was to blame for the delay in coming round to the idea of a statuary code.

Perkins defended the previous Government's efforts in the area and said although several Business, Innovation & Skills Select Committee (BISC) reports had called for regulation; Labour had wanted to give pubcos a chance to 'put their house in order'.

Declaring that 'the British pub stands on the precipice', Perkins also claimed the efforts of the Pubs Independent Conciliation and Arbitration Service (PICAS) to deal with complaints from publicans had been 'shambolic'.

Greg Mulholland, chair of the All-Party Parliamentary Save the Pub Group criticised the speed in which the industry had attempted to implement self-regulation.

"The reality is that the process has been as glacial as it had been when the Select Committee reported, the BBPA has been as impotent in getting self-regulation to work and there is still an impasse on those codes," he claimed.

Serious questions​

However Andrew Griffiths, chair of the All-Party Parliamentary Beer Group, sounded a note of caution and warned he thought the Government had not fully considered the plans before announcing them.

"There can be a company with 380 pubs or 450 pubs that won't be regulated. I am not sure that the Government has thought this through in relation to competition and free market," he told the House of Commons.

"I think there are some really serious questions to be asked about whether, if we want fair dealing for the tenants, we are offering fair dealing for all of the companies who own pubs," added Griffiths.

Good for pubs​

Concluding the debate by declaring that the Government's plans were 'good for publicans, good for pubs and good for the public', Jo Swinson, Minister at the Department for Business, Innovation & Skills (BIS) said the measures to regulate the pubco-tenant relationship would help build a stronger economy and a fairer society.

"This action will help to put a stop to lessees being treated unfairly by large companies and to abuse of the beer tie," said Swinson. "This adjudicator would have to be established by primary legislation and we are very keen to press ahead with the timetable.

"The consultation will include the future role of self-regulation and of PICAS. The power to fine is certainly envisaged for severe cases," she added.