Bemoaning the existence of 'real hardship in the pubs sector', the Business Secretary Vince Cable revealed plans for an independent adjudicator to enforce a statutory code which he hopes to establish in order to investigate the pubco-tenant relationship.
The plans build on the already existing Industry Framework Code but end any hope that self-regulation of the code would be allowed to proceed.
"Last year we gave the pubcos one last chance to change their behaviour but it is clear that the self-regulatory approach was not enough," said Cable, announcing the controversial plans.
Law change needed?
There have been mixed messages emanating from the Government with regards to their position on the issue with Cable known to be personally disappointed that the industry had not yet agreed how a strengthened voluntary code of practice would work.
"In October I wrote to the industry to seek their views. A change in the law is now needed to shift behaviour," he added. "I hope these measures mean publicans are given a fairer chance at running their pub, which in turn will help them grow their businesses instead of losing them."
Industry bodies, including the BBPA, had been in negotiations over a sixth version of a voluntary code which would have strengthened the powers of the Pubs Independent Conciliation and Arbitration Service (PICAS) which allows complaints from tenants to be handled without cost to the courts.
Earlier versions of the code had allowed tenants to call pub companies to court if they still had unresolved complaints about pubcos breaching standards.
"It is disappointing that self-regulation has not been given a proper chance to work, after all the hard work from the BBPA, Association of Licensed Multiple Retailers (ALMR), Federation of Licensed Victuallers Associations (FLVA), British Institute of Innkeeping (BII), and other industry colleagues on version six of the code of practice," said Jonathan Neame, chairman of the BBPA.
The organisation has warned the plans could create 'unnecessary red tape and bureaucracy'.
Industry bodies have however welcomed a consistent and clear position from policy-makers. They have also pledged to ensure the best parts of the voluntary code are enshrined in any future regulation and that the plans will not impair the day-to-day business of the country's pubcos and publicans.
ALMR chief executive Nick Bish said: “Today’s announcement draws a line under the protracted and prolonged period of political uncertainty and debate, which has been going on for far too long without any clear end in sight. That can only be helpful for investment in the sector as a whole and individual businesses in particular."
As well as confusion from the top levels of Government, four select committee hearings since 2004, held to investigate the issue, have failed to yield a policy position with the backing of a majority of parliamentarians.
Yesterday's announcement came less than 24 hours before a debate was due to take place in the House of Commons on the pubco-tenant relationship. The debate had been called for by the Labour party who are now expected to back the Government plans for legislation.
The Department for Business, Innovation and Skills (BIS) will launch a formal consultation on the following new measures in spring 2013:
- The new statutory code will enshrine the principle that 'a tied licensee should be no worse off than a free-of-tie-licensee'.
- The code is expected to apply to all pub companies which own more than 500 tied leases.
- The role of a proposed adjudicator will be based on the model of the Groceries Code Adjudicator.
- The adjudicator will arbitrate disputes, investigate complaints, impose sanctions, publish guidelines and advice, publish an annual report and recommend changes to the code.