It's time to protect pubs from exploitative PubCos

Too many pub companies force their licencees to buy limited products at inflated prices. But the Tories have consistently failed to act.

I often say that one of the best things about my job is that no two days are the same. But for the first time since I became shadow minister for pubs, I’m getting a strange feeling of déjà vu. This is now the third January in a row I’ve been involved in a grassroots campaign to drag ministers to the House of Commons to talk about supporting British pubs.
 
Pubs need this support so they can get a fair deal. Most people know a favoured local which has been left derelict or transformed into a supermarket. These personal stories are reflected by the national figures. The Campaign for Real Ale (CAMRA) estimates that 26 pubs close each week and that each closure costs the local economy £80,000. Pubs are more than just businesses – they are community hubs, part of the fabric of neighbourhoods which bind us together.
                                                                                                                    
That is why it is so important that we fix the unbalanced and unfair relationship between landlords and the large pub companies (known as PubCos) from whom they rent their premises. In the House of Commons on Tuesday we will be repeating our call for a proper statutory code to govern this relationship and protect landlords.
 
Many landlords used to dream of opening a pub so they could be their own boss and run their own business. Unfortunately this dream is all too often not matched by reality. The PubCos own three quarters of Britain’s pubs and often require their licencees to buy all drinks products from them, at whatever price they determine. There also many disputes about setting of rents on pubs, and even cases where a licencee works hard to increase the profit of their pub only to see this swallowed up in increased rents the next year. The PubCos have been accused of creating perverse incentives to squeeze short-term finance out of their properties rather than promote long term stability. No wonder CAMRA estimates that three fifths of landlords tied to PubCos earn less than the minimum wage.
 
The cross-party BIS Select Committee has investigated this issue several times and has consistently recommended a strengthened statutory code to rebalance this relationship. Such a step is also supported by trade unions and small business groups. However, the Tory-led government has consistently failed to act.
 
A new statutory code would not be a silver bullet addressing all of the challenges that publicans face, but it would certainly make a positive difference.
 
In January 2012, the House voted unanimously to introduce such a code, but the government did nothing. So in January 2013, I called an Opposition Day Debate to highlight this inaction.  Just 24 hours ahead of the debate the government announced a dramatic U-turn and promised finally to introduce the code.  But a year later, despite a lengthy consultation, nothing has changed in legal terms.
 
So next Tuesday we will be debating the issue once again.
 
I will make a genuine offer to work collaboratively to get a code on the statute book to support local publicans.  But any new code must meet three key tests:
 
1. The Beer Tie, whereby landlords can only buy products from their PubCo, works for some licencees. However, for many others it means they can only buy limited products at inflated prices. We want every landlord to have the choice of whether to go free-of-tie. This would allow licencees to operate in a re-constructed market which would actually be more competitive.
 
2. When a new licencee takes over a pub, or when an existing rent contract expires and is renegotiated, there should be a fully transparent and independent rent review completed by a qualified surveyor.
 
3. There must be a truly independent body to monitor the regulations and adjudicate in disputes between licencees and pubcos.
 
Many Lib Dems privately claim that they are persuaded of the need for these measures, but have difficulty persuading the Tory side of the coalition. I hope we are able to gain enough support from right across the House to ensure that next Tuesday marks the start of a brighter future for this great British industry.
 
The Campaign for Real Ale estimates that 26 pubs close each week. Photograph: Getty Images.

Toby Perkins is Labour MP for Chesterfield and shadow minister for small business

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Will Euroscepticism prove an unbeatable advantage in the Conservative leadership race?

Conservative members who are eager for Brexit are still searching for a heavyweight champion - and they could yet inherit the earth.

Put your money on Liam Fox? The former Defence Secretary has been given a boost by the news that ConservativeHome’s rolling survey of party members preferences for the next Conservative leader. Jeremy Wilson at BusinessInsider and James Millar at the Sunday Post have both tipped Fox for the top job.

Are they right? The expectation among Conservative MPs is that there will be several candidates from the Tory right: Dominic Raab, Priti Patel and potentially Owen Paterson could all be candidates, while Boris Johnson, in the words of one: “rides both horses – is he the candidate of the left, of the right, or both?”

MPs will whittle down the field of candidates to a top two, who will then be voted on by the membership.  (As Graham Brady, chair of the 1922 Committee, notes in his interview with my colleague George Eaton, Conservative MPs could choose to offer a wider field if they so desired, but would be unlikely to surrender more power to party activists.)

The extreme likelihood is that that contest will be between two candidates: George Osborne and not-George Osborne.  “We know that the Chancellor has a bye to the final,” one minister observes, “But once you’re in the final – well, then it’s anyone’s game.”

Could “not-George Osborne” be Liam Fox? Well, the difficulty, as one MP observes, is we don’t really know what the Conservative leadership election is about:

“We don’t even know what the questions are to which the candidates will attempt to present themselves as the answer. Usually, that question would be: who can win us the election? But now that Labour have Corbyn, that question is taken care of.”

So what’s the question that MPs will be asking? We simply don’t know – and it may be that they come to a very different conclusion to their members, just as in 2001, when Ken Clarke won among MPs – before being defeated in a landslide by Conservative activists.

Much depends not only on the outcome of the European referendum, but also on its conduct. If the contest is particularly bruising, it may be that MPs are looking for a candidate who will “heal and settle”, in the words of one. That would disadvantage Fox, who will likely be a combative presence in the European referendum, and could benefit Boris Johnson, who, as one MP put it, “rides both horses” and will be less intimately linked with the referendum and its outcome than Osborne.

But equally, it could be that Euroscepticism proves to be a less powerful card than we currently expect. Ignoring the not inconsiderable organisational hurdles that have to be cleared to beat Theresa May, Boris Johnson, and potentially any or all of the “next generation” of Sajid Javid, Nicky Morgan or Stephen Crabb, we simply don’t know what the reaction of Conservative members to the In-Out referendum will be.

Firstly, there’s a non-trivial possibility that Leave could still win, despite its difficulties at centre-forward. The incentive to “reward” an Outer will be smaller. But if Britain votes to Remain – and if that vote is seen by Conservative members as the result of “dirty tricks” by the Conservative leadership – it could be that many members, far from sticking around for another three to four years to vote in the election, simply decide to leave. The last time that Cameron went against the dearest instincts of many of his party grassroots, the result was victory for the Prime Minister – and an activist base that, as the result of defections to Ukip and cancelled membership fees, is more socially liberal and more sympathetic to Cameron than it was before. Don’t forget that, for all the worry about “entryism” in the Labour leadership, it was “exitism” – of Labour members who supported David Miliband and liked the New Labour years  - that shifted that party towards Jeremy Corbyn.

It could be that if – as Brady predicts in this week’s New Statesman – the final two is an Inner and an Outer, the Eurosceptic candidate finds that the members who might have backed them are simply no longer around.

It comes back to the biggest known unknown in the race to succeed Cameron: Conservative members. For the first time in British political history, a Prime Minister will be chosen, not by MPs with an electoral mandate of their own or by voters at a general election but by an entirelyself-selecting group: party members. And we simply don't know enough about what they feel - yet. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog. He usually writes about politics.