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

Photo: Getty
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What Jeremy Corbyn gets right about the single market

Technically, you can be outside the EU but inside the single market. Philosophically, you're still in the EU. 

I’ve been trying to work out what bothers me about the response to Jeremy Corbyn’s interview on the Andrew Marr programme.

What bothers me about Corbyn’s interview is obvious: the use of the phrase “wholesale importation” to describe people coming from Eastern Europe to the United Kingdom makes them sound like boxes of sugar rather than people. Adding to that, by suggesting that this “importation” had “destroy[ed] conditions”, rather than laying the blame on Britain’s under-enforced and under-regulated labour market, his words were more appropriate to a politician who believes that immigrants are objects to be scapegoated, not people to be served. (Though perhaps that is appropriate for the leader of the Labour Party if recent history is any guide.)

But I’m bothered, too, by the reaction to another part of his interview, in which the Labour leader said that Britain must leave the single market as it leaves the European Union. The response to this, which is technically correct, has been to attack Corbyn as Liechtenstein, Switzerland, Norway and Iceland are members of the single market but not the European Union.

In my view, leaving the single market will make Britain poorer in the short and long term, will immediately render much of Labour’s 2017 manifesto moot and will, in the long run, be a far bigger victory for right-wing politics than any mere election. Corbyn’s view, that the benefits of freeing a British government from the rules of the single market will outweigh the costs, doesn’t seem very likely to me. So why do I feel so uneasy about the claim that you can be a member of the single market and not the European Union?

I think it’s because the difficult truth is that these countries are, de facto, in the European Union in any meaningful sense. By any estimation, the three pillars of Britain’s “Out” vote were, firstly, control over Britain’s borders, aka the end of the free movement of people, secondly, more money for the public realm aka £350m a week for the NHS, and thirdly control over Britain’s own laws. It’s hard to see how, if the United Kingdom continues to be subject to the free movement of people, continues to pay large sums towards the European Union, and continues to have its laws set elsewhere, we have “honoured the referendum result”.

None of which changes my view that leaving the single market would be a catastrophe for the United Kingdom. But retaining Britain’s single market membership starts with making the argument for single market membership, not hiding behind rhetorical tricks about whether or not single market membership was on the ballot last June, when it quite clearly was. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.