RBS urged to free pubs from tie and sell to tenants
A campaign has been launched urging the government and Royal Bank of Scotland (RBS) to free the bank's 1,000 pubs from tied agreements and allow tenants to buy their pubs.
Fair Pint and the Federation of Small Businesses (FSB) have set up the campaign and want RBS - of which the government has a 68 per cent stake - to offer mortgages to its licensees and sell the pubs at "realistic" prices.
RBS owns around 1,000 tied pubs which are managed for it by Scottish & Newcastle Pub Enterprises (S&NPE).
The pubs are estimated to be worth more than £600m.
Fair Pint and the FSB have produced a proposal document that shows the extra income pubs would get if allowed to buy beer at free-of-tie prices would mean licensees can take on a bank mortgage at commercial rates.
Fair Pint's Steve Corbett said: "Our scheme would allow the government to take action to support the struggling pub sector at the same time as helping RBS back onto a proper commercial footing.
"The right people to own pubs are publicans and here is a chance to make a real difference and to save jobs."
Clive Davenport, the FSB's chairman, said: "Through this scheme, the government has an opportunity via RBS to help around 1,000 pub owners get out of the tie and give them the chance to run their businesses effectively, and to make a fair profit.
"The FSB urges RBS and the government, as a majority shareholder, to act now and take on this practical solution that could save some of our pubs from closing."
An S&NPE spokesperson said: "We are only successful if our lessees are successful.
"Our lease provides lessees with a range of benefits not available to free traders, such as a whole package of business and training support and help with major building repairs. It also provides a low cost, low risk means for people who cannot afford to buy a pub to have their own pub business.
"It is in our interest to have happy lessees.
"We take great care to explain how the lease works and rent is calculated and urge prospective lessees to get independent financial, legal and business advice to ensure they are fully satisfied before they take on a pub with us.
"We also have a 90-day cooling off period. If a new lessee decides within this timeframe that it is not the business for them, they can walk away from it.
"We are proud of our many successful lessees up and down the country. Rising food and utility prices and lower consumer spending are creating challenging trading conditions for the whole of the pub industry. We are working in close partnership with our lessees to support them in this market."
The Publican has contacted RBS for comment and is waiting to hear from the company.
