BISC: A round-up of the pubco-tenant debate

The debate into the pubco-tenant relationship headed to the House of Commons last week, with MPs spending three hours discussing the pub trade and the Government’s response to the Business, Innovation & Skills Committee (BISC). The heated debate was popular with MPs across all parties, who wished to add their views on the issue.

The BISC was concerned about the Government’s response to its report that called for a statutory code of practice and an independent adjudicator. The Government chose a self-regulation route after discussions with the British Beer & Pub Association (BBPA) and this includes making a toughened industry framework code legally binding, setting up the Pub Independent Conciliation Advisory Service (PICAS) and a three-year accreditation for company codes.

BISC chairman Adrian Bailey drafted a motion in Parliament calling for the Government to reconsider a statutory code and to set up an independent panel, approved by BISC, to monitor the deal made with the BBPA.

Bailey told the House: “It is important for Parliament not only to state clearly today the need in principle for a statutory code but to retain control of the process to ensure that the code genuinely reflects the interests of all sides of the industry.

“Thousands of publicans up and down the country will be listening to and watching our debate, because they know its outcome could be vital in determining their future. At the moment, they feel overwhelmingly let down. It is up to Parliament to pass the motion and to demonstrate that we are on their side and we will not rest until they get a fair deal.”

Here we publish extracts from speeches made by MPs in the debate. For a full transcript, go to www.parliament.uk/business/commons/

Brian Binley ​
Northampton South MP (Con)

“In many cases licensees face prices higher than those on the open market, exorbitant rents and a quart-measure of misleading information. To make a pub work, individuals have ploughed in savings on the back of distorted information, and gone to the wall.

"The Government’s plans for a legally-binding voluntary code are not good enough. Business minister Ed Davey’s argument seems to be that the level of protection will be comparable to that provided by a statutory code, but why is a voluntary code preferred when it has failed in the past?”

Greg Mulholland ​
Leeds NW MP and chairman of the Save the Pub Group (Lib Dem)

“I am afraid the Government has been sold a pup. First, there are no substantive changes in the new framework code of practice produced by the BBPA.

“More worryingly, the idea of putting the new codes on a legal footing is a mirage. I am afraid the explanation appears to be clear from the freedom of information request submitted by the Save the Pub Group: the so-called Government response is basically the BBPA’s own report, with some passages
and commitments taken word for word — indeed, there is even a typo in the BBPA report presented to ministers that was cut and pasted into the Government’s response.

“The evidence is damning. The minister (Ed Davey) has been misled by the BBPA, because its report, copied into the Government’s response, stated that the Association of Licensed Multiple Retailers and the Guild of Master Victuallers (GMV) had agreed to be part of the PICAS.

“However, the chairman of GMV has stated: ‘We as an organisation have neither agreed to, or been presented with, any proposal in respect of our participation in PICAS’.”

Ian Lucas ​
Wrexham MP (Lab)

“Before I came to the House, I was a solicitor. One thing I found most surprising, when I worked on commercial leases, particularly in licensing, was the existence of the beer tie, which seems to create an anti-competitive situation in the brewing industry that does not appear to be allowed in any other industry.

“When I surveyed publicans in my constituency on how their business could be improved, one of the overriding themes was the existence of the tie. I was a minister for regulatory reform before the last election, and my view is that regulation should be a last resort. As far as I am concerned, this is the last resort.”

Fiona O’Donnell ​
East Lothian MP (Lab)

“I cannot begin to imagine the stress that the situation causes publicans as they try to negotiate a fair deal with pub companies.

“It really is time for the Government to do something about the situation. Indeed, within my constituency one publican, Laurence Brunton, contacted me when he heard the Government’s response to the BISC report, and said that the ‘Government’s lame response to the committee’s recommendation makes a laughing stock of a hard-working publican who is earning £10,000 a year’.”

Andrew Griffiths ​
Burton MP and chairman of the All-Party Parliamentary Beer Group (Con)

“We agree on the need to clean up the pubcos’ act and we want to see vibrant brewing and pub industries. I do not defend the actions of some pubcos. We must be careful before we reach out for the lever of regulation, because once it is imposed, the costs and burdens are there for all to see.

“Pubcos are in the last-chance saloon, but today I heard the accusations made against the BBPA and am staggered. It is not some sinister organisation, and although it is made up of pubcos, it also includes family brewers.”

Edward Davey​
Parliamentary Under-Secretary of State for Business, Innovation and Skills

“There have been suggestions of collusion, with allegations that the Government listened only to the BBPA and was deaf to the voices of licensees. That is not true. I met the Campaign for Real Ale three times over the past year and Greg Mulholland four times. I also met the Independent Pub Confederation and representatives of the Association of Licensed Multiple Retailers, with which we were in discussions while negotiating with the BBPA.

“For example, there are the minutes of the meeting with the BBPA on 12 October, in which I laid down the conditions that any self-regulatory deal must satisfy. Otherwise, we would have had to consider regulation. The minutes show that the key conditions were those that I laid down — that the code must be legally binding, that it must be strengthened and that there must be an independent dispute resolution service.

“Why did we not legislate? Some wanted Government to regulate, and some even believe we promised to do so, but we promised to act, and that is what we have done.”