Business secretary rejects claims that BIS officials acted inappropriately over pubco-tenant deal
In a letter, seen exclusively by the Publican’s Morning Advertiser, sent by Cable to Save the Pub Group chairman Greg Mulholland MP, he confirmed that he would look closely at the Government’s position on the deal following feedback.
The letter follows a Government debate last week where it was revealed that the industry has until the 23 November to assure the Government that the self-regulation deal on the pubco-tenant relationship is working. Cable has written to all the organisations involved asking them to provide full details on how the process is progressing and said any action would be “evidence based”.
Last year, the Government chose not to implement the Business, Innovation & Skills Committee recommendation of a statutory code, instead saying the current industry framework code would be strengthened and made legally binding. It also agreed that a Pubs Independent Conciliation and Arbitration Service (PICA-Service) and Pubs Advisory Service (PAS) would be launched.
In the letter, Cable said: “We are conscious that many pubs have been in serious financial difficulty and the terms of their contracts with pubcos are one important factor.
“The changes detailed in the Government’s response to the BIS Select Committee’s report were not designed to remove the beer tie or to require pubcos to offer a ‘free-of-tie option with open-market review’.”
On the formation of a PAS, Cable admitted that the existing organisation is an “alternative to the proposal envisaged in the Government’s response to the committee, which stated that the service would be administered by the BII”.
But he asked for evidence the service was not providing good-quality advice.
Mulholland welcomed news that the Government is looking into the self-regulation deal, but raised concern over the extent of the investigation, claiming the questions being asked are a “deliberately restricted list that avoids the issue of risk and reward”.
He said the question that should be asked is: “Have the reforms addressed the fundamental problem that pub companies overcharge their tenants/licensees, taking more than is fair or sustainable from pub turnover?”
“I am concerned that the Government is still failing to recognise that the majority of industry organisations have not signed up to the code or the code process, so it simply doesn’t have legitimacy in the sector.
"There is a real danger they are simply asking the few organisations that have been involved in the code process how they are getting on with something that most organisations have rejected, which is like something from the ‘Thick of It’.
"BIS must now properly engage with all Independent Pub Confederation member organisations and the Forum of Private Business and afford them the same time as they have given to speaking with the pubco funded organisations."
