Government u-turn on pubs threshold and market rent only option

In a surprise move during the final reading of the Small Business, Enterprise and Employment Bill in the House of Commons, Employment Relations Minister, Jo Swinson said the threshold would be moved from 500 to 350.

She also said a review will be held two years after the bill is introduced to determine if an MRO option should be included in the code.

Last week the business secretary Vince Cable tabled an amendment which ruled that pub companies with fewer than 500 tied pubs would be covered by the pubs code. This overruled an earlier amendment which suggested removing smaller companies completely. The Government did however move some of the more onerous requirements into the enhanced code – meaning they would apply to firms with 500 or more tied pubs.

However, in today’s debate, Swinson said: “We are proposing a power for the Secretary of State to introduce a market rent only option two years after the Bill has been implemented following a review that finds tenants are not sufficiently protected by the system we have put in place. If it is not working we do not want to be in situation where we have to go through primary legislation but to act swiftly.

She added: “We have heard concerns about smaller companies and family brewers being covered. On further reflection we have decided not to move forward the amendment that was designed to reinstate family brewers with further requirements. Instead we would move forward an amendment proposing instead of 500 tied pubs, the threshold should be 350 tied pubs.”

It is thought that at least two more pub companies (Spirit and Trust Inns) would be brought into the scope of the enhanced code following this amendment.

Shadow pubs minister Toby Perkins described the 11th hour amendment as “a complete and utter shambles”.