Pubs are the lifeblood of our high streets, towns and villages. From family celebrations, to watching the football or catching up with friends, they are the places where people come together to enjoy themselves and feel part of a community.
Making sure tied pub tenants have a fair deal is key to the success of an industry that plays such an important role in our national life. That’s why I’m pleased to publish the first part of our consultation on the statutory pubs code.
It sets out how we think the Market Rent Only-option (MRO) should work in practice - so that a tenant tied to a business owning 500 or more tied pubs is no worse off than a free-of-tie tenant.
The MRO option will undoubtedly bring changes to the pubs world. Our proposals aim to strike a fair balance between protecting pub companies’ property, bringing in new protections for tied tenants and minimising unnecessary burdens on both sides. We have devised proposals which are practical and meet the concerns of tenants and pub companies alike.
For all aspects of the pubs code, ‘fair’ and ‘proportionate’ have been our watchwords. Our goal has been to create the conditions for a stronger, more confident tied pubs sector.
Now we’re providing you with the opportunity to tell Government what you think.
Consultations
The first part of the consultation includes how the MRO disputes procedure will operate and, as promised, we have now put flesh on the bones of the ‘MRO waiver’ – the ability to waive the right to a rent assessment for a specified period in exchange for a significant capital investment in the pub.
The second part of the consultation, to be published soon, will cover other aspects of the pubs code including:
- improving transparency through the type and timing of information provided to tied tenants;
- repair and maintenance obligations;
- types of agreement outside the scope of some or all of the Code, such as genuine franchises and some short-term agreements and tenancies at will;
- the fee to take a case to the Adjudicator; and the maximum financial penalty on pub-owning businesses the Adjudicator may impose following an investigation for breaches of the Code;
- how extended Code protection will work when a pub covered by the Code is sold to a company outside it.
We are now in the process of recruiting the new Pubs Code Adjudicator, whom I expect to start work in April, ahead of the code coming into force towards the end of May.
I urge as many of you as possible to read and respond to both parts of the consultation, so you fully understand the changes in the pipeline.
With your help, these proposals will put the tied pubs sector on the best possible footing for future growth and prosperity and make sure tied pub tenants get a fair deal.
Anna Soubry is minister for small business, industry and enterprise