Draft pubs code: Are Parallel Rent Assessments unworkable?

Business Minister Anna Soubry revealed the U-turn in the House of Commons yesterday​ (10 November) after fierce criticism from campaign groups.

PRAs are a breakdown of rents and earnings under tied and free-of-tie models, designed to show tenants whether they would be better off staying tied or taking the market rent-only (MRO) option.

The original code concluded there is no need for PRAs, as MRO would achieve its objectives alone.

'Almost unworkable'

But the British Beer and Pub Association said it looked at how PRA might work with its members, and concluded them to be “almost unworkable”.

Chief executive Brigid Simmonds said: “So many pubs are unique, it is very difficult to establish 'comparables'. We do think that the MRO process provides more than sufficient safeguards.”

BBPA will work with Government to voice its members’ concerns.

But campaign groups have claimed the Department for Business, Innovation and Skills acted in bad faith by removing PRA, and that the draft code negates the market rent only option.

Genuine consultation

But the Association of Licensed Multiple Retailers is glad Government is in "listening mode".

Chief executive Kate Nicholls said: "This is a genuine consultation on the best way to deliver meaningful change. The Minister’s acknowledgement that they haven’t got the balance right yet is welcome, and underlines the importance of getting this right and making sure the proposals are crystal clear, pragmatic and workable.”

Nicholls said the ALMR was not convinced the draft provided a pragmatic and workable solution.

“We are meeting with BIS officials tomorrow to ensure we have clear, easily understandable legislation which is proportionate but which also practically addresses the problems faced by tenants,” she added.

The ALMR stresses the importance in reaching a decision to enable businesses to underpin business and investment decisions.

What do you think? Email oli.gross@wrbm.com