Business minister Anna Soubry revealed in the House of Commons today (10 November) that PRA will be included in the second part of the consultation, as campaigners geared up to fight for its inclusion.
MP and chair of Save the Pub Group Greg Mulholland said tenants’ groups and the Fair Deal for Your Local campaign 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.
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.
Concerns from the Lords
Soubry told the House of Commons: “The noble Lords have made their concerns very clear to Baroness Neville-Rolfe, and as a result of my conversations with her, that particular proposal will go into the second part of the consultation.”
The original code concluded there is no need for PRAs, as MRO would achieve its objectives alone.
Soubry continued: “I know from my own constituency work that pub companies such as Punch and Greene King have hugely changed their views to the benefit of tenants, and that must be welcomed.
“It is important that we strike the balance fairly between both sides of the argument, and that we understand and accept that there has been a great deal of movement to the betterment of tenants over the past few years.”
Not everyone in the trade opposed the removal of PRA, as the BBPA welcomed the decision.
Consultation
The draft Pubs Code has also been criticised for a section which “undermines” MRO.
Section 8.12 states a tenant will gain the right to request an MRO offer following the receipt of a rent review proposal – so long as the rent proposed by the pubco is higher than the existing rent that the tenant is paying.
The BIS is welcoming contributions to its consultation, and is open to changes.