The pubs code has always suffered, in my opinion, in that it was Liberal Democrat inspired legislation when the Lib Dems, with 57 MPs, were part of Government.
Tories instinctively don’t like extra business regulations, so you had a hastily drawn up and, in my view, poorly written code after which the Lib Dems were wiped out at the next election in May 2015 – they couldn’t even book a table at the Great British Pub Awards (you need ten for a table, they only had eight MPs).
I am unconvinced there has been the political will, muscle and support to make the code work effectively under successive Conservative Governments.
Pros and cons
What has been good is by granting the market rent only (MRO) option, long standing publicans have had far better rental deals than if there was no MRO.
I sat in on a case where a publican had one year left on his lease with a rent review. I felt ‘free of tie’ was worth an extra £40,000 per annum. The pubco – no names – gave him extra discounts and a cheque for £30,000 for remaining in a tied relationship.
In many other cases tied tenants have enjoyed improved terms because they had MRO.
The initial financial barriers to MRO have been reduced, but the costs remain intimidating for the majority of publicans. Remember when it’s the other way round i.e. a pubco wants a pub to go ‘free of tie’ it’s a simple 14-day process.
However, the threat of MRO has seen many decent publicans lose their pubs to other models. It is easy to forget the pub is typically in 95% of cases also the family home.
The fact the landlord company does not have to justify the free-of-tie rent and pubco surveyors can ignore their Royal Institution of Chartered Surveyors ethics and come up with fantasy figures – nothing new here in my view – is an issue, this approach appears to also border on intimidation.
The lack of requirements and detail on pub letting to be fair, honest and transparent is another issue. Pubco directors assure me the code has made business development managers (BDM) more professional, but did we really need legislation for that?
I do, however, agree with this as one highly respected BDM informed me last week it has made her more consistent and effective in supporting her publicans.
Extending the code
Dispute resolution? There is a hole here in the pubs code legislation. PCA arbitration can only be for matters covered by the code.
The simple pubs independent conciliation and arbitration service (PICAS) process for £200 available to the tenants of the under 500-pub owning companies who have a voluntary code is far preferable than the pubs code arbitration provisions.
Almost any questionable pubco behaviour can be taken to PICAS. This has seen publicans awarded considerable amounts of compensation in the thousands for zero cost – £200 is returned if you are successful. It is easily accessible and the panel which hears the complaint is drawn up by the Industry. This facility should be extended to all UK publicans.
Regarding extending the code to smaller companies, I judged Sheperd Neame and Robinsons for ‘Pub Co the Year’ back in February. I was humbled by the superb support they had given during the pandemic, and they certainly do not deserve or require any further legislation.
The only ‘Achilles Heel’ here are companies such as Red Oak Taverns, which refuses to be subject to the scrutiny of the under 500 voluntary pubs code but are sizeable and ambitious operators.
They appear to be of the view that they don’t require scrutiny, but I disagree. I have had enough experience of companies who prefer to be a law unto themselves.
All British publicans and their families are entitled to just and fair treatment and it should not only be to those who can afford it.
