The journey to the pubs code

It feels like a long time since Save the Pub group chair, Greg Mulholland MP, stood behind Strangers’ Bar and pulled a pint of ‘Mulholland’s Law’ – the brew created to honour the passing of the pubs code. The period between that event, almost two years ago, and it becoming law last month has been a difficult and painful process.

First draft

It wasn’t until almost a year after ‘Mulholland’s Law’ that the first draft of the code was published in October 2015. This document removed parallel rent assessments (PRA) – the vehicle by which licensees could compare MRO with tied agreements.

But the most controversial element of the draft code was clause 8.12. This was slammed by Mulholland and campaigners because it stated that a tenant will only gain the right to request MRO following the receipt of a rent proposal that is higher than the existing rent.

The PRA issue was altered by Business Minister Anna Soubry by December 2015, along with the publication of the second part of the draft, which made explicit reference to the issues around clause 8.12 and sought to change the wording because it was “not the Government’s intention” to undermine MRO in such a manner.

Welcome move

In February 2016, Business Secretary Sajid Javid finally confirmed what campaigners had called for: that MRO would not have to be triggered by a rent increase. The British Pub Confederation welcomed the news.

Javid said: “Good government is about listening and responding positively.

“We want to see more investment in our local pubs and I hope these measures, taken together, will help to achieve just that.”

Adjudicator appointed

In March, Paul Newby, a former director of property firm Fleurets, was announced as the pubs code adjudicator.

Newby had been a member of the Royal Institute of Chartered Surveyors (RICS) president’s panel of arbitrators and an independent expert for 14 years – as well as being on the panel of experts making up the former Pubs Independent Rent Review Scheme (PIRRS).

But it was in his role as a director at Fleurets that has been the contentious issue. It was only days after his appointment that the position of the British Pub Confederation and Greg Mulholland hardened to outright dissent.

In heated exchanges in parliament, Anna Soubry slammed Mulholland for a ‘disgraceful set of slurs’ made against Newby that questioned his independence and ability to judge cases fairly.

Mulholland had said: “How can he be trusted to be independent given his salary for the past 20 years has been dependent on the companies he must now adjudicate?”

The situation has rumbled on to the present day. Most recently, the Business, Innovation & Skills (BIS) select committee last week called on the Government to overturn his appointment with chair Iain Wright citing issues over his perceived conflict of interest.

The final hurdle

The last leg was a painful one for tenants. Just days before the pubs code was due to become law in May, the Government requested a meeting with all stakeholders. The reason shocked campaigners – a “technical drafting error” was discovered regarding protected and unprotected tenancies, which had led to fears that as many as half of qualifying tenants would be ineligible for the MRO option.

Although eventually disputed by campaigners, who said there was no need to withdraw the code, it was taken out of the legislative process and delayed until July. The result was that some tenants, who would have been able to apply for MRO through their rent reviews during that period, were denied the opportunity.

The British Pub Confederation estimates several hundred licensees were impacted by the delay. It remains to be seen whether any legal action will be taken by licensees that potentially missed out.

Finally, on 21 July 2016, the pubs code became law – and the biggest change in legislation since the Beer Orders of the 1980s came into being for the pubs industry. The future of the trade is anyone’s guess – but this significant chapter in pub history has finally closed.