Pub Companies

Baroness Primarolo Excerpts

Wednesday 9th January 2013 Commons Chamber

[Relevant documents: The Second Report of the Trade and Industry Committee, Session 2004-05, Pub Companies, HC 128, the Fourth Special Report of the Trade and Industry Committee, Session 2004-05, Pub Companies: Government Response to the Committee’s Second Report on Pub Companies, HC 434, the Seventh Report of the Business and Enterprise Committee, Session 2008-09, Pub Companies, HC 26, the Third Special Report of the Business and Enterprise Committee, Session 2008-09, Pub Companies, HC 798, the Fifth Report of the Business, Innovation and Skills Committee, Session 2009-10, Pub Companies: follow-up HC 138, the Eighth Report of the Business, Innovation and Skills Committee, Session 2009-10, Pub Companies: follow-up: Government Response to the Committee’s Fifth Report, HC 503, the Tenth Report of the Business, Innovation and Skills Committee, Session 2010-12, Pub Companies, HC 1369, and the Government’s response, CM 8222, and the oral evidence taken before the Business, Innovation and Skills Committee on 6 December 2011, HC 1690-i of Session 2010-12.]

[Madam Deputy Speaker (Dawn Primarolo)]

I have to inform the House that Mr Speaker has selected the amendment in the name of the Prime Minister.

--- Later in debate ---

[Madam Deputy Speaker (Dawn Primarolo)]

Order. This is a very short debate and many Members wish to speak, but some of them are repeatedly intervening on the Secretary of State. It would be good if, first, interventions could be short, and secondly, those wishing to speak could be a little more disciplined, given that there is already a five-minute time limit on Back-Bench speeches. At this rate, that is going to go down.

[Vince Cable]

I am afraid that I cannot offer the hon. Gentleman the assurances he wants on beer duty. I supported the Government’s approach to the taxation. On his drinking habits, I will only say that, like several of us, I am still haunted by having signed the temperance pledge aged 11.

--- Later in debate ---

[Greg Mulholland]

Will my right hon. Friend look again at the Save the Pub document, which shows that the figures on pub closures are extremely misleading? He must recognise that they were paid for by the pubcos’ association, the British Beer and Pub Association. Many pubs have been reclassified on closure as being free of tie, having in some cases never operated as such. The figures clearly show that there are more free-of-tie pubs now than there were, and that tied business failure is huge—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. We must have brief interventions. Time is ticking on.

[Vince Cable]

I would not want to cross swords with my colleague on the statistics, which he knows extremely well. He makes a compelling point.

Returning to the issue of the success of the industry, and particularly the small companies, the Office of Fair Trading found in 2010 that the market share of microbrewers had increased between 2004 and 2008, and that the volume of sales had grown by something in the order of 50% in that period. We found out recently that the number of breweries in Britain had topped 1,000, which is the highest level since the 1930s. Furthermore, as well as the tie being essential to family brewers such as Charles Wells or Fuller’s, the OFT also found that large pub companies that owned tied pubs also bought a considerable volume from microbrewers and regional brewers. Accordingly, the Government’s proposals are designed to address abuses of the tie, through enshrining in the code the principle that a tied tenant should be no worse off than a free-of-tie tenant, while not impinging on the business practices of companies that are using the tie responsibly, as many do.

This is an industry in which many companies behave well, in which seven out of 10 licensees would sign up again with their pub company and in which there are real examples of pub companies, brewers and tenants working together to invest for the future. Unfortunately, parts of the industry have acted irresponsibly in squeezing their tenants, resulting in considerable personal, as well as economic, hardship for those who lose out.

That is why the Government are now going to consult on the strong, decisive step of introducing a strengthened statutory code that will address the balance of risk and reward, as well as an independent adjudicator who can investigate on behalf of tenants and impose sanctions on pub companies that persistently breach the code. As I said to the hon. Member for Hayes and Harlington (John McDonnell), I intend to publish the consultation soon. We hope that it will be completed in the spring and that it will be strongly welcomed by the House, as well as more widely by all those who work in, use or benefit from the pub industry.

[Several hon. Members]

rose—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. There is a five-minute time limit on all Back-Bench contributions, from now.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

Thank you, Madam Deputy Speaker—

[Madam Deputy Speaker]

Order. I beg your pardon, Mr Bailey. We need to be sure what we are talking about. The original Question is on the Order Paper, since when an amendment has been proposed, as on the Order Paper. The Question is that the original words stand part of the Question. In my haste to get the debate started, I omitted to say that.

[Mr Bailey]

Thank you, Madam Deputy Speaker. I will do my best to ensure that I know what I am talking about.

I welcome the debate and thank the Secretary of State for his letter to me yesterday and for his statement to the House. I want to clarify why we have reached this position and to give the House the history of the matter. There have been four Select Committee reports on this issue since 2004, and the one produced by my predecessor, the hon. Member for Mid Worcestershire (Peter Luff), was key to our reaching the current position. It stated that the industry was not making the progress to which it had previously committed itself to making, that it should be given a further year and that, if it had not made sufficient progress after that time, we should introduce a statutory code that would include provisions for the free-of-tie option and the open market rent review.