Fair Deal for Your Local campaign writes to Vince Cable in push to secure pubco reform

Fair Deal for Your Local campaign writes to Vince Cable in push to secure pubco reform

The Fair Deal for Your Local campaign has written to Vince Cable to urge the Department for Business, Innovation and Skills (BIS) to press ahead in delivering pub company reform and the all important market rent-only option, as proposed by the BIS Select Committee. 

The letter, which was signed by the Campaign for Real Ale, Federation of Small Businesses, Forum of Private Business, Fair Pint Campaign, GMB Union, Licensees Supporting Licensees, Pubs Advisory Service, Justice For Licensees, Licensees Unite, Guild of Master Victuallers and All Party Parliamentary Save the Pub Group who together have a membership of more than two million people.

The letter stressed that the inclusion of a market rent only option is absolutely essential to incentivising pub companies to deliver a fair division of pub profit before emphasising that:

“Reform that does not include a market rent only option will allow pub companies to continue to take an excessive share of pub profits whilst imposing unreasonable business risks on licensees – and so this problem, that you have pledged to deal with, will continue”.

The letter also makes it clear that other options that have been considered by BIS would simply not deal with the fundamental problem:

Suggested alternatives to the market rent only option are unlikely to be effective at securing the necessary rebalancing of risk and reward, in a timescale that would make a difference to publicans, many of whom risk being forced out of business and would lead to a huge workload and increased costs for an Adjudicator.”

It also argued that a market rent only option would mean less regulatory work for any Adjudicator.

“The market rent only option is the best means of minimising this workload and the necessity of third party intervention as pub companies would have a clear motivation to ensure tied deals are competitive to avoid licensees triggering market rent only options at rent review or lease renewal.”

The letter concluded by calling on the Secretary of State to implement reform – something that is “essential to deliver a solid legal framework that will eliminate abusive practices and ensure the long term sustainability of the pub sector and the 500,000 who are employed in the sector.”

203 MPs are currently signed up to the Fair Deal for Your Local Campaign, backing the Select Committee market rent only option.

Greg Mulholland MP, Co-ordinator of the Fair Deal for Your Local Campaign and Chair of the Parliamentary Save the Pub Group said:

 “The Fair Deal for Your Local campaign, backed by ten leading organisations, has powerfully laid out the case for desperately needed, real reform of the discredited pubco tied business model. This time, the Government must do the right thing, do the obvious thing and back the BIS Select Committee and at last introduce the market rent only option, for the tenants and lessees of the large pub companies. Vince Cable now has the opportunity to positively change the fortune of thousands of pubs, to stamp out the endemic overcharging and abuse and to prevent hundreds of unnecessary pub closures.

“The future for the British pub is as sustainable small businesses, not as cash cows for fat cat city speculators and with a Fair Deal for Your Local, the future for the Great British pub is much brighter”.

The Forum of Private Business commented:

Pubs are disappearing from local communities far too rapidly. Many of these small businesses are operating under the pubco model and used the consultation process to voice the case for reform. If the government is serious about supporting small business maximise their growth potential they need to take action and stop delaying this decision.”

Simon Clarke from Fair Pint Campaign said:

Considerable public money and resources have been used to consider a solution to the pub industries problems. Four Parliamentary Select Committees have made the recommendation of a Market Rent Only option, two house of commons debates have voted overwhelmingly in favour of a motion for Government to issue a timetable for a statutory code with a free of tie (market rent only option) to be implemented. If anything matters have worsened despite self regulation and public consultation has revealed no alternative solutions. Fair Pint believe anything less than a market rent only option enshrined in law would be contrary to the will of the house of commons, a waste of taxpayers money and undermine the necessity for select committees and parliamentary process.”

Mike Benner, Chief Executive of the Campaign for Real Ale (CAMRA) added:

“Our online petition at www.pubscandal.org.uk has already secured the support of over 34,000 people. This is the latest demonstration of public dissatisfaction at the way far too many publicans are treated by the big pub companies. 

“The Government has recognised that costly rents combined with high beer prices are damaging some pubs. It’s now time for the Government to stick to their commitment and deliver meaningful reform including a Statutory Code, Pubs Watchdog and a market rent only option for licensees tied to the large pub companies”. 

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