Date: 18th Nov 2014
A Conservative Party member and activist, a former Punch Taverns tenant, has written to all Conservative MPs telling them about the reality of the pubco tied model – and urging them to vote for pubs and hardworking licensees – and back New Clause 2 of the Small Business Bill.
The new clause, being debated this afternoon as part of the Small Business Bill, would introduce the cross party BIS Select Committee solution to the well documented problems with the pubco model – the ‘market rent only’ option for tenants of the large pubcos.
Alison Smith ran a Punch Taverns pub with her partner, believing it to be a good business opportunity and they worked hard and innovated, to make the pub a popular community hub. However despite improving the pub’s takings, they found that the eye watering marked up beer prices and excessive rents they were forced to pay made it impossible for them to make a living – and they ended up leaving the pub.
Alison, who is a committed Conservative, believes that people need to know the truth about the pubco model – which she feels is not one that Conservatives would support if they truly understood how it operated.
Alison’s intervention has been welcomed by Chris and Von Lindesay, Punch tenants who also coordinate the Punch Tenant Network, which promotes mutual support among Punch tenants.
The Punch Tenant Network, alongside CAMRA, the Federation of Small Businesses, the Forum of Private Business and licensees’ organisations all support New Clause 2 and the market rent only option. This is a simple, market based solution that would allow tenants of the large pub companies the right, at rent review or renewal, to ask for an independent assessment of their rent without tie obligations, then have the option to pay this to the pub owning company – or to opt for a fair tied agreement with a lower rent and benefit package being offered in exchange for higher beer prices.
The vote on New Clause 2 is expected to very close, with Government whips seriously worried that the Government may lose the vote. Over 8,000 CAMRA members have already contacted their MP urging them to vote for pubs and NC2.
New Clause 2, has been tabled by Greg Mulholland, Chair of the All-Party Parliamentary Save the Pub Group, Adrian Bailey, Chair of the BIS Select Committee and Brian Binley, a member of the Select Committee and President of the Save the Pub Group, with support from many pro-pub and pro-small business MPs across the House.
The Fair Deal for Your Local campaign is backed by 212 MPs, and 74 MPs have signed the cross-party new clause, including 14 Conservative MPs.
Commenting, Alison Smith, Conservative activist and party member, said:
“As a Conservative party member and activist, and a former Punch tenant I would strongly urge Conservative Members to vote for new clause 2, supported by the Fair Deal for Your Local campaign to support the market rent only option. Whatever they have been told by Punch and their lobbyists, I can tell them the reality of the business model.
“My experience on the sharp end of this was that the current system allowed my landlord too much control over my business, especially where the economic climate is fluctuating and where having restrictions on your cost of sales adversely impacts your profitability. The pubco tied model is grossly unfair, uncompetitive, frustrating and also strips away creativity and enterprise from individual tenants who may wish to develop their business away from the standard products offered on a pubco price list. This damaging and skewed business model has no place in the twenty-first century!”
Chris Lindesay of the Punch Tenants’ Network added:
“The sad reality is that Alison’s experience is not an isolated one, with many other tenants of large pubcos having been through or currently facing similarly difficult situations. I hope Conservative MPs will listen to their constituents and their own members, hardworking people like Alison, and back New Clause 2.
“We believe that the legal capability of Pubcos to enforce the beer tie, with no possible recourse available to the tenant causes most of the problems. New Clause 2 and the market rent only option will resolve that, gradually, and in a natural non-regulatory, but market- based process based on commercial rent. We really don’t understand how anyone could possibly object to this, but as some do, including Punch Taverns, we will continue to tell people the reality of the model and why this simple solution is the right and only one”.
Brian Binley MP, Conservative MP and President of the Parliamentary Save the Pub group and a member of the BIS Select Committee commented:
“This crucial new clause would make the Government’s currently weak proposals work and is a simple, market-based mechanism that would finally tackle what CAMRA have called the ‘pub scandal’ of the large pubcos.
“MPs, including Conservative ones, must help end the scandal that is contributing to an average of 31 pubs closing a week. The only question today is whether they will stand up for pubs or for greedy pubcos who still today are exploiting licensees like Alison.”
John Allan, National Chairman, Federation of Small Businesses, said:
“Pubco tenants aren’t getting a fair deal and this will continue unless they have the option to go free of tie, with an independently assessed rent.
“Our research showed that the ‘market rent only’ option would bring significant benefits in terms of investment, employment and consumer choice. This New Clause will give MPs the opportunity to ensure that the Small Business Bill provides a fair deal for tied pubs.”
Notes to Editors:
1. For more information, contact George Scott (Administrator of Fair Deal for Your Local campaign) on firstname.lastname@example.org or 0207 219 3833