Government plans for a statutory code and adjudicator to oversee the pubco-tenant relationship came as a shock
to many after the Department for Business, Innovation & Skills (BIS) seemed to wash its hands of the issue last October.
The department refused the Publican’s Morning Advertiser an interview with Jo Swinson, the minister in charge of the issue, claiming that all the commitments made “have now been achieved”.
What followed included heavy lobbying from MPs, including All-Party Parliamentary Save the Pub Group chairman MP Greg Mulholland and shadow pubs minister Toby Perkins, licensee lobby groups, as well as scrutiny from the chairman of the BIS committee (BISC), Adrian Bailey.
A Government U-turn over the issue saw secretary of state Vince Cable make a call for evidence on how the self-regulation deal, which included the setting up of arbitration service PICA-Service, strengthening of the industry framework code (IFC) and a Pubs Advisory Service, was working.
In an exclusive interview with the PMA, Jo Swinson MP, who is employ-ment relations, consumer and postal affairs minister, said she did not enter her new role believing everything was rosy with the sector.
“I get a lot of correspondence from MPs all round the country about this issue where they have taken up concerns from constituents who have a range of worries,” she said.
“The November review that the secretary of state initiated put us in a position to analyse what came back and it was very obvious from the responses that significant concerns remained and that is in the context of Ed Davey [former minister] having made it clear this was the last chance for self-regulation to work.”
She said it became immediately obvious that the industry’s response to the Government deal was “hugely too slow” as the parties had not even been able to agree the revised code.
However, Swinson said the Government is now looking to move quickly to consult over the implementation, although there is no set timetable
due to the allocation of parliamentary time. Currently Swinson and officials are meeting stakeholders at a series of round-table discussions to consider what should be included in the consultation.
“I am finding it very interesting to speak to people face-to-face. We are going to publish a consultation document, although I can’t give an exact date when that will be published. However, we are looking to do this with a fair degree of pace,” she said.
She confirmed that version six of the IFC, which is yet to be signed off by the industry, would be looked at closely and used as a basis for the consultation on regulation.
“The principle that tied licensees should not be worse off than a free-of-tie is one that wouldn’t necessarily be addressed by version six, so one of the things we will consult on is how you actually do that. We will use version six of the code as a starting point,” Swinson said.
The Government is to consult on a threshold of 500 pubs for the regulation, meaning the plan
is that six pubcos will face regulation — Enterprise, Punch, Marston’s, Greene King, Admiral and Star Pubs & Bars. The 500 threshold is a controversial one that has sparked much confusion among those in the trade.
“We know there is a range of views about that and strong arguments for having a threshold of 500, and we also know there are arguments against. I have heard some of those already in the round-tables from different stakeholders,” confirmed Swinson.
She said she recognises that a threshold of 500 could leave pubcos who are below that number unregulated.
“One of the options is that you continue with voluntary arrangements and the PICA-Service system that is in place and we will ask people about that,” she added.
“We are obviously keen to explore how PICA-Service and the adjudicator could work alongside each other. You might not want to do away entirely with PICA-Service.
“We will, of course, take great interest in how the PICA-Service develops and the role that it plays. It is not necessarily the end of it.”
Swinson said it could be that the Pubs Independent Rent Review Scheme (PIRRS) might have a role to play or the independent adjudicator could implement another system to look into that issue.
“The principle about the tied licensee not being better or worse off than the free-of-tie licensee is one where, having a mechanism to look at rents and what is fair rent, is going to be an important part of that.”
An adjudicator could be given power to financially penalise in extreme cases, ask companies to change their behaviour or name and shame, and views will be sought on this during the consultation.
Finally, Swinson was keen to stress that the BIS does not want to burden the industry and promised that any regulation will be proportionate.