Report leads to government rift on upward-only rents

Licensees campaigning for an end to upward-only rent reviews could be left high-and-dry by a government rift in the wake of a long awaited report on the issue.

The report by Reading University, commissioned by the government, concluded that overall, leases have got shorter and terms more flexible. The report looked at the whole sector, including retail and office rents.

Deputy Prime Minister John Prescott is understood to now believe that no action is needed by the government in the light of the findings, although a spokesman for his office said that it is still studying the Reading report and would decide whether legislation is needed to ban upward-only reviews in due course.

Mr Prescott's view would put him at odds with Gordon Brown, who is known to believe that upward-only clauses can hinder competition. However, the prospect of a rift between the Chancellor and Mr Prescott may simply see the issue put on the back burner until well after the General Election.

Licensees' groups have argued that the combination of the beer tie and upward-only reviews puts them at a greater disadvantage that other tenants. David Lostitch, licensee of the Black Horse in Redditch, Worcestershire and founder of the David and Goliath lobby group, said: "We desperately need the government to intervene on this issue. They're the only ones who can protect lndividual licensees from the might of the pubcos."

Mr Lostich said he has been contacted by more than 700 licensees since the launch of David and Goliath was announced in The Publican. "Far and away, the biggest issues raised are the tie and upward-only reviews."

Related articles:​

Reading University reports on landlord tenant relations (25 February 2005)

Licensees set up new pressure groups (24 February 2005)