Luff 'suspicious' of pubco promises
The MP heading a new probe into recent industry promises to improve the lot of tenants is "very suspicious" of the undertakings from pubcos.
Peter Luff said pubcos are "emphatically not off the hook" after the Office of Fair Trading (OFT) declined to act on the beer tie - and stressed that the new study will be about whether pubcos can be trusted.
Luff, chairman of the Business, Innovation & Skills Committee (BISC), formerly the Business & Enterprise Committee (BEC), spoke to the Morning Advertiser as BISC announced it would question trade chiefs again during an oral session on 8 December.
The focus will be on action taken since the damning BEC report was released in the summer. In particular:
- The Royal Institution of Chartered Surveyors' (RICS) proposed reforms to make the rent-setting process more transparent
- The British Beer and Pub Association's (BBPA) new code on tenancies and leases, which promises a better deal for tenants from 1 January
- The BII-led, low-cost rent arbitration initiative Pub Independent Rent Review Scheme
- The Independent Pub Confederation (IPC), formed after the trade's mediation process and including anti-pubco campaign Fair Pint and the Association of Licensed Multiple Retailers
Senior figures from the BBPA, IPC and RICS will be questioned during the hearing, with a new report planned for January.
Luff accused pubcos of playing a "political game" over their reaction to the OFT report on the tie.
The OFT said the tie did not cause competition concerns. However, the competition body did not examine the treatment of tenants by pubcos.
"The industry thinks that in some senses it's off the hook. They are emphatically not off the hook," said Luff.
"It will get more and more uncomfortable for them if they keep playing those games."
"[The reaction] makes me very suspicious of how much to trust the undertakings given.
"That's what the session will be about - can we trust them?"
Trade chiefs have welcomed news of the new investigation.
BBPA chief executive Brigid Simmonds said: "[The Committee's] initial report pointed out shortcomings, which we have acknowledged and addressed. It has very much been a catalyst for change.
"We trust Committee members, having heard and examined the evidence will conclude that on the basis of these reforms [from the BBPA], the RICs review and the ruling of the OFT, further Government intervention in the sector is unnecessary."
Fair Pint spokesman Steve Corbett said: "In response to the Trade and Industry Select Committee [in 2004], the industry promised change and new codes of practice, but as BEC discovered the situation just got worse.
"The Select Committee must not allow pubcos' to get away with promises of change again."
The ALMR also welcomed news, saying: "This evidence session will be the opportunity for MPs to hear about the key outstanding issues of concern which have yet to be resolved."
IPC secretary Kate Nicholls said: "The IPC has made it clear that we do not believe the BBPA revised code is sufficient and that more can and should be done by pubcos to address tenants concerns as set out in our manifesto.
"The RICS recommendations do have the potential to resolve problems about the way in which rents are calculated, reviewed and properties valued.
"RICS recommends that there should be a single independent industry code drafted and implemented by RICS. We agree with that and will accept their offer to contribute lessees' view to that process"
Luff said he did not know when the Government will give its long-awaited response to the BEC report.
