'Government lacks will on pubco issue'
Leading City analyst Geof Collyer says the Government lacks the "political will" to get involved in the pubco/tenant relationship because pubcos have "broadly"
complied with MPs' requests to reform.
It follows news that the oral hearings by the Business, Innovation & Skills Committee (BISC) have been confirmed for 28 June and 6 July.
Collyer, of Deutsche Bank, said: "We do not see any political will to get involved again by Government, especially after the competition authorities (both the Office of Fair Trading and the EU) cleared the pubco business model yet again in 2010, but we do expect the white noise levels to be dialled up again for a month or so until the review is completed."
Collyer described the hearings as a "reviewing process", a "much less aggressive brief" than a re-opening of the pubco inquiry.
He added: "Some will be pressing for the option to bid for a genuine free-of-tie
contract, which we believe most pubcos are now offering, though that does not guarantee that they will be the best bids for new pub letting deals.
"The other area that we would expect the anti-pubco lobby to push for is that a tied tenant should be no worse off than a free-of-tie tenant.
"Looking back through the myriad documents on the pubco inquiries since 2004, this has always been a proposal of the anti-pubco lobby, not a prime consideration or recommendation of the BISC/TISC [Trade & Industry Select Committee] or BEC [Business & Enterprise Committee] in all of its forms.
"In our view, there is no principle that all rental contracts should be equal — it is an issue of the varying degrees of risk based on capital investment."
