Government stance on covenants slated by BBPA
The British Beer & Pub Association (BBPA) claims the Government's new consultation into restrictive covenants is at odds with its drive to cut red tape.
The Government launched a 12-week consultation on 2 August asking for evidence about the impact of covenants, which force change of use when pubs are sold.
The consultation asks whether covenants can have a "negative or harmful impact" on communities and whether their use should be restricted.
According to the Department for Communities and Local Government, between 2004 and 2009, around 572 pubs have been lost following a sale with a restrictive covenant. The Government is also concerned that the covenants could have a "double whammy" effect, not only taking away a com-munity hub but preventing local people from stepping in to buy their locals.
Community pubs minister Bob Neill, announced the consultation at the Great British Beer Festival last week, praising the Campaign for Real Ale (CAMRA) for its professionalism in raising the issue.
"We have been going through some difficult times in the pub business," he said. "The use of restrictive covenants means a pub is lost to a community forever."
However, Brigid Simmonds, chief executive of the BBPA, said: "Restrictive covenants are not widely applied, and the consultation document itself acknowledges that the Office of Fair Trading has already said that their potential adverse effects on competition are 'not likely to be significant' — it is good to see that the Government acknowledges that it may reach the same conclusion as a result of the consultation.
"The Government does more to restrict pubs than any issues caused by restrictive covenants — it is punitive taxes and red tape that are the key causes of the vast majority of pub closures in recent years."
Outrageous
Campaign for Real Ale chief executive Mike Benner welcomed the consultation. He said: "I think it is wrong that people can close pubs and stop them being used as pubs in the future. It should be left up to the market place to decide what's going to work in that community."
Save the Pub Group chair Greg Mulholland MP, said the use of restrictive covenants were "unacceptable".
"Restrictive covenants should not have been going on so long and they should now be outlawed," he said.
"It is simply outrageous that any company can decide that a pub — that could be wanted by the local community — should stop being a pub forever."
The Lib Dem MP also warned that the Government should be wary of restrictive covenants "by the back door" where pubs may be sold deliberately for alternative use.
"My message to Bob Neill is to not only outlaw restrictive covenants but we need to include a community consultation and viability test in planning law so that we stop losing those pubs that are closing which are still wanted by the community.
"It is a national scandal and must be tackled."
