BISC: MPs on churn, rent reviews and the tie
Caroline Lucas, Brighton Pavilion MP (Green)
“Chris Beaumont, landlord of the Greys in the Hanover area of my constituency, says his is the only pub in the area that has not closed and reopened in the past nine years. In the pub trade, this is known as ‘churn’. ‘Churn’ matters, as it means ruined livelihoods for landlords and their families.
“One thing pubcos are less than honest about is that, when they negotiate with lessees, they claim lessees can be given free-of-tie options, yet often fail to mention that they must pay a premium to qualify.”
Peter Aldous, Waveney MP (Con)
“I spent 27 years as a chartered surveyor. I did rent reviews on most types of business properties. Underpinning most valuations was a requirement to assess the open-market rental value.
“If the parties can’t agree, the matter is referred to an arbitrator or an independent expert. It is bizarre that a procedure that is routine for most business people who lease premises is not available to pubco tenants.”
Stephen Lloyd, Eastbourne MP (Lib Dem)
“A lot of the work I did for the Federation of Small Businesses before coming to the House involved meeting landlords who had pubco tenancies. Some of the meetings were among the most desperate I have ever had, because people were getting absolutely nailed by pubcos. So, to be honest, I would not advise anyone to become a tenant under the present criteria.”
Tom Blenkinsop, Middlesbrough South/East Cleveland MP (Lab)
“Licensees in my constituency get a poor deal from exploitative pubcos, and the Government has to act.
On this issue the Prime Minister is dodging his round at the bar. Louise Gibben, of the Huntsman in Guisborough, told me that, after paying Enterprise £20,000 a year in rent, plus overheads, business rates and her PRS for Music licence, she is left with next to nothing.”
John Pugh, Southport MP (Lib Dem)
“Pubco co-operation will make any solution more workable, especially if self-regulation is given legal backing, although a statutory code would lead to more compliance and less legal recourse.”
Damian Hinds, East Hampshire MP (Con)
“I used to work in pubs and brewing. The industry is built on partnerships between large companies and entrepreneurs. If we want to keep pubs open, we must address two things. The first is pubs competing on price, partly against the supermarkets, but also against managed houses. The second is alternative-use value, as one way of keeping pubs open is to make it harder and more expensive to get a change of use for premises.”
Martin Horwood, Cheltenham MP (Lib Dem)
“I promoted a Private Members’ Bill on this subject last year and received a lot of correspondence, especially from the trade. I did get a letter from Enterprise, which pointed out the value of the tie. It took me round my constituency and showed the tie can deliver real benefits; that is true, especially where extensive capital investment is required. Yet the overwhelming volume of correspondence from the trade
was supportive of a statutory code with a free-of-tie option.”
Lorely Burt, Solihull MP (Lib Dem)
“I think I am the only member to speak who has operated under a tie. It represents the symbiotic relationship between the company that owns the pub and the tenant, who puts his or her labour into the equation. Most tied pubs are owned not by breweries but companies whose purpose is not just selling beer but owning properties that they expected to accrue in value. The property bubble has burst and pubcos can’t rely on increasing property values to square a decreasing profit circle.”
Karen Bradley, Staffordshire Moorlands MP (Con)
“I am the daughter of a publican who was tied to a large pubco but now runs a freehouse. Having a freehouse is a much more favourable position.”
Toby Perkins, Chesterfield MP (Lab), Shadow Minister for Small Businesses
“If a minister could create a policy to unite opinion in the House, we’d call him a genius. I don’t know what the word is for the opposite, but the minister (Ed Davey) appears to have achieved the opposite of that united opinion.”
John Healey, Wentworth and Dearne MP (Lab)
“Will the code help Mr Wild, who runs a popular pub in Rotherham, and whose business is being throttled by the terms of his tenancy? He tried to arrange with Enterprise to buy cask ales free-of-tie. He was told it’d be £10,000 to £15,000 and negotiable but was then told, three days later, it’d be £20,000 non-negotiable.”
