In his submission to the Government’s consultation, Neill, who issued his support for a statutory code, also called on business secretary Vince Cable to give tenants the right to have a free-of-tie option combined with an open-market rent review.
Conservative MP Neill said a free-of-tie option would be “entirely voluntary” but “would give struggling licensees a far stronger position when negotiating terms with the major pubcos”.
In the letter, Furness-Smith said: “How depressing to hear a former pubs minister come out in support of Government intervention into the tenanted pub market.” He accused the Government of supporting intervention in the market “all for a few votes”.
'Bayoneting the wounded'
“As is often the case with politicians, you appear to get immense satisfaction from arriving at the scene of a battle once it has been won, and bayoneting the wounded.
“For most of us who work in the beer and pub industry this Government appears to be about to ruin all the good work and goodwill generated when, in the last Budget, they listened to common sense and reduced beer duty. This fit of generosity is, however, worth only a few hundred pounds per pub but was a start and is much appreciated by the trade and consumers alike,” said Furness-Smith.
“It compares unfavourably, however, with a Government that is still taking, in one tax or another, more than 40% of turnover from an average community pub and has increased the tax burden — the largest cost of running these pubs — since 2006 by some 30% at a time when trading has been challenging and average pub profits have been, at best, flat. Not unsurprising, then, to hear that politicians wish to blame pub owners for the plight of those whose pubs have sadly failed.”
'Mugabe would be proud'
He added: “Most sane people would have thought ministers have more important things to do with their time and taxpayers’ money than trying to justify this vindictive and politically inspired interference with the pub market at the expense of shareholders — all for a few votes. Robert Mugabe would be proud of you for supporting such tinkering with a market that is working and evolving in line with the changing environment and trading conditions.”
Furness-Smith said that, in the past six years, pub owners had responded to tenants’ plight by cutting rents and improving trading terms. He also told Neill that it was in the interests of the pub-owning company to ensure tenants make a success of the outlet.
Furness-Smith revealed that support packages had cost all pubcos “considerable sums” and — in the case of McMullen — amounted to more than 50% of the tenanted division’s profits.
He added: “May I respectfully suggest, therefore, that our political elite looks at your own appalling record on excessive taxation of pubs before blaming and punishing pub owners who have been helping our tenants, particularly when times have been challenging, and in the process taken massive hits to our P&L accounts.
“If ministers really cared and had responded as favourably as pub-owning companies to the plight of pub tenants, the industry would be in a strong position to play an even greater part in helping to restore our economy.”