Government to accept MRO pubs code vote

By Mike Berry

- Last updated on GMT

Related tags Lib dem mp House of lords

Business secretary Vince Cable said he respected the will of Parliament
Business secretary Vince Cable said he respected the will of Parliament
The Government has accepted MPs’ decision to vote for a market rent only clause for tied tenants in the pubs code and will not seek to challenge it.

Speaking during Business Innovation and Skills questions in the House of Commons on Thursday morning, business secretary Vince Cable confirmed he would accept the vote result and “let the matter rest”.

On Tuesday, MPs voted to introduce the New Clause 2 amendment, which outlines that companies with more than 500 pubs and at least one tenanted/leased site will have to offer a market rent only option,

It will now be added to the Small Business, Enterprise and Employment Bill after 284 MPs voted in favour, with 259 votes opposing the clause.


Responding to a question from Lib Dem MP and Save the Pub Group chair Greg Mulholland – who tabled the amendment – Cable said: “I would like to congratulate him on a long and successful campaign which he has won. I’m inclined to let the matter rest. Parliament has spoken and we respect its views.”

Cable’s comments were later confirmed by William Hague, leader of the House of Commons.

Conservative MP Andrew Griffiths had earlier raised concerns about the impact of the decision on affected pubco’s.

Shares of the big tenanted companies fell sharply yesterday as the market digested the implications of the vote. Shares in both Punch Taverns and Enterprise both fell by almost 17% and Griffiths said this put jobs and investment at risk.

MRO clause

The new clause outlines that MRO would “come in gradually only at certain trigger points”, including lease/tenancy renewals, rent reviews, change of terms or change of pub company.

It also states that large pubcos that also brew beer will be able to insist on their brands being sold in their tenanted and leased pubs, but the tenant would be free to buy them from anywhere. It states that the MRO option would involve a 21-day period of negotiation followed by a 90-day period of assessment undertaken by an independent expert agreed by the two parties (or appointed by the RICS Chairman if they cannot agree).

After this date the tenant has the right to pay the assessed MRO and can choose where to buy their beer.

The Bill now heads to the House of Lords before becoming law.

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