ALMR on code

Swift implementation of pubs code is now needed

By Kate Nicholls

- Last updated on GMT

Swift implementation of pubs code is now needed

Related tags Statutory pubs code Rent review Landlord

There are two things politicians are particularly concerned about when legislating: the law of unintended consequences and an acceptance that you cannot please all of the people all of the time.

The history of our sector is littered with the former and the ghost of Christmas past – the Beer Orders – looms large. The latter is the acid test of whether they have got the balance right - it may be a truism that politicians dislike noise and act to stop it, but on controversial measures like the Statutory Pubs Code, that balance is key.

That is why, when the Government first published the Bill to introduce a Statutory Code this time last year we welcomed it as a sensible, moderate and pragmatic compromise. At the time, we were something of a lone voice but we believe in a very polarised debate, but we believed that whilst there were  elements of concern with the proposals, there were others to be welcomed.

When we were called to give evidence to the Bill Committee, we applauded Ministers for having got the balance about right. And we warned of the danger with any tweaks or changes - concessions if you like to one side or the other – being that there would be an inevitable equal and opposite reaction to attempt to redress the balance.

As we know, the Bill – and that precarious balance – was changed considerably during its passage through the Houses of Parliament and last week the cause and effect of that sequence of changes was revealed with the publication of the Government’s consultation on the implementation of the code. I am sure that there will be many reading it who will look back to the Government’s original proposals and may yet come to agree with us that they were a fair, balanced and pragmatic.

Parallel rent assessments on their own would arguably have done far more to provide more meaningful information to the majority of lessees and have redressed the imbalance in rent review negotiations than MRO. 

But it is also entirely understandable that the Government felt it was an either/or choice. It was also inevitable that a regulatory intervention as dramatic as MRO would need to be ameliorated in order to avoid impacting on investment and uncertainty across the sector. It was why we could not and did not support it.

While much has been made of landlord concerns about investment and stability, this is something which affects the sector as a whole – managed, freehold, as well as tenanted. It is not just landlords who invest in their estate but lessees and independent operators as well - indeed almost all of the large projects the Government’s consultation envisages could see an MRO waiver being applied, will be co-investments – and they need liquidity in the market to grow, expand and improve their offer. Moreover, this has coloured the perception of the banks, finance house and inward investment as to whether the sector as a whole is a viable and secure proposition.

If you add in the statements from landlords about their future plans for their estate and it is easy to see how this has fostered an uncertain – and unhelpful - climate for business planning and investment amongst small businesses and lessees.

So what need now more than anything is for a swift resolution of any outstanding points and early confirmation from the Government on the timetable for implementation to provide that certainty and stability to encourage the free flow of finance. The Government has listened and addressed landlord concerns around MRO, we trust that that will now give sufficient assurance to unblock the current stasis surrounding lease renewal, investment and rent review decisions which many lessees have been suffering from – and for which MRO has been cited as the cause.

This has been a polarising debate and the ALMR has continually emphasised a pragmatic and moderate approach to develop a workable solution. 

As we move into the final debate, it is vital that we focus only on those very small number of issues which are critical to the delivery of that solution – and that we are mindful at all times of the need to ensure that both sides are treated fairly and have legitimate concerns.

There is a third law in politics – be careful what you ask for.

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