Legislation

Pubs Code: Call for draft to be scrapped

By Oli Gross contact

- Last updated on GMT

Pubs Code: Call for draft to be scrapped

Related tags: Executive brigid simmonds, House of lords

Despite the Government’s U-turn on removing Parallel Rent Assessments from the pubs code, campaign groups are demanding the draft is scrapped and rewritten before consultation can begin as it faces conflicting criticisms.

Fair Deal for Your Local has asked for the code to be withdrawn, supported by MP and chair of Save the Pub Group Greg Mulholland.

The groups have criticised the Department for Business innovation and Skills for acting in “bad faith” for removing PRA, as campaigners feel the move negated the market rent only (MRO) option.

"Unworkable"

But the British Beer and Pub Association said it looked at how PRA might work with its members, and concluded it to be “almost unworkable”.

Chief executive Brigid Simmonds said: “So many pubs are unique, it is very difficult to establish 'comparables'. We do think that the MRO process provides more than sufficient safeguards.”

PRAs are a breakdown of rents and earnings under tied and free-of-tie models, designed to show tenants whether they would be better off staying tied or taking the market rent-only (MRO) option.

The original code concluded there is no need for PRAs, as MRO would achieve its objectives alone, but the U-turn means the assessment will be included in the second part of the code consultation.

The first consultation has also been criticised for only offering MRO if the rent proposed by the pubco is higher than a licensee’s existing rent​.

Negating MRO

Mulholland MP said the draft was “entirely unacceptable”, and does not abide by the legislation approved by the House of Commons last November.

It ignores advice of tenants’ groups and pub campaigners in favour of creating a code which supported big businesses, he claimed.

“The draft pubs code negates the MRO option by making it very difficult to trigger, a core part of the legislation strengthening tenants’ position,” Mulholland added.

Business minister Anna Soubry revealed the U-turn on PRA in the House of Commons yesterday​ (10 November).

She said: “The noble Lords have made their concerns very clear to Baroness Neville-Rolfe, and as a result of my conversations with her, that particular proposal will go into the second part of the consultation.”

Genuine consultation 

The Association of Licensed Multiple Retailers told the PMA it was not convinced the draft provided a pragmatic and workable solution, and was glad the Government was in "listening mode".

Chief executive Kate Nicholls said: "This is a genuine consultation on the best way to deliver meaningful change. The minister’s acknowledgement that they haven’t got the balance right yet is welcome, and underlines the importance of getting this right and making sure the proposals are crystal clear, pragmatic and workable.”

Also questioning Soubry were MPs Louise Haigh, Michael Fabricant, and Bill Esterson.

Haigh said that the draft code would mean “very few tenants will be free from the pubco profiteers”, and Fabricant warned pubs may close due to high rents. Esterson welcomed the U-turn on PRA and echoed the view that ministers had acted in “bad faith”.

Industry bodies met with Government today (11 November) to discuss changes to the code.

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