Legislation

2015 review: the pubs code debate

By James Evison contact

- Last updated on GMT

2015 review: the pubs code debate

Related tags: Pubs code, Renting, Landlord, Government

It was a long year in parliament for the pub sector and the potentially life-changing impact of the pubs code legislation. James Evison looks back at an emotive year for the industry.

January

Mulholland-is-a-formidable-campaigner-and-MP.-But-he-overstepped-the-mark_strict_xxl

The year kicked off as it ended with the outspoken champion of pubs, parliament's Save the Pub group chair Greg Mulholland hitting out at 'rotten amendments' to the pubs code bill​.

This was due to the House of Commons publishing the code's summary report​ - and the beginning of a long year of engagement on the subject across business and campaign groups.

February

By the time it was February, we already had the first of many comments on the code​ having an impact on the pub property market, potentially bring 'turmoil' to the sector, just as it is recovering from the recession - although the opinion from a valuation expert did say 'no-one knows what the consequences will be'.

At the same time the FLVA called for a pubs code helpline to assist those affected by the new legislation.

March

The Royal Assent for the pubs code, while welcomed by Enterprise​, was far from the end of the debate. The pubs code adjudicator role was also announced​ - with a potential start date of May 2016.

The government also agreed to exemptions to the MRO element of the pubs code,​ saying it will introduce exemptions to the market rent only option element of the pubs code for pubcos willing to make “significant investments” and also to “genuine franchise agreements”.

April

Scottish tenant campaigners called for a pubs code north of the border​ - as the current legislation was only applicable in England.

At the same time Punch Taverns were accused of scaremongering over MRO, claiming it would take legal action against the pubs code using human rights legislation​.

July

Bill-Sharp

The former chairman of the Independent Pub Confederation (IPC) Bill Sharp called on all factions of the trade to show “tolerance”​ and work together to ensure the smooth implementation of the new pubs code.

August

The salary for the pubs code adjudicator was announced in August with the offer of a £130,000 salary​.

The Pubs Advisory Service called on the government to review the pubs code​ in light of the purchase of 158 pubs from Punch by Real Estate Investment Trust, New River Retail.

Co-founder Chris Wright said: “It was stated by the Business, Innovation and Skills committee officials during the run-up to the new the law that the government would look at moves by pub companies to reduce their holding to below the 500 level.

“Given that one company New River Retail now have over 350 pubs from just two of the big 5 pubcos it would seem an appropriate time to review the level."

September

SimonClarke

The autumn began with the pubs minister meeting with PAS representatives Dave Mountford and Simon Clarke to discuss the legislation and the 500 pubs figure for MRO​.

In a separate claim, the PAS has reported incidents of tied tenants “being coerced, some might say bullied, into swapping their existing leases for short term leases which will deny them the MRO opportunity”.

“The Government’s intention is being subverted and tied tenants are not being offered a 'fair deal' as was anticipated. Instead of working towards a more fruitful relationship with their tied tenants it seems, as before, any time offered to the pubcos to change their ways is being used to seek ways to circumvent the regulation and carry on business as usual,” the PAS stated."

October

As the nights drew in, the government finally published the first draft of the pubs code​. 

In an exclusive comment for PMA by minister Anna Soubry​, she said that the 'proposals aim to strike a fair balance between protecting pub companies’ property, bringing in new protections for tied tenants and minimising unnecessary burdens on both sides.'

The trade was also warned by the current Grocery Code Adjudicator that ignorance of the new legislation would be 'no excuse'. 

But some in the industry were not happy with the first draft​ claiming that it undermined MRO.

In section 8.12 the draft states a tenant will gain the right to request an MRO​ offer following the receipt of a rent review proposal – so long as the rent proposed by the pubco is higher than the existing rent that the tenant is paying.

The Pubs Advisory Service (PAS) has been ‘inundated’ with calls from worried licensees who were ‘shocked’ by an unexpected condition in the Code. Co-founder Chris Wright said: “If things stay as they are the whole Pubs Code can be simply neutered by a landlord who has only to offer the tenant nothing come rent review.”

November

Parallel rent assessments became the new talking point of the pubs code with calls for the draft to be scrapped as a result​. The issue was that PRAs - which aim to show whether you will be worse or better off under and MRO option - were not included. 

By December, the government had clarified its position​, stating it was not going to have a separate PRA but instead would integrate PRA into the MRO process.

The issue around the legislation also heated up during an explosive debate at the Tenanted Pub Company Summit.

Save the Pub Group chair Greg Mulholland was dubbed a 'pantomime villain' by deputy editor of the PMA, Mike Berry​ as he went on the attack against the BBPA's Brigid Simmonds and several long-serving pub industry professionals.

Mulholland responded in his typically forthright fashion​ - although he failed to respond to the majority of Mike's issues, and personally attacked him instead.

Editor Ed Bedington called on the industry to show reason, not emotion, on the issues. 

December

Pubs-code-Government-praised-for-listening-to-tenant-campaigners_strict_xxl

The government finally published the second part of the consultation. 

And the year finished with some seasonal goodwill, as the government was praised for listening to tenant campaigners during the legislative process​ - although with a bit of a sting in the tail...

PAS head Chris Wright said: “We are delighted the Minister took into account pubs seasonal trading patterns, it shows Government is listening to publicans. However, part two jars badly when set against the first part and we are disappointed Government was unable to pull the first part despite all its inherent problems.

"Looking back there was clearly no reason to produce a complicated wordy first draft and we still believe its continued use causes confusion for many tenants in responding to the consultation.”

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