The government has sworn blind that it intends to help small businesses get through the financial mire. But new evidence reveals that, for the entrepreneurs running many of the 6,000 pubs currently trading in the UK today, the opposite is true.
The problem lies in the alleged unfair treatment of landlords by the big pub companies. Since 2004, four separate inquiries have been launched into the ‘tied’ system that governs the rents landlords pay pubcos and the beers they are allowed to sell. Each time, serious problems were uncovered. Yet, on every occasion, the Department for Business Innovation and Skills has swept the issues under the carpet, caving to pressure from the BBPA lobbyists.
This week, the Parliamentary Save the Pub Group, led by MP Greg Mulholland, went into battle once again to expose the injustice behind the tied system. This time, the movement was armed with findings resulting from a freedom of information request to the BIS. The report was damning.
Firstly, the Save The Pub Group found that swathes of text from the government’s recommendation to the business select committee came straight from the BBPA’s own lobbying documents – including the typos. In addition, BIS refused to cooperate with certain sections of the request, to ‘protect commercial interests’. The department also refused to publish information on the legal advice they received, despite concerns being raised about where, and indeed if, they received any.
Mulholland makes no bones about it: ‘It appears that this is an attempt to cover up the quite obvious collaboration that has been going on in secret between BIS and the pubcos and their representative organisation, the BBPA,’ he says. ‘Also, presumably, to cover up the fact that BIS failed to take proper legal advice and instead seemed to have accepted what the BBPA's lawyer was telling them.'
The Save the Pub Group, supported by landlords and their supporting bodies, is calling for a ‘statutory code of practice and adjudicator’ to prevent pubcos from exploiting landlords. Yesterday, a unanimous vote brought a ray of hope to campaigners, allowing them to put forward the motion today.
The BBPA sees things differently. The body whose members include Punch Taverns, Enterprise Inns, Heineken UK, and Young’s is instead demanding that government back its plans for self-regulation.
And the plot thickens. Evidence that the ‘tied’ system is fatally flawed has been building up for years. At the close of 2011, CAMRA crunched the data on failing pubs between December 2008 and June 2011. It found that the numbers of free houses has actually risen by 425 over the period, while the number of tied pubs has declined by 3,216. Based on this evidence, the tied model is deeply unsound.
The BBPA is sticking to its guns, however. Chief executive Brigid Simmonds says: ‘We are disappointed that MPs have supported calls for further red tape for pubs. We have demonstrated that self-regulation is working. With the number of pub closures falling, further Government red tape for pubs risks choking off recovery – stifling growth and hitting jobs.’ It may be working for you, Brigid. Not for small businesses.
Phil McCabe, spokesman for Forum of Private Business, which supports the calls for the statutory regulation, says: ‘The report by the Save The Pub Group shows damning collusion at worst, naivete at best. Landlords have been forced to provide only the beers that the pubcos want them to buy - often at massively inflated prices - and pay massively inflated rents on their premises. We think publicans should get a genuine alternative to the pub tie and be able to run their pubs as businesses without restrictive covenants.’
Huzzah. MT drinks to that.