Minister Jo Swinson has said family brewers shoud not be removed from the statutory pubs code but that some requirements should be moved from the core to the enhanced code.
She said revisions to the code would relieve family brewers of responsibilities for producing an annual compliance report. The Government will also “qualify” the need to record business discussions, she said.
The Employment Relations Minister said: “I am open-minded to further changes and I would like the new draft code to be able to take account of the committee’s deliberations on the bill. In particular I am giving careful consideration to the suggestion that the requirements for a code compliance officer and for rent assessments to be signed off by a qualified RICS valuer should apply only to those with 500 or more tied pubs.”
In evidence submitted last night, but written last month, Swinson said while she was ”sympathetic to the idea that we should avoid placing unnecessary burdens on family brewers” smaller companies would still be included.”
She explained: “The requirement to produce an annual compliance report will be moved to the enhanced code and so will apply only to pub-owning businesses with 500 or more tied pubs. This is broadly equivalent to the existing Industry Framework Code where the requirement to produce an annual compliance report applies to pubs with 100 or more ‘leases’ (but not to pub sector ‘tenancies’). The legislation does not distinguish between leases and tenancies, as the two terms are interchangeable in law, but the effect of moving the provision to the enhanced code is much the same – the only difference is that two pub-owning businesses (Spirit and Trust Inns) own fewer than 500 tied pubs for the purposes of the bill but more than 100 leased pubs under the Industry Code.”
She said the requirement for Business Development Managers to record all business discussions and agreements with tenants and to provide tenants with a note on the conversation within seven days would be “qualified”.
She explained: ”It will apply only to discussions about rent, repairs and matters impacting the tenant’s business plan. This addresses concerns raised by pub-owning businesses that the original drafting could be onerous in terms of recording every contract, and this was never the Government’s intention. The BIS Select Committee and the Government consultation highlighted considerable evidence of problems in relation to the communication between the tenant and their main contact with the pub-owning business. This provision is tended to be a safeguard and to avoid disputes which rely on different recollections of a discussion.”
Under the Government’s revisions, pub operators will be forced to inform their tenants, as well as the Adjudicator, when they cross the 500 tied pub threshold.
Swinson said the information requirements in respect of repairs and informing tenants who are ‘contracted out’ of the Landlord and Tenant Act that their renewal is due, would be redrafted to be a direct copy of the Industry Framework Code.
She added: “Tenant representatives had expressed concern to us that the wording in the June draft of the code inadvertently gave them less protection on these matters than the Industry Code currently provides.”
The information requirements in respect of rent negotiations will be clarified to ensure that historic data which is provided to tenants is accurate, and projected data is reasonable, Swinson said.
She also said the draft code would make it clearer that disputes about repairs could be arbitrated by the Adjudicator.
She said: “The current self-regulation process arbitrates repairs disputes on the basis of company codes of practice; as these codes are voluntary it is important that the statutory code contains this provision so as to safeguard the protection currently afforded to tenants.”
