Business minister Ed Davey has told M&C Report he believes it would take at least three years to implement a statutory code of practice and adjudicator to monitor the pubco/tenant relationship.
Davey also said he expected the Business, Innovation & Skills Committee (BISC) to continue to monitor progress of the strengthened self regulation agreement negotiated by the Government and the industry as an alternative to legislation, as recommended by BISC.
Pledges made under the agreement including making the industry’s code of practice legally binding, strengthening the framework code of practice and setting up new bodies the Pub Independent Conciliation and Arbitration Service and the Pubs Advisory Service.
Davey told M&C Report: “We believe the solution will be quicker than that proposed by the BIS [the Business, Innovation & Skills department] select committee and as effective, if not more effective.
“The BIS select committee proposal was for statutory regulation of the code, bringing the code of practice into law through an act of Parliament. Now that would have taken a long time. We would have had to consult, we would have had to find a legislative slot...you’d be looking at three-plus years, at least.”
He made a comparison with the bill bringing forward an adjudicator for the grocery sector, which was included in the Coalition agreement but may not enter the Commons until as late as the third session of the current Parliament.
“Not only is [the agreement] an effective approach, but it’s a quicker approach.”
He added: “We think we’ve come up with a solution that meets most of the key demands of the BIS select committee and many of the campaigners. What they wanted was a legally enforceable code of practice. We have worked with the industry to make sure they take the action that will make the code indisputably legally binding.
“That will give, I believe, tenants and lessees something they have wanted: the knowledge that if a pub company or brewery is not treating them fairly, not abiding by the code, they can go the independent arbitrator or the dispute resolution body that can look at the allegations against them.
“I hope that when I appear before the Committee to discuss their recommendations, members will understand the solution we’ve come up with.
“When the dust settles on what is an emotional issue, people will look on in the cold light of day and say that we have made real progress.”
However, he would not be drawn on whether the Government has ruled out legislative action in the future.
Davey made it clear that BIS would not be proactive when it comes to monitoring the success of the reforms. “I’m sure that the people who have had problems [with pub companies] will not be shy in coming forward, and I hope and expect the BIS Select Committee, which has had great leadership on this, and Parliament will continue to keep real interest in this matter.”
The Liberal Democrat MP said he’d listened to “all sides” of the argument and rejected claims that views of pubco critics had been ignored as the agreement was negotiated.
The pledges primarily relate to full repairing leases (FRI) operated by major national pub companies, rather than traditional brewery tenancies, and Davey said: “If I look at where real detriment to the licensee is it’s the FRI leases used by the pubcos. It’s not really the tied tenanted model.”
