I wholeheartedly welcome the Bill. I have been an advocate in this place of small business since I came here, having founded two small businesses that have grown to employ almost 300 people. That underlines the power of small businesses in our business sector. I am vice-chairman of the Business, Innovation and Skills Committee and am proud of the work we have done, particularly in advocating the pub code. I am also the chairman of the second largest all-party group after that on beer, namely the all-party group on small business. It has been one of the major themes I have pursued since I came to this place.
I want to concentrate on clauses relating to the pub code. When the BIS Committee took evidence, we found that many tenants had been attracted to pub tenancies by misleading information given by pubcos—I am excluding small and sizeable family breweries—that turned out to be untrue. The Committee proved that estimated profits were often overstated and that the effect of estimated costs relating to a combination of dry and wet rent was often understated. The result was tenants investing money on a fake premise. They lost that investment over time by supporting an ever-more costly business which eventually failed. What happened then? Similar tenants came in to support a pubco financial model that is heavily laden with debt and that simply does not work without that sort of subsidy—but it is a criminal sort of subsidy, and I say that without fear or favour.
I am for a pub code, but I do not think it goes far enough with regard to those particular pubs and companies. We need to do more. The Federation of Small Businesses survey found that almost 90% of tied tenants would take a free-of-tie option with an independently fair-rent option, and 51% confirmed that the rent paid to a pubco is higher than in the open market—a crazy situation—while 98% would have more confidence in the future of their business if they were free of tie, 78% would invest in pub maintenance and 73% would invest in modernisation. The figures are meaningful.