I want to follow on from some of the issues that have been raised, not least by the hon. Member for Burton (Andrew Griffiths), although I take a rather different view. I am speaking not for the brewers, but rather for my own union, Unite, and for Save the Pub, CAMRA and Fair Pint. I want to make a couple of brief points, having listened to some of the earlier contributions, particularly in relation to the levels of unemployment and the triumphalist claims from Government Members about how wonderful the situation is. I emphasise that the recovery—such as it is—is uneven, and there are huge regional disparities. I advise the Minister and Government
Members that in my region unemployment is 129,000, and rose by 5,000 between last December and May this year. That needs addressing, and I was hoping for rather more practical measures to deal with those problems.
The main point I want to raise is about pubs, and I pay tribute to the hon. Members for Leeds North West (Greg Mulholland) and for Romsey and Southampton North (Caroline Nokes), who are also officers of the all-party save the pub group. Pubs, and indeed working men’s clubs, are vital community hubs, but they are closing at an alarming rate—10,000 pubs in 10 years, which is 26 a week. I fear that the measures in the Bill will not adequately address the problems faced by our pubs.
I welcome the introduction of a statutory code of practice for large pub owning companies, and we have already rehearsed the arguments about the difference between those large pub companies and smaller regional brewers. Such a code is long overdue and much needed to address the fundamental problems created by pubcos, which I believe have done so much damage to pubs.
I do not believe that the current problems properly address that matter, and neither do they deliver on the Government’s commitment to the two core principles that the Secretary of State told us about in his opening remarks: a fair and lawful deal to ensure that the tied licensee is not worse off than the free-of-tie licensee. We know how many pubs are closing—26 a week—and for too long, large pub company chains have been giving landlords a raw deal. It is clear that large companies take too much profit from pubs—profit that would go into expanding those small businesses, employing more staff, offering longer hours, and boosting the local economy. That fundamental problem is acknowledged by the industry, and I hope that the Government will address it in Committee.
The Government have said that they will not introduce the market rents only option, and instead they have the principle that no landlord should be worse off than if they were free of tie. The reforms in the Bill aim to ensure that the tied licensee is not worse off than the free-of-tie licensee, but as the hon. Member for Leeds North West indicated, there is no effective mechanism to deliver that.
There is a strong economic argument to end the abuse by pubcos which unfairly exploit tied tenants, and there is lots of survey evidence that 90% of tied tenants would take a free-of-tie option with an independently assessed—that is important—fair rent, if that were on offer. More than half confirm that the rent they pay to pub owning companies is higher than the open market rent. I find it strange when some hon. Members say that such a measure would be a backward step and lead to wholesale pub closures, as I do not think that is the case. I have indicated where I think the extra profit would go in terms of additional staff, and under the proposed scheme licensees would be granted the right to ask their pubco to show them how much their rent would be under a free-of-tie scheme. Those calculations would be made by the pubcos, however, which obviously have an interest in providing the highest possible estimates. There are some problems with the Bill, and I hope we can explore them in more detail in Committee.