I understand that argument, and I have some sympathy for it. However, the hon. Gentleman referred to unintended disastrous consequences. I think that many people would describe the closing of 27 pubs a week, which is happening at this moment, as a pretty disastrous scenario. I do not pretend that all the closures are a direct result of the beer tie or that all the pubs are owned by pub companies, but those are undoubtedly major factors in a high proportion of the closures. Given the current rate of closures, if we delay for two years the industry will have been greatly slimmed down even within that time.
2.45 pm
The Minister did not make clear whether the Government would adopt a “big bang” approach to implementation of the market rent only option following the consultation and the two-year threshold, or the incremental approach proposed in new clause 2. I think that the “big bang” approach would cause a degree of uncertainty in the industry which we could well do without. As for the incremental approach, the Minister suggested that we would wait two years for a decision. Given that most rent reviews take five years, it could take a further five years for the reform to be fully implemented, and I do not consider that acceptable. I think it sends a message to the industry that the Government are not serious about implementation.
I believe that, while the market rent only option will not solve all the problems by itself, it is an essential part of the regulatory machinery that could potentially do so. The proposals for a code and an adjudicator are welcome, and I pay tribute to the Government for them, but without a mechanism such as market rent only, they will not be sufficient in themselves to change the fundamental imbalance in the relationship of which I spoke earlier. The parallel rent assessment mechanism, which is bureaucratic and cumbersome—and my consultations with pub tenants suggest that few are aware of it anyway—will not do that either, and there would be no measures to make its implementation compulsory even if a tenant considered it adequate to rectify the problem. The market rent only option, as spelt out by the new clause, provides a mechanism that should give some reassurance to the industry while also addressing the core problem.
The hon. Member for Gloucester (Richard Graham) spoke of unforeseen consequences, and I saw his point. As he said, the history of brewing has not been without such consequences. I also understand the Government’s circumspection about introducing a “big bang” approach,
given that such a mechanism could potentially undermine pub companies and lead to even more pub closures, to the detriment of the industry as a whole. I personally think that it would give more entrepreneurial bodies an opportunity to buy pubs and run them more successfully, but I agree that there are no certainties in this debate. I do believe, however, that the well thought out, incremental and graduated approach proposed in new clause 2 will enable the market rent only option to be introduced in a way, and over a period, that will give the industry a good chance of adapting and making the necessary changes. I believe that it will preserve the essential core of the industry, while at the same time addressing the worst excesses of the injustices that are currently endemic in it. That is why I support the new clause.
The situation of so many tenants has been well spelled out by other Members. We have 27 pubs closing every week. CAMRA estimates that 57% of pubco lessees earn less than £10,000 a year. The surveys I have carried out in my area would seem to substantiate those figures. If the pub companies reject them, they have never come forward with any hard evidence to counter them. These figures are themselves bad enough, but we know that behind every closure there is a personal story, often heart-rending, of people investing their life savings and working all hours and then having to close their businesses because the imbalance in the fundamental economic relationship between them and the pub company was so unfair that they just could not keep going. If we add to the personal tragedies that are happening in our constituencies every day of the week the loss to local communities of much loved pubs, which are community hubs, we realise that there is a problem that has to be sorted, and this is our best ever chance of sorting it.
This new clause is not only vital for the future of thousands of pub tenants who will be watching this debate knowing that their future could depend on the outcome of it, but it is also potentially, as my hon. Friend the Member for Chesterfield (Toby Perkins) said, a milestone in our democracy. That is because this debate has arisen out of a very long process of campaigning against an injustice at large in our country. Those campaigns have been built up around campaigning bodies and have been recognised by MPs and bodies as diverse as the Federation of Small Businesses and trade unions as well as the, as it were, beer-supporting bodies. It has been a grass-roots public campaign and the fact that it is being debated in Parliament today demonstrates the ability of ordinary men and women up and down the country successfully to raise an issue that greatly concerns them and from which legislation may arise.
The cause has been taken up by MPs and tribute has been paid to a number of them. I want to commend the hon. Member for Leeds North West on his tenacity in pursuing this over a number of years and many of my colleagues in the appropriate parliamentary bodies, particularly in the Business, Innovation and Skills Committee, who over a number of years have assiduously devoted their time to this issue, especially my Committee colleague the hon. Member for Northampton South (Mr Binley), who is unable to be here.
This debate is a reflection of our parliamentary democracy working, and every Member today has the opportunity to keep faith with the public—the electorate—and to demonstrate that Parliament does work on their behalf, and to support this legislation against Government
recommendations that in the past were based on inertia but are now based on a certain nervousness. The opportunity is here today.
I close with another quote from the pub tenant:
“In short, pubco wins every time, highly inflated beer prices for tenants and we can’t get out of it unless Government breaks these types of contracts NOW!!!”
We do need to break them now. I hope for support from Members on both sides of the House, as they have demonstrated in the past, to achieve that today.