My Lords, I want to clarify one thing in response to the comments of the noble Lord, Lord Hodgson, about my dear and noble friend Lord Stevenson of Balmacara, who is not in his place. He does in fact drink at the Crown; the alternative option is the Red Lion. They both happen to be privately owned, so we will leave that one there.
I am grateful to my noble friend Lord Whitty for helping us to focus on the context of this debate. There is little doubt that a small business Bill is the perfect location for these provisions. During the discussions we have had on supporting small business, all sides of the Committee have raised issues to ensure that small businesses are given the support to allow them to operate efficiently and to have the right level of protections and opportunities for commercial activity, employment, growth and development. In the area that we are addressing today, we are looking at issues of asymmetric information, imbalances of bargaining power, behaviour and commercial restrictions—all issues that we have discussed in different ways on parts of the Bill.
We believe that the Bill should be a key part of the UK’s growth requirements, to be achieved by allowing commerce and markets to flourish and addressing impediments to functioning and competitive markets.
This is why we are keen to support it. Commercial change, innovation, transformation and adaptability are crucial for the UK. With all the good that there is within the UK pub sector—although there has also been some bad, which many colleagues spoke to so eloquently at Second Reading—it is a market that should see itself as being enabled by the proposed legislation and the measures that we are debating today. We certainly see the market rent only option in this context. It is a firm pro-business and pro-market principle that we are pleased to see in the Bill.
Labour has long argued for a market rent only option as the only way of guaranteeing the principle that tied tenants are no worse off than their free-of-tie counterparts. We have brought the issue to a vote in the Commons four times. Under the original Bill, licensees would merely have had the right to ask their pub company to show them how much their rent would be under a free-of-tie scheme. This was problematic, as all the information would be held by the pubcos; all the calculations would be crunched by their accountants and all the final estimates made by them. Even if they then revealed that the landlord would be better off free of tie, they would have had no legal right to demand this option.
The Government’s own response to a consultation on a statutory code, printed in June, concluded that,
“a mandatory free-of-tie option … is popular with many tenant groups and might arguably offer the simplest way of ensuring a tied tenant is no worse off than a free-of-tie tenant”.
However, for reasons known only to them, it took a new clause and a massive Back-Bench rebellion for the Government to come to in our view was the right conclusion. Now that they are there, we are very pleased that they are working hard on how we can make this work. The proposed new clause puts the right principles back into the Bill. It delivers a mandatory free-of-tie option that allows publicans to buy their beer on the open market. The Business, Innovation and Skills Select Committee concluded that this was the only way to ensure that landlords would be no worse off than if they were free of tie, as it would force pubcos to offer tied tenants the best deals.
We are in a somewhat complex position. We have had amendments tabled very late and I saw the impact assessment only on my way into the Committee today. It is not simple and straightforward, and the lack of time to adequately identify where we are on all these matters has generated a great deal of examination and commentary. Some aspects were expected, but there is a great deal of concern about the approach in detail. I look forward to listening to the comments and explanations that the Minister is going to give. I expect she will have quite a bit to do today. We should make it clear that although we are supportive of the Government’s approach—
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