A debate on pubco reform held in the House of Commons earlier this month concluded with the government agreeing to set up an independent panel to review the progress made by the industry’s new code of practice in the autumn.
The code will be put on a statutory footing if it’s found that it does not address the imbalance in the tenant-pubco relationship highlighted by successive reports by the Business, Innovations and Skills Select Committee. It could yet mean that tenants are offered a lease free of tie and open market rent reviews.
Committee member Ann McKechin, the Labour MP for Glasgow North, conceded the outcome may frustrate tenant groups campaigning for reform, but said the debate showed that “parliament and parliamentarians are not minded to give up the ghost”.
“The select committee will be following that outcome very closely now,” she told SLTN.
“I anticipate that the clerk and the chair of the committee will be writing to the government asking for their official confirmation of what they will now do, with a timeline, in terms of setting that enquiry up, and what processes will be followed.
With the pubcos only recently finalising their updated code of practice, McKechin said it would be the end of the year before the review takes place.
“We want to see that implementation carried out in full, and then by the autumn we will have some idea of how many people have used the [new] arbitration process, and what the results have been,” she said.
“Obviously, we would have to wait a period of several months to allow at least some cases to go through that process.”
The British Beer & Pub Association, which represents pubcos, said it was “disappointed that MPs have supported calls for further red tape for pubs”.
“We have demonstrated that self-regulation is working,” said chief executive Brigid Simmonds. “Our focus remains in delivering against the recent agreements we have made to enhance the Industry Framework Code, introduce a more effective mediation service and improve support to lessees and tenants.”
The Commons debate was inspired by a motion lodged by Adrian Bailey MP, chair of the BIS committee, which criticised the government for not going far enough to tackle the problems between pubcos and tenants. Ministers resisted calls for a statutory code and an end to the tie in favour of self-regulation, but committed to making the code legally binding.