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Pub companies’ regulation to be subject of independent inquiry

To relieve pressure on struggling publicans tied to pubcos, MPs also call for statutory code of practice for the industry

MPs have forced the government to back down and set up an independent inquiry into the regulation of large pub companies – pubcos – in a bid to curb pressure on struggling publicans.

During a sometimes highly personalised three-hour Commons debate, MPs also called for an industry-wide statutory code of practice with an option for publicans to be free of being tied to pubcos alongside an open market review of rent, all overseen by an independent body.

The independent inquiry, due to report in the autumn, marks a shift from the government’s alternative plan to encourage legally binding self-regulation in the sector, a settlement agreed in December between government and the large pub trade bodies.

During the debate, the government’s decision in December to welcome the deal announced by the British Beer and Pub Association (BBPA), the trade association that includes pubcos in its membership, was slammed by MPs on all sides of the house.

Adrian Bailey, the chairman of the business, innovation and skills (BIS) select committee, said: “The pledge given by the minister fails to meet the aspirations of virtually all sections of the industry, apart from the pub companies themselves.

“Up and down the country there are literally thousands of publicans who will be listening and watching this today. They are watching because they know that the outcome of it could be vital in determining their future. This is a motion about the liberation of licensees.”

The BIS select committee will affirm the membership of the independent inquiry.

The chairman of the all-party Save the Pub group, Greg Mulholland, told MPs that “the government response has backed the pub companies and has backed crony capitalism in the worst sense.”

The Liberal Democrat MP accused the coalition government, including the Lib Dem industry minister, Ed Davey, of collusion with the large pub companies. “The so-called government response is basically the BBPA’s own report, with some passages and commitments taken word for word. Indeed, there’s even a typo in the BBPA report that has been directly cut and pasted into the government response. I am afraid it is damning.”

Responding on behalf of the government, Davey said: “We have come up with the toughest regulatory regime imaginable,” and that he said he had personally intervened to ensure the BBPA’s self-regulatory code was both legally binding and stronger than the previous edition, with an independent resolution service.

Davey rejected claims of collusion with the BBPA, and said that he met with a wide range of parties during the consultation.

The Conservative MP Brian Binley accused pubcos of operating a “model that is unsustainable, and continues on the base of excessive debt, misleading information and deception”.

He also alleged that some tenants “face prices higher than on the open market, they face exorbitant rents and a measure of misleading information”.

Binley added: “I am talking about companies called pubcos, and I want to exclude family businesses who own less than 500 pubs.” © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds