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Pub Companies

York's pubs are part of the heritage of the city. Some of them have been open, welcoming guests and serving beer, for hundreds of years, whereas others have of course opened more recently, but they are all valued by local people and attract thousands of tourists to the city and contribute to the local economy. I meet the members of the Licensed Victuallers Association in York from time to time to discuss business conditions, and recently I conducted a survey of 160 pubs and working men's clubs in my constituency. In their responses, the licensees were extremely critical of the relationship between lessees and pub companies, and one commented:"““It's like me renting you a house for a market rent but telling you that you can only do your food shop in Harrods, ie: at top prices””." The beer tie, which of course covers a lot more than beer—soft drinks, peanuts and practically everything that a pub sells—is clearly anti-competitive and not in the consumer's interest. The previous Government endorsed the then Select Committee's recommendation that, over a period of time, all existing and new lessees should be offered a free-of-tie lease with an open-market rent. In its recent report, the Business, Innovation and Skills Committee revealed that only 16% of new lessees and 9% of current lessees had been offered that, which is clearly completely unacceptable. The Government's response is out of touch with the industry. We are told that the tie is a lawful practice, so that is all right. However, the Select Committee argues that there should be legislation to give lessees the opportunity of running a business without the tie. The Government's response also expresses the view that whether a lease or tenancy includes a tie is simply"““a commercial decision on the part of both parties.””" That is like suggesting that the competition for road space between a juggernaut and a bicycle is a competition between equals. It is not a satisfactory response. If one of the major clothing retailers decided to get into the business of renting out small shops, but restricted its tenants to selling only its own brands and then insisted on selling those brands to the tenants at double the market price, we would immediately say that it was anti-competitive, unfair and wrong, and we would not allow it, yet that is exactly the relationship between the pub companies and many of their lessees. I wish to refer to one other issue, which is the retail price of alcohol in supermarkets and off-licences. In my survey, 76% of York licensees said that alcohol sales at supermarkets were the leading cause of their falling profits, and 96% thought that supermarkets should not be able to sell alcohol at cheap rates. Indeed, 70% wanted a minimum retail price for beer sales on licensed premises. Before the general election, I wrote a chapter of a policy pamphlet in which I proposed a minimum retail price for alcohol on health grounds. I suggested a price of 50p a unit, which would equate to £3 as the minimum cost of a bottle of wine, or £1 for a pint. Pubs would not go out of business if we had a minimum price of that level; nor would it prevent people on modest incomes from going to a supermarket and buying an occasional bottle of wine or beer to enjoy. However, it would stop the sale of alcohol as loss-leaders by supermarkets, which is doing so much damage to both pubs and public health. I believe that the Government's response is intellectually incoherent. They say that there is no need for legislation on the terms of leases, because they affect lessees rather than consumers. Yet on the subject of the beer tie, they propose taking no real action because it would affect consumers rather than lessees. They should concern themselves both with the viability of pubs as businesses and the rights of consumers, but they fail to do either of those things in their response.