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Mr. Burt : In conclusion, if my hon. Friend would make such a commitment to monitor the situation, some of our concerns will be covered. I recognise the balance that my right hon. Friend the Secretary of State explained at the beginning of the debate, and it has been evident in some of the speeches that we have heard already. Sometimes the poor old Secretary of State is caught in a vice between the interests of the brewers and the industry and those of the tenants so that he cannot get it right. The Bill is a genuine effort to help, and I believe that it will help in a number of ways. The Bill could be further improved, but if there is a commitment to monitor its effects the best things about the brewing industry in Britain--the quality of pubs, their management and tenants--can be further enhanced. The Bill will not have a detrimental effect--it will be beneficial for tenants, for my constituents, and for the people of Britain.
Mr. James Couchman (Gillingham) : I declare my interest in the licensed trade, as I have done on a number of occasions in the House. I am the chairman and majority shareholder of a small family company which runs six houses in London. They are held on a variety of tenures, but are all tenanted or leased. I am also a member of the National Licensed Victuallers Association. I was delighted at the robust and stout defence of interests in the House by the hon. Member for Rotherham (Mr. Crowther).
Column 1254I had some difficulty earlier in the year when the Monopolies and Mergers Commission report was published, because at the time I was, as I now am, Parliamentary Private Secretary to my right hon. Friend the Member for Braintree (Mr. Newton), who was then Chancellor of the Duchy of Lancaster and at the Department of Trade and Industry. I was thus constrained to silence at a time when I might have been able to say something about the report, which I consider to have been a flawed piece of work by people who did not understand the industry and all its ramifications despite two and a half years' investigation.
I believe that too much notice was taken in that report of two interests in particular--Guinness and Bulmer's. Guinness has a unique position, as it supplies almost every public house with its products, but until recently it had not invested in any public houses. Bulmer's had a monopoly, and was pretty upset when it was destroyed by the creation of a second company.
The report offered a grotesque piece of retrospection, because the suggestion was that brewers who owned more than 2,000 public houses would need to sell off all the houses in excess of that number. The brewers had acquired those assets for the sale of their products entirely legitimately, either as individual purchases or through takeovers. The law which prevailed at that time allowed them to acquire the houses. Then, all of a sudden, six people came along, wrote a report and said, "You shouldn't be allowed to do that--you must flog them all off." To me, that was a piece of interference in the market which seemed utterly inappropriate, unfair and retrospective. I thought it particularly so because of the strange phrase that my hon. Friend the Member for Faversham (Mr. Moate) highlighted--the "complex monopoly". We have diffuse ownership in the brewing industry. Although it is far less concentrated than in the United States, Australia and several continental countries, it has been held to operate as a "complex monopoly". I found that concept difficult to grasp.
I also found that, after two and a half years of work, the MMC had come to some strange conclusions. I shall mention just one. It concluded that the brewers, who had assiduously built up their managed house operations over 20 years, had done so to make a loss. That seemed a peculiar and curious conclusion. It is, of course, untrue.
Above all, I was worried by the MMC's suggestions, as it seemed to demand a weakening of a substantial, successful and mature industry which has operated in a unique way when we should be strengthening our brewing companies in preparation for 1992 when they may be able more freely to take our unique beer to the continent and interest them in drinking our beer rather than the other way round. I am worried that the consequences of the report, and what the Bill and the motions that we are to discuss later suggest, will be a weaker brewing industry. I am aware of at least one of the big six companies which is likely to sell its brewing interests. Another is likely to put them at arm's length as a separate plc. A third does not know quite where it is going, but would like to stay in its present vertically integrated form, although it would be caught by the steps that we are taking in these three pieces of legislation. A fourth company's brewing operation is already almost off-shore. A fifth appears to be trying to get itself below the
Column 12552,000 houses limit. The management of the sixth has yet to reveal its hand and where it may go. We know little about it.
I am worried that those six companies will, as a result of the MMC report, substantially damage the structure of an efficient industry. That structure has allowed investment by brewers in their public houses, knowing what the likely throughput for their brewing interests would be. That is the purpose of vertical integration. In such circumstances, brewers know with some certainty how much of their product they will sell and if they sell in the free market, that is a bonus.
I was worried that the MMC report came to some curious conclusions, but it was obvious that my noble Friend Lord Young, for whom I worked at the time, was minded to accept much of the report. It seemed, therefore, that there were bound to be changes in the industry. I set myself the task, in a fairly humble way, of acting as a kind of bridge between my friends and landlords in the brewing industry and the Department for which I was working.
I have spoken of my vested interest and experience. Perhaps I may be permitted to take the House back to the early 1970s when brewers decided to build up their chains of managed houses in a pretty rough way, dispossessing successful tenants of their houses and therefore of their homes. The brewers took the successful houses into management, but they did not try to exploit those which were badly run by tenants. They frequently did that without paying any compensation or without offering an alternative house. If an alternative house was offered, it was of a lower standard. Where compensation was paid, it was at a derisory level. As a result of the fight by the trade, a code of practice came into being, which was considered an improvement on the previous position although it had no force in law. The hon. Member for Rotherham referred to the code. Recently, the major brewers have tended to set houses back from management to tenancy. That is because they made a mess of running the houses under management. This, to some extent, has opened up new opportunities. The kick is that downgraded houses in need of substantial repair are frequently being offered on a lease rather than being set back to tenancy. I speak with personal experience because I recently took a house in such circumstances on a 20-year agreement. It is a good trend as it may allow into the trade those who would not otherwise have been able to enter it, but they will do so on a basis entirely different from that which has prevailed traditionally in the trade. I speak with the experience of my company, which has seen people come into the trade at 18 years of age as barmen, work through management and eventually, in their early thirties, with modest capital, take a tenancy on their own account. That is a way into small business that we should continue to encourage. When premises are put to lease, the capital required is entirely different from a tenancy agreement. Again, I speak with some personal experience.
The worry about security stems, perhaps, from a spate of sales of blocks of houses--the freeholds of houses--over the heads of tenants without any offer being made to the tenants. The houses go to all sorts of companies and are then sold on again. The relationship between the tenant and the brewer landlord is broken entirely and instead there is a purely property relationship. When that
Column 1256happens a lease may be offered, but at a rack rent, by someone who is not interested in selling beer through the property. It may be that the rack rents will relate to property rather than the public house. The House may know that public house rents have traditionally been quite low compared with those for other retail outlets. When a person is faced with a rack rent on a lease and full repairing terms, however, there is a much greater commitment than that which many people would wish to face, especially if the offer comes late in a career. A man of 55 or 58 may not wish to take on a 20-year lease and may wish, for example, to continue a tenancy with three-year reviews.
I suppose that the Bill offers a degree of security that we have not had before, although I, too, am worried about the right to break out of the landlord and tenant relationship if that is mutually agreed. The mutual agreement is an uneven relationship and may be used either as a lever to ease the tenant out of his house or as part of the interviewing process for new tenants. I am concerned that the Bill may lead ultimately to an end of tenancy as we know it and that there will be a far greater prevalence of leases. That would be a shame. It would mean the end of a route into small business with modest capital, which has allowed many people to enter the industry. I do not wish to speak at great length about the order, but I should be grateful for your indulgence, Mr. Deputy Speaker, while I ask my hon. Friend the Minister a few questions
Mr. Deputy Speaker (Sir Paul Dean) : Order. I realise that the procedure is a little difficult. We are dealing with the Bill and later we shall deal with the orders. It might be better if questions about the orders were left until we reach that debate.
Mr. Couchman : I am entirely in your hands, Mr. Deputy Speaker. I will postpone my questions on the orders, but I regret that that will mean asking for the indulgence of the House for a few minutes in the next debate.
I hope that this great and successful industry will not be irreparably damaged by the steps that we are taking today. Had the inclination to accept the original report unamended prevailed, it would have led to masses of changes in the industry and, ultimately, to far fewer pubs and a great deal of damage. I hope that the Bill will offer a sensible balance. I am timorous about asking for codes of practice to be added at later stages. The question of contracting out should be considered exhaustively in Committee. I am only sorry that I have to serve on the Committee on the NHS and Community Care Bill, and thus will not be able to take part in discussions in Committee on this Bill. I hope that my hon. Friend the Minister will take on board the concerns about contracting out that have been expressed by several hon. Members tonight.
Mr. Iain Mills (Meriden) : I shall not detain the House for long. I intend to make a short but important speech on behalf of the small independent brewers. I am disappointed that hon. Members have spoken only about the large brewers and have given no encouragement to the smaller businesses. Hon. Members have talked about the retailing, the distribution and the selling in public houses
Column 1257of the products of extremely large organisations. No one has said that new people wish to come into the business. How do they do that? How do they challenge the great brewing houses?
Some colleagues may say that there are complex problems, and I agree with some of their assessments. However, my few remarks tonight are really an appeal both to the Minister and to House for a little lateral thinking. We need to consider how this measure will encourage new starters in the business. No one has said how one actually starts a new business and how one challenges the big guys. The measure, through its protection of tenants, will encourage those who wish to try.
I have some sympathy with the original reaction to the Monopolies and Mergers Commission proposals, but I think that the Government have the balance about right. Many of the proposals that have been mooted and much of the to-ing and fro-ing during recent months have now been distilled into a practical, good working code. I should like it to go further and encourage small brewers.
If I catch your eye in the next debate, Mr. Deputy Speaker, I will talk about guest beers. There are at least 200 members of the Small Independent Brewers Association who want the opportunity for small business men to begin to brew beer and to get into that big market. I do not formally represent them, but they are my friends and some of them are my constituents. One thing that we can do tonight is to recognise the importance of such people. It is the Government's policy to encourage small business men and entrepreneurs who, strangely, have so far been denied access to a market for their specialist beers. We cannot buy Old Tusker in our local public houses because they are tied and because of the monopoly. Change is needed. Why was such a big industry, with all its strength, incapable of innovation, of encouraging such people? The CBI, most businesses and even the old steel industry encourage small entrants into their businesses. The breweries have failed to do that, and we need to encourage small new entrepreneurs to enter the business.
I support the Bill. In general it moves in the right direction. But I share many of the concerns that I have heard voiced in the Chamber in the past half hour or so. First, I share the concern that the inequality of power between the two contracting authorities might give the brewery a dominant position over the publican, allowing contracting-out to work to the advantage of the brewery in almost every case. I ask the Minister seriously to consider bringing forward the Bill's implementation date of July 1992. The hon. Member for Faversham (Mr. Moate) is nodding. I speak as someone who is the son and grandson of a brewer--a large brewery, too, for most of the time--and my earliest memory was going to a brewery. I do not come to this from a prejudiced position.
A third matter which I have not yet heard mentioned relates to a practice which can often mean that a publican can be put under considerable pressure by breweries. Publican constituents of mine have regularly come to me under such considerable pressure. Widows have had the
Column 1258traditional indulgence of the widow's year, which breweries are not necessarily keen to uphold. I hope that in Committee such a custom will be legalised so that a spouse of a deceased or otherwise incapacitated publican who wishes to continue will be allowed to do so for an additional year.
Let me say one final thing which is not necessarily in support of licensed victuallers or publicans. I share the concern of the hon. Member for Meriden (Mr. Mills). Many people make a substantial contribution to the pleasure and variety of brewing and to the interest of the public by setting up, running and developing small brewing companies. We do not want to prevent them from being able to develop and practise. There was an over- restrictive practice and it was right that that should be examined by the Monopolies and Mergers Commission. I, too, am happy that in the event the original recommendations were not implemented. The Government are moving in the right direction.
The concerns of hon. Members on both sides of the House, not just those who represent members of licensed victuallers associations, appear to command widespread support, and I hope we can ensure that we protect against the danger of inequality. In seeking to provide better security of tenure, we must ensure that publicans are more secure in practice as well as in theory.
Dr. Lewis Moonie (Kirkcaldy) : I do not propose to dwell on my role as chairman of the all-party alcohol policy and services sub-committee and as a specialist in public health ; that would be inappropriate, given the tenor of tonight's debate. I have preached to the House often enough about the difficulties that some people have with alcohol, and no doubt I shall have ample opportunity to do so again.
I wholeheartedly support the remarks of the hon. Member for Meriden (Mr. Mills). My own experience of pubs began about 25 years ago--I must be sure that that puts me over the age of 18 at the time--in the dark, dingy, smokey places that we had to frequent in Scotland in those days because they were all that was available. There has been a remarkable improvement in the standard of public houses since then. I wish that I could say the same for the beer. Like the hon. Member for Meriden, I should like to see a proliferation of small brewers being given the opportunity to sell their products on licensed premises. Tonight's debate is part of a highly complex issue. The Bill itself is unexceptionable so far as it goes. As my hon. Friend the Member for Newcastle upon Tyne, North (Mr. Henderson) said, we do not intend to oppose its Second Reading. One could say that the Bill is distinguished solely by the fact that it is the only one that we shall be considering this Session that is shorter than the legislation dealing with student loans.
The Bill gives on-licence tenants the same rights as other commercial tenants, thereby bringing them within the scope of the Landlord and Tenant Act 1954, from which they were previously excluded. The Bill's provisions have generally been accepted by the brewers and have the support of the National Licensed Victuallers Association, on whose behalf my hon. Friend the Member for Rotherham (Mr. Crowther) spoke earlier. I am sure that right hon. and hon. Members in all parts of the House accept the conviction and knowledge with which he spoke
Column 1259in respect of the attitudes of an association that represents the wishes and aspirations of tenants. I sincerely hope that the Minister listened carefully to my hon. Friend's remarks and that his points will be taken on board.
Monopolies are complex entities, and the brewing industry is no exception. I suppose that one might more properly call it an oligopoly because there is more than one competing company in that industry. Just because that oligopoly takes a different form in this country from that in other countries--where there is vertical rather than horizontal integration, with the buying out of competitors that one sees in a country such as Holland-- does not alter the fact that there are constraints on competition in Britain, which the report of the Monopoly and Mergers Commission properly saw fit to examine. The Government recognise that there are problems with the present form of the industry. Attempts have been made to modify the Commission's recommendations and to specify which of them should be implemented and which should not. Fair enough. We may challenge the Minister on some of them, and may accept others. Tonight we are attempting to improve the Bill, and we shall do so again in Committee. My hon. Friend the Member for Newcastle upon Tyne, North mentioned giving the Bill backbone, and we shall certainly seek to do that in Committee.
Specific cases cited by hon. Members in all parts of the House are indicative of the many unfair pressures that are often placed on tenant landlords by their breweries. They make it essential that we try to give the Bill real powers. The Opposition do not accept that a voluntary code of practice is an adequate safeguard against abuse, certainly in the form that has been suggested ; we recognise the need for tenants to receive adequate protection, however, and will therefore do our best to give the Bill the teeth that it needs. Let me add my plea to that of my hon. Friend the Member for Newcastle upon Tyne, North, and ask the Government to consider extending the provisions to Scotland. There can be no logic in retaining an anomaly of this kind.
The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. John Redwood) : I am grateful to all who have contributed to this workmanlike debate. Many good points have been made, some of which can be discussed more appropriately and at greater length in Committee.
The hon. Member for Newcastle upon Tyne, North (Mr. Henderson) said that he welcomed measures that offered protection to the landlord, balanced by increased competition in the brewing industry. That is the Government's case tonight in comparing the Bill with the orders that we are shortly to consider. The hon. Gentleman feared that the prices of soft drinks were too high : he was worried about paying £2 for some orange juice. He will see that the orders contain proposals to break the ties concerning soft drinks, which may help competition--and competition is the friend of the customer. I am glad that the Opposition agree that the Bill is necessary. It will be the Government's task in Committee to explain why this Bill, and this Bill alone, provides the
Column 1260required balance--for it is a case for balance, as my right hon. Friend the Secretary of State made clear. Other hon. Members have pointed out that, if we go too far, not enough tenancies will be on offer, and the market will be considerably affected, whereas if we do not go far enough we shall not be offering a reasonable deal to tenants who have made representations to my Department, both directly and through other hon. Members.
The hon. Members for Newcastle upon Tyne, North and for Rotherham (Mr. Crowther) mentioned Scottish and Newcastle Breweries. As we have seen in the press, the brewery is selling some pubs, and I have heard about the nature of the sale from one of its advisers, who tells me that existing tenancies will be honoured as part of its terms. The sale will, of course, lead to more diversified ownership in the pub market, so in a way it satisfies the Opposition's demand that we further implement the MMC's recommendations.
Both the hon. Member for Newcastle upon Tyne, North and the hon. Member for Kirkcaldy (Dr. Moonie) mentioned the Scottish legislation. There are two important differences. First, there is more free trade in Scotland anyway, so the market starts from a different point ; secondly, there is no Landlord and Tenant Act in Scotland, so the legislation would not be appropriate there. We chose this route because we felt that, in England, there should be a symmetry between the treatment of pubs and the treatment of other types of business tenancy.
My hon. Friend the Member for Faversham (Mr. Moate) made a good point about the need to balance protection with the danger of fewer tenancies resulting. He was worried about the possibility of higher prices. The purpose of the orders is to introduce more competition, which should--in one combination or another--improve service, or prices and choice, for the customer.
I am grateful to the hon. Member for Rotherham for making his points about tenants' protection. He will know that I have met the National Licensed Victuallers Association to hear its representations, and my door is open whenever the association wishes to bring new material to my attention or that of my right hon. Friend. I am sure that the hon. Gentleman will recognise that the Government are keen to ensure that the NLVA has a role in monitoring the way in which changes in the industry take place, and the way in which the Act and the orders work in practice.
My hon. Friend the Member for Ilford, North (Mr. Bendall) and the hon. Member for Newcastle upon Tyne, North were worried about the case where a tenant builds up a business and is then threatened with the loss of it as the pub tenancy changes. Under current legislation, there is no compensation in such a case. Under the Bill, such tenants will be eligible for compensation. That is an improvement which many hon. Members will welcome. I am sure that there will be further debate in Committee about the way in which that compensation is arrived at, but it is progress to have compensation and the Government's case will be symmetry of treatment between pubs and other business tenancies.
I know that my hon. Friend the Member for Bury, North (Mr. Burt) wants the Bill to proceed. I was grateful for the persuasive way in which he put his points and for the way in which he said that, if we pledged careful monitoring, he might see his way to welcoming our proposals. I can pledge tonight that the Government will,
Column 1261of course, monitor the proposals when they are implemented extremely carefully and we shall have an open door to good representations on changes.
I know that my hon. Friend the Member for Gillingham (Mr. Couchman) was concerned about the original MMC recommendations and thought that they were a little over the top. I am glad that he now agrees that we have abated some of the recommendations and I hope that he will agree that this is a balanced package which reflects the concerns that were put to the Government by the brewing interests on the one hand and by the tenants' and the customers' interests on the other.
My hon. Friend the Member for Meriden (Mr. Mills) was interested in the plight of small business. Like him, I am a fan of small business and of more choice and competition. He may find that the guest beer provision in the order goes some way to meeting his point. Of course we welcome more small businesses. Pubs provide a way of building a small business for the tenant and there will be more free houses as a result of the proposals. There is a niche in the market for certain kinds of brew. Listening to the hon. Member for Kirkcaldy who, from his Scottish viewpoint, casts aspersions against our English beers, I
Column 1262suspect that he may be part of the market for the new beers which my hon. Friend the Member for Meriden would like to see.
The hon. Member for Southwark and Bermondsey (Mr. Hughes) was worried about the implementation date. It will be two months after Royal Assent. I think that the hon. Gentleman may have been a little confused about the transitional period. There has to be a transitional period for tenancies that are already in force, but new tenancies will be governed by the provisions from an earlier date than he thought. I shall look into his question about the spouse of a publican who dies or who becomes an invalid during a tenancy ; that is a point to which I shall respond in Committee.
I recommend the Bill to the House. It represents great progress for tenants. It is part of a balanced package to improve the shape of the brewing industry and I hope that the House will agree that we should proceed without a Division.
Question put and agreed to.
Bill read a Second time and committed to a Standing Committee pursuant to Standing Order No. 61 (Committal of Bills).
Column 1263Supply of Beer (Tied Estates)
That the draft Supply of Beer (Tied Estates) Order 1989, which was laid before this House on 6th December, be approved.
Mr. Deputy Speaker (Sir Paul Dean) : With this, it will be convenient to discuss the prayer :
That an humble Address be presented to Her Majesty, praying that the Supply of Beer (Loan Ties, Licensed Premises and Wholesale Prices) Order 1989 (S.I., 1989, No. 2258), dated 1st December 1989, a copy of which was laid before this House on 4th December, be annulled.
Mr. Redwood : The hour is late and I do not want to detain the House at great length. The two orders are an essential part of our balanced package for the brewing industry in response to the report by the Monopolies and Mergers Commission. The draft Supply of Beer (Tied Estates) Order includes the guest beer provisions, the reduction in the number of tied houses under the formula identified in the measure and the breaking of the tie on soft drinks, non-beer drinks and low alcohol drinks, which will improve choice and competition.
The Supply of Beer (Loan Ties, Licensed Premises and Wholesale Prices) Order deals with the need to have a facility to repay loans and to obtain an exit from the loan tie within a reasonable time, and it introduces a maximum wholesale prices list. It introduces a supply obligation and restricts or prevents covenants on the sale of pubs after1 January 1990, under which a brewer tries to sell a pub and to stop its further use as a pub.
These are important measures which are part of a balanced package for the industry. They are the result of a great deal of consultation and thought with the industry, with tenants and with customer groups, following the MMC report. It would be best for me to reply to the specific concerns of hon. Members that they raise in the debate. 10.39 pm
Mr. Doug Henderson (Newcastle upon Tyne, North) : I am somewhat disappointed at the way in which the Government have approached these matters. I should have expected a more detailed and thorough approach by the Minister. The order has caused considerable controversy over a long period. By no means is there unanimity in the House on how these matters should be dealt with.
The Government have failed the industry and the consumer by bringing forward the proposals. They have failed to take the opportunity to restructure the industry and bring about competition. They have failed to satisfy the valid objections of pub customers who are fed up with being overcharged for beer and, in particular, lager. The Monopolies and Mergers Commission reckoned that there is overcharging to the tune of 20 per cent. We know also that there are considerable regional differences. A product produced in a certain brewery sells at remarkably different prices in similar circumstances in different regions. The Government have failed to outlaw overcharging for soft drinks, low-alcohol and non-alcoholic beers. That subject
Column 1264was mentioned in an earlier debate this evening. More important, the Government have failed to give future security to the people who work in breweries and bars.
The proposals are a cave-in to the brewers' lobby. They are half-baked, and they fail to address the need to introduce real competition in the industry, and they will probably do very little to bring down beer prices.
The extent of competition in the brewing industry has always been controversial. The Monopolies and Mergers Commission report in March was but another stage in what has become a long controversy. At the time of publication of the report, Lord Young stated that he was mindful to--
Mr. Henderson : He was minded to implement the findings. We all know that it did not take Lord Young long to be less minded, and it did not take him long to realise the error of his ways. Few hon. Members are surprised that such a transformation can occur after a little word in the ear from Victoria street and, perhaps, a bigger word in the ear from the Brewers Society. We all know that, in March, the Monopolies and Mergers Commission said that brewers are protected from competition in a complex monopoly. By December, and a Secretary of State later, it seems that the brewers are protected from competition by a new complex monopoly.
The Government have repeatedly stated that they believe in competition policy--the Minister hardly needs me to remind him of this--but does competition apply only to local authorities and public authorities? Where is commitment to competition in the brewing industry? Is it the case that competition is all very well if it involves selling or, as has more often become the case, giving away public sector assets? If it entails compulsorily divesting private capital, we are told that it is an infringement of business freedom. Is it not more honestly an infringement of Conservative party ideology, a cave-in to the Brewers Society and the £6 million of advertising, and a surrender to Conservative Back-Bench Members with vested brewing interests? There are many of them present this evening.
Mr. Henderson : I am grateful to the hon. Gentleman for giving me the opportunity to remark on the number of hon. Members who have declared a direct interest in the industry. I have made no specific reference to the hon. Gentleman.
Mr. Moate rose --
Mr. James Couchman (Gillingham) : On a point of order, Mr. Deputy Speaker. I have a vague feeling that the hon. Member for Newcastle upon Tyne, North (Mr. Henderson) was looking in my direction. My vested interest is not as a brewer ; it is as a licensee and a publican in six tenanted and leased premises. I have no brewing interests whatsoever.
Column 1265Mr. Deputy Speaker : It was not a point of order, but the hon. Member for Gillingham (Mr. Couchman) has now got his point on the record. Does the hon. Member for Faversham (Mr. Moate) have a point of order?
Mr. Moate : Only to the extent that the hon. Member for Newcastle upon Tyne, North (Mr. Henderson) made a point about vested brewing interests. When some of us speak, we are not speaking for vested interests : we believe that we are speaking for our constituents. In my case, I was speaking for the Transport and General Workers Union, which the hon. Gentleman has singularly failed to do.
I was grateful to the hon. Member for Gillingham (Mr. Couchman) for raising his point of order because the fact that he thought that I was looking in his direction suggests that he accepts some guilt. The Monopolies and Mergers Commission may or may not have the right approach to breaking up monopoly in the industry. I believe that if a limit of 2,000 were put on ownership, a firm policy of preventing the further concentration of ownership would be absolutely necessary. Only that action could prevent predators from gobbling up the assets disposed of by the brewers. If the loan tie for large brewers were outlawed, we would need a lower limit on pub ownership, which would be permissible to protect the genuinely regional and local breweries.
The Government now appear to have accepted the important principal of tackling the issue of loan tying. If they have--I hope that they have--how can they justify their scheme to outlaw only half the loan ties above 2,000 units? Surely that would still allow the big six to dictate the market. Bass will still have 4,650 units that are owned or tied, out of an estate of 7,300 units. Allied Breweries Ltd. will still have 4,300 units tied or owned, out of an estate of 6,600 units. Many believe that the impact of that will not be to extend competition meaningfully. Indeed, that view has been put to me by people who work in the industry and who believe that it will create instability, threaten jobs and make breweries more vulnerable to takeover.
It is noticeable that the Brewers Society has been remarkably silent of late. We all recall the outrage expressed by the Brewers Society when the MMC report was published in March which had become something of a reservation by the time Lord Young changed his position in July. Where is the Brewers Society now in December? Does it believe that its complex monopoly has been let off the hook by the Government's proposals? If that is the case, where are the Government now? Can they still say that they have stood their ground in the face of pressure from the Brewers Society? Can the Government still say that competition is on the agenda in the brewing industry? How minded is the current Secretary of State to face up to the issues that his predecessor chose to duck after four months? Do the Government really expect that these proposals will dent monopoly power in the industry? And to what extent do the Government believe that their proposals will succeed in bringing down beer prices around the country? The Opposition accept some parts of the orders. The publication of wholesale price lists for beer, with discounts that are both shown and known, is an important contribution to increasing the information that is available
Column 1266to publicans. I am pleased that the Government have accepted the MMC's views on this matter--and those of many people in the industry. The provisions that prevent brewers with over 2,000 outlets from tying those outlets to their exclusive supplies of non- alcoholic, low alcohol and non-beer drinks are welcome. That is long overdue. As I mentioned in the previous debate, the Consumers Association estimates that the average price of orange juice in an English pub is £2 a pint.
Large profits are to be made on soft drinks, low-alcohol beers and non- alcoholic beers. Regrettably, the Government have caved in on applying the regulation to regional breweries with fewer than 2,000 units. The Monopolies and Mergers Commission believes that the provision should apply to outlets throughout the country, and I agree.
In my area in north-east England--I apologise for repeating what I said in the previous debate--the new regulations have motivated Scottish and Newcastle Breweries to dispose of its outlets over the level of 2,000. That means that, in many instances, people who drink in regionally owned pubs will have to pay more in the long term for soft drinks and low-alcohol beers. I am the first to concede that in my local area there is not the same demand for low-alcohol beer as there is perhaps in other parts of the country. However, that is no excuse for not providing protection. Consumers in the north-east and those who consume in other regional breweries should have the same rights as those who patronise pubs in national chains.
The Opposition welcome the provision to allow tied pubs to offer a guest beer if they wish. There is a danger that swap arrangements will develop between big brewers. That would undermine consumer choice and keep small cask beers from the smaller breweries out of pubs. As with the soft drinks regulations, regional brewers with under 2,000 units will be completely exempt from the provision and drinkers in north-east England, who are largely required to drink in the outlets of regional brewers, may not have the same choice as drinkers in other parts of the country.
The Opposition believe that the regulations are inadequate to break up what the MMC described accurately as a complex monopoly. Consumers and workers must have better protection. Because of the way in which the regulations have been presented to the House, we do not feel bound in the long term by their contents. We shall not finish with the matters before us this evening. They must be kept under constant review.
The Labour party believes that competition can be enhanced and security for the industry's work force achieved only if several other measures are taken. Further concentration of the big brewers must be stopped. Companies such as Anheuser-Busch and Heineken should not be allowed to plunder the United Kingdom market and would not be allowed to do so under a Labour Government. They would be subject to strict regulations which would be reinforced by the Office of Fair Trading--[--Hon. Members : "That is what this is all about."] The matter of the tie should be reviewed. We recognise the need for protection to allow smaller regional and local brewers to develop their business.
Column 1267Mr. Henderson : The EEC has still to come to an agreement on how the balance will be struck between powers in Brussels, in Westminster and other powers. If we gave notice that a Labour Government would not allow further concentration of monopoly power in the brewing industry, that would be consistent with the arguments put forward in Brussels to improve competition not only in this country but throughout the European Community.
Non-brewing retail companies which might move into licensed retailing should similarly not be allowed to dominate the market and any ownership limits should also apply to them. Full statutory protection and the right to buy should be guaranteed for pub tenants. Tied arrangements for soft drinks, low-alcohol beers and non-alcoholic beers should be outlawed in all outlets. The Office of Fair Trading should be charged with constantly monitoring competition in the industry. A Labour Government would want discussions with brewers and their work force on how the British brewing industry can break into the European market. In 1988, we had a trade deficit in beer of £73 million.
If competition, consumers' choice, reducing prices, protecting jobs and building a sound future for the industry matter, the Government should further review these orders and face up to the real issues in the industry.
Mr. Jerry Wiggin (Weston-super-Mare) : I am sure that it is no new commentary to my hon. Friends that when the two Front Benches agree, let the people of this nation beware for their freedom for their choice and, on this occasion, for their beer.
In case anybody listened to the speech of the hon. Member for Newcastle upon Tyne, North (Mr. Henderson) and interpreted it to mean that the Labour party was against the Government's proposals, I should point out that only one Labour Member has sat throughout the debate, recently joined by another. That shows the depth of feeling in the Labour party. I understand that there is to be no demonstration in the Lobby from the Labour party. It will be up to others to demonstrate that the Government are not going along the lines that we believe to be in the best interests of consumers. The Transport and General Workers Union, which is deeply involved in the brewing industry, rightly and wisely made representations, as have non- political clubs. The hon. Member for Dagenham (Mr. Gould), who is in charge of these matters for the Opposition, however, believes that there is "a feeling" against the big brewers. In more than 20 years in this House I do not recall once having a letter complaining about a monopoly, near-monopoly or technical monopoly in beer. The reason is perfectly simple. If one does not like the house in which one finds oneself, one goes down the road to another. I do not understand how it has been possible magically to dream up the supposition of a monopoly in the supply of beer.
This is not an unimportant matter. Half of British adults go into licensed premises at least once a month and a third do so more than once a week, so if there were a monopoly we would surely have heard about it. We hear of many strange things, so I am sure that we would have heard about that. The Office of Fair Trading dreamed up this inquiry. There were no complaints on its table. It