Memorandum submitted by Justice for Licensees
RICS
RICS have held their forum and produced a somewhat
viable report and yet they have still failed to act. There is
no justification for hesitancy. The TRVG have not been brought
to task over the manipulation of the rental system and the pubcos
continue to abuse said system. Companies such as Greene King and
Enterprise Inns are telling their tenants that the RICS report
means nothing that it is business as usual. Since the release
of the BEC report there has been murmurings but no change whatsoever,
tenants continue to face rent increases in a time when the market
just will not sustain those increases and so tenants continue
to lose everything and the pubcos continue their churn. UORR's
still remain as part of the contract as do upward only RPI, until
those issues are addressed as part of the contract they will remain
open to interpretation and abuse. The pubcos made promised to
your committee that upward only rent reviews would be removed
by Deed of Variation and this has not happened. Non-binding side
letters have been issued by Enterprise Inns. The formulation for
the rent must be completely transparent and form part of the contract
and if comparables are to be used then there is substantial need
for a national register of rents, to ensure that the tenants have
the information required and do not have to rely on the evidence
of the pubcos.
BBPA
The BBPA have produced their agreement which
does little to address the concerns of the BEC report, it is nothing
more than a suggestion that BBPA members may take part in more
normal business practice. It is difficult to understand why it
has taken two parliamentary investigations to instil action! The
BBPA agreement is not legal and binding. Pubcos can leave the
BBPA whenever they so choose (Greene King prime example) and therefore
the agreement is open to abuse. Part of the BBPA agreement addresses
training for incoming tenants, JFL sits on the steering group
for this training. To date JFL is far from impressed with the
manifesto put forward, it fails on core issues and two hours training
is far from enough to address the issues of naive new-comers to
the trade. The steering group are fully aware of the concerns
of JFL and we await the outcome. JFL is aware that the BBPA have
lobbied MP's with their agreement and hailed it as the answer
to the problems within the trade, the agreement is far from the
answer they portray and will do little to protect tenants, it
fails miserably in addressing the prime concerns of the BEC report.
Who is going to monitor adherence by the members of the BBPA,
not forgetting that the BBPA failed to acknowledge the problems
that the tied sector have faced for many years? Should the pubcos
choose to leave the BBPA then who is going to ensure that the
current debacle does not continue? The BBPA and its members have
made promises before and have not carried them through. This looks
like a repeat of the same.
PIRRS
In essence the PIRRS scheme could be a good
idea if progressed correctly. It would appear however, that the
proposed scheme may already have been the subject of pubco manipulation.
The PIRRS website went live a couple of weeks ago and then was
removed. On the site there were some surveyors who were noted
as declaring no interests eg Fleurets and yet they act for the
pubcos, this is not a good sign. The integrity of the PIRRS system
has been called into question by these actions. In reality, if
the RICS is to fully and properly implement the findings of its
recent report then there is, in principle, no need for the PIRRS
scheme to be in place.
IPC
The formation of the IPC will be good for tenants
and for the trade. They represent the voice of the Publicans which
is something that this trade has lacked in previous years.
PUBCOS
From a tenants perspective it would appear that
it is business as usual for the pubcos, despite the numerous press
releases stating the opposite. Tenants continue to feel abused,
exploited and bullied by their alleged business partners, in fact
the levels of discontent have risen considerably since the findings
of the BEC report. The pubcos are continuing to fail to address
the issues and concerns of the tenants, they continue to increase
rents, they continue to use Brulines as a weapon despite it's
obvious inadequacy, they continue to increase the cost and severity
of the tie, they continue to fail to help struggling tenants,
they continue with the churn, they continue to instil the view
that they are benevolent business partners, they are failing to
self-regulate and they are failing miserably in transparency and
honesty. In fact the situation within the pubco model had deteriorated
instead of improving.
OVERALL VIEW
The pubcos have failed in self regulation as
they failed in 2004. The BEC report was one of the finest pieces
of investigation that this trade has seen, despite the mumblings
of the pubcos and yet every action of the pubcos that the report
highlighted continues unabated by the pubcos. It is absolutely
imperative that the government act now to protect current tenants
and immediately commence a full and complete investigation of
every aspect of the pubco model by a totally independent body.
The pubcos must go before the Competition Commission with all
due haste, if the pubcos have done no wrong then surely they will
welcome this to protect their name? This will give all sides the
chance to clear the issues once and for all and tenants, pubcos,
consumers, trade bodies and the government should welcome the
opportunity to lay to rest the issues that have dogged this trade
for many years.
18 November 2009
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