Pub companies: follow-up: Government Response to the Committee's Fifth Report of Session 2009-10 - Business, Innovation and Skills Committee Contents


Report



1. On 13 May 2009, we published our Report on Pub Companies,[1] which examined the relationship between the pub companies and their lessees. Our Report concluded that the industry had failed to make any meaningful reform since the Trade and Industry Committee's Report on Pub Companies in 2004.[2] We asked the Government to delay its response to give the industry the opportunity to respond and for us to assess its proposals for reform. We evaluated the industry's response through a second call for evidence and by holding a further oral evidence session with representatives of the Royal Institution of Chartered Surveyors, British Beer and Pub Association and the Independent Pub Confederation.

2. On 4 March, we published our follow-up Report on pub companies.[3] On 19 March we received the Government's Response together with a briefing note from John Healey MP, the recently appointed Pubs Minister, on the Government's new community pubs strategy. The Government Response and the briefing note are appended to this Report.

3. We are extremely pleased that the Government has, as part of its wider strategy on pubs, wholeheartedly endorsed the recommendations contained in our Report. Indeed, we see its effective adoption of all of our recommendations, including:

  • the future of the tie;
  • the use of restrictive covenants; and
  • the accuracy of flow monitoring equipment,

as a vindication of our hard work on this issue over the past two years—work which has been carried out in the face of vociferous and, on occasion, unacceptable criticism. We are particularly pleased that the Government has retained the option of a reference to the Competition Commission.

4. Our most recent Report set a June 2011 deadline for the industry[4]—a year after the codes are due to be implemented—to prove that it has delivered on its proposals for reform and to demonstrate that those reforms are working effectively. That deadline has now also been taken up by the Government. In its Response the Government makes the following commitment:

    If the Business, Innovation and Skills Committee concludes by then that the code is not working as well as it should we will consult on putting the code on a statutory basis with effective enforcement.[5]

5. We are grateful to the Government for its acknowledgement of the central role that we have played in driving forward reform of the industry. This commitment sends to the pub industry an unambiguous message that, should our successor Committee not be satisfied with the industry's measures in 2011, the Government will not hesitate to intervene.

6. We see the Government's Response to our two Reports as a vote of confidence in the select committee system. More importantly, we believe its Response is very likely to rebalance the relationship between pub companies and lessees in exactly the way we believed was necessary. We hope the industry will ensure the effectiveness of the steps it is taking voluntarily—if not the Government is clearly committed to act.

7. We consider this to be a significant achievement for our Committee and we look forward to our successor committee continuing our dogged pursuit of reform of the pub industry in the next Parliament.


1   Business and Enterprise Committee, Seventh Report of Session 2008-09, Pub Companies, HC 26-I Back

2   Trade and Industry Committee, Second Report of Session 2004-04, Pub Companies, HC 128 Back

3   Business, Innovation and Skills Committee, Fifth Report of Session 2009-10, Pub Companies: follow-up, HC 138 Back

4   HC (2009-10) 138 Para 21-70 Back

5   Page 6 Back


 
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Prepared 25 March 2010