Small Business, Enterprise and Employment Bill

Written evidence submitted by J Mark Dodds (SB 75)

J Mark Dodds FRSA, Ba(Hons), Dip. Kew Garden Design.

My submission is about parts of the bill that impact on Tied pub tenants . Particularly Market Rent Option (MRO).

I’ve worked in the catering trade since 1977 and have been a Licensee s ince 1986. I’ve run successful, high profile , very busy bars, restaurants and clubs in London’s West End and for twenty years have be en a London publican . I am a co - founder of the Fair Pint Campaign and sit on the steering gr oup of Fair Deal For Your Local and I administer Licensees Supporting Licensees , a forum of more than 250 p rofessional tied and free of tie publicans.

1) Consider that :

· A) In the last ten years f our Select Committee s have found that Tied tenants are perennially abused by bullying freeholders ;

· B) Each committee has announced Statutory Legislation will have to be forced on the sector if it proves incapable of ‘Self Regulation’;

· C) No-one is in disagreement t hat many pub owning companies act improperly toward their tenants;

· D) Tied pub rents are higher than open market;

· E) Tied supply prices are profiteering , being up to double the open market ;

· F) The majority of Tied tenants earn substantially below the minimum wage;

· G) With start up costs from £10K to more than £100K t here is no such thing as a ‘low cost entry’ into Tied pubs ; rather a Tied lease is proven to be a costly entry into almost certain penury;

· H ) ‘Self regulation’ has manifestly failed;

· I ) Government representatives have told tenant representative groups verbatim that a Market Rent Option will NOT be introduced in statutory regulation under any circumstances and therefore to consider how to push for the best outcome for Tied tenants without MRO .

· J ) The Communities and Local Government Select Committee has found there is not enough protection for pubs from failing and being put to alternative use ;

· K ) T he only people who object to M arket R ent O ption (MRO) are those who say that Tied tenants are happy with their business relationship with pub freeholders : Pubco’s; Family Brewers and trade organisations represent ing freeholders who operate Tied leases and say the Tie promotes the health, strength and vitality of the British Pub Sector.

· L ) All the people who ask for M RO support the rights of millions of customers and the human rights of thousands individual pub tenant s to have a free and fair market in the Pub Sector : CAMRA; FSB; LSL; JFL; Fair Pint; GMV; FPB; PAS; UNITE and GMB. These people all recognise MRO is the only regulatory tool that will deliver a workable solution that Tenants can use as a tool to address all the above points and stand equal to their freeholders in contract negotiations.

· M) The tenant groups are all absolutely clear that no MRO will leave Tied Tenants without any effective tools to defend themselves with against their freeholders profligate abu se of the terms of their leases ;

· N ) The published business plans of the two largest British pub companies (owned by private equity) show that their strategy for paying interest only on the debts raised to buy the thousands of pubs they ‘own’ is to sell each year a number of pubs considered ‘no longer economically viable’ equal in value to the amount of annual debt interest.

· O ) These pubs will be sold ‘vacant possession’ which clearly demands the business failure of the tenants who occupy them on tied leases.

· P ) Successive ‘Ministers for Pubs’ have ignored publican representative groups about MRO while supporting the views of BBPA et al on the part of freeholders .

· Q ) 20,000 pubs have closed forever; removing vital social hubs from communities everywhere – as evidenced by hundreds of campaigns nationally by people hoping to ‘save’ the last pub in their locality , and many more hundreds of pubs are being listed, ineffectually, as Assets of Community Value by local people from Land’s End to John O’Groats.

2) When look ing at these points together it’s impossible to not to deduce that the British Government is being w ilful ly b lind to enormous evidence that the Beer Tie is systemically abused against public interest and common good in favour of private equity greed.

3) Government ignores the findings of its own colleagues who work diligently on Select Committees exposing the shocking behaviour endemic in the Tied Pub Sector that any rational observer could easily deduce to be the workings of a cartel.

4) Government listens to the Directors of Pub Companies and Family Brewers and ignores thousands of publicans whose extraordinary industry, hard work and perennial tenacity against odds pays all the salaries and buys the yachts and country homes those same Directors earn as reward for their bad management .

5) Government is complicit with ‘Tied Pub Company’ and ‘Family Brewer’ boards of directors and the British Beer and Pub Association, in the dismantling, asset stripping , and permanent removal of Britain’s traditions, solid social foundations, cultural heritage and community assets that pubs really are.

6) The further inaction of Government will destroy what is left of a unique and especially British institution and way of life and rob thousands more communities of vital social hubs; damaging future generations’ ability to integrate maturely, competently and healthily into society at large.

Conclusion. We are a cultural crossroads in the pub sector from where there is no going back. All that it will take for us to see the end of independent characterful pubs forever is for good people to stand by and do nothing. Government must act responsibly, give the Tied Pub Sector the opportunity to prove that the Tie is benign and bring in MRO. It will lead to thousands of pubs surviving economically instead of being turned into rubble or inappropriate alternative use that is blighting the landscape and damaging communities everywhere in the British Isles.

November 2014

Prepared 6th November 2014