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Public Houses

Volume 476: debated on Monday 2 June 2008

To ask the Secretary of State for Business, Enterprise and Regulatory Reform what progress his Department has made in implementing those recommendations made by the Trade and Industry Committee on Public House Ownership in 2004 that were accepted by the Government; if he will introduce proposals for legislation to implement those recommendations in full; and if he will make a statement. (206880)

There was just one recommendation made to Government in the House of Commons Trade and Industry Committee’s report on pub companies published on 8 December 2004.

My predecessor wrote to the Chairman of the Committee in February 2005. The Government agreed that a voluntary code could go some way to resolving concerns of tenants about their contractual relationships with pub companies. However, the Government saw difficulties with imposing a statutory code of practice upon the industry which would prescribe the terms and conditions for what are commercial arrangements.

Any competition concerns that arise in relation to the behaviour of the pub companies would be a matter for the competition authorities.

To ask the Secretary of State for Business, Enterprise and Regulatory Reform if he will bring forward legislative proposals to regulate public house leasing to require public house owners to (a) inform their tenants how their rents are calculated, (b) prevent tenants being financially disadvantaged by the creation of a tie, (c) cease the practice of upward-only rent review and (d) remove the tie on assessment with prizes machines; and if he will make a statement. (206881)

The arrangements under which the rent may be varied during the course of a business tenancy are a matter of agreement between the pub landlord and the lessor during negotiations and will be set out in the lease document. The lessor can only vary the rent in accordance with these agreed arrangements. Leases generally make provision for dispute resolution, which pub landlords can use to challenge the lessor’s proposals if they consider them too high.

On the question of upward only rent reviews, the Government are concerned to promote more flexibility in the commercial property market. Hence last year, at the Government’s request, the property industry introduced a stronger code of practice which makes recommendations to landlords on rent reviews, among other things. Although the code, ‘The Code for Leasing Business Premises in England and Wales 2007’, is voluntary, Communities and Local Government will be keeping an eye on the market and have not ruled out legislation as an option. The code can be found at:

On the subject of beer ties I refer the hon. Member to my answer to written parliamentary question 2007/2709.

With regards to amusements with prizes machines, the possessor of an on-premises alcohol licence, whether the lessee of a tied premises or an owner of a free house, is automatically entitled to offer up to two category C or D gaming machines (known before the introduction of the Gambling Act 2005 as Amusement with Prizes machines), and to apply for an enhanced entitlement from the licensing authority under section 283 of the Act. The Government have no plans to review these provisions.