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Statutory Code For Fair Pub Rents Welcome

Tuesday, June 3, 2014

GMB Welcome Announcement Of Statutory Code For Fixing Pub Rents And Regrets Free Of Tie Option Not Being Included

Key issues will be to stop the pubcos watering down the code and pulling teeth an independent adjudicator has as the legislation goes through Parliament and then to make it work in practice says GMB.

GMB, the union for tied pub tenants, commented on the announcement by Deputy Prime Minister Nick Clegg and Business Secretary Vince Cable today (3 June 2014) that the government will give publicans new rights under a statutory code, and set up an independent adjudicator with the power to resolve disputes. See notes to editors for a copy of BIS press release.

Steve Kemp, GMB lead officer for tied pub tenants, said "Self-regulation has been rejected. That is to be welcomed. Any tenant will tell you this self- regulation simply does not exist.

We will study what is proposed to see how workable it is. Everything in the proposed code already exists in the voluntary codes but up to now these provisions have been largely ignored by the pubcos.

So the key issues will be to stop the pubcos watering down the code and pulling the teeth an independent adjudicator has to enforce the code as the necessary legislation goes through Parliament and then to make it work in practice

GMB regret that the free of tie option has been ruled out. That would provide a powerful incentive to the pubcos to deal fairly with tied tenants.

The new regime has to stop abuses and lead to fair and affordable rents. The system now is that interest payments on the huge pubco debts have to be paid each week before the tenant pours a pint and regardless of whether s/he can make ends meet or not.

To pay these sky high rents a pint of lager is on average 80p per pint higher and ale is 65p per pint higher than justified by inflation and like for like changes in taxes since 1987. This is pricing pubs out of the market and they have closed in droves. The test of the new regime will be if it can stop this."

End

Contact Steve Kemp 07730 898102 or Dave Mountford GMB publican who led the campaign for changes on 07792 198 954 or 07794 021212 or GMB press office 07921 289880.

Notes to editors

Copy of BIS press release - published 3 June 2014

Publicans to get a fairer deal

Department for Business, Innovation & Skills and Deputy Prime Minister's Office

Preventing and reducing anti-competitive activities

The Rt Hon Dr Vince Cable MP and The Rt Hon Nick Clegg MP

Plans to protect thousands of publicans from unfair treatment and hardship are unveiled today (3 June 2014).

Publicans who are currently tied to large pub companies say they are struggling to make a decent living, and more than half say they are earning less than the minimum wage.

Deputy Prime Minister Nick Clegg and Business Secretary Vince Cable today (3 June 2014) announced that the government will give publicans new rights under a statutory code, and set up an independent adjudicator with the power to resolve disputes.

The adjudicator will have powers to enforce the new code, arbitrate disputes, carry out investigations into alleged breaches and impose sanctions on pub owning companies if they fail to comply.

Deputy Prime Minister Nick Clegg said:

British pubs are often the centre of our community, a place where we meet friends, watch sport and enjoy a Sunday roast – they are a national treasure and the envy of the world.

They also contribute billions to our economy every year. But for too long, landlords who are tied to larger pub companies have struggled to make ends meet – over half earning less than the minimum wage.

The self regulatory approach hasn’t worked, so these new rules will give fairer treatment for landlords so that they can keep your local pub going strong.

Business Secretary Vince Cable said:

Local pubs and their owners play a vital part in vibrant local communities right across the country, as well as making an important contribution to the economy.

Far too many landlords feel their income is squeezed by big pub companies. So today we are taking action to make sure they get a fairer deal.

The introduction of a statutory code will make sure that tied tenants get an accurate assessment of how better off they could be and the new independent adjudicator would make sure pubs companies are forced to act to redress the situation if they aren’t behaving responsibly.

Tied tenants have to buy beer from their owning company, and usually pay a higher price for it. This should be balanced out by the subsidised rent or other benefits they may receive from their pub company, but this may not happen and rents can be too high. Under the new Code, Pub landlords will benefit from fairer rent assessments.

Under the reforms announced today:

all tied tenants will be given the power to request a rent review if they have not had one for 5 years

For the first time, tied tenants will also have the right to review the information pub owning companies have used to decide to increase rents. This greater transparency will allow tenants to see what information their landlord has used in calculating the rent, and decide whether an increase is fair

there will be additional protection for tied tenants whose pub owning company owns 500 or more tied pubs. If they cannot agree a tied rent with their pub company, these tenants will have the right to request a ‘parallel free-of-tie rent assessment’ to show whether they are worse off than their free-of-tie counterparts. Having this information will give tenants the information they need to negotiate a better, fairer deal with their pub company

tied tenants will have the right to choose whether to be tied for gaming machines

tied tenants will be able to report breaches of the code to a new independent adjudicator who will also arbitrate on rent disputes. The adjudicator will have the power to provide redress where the code has been breached. The adjudicator will also be able to launch investigations into allegations of systemic breaches of the code and to impose sanctions – including financial penalties – if it finds the code has been breached

Notes to editors

In January 2013 the government announced it would consult on introducing a Statutory Code of Practice and an adjudicator, based on the model of the Groceries Code Adjudicator, to arbitrate disputes, carry out investigations and impose sanctions where a pub owning company had breached the Code. An eight week consultation was held between 22 April and 14 June 2013. Responses to the consultation were published on 13 December 2013.

Publicans were surveyed by the Campaign for Real Ale (CAMRA), with more than half, 57%, of those in tied tenancies saying they earned less than a National Minimum Wage equivalent salary of £10,000 a year.

Tenants will pay a £200 fee to the Adjudicator for a parallel free-of-tie rent assessment.

 

 

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