Mulholland anger at watered-down MRO that's 'in defiance of will of parliament'
Added: Monday, November 30th 2015
Greg Mulholland isn’t a man to mince his words. The LibDem MP and chair of the Parliamentary Save the Pub Group says he was “horrified” when he read the draft proposals in the Pub Code drawn up by the government’s Business, Innovation and Skills Department.
“It’s a clear and concerted attempt to undermine the Market Rent Only option,” he says. “The BIS is acting in bad faith and its proposals undermine MRO as agreed by the House of Commons.”
In the last parliament, just before the general election, a debate led by Greg Muholland ended with MPs voting to give tenants of big pub companies the right to choose MRO at various times during the life of their tenancies. This would have given tenants the freedom to buy beers free of the “tie” – the restricted list of beers offered by the pub companies.
But the draft code’s clauses stipulate that MRO would only be triggered when there is a proposed increase at the time of a rent review – a proposal that Mulholland condemns as “utterly disgraceful and wholly unacceptable.
“Clause 8.12 of the draft code says a tenant can only opt for MRO if the pubco puts up the rent, which means it’s impossible to trigger MRO. If the code goes through as drafted it will mean that the concept of MRO will be meaningless.
“We have to campaign again to get a code that adheres to the decision taken by parliament. Tenants must have the right to seek MRO during the life of an agreement.”
He points the finger at those responsible for undermining the MRO proposals. “Clause 8.12 is the result of pressure from the BBPA [the British Beer & Pub Association], the voice of the big pubcos and big brewers.” The BBPA’s chief executive Brigid Simmons – with whom Mulholland has clashed repeatedly over pubco reform -- has welcomed the draft proposals from BIS.
But Mulholland also turns his fire inside parliament. “The coalition government had muscle,” he says. “But now we have a majority Tory government and some ministers and MPs are close to the pubcos and are working hard to undermine the will of parliament.”
The draft proposals have also dropped Parallel Rent Assessments [PRA] which were included in the legislation agreed by parliament. The assessments were meant to provide a breakdown of rents and earnings under tied and free-of-tie models and were designed to show tenants whether they would be better off staying tied or taking the market rent-only option.
To the fury of pub campaigners, the government has now axed PRA. Its consultation document says there is “no need for PRA” and its implementation would “impose significant additional burdens. For these reasons of cost, complexity and proportionality, the government has decided not to pursue the discretionary power to introduce a separate PRA procedure with the pubs code.” The axing of PRA has been welcomed by the BBPA.
Greg Mulholland believes the watering down of the legislation agreed by parliament is the result of behind the scenes deals agreed by civil servants, the BBPA and the giant pubcos, Enterprise and Punch.
“The pubcos have been kicking and screaming – afraid their tenants will get independent assessments of their rents,” he says. “I intend to make a Freedom of Information [FoI] request to see what meetings have taken place that led to clause 8.12 that undermines the original legislation and the will of parliament.”
He concedes it will be difficult to get a new vote in parliament on the draft proposals. But he says ministers must be pressured to stick to the commitments outlined in the original legislation and introduce the Market Rent Only option as agreed by parliament at the time of the coalition government.
He believes CAMRA, the Campaign for Real Ale, has a vital role to play and he calls on members and branches to lobby MPs on the subject of MRO and PRA. “CAMRA’s intervention was vital the first time round,” he says. “We need members to turn up at MPs’ surgeries and say how disappointed they are that the proposals have been watered down.”
Mulholland is also concerned that the job of Pub Adjudicator, agreed by parliament, has yet to be filled. The adjudicator will be an ombudsman for the pub trade and one of his or her key tasks will be to set fair rents for tenants of the pub companies.
“The adjudicator must be knowledgeable but totally independent. Under the legislation, the adjudicator would have to intervene in every rent case – that’s untenable. He would be snowed under. We also need an independent assessor to set the rents.”
He said the case of the Rose & Crown in St Albans (pictured above) showed how the pubcos were striving to avoid MRO and find loopholes in the legislation. The tenants of the 17th century pub had opted for MRO but the owner, Punch Taverns, said their lease would not be renewed and they would be replaced by a manager. Following an intervention from CAMRA, Punch has now rescinded its decision and the tenants will stay – but Mulholland doesn’t believe all such tenants will be that fortunate.
He is also deeply sceptical about the outcome of the sale of Punch pubs to the property group New River Retail. In the autumn, Punch sold 158 pubs worth £53.5 million to New River, which specialises in building convenience stores. The company has said that most of the pubs – including the renowned Roscoe Head in Liverpool – are safe but Mulholland has doubts.
“The way New River operates is to get planning permission to build a convenience store on a pub car park. As a result, the pub loses trade and New River then seeks change of use to a bigger convenience store.”
Greg Mulholland is up for the fight. He will work with pub campaigners, including CAMRA, to attempt to get the original legislation reinstated so that the pub code will have teeth and give tenants of the pubcos the freedom to seek MRO free from the threat of eviction.