Meeting of the Parliament (Hybrid) 26 November 2020
I accept that the Tied Pubs (Scotland) Bill has been introduced with good intentions, although the manner in which the member has sought to progress the bill has been inappropriate. Neil Bibby has said of the Economy, Energy and Fair Work Committee that its
“report flies in the face of the evidence placed before them.”
That is not true. The only study that was conducted in Scotland on the issue before the member introduced the bill was the independent CGA study that was commissioned by the Scottish Government, which was quite clear that no sector was significantly disadvantaged when compared with others. Neil Bibby says that 93 per cent of respondents to his survey agree with him, but it was not a statistically robust survey and was flooded by responses from fellow Labour politicians and members.
Neil Bibby also said that
“Tory and SNP MSPs inexplicably want to leave tenants in Scotland with no rights at all.”
That is factually incorrect. However, it reflects a vexatious narrative. That stands in vivid contrast to the approach of Daniel Johnson in introducing his member’s bill.
The bill intends to extend to tied tenants in Scotland similar provisions to those that are in place in England and Wales. However, there are significant concerns about the bill—primarily because the markets are dramatically different. For example, tied pubs make up 36 per cent of the English and Welsh market, whereas tied pubs account for just 17 per cent of the market in Scotland. The bill will be inherently narrow in scope, which raises the question whether there is enough of a problem for it to address.
The committee’s report raised that very point. It said:
“The majority were unconvinced that sufficient evidence was presented to the Committee to suggest that the problem described was large-scale or that there were adequate grounds to warrant legislative interference in contractual agreements.”
Addressing such a fundamental question must be a priority as the bill progresses, or we risk losing investment and jobs. That is to be avoided at the best of times, but especially during the current crisis, when the Scottish pub sector is on its knees.
The provision for market rent only, without qualifying circumstances, is an intrusion into contract law. It is hard to imagine that that would be accepted in other sectors. It could be a serious disincentive for pub companies to invest. We already know what that looks like: following the introduction of the pubs code in England and Wales, UK-wide investment from pub companies flowed to Scottish pubs—it almost doubled from 6.53 per cent to 11.66 per cent. Unfortunately, early signs of investment flight have already appeared in Scotland. An estimated £10 million of investment has been put on hold until the bill is decided on. I hope that not one penny of that investment will be lost, if the bill progresses. If investment is lost, Neil Bibby will have a lot to answer for.
I appreciate that such an outcome is not the intention of the bill. The current voluntary Scottish pubs code offers a model to avoid conflict by giving tenants many of the rights that are included in the bill, including access to independent arbitration, but—crucially—the code does that without risking jobs or investment.
We have seen the essential support that pub companies have provided during the pandemic, including support with stock maintenance, wellbeing checks and millions of pounds in rent concessions to allow pubs to survive. In contrast, independent landlords have, at best, offered mortgage or rent deferrals. If we want more pubs to survive and more pubs to open, the tied pub model offers a route into running a pub that would otherwise require significant financial resources. Pub companies are incentivised—[Inaudible.]—to attract tenants.
Numerous tied tenants from across Scotland have contacted me. From Bearsden to Dundee to Clydebank to Edinburgh, they are living in fear of the bill progressing. Their voices must be heard. If the bill progresses, I expect Neil Bibby to get each and every tied pub tenant to support the bill—even if that is done privately to the committee. If Neil Bibby’s assertions are correct, that should not be a problem.
The Scottish Conservatives recognise the merit in exploring such issues further, so we will vote for the bill at stage 1. However, if the bill is to pass future stages, the bill’s proponents have a responsibility to address the real and pressing concerns that are being raised by businesses and tenants.
17:35