Hansard

It gives me great pleasure to open today’s stage 3 debate on the Tied Pubs (Scotland) Bill. I lodged the draft proposal for this member’s bill more than four years ago and, if the bill is passed today, it will be the result of an entire session’s worth of work. I thank all those who have played such a vital part in getting the bill to this stage.

I thank the Scottish Licensed Trade Association, which has consistently championed the rights of leased and tenanted publicans and small businesses in the licensed trade, and the Campaign for Real Ale, which represents many pub lovers and has campaigned for more choice for consumers. I thank our trade unions, particularly the GMB and the Scottish Trades Union Congress, which represent workers in the brewing sector. I thank Greg Mulholland MP, who was instrumental in ensuring cross-party support for tied pub reform in England and Wales. I also thank campaigners such as Chris Wright and the wider and powerfully persuasive coalition formed by the Scottish Co-operative Party, Tennent Caledonian, the Federation of Small Businesses Scotland, the Society of Independent Brewers and many more, which has supported tied pub reform.

I also recognise the work of Nick Hawthorne, Neil Ross and Kate Blackman and all at the non-government bills unit, and that of other parliamentary staff and Scottish Government officials. I thank my own staff, Joe Fagan and Emma Hyndman, for their invaluable support and their work in the past few years.

In particular, I thank the minister for his interest and engagement and for his role in ensuring that the bill has proceeded with Government support. Jamie Hepburn has shown leadership that will be recognised by the licensed trade and pub tenants. I recognise that his work today and over the past few months has made the progress of the bill possible.

Tied pubs have been around for a long time. The basic idea is sound: a pub is owned by a business and leased to a tenant to manage. That tenant will pay below the going market rent for the pub but, in turn, must buy alcohol from the business at a higher rate than would be the case on the open market. The business is expected to provide other support and assistance to the tenant, although, as the committee heard, that support is not always specified in the tied agreement.

Over the years, that basic model has eroded. Rents have increased, as have the mark-ups on alcohol, and many tied tenants have found themselves locked into unfair contracts. That has resulted in far too many tenants barely earning a living, despite often working long hours in a demanding job. According to a survey last month by the SLTA, 60 per cent of tenants earn less than the minimum wage when the hours that they work are taken into account. It has become clear that the sector cannot regulate itself fairly and that action is needed.

In 2015, the United Kingdom Parliament passed the Small Business, Enterprise and Employment Act, which created a tied pubs code and adjudicator for England and Wales. Thousands of tied tenants there now benefit as a result of that legislation. It is true that not everything in the 2015 act has worked as well as was hoped, due in no small part to some of the pubco-backed amendments that tied down the code and the adjudicator.

The bill does not replicate the UK legislation; it improves on it, simplifying it where possible. It may have taken six years, but I am delighted that, should the bill be passed, tied tenants in Scotland can look forward to having a Scottish code and statute, and a Scottish adjudicator to govern and enforce the code. The code and the adjudicator will give companies that own tied pubs in Scotland and their tenants a clear, fair and proportionate framework to operate in and abide by—a framework that will allow the sector to flourish.

I thank the minister and his team for the collaborative approach that they have taken since stage 1 in working with me on the bill. That approach led to the lodging of 18 amendments at stage 2—I lodged some and the minister lodged others—that we both supported. The amendments introduced a number of provisions. One allows a longer period for the Government to create the code and appoint an adjudicator. Another allows longer review periods, so that the impact and effectiveness of the code can be properly assessed. Another ensures that investigations into alleged breaches of the code take account of tenants’ behaviour. Another includes time limits. Perhaps the most significant amendment allows the code to set out the circumstances in which a market-rent-only offer need not be made by a pub-owning business.

The MRO option remains a central part of the bill. I watched with frustration as the MRO option in England and Wales became bogged down in a morass of complicated rules and barriers. The MRO provision in the bill is simpler and clearer. However, to encourage positive relationships, it is right that the code can set out situations in which the MRO option is not open, such as when a pub-owning business has made a significant investment in a tied property.

The aims of the bill remain those that are set out in the three principles found in section 3: fair and lawful dealing; tenants no worse off because of the tie; and tied deals that provide a fair share of risk and reward. Passing the bill will realise those aims.

Although I hope that today will be the end of the bill’s long journey, it is only the start of a new chapter for the sector. In the next session of Parliament, the Scottish Government will consult fully, meaningfully and thoroughly on a draft code. It will be vital for the future of the sector to get that code right.

The regulations that will contain the final code must gain parliamentary approval, so there will be an opportunity for detailed scrutiny by the committee and the wider Parliament. The selection of the first adjudicator, which is an appointment that the Parliament must approve, will also take place next session.

It is my hope that, after today, pub-owning businesses and tenants, and their representative bodies, will put aside any differences and work together, collaboratively and constructively, to ensure the success of the code, which will benefit many people in Scotland.

I move,

That the Parliament agrees that the Tied Pubs (Scotland) Bill be passed.