Meeting of the Parliament (Hybrid) 26 November 2020
I, too, commend Neil Bibby for introducing the bill, which the Scottish Greens believe provides for a proportionate and fair intervention in the relationship between pub companies and tied tenants. As a member of the committee that scrutinised the bill at stage 1, I thank all those who gave evidence to the committee and those who have sent briefings during the last few weeks.
As others have said, pubs are part of the social fabric of our communities across Scotland. There has been a marked increase in pub closures in the last few decades, and this year that will only be exacerbated by the on-going pandemic.
The committee heard from pub owners, tenants, drink suppliers and various trade bodies. The opinions of those who gave evidence to the committee were polarised, with those in favour believing that they are not getting a fair deal, and those against believing that the bill will damage the pub industry in Scotland.
Some tied tenants are happy with the current set-up and it is unlikely that those tenants will want to take advantage of any of the provisions in the bill, although I am sure that they will be pleased to have the backstop protection of a statutory code.
There are, however, also those who are not happy. Neil Bibby directly articulated some of their evidence. They are seeing low returns for the time and effort that they put in and are being forced into poverty as a result. In far too many cases, there is a great deal of risk for the tenant and very little for the owners.
One pub company, Hawthorn Leisure, identified £25,000 as an acceptable annual income for pub tenants. Pub tenants are often a couple—in many cases that is the preferred arrangement for pub companies—and they will often work every day. There is a real danger that some of those tenants are not currently able to pay themselves even the minimum wage. In contrast, in 2019 Hawthorn Leisure Ltd reported a £21.2 million profit. There is a power imbalance between tenants and landlords, and it is legitimate for the Parliament to alter that relationship in favour of either of the parties; in this case, the weaker one.
In his speech, Maurice Golden said that we should not interfere with private contracts. However, there are few, if any, contracts in the developed world that are not agreed within a statutory framework. We legislate in those frameworks all the time, whether it is about the contract between a landowner and farming tenant, a landlord and tenant in a house, company law, contracts, and licenses entered into between regulators and utility companies. It is a normal thing to do.
Pub tenants are personal guarantors for their businesses. They often have to put up their home and other assets. They are then charged rent and an inflated product price with little freedom to choose their own stock.
The proposed requirement for ministers to establish a Scottish pub code would address that imbalance. Providing people with fair work that provides them with an acceptable standard of living should not be up for debate. It should be one of the key principles for the code when it is designed, and I support the regulatory principles as drafted in the bill.
The member has taken note of the loopholes that were exploited when the Small Business, Enterprise and Employment Act 2015 was brought in in England and Wales, and has ensured that this bill is robust and not able to be exploited in the same way.
I regret that the committee’s stage 1 report recommended against the general principles of the bill. Most committee members took the view that, because evidence was sometimes in conflict, they were not persuaded that the legislation was needed.
The job of MSPs is to take evidence and apply their judgment. Where the evidence is contradictory, it must be assessed, weighed and used to form a judgment that is based on the merits of the proposals. That is what I did. It is why I am pleased that the minister is not persuaded by the committee’s recommendations and that he is willing to support the bill at stage 1 and to work with the member to find a way forward.
The Greens will support the bill.
17:45