Wednesday, 19 November 2014

A good day for pubs and their customers

Yesterday was unquestionably a good day for supporters of the Great British pub. An amendment to the Small Business, Enterprise & Employment Bill should change the relationship between ‘tied’ landlords and the large pub companies irrevocably, and for the better. The effect of this ‘tie’ has been investigated at length – including four times by the Parliamentary Business, Innovation & Skills’ Select Committee – and this Government (as well as the last) has promised action to address the problem.

The problem can be traced to the 1970s, when the then Government, through the Monopolies Commission, assailed a well-functioning market. At that time, the seven large breweries were forced to withdraw from their estates; as one who used to work for Courage, we had around seven thousand pubs. Sadly, the Monopolies Commission’s interference broke up a functional system, based on the breweries as paternal, patrician and benevolent towards their tenants. The consequence was a large number of pubs put up for sale, which were transferred into the ownership of all-too-clever financiers and speculators who believed there was an opportunity – provided the stability of the market could be guaranteed.

Sadly for them the crunch came in the first decade of this century, and the model was found to be unsustainable. These so-called entrepreneurs found that they would struggle to service the colossal debts that they had acquired, and launched a campaign to squeeze every possible penny out of their landlords. Punch Taverns operate around four thousand pubs, and have a net debt of more than £2.2 billion; Enterprise Inns operate more than five thousand pubs, with a net debt of £2.4 billion. That equates to around half-a-million pound for every Punch Tavern pub, and £450,000 for every Enterprise Inn pub as a measurement of net debt to pub ratio. Plainly, that is an unsustainable level of debt, and hints at a somewhat flawed business model. No wonder they’re squeezing their tenants

Anecdotally, it is clear that these large pub companies were vicious in their pursuit of making tenants pay. In addition to the ‘dry’ rent, landlords had to pay exorbitant prices for drinks, and were constrained by the ‘tie’ with the pub company to prevent them sourcing from elsewhere. I have seen landlords reduced to tears as a result of their efforts to make this flawed model work: the promise of a 35 per cent bottom line just couldn’t happen. As the large pub companies have increased the margins charged to their pubs, the breweries have benefitted from the need to deal with just a few large companies rather than thousands of individual pubs, and I understand why they feel aggrieved

Unsurprisingly, the success of the amendment in the House yesterday has inspired some squealing from those vested interests which stand to pay for their speculative folly. Allowing pubs to procure their drinks at a lower price should drive pub prices down; that can only be good for the customer and for the industry as a whole. It’s the speculators and financiers who don’t like the result of yesterday’s vote: but they have been trapped by the inadequacy of their own calculations. Their shouts and yelps sound very similar to those I remember when the resale price maintenance was abolished in this country back in 1964.  It is not acceptable for consumers to be made to pay for the folly of big financiers and speculators, particularly when they do so by abusing thousands of small businesses trying to make a success of running their pub.

But there is another part of this saga which causes me alarm. The Select Committee on which I sit has produced four reports calling for a statutory code of practice, and various ministers have undertaken to do something to address what has been an acknowledged problem. It reflects badly on our democracy when ministers relegate Select Committees to mere exercises to occupy the time of backbench Parliamentarians. The Business, Innovation & Skills Select Committee has undertaken a very considerable amount of work on this issue – not least in investigating the issue, considering potential alternatives and building a cross-party consensus for action. Sadly, even yesterday, the Government did not embrace the opportunity to make the change which has been discussed for at least a decade.

As a Conservative, I am proud that Parliament has now stood up to large vested interests in favour of hard-working small businesses. If this Government does not have that as its philosophical base, then very many more questions will be asked about its suitability for office. Yesterday was a good day for pub landlords across the land, and for Parliament; I hope that the Government will now accept the amendment passed, and re-dedicate itself to stand up for small business, enterprise and employment – the very title of the Bill in which these measures are contained.​

Wednesday, 12 November 2014

Northamptonians Not Lazy

Brian Binley, the Conservative MP, for Northampton has reacted to recent criticism in the Daily Mail that the people of Northampton were either “just too lazy” or that the town had miraculously reached full employment.
Mr Binley has written to Greencore, a local company, which prompted the allegations by saying they could not recruit locally and would have to go to Hungary to get the extra 300 staff they would need in the future.
Brian said: “The storyline published by the Daily Mail harmed the image of Northampton at a time when we are trying to attract new industry by way of our enterprise zone and when there are still 8000 individuals who are currently jobless in the town. Add to that total 9.5% of the working population in Corby who are out of work to say little of the populations of Rushden, Wellingborough, Kettering, Daventry, Towcester and the myriad of villages surrounding our county town and you understand my apprehension.”
Mr Binley continued: “Furthermore I am told that you have not discussed this issue with Senior Managers at the Northampton Job Centre, that you have not held proper in depth discussions with the Chief Executive of the Northamptonshire Enterprise Partnership and nor have you approached Northampton University which is situated almost adjacent to your site which has 13,000 students, many of whom might be available for part-time employment.”
Brian went on to criticise the company by underlining the fact he was an Non-Executive Chairman of a company he founded in nearby Wellingborough which now employs some 180 people saying “I know a little about the difficulties you face… but I can tell you however that they are not insurmountable and certainly should not be tough enough to go to Hungary to recruit”
“I can only conclude that your Executive was overwhelmed by the pressures of the media and as a result was slightly less careful about what she said than might have been advisable. Even so, the slant put on the story by the Daily Mail was massively unhelpful to the town and a correction of some kind might be helpful in the circumstances.”

Tuesday, 11 November 2014

Brian Binley MP: Introducing a Spotter’s Guide to Sound Conservative Policies

Never let it be said that Conservatives lack ideas. The vigour and drive that regularly encourages my fellow MPs to push hard-hitting yet self-evidently beneficial Ten Minute Rule Bills demonstrates that the Right is alive and kicking in Westminster. Then of course there is the example of the sheer two-brainery of colleagues such as Steve Baker and John Redwood. Forget the Labour Opposition’s wind power; being in the Commons can be a daunting prospect, observing on nearby benches such intellectual power plants in full flow.

Notwithstanding some notable and high-profile individual exceptions, the Party itself has perhaps been less successful in adopting and running with the ideas of the Right within Government. Sometimes this has been a painful by-product of coalition – assuming of course you accept the founding premise of setting up such a Mephistophelian Pact in the first place. Even if you think it was correct to choose that route, you must surely though agree that compromise has stifled ingenuity.

Now as we look forward to life after the Coalition, we can open up our horizons once more. In the coming weeks, the Party will start to more clearly develop the outriders of its forthcoming manifesto. What should feature as part of the main body?

This is where a new publication may be of help. Seasoned think tanker Dr Lee Rotherham and I together with additional immensely-valued input from a man who knows a few things about policies that win general elections and improve the country – Lord Tebbit have authored “A Spotter’s Guide to Sound Conservative Policies” which sets out one hundred policy ideas to address a range of critical failings and gaps across Government today. As Lord Tebbit points out, not everyone will agree with everything being suggested. But I believe everyone will agree that the underlying issues themselves do need to be addressed and not ducked by ministers. I also believe that the solutions we highlight would, by and large, prove to be popular.

That certainly does not mean that they invariably will be easy ones to pursue. In many cases, their path will be obstructed by barricades of vested interest, civil service indifference, and especially of Left wing myopia.  Fears of a few negative headlines over the short term often threaten vital reform. In putting the book together we’ve had some fun with this and suggested a points system. It’s somewhat arbitrary but does have the advantage that anybody looking at manifesto pledges from the Conservatives – or indeed from any other political party – can cross check the points awarded to judge how creative the front bencher is being.
Boldness bingo, if you will. Since assembling the centenary list, Chris Grayling, for instance, has scored a hefty 50 points for daring to put the ECHR fully in the sniper scope. I suspect from recent press releases, Messieurs Pickles and Gove may end up doing quite well soon too.

Each idea is succinctly and individually presented. Of course there is a limit to what you can set out on a single page, so perhaps most valuably of all we direct the reader to think tankers, campaigners and published research that more fully and properly develops what are all very complex subjects deserving more than a swift fly past.

There have been some absolutely fantastic ideas that have been put forward that Whitehall really does need to take up. For instance, the IEA’s exploration of sock puppetry has revealed the need to sever the insidious backdoor state-sponsored support that both Socialist and pro-EU campaigns get. By contrast, the work of campaign group Open Doors, coupled with the ‘Cranmer blog’ spotlight of Dr Adrian Hilton, has informed us of the critical need to modify how we work in government to protect Christians overseas. In addition to game-changing ideas such as these, we also add suggestions of our own such as the idea of a (entirely privately-sponsored) patriotic film fund. But these are just three swift and very different examples.

Producing this book means that a single big bag of pick-and-mix ideas is now out there, to help campaign planners explore the flavours in the shop. Downing Street and CCHQ can dip in and try out what they like, and then go on to the manufacturers at source and ask for more. With such a variety of brilliant and often under-exploited think tanks that now exist on the Right, there’s really no excuse for policy writers to leave them undertapped. If the Centre for Policy Studies was the motor for the Thatcher Revolution, with such a range out there today there’s certainly no excuse for the 2015 Agenda to be any less radical.