Neighbourhood Planning Bill - Report (2nd Day)

Part of the debate – in the House of Lords at 3:30 pm on 28th February 2017.

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Photo of Lord Hodgson of Astley Abbotts Lord Hodgson of Astley Abbotts Conservative 3:30 pm, 28th February 2017

I certainly cannot. There are 37,000 pubs in the country and I am not able to stand here and say that the 37,000 pubs have been operated completely to the highest standards or that people have not tried to run them down. I shall return to the point about how there is already adequate protection for the community if it chooses to use it. One of the ways to improve a pub is to improve your kitchen facilities or enlarge your car park, but some of these pubs do not have the land area or curtilage to be able to do that.

It is not as though there is not already an opportunity for individual communities, using the asset of community value—the ACV facility—to apply for it to be listed. The noble Lord, Lord Kennedy, suggested that this was not an adequate remedy and that in some cases local authorities were reluctant to get involved for a series of reasons. I am sure there have seen cases like that, which is why I shall come in a minute to the question of one of the remedies for this. But equally, it is fair to say there are cases where local authorities have blanket-classified a whole series of pubs in their area—the lot—and that is also not what the ACV arrangements were designed to do.

Am I suggesting that every pub is being run scrupulously? Of course not: there are thousands of them and there will be outliers, on both sides of the case, in every community and every part of the country. But to introduce new legislation on the basis of a small number of cases—and it is a small number of cases, some of them anecdotal—is in my view a mistake. What the industry needs above all is more investment, not less, and nothing is more likely to put off potential investors than restrictions on how they can, in the end, realise their investment.

It has somehow gained credence that the groups at which these amendments are aimed are the allegedly rapacious pubcos and integrated brewers. If that is the aim, I have to tell the House that the target is being missed. The losers will be the independent operators, for example the many thousands of mum and dad operators. There are probably 20,000 couples who have worked long and hard, maybe after inheriting the pub from parents, and who now wish to sell up and retire. But because of restrictions like these, they find the sale price of the pub—also their home and their only asset—reduced in price drastically and maybe even unsaleable pending the ACV negotiations. If it is felt that the ACV process is not working well, I agree that it should be reviewed—but reviewed in the round so that the cases that the noble Lord, Lord Kennedy, refers to and the other cases where there have been block listings can be looked at and we can see how the balance of the ACV operation has been proved to work.

I urge those who support the amendment to be careful what they wish for. Legislation about the pub industry in the past has all too frequently led to some very unhappy unintended consequences. It is worth remembering that the emergence of the pubcos—companies that only own pubs, buy in all their beer and alcoholic drinks and are most disliked by CAMRA—came about only because of legislative action. The beer orders had the intent of opening up the market by reducing the power of the large brewers to dictate which beers were produced, and which owned and controlled the vast majority of the pubs.

Forced divestment of pubs did not lead to the anticipated happy outcome. It led instead to the emergence of what were essentially specialist property companies, all too often highly geared, with all that that implied for reinvestment in the pub industry. In my view, a similar unintended consequence may result if my noble friend were minded to accept this amendment, or the noble Lord was minded to put it to the vote and won the subsequent Division. My reason is this: because of the highly competitive nature of the market for the sale of alcoholic drinks and other changes in our socioeconomic life, pubs have increasingly turned to food, as a means of improving their profitability. Increasingly, they are becoming, in effect, restaurants. If I were an independent owner of a pub, faced with yet further changes, I would consider what the balance of my business was like; I would boost my food offering and apply for a change of use from my current A4—drinking establishment—to A3—restaurant/café. As a result the loss of pubs would accelerate, not slow down.

There is no evidence of widespread running down of pubs to accelerate closure. Where it happens the ACV procedure is available for the community to use. A handful of cases do not justify the imposition of additional restrictions on the whole industry. Hard cases make bad law—