Tied Pubs (Scotland) Bill

– in the Scottish Parliament at on 23 March 2021.

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Photo of Kenneth Macintosh Kenneth Macintosh Labour

The next item of business is a debate on motion S5M-24271, in the name of Neil Bibby, on the Tied Pubs (Scotland) Bill at stage 3.

Photo of Neil Bibby Neil Bibby Labour

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.

Photo of Jamie Hepburn Jamie Hepburn Scottish National Party

I am very pleased to be speaking on behalf of the Government in this final debate on the Tied Pubs (Scotland) Bill. Of course, as I have been at pains to emphasise throughout the process, it is not a Government bill; nonetheless, I thank my officials for their efforts in supporting me through the process.

I commend Neil Bibby for reaching this stage today. It is not easy to progress any bill in any circumstances, but that is particularly the case without the full support and assistance of the civil service. I congratulate him on getting his bill to this stage.

As we have heard, the bill will promote fair and equitable treatment in commercial agreements. It will also rebalance the relationship between pub-owning companies and tied pub tenants. The bill is an important step forward for the tied pub sector in Scotland and, as we have heard, it is the culmination of many years of work by Mr Bibby, who first proposed the bill towards the start of the parliamentary session. As we come to the end of the session, it seems fitting that we are considering whether to pass his bill.

I would like to thank Mr Bibby and his team for working closely with me and my officials, and for his on-going dialogue and openness. I would also like to thank the Economy, Energy and Fair Work Committee for its comprehensive consideration of the bill at stages 1 and 2.

I arrived at a different conclusion from the committee at stage 1, after giving a great deal of thought to the merits of the bill. Nonetheless, I appreciated the committee’s clear and thorough report and examination of the evidence and views at both stages1 and 2, which helped to influence the Government’s approach to the bill.

Whether we would support the bill’s progress was a balanced decision, but engagement—fairly late in the day—from a number of tied pub tenants led me to conclude that, if we were to follow the committee’s recommendations and undertake more investigative work, we would have concluded, in all probability, that we would need to introduce similar legislation.

Having mentioned that engagement, I would like to thank the sector, their representatives and the tenants who took the time to meet me during the bill process. Their approach has helped to influence our approach, too. In so far as I will be involved, I am keen for that spirit of co-operation between interested parties to continue into the bill’s implementation, should the Parliament pass it at decision time.

I have had an open-door policy because I have been keen to understand the issues across the industry as I considered Mr Bibby’s bill. I have listened carefully to all views and concerns. I hope that all parties see that approach reflected today in the amendments that have been agreed to. I have sought to ensure that the bill is fair and balanced for both landlords and tenants, for example through the amendments on MRO leases. Those not only preserve tenants’ right to request an MRO lease but provide safeguards for pub companies, particularly in relation to investment. That balance for landlords and tenants is crucial for the bill and for the sector.

I understand that this is an extremely challenging time for everyone involved in the pub sector, which has been particularly hard hit by the pandemic. I have heard about the support provided to many tenants by their pub companies during this time. That clearly shows that the tied pubs model has tremendous value and an important place in the pub landscape. It also provides a low-cost entry point for people who are looking to take that first step into business. However, although I have heard both those points from tied pub tenants, the picture across the sector is not uniform. I have also heard from some tenants that they have not had that level of support and believe that change is required.

I want to preserve the benefits of the tied pubs system, which I recognise is an important model of tenure. I also want to ensure that there is a better balance in landlord-tenant relationships, and a proportionate approach.

If the bill is passed, the code will require to be implemented by whoever forms the Government after the election. The current Government is certainly committed to full and meaningful engagement if development of the code falls to us. The code will govern the relationship between pub-owning businesses and their tied tenants, and it will need to be created within two years. If that work falls to us, we will look to do it as soon as possible.

I would like to continue to work closely with stakeholders to ensure that the code works well for the whole sector. I want to see the sector recover and flourish; I hope that we all approach the bill in that spirit.

Once again, I congratulate Mr Bibby on reaching this stage.

Photo of Lewis Macdonald Lewis Macdonald Labour

I remind members at the back of the chamber that their voices carry.

Photo of Graham Simpson Graham Simpson Conservative

We are near the end of the parliamentary session—we have only a day to go—and all of us have been clearing out our offices to get them ready for the next occupant. Those of us who are standing again and are lucky enough to return may end up back in the same room, or we may not.

I am not a great hoarder, but, while I was clearing my office, I came across an unopened bottle of beer with a label that urged me to support the tied pubs bill. Goodness knows how it stayed unopened and forgotten about, but it did. It was dated February 2018. That shows how long it can take for a member to get a bill through the legislative process, if they are lucky.

I had my own abortive attempt at a member’s bill on the protection of buyers of new homes, and I found that immensely frustrating. I had come from the fast-paced newspaper industry, and I realised that I needed to show a little more patience.

I commend anyone who gets to the stage that Neil Bibby has arrived at, and I say well done to him. He has been along a rocky road, but he got there in the end. He put in a fair shift prior to stage 1 in trying to drum up support. It then all went quiet for a bit. Some of us thought that he had dropped the whole thing, but he got to stage 1. When the committee, which I was not on at the time, reported, it did not look good for Mr Bibby and his bill. The committee was divided, but the majority did not support its general principles.

Members of my party and the Scottish National Party members thought that, on balance, the bill should go no further. However, there is a lesson for all those who get to that point: do not give up, because funny things can happen. That happened with Monica Lennon’s Period Products (Free Provision) (Scotland) Bill. I see that Monica Lennon is here. We and the SNP were against that bill, and it looked sunk. My party’s stance then suddenly changed and the SNP’s stance did, too. A hurdle was crossed, and the bill went on to its ultimate conclusion.

The same has happened with the Tied Pubs (Scotland) Bill. We have changed our stance, and the SNP has fallen into line, too. Funny things happen. Mr Bibby has made it, and I say well done to him.

I have never had strong feelings about the Tied Pubs (Scotland) Bill one way or the other. It could be argued both ways—the committee’s stage 1 report reflected that. We are prepared to support the bill, but I have to admit to having some reservations about it. I wonder what will happen to the hospitality trade, which has been hollowed out by lockdown. I fear that the good intentions behind the bill may—I stress “may”—lead to some pub companies deciding that it is not worth investing in Scotland, or they could change their business models and remove the tied option, which can be a route into the licensed trade for some. Mr Bibby mentioned that earlier. That would be a shame, but it could happen. It could easily be argued that the time is not right for the bill, if it ever was. I know that a number of colleagues share those concerns, and there must be some SNP members who share them.

Emma McClarkin, who is the chief executive of the British Beer & Pub Association, said that the bill

“poses a real danger to future investment in the sector, entrepreneurship opportunities” and

“threatens jobs”.

That said, similar legislation was enacted by the Conservative Government in 2015 in England, although the tied pub sector there is much larger. That created a pubs code and an adjudicator that would govern the relationships between some tied pubs’ tenants and their pub-owning company landlords. Mr Bibby’s bill aims to ensure that Scottish tied pub tenants have at least the same protections and opportunities as those covered by the 2015 act. The bill is in a better position than it was, thanks to some sensible amendments and, as I have said, we will back it, albeit with some reservations.

Before I sit down, I should say that my colleague Margaret Mitchell, who also got a member’s bill through, will close for us. It will be Margaret’s final speech as an MSP, so I do not expect her to say much of anything about the bill. She has served the constituents of Central region with distinction since 2003. Until 2016, she was the only Conservative representing the region. It has been a pleasure to work alongside her for the past five years, and I wish her and Henry a happy and healthy retirement.

Photo of Alex Rowley Alex Rowley Labour

I congratulate Neil Bibby and his team for the tremendous amount of work that they have done to get the bill to this stage. I hope that the bill will be passed this evening. I also thank the minister for the positive approach that he has taken, which was evident at stage 2, when the bill came to the committee.

I will focus on the letter that the Scottish Licensed Trade Association sent to all MSPs today. It makes the following points, which are worth restating.

“For too long, large pub-owning companies have taken more than their fair share from publicans. Too often they have held their tied tenants back, restricted consumer choice and failed to properly regulate themselves and keep their house in order. They have put their own profits before the sustainability of local pubs and fairness for tied pub tenants. It cannot go on.”

It continues:

“The Tied Pubs Bill delivers a fairer deal for tied publicans, with a new statutory Pubs Code. It would rebalance tied agreements, shifting power from the large pubcos to the local pubs who desperately need your help. It allows tenants to opt-out of tied deals that aren’t working. It will give publicans more choice over the drinks they stock to help meet consumer demand, promote Scottish products and sustain their business. The Tied Pubs Bill will also be very positive for Scotland’s small brewers, who at the moment are restricted from access to pubs owned by the big brewers and pubcos operating the tie.

The fact that global brewers and pubcos are so desperate to stop this Bill exposes the fact that they take too much from pub profits. The reality is that the Market Rent Only option is just that, an option and if they want to keep publicans tied, they need to offer much better deals, lower prices and lower rents. That’s all the Bill calls for – fairness and a fair split of pub profits, which all MSPs must surely agree with.”

The letter also makes the point that,

“In England, pubcos have continued to invest in pubs, despite the Pubs Code and if they want to continue to own and operate pubs, they will do the same in Scotland.”

I will also refer to the survey that the SLTA carried out, as the key data points in that survey are quite stark. They show that 50 per cent of tied pub tenants report earning less than £20,000 a year, with 34 per cent earning less than £15,000 a year. In many cases, those amounts are for a couple, not for an individual. A shocking 58 per cent of tied pub tenants reported earning less than the minimum wage, with just 13 per cent earning more than the minimum wage. The average price paid for a keg of standard lager by tied pubs is a staggering 61 per cent higher than the open market price, with some paying as much as 107 per cent more than would be paid on the open market. It is also reported that 81 per cent say that the information that was provided to them when they entered the lease was inaccurate or misleading.

That demonstrates why there was a need for the bill. I congratulate Neil Bibby once again on bringing the bill to Parliament, and I hope that everyone will support it at decision time.

Photo of Willie Rennie Willie Rennie Liberal Democrat

Probably more than ever before, we know through the pandemic the value of pubs as community assets that play a social role and as major employers that showcase world-class Scottish products. The bill will help to rebalance the pub sector in Scotland in the way that the sector has been helped in England. However, there is much more to be done beyond the bill, because of the impact of the pandemic on the sector. This cannot be the end of the story. We need to look again at what support we can provide to pubs to ensure that they continue to play that essential role in our communities.

Neil Bibby was generous in his praise of Greg Mulholland, the former Liberal Democrat member of Parliament who championed the sector for many years. Through his hard work and diligence, the landscape of the sector in England and Wales has changed markedly. I like the fact that Graham Simpson tried to claim the legislation there as a Conservative achievement in government, when in fact it was Liberal Democrat ministers who drove it through the Department for Business, Innovation and Skills. I do not often refer to, praise or boast about the coalition years, but that is one thing that I am prepared to recognise.

One Conservative contribution that is missing from this debate is that of Maurice Golden. His contribution last time was remarkable and I would have enjoyed hearing him participate in the debate again today. Alas, he is nowhere to be seen.

The pubs code and the adjudicator are assets to be lauded. They have governed the relationship between the large pub-owning companies and their tied tenants in England and Wales, and it think that that has changed the landscape there for the better.

Neil Bibby deserves huge credit for his determination and single-mindedness. Lesser politicians would have buckled by now, but he withstood the pressure from all sides and persuaded—perhaps even charmed—others to his way of thinking. That obviously had some effect on the minister, who was a reluctant supporter at the beginning; in fact, he was opposed to the bill. The charm obviously worked on the minister, but it has also worked on the rest of the sector because, as the minister said—

Photo of Willie Rennie Willie Rennie Liberal Democrat

If the minister is going to deny that he was charmed, I want to hear from him.

Photo of Jamie Hepburn Jamie Hepburn Scottish National Party

I will leave others to consider the charm or otherwise of Mr Bibby. I put on the record that at no stage did I state any opposition to the legislation.

Photo of Willie Rennie Willie Rennie Liberal Democrat

He was charmed even before he knew he was! That is an incredible admission. Neil Bibby’s powers know no bounds.

It is true that the profile of the sector in Scotland is different. There are fewer tied pubs. The tie may provide a way for new tenants in the sector to hone their skills and knowledge and to climb the ladder to having their own pubs. That has to be recognised and we should try to hold on to it where it is of benefit to the sector.

However, the support that the bill has received from a range of trade organisations and trade unions is an indication that there is a significant problem and cannot be ignored. The fact that many in the sector came to the minister and tried to make it a workable bill, as far as they were concerned, was recognition from them, too, that change is required. Neil Bibby’s powerful evidence has been persuasive all round.

Giving tenants more freedom to grow and develop their businesses with creativity must be encouraged. Sometimes the sign of a good law is that it is not often used. I hope that that is the case in this circumstance. Neil Bibby has already achieved changes in the sector before the legislation is introduced. Let us hope that that continues and that our pub sector recognises that it has to change for the better to make sure that it thrives for many years to come.

Photo of Patrick Harvie Patrick Harvie Green

I add my sincere congratulations to Neil Bibby, not just on introducing the bill and steering it through but on doing the work of building consensus to get the bill to the point of being passed—and it will certainly pass with the support of the Green group of MSPs.

I declare, from my entry in the register of members’ interests, not only my membership of the cross-party group on beer and pubs, which has no collective view on the bill, but my membership of CAMRA, the Campaign for Real Ale. Neil Bibby is one of a relatively select few MSPs I have had the pleasure of bumping into at CAMRA beer festivals from time to time over the years.

As CAMRA’s evidence states, the pub companies take a share of profit from tied tenants that is more than fair and more than sustainable, and that often leaves tenants unable to earn a decent living. The way in which tenants are being expected to pay over the odds for the beer that they sell is clearly unfair. Even if some of them find the tied-pub model agreeable and might choose to stick with it, they should have the choice, and the bill will give them that choice.

Over the years, I have been privileged to host a number of events in Parliament with CAMRA and others in the Scottish brewing community. This is an important opportunity to say that although, when we debate alcohol, we often debate the social and health harm—issues that do not need to be downplayed at all—we should also find opportunities to celebrate what is positive about a more diverse, decentralised model of pubs and brewing. The domination of a small number of giant companies is itself unhealthy, and it is a model that compounds the public health harm that comes from alcohol. A more diverse brewing sector and a more diverse pub sector, with a greater number of smaller independent companies, would offer a healthier way forward, in my view, and the bill will be one measure that helps to achieve that.

Over the past year, as I have spoken both in Parliament and at other meetings from this little corner of my living room, I have occasionally been teased about the fact that I keep my refreshments close at hand. In a few parliamentary debates, that has been necessary. Today, I have made a slight change, so that members can all see that my taste covers the grain as well as the grape. If I regret anything about today’s debate, it is that I will not have the opportunity to buy Neil Bibby a pint in the Parliament bar after the end, to celebrate our passing his bill. If I could think of nothing better, I would give him a chance to try Hoptimistic Future, which was specially brewed for the Green yes campaign back in 2014. After a few years, however, it is probably not safe to open this bottle here, but perhaps I will get the chance to buy Neil a beer when we all return.

Photo of Willie Coffey Willie Coffey Scottish National Party

To say that the evidence that we heard during consideration of the bill was polarised is putting it mildly, and it is fair to say that committee members were more than a little disappointed with that. At the outset, the bill struggled to gain the support of the whole committee, but Mr Bibby’s persistence and his willingness to find a way forward at stage 2 gradually won that support. Of course, the Tories tried to sabotage the bill at stage 2 with hundreds of pointless amendments until they realised the mistake that they were making and gave up their attempt to talk the bill out of parliamentary time altogether.

Although the bill began its journey pre-Covid, it took on new significance as the impact on the tied sector and the wider pub sector became clearer during the pandemic. We can see the continuing impact simply by taking a walk along any of Scotland’s high streets. The pubs were the first premises to be closed, and they will probably be the last to reopen. We know that, sadly, many of them may not reopen at all.

Establishing a new pub code will allow the Scottish ministers to set out the circumstances in which a market-rent-only lease is offered. That will ensure that we get a balance between the rights of the pub-owning companies and their tenants, which I hope will be helpful. It will introduce consultation and engagement into the process, meaning that a tenant who is satisfied with their current lease arrangements will be under no obligation to accept market rent only. All of that should, hopefully, make for a stronger and more successful tenanted pub sector in Scotland.

The bill applies to the tied sector, which accounts for around 17 per cent of pubs, or 750 out of a total of about 4,000. The profile of tied pubs in Scotland is very different from that in Wales and England, but the bill offers some protections and increased opportunities for consultation, as the member in charge has continually reminded us.

At an earlier stage of the bill’s journey, research that the Government carried out did not appear to back the case for change. There were sufficient voices telling us about problems in the tied sector, principally involving the higher costs of beers and ciders and property maintenance issues. On the plus side, the tied model can offer a cheaper way into pub management for many, with the added benefits of including satellite TV and wi-fi, which might otherwise be too expensive for new entrants to pay for themselves.

The arrangements under the bill that will permit tenants to introduce a choice of at least one guest beer beyond the tied arrangement will surely be welcomed by everyone. However, I leave it to other members to give us a flavour of that and of other aspects of the bill.

I offer congratulations to Neil Bibby for taking the bill through; to our committee clerks for supporting us; and to the Scottish Government for showing a willingness to listen to the pleas from the sector and, ultimately, for supporting the bill.

Photo of Sarah Boyack Sarah Boyack Labour

I, too, congratulate my Labour colleague Neil Bibby on getting the Tied Pubs (Scotland) Bill to stage 3. I recognise all the hard work that he has put in to get it here, as well as the contributions from all the witnesses who gave evidence that was considered by the committee.

As we have heard, the bill is supported by Scotland’s trade unions, CAMRA and many pubs across the country. It puts power in the hands of consumers and tenants, rather than multinational pub companies, and it is an important step in bringing tied pubs in Scotland into line with those in England and Wales, which FSB Scotland identified as being important to the sector. As others have said, it is vital that we support the sector, and I am glad that the small pubs in our communities will get the flexibility and new choices that they need.

Hospitality is a key sector in our economy, and, as we build back from the pandemic, I am pleased that the bill will give pubs more choices and more support as they begin to think about opening again. As the Society of Independent Brewers said, it is important to open up opportunities for

“small brewers … to provide the craft beer that more and more consumers are demanding.”

As GMB Scotland said, the bill is also about “creating and safeguarding” jobs in our Scottish breweries. There is much to look forward to when the bill is passed.

The bill requires the Scottish Government to make regulations that will change the relationship between tied pubs and pub-owning businesses to ensure that there is fair and lawful trading; that tied pubs should be no worse off than free-of-tie equivalents; and that tied agreements should provide a fair share of risk and reward. It gets rid of voluntary self-regulation and introduces statutory regulation, which means that there will be a clearer set of rules. I am glad that the bill will bring all of that into play.

In addition, the market-rent-only option allows a publican to opt out of their tied agreement and pay a market rent only for their premises. The evidence from England and Wales shows that MRO rights give tenants leverage to negotiate fairer deals, even if they do not choose to go free of the tie. The bill is about choices and fairness, and I hope that it will support our hospitality sector.

It will also provide for something that I suspect one or two colleagues in the chamber will like. Tied publicans will have the right to stock one beer of their choosing, which will allow them to respond to consumer demand and make their pub more profitable. That provision will also support our Scottish and independent brewers, which has to be good news for Scotland. The bill will change the landscape for tied pub tenants, bringing greater equality to the relationship between tenants and pubcos and opening up a bigger market for Scotland’s brewers. I am delighted to support this Labour bill today.

I have been thinking about all the comments from members about the work that Neil Bibby has done and about his negotiating and persuasion skills. I attended a Commonwealth Parliamentary Association conference on getting organised for COP26—the 26th United Nations climate change conference of the parties. The last session was about negotiating skills and how to get the Government to do something that it does not initially agree with. In the future, Neil Bibby will be able to talk to members about how to go from proposing a members’ bill that may not work to taking the bill through the legislative process, with a lot of hard work by the lead committee, and getting support from Parliament. The bill is a great example of that, and I hope that all members will support it at decision time.

Photo of Colin Beattie Colin Beattie Scottish National Party

I thank Neil Bibby for introducing the bill and for his open engagement throughout the whole process. The bill was not easy for the Economy, Energy and Fair Work Committee to consider, by any means. Listening to the evidence over the months raised many question marks. Effectively, two sides put forward evidence: on the one hand, the tenants; on the other hand, the pub companies or landlords. Frequently, those two sides presented significantly differing evidence, with one side sometimes contradicting the other. Little in the way of independent data was available, and the committee felt concerned at times that it did not have enough information to reach a conclusion—a situation that led to the committee’s initial rejection of the bill at stage 1.

We heard forceful arguments from the pub landlords that legislating for a change in relationship between the tenant and the landlord would lead to dramatic drops in investment in tenanted pubs and create uncertainty and slow recovery from the Covid-19 pandemic. Equally, forceful arguments were made that the pubcos take an unfair share of the profits of the tied tenants and that the legislation would make community pubs more sustainable, as well as increasing variety and choice at the bar for customers. It has been difficult to separate out the carefully constructed and presented arguments and get a grip of the best solution. However, we all want a prosperous and well-run pub sector that provides both choice and service to its customers while enabling the tenant to secure a fair income for the work that they commit to the business.

On balance, I accept the probability that tenants are at a disadvantage when negotiating with pub landlords. The decision for the tenant of whether to take up the MRO option is to be made entirely in the light of individual circumstances. When a good and fair relationship exists with the landlord, it seems to me unlikely that the tenant will wish to disturb it. However, when a relationship is sour or perceived as less than fair, the tenant will have the option to change that relationship if they believe that that will be of benefit.

The concerns about choice of products and the stocking of guest beers—specifically local beers—have received considerable attention. It seems fair to think that a tenant might feel that they have more flexibility to stock products that better reflect local tastes if they take the MRO option.

I was in two minds as to whether the bill was needed, but I am now content that, for a few tenants, it might provide a level of protection and the opportunity to reset a relationship that is simply not providing the expected results. I believe that it is important that we put policies in place that support pubs to best recover from the Covid-19 pandemic. If that will benefit some tenants, it is worthwhile.

Once again, I congratulate Mr Bibby on introducing the bill and I commend it to Parliament.

Photo of James Kelly James Kelly Labour

I join other members in congratulating Neil Bibby on securing the passage of his member’s bill on tied pubs later this evening. As many have recounted, it has been a long journey for Mr Bibby—a bit of a bumpy ride with regard to getting the bill through the committee and to this stage—and it is a tribute to his persistence that he will achieve that tonight. I remember going into his office earlier in this session of the Parliament: he had a list of MSPs on the wall, with one of those election battleground maps, which he had used to chart how he would persuade MSPs to support his bill. He has come a long way since then, and it is great to see the success that he has achieved.

The bill will make a difference. Pubs have been closed during the pandemic, which has shown that they play an important role in our communities. They bring people together and are important for their social aspect. They support people, as a trip to the local pub might be the only way anyone who lives on their own can come into contact with people, so it is important that we support them.

The legislation addresses the issue of the balance of power between landlords and tenants. As Sarah Boyack pointed out, it is all about achieving fairness. It is reasonable to say that that balance of power in some relationships has gone too far in support of the big pub businesses, which have sometimes taken decisions that are not to the benefit of the tenant or the local customers. Alex Rowley quoted some vital statistics around wages and prices in local pubs, which shows the advantage that there would be in giving a greater say to tenants.

The legislation sets up the role of an adjudicator and a statutory code, which will ensure that there is a mechanism to achieve fairness and ensure better wages, proper pricing and a better choice of beers on the ground. That is why the bill has achieved such a wide range of support from organisations such as the Scottish Licensed Trade Association, the GMB, and the Federation of Small Businesses. Such support shows that the bill will make a difference to businesses, workers and customers.

Ultimately, the bill will help as we emerge out of Covid, and when the shutters come up as pubs reopen. It will be good to see customers return, but the model will also help to promote pubs, which will be good for jobs and local economies and communities.

I congratulate Neil Bibby on taking the bill though the Parliament to a conclusion. The point of legislation is to make a difference, and I firmly believe that the bill will be to the benefit of pubs, pub owners and customer alike.

The Deputy Presiding Officer:

I call Margaret Mitchell, who is making her final speech as a member of the Parliament.

Photo of Margaret Mitchell Margaret Mitchell Conservative

I know how much work goes into introducing a member’s bill, and I congratulate Neil Bibby on the tenacity that he has shown in getting it to this stage.

The Tied Pubs (Scotland) Bill seeks to improve the position of tied pub tenants and their pub-owning businesses, and give Scottish tied pub tenants at least the same protections and opportunities as those in England and Wales have. As others have said, those aims are to be realised through the establishment of a Scottish pubs code and the appointment of a Scottish pubs code adjudicator. Key aspects of the code include the right to sell a guest beer and the right to pay a market rent on a property without having to buy into other products or services.

The bill’s overall benefits include prompting owners and tied tenants to work together to ensure that both parties share the profits and risks. Covid has had a massively adverse effect on Scotland’s pubs and publicans, which makes it all the more important that owners and tenants work together to aid the industry’s recovery. The bill will give tenants greater choices in running their pub, and the opportunity to invest in the business and themselves.

Scotland’s pubs are a vital part of our economy, as well as our local communities. Pubs act as a social hub in villages and communities throughout Scotland. When we can meet again, customers will be able to enjoy a wider choice of products, particularly from local independent brewers, at more competitive prices, and Scotland’s brewing industry will also see a welcome boost. Therefore, I look forward to voting for the bill at decision time.

After 18 years of having had the privilege and pleasure of representing my constituents in the Central Scotland region, this is my last speech in the Scottish Parliament. The most important and rewarding aspect of being an MSP has been the ability to fight my constituents’ corner, help to resolve problems and ensure that their issues and concerns are not brushed aside, but given a fair hearing.

As a list MSP, it has been a frustration that, rather than being held directly accountable to our constituents when seeking re-election, the list ranking of regional MSPs is in the hands of our various parties before the electorate has its say. That is a weakness of the Scottish Parliament’s democratic process.

Chamber debates tend to be dominated by party-political speeches. By contrast, MSPs work well together in cross-party groups, such as the CPG on dyslexia. Such groups seek to take forward issues raised by the individuals, voluntary organisations and other stakeholders who are members of the groups. I will return to CPGs in my closing remarks, with suggestions about how we can make chamber business more effective.

The atmosphere in the chamber today has been different from the usual final days of a parliamentary session as MSPs make their closing speeches. I want to address the Committee on the Scottish Government Handling of Harassment Complaints inquiry report. For me, the most important findings were not those relating to breaches of the ministerial code but the infinitely more worrying revelations about the centralised system of Government in Scotland, in which the Government is all powerful and there is an absence of the necessary checks and balances to prevent abuses and ensure the openness, transparency and accountability that is essential for any Government to establish trust with the electorate.

Those issues will not be easily or quickly resolved. For all of us in the chamber and for the wider public, a good place to start is with the inquiry report, which can be used as a reference document with the minutes of the committee meetings, the Official Reports of our evidence sessions and the published submissions, which are listed in the report’s annexes.

The report contains the transcript of the balanced and insightful evidence of the two brave complainers, who, having listened to the inquiry evidence, including the final evidence sessions with the former First Minister and the First Minister, insisted on giving evidence to the committee on oath and in person. They did so because those who are anonymous have no voice. It was entirely fitting that the final evidence session was with the complainers and that they had the final word. Abuses of power matter. In any democracy, the end does not justify the means. It is a stark reminder that our democratic freedoms are hard won and should never be taken for granted.

I return to the Parliament’s CPGs. My first experience of a CPG was in 2003, when Annabel Goldie asked me to attend a meeting of the CPG on adult survivors of childhood sexual abuse. From that day on, I have been full of admiration for individuals whose trust has been betrayed in an unimaginable way, often in a family context by the very people who they should have expected to protect them and keep them safe. The CPG has informed much of the work that I have focused on as an MSP, including the Apologies (Scotland) Bill, which was suggested in a CPG meeting by the former chair of the Scottish Human Rights Commission, Professor Alan Miller. It was something that could give brave women—largely, the victims are women, although men have also suffered dreadful abuse—the important acknowledgement that they seek of the abuse that they have suffered. It provides empathy and—most important for them—it provides a method of ensuring that the same thing does not happen to anyone else.

The process also involved arguments for independent legal representation for victims of rape and other serious assaults, which has been rejected by the Government in the context of various pieces of legislation but which I hope will go forward in the next Parliament.

On improving chamber time, if the Scottish Parliament cut out the happy-clappy, time-filling debates that we all know exist, and used the time for MSPs to raise informed issues that have come about through their work in cross-party groups, that would allow for suggestions to be put forward at the end of the debate for the minister to consider, with the possibility that they could put in place concrete proposals to address the issues that have been raised.

I thank Kate Wane and Claire Wilson for their hard work and support in what has been an exhausting parliamentary session. I look forward to spending more time with my family—that is usually a euphemism and has other connotations, but I genuinely mean it—my husband, Henry, and westies Jack and Jamie. Henry will be very pleased, if not a little surprised, that I have put them in that order. I also look forward to doing what I want to do, including starting on my ever-increasing bucket list.

I wish remaining MSPs, and those who are standing down, well in the future. I hope that all who seek re-election do well. It has been a pleasure to work with everyone and to be an MSP in the Parliament, and I wish members good fortune for the future.

Photo of Jamie Hepburn Jamie Hepburn Scottish National Party

I thank those who have contributed to the debate, which has been something of a revelation. I was interested to see that both Graham Simpson and Patrick Harvie, on receipt of a bottle of beer, decide to hold on to it rather than to drink it. That might be the only thing that unites them. I put it on record that, when I am presented with a bottle of beer, I opt for a different tack.

I had not envisaged that the debate on the Tied Pubs (Scotland) Bill would involve my last speech during this parliamentary session, but I am very glad to have been able to take part. I am not sure whether Margaret Mitchell intended this to be the debate for her last-ever contribution; she certainly took advantage of the opportunity, and I wish her well for the future.

I will try to confine my remarks, because I recognise that we are running later than expected.

I recognise that there remain differences of opinion on the merits of the bill, but the constructive approach that we have taken has ensured that the bill is more balanced and fairer in representing the interests of tenants and landlords than it was at the outset, while it continues to respect the fundamental precepts that were envisaged by Neil Bibby.

I want a successful tied pub sector in Scotland. I do not think that any member demurs from the point of view that tied pubs are an appropriate model and form of tenure in the pub sector. I want that to continue, and I also want a level playing field for tenants and landlords. I want tenants to be treated fairly and landlords to be able to see a return for their investment. The approach that we have taken through refining and improving the bill will, if it is passed this evening, enable us to reach that point.

I urge Parliament to support the legislation. I congratulate Mr Bibby once again on reaching this stage and I thank him for his constructive approach in working with me towards the position that we have reached.

Photo of Neil Bibby Neil Bibby Labour

I thank all members who have participated in the debate.

I pay tribute to Margaret Mitchell, who just made her final speech. She was a particular help to my constituent, the late Michael McClelland. He was grateful for her support when she was convener of the Justice Committee, and I thank her.

I thank the minister, again, for the leadership that he has shown in listening to Scotland’s tied publicans throughout the bill process.

I thank Willie Rennie for his warm words—although I am sure that I cannot match his charm. I thank him for his support and that of the Liberal Democrats. Liberal Democrats were instrumental in getting similar legislation passed at Westminster.

I thank Patrick Harvie for his long-standing support. I recognise that the cross-party group does not have a collective view and I welcome his personal commitment to and sustained interest in the issue. I look forward to having that drink with him when the CAMRA festival is allowed to happen again.

I recognise that the views of members, particularly committee members, have evolved during the bill process. I am aware that there continue to be reservations about the bill; Graham Simpson highlighted some of them. I welcome the collaborative approach of the Government and the candid discussions about how the bill could be amended, which have led to a bill that has reassured members. I particularly thank the committee members who supported the bill and spoke in the debate—I also thank Andy Wightman, who did not speak in the debate, for his support.

I thank Willie Coffey and Colin Beattie for their speeches. They were right to say that the debate about tied pub reform has been described as polarised, with different views on how the model operates in practice. That was a feature of the debate in England and Wales before the UK Parliament chose to act, and it has been a feature of the debates on this bill.

As legislators, we must regularly make decisions about issues on which opinion is divided and about which accounts differ. It is what we are elected to do. However, the fact that opinion is divided does not mean that the weight of opinion or indeed the evidence is divided equally. We have to decide whether to take the global brewing giants at their word—companies such as Heineken, which was fined £2 million for serious and repeated breaches of the pubs code in England and Wales—or to accept the outcome of three parliamentary select committee inquiries, my consultation and the evidence that the Economy, Energy and Fair Work Committee heard, which brought us to this point.

We have to decide whether to accept the evidence that was brought to us by perhaps one of the broadest coalitions ever assembled in support of a member’s bill that sought to intervene in a sector of the economy, which included the SLTA, CAMRA, FSB Scotland, GMB Scotland, the Society of Independent Brewers, the British Pub Confederation, the Campaign for Pubs, the Pubs Advisory Service, Tennent Caledonian Breweries, the STUC and many more organisations that backed tied pub reform.

As Greg Mulholland told the committee last year, the number 1 cause of pub closures is tenants not being able to make a living out of their pubs. Sarah Boyack and James Kelly talked about the importance of rebalancing the relationships in the tied pub sector. As Alex Rowley said, the SLTA has circulated survey findings today that show that one in three tied pubs earns less than £15,000 a year in profit, while paying excessive mark-ups for the products that it sells.

I have always accepted that there is a place for the tied pub model. We are not debating the model’s merits and whether it should continue. If the tied model was being operated responsibly, as pubcos claim, pubcos would have nothing to fear from the bill. Why would a publican who is getting a fair deal report their landlord to an adjudicator? Why would a publican who is getting a fair deal choose to break the tie and exercise their right to a market-rent-only option? Why would an adjudicator rule against a pubco that is operating in a way that is consistent with the principles on which the bill is based?

If pub companies operate in a manner that is inconsistent with the principles of the bill, publicans will have recourse to a statutory code, which will be consulted on by Government, approved by the Parliament and enforced objectively by an independent adjudicator.

I will say a few words about the challenges that the pub sector faces. The crisis that we are living through has no precedent in modern times and the impact on the sector has been enormous. As members said, businesses have been unable to trade for extended periods, and when trading was permitted, many establishments found that the on-going restrictions made the business unviable. Politicians of all parties have called on the nation to build back better after the pandemic. Those calls give new meaning and purpose to the bill and to the statutory code for which it provides, which can protect Scotland’s publicans as they choose to do what is best for their pubs and customers as they emerge from the crisis.

We have an opportunity to secure a fairer deal for Scotland’s tied pubs tonight. For the good of the industry, we must seize that opportunity.