BISC misses the bigger picture

In a damming and emotive report, the exasperated, out of patience Committee blames pubcos and their trade body, the British Beer and Pub Association, for tardy progress towards sorting out the industry’s historic and well-documented ills.

The charge sheet is lengthy: free of tie options should be more available by now; Brulines needs Weights and Measures approval; PEAT, the pre-entry training scheme is inadequate; amusement machines remain tied; RICS guidance on rents is ignored; so, too, is benchmarking for licensee costs; tenants are still at a disadvantage to freeholders; sanctions aren’t strong enough. And so on, and so on. Nothing done by the trade to get its act together over the past 24 months meets with the Committee’s approval. Even when it acknowledges a success story like PIRRS, the rent review scheme, the Committee carps that it has not been better highlighted. This, apparently, is indicative of the industry’s “malaise.”

As the trade has proved incapable of self reform, an independent regulator must be set up to administer the codes properly and impose heavy financial penalties for infringement.
Many licensees will be cheering at this kicking dished out by the Committee. They’ll be hoping now for an “Arab Spring” with the trade’s dictators toppled by a sanctions-wielding independent regulator.

But others – and not just pubcos – will feel dismayed by the Committee’s failure to recognize enormous efforts across the trade spectrum to put things right. Its dismissive verdict of “Too Little, Too Late” does no justice to the months of discussions by working parties genuinely dedicated to finding a way forward that works for licensee and pubco. And it does no justice whatsoever to the truly substantial progress made towards greater transparency in the trade and the mandatory advice for incoming licensees.

Nor does the Committee seem aware the pace of progress was inevitably slowed by the economic crisis that has gripped pubs over the past few years. Time and resource that might have been focused on resolving differences was, by sheer dint of self preservation, required for fire-fighting at home. The severity of the so-called Perfect Storm has made settling the big issues far more difficult than it might otherwise have been.

The Committee accepts there are “complexities” in the pub sector, but  displays no insight into why these complexities exist or why their resolution is so challenging. For a business committee, it is quite a failing.

Instead of understanding why progress may not have been as speedy as its predecessor committee demanded, an often petulant BISC sees only affront after affront to its Parliamentary dignity. 

Once again, though - and remember, this is the third time they’ve been found significantly wanting by Parliament- it’s hard not to feel that the pubcos have  played a poor hand badly. AWP machines still tied? Talk about shooting yourself in the foot. To ignore previous recommendations that this tie be removed displays death-wish tendencies. Similarly, failing to put the codes of practice on a fully legal basis does indeed smack of the “half-hearted implementation” the Committee talks about. And not to have talked more regularly and constructively with IPC, again betrays a hesitancy that can so easily be interpreted as lack of full commitment to the process of reform.

Yet however lukewarm the pubcos  might sometimes have been to implementing what previous committees have requested from them, it is still the case that real progress is being made. And it reflects very poorly on BISC that it was so deliberately blind to this, and was not prepared to grant more time. Impatiently demanding statutory regulation because of a gut feeling that pubcos were “half hearted” and would always remain so puts emotion ahead of reason, and that can never make for good laws.

There’s no doubt that statutory regulation could be bad for the trade –  disputes become legalistic battles dependent on detailed paperwork (which has never been a strongpoint with many licensees); and BII’s behind-the-scenes conciliation steps, which are quietly effective, may be superseded as the regulator steps in. Pubcos can be fined, but there’ll be no restitution for wronged licensees. And we all know Government has an abysmal record wherever it puts its hob-nailed boots.

But is Government really now obliged to honour its commitment and impose the statutory code? The Lib-Dems will push for it, that’s certain. It plays well to their constituency if Vince Cable and Chris Huhne  bash big bad pubcos as well as big bad banks and utility companies.
The Tories, though, will seek to avoid legislation – it’s not in their free trade bones to interfere more than they have to in markets. And remember, the Department For Business is leading the charge on de-regulation.

This natural reluctance might yet save the trade from outside regulation, and all the more so if it can suddenly produce a rabbit from its hat. Government has up to three months before delivering its response to the report. During that time senior trade figures will be moving heaven and earth to persuade ministers they can accelerate the pace of reform and finally deliver all that previous BISCs have asked of them. We’re nearly there, don’t give up on us yet will be the message.

It’s five minutes to midnight. But if trade leaders can find a way to deliver significant breakthroughs – an agreement to loosen the AWP tie, writing ALMR benchmarking into rent setting agreements, a national rents database – then self-regulation may yet prevail. And with steps like that in place, the trade would have shown it can sort out its own affairs. And be so much more the trade we all want it to be.

Andrew Pring, BIIBUSINESS Editor

ENDS