BII’s Policing Of Pubco Codes Of Practice Welcomed By BIS Committee

The BISC’s report suggests that a reference to the Competition Commission may still be necessary and says that ‘we have grave doubts about the industry’s willingness to do enough voluntarily to prevent statutory or regulatory intervention’. The report urges ‘all the players to work together constructively to achieve this outcome’. The main comments and suggestions to come out of the report are set out below, courtesy of Astaire Securities (www.astairesecurities.co.uk):

• The BISC stands ‘fully behind all the recommendations in the (May) 2009 report.
• A Competition Commission enquiry may be necessary and the committee has ‘grave doubts about the industry’s willingness to do enough’.
• The revised BBPA framework ‘has made modest progress’.
• The BISC recommends that flow-monitoring equipment ‘be included under the Weights & Measures Act 1985 for calibration and verification purposes’.
• The committee suggests that upward-only rent clauses be removed even from existing contracts.
• The BBPA framework should be an ‘absolute de-minimus requirement’ and the BII ‘must act as an impartial arbiter in this area’.
• The BISC welcomes the RICS’ new guidance on valuations and suggests that the acid test should be that a tenant should be no worse off under a tied lease than would be a free-of-tie tenant.
• Measures for transparency are ‘steps in the right direction’.
• ‘This is the industry’s last opportunity for self-regulated reform’. If the industry does not deliver ‘then Government intervention will be necessary’ and the industry has until June 2011 to put its house in order.

The Report states explicitly that: "The successful policing of the Codes will be vital to the success of these reforms. We give a cautious welcome to the BII's role in policing the Codes of Practice. The BII must act as an impartial arbiter in this area and is in the best position to administer accreditation for codes and to oversee and monitor compliance. However, we clearly state the need for the BII to demonstrate the necessary authority and impartiality to be effective as a policeman for the industry. The success of all of the reforms proposed by the industry hinges on the credibility and effectiveness of the BII."

Furthermore, the Report concludes that: "Unless the BBPA can prove beyond doubt that the Codes of Practice are legally binding, incorporating the Code into the lease would be the only remaining option. The Committee recommends that the Codes should be incorporated into the actual pub leases."

The following is an excerpt from an interview with BISC chairman Peter Luff in the Morning Advertiser

When asked if he was confident that pubcos can be trusted to change, Luff said: “I’m not confident. The track record is a disappointing one. However, we were impressed by the progress made by the BII under Neil Robertson. Everything hinges on the success of failure of the BII to support the codes.

“I personally think they will succeed but time will tell. They are in the best place. We can not trust the pubcos to do this by themselves.”

When asked about the BII’s role, he said: “No one’s independent. It’s impartiality that matters. We believe the BII is impartial.”

Luff also urged the pubcos not to "nobble" BII as their codes go through the strengthened BIIBAS accreditation scheme.

For a copy of the full 210 page report, visit the Parliament website here or click on the icon to the right to download a PDF.

For more information on the Pubs Independent Rent Review Scheme (PIRRS) www.pirrscheme.com

For more information on the BII Benchmarking and Accreditation Scheme (BIIBAS) www.biibas.com

Contact

Joanna Buston
Email: joannab@bii.org
Telephone: 01276 417863