HL Deb 10 February 1975 vol 356 cc1070-3
Lord CASTLE

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether their attention has been drawn to the exorbitant increases in rents being proposed by major brewery groups to their tenants and, if so, what action they propose to take to prevent the unacceptable rise in the price of beer which could result.

Lord JACQUES

My Lords, Her Majesty's Government have received a number of letters from Members of Parliament and the licensed trade drawing attention to the effect on the price of beer of higher rents which may become payable on the decontrol of business rents. Increases in rents are an allowable cost under the Price Code and may therefore be passed on to the consumer in higher prices. But, when spread over a whole year's sales, this should not lead to large increases in the price of beer.

Lord CASTLE

My Lords, I thank my noble friend for his Answer, but I wonder whether he realises how utterly unacceptable it is. I wonder whether he would accompany me on—

Several Noble Lords

A pub crawl!

Lord CASTLE

—some field work on the Buckinghamshire/Oxfordshire boundary, where he would find that the brewers were proposing to the landlords that their rents should be increased from £400 to £2,600, from £300 to £1,900 and from £600 to £5,000. Do the Government regard this as a state of affairs which they cannot remedy? Also, does the noble Lord realise that the tenants with whom I have spoken say that a 3p increase in the price of a pint is imminent, and that by next year we must face the utterly unacceptable possibility of a 25p pint of beer?

Lord JACQUES

My Lords, I should be pleased to accompany the noble Lord, Lord Castle, on any such field work as he has mentioned—and I am not particular as to county! I wonder whether he is aware that there is a code of practice which is agreed by the brewers and their tenants, and which has the blessing of the Government? This code of practice deals with security of tenure and rents, and provides also that where there is any difference of opinion as to rents, there shall be fair and reasonable negotiation and, in the last analysis, arbitration if need be. The Government hope that this fair and reasonable approach to the problem will be sustained by the industry, and they have no reason to believe that it is not.

Lord SLATER

My Lords, with regard to the matter raised by my noble friend Lord Castle, is my noble friend aware that there is sheer exploitation? I must admit that I am a teetotaller, but, nevertheless, one has to face up to reality. Is the noble Lord aware that we cannot help noticing the cheers and jeers coming from those noble Lords who frequent these places more than I do? It is sheer exploitation.

Lord JACQUES

My Lords, one has to bear two things in mind. First, in the past it was the practice of brewers to ask their tenants for nominal rents, and to charge them a little higher price for the beer. In the recent past, however, the tendency has been to charge for the beer and the rent at market prices. Therefore, that is a factor which probably has some influence. Secondly, it has to be borne in mind that an increase in rent may be high in relation to the present rent, but extremely low in relation to the turnover.

Lord HARVEY of PRESTBURY

My Lords, would it not be helpful if the noble Lord, Lord Castle, gave the figure for one-star houses as well as for five-star houses?

The LORD PRIVY SEAL (Lord Shepherd)

My Lords, the noble Lord, Lord Harvey of Prestbury, has been long enough in your Lordships' House to know that questions are put to this Bench, and not to the Benches behind.

Lord MAYBRAY-KING

My Lords, is the noble Lord aware, in spite of all he has said about the negotiations, that the power is in the hands of the brewers, and not in the hands of the publicans? Is he also aware that the swingeing in-crease proposed in rents, mentioned by the noble Lord, Lord Castle, calls for some intervention on the part of the Government?

Lord JACQUES

My Lords, I know of the details only as they affect one brewer. There are 600 tenancies which are subject to rent increase, and only two have gone to arbitration. The arbitrator is a completely independent man appointed by the President of the Royal Institution of Chartered Surveyors.

Lord HAILSHAM of SAINT MARYLEBONE

My Lords, will the noble Lord coyly admit to the House, and explain to his noble friend behind him, that if the price of beer proves to be un-acceptably high the Government have it in their power to apply their own exploitation of the opportunity by reducing the rate of tax?

Lord JACQUES

My Lords, I suspect that the Government will do that in exactly the same way as the last Government did it.

Lord PEDDIE

My Lords, would the noble Lord agree that the position could be improved if more power were given to tenants to obtain the freeholds of their public houses, instead of being tied?

Lord CASTLE

My Lords, would my noble friend reassure the noble Lord, Lord Harvey of Prestbury, that I have not dealt with any five-star houses. I was quoting purely and simply the tenants of village pubs who feel they are being subjected to rapacious demands by the brewer, and pointing out that the working people of this country will suffer very severely.

Lord SHEPHERD

My Lords, this is a matter for an interesting debate on another occasion, but I suggest that we now move to the next Question.