Hundreds of pubs face closure, warns Labour

Pubs will continue closing in their hundreds every year across the country without urgent action to ease the financial pressures on landlords, ministers will be warned next week.

Labour is calling for the Government to introduce a statutory code of conduct to regulate “pubcos”, the large firms that own thousands of bars and control them through agreements with tied landlords.

It will use a Commons debate to highlight fears that the companies are asset-stripping pubs by charging unreasonable rents to publicans and forcing them to sell their drinks at inflated prices.

The Government has signalled its concern over the activities of “pubcos”, but has so far has supported the current system of self-regulation.

According to the latest figures, about 18 pubs close every week and a billion fewer pints are sold a year than in 2008. Pub campaigners said they are vital community hubs that are too important to be simply left to the sharp business practices of major companies. Toby Perkins, a shadow Business minister, said the system of tied licences was a “significant cause of pub failure” and led to landlords losing their life savings. He said a Labour government would legislate to demonstrate “responsible capitalism” by stopping the “big guy using his power against the little guy”. Greg Mulholland, a Liberal Democrat MP, said a code of conduct would ensure landlords were paid reasonable rents and were not forced to serve only drinks supplied by pubcos. He said it would be the “biggest single thing that could be done to stop pub closures”.

Vince Cable, the Business Secretary, acknowledged last month that “significant numbers of individual publicans are continuing to face serious hardship and difficulties in operating in this industry”.

About half of the 51,000 pubs in Britain are tied. Critics say the major pub chains bought their outlets at over-inflated prices.