Pub closure loophole under review

The Campaign for Real Ale says restrictive covenants are depriving communities of their pubs

A legal loophole that allows breweries to sell off pubs and prevent them being reopened by a rival could be removed by the government.

Pubs Minister Bob Neill has launched a public consultation into the use of "restrictive covenants", often used to put limits on future use of buildings.

The Campaign for Real Ale says 29 pubs a week are closing across the UK.

The government has already announced plans to give communities in England and Wales the chance to take over pubs.

The Localism Bill, which was unveiled last month, would give local people the chance to place pubs on a "most wanted" list and if they are put up for sale, give them the time to develop a bid and raise the necessary money.

Three local councils - Darlington, Newcastle upon Tyne and Ryedale - urged the government to take action on the issue of restrictive covenants.

Brewers and pub chain owners can insert a clause into sale documents preventing a pub they have decided to close from being reopened by a rival.

Camra has long argued such covenants are used to stop competition.

Mr Neill said: "The pubs and clubs in our community can be the heart and soul of a town, village or street and many of us will be heading off to our local this evening to celebrate the new year.

"But too many are being closed down, depriving communities of important places to get together with their neighbours for a quick pint and a catch up."

In April, the brewers, Thwaites, closed a pub in Blackburn, Lancashire, which is to be converted into flats.

Thwaites' director of operations Andrew Buchanan defended the closure - and the decision to put a restrictive covenant on it to prevent it being used as a pub in the future.

He told the Blackburn Citizen newspaper: "In a very limited number of instances, we may place a restrictive covenant on the property's future use.

"In doing so we are trying to encourage a viable pub industry in the teeth of all of the pressures currently faced by the sector as a whole."

But Camra's chief executive, Mike Benner, said: "Restrictive covenants are used by pub companies to deprive local communities of their pubs, at a time when 29 pubs are closing every week.

"Between 2004 and 2009, this happened to almost 600 pubs."

He welcomed the consultation as a "great success for localism" and added: "It shows that government recognises that pubs are vital community assets that need to be protected.

"For the new community right-to-buy scheme to work, pubs need to be available for communities to keep open.

"It's a victory too for people power: this proposal came from communities on the ground, via their local councils who put the proposals to central government. "