A government report out this week has slammed the UK's large pub companies for failing to improve their relationships with the landlords running their pubs.

On publication of the report, chair of the Commons Business, innovation and Skills Committee, Adrian Bailey MP, said: "The deep-seated problems within the pub industry, and in particular the relationship between pub companies and their lessees who run pubs, have been the subject of repeated scrutiny by Parliamentary select committees.

"Each report challenged the industry to deliver meaningful reform. On every occasion the industry was found wanting. The third report in 2010 delivered a final ultimatum to the industry: 18 months to show that they were working successfully within the voluntary code. That has passed, and the evidence is that they are not. The message now can only be: three strikes and you're out.

"We are firmly of the view that statutory regulation should only be used as a last resort, but we can only conclude that industry self-regulation has failed."

In recommending statutory regulation as the only way to bring about 'meaningful reform', the report claimed: "The BBPA (British Beer and Pub Association) has shown itself to be impotent in enforcing its own timetable for reform and the supposed threat of removing the membership of pub companies who did not deliver was hollow."

Responding to the report, Brigid Simmonds, chief executive of the BBPA, said: "We are deeply disappointed with this report. We believe we have demonstrated to the Select Committee that significant progress has been made by BBPA member companies which operate tied tenancies and leases, and we reject the Committee's calls for a costly statutory code. This would pile more costs onto pubs and lead to more closures.

"We have continued to develop proposals to strengthen self regulation, building on what we have already done as an industry; the pub company codes of practice, the low cost arbitration service for tenants and lessees and the business advice already offered by the BII."

"BBPA members have invested some £265 million into supporting the leased and tenanted sector over the last year at a time of unprecedented economic pressure. It is a combination of the smoking ban, economic recession and the 35 per cent increase in beer taxation which the industry has endured since March 2008 which are the real reasons why pubs are closing.

"We call upon the Government to recognise these economic pressures and ease the burden on pubs. The pub sector needs less tax and less regulation, not more, if it is to continue to create jobs and sustain much needed economic growth in our communities."