House of Commons Amendments

Session 2014 - 15
Internet Publications
Other Bills before Parliament

865

House of Commons

Tuesday 18 November 2014

Consideration of Bill

New Amendments handed in are marked thus

Amendments which will comply with the required notice period at their next appearance

Small Business, Enterprise and Employment Bill, As Amended

Note

The Amendments have been arranged in accordance with the Small Business,

Enterprise and Employment Bill (Programme) (No. 2) Motion to be proposed by

Secretary Vince Cable.

NEW CLAUSES, NEW SCHEDULES AND AMENDMENTS RELATING TO PART 4

Secretary Vince Cable

NC6

To move the following Clause—


“Power to grant exemptions from Pubs Code

(1)
The Secretary of State may by regulations provide that the Pubs Code does not,

or specified provisions of the Pubs Code do not, apply in relation to—

(a)
the dealings of pub-owning businesses—

(i)
with tied pub tenants of a specified description, or

(ii)
in relation to tied pubs of a specified description;

(b)
the dealings of a specified pub-owning business or pub-owning

businesses of a specified description—

(i)
with their tied pub tenants or tied pub tenants of a specified

description, or

(ii)
in relation to their tied pubs or tied pubs of a specified

description.

(2)
Regulations under subsection (1) may, in particular, specify a description of pub-

owning businesses or tied pub tenants by reference to—

(a)
the nature of the tenancy or licence, or

(b)
the nature of any other contractual agreement entered (or to be entered)

into by the tied pub tenant with the pub-owning business, or a person

nominated by that business, in connection with the tenancy or licence.

Consideration of Bill:
866

, continued

(3)
The regulations may provide for circumstances in which a tied pub of a specified

description is to be disregarded for the purposes of section 64(2) and (3)

(determining whether a business is a large pub-owning business).

(4)
In this section “specified” means specified in regulations.”

Member’s explanatory statement

This amendment gives the Secretary of State a power to make regulations exempting from the Pubs

Code dealings with a particular type of tenant, or in relation to particular types of pub premises.

The regulations may set out circumstances in which a particular tied pub is not counted for the

purpose of calculating whether a company is a “large pub-owning business”.

Greg Mulholland

Mr Adrian Bailey

Mr Brian Binley

Caroline Lucas

Peter Aldous

Tim Farron

Grahame M. Morris

Philip Davies

Mike Crockart

Paul Murphy

Mr John Leech

Martin Horwood

Mr Clive Betts

Andrew Bridgen

Mr David Ward

Paul Flynn

Andrew Percy

Dr Julian Huppert

Mrs Mary Glindon

Sir Nick Harvey

Fiona O’Donnell

Mr Mark Williams

Mark Hunter

Mr Stewart Jackson

Mr Adrian Sanders

John Pugh

Mr Mike Hancock

Mr David Nuttall

John Hemming

Charlotte Leslie

Mr Frank Field

Barbara Keeley

Mr David Anderson

Neil Carmichael

Sir Alan Meale

Jason McCartney

Paul Burstow

Mr Michael Thornton

Ian Swales

John Healey

Jackie Doyle-Price

Mike Gapes

Mr Dennis Skinner

Roger Williams

Sir Peter Bottomley

Annette Brooke

Mr Jeremy Browne

Mr Brian H. Donohoe

Jenny Willott

Hugh Bayley

Sir Edward Leigh

Rebecca Harris

Ann McKechin

Karl McCartney

Mr Andrew Smith

Mr Elfyn Llwyd

Rosie Cooper

Graham Stringer

Gordon Henderson

Jenny Chapman

Nick Smith

John Cryer

Emily Thornberry

Mr Barry Sheerman

Ian Austin

Tom Greatrex

Mark Lazarowicz

Mike Kane

John Thurso

Hazel Blears

Albert Owen

Jeremy Corbyn

Mr Gerry Sutcliffe

Natascha Engel

Mr Gordon Marsden

Sandra Osborne

Mr Alan Reid

Graeme Morrice

Andrew Gwynne

Sir Menzies Campbell

Yvonne Fovargue

Paul Blomfield

Kevin Barron

Bill Esterson

Frank Dobson

Mr Ben Bradshaw

Derek Twigg

Kerry McCarthy

Stephen Lloyd

Norman Baker

John Thurso

NC2

To move the following Clause—


“Pubs code: market rent only option for large pub-owning businesses

(1)
The Pubs Code shall include a Market Rent Only Option to be provided by large

pub-owning businesses in respect of their tenants and leaseholders.

Consideration of Bill:
867

, continued

(2)
A Market Rent Only Option means the right of the tenant, or leaseholder, of a pub

owned by a large pub-owning business, to be offered such tenancy or lease in

exchange for an independently assessed market rent paid to the pub-owning

business and, for the avoidance of doubt, not thereafter being bound by “a tie”,

meaning an agreement meeting, in whole or in part, Condition D as defined in

section 63(5) of this Act (obligation to buy from the landlord, or from a person

nominated by the landlord, some or all of the alcohol to be sold at the premises).

(3)
For the purposes of this section, the definition of Condition D in subsection (2) is

to be interpreted to include an obligation to buy or contract for goods and services

other than alcohol.

(4)
For the purposes of this section, the definition of a “large pub-owning business”

is a business which, for a period of at least six months in the previous financial

year, was the landlord of—

(a)
500 or more pubs (of any description); and

(b)
one or more tenanted or leased pub.

(5)
The Pubs Code may include provisions to permit a brewery which qualifies as a

large pub-owning business to continue to require that specified brands produced

by that brewery (required products) are sold within its tenanted or leased pubs—

provided that such tenants and leaseholders are free to purchase such required

products from any supplier.

(6)
The Pubs Code shall contain provisions requiring that the offer of a Market Rent

Only Option to a tenant—

(a)
at the point of lease, tenancy contract or other agreement renewal, or at

rent review or five years from the date of the previous rent review;

(b)
when the large pub-owning business gives notice of, or imposes,

(whichever is the earlier) a significant increase in the price at which it

supplies products, goods or services (falling under subsections (2) or (3))

to the tenant;

(c)
when a large pub-owning business implements, or gives notice of, a

transfer of title;

(d)
when a large pub-owning business goes into administration; or

(e)
upon an event outside of the tenant’s control, and unpredicted at the time

of the previous rent review, that impacts significantly on the tenant’s

ability to trade.

(7)
The terms of an offer under subsection (5) shall include provision for a 21 day

period of negotiation, commencing from the tenant giving notice of an intention

to pursue a Market Rent Only Option, in which the large pub-owning business

and the tenant may seek to negotiate a mutually agreeable Market Rent Only

settlement.

(8)
Following the negotiation period under subsection (7) there shall follow a 90 day

period of assessment. In this period—

(a)
an independent assessor shall be appointed with the agreement of both

parties by joint private instruction and on the basis of an equal

apportionment of costs; and

(b)
under arrangements and criteria that the Adjudicator shall establish, such

an assessor shall be—

(i)
independent of both parties; and

(ii)
competent by virtue of qualification and/or experience.

(c)
if the business and tenant cannot agree on an appointee then a person

shall be appointed, on the application of either party, under arrangements

established by the Adjudicator;

Consideration of Bill:
868

, continued

(d)
the appointed assessor shall then assess the market rent for the property

operating as a pub with no “tie” as defined in subsection (2) and submit

to both parties the resulting sum for such a rent; and

(e)
at the time of the three month assessment period, the tenant shall have the

right to pay no more than the sum determined under paragraph (d) to the

pub-owning business and, if previously one party to a “tie” as defined in

subsection (2), shall no longer be bound by it.

(9)
The Pubs Code shall contain such measures as ensure that—

(a)
the Market Rent Only Option is conducted in accordance with timing

provisions and procedures, in accordance with RICS guidance, as

specified in the Pubs Code; and

(b)
large pub-owning businesses are prohibited from acting or discriminating

against any of their tenants who choose the Market Rent Only Option.

(10)
The Secretary of State shall confer on the Adjudicator functions and powers in

relation to the Market Rent Only Option, that include—

(a)
determining what constitutes a significant increase in price, as mentioned

in subsection (6)(b) in the event of a dispute between tenant and business;

(b)
adjudicating in disputes concerning the process or outcome of the market

rent assessment; including the power to set the market rent if the

Adjudicator deems the process or decision to have been flawed; and

(c)
receiving, investigating and adjudicating in relation to complaints made

under subsection (9)(b).

(11)
The Secretary of State shall make provisions for the implementation of the

following measures in this section by regulations amending the Pubs Code. Such

regulations shall be made under negative resolution procedure. The Secretary of

State may make provisions changing the types of agreement that fall under

subsection (2) by regulations. Such regulations shall be made under negative

resolution procedure.”

Secretary Vince Cable

Clause  40,  page  37,  line  29,  at end insert—

“(5A)
The Pubs Code may require large pub-owning businesses to ensure that any rent

assessment or assessment of money payable in lieu of rent which they provide to

their tied pub tenants has been certified by a person of a description specified in

the Pubs Code as having been conducted in accordance with the provisions of any

documents specified for the purposes of subsection (5)(d).”

Member’s explanatory statement

This amendment, and amendments 30 and 31, provides that the Pubs Code may require pub-

owning businesses with 500 or more tied pubs to have rent assessments signed-off as defined in the

Code. The intention is that the Code will specify a RICS qualified valuer and RICS guidance. This

includes assessments of money payable in lieu of rent, such as where a tied agreement charges the

tenant via a percentage of turnover rather than through a rent.

Secretary Vince Cable

Clause  40,  page  37,  line  37,  leave out “subsection” and insert “subsections”

Member’s explanatory statement

See amendment 29.

Consideration of Bill:
869

, continued

Secretary Vince Cable

Clause  40,  page  37,  line  38,  at end insert “and (5A).

(7)
In specifying a description of person under subsection (5A) (or subsection (6)(c)

so far as it relates to subsection (5A)) the Secretary of State must secure that the

person—

(a)
is independent from the large pub-owning business concerned;

(b)
has appropriate qualifications;

(c)
is a member of an appropriate professional body.”

Member’s explanatory statement

See amendment 29.

Secretary Vince Cable

Clause  40,  page  37,  line  38,  at end insert—

“(8)
The Pubs Code may require large pub-owning businesses to—

(a)
appoint one of their employees to monitor their compliance with the Pubs

Code;

(b)
prepare an annual report on their compliance with the Pubs Code.”

Member’s explanatory statement

This amendment means that only those businesses with more than 500 tied pubs may be required

by the Pubs Code to have a Code Compliance Officer and to produce an annual compliance report.

Secretary Vince Cable

Clause  40,  page  37,  line  38,  at end insert—

“(9)
Subsections (5A), (6) and (8) do not restrict the recommendations that may be

made by the Adjudicator under section 51 in relation to a pub-owning business

that is not a large pub-owning business.”

Member’s explanatory statement

This amendment allows the Pubs Code Adjudicator to make recommendations to businesses with

fewer than 500 tied pubs about actions that such a business should take, even where the equivalent

requirements of the Pubs Code may apply only to large pub-owning businesses.

Secretary Vince Cable

Clause  42,  page  38,  line  21,  after “assessment” insert “or assessment of money

payable by the tenant in lieu of rent”

Member’s explanatory statement

This amendment, and amendment 35, ensures that references to rent assessments also include

assessments of money payable in lieu of rent, such as where a tied agreement charges the tenant

via a percentage of turnover rather than through a rent

Consideration of Bill:
870

, continued

Secretary Vince Cable

Clause  42,  page  38,  line  24,  after “rent” insert “or money payable in lieu of rent”

Member’s explanatory statement

See amendment 34.

Secretary Vince Cable

Clause  43,  page  39,  line  5,  after “business” insert “concerned”

Member’s explanatory statement

This amendment is related to amendment 42.

Secretary Vince Cable

Clause  43,  page  39,  line  6,  leave out subsection (2)

Member’s explanatory statement

This amendment is related to amendment 42.

Secretary Vince Cable

Clause  63,  page  47,  line  10,  at end insert “or licence”

Member’s explanatory statement

This amendment, and amendments 39 and 47 to 53, ensure that tied agreements are subject to the

Pubs Code whether the pub premises are occupied under a tenancy or a licence to occupy.

Secretary Vince Cable

Clause  63,  page  47,  line  11,  after “tenant” insert “or licensee”

Member’s explanatory statement

See amendment 38.

Secretary Vince Cable

Clause  63,  page  47,  line  11,  leave out from second “is” to end of line 13 and insert

“subject to a contractual obligation that some or all of the alcohol to be sold at the

premises is supplied by—

(a)
the landlord or a person who is a group undertaking in relation to the

landlord, or

(b)
a person nominated by the landlord or by a person who is a group

undertaking in relation to the landlord.”

Member’s explanatory statement

This amendment, and amendment 56, specifies that a tied agreement is one where the tenant is

subject to a contractual obligation that some or all of the alcohol to be sold at the premises must

be supplied by the pub-owning business or a person nominated by the business.

Consideration of Bill:
871

, continued

Secretary Vince Cable

Clause  64,  page  47,  line  18,  leave out “500” and insert “one”

Member’s explanatory statement

This amendment, and amendments 43 and 44, reverse amendments made at committee and bring

pub-owning businesses with fewer than 500 tied pubs back into the scope of the Pubs Code.

Toby Perkins

Mr Iain Wright

Ian Murray

Mr Gerry Sutcliffe

Natascha Engel

Greg Mulholland

Mr Adrian Bailey

Frank Dobson

Mr Ben Bradshaw

Kerry McCarthy

Clause  64,  page  47,  line  19,  leave out “tied” and insert “tenanted, leased or

franchised”

Secretary Vince Cable

Clause  64,  page  47,  line  19,  at end insert—

“(1A)
But regulations may specify circumstances in which a person who is a group

undertaking in relation to such a landlord—

(a)
is to be treated, or

(b)
may if the Adjudicator so determines be treated,


as a pub-owning business (as well as or instead of the landlord) for the purposes

of any provision of or made under this Part.”

Member’s explanatory statement

This amendment, together with amendments 36, 37, 45, 46 and 54, ensures that the definition of a

pub-owning business can be sufficiently flexible to encompass adequately any parent or subsidiary

companies.

Secretary Vince Cable

Clause  64,  page  47,  line  21,  leave out second “pub-owning” and insert “large pub-

owning”

Member’s explanatory statement

See amendment 41.

Secretary Vince Cable

Clause  64,  page  47,  line  24,  leave out second “pub-owning” and insert “large pub-

owning”

Member’s explanatory statement

See amendment 41



© Parliamentary copyright	Revised 18 November 2014