Small Business, Enterprise and Employment Bill (HC Bill 117)

(b) the circumstances in which an undertaking which has been
established for less than a complete assessment period is to be
regarded as meeting the small business size conditions or the
micro business size conditions.

(4) 5Provision made by virtue of subsection (3) may, in particular, provide
that—

(a) an undertaking is a small business or a micro business if it meets
the relevant size conditions in respect of each of its two most
recent assessment periods;

(b) 10where there has been only one complete assessment period
since an undertaking was established, the undertaking is a
small business or a micro business if it meets the relevant size
conditions in respect of that period;

(c) an undertaking which is a small business or a micro business
15does not cease to be such unless it fails to meet the relevant size
conditions in respect of two consecutive assessment periods.

(5) The small and micro business regulations may make provision for one
undertaking (“undertaking A”) which satisfies such conditions as may
be prescribed in relation to another undertaking (“undertaking B”), to
20be treated as being undertaking B (whether or not undertaking B is still
in existence) for such purposes as may be prescribed.

(6) Conditions which may be prescribed under subsection (5) include, in
particular, conditions relating to—

(a) the transfer of a business from undertaking B to undertaking A;

(b) 25the carrying on by undertaking A of a business on undertaking
B ceasing to carry on the activities, or most of the activities, of
which the business consists in consequence of arrangements
involving both undertakings;

(c) the existence of some other connection between undertaking A
30and undertaking B.

(7) The purposes which may be prescribed under subsection (5) include, in
particular—

(a) determining the date on which undertaking A was established
(and so the number of assessment periods there have been since
35it was established);

(b) determining which periods are assessment periods in respect of
undertaking A;

(c) calculating the headcount of staff, turnover and balance sheet
total of undertaking A.

(8) 40The small and micro business regulations may provide that an
undertaking of such description as may be prescribed is not a small
business or a micro business even if it falls within the relevant
definition.

(9) In this section—

• 45 “micro business size conditions”, “small business size conditions”
  and “undertaking” have the same meanings as in section 32;

• “prescribed” means prescribed in the small and micro business
  regulations.”

Home Businesses

34 Exclusion of home businesses from Part 2 of the Landlord and Tenant Act
1954

(1) Part 2 of the Landlord and Tenant Act 1954 (security of tenure for business,
5professional and other tenants) is amended as follows.

(2) In section 23(4) (tenancies to which Part 2 applies) at the beginning insert
“Subject to subsection (5),”.

(3) After section 23(4) insert—

“(5) Where the tenant’s breach of a prohibition (however expressed) of use
10for business purposes which subsists under the terms of the tenancy
and extends to the whole of that property consists solely of carrying on
a home business, this Part of this Act does not apply to the tenancy,
even if the immediate landlord or the immediate landlord’s
predecessor in title has consented to the breach or the immediate
15landlord has acquiesced in the breach.

(6) In subsection (5) “home business” has the same meaning as in section
43ZA.”

(4) After section 43 (tenancies excluded from Part 2), insert—

“43ZA Further exclusion of home business tenancies from Part 2

(1) 20This Part of this Act does not apply to a home business tenancy.

(2) A home business tenancy is a tenancy under which—

(a) a dwelling-house is let as a separate dwelling,

(b) the tenant or, where there are joint tenants, each of them, is an
individual, and

(c) 25the terms of the tenancy—

(i) require the tenant or, where there are joint tenants, at
least one of them, to occupy the dwelling-house as a
home (whether or not as that individual’s only or
principal home),

(ii) 30permit a home business to be carried on in the dwelling-
house, or permit the immediate landlord to give consent
for a home business to be carried on in the dwelling-
house, and

(iii) do not permit a business other than a home business to
35be carried on in the dwelling-house.

(3) The terms of a tenancy permit the carrying on of a home business if they
permit the carrying on of a particular home business, a particular
description of home business or any home business.

(4) A “home business” is a business of a kind which might reasonably be
40carried on at home.

(5) A business is not to be treated as a home business if it involves the
supply of alcohol for consumption on licensed premises which form all
or part of the dwelling-house.

(6) The appropriate national authority may by regulations prescribe cases
in which businesses are, or are not, to be treated as home businesses.

(7) Regulations under this section—

(a) may include transitional or saving provision,

(b) 5may make different provision for different purposes,

(c) are to be made by statutory instrument which—

(i) in the case of an instrument made by the Secretary of
State, is subject to annulment in pursuance of a
resolution of either House of Parliament, and

(ii) 10in the case of an instrument made by the Welsh
Ministers, is subject to annulment in pursuance of a
resolution of the National Assembly for Wales.

(8) For the purposes of this section, a dwelling-house which is let for mixed
residential and business use is capable of being let as a dwelling.

(9) 15If, under a tenancy, a dwelling-house is let together with other land,
then, for the purposes of this section—

(a) if the main purpose of the letting is the provision of a home for
the tenant, the other land is to be treated as part of the dwelling-
house, and

(b) 20if the main purpose of the letting is not as mentioned in
paragraph (a), the tenancy is to be treated as not being one
under which a dwelling-house is let as a separate dwelling.

(10) In this section—

• “the appropriate national authority” means—

  (a)

  25in relation to England, the Secretary of State, and

  (b)

  in relation to Wales, the Welsh Ministers;

• “dwelling-house” may be a house or part of a house;

• “let” includes sub-let;

• “licensed premises” has the same meaning as in the Licensing Act
  302003 (see section 193 of that Act);

• “supply of alcohol” has the same meaning as in the Licensing Act
  2003 (see section 14 of that Act).”

(5) Subsections (1) to (4) do not apply to—

(a) a tenancy which is entered into before the day on which this section
35comes into force;

(b) a tenancy which is entered into on or after the day on which this section
comes into force, pursuant to a contract made before that day;

(c) a tenancy which arises by operation of any enactment or other law
when a tenancy mentioned in paragraph (a) or (b) comes to an end.

40CMA recommendations

35 CMA to publish recommendations on proposals for Westminster legislation

(1) Section 7 of the Enterprise Act 2002 (provision by CMA of information and
advice to Ministers etc) is amended as follows.

(2) After subsection (1) insert—

“(1A) The CMA may, in particular, carry out the function under subsection
(1)(a) by making a proposal in the form of a recommendation to a
Minister of the Crown about the potential effect of a proposal for
5Westminster legislation on competition within any market or markets
in the United Kingdom for goods or services.

(1B) The CMA must publish such a recommendation in such manner as the
CMA considers appropriate for bringing the subject matter of the
recommendation to the attention of those likely to be affected by it.”

(3) 10After subsection (2) insert—

“(3) In this section—

• “market in the United Kingdom” includes—

  (a)

  so far as it operates in the United Kingdom or a part of
  the United Kingdom, any market which operates there
  15and in another country or territory or in a part of another
  country or territory; and

  (b)

  any market which operates only in a part of the United
  Kingdom;

  and the reference to a market for goods or services includes a
  20reference to a market for goods and services; and

• “Westminster legislation” means—

  (a)

  an Act of Parliament, or

  (b)

  subordinate legislation (within the meaning given by
  section 21 of the Interpretation Act 1978).”

25Liability of bodies concerned with accounting standards

36 Exemption from liability for bodies concerned with accounting standards etc

(1) After section 18 of the Companies (Audit, Investigations and Community
Enterprise) Act 2004 insert—

“18A Power to confer exemption from liability

(1) 30The Secretary of State may by order or regulations provide for the
exemption from liability in subsections (3) and (4) to apply to specified
bodies or persons (referred to in this section as “exempt persons”).

(2) The order or regulations may provide for the exemption to apply
subject to specified conditions or for a specified period.

(3) 35Neither the exempt person, nor any person who is (or is acting as) a
member, officer or member of staff of the exempt person, is to be liable
in damages for anything done, or omitted to be done, for the purposes
of or in connection with—

(a) the carrying on of those section 16(2) activities of the exempt
40person that are specified in relation to that person, or

(b) the purported carrying on of any such activities.

(4) Subsection (3) does not apply—

(a) if the act or omission is shown to have been in bad faith, or

(b) so as to prevent an award of damages in respect of the act or
omission on the grounds that it was unlawful as a result of
section 6(1) of the Human Rights Act 1998 (acts of public
authorities incompatible with Convention rights).

(5) 5In this section—

• “section 16(2) activities” means activities concerned with any of
  the matters within section 16(2);

• “specified” means specified in an order or regulations under this
  section.

(6) 10Orders and regulations under this section—

(a) are to be made by statutory instrument;

(b) may make different provision for different cases;

(c) may make transitional provision and savings.

(7) A statutory instrument containing an order or regulations under this
15section is subject to annulment in pursuance of a resolution of either
House of Parliament, subject to subsection (8).

(8) An order or regulations under this section may be included in a
statutory instrument which may not be made unless a draft of the
instrument is laid before, and approved by a resolution of, each House
20of Parliament.”

(2) Omit section 18 of that Act (exemption from liability for bodies to whom grants
are paid).

(3) In section 66(2) of that Act (provisions extending to Northern Ireland) for “18”
substitute “18A”.

25Part 3 Public sector procurement

37 Regulations about procurement

(1) The Minister for the Cabinet Office or the Secretary of State may by regulations
impose on a contracting authority duties in respect of the exercise of its
30functions relating to procurement.

(2) For the purposes of this section “the exercise of functions relating to
procurement” includes the exercise of functions in preparation for entering
into contracts and in the management of contracts.

(3) Subject to subsection (4), “contracting authority” means a contracting authority
35for the purposes of regulation 3 of the Public Contracts Regulations 2006 (S.I.
2006/5), or any regulation replacing that regulation, as from time to time
amended.

(4) But such an authority is not a contracting authority for the purposes of this
section if its functions are wholly or mainly devolved functions, namely—

(a) 40Scottish devolved functions, that is to say functions the exercise of
which would be within devolved competence (within the meaning of
section 54 of the Scotland Act 1998);

(b) Northern Ireland devolved functions, that is to say functions which
could be conferred by provision included in an Act of the Northern

Ireland Assembly made without the consent of the Secretary of State
(see sections 6 to 8 of the Northern Ireland Act 1998), or

(c) Welsh devolved functions, that is to say functions which could be
conferred by provision falling within the legislative competence of the
5National Assembly for Wales (as defined in section 108 of the
Government of Wales Act 2006).

(5) Regulations under this section may, in particular, impose—

(a) duties to exercise functions relating to procurement in an efficient and
timely manner;

(b) 10duties relating to the process by which contracts are entered into
(including timescales and the extent and manner of engagement with
potential parties to a contract);

(c) duties to make available without charge—

(i) information or documents;

(ii) 15any process required to be completed in order to bid for a
contract;

(d) duties relating to the acceptance of invoices by electronic means
(including a prohibition on the charging of fees for processing such
invoices, the publication of reports relating to the number of such
20invoices received or the electronic systems that must be used by a
contracting authority);

(e) duties to publish reports about compliance with the regulations.

(6) A person making regulations under this section must before making the
regulations undertake such consultation as the person considers appropriate.

(7) 25The Minister for the Cabinet Office or the Secretary of State may issue guidance
relating to regulations under this section.

(8) A contracting authority must have regard to any guidance for the time being
in force under this section.

(9) Guidance or revised guidance given under this section must be published.

(10) 30Regulations under this section are subject to negative resolution procedure.

38 Investigation of procurement functions

(1) In this section “a Minister” means the Minister for the Cabinet Office or the
Secretary of State.

(2) A Minister may investigate the exercise by a contracting authority of relevant
35functions relating to procurement.

(3) A Minister may by notice require a contracting authority to provide such
documents or other information, in such form or manner as the Minister may
direct, as the Minister may require for the purposes of an investigation under
this section.

(4) 40A contracting authority must—

(a) give a Minister such assistance with an investigation as is reasonable in
all the circumstances of the case;

(b) comply with a notice under subsection (3) before the end of the period
of 30 days beginning with the day on which the notice is given.

(5) 45In this section—

Small Business, Enterprise and Employment BillPage 36

• “contracting authority” has the same meaning as in section 37, but does
  not include a Minister of the Crown or a government department;

• “a relevant function relating to procurement” is a function to which—

  (a)

  the Public Contracts Regulations 2006 (S.I. 2006/5S.I. 2006/5) apply,
  5disregarding for this purpose the operation of regulation 8
  (thresholds),

  (b)

  the Defence and Security Public Contracts Regulations 2011 (S.I.
  2011/1848) apply, disregarding for this purpose the operation
  of regulation 9 (thresholds), or

  (c)

  10the Public Contracts (Scotland) Regulations 2012 (S.S.I. 2012/
  88) apply, disregarding for this purpose the operation of
  regulation 8 (thresholds);

• a reference to regulations includes a reference to any regulations
  replacing those regulations, as from time to time amended.

(6) 15An investigation under this section may also include an investigation of—

(a) preparations for the exercise of a relevant function relating to
procurement, and

(b) the management of a contract entered into in the exercise of such a
function.

(7) 20But the exercise of a function—

(a) by—

(i) the governing body of a maintained school (see section 19 of the
of the Education Act 2002), or

(ii) a person who is the proprietor of an Academy (see section 17(4)
25of the Academies Act 2010 and section 579(1) of the Education
Act 1996), or

(b) which is regulated by the National Health Service (Procurement,
Patient Choice and Competition) (No. 2) Regulations 2013 (S.I. 2013/
500) (functions relating to the procurement of health care services for
30the purposes of the NHS),

may not be investigated under this section.

(8) A person conducting an investigation under this section may publish the
results of the investigation.

Part 4 35The Pubs Code Adjudicator and the Pubs Code

The Pubs Code Adjudicator

39 The Adjudicator

(1) A Pubs Code Adjudicator is established.

(2) Part 1 of Schedule 1 makes provision about the Adjudicator.

(3) 40Part 2 of that Schedule contains the Adjudicator’s powers to require
information.

(4) Part 3 of that Schedule contains amendments consequential on the
establishment of the Adjudicator.

The Pubs Code

40 The Pubs Code

(1) The Secretary of State must, before the end of the period of one year beginning
with the day on which this section comes into force, make regulations about
5practices and procedures to be followed by pub-owning businesses in their
dealings with their tied pub tenants.

(2) In this Part the regulations are referred to as “the Pubs Code”.

(3) The Secretary of State must seek to ensure that all provisions of the Pubs Code
are consistent with the principle of fair and lawful dealing by pub-owning
10businesses in relation to their tied pub tenants.

(4) The Secretary of State must seek to ensure that any provisions of the Pubs Code
which apply only in relation to large pub-owning businesses are also
consistent with the principle that tied pub tenants should not be worse off as a
result of any product or service tie.

(5) 15The Pubs Code may, in particular—

(a) contain requirements as to the provision of information by pub-owning
businesses to their tied pub tenants;

(b) require pub-owning businesses, in specified circumstances, to provide
the following assessments in relation to their tied pub tenants—

(i) 20rent assessments, or

(ii) assessments of money payable by the tenant in lieu of rent;

(c) make provision about the information that such assessments must
contain and how they are to be calculated and presented;

(d) specify that such assessments must be conducted in accordance with
25provisions of documents specified in the Pubs Code;

(e) where any document is specified for the purposes of paragraph (d),
refer to the provisions of the document as amended from time to time;

(f) impose other obligations on pub-owning businesses in relation to their
tied pub tenants.

(6) 30The Pubs Code may require large pub-owning businesses to provide parallel
rent assessments in relation to their tied pub tenants in specified
circumstances, and in connection with such provision—

(a) may confer on the Adjudicator functions in relation to parallel rent
assessments,

(b) 35may require the payment of a fee by tied pub tenants to the Adjudicator
in connection with the exercise of those functions, and

(c) may make provision corresponding to that mentioned in subsection
(5)(c), (d) and (e).

41 Review of the Pubs Code

(1) 40The Secretary of State must review the operation of the Pubs Code for each
review period.

(2) The first review period is the period beginning on the date on which the Pubs
Code comes into force and ending 2 years after the following 31 March.

(3) Subsequent review periods are each successive period of 3 years after the first
review period.

(4) As soon as practicable after a review period, the Secretary of State must—

(a) publish a report of the findings of the review for that period, and

(b) 5lay a copy of the report before Parliament.

(5) In particular, the report must set out—

(a) the extent to which, in the Secretary of State’s opinion, the Pubs Code
is consistent with the principles set out in section 40(3) and (if
applicable) (4), and

(b) 10any revisions of the Pubs Code which, in the Secretary of State’s
opinion, would enable the Pubs Code to more fully reflect those
principles.

42 Inconsistency with Pubs Code etc

(1) The Secretary of State may by regulations make provision about terms of a
15tenancy or other agreement between a pub-owning business and a tied pub
tenant—

(a) which are inconsistent with the Pubs Code,

(b) which purport to penalise the tenant for requiring the business to act,
or not act, in accordance with any provision of the Pubs Code with
20which the business is bound to comply,

(c) which purport to provide that a rent assessment in relation to the tied
pub—

(i) may be initiated only by the business, or

(ii) may only determine that the rent is to be increased.

(2) 25The regulations may include provision about the effect of a term of a tenancy
or other agreement being void or unenforceable as a result of the regulations.

(3) Regulations under subsection (1) may make provision about terms of tenancies
or other agreements entered into before the date on which the regulations come
into force.

(4) 30A term of any agreement between a pub-owning business and a tied pub
tenant is void to the extent that it purports to—

(a) prevent the tenant from referring a dispute to the Adjudicator for
arbitration in accordance with section 43, or

(b) penalise the tenant for making such a referral.

(5) 35A term of an arbitration agreement between a pub-owning business and a tied
pub tenant is unenforceable to the extent that it is inconsistent with—

(a) section 45,

(b) section 46, or

(c) regulations under section 46(7).

(6) 40Subsections (4) and (5) apply to agreements entered into before the date on
which those subsections come into force, as well as those entered into on or
after that date.

(7) The Secretary of State may by regulations make provision about the effect of a
term of an agreement being void or unenforceable as a result of subsection (4)
45or (5).

Arbitration by Adjudicator

43 Referral for arbitration by tied pub tenants

(1) In accordance with the following provisions of this section and section 44, a
tied pub tenant may refer a dispute between the tenant and the pub-owning
5business to the Adjudicator for arbitration.

(2) In this section “the pub-owning business” means the landlord of the tied pub
in question.

(3) If the Pubs Code specifies that particular provisions of the Pubs Code are
arbitrable, a dispute may be referred to the Adjudicator only to the extent that
10it relates to an allegation by the tenant that the pub-owning business has failed
to comply with an arbitrable provision of the Pubs Code.

(4) If the Pubs Code specifies that particular provisions of the Pubs Code are not
arbitrable, a dispute may be referred to the Adjudicator only to the extent that
it relates to an allegation by the tenant that the pub-owning business has failed
15to comply with any other provision of the Pubs Code.

(5) If the Pubs Code does not specify whether any of its provisions are arbitrable
or not arbitrable, a dispute may be referred to the Adjudicator only to the
extent that it relates to an allegation by the tenant that the pub-owning business
has failed to comply with any provision of the Pubs Code.

(6) 20Where a dispute is referred for arbitration under this section, the Adjudicator
must either—

(a) arbitrate the dispute, or

(b) appoint another person to arbitrate the dispute.

44 Timing of referral for arbitration by tied pub tenants

(1) 25This section makes provision as to the period within which a tied pub tenant
may refer a dispute to the Adjudicator in accordance with section 43.

(2) Except in the case mentioned in subsection (3), the dispute may not be referred
until after the expiry of the period of 21 days beginning with the date on which
the tenant notifies the pub-owning business of the alleged non-compliance.

(3) 30Where the Pubs Code requires a pub-owning business to provide a parallel
rent assessment within a period of time specified by the Adjudicator, a dispute
which relates to an allegation that the pub-owning business has failed to
comply with that requirement may not be referred until the day after the day
on which the specified period ends.

(4) 35In all cases, a dispute may not be referred after the expiry of the period of 4
months beginning with the first date on which the dispute could have been
referred.

45 Arbitration commenced by pub-owning businesses

(1) This section applies where—

(a) 40there is an arbitration agreement between a tied pub tenant and a pub-
owning business, and