House of Commons Public Bill Committee Proceedings

Session 2014 - 15
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Other Bills before Parliament

245

SUPPLEMENT TO THE VOTES AND PROCEEDINGS

Tuesday 18 November 2014

Report Stage Proceedings

Small Business, Enterprise and Employment Bill, As Amended

[FIrst Day]

NEW CLAUSES, NEW SCHEDULES AND AMENDMENTS RELATING TO PART 4

Secretary Vince Cable

Added  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.

(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.”

:
246

, continued

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

Added  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.

(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

:
247

, continued

(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;

(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—

:
248

, continued

(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

Not moved  29

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).”

Secretary Vince Cable

Not moved  30

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

Secretary Vince Cable

Not moved  31

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.”

Secretary Vince Cable

Not moved  32

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.”

Secretary Vince Cable

Not moved  33

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

:
249

, continued

“(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.”

Secretary Vince Cable

Agreed to  34

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

payable by the tenant in lieu of rent”

Secretary Vince Cable

Agreed to  35

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

Secretary Vince Cable

Agreed to  36

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

Secretary Vince Cable

Agreed to  37

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

Secretary Vince Cable

Agreed to  38

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

Secretary Vince Cable

Agreed to  39

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

Secretary Vince Cable

Agreed to  40

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.”

:
250

, continued

Secretary Vince Cable

Not moved  41

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

Toby Perkins

Mr Iain Wright

Ian Murray

Mr Gerry Sutcliffe

Natascha Engel

Greg Mulholland

Mr Adrian Bailey

Frank Dobson

Mr Ben Bradshaw

Kerry McCarthy

Negatived on division  5

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

franchised”

Secretary Vince Cable

Agreed to  42

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.”

Secretary Vince Cable

Not moved  43

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

owning”

Secretary Vince Cable

Not moved  44

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

owning”

Secretary Vince Cable

Agreed to  45

Clause  64,  page  47,  leave out from “pubs” in line 27 to the end of line 30 and insert “of

which a pub-owning business (“B”) is the landlord, any tied pub the landlord of which is

a person who is a group undertaking in relation to B is treated as a tied pub of which B is

the landlord.”

Secretary Vince Cable

Agreed to  46

Clause  64,  page  47,  line  37,  leave out subsection (6)

:
251

, continued

Secretary Vince Cable

Agreed to  47

Clause  65,  page  47,  line  41,  after “tenant” insert “or licensee”

Secretary Vince Cable

Agreed to  48

Clause  65,  page  48,  line  1,  at end insert “or licence to occupy”

Secretary Vince Cable

Agreed to  49

Clause  65,  page  48,  line  5,  leave out “immediate landlord” and insert “—

(a)
in relation to a tied pub occupied under a tenancy, the immediate

landlord, or

(b)
in relation to a tied pub occupied under a licence, the licensor;

“licence” means a licence to occupy premises; and “licensee” is to be

construed accordingly;”

Secretary Vince Cable

Agreed to  50

Clause  65,  page  48,  leave out lines 13 and 14

Secretary Vince Cable

Agreed to  51

Clause  65,  page  48,  line  15,  after second “the” insert “tied pub”

Secretary Vince Cable

Agreed to  52

Clause  65,  page  48,  line  16,  after second “the” insert “tied pub”

Secretary Vince Cable

Agreed to  53

Clause  65,  page  48,  line  17,  after third “the” insert “tied pub”

Secretary Vince Cable

Agreed to  54

Clause  66,  page  48,  line  25,  at end insert—

““group undertaking” has the meaning given by section 1161 of the

Companies Act 2006;”

Secretary Vince Cable

Agreed to  55

Clause  66,  page  48,  line  26,  leave out from “rent assessment”” to the end of line 30

and insert “has such meaning as may be prescribed in regulations made by the Secretary

of State”

Secretary Vince Cable

Agreed to  56

Clause  66,  page  48,  line  33,  leave out paragraph (a) and insert—

“(a)
that a product to be sold at the tied pub must be supplied by—



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