Small Business, Enterprise and Employment Bill

Seventh
marshalled
list of amendments
to be moved
in Grand Committee

The amendments have been marshalled in accordance with the Instruction of 15th December 2014, as follows—

Clause 40
Clauses 41 to 70
Schedule 1
Clauses 152 to 158

[Amendments marked * are new or have been altered]

Schedule 1

BARONESS NEVILLE-ROLFE

68P

Page 148, line 13, leave out from beginning to “require” in line 15 and insert “The
Adjudicator may, for the purposes of exercising functions in relation to the offer of
a market rent option or the provision of parallel rent assessments,”

Clause 41

BARONESS NEVILLE-ROLFE

68Q

Page 37, line 37, leave out “all provisions of the Pubs Code are” and insert “the
Pubs Code is”

68R

Page 37, line 38, after “with” insert “—

(a)   ”

68S

Page 38, line 1, leave out from beginning to “the” in line 3 and insert—

“(b)   ”

LORD BERKELEY

68T*

Page 38, line 19, at end insert—

“( )   require pub-owning businesses to publish wholesale prices
charged to their tied pub tenants.”

68U*

Page 38, line 19, at end insert—

“( )   require large pub-owning businesses to permit tied pub tenants to
purchase one brand of cask-conditioned or bottle-conditioned beer
from any supplier at a freely negotiated price, and free from any
penalty.”

LORD HODGSON OF ASTLEY ABBOTTS

LORD HOWARD OF RISING

69

Page 38, line 20, leave out subsection (6)

BARONESS NEVILLE-ROLFE

69ZA

Page 38, line 20, leave out “large”

69ZB

Page 38, line 21, after “tenants” insert “falling within section 67(1)(b)”

Clause 42

LORD WHITTY

69ZC*

Page 38, line 30, leave out from beginning to “be” and insert “A Market Rent Only
Option shall”

LORD BERKELEY

69A

Page 38, line 46, leave out “500” and insert “100”

LORD HODGSON OF ASTLEY ABBOTTS

LORD HOWARD OF RISING

70

Page 38, line 46, leave out “or more” and insert “tied”

71

Page 38, line 46, leave out from “description);” to end of line 47

LORD WHITTY

71A*

Page 39, line 1, leave out “The Pubs Code may include provisions to permit”

LORD HODGSON OF ASTLEY ABBOTTS

LORD HOWARD OF RISING

VISCOUNT RIDLEY

72

Page 39, line 1, leave out “may” and insert “shall”

LORD WHITTY

72A*

Page 39, line 2, leave out first “to” and insert “may”

LORD HODGSON OF ASTLEY ABBOTTS

LORD HOWARD OF RISING

VISCOUNT RIDLEY

73

Page 39, line 2, after “that” insert “only”

74

Page 39, line 3, leave out “are” and insert “can be”

LORD WHITTY

74ZA*

Page 39, line 5, at end insert “and are not restrained from selling other products
and brands (not produced by that brewery) purchased from any supplier”

74ZB*

Page 39, line 6, leave out from beginning to “to” in line 7 and insert “A Market Rent
Only Option shall be available”

LORD HODGSON OF ASTLEY ABBOTTS

74A

Page 39, line 6, leave out “that”

LORD HODGSON OF ASTLEY ABBOTTS

LORD HOWARD OF RISING

VISCOUNT RIDLEY

75

Page 39, line 6, after “a” insert “new lease or tenancy with a”

76

Page 39, line 7, after “tenant” insert “only”

77

Page 39, line 8, after “of” insert “renewal of a”

78

Page 39, line 8, leave out “renewal”

79

Page 39, line 11, leave out “a significant” and insert “an unfair”

80

Page 39, line 14, leave out paragraphs (c) and (d)

81

Page 39, line 17, leave out “an event” and insert “a material change in
circumstances (as defined in paragraph 2(7) of Schedule 6 to the Local Government
Finance Act 1988)”

82

Page 39, line 19, at end insert—

“( )     The Pubs Code shall offer an exemption from the Market Rent Only Option
for a mutually agreed period in return for a significant investment by a
large pub-owning business in that tenant’s pub.”

LORD BORWICK

82A

Page 39, line 20, leave out “21” and insert “90”

LORD HODGSON OF ASTLEY ABBOTTS

LORD HOWARD OF RISING

VISCOUNT RIDLEY

83

Page 39, line 23, after “agreeable” insert “new tenancy or lease with a”

LORD BORWICK

83A*

Page 39, line 24, at end insert—

“( )     As part of the negotiation under subsection (7), the large pub-owning
business is entitled to require an entirely new free-of-tie commercial
agreement, which may include removing the provisions of support that
existed under the initial contract.”

LORD HODGSON OF ASTLEY ABBOTTS

LORD HOWARD OF RISING

VISCOUNT RIDLEY

84

Page 39, line 25, after “(7)” insert “, and if the large pub-owning business and the
tenant have not reached a mutually agreeable Market Rent Only settlement,”

85

Page 39, line 40, leave out “time” and insert “end”

86

Page 39, line 42, after “business” insert “under the new lease or tenancy”

87

Page 39, line 43, at end insert—

“( )   the tenant will comply with the provisions of the existing contract
until the new Market Rent Only contract comes into effect”

LORD WHITTY

87A*

Page 39, leave out line 44

87B*

Page 39, line 45, leave out “is” and insert “should be”

87C*

Page 39, line 47, leave out “Pubs Code” and insert “lease or tenancy agreement”

LORD HODGSON OF ASTLEY ABBOTTS

LORD HOWARD OF RISING

VISCOUNT RIDLEY

88

Page 39, line 50, at end insert “provided that the requirement to enter into a new
tenancy or lease if such tenants choose the Market Rent Only option shall not be
considered discrimination”

LORD HODGSON OF ASTLEY ABBOTTS

LORD HOWARD OF RISING

89

Page 40, line 3, leave out “a significant” and insert “an unfair”

LORD WHITTY

89ZA*

Page 40, line 11, leave out subsection (11)

BARONESS NEVILLE-ROLFE

89A

Leave out Clause 42 and insert the following new Clause—

“Pubs Code: market rent option

(1)     The Pubs Code must require pub-owning businesses to offer their tied pub
tenants falling within section 67(1)(a) a market rent option in specified
circumstances.

(2)     A “market rent option” means the option for the tied pub tenant—

(a)   to occupy the tied pub under a tenancy or licence which is MRO-
compliant, and

(b)   to pay the market rent in respect of that occupation.

(3)     The Pubs Code may specify—

(a)   circumstances in which a market rent option must or may be an
option to occupy under a tenancy;

(b)   circumstances in which a market rent option must or may be an
option to occupy under a licence.

(4)     A tenancy or licence is MRO-compliant if—

(a)   taken together with any other contractual agreement entered into
by the tied pub tenant with the pub-owning business in connection
with the tenancy or licence it—

(i)   contains such terms and conditions as may be required by
virtue of subsection (5)(a),

(ii)   does not contain any product or service tie other than one in
respect of insurance in connection with the tied pub, and

(iii)   does not contain any unreasonable terms or conditions, and

(b)   it is not a tenancy at will.

(5)     The Pubs Code may specify descriptions of terms and conditions—

(a)   which are required to be contained in a tenancy or licence for it to
be MRO-compliant;

(b)   which are to be regarded as reasonable or unreasonable for the
purposes of subsection (4).

(6)     Provision made under subsection (1) may, in particular, require a pub-
owning business to offer a tied pub tenant a market rent option—

(a)   in connection with the renewal of any of the pub arrangements;

(b)   in connection with a rent assessment or assessment of money
payable by the tenant in lieu of rent;

(c)   in connection with a significant increase in the price at which any
product or service which is subject to a product or service tie is
supplied to the tied pub tenant where the increase was not
38reasonably foreseeable—

(i)   when the tenancy or licence was granted, or

(ii)   if there has been an assessment of a kind mentioned in
paragraph (b), when the last assessment was concluded;

(d)   after a trigger event has occurred.

(7)     The Pubs Code may specify what “renewal” means in relation to a tenancy
or a licence for the purposes of subsection (6).

(8)     In subsection (6) “pub arrangements”, in relation to a tied pub, means—

(a)   the tenancy or licence under which the tied pub is occupied, and

(b)   any other contractual agreement which contains an obligation by
virtue of which condition D in section 65 is met in relation to the
premises.

(9)     In this Part a “trigger event”, in relation to a tied pub tenant, means an
event which—


52

(a)   is beyond the control of the tied pub tenant,


53

(b)   was not reasonably foreseeable as mentioned in subsection (6)(c),


54

(c)   has a significant impact on the level of trade that could reasonably
be expected to be achieved at the tied pub, and


56

(d)   is of a description specified in the Pubs Code.

(10)     In this Part “market rent”, in relation to particular premises at any time,
means the rent which the premises might reasonably be expected to fetch
at that time in the open market, on the assumption that condition B in
section 65 continues to be met.”

LORD STEVENSON OF BALMACARA

LORD MENDELSOHN

[Amendments 89AA to 89AF are amendments to Amendment 89A]

89AA*


Line 38, after “foreseeable” insert “with specific reference to prices paid by free-of-
tie tenant to wholesalers”

89AB*


Line 52, after “tenant” insert “and”

89AC*


Line 53, after “(6)(c),” insert “and”

89AD*


Line 54, leave out “trade” and insert “profitability”

89AE*


Line 56, at end insert—

    In the event of transfer of title, the tied pub tenant would have the right to
request a Market Rent Only Option in the event that all the conditions in
subsection (9)(a) to (d) are met.”

89AF*


Line 56, at end insert—

    The Secretary of State may by order infer the right of tied-pub tenants to
trigger a Market Rent Only Option in the event of transfer of title or
administration if in their view avoidance of being covered by the Pubs
Code was a sole or significant reason for the sale or administration of that
business.

    The Secretary of State may impose the provisions of the Pubs Code upon
companies with fewer than 500 pubs if they are part of a group or have
similar ownership to other companies which cumulatively own over 500
pubs.”

After Clause 42

BARONESS NEVILLE-ROLFE

89B

Insert the following new Clause—

“Market rent option: procedure

(1)     The Pubs Code may—

(a)   make provision about the procedure to be followed in connection
with an offer of a market rent option (referred to in this Part as “the
market rent option procedure”);

(b)   confer functions on the Adjudicator in connection with that
procedure.

(2)     Provision made under subsection (1) may, in particular—

(a)   make provision for the tied pub tenant to give notice to the pub-
owning business that the tenant—

(i)   considers that circumstances are such that the pub-owning
business is required to offer the tenant a market rent option,
and

(ii)   wishes to receive such an offer;

(b)   require the appointment of a person (referred to in this Part as an
“independent assessor”) to determine the market rent of the
premises concerned in a case where the pub-owning business and
the tied pub tenant cannot agree on that market rent;

(c)   require that appointment to be made by the pub-owning business
and the tied pub tenant acting jointly or (where they cannot agree
on a person to appoint) by the Adjudicator;

(d)   require the Adjudicator to set criteria which a person must satisfy
in order to be appointed as an independent assessor;

(e)   specify that the determination of the market rent by the
independent assessor must be conducted in accordance with
provisions of documents specified in the Pubs Code;

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

(3)     The Pubs Code may make provision for—

(a)   the tenancy or licence under which the tied pub is occupied, and

(b)   any other contractual agreement entered into by the tied pub tenant
with the pub-owning business in connection with the tenancy or
licence,

as they are in force when a notice is given by virtue of subsection (2)(a), to
continue to have effect until such time as the market rent option procedure
has come to an end (regardless of whether any of the agreements would or
could otherwise cease to have effect before that time).

(4)     The Pubs Code may, for the purposes of subsection (3), specify the
circumstances in which the market rent option procedure is to be treated as
having come to an end.”

89C

Insert the following new Clause—

“Market rent option: disputes

(1)     The Secretary of State may by regulations confer functions on the
Adjudicator in connection with the resolution of disputes relating to the
offer of a market rent option.

(2)     The regulations may, in particular, make provision concerning the
resolution of disputes about whether—

(a)   circumstances are such that a pub-owning business is required to
offer a tied pub tenant a market rent option;

(b)   a proposed tenancy or licence is MRO-compliant;

(c)   a determination of the market rent of a tenancy or licence made by
an independent assessor has been made in accordance with the
Pubs Code;

(d)   any other requirement of the market rent option procedure has
been complied with.

(3)     The regulations may, in particular, confer on the Adjudicator the function
of determining the market rent of a tenancy or licence in such
circumstances as may be specified in the regulations.

(4)     Nothing in sections 45 to 49 applies in relation to provision made by virtue
of section (Pubs Code: market rent option) or (Market rent option: procedure) but
the regulations may include provision which is similar to that contained in
or made under those sections.”

Clause 43

LORD HODGSON OF ASTLEY ABBOTTS

LORD HOWARD OF RISING

VISCOUNT RIDLEY

90

Page 40, line 26, at end insert—

“( )     Any proposed changes to the Pubs Code must be subject to full
parliamentary scrutiny and consultation.”

BARONESS NEVILLE-ROLFE

90ZA

Page 40, line 29, leave out “and (if applicable) (4)”

After Clause 43

LORD BERKELEY

90A

Insert the following new Clause—

“Definition of market rent

The market rent shall be determined on the basis of the likely turnover and
profit of the business of the pub, and shall not take into account any value
to the pub owner of a change of use of the pub.”

Clause 44

BARONESS NEVILLE-ROLFE

90AA

Page 41, line 11, after “with” insert “regulations under section (Market rent option:
disputes)
or in accordance with”

90AB

Page 41, line 14, at end insert—

“( )   regulations under section (Market rent option: disputes),”

Clause 59

BARONESS NEVILLE-ROLFE

90AC

Page 47, line 17, leave out “under the Pubs Code in relation to” and insert “in
relation to the offer of a market rent option or”

Clause 60

LORD HODGSON OF ASTLEY ABBOTTS

VISCOUNT RIDLEY

90B

Page 47, line 30, leave out “may require” and insert “must require every”

Clause 65

LORD HODGSON OF ASTLEY ABBOTTS

LORD HOWARD OF RISING

VISCOUNT RIDLEY

91

Page 49, line 34, at end insert—

“and part of this agreement contains special commercial and financial advantages.”

BARONESS NEVILLE-ROLFE

91ZA

Page 49, line 34, at end insert—

“(5A)    But condition D is not met if the contractual obligation is a stocking
requirement.

(5B)    The contractual obligation is a stocking requirement if—

(a)   it relates only to beer or cider (or both) produced by the landlord or
by a person who is a group undertaking in relation to the landlord,

(b)   it does not require the tied pub tenant to procure the beer or cider
from any particular supplier, and

(c)   it does not prevent the tied pub tenant from selling at the premises
beer or cider produced by a person not mentioned in paragraph (a).

(5C)    In subsection (5B), “beer” and “cider” have the same meanings as in the
Alcoholic Liquor Duties Act 1979 (see section 1 of that Act).”

Clause 66

BARONESS NEVILLE-ROLFE

91ZB

Page 49, line 39, leave out subsection (1) and insert—

“(1)     A person is a “pub-owning business” for the purposes of this Part—

(a)   in the period beginning with the day on which the Pubs Code
comes into force and ending with the following 31 March, if
immediately before the Pubs Code comes into force the person was
the landlord of 500 or more tied pubs;

(b)   in any subsequent financial year, if for a period of at least 6 months
in the previous financial year the person was the landlord of 500 or
more tied pubs.

(1A)    For the purposes of calculating the number of tied pubs of which a person
(“L”) is the landlord, any tied pub the landlord of which is a person who is
a group undertaking in relation to L is treated as a tied pub of which L is
the landlord.”

LORD BERKELEY

91A

Page 49, line 39, leave out “500” and insert “100”

LORD WHITTY

91AZA*

Page 49, line 40, leave out “tied pubs” and insert “pubs (of any kind)”

BARONESS NEVILLE-ROLFE

91AA

Page 50, line 1, leave out “But regulations may” and insert “The Secretary of State
may by regulations”

91AB

Page 50, line 2, leave out “such a landlord” and insert “a pub-owning business”

91AC

Page 50, line 5, leave out “the landlord” and insert “any other person”

91AD

Page 50, line 7, leave out subsections (3) to (5)

LORD BERKELEY

91B

Page 50, line 10, leave out “500” and insert “100”

LORD WHITTY

91BA*

Page 50, line 10, leave out “tied pubs” and insert “pubs (of any kind)”

LORD BERKELEY

91C

Page 50, line 13, leave out “500” and insert “100”

LORD WHITTY

91CA*

Page 50, line 13, leave out “tied pubs” and insert “pubs (of any kind)”

LORD HOWARD OF RISING

LORD HODGSON OF ASTLEY ABBOTTS

91D

Page 50, line 18, leave out subsection (6)

BARONESS NEVILLE-ROLFE

91E

Page 50, line 19, leave out “subsections (3) and (4)” and insert “subsection (1)(a) or
(b)”

91F

Page 50, line 23, leave out “(5)” and insert “(1A)”

LORD HODGSON OF ASTLEY ABBOTTS

LORD HOWARD OF RISING

VISCOUNT RIDLEY

92

Page 50, line 23, at end insert—

“( )     Subsections (3) and (4) may only be amended after independent review and
full public consultation.”

Clause 67

LORD HODGSON OF ASTLEY ABBOTTS

LORD HOWARD OF RISING

93

Page 50, line 27, leave out paragraph (b) and insert—

“(b)   who is party to negotiations which have reached the stage of a
provisional trading agreement for the prospective tenancy of a
premises which are, or expected to be, a tied pub ahead of any final
terms of the agreement being agreed.”

LORD HODGSON OF ASTLEY ABBOTTS

LORD HOWARD OF RISING

VISCOUNT RIDLEY

94

Page 50, leave out line 43

95

Page 50, line 43, at end insert—

“( )     The definition of tenancy in subsection (2) excludes temporary agreement
where the tenant has occupied the same pub premises for less than twelve
months.”

LORD HODGSON OF ASTLEY ABBOTTS

LORD HOWARD OF RISING

96

Page 50, line 43, at end insert—

“( )     The definition of “tenancy” in subsection (2) excludes franchise agreements
whereby no rent is paid by the franchisee and their share of the profit is
unaffected by the price paid for tied products.”

Clause 68

BARONESS NEVILLE-ROLFE

96ZA

Page 51, line 22, leave out from “of” to end of line 23 and insert “determining under
section 66 whether a person is a pub-owning business”

LORD BERKELEY

 

Lord Berkeley gives notice of his intention to oppose the Question that Clause 68 stand part
of the Bill
.

Clause 69

BARONESS NEVILLE-ROLFE

96ZB

Page 51, line 33, at end insert—

““independent assessor” has the meaning given by section (Market
rent option: procedure
);

“market rent” and “market rent option” have the meanings given by
section (Pubs Code: market rent option);

“market rent option procedure” has the meaning given by section
(Market rent option: procedure);

“MRO-compliant”, in relation to a tenancy or licence, has the meaning
given by section (Pubs Code: market rent option);”

96ZC

Page 51, line 35, at end insert—

““product or service tie” means a product tie or a service tie;”

96ZD

Page 51, line 36, leave out “or service”

96ZE

Page 51, line 36, after “obligation” insert “, other than a stocking requirement,”

96ZF

Page 51, line 43, leave out paragraph (b)

96ZG

Page 51, line 45, at end insert—

“service tie” means any contractual obligation of a tied pub tenant to
receive a service supplied by—

(a)   the landlord of the tied pub 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;

“stocking requirement” has the meaning given by section 65.”

96ZH

Page 51, line 45, at end insert—

“( )     In this Part, references to “rent”, in relation to a licence to occupy, are to be
read as references to the fee payable in respect of the licence.”

96ZJ

Page 52, line 1, leave out subsection (2)

Clause 70

LORD HODGSON OF ASTLEY ABBOTTS

96A

Page 52, line 12, leave out “negative” and insert “affirmative”

Clause 152

BARONESS NEVILLE-ROLFE

97

Page 141, line 24, leave out “section 35 as it applies” and insert “sections 35 and
(Section 35: supplementary and consequential provision) as they apply”

98

Page 141, line 40, after “35” insert “or (Section 35: supplementary and consequential
provision
)”

After Clause 152

BARONESS NEVILLE-ROLFE

99

Insert the following new Clause—

“Fines on summary conviction in England and Wales: transitory provision

(1)     Subsection (2) applies to any provision of this Act that provides that a
person guilty of an offence triable either way is liable on summary
conviction in England and Wales to a fine.

(2)     In relation to an offence committed before section 85(1) of the Legal Aid,
Sentencing and Punishment of Offenders Act 2012 comes into force, the
reference to a fine is to be read as a reference to a fine not exceeding the
statutory maximum.

(3)     After section 1131 of the Companies Act 2006 insert—

“1131A           Fines on summary conviction in England and Wales: transitory
provision

(1)     In relation to an offence committed before section 85(1) of the Legal
Aid, Sentencing and Punishment of Offenders Act 2012 comes into
force, in the provisions mentioned in subsection (2), “a fine” is to be
read as “a fine not exceeding level 5 on the standard scale”.

(2)     The provisions are—

(a)   section 156A(7)(a);

(b)   section 167D(5)(a);

(c)   section 279D(5)(a);

(d)   section 853L(2)(a).

(3)     In relation to an offence committed before section 85(1) of the Legal
Aid, Sentencing and Punishment of Offenders Act 2012 comes into
force, in the provisions mentioned in subsection (4), “a fine” is to be
read as “a fine not exceeding the statutory maximum”.

(4)     The provisions are—

(a)   section 790F(2)(b)(i);

(b)   section 790R(3)(b)(i);

(c)   section 1028A(11)(b)(i);

(d)   section 1032A(12)(b)(i);

(e)   paragraphs 7(1)(b)(i), 13(4)(b)(i) and 14(3)(b)(i) of Schedule
1B.””

Clause 153

BARONESS NEVILLE-ROLFE

100

Page 142, line 23, leave out “section 35 as it applies” and insert “sections 35 and
(Section 35: supplementary and consequential provision) as they apply”

101

Page 142, line 26, after “35” insert “or (Section 35: supplementary and consequential
provision
)”

Clause 154

BARONESS NEVILLE-ROLFE

101A

Page 142, line 29, after “1” insert “or 149(1)”

Clause 156

BARONESS NEVILLE-ROLFE

102

Page 143, line 18, leave out “section” and insert “sections 110 and”

LORD STEVENSON OF BALMACARA

LORD MENDELSOHN

102ZA*

Page 143, line 19, at end insert—

“( )     The Scottish Government may lay before Parliament legislation to extend
provisions under Part 4 to Scotland.”

Clause 157

BARONESS NEVILLE-ROLFE

102A

Page 144, line 9, leave out “section 41” and insert “sections 41 to (Market rent option:
procedure
)”

LORD WHITTY

102B*

Page 144, line 9, leave out “section 41” and insert “sections 41 and 42”

BARONESS NEVILLE-ROLFE

103

Page 144, line 29, at end insert—

“( )     Section 13 (electronic paying in of cheques etc) comes into force—

(a)   on the day this Act is passsed, for the purpose of enabling the
making of regulations under section 89D of the Bills of Exchange
Act 1882 (as inserted by section 13);

(b)   on 31 July 2016, for all other purposes.”

104

Page 144, line 30, leave out “Section 35 as it applies in Wales comes” and insert
“Sections 35 and (Section 35: supplementary and consequential provision) as they apply
in Wales come”

Prepared 27th January 2015