Small Business, Enterprise and Employment Bill (HL Bill 103)

(6) “Secondary legislation” means orders, regulations or rules made under any
Act.

(7) The validity of any secondary legislation is not to be affected by any question
as to whether a Minister of the Crown complied with section 28(2).

5Definitions of small and micro business

33 Definitions of small and micro business

(1) This section applies where any subordinate legislation made by a Minister of
the Crown (the “underlying provision”)—

(a) uses the term “small business” or “micro business”, and

(b) 10defines that term by reference to this section.

(2) In the underlying provision “small business” means an undertaking other than
a micro business (see subsection (3)) which meets the following conditions
(“the small business size conditions”)—

(a) it has a headcount of staff of less than 50, and

(b) 15it has—

(i) a turnover, or

(ii) a balance sheet total,

of an amount less than or equal to the small business threshold.

(3) In the underlying provision “micro business” means an undertaking which
20meets the following conditions (“the micro business size conditions”)—

(a) it has a headcount of staff of less than 10, and

(b) it has—

(i) a turnover, or

(ii) a balance sheet total,

25of an amount less than or equal to the micro business threshold.

(4) The Secretary of State may by regulations (referred to as “the small and micro
business regulations”) make further provision about the meanings of “small
business” and “micro business”.

(5) This section and the small and micro business regulations are to be read subject
30to any modifications made by the underlying provision in any particular case.

(6) In this section—

• “balance sheet total”, “headcount of staff”, “micro business threshold”,
  “small business threshold” and “turnover” have such meanings as may
  be prescribed by the small and micro business regulations;

• 35“Minister of the Crown” has the same meaning as in the Ministers of the
  Crown Act 1975;

• “subordinate legislation” has the same meaning as in the Interpretation
  Act 1978 (see section 21 of that Act);

• “undertaking” means—

  (a)

  40a person carrying on one or more businesses;

  (b)

  a voluntary or community body within the meaning given by
  section 27;

  (c)

  a body which is formed or recognised under the law of a
  country or territory outside the United Kingdom and which is

  Small Business, Enterprise and Employment BillPage 31

  equivalent in nature to a body falling within the definition of
  voluntary or community body.

(7) The small and micro business regulations are subject to negative resolution
procedure.

34 5Small and micro business regulations: further provision

(1) The small and micro business regulations may make provision—

(a) about the calculation of the headcount of staff, turnover and balance
sheet total of an undertaking, including provision about the period
(“assessment period”) in respect of which they are to be calculated;

(b) 10for the headcount of staff, turnover and balance sheet total, or a
proportion of such, of any undertaking which satisfies such conditions
as may be prescribed in relation to another undertaking (the “principal
undertaking”) to be treated as part of the principal undertaking’s
headcount of staff, turnover and balance sheet total.

(2) 15Conditions which may be prescribed under subsection (1)(b) include, in
particular, conditions relating to—

(a) the extent of ownership (whether direct or indirect) of one undertaking
by one or more other undertakings;

(b) the degree of control exercised (whether directly or indirectly) by one
20or more undertakings over another.

(3) The small and micro business regulations may make provision about—

(a) the assessment period or periods in respect of which an undertaking
must meet the small business size conditions or the micro business size
conditions in order to be a small business or (as the case may be) micro
25business;

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

(a) 30an 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) where there has been only one complete assessment period since an
undertaking was established, the undertaking is a small business or a
35micro 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 does not
cease to be such unless it fails to meet the relevant size conditions in
respect of two consecutive assessment periods.

(5) 40The 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 be treated
as being undertaking B (whether or not undertaking B is still in existence) for
such purposes as may be prescribed.

(6) 45Conditions 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) the 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) 5the existence of some other connection between undertaking A and
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
10the number of assessment periods there have been since it 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
15undertaking A.

(8) The 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—

• 20 “micro business size conditions”, “small business size conditions” and
  “undertaking” have the same meanings as in section 33;

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

Home businesses

35 25Exclusion 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,
professional and other tenants) is amended as follows.

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

(3) After section 23(4) insert—

“(5) Where the tenant’s breach of a prohibition (however expressed) of use
for business purposes which subsists under the terms of the tenancy
and extends to the whole of that property consists solely of carrying on
35a 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
landlord has acquiesced in the breach.

(6) In subsection (5) “home business” has the same meaning as in section
4043ZA.”

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

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

(1) This 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) 5the 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) 10permit 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
15be 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
20carried 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
25in 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) may make different provision for different purposes,

(c) are to be made by statutory instrument,

(d) 30may not be made unless—

(i) in the case of regulations made by the Secretary of State,
a draft of the statutory instrument containing the
regulations has been laid before Parliament and
approved by a resolution of each House of Parliament,

(ii) 35in the case of regulations made by the Welsh Ministers,
a draft of the statutory instrument containing the
regulations has been laid before, and approved by a
resolution of, the National Assembly for Wales.

(8) For the purposes of this section, a dwelling-house which is let for mixed
40residential and business use is capable of being let as a dwelling.

(9) If, 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-
45house, and

(b) if 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)

  in relation to England, the Secretary of State, and

  (b)

  in relation to Wales, the Welsh Ministers;

• 5“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
  2003 (see section 193 of that Act);

• “supply of alcohol” has the same meaning as in the Licensing Act
  102003 (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
comes into force;

(b) a tenancy which is entered into on or after the day on which this section
15comes 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.

36 Section 35: supplementary and consequential provision

(1) In section 41 of the Landlord and Tenant Act 1954 (trusts), after subsection (2)
20insert—

“(3) Where a tenancy is held on trust, section 43ZA(2) has effect as if—

(a) paragraph (b) were omitted, and

(b) the condition in paragraph (c)(i) were a condition that the terms
of the tenancy require at least one individual who is a trustee or
25a beneficiary under the trust to occupy the dwelling-house as a
home (whether or not as that individual’s only or principal
home).”

(2) A dwelling-house which is let under a home business tenancy is to be regarded
as being “let as a separate dwelling” for the purposes of—

(a) 30section 1 of the Rent Act 1977 (protected tenancies),

(b) section 79 of the Housing Act 1985 (secure tenancies),

(c) section 1 of the Housing Act 1988 (assured tenancies), and

(d) any other England and Wales enactment relating to protected, secure or
assured tenancies.

(3)
35Subsections (1) and (2) do not apply to the tenancies mentioned in section 35(3)(5).

(4) Subsections (2) and (3) do not limit the circumstances in which a dwelling-
house which is let under a home business tenancy is to be regarded as “let as a
separate dwelling”.

(5) In this section—

• 40“enactment” includes provision made—

  (a)

  under an Act, or

  (b)

  by or under a Measure or Act of the National Assembly for
  Wales,

• “England and Wales enactment” means any enactment so far as it forms
  45part of the law of England and Wales,

Small Business, Enterprise and Employment BillPage 35

• “home business tenancy” has the same meaning as in section 43ZA of the
  Landlord and Tenant Act 1954.

CMA recommendations

37 CMA to publish recommendations on proposals for Westminster legislation

(1) 5Section 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
10Minister of the Crown about the potential effect of a proposal for
Westminster 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
15recommendation to the attention of those likely to be affected by it.”

(3) After 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
  20the United Kingdom, any market which operates there
  and 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;

  25and the reference to a market for goods or services includes a
  reference 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
  30section 21 of the Interpretation Act 1978).”

Liability of bodies concerned with accounting standards

38 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 35Power to confer exemption from liability

(1) The 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
40subject to specified conditions or for a specified period.

(3) Neither 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) 5the carrying on of those section 16(2) activities of the exempt
person 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) 10so 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) In this section—

• 15“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) Orders and regulations under this section—

(a) 20are 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
section is subject to annulment in pursuance of a resolution of either
25House 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
of Parliament.”

(2) 30Omit 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”.

Part 3 35Public sector procurement

39 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
functions relating to procurement.

(2) 40For 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” has the same meaning as in
regulation 2 of the Public Contracts Regulations 2015 (S.I. 2015/102S.I. 2015/102), 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
5section if its functions are wholly or mainly devolved functions, namely—

(a) Scottish 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
10could 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
15National 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) 20duties 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) 25any 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
30invoices 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) 35The 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) 40Regulations under this section are subject to affirmative resolution procedure.

40 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
45functions 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) 5A 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) 10In this section—

• “contracting authority” has the same meaning as in section 39, 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,
  15disregarding 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),

  (c)

  20the Public Contracts (Scotland) Regulations 2012 (S.S.I. 2012/
  88) apply, disregarding for this purpose the operation of
  regulation 8 (thresholds), or

  (d)

  the Public Contracts Regulations 2015 (S.I. 2015/102S.I. 2015/102) apply,
  disregarding for this purpose the operation of any financial
  25threshold provided for by those regulations;

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

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

(a) preparations for the exercise of a relevant function relating to
30procurement, and

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

(7) But the exercise of a function—

(a) by—

(i) 35the 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)
of the Academies Act 2010 and section 579(1) of the Education
Act 1996), or

(b) 40which 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
the purposes of the NHS),

may not be investigated under this section.

(8) 45A person conducting an investigation under this section may publish the
results of the investigation.

Part 4 The Pubs Code Adjudicator and the Pubs Code

The Pubs Code Adjudicator

41 The Adjudicator

(1) 5A Pubs Code Adjudicator is established.

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

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

(4) Part 3 of that Schedule contains amendments consequential on the
10establishment of the Adjudicator.

The Pubs Code

42 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
15practices 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 the Pubs Code is consistent
with—

(a) 20the principle of fair and lawful dealing by pub-owning businesses in
relation to their tied pub tenants;

(b) the principle that tied pub tenants should not be worse off than they
would be if they were not subject to any product or service tie.

(4) The Pubs Code may, in particular—

(a) 25contain 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) rent assessments, or

(ii) 30assessments 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
provisions of documents specified in the Pubs Code;

(e) 35where 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.