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Lord Irvine of Lairg: I am concerned about the width and significance of this amendment, which has been put down so recently. I understand that it first appeared on the list only on Monday, two days ago. It has been put down so recently that we have really had no adequate time to consider it thoroughly in the context of what I might call "the balance of power" between landlord and tenant. That said, it is right that I should acknowledge the courtesy of the noble Earl in seeking to explain this amendment to me shortly before we began our discussions in Committee this evening.

The amendment is part of the trade package, the BRC-BPF package, and, as I understand the noble Earl, it is regarded as the backbone of the package. Essentially, it would seem to be regarded by the landlord/investor interest as a means of enabling landlords to secure much greater control over assignments once they have lost the benefit of privity of contract liability.

My concern is that under the Bill, it being generally accepted that privity of contract liability is not defensible, we may be seeing, in the shape of the amendment, an

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attempt to put into law, with insufficient notice I would suggest, an amendment to Section 19 of the Landlord and Tenant Act 1927, the effect of which is that, in relation to assignments, the balance of power between landlord and tenant is being altered sharply in favour of landlords to an extent which was not specifically anticipated, and which may, on mature consideration, be shown to go further than is necessary.

The basic effect of Section 19 was that, no matter what was said in a lease, where it provided that the lease could not be assigned without the landlord's consent, that was subject, in effect, to a proviso: "consent not to be unreasonably withheld". The intended effect of the amendment is, I think, ashamedly, to allow landlords a greater ability to control assignments short of imposing an absolute ban on assignment, that being regarded as so blunt an instrument as not to be desired.

The effect is that the jurisdiction of the court to hold that a consent to assignment has been unreasonably withheld is gone as a result of the amendment in a case where the landlord shows that the pre-agreed grounds for withholding consent have been made out. Then, where the grounds for withholding consent are of a discretionary nature—I would interpose that I would think that the drafting of subsection (1C) calls for further consideration—if the provision requires the landlord to make a reasonable decision, the landlord wins if he can satisfy the court that a reasonable landlord could have decided as he did.

This, as I say, is a provision which requires careful thought, but certainly at first blush it seems to me that it may alter the balance of power in favour of landlords by contrast to a decision by a court as to whether in the view of the court consent has been unreasonably withheld.

I have little doubt that that part of the package is designed by the landlord interest to improve its position from what is seen by that interest as the too pro-tenant direction of the decisions of the courts concerning consent not to be unreasonably withheld.

I would urge the noble Earl to withdraw his amendment and to leave it over to Report. That would allow those of us who are concerned that his amendment goes further than is necessary to make the package viable in the landlord interest to consider more fully our approach to it. I should make it plain that I had hoped—indeed, I still hope—that the Bill can go through as non-controversial. If the noble Earl were to agree to withdraw the amendment and to come back on Report, that would assist in the endeavour of securing the Bill to enter upon the statute book on a non-controversial basis.

Having said that, I appreciate that the changes embraced in the amendment are to apply to new tenancies only. I appreciate that the relevant terms will be terms which have actually been agreed by the relevant parties. I appreciate also that the amendment cannot apply either to residential or agricultural tenancies. I put that on the record, as it were.

Nevertheless, I invite the noble Earl to withdraw the amendment and move it at Report stage, essentially on the basis that it merits careful thought. As he says, it is complex and is also the backbone of the package. We have not had sufficient time to address in a considered and

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critical way that which he informs the Committee is the essential core of the package agreed which is sought to be translated onto the statute book.

Lord Meston: I share the anxieties of the noble Lord, Lord Irvine of Lairg, and I join with him in the invitation that he has just extended to the noble Earl.

This is an important and substantial amendment which was tabled only very recently and which has been debated in this Committee at a very late hour. I have reservations about the drafting. I should like to think it through in more detail and discuss with others more knowledgeable than myself how it might work in practice and its wider implications, some of which were touched on by the noble Lord, Lord Irvine.

It may well be that the noble Earl is quite right when he says that this is a realistic proposition but it may be also that there is room for further improvement and adjustment. I hope that the noble Earl will not see the invitation to withdraw the amendment at this stage as in any way hostile. It is merely a plea that those of us who wish to see the Bill pass through in a satisfactory time should have proper time to give the matter thorough thought.

The Lord Chancellor: My understanding of this clause is that it represents the agreement between the property interests and the tenant interests which are represented by the major operators in the field. When we knew of it, we put it out to consultation because I did not wish to support this Private Member's Bill unless there was general agreement, because it is one matter for the large operators in an industry to agree something but quite different in relation to the small operators. However, on consultation, we have secured the views of the industry in general and those views were supportive of that compromise.

I am sure that my noble friend would not wish to press this forward as something agreed at this juncture. But I venture to suggest to the Committee that for the purposes of considering whether this clause is right in the light of the agreement that has been made, perhaps the noble Lords, Lord Irvine of Lairg and Lord Meston, would take into account the fact that if the clause goes into the Bill this evening as an amendment, the whole Bill will be available for consultation—not only this amendment but the whole proposal. I venture to think that it may be easier to consult people if the whole proposal is in one document rather than trying to fit the amendment, as it were, into some other document. I suggest to the Committee that it may be easier to consult upon the matter if the amendment is agreed within the Bill this evening.

I have made it clear all along—and I am sure that my noble friend supports this—that the Bill can go forward to the statute book ultimately only by agreement. If the noble Lord, Lord Irvine of Lairg, the noble Lord, Lord Meston, or any other noble Lord wishes to challenge this clause or suggest amendments to it, that will have to be considered very carefully.

If it is convenient to noble Lords opposite, I think it would be better for the whole clause to be included in the Bill so that one can read the whole thing together. It may be much easier to consult other people than if one has to do it by reference to two documents, because it is intended

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to hang together as drafted. I fully appreciate that the noble Lords, Lord Meston and Lord Irvine of Lairg, feel that they require more time further to consider the matter. However, that time will certainly be available between now and Report stage, which will be some time off. The minimum period will certainly be available, and my understanding is that more than the minimum period will elapse.

In the light of those considerations, I wonder whether both noble Lords will feel able to accept that the provision should go into the Bill tonight on the understanding that it is fully open for reconsideration. As I said at the outset, anyone who wishes to raise any questions with me would certainly find an open door. I am equally sure that my noble friend would be most willing to co-operate in any such arrangements. I know that small tenants—if I may call them so—are also very interested in the Bill proceeding because there is substantial protection for them in it, even in regard to existing leases. My observations are intended to try to facilitate a solution to the problem, which might make it easier for the consultations that may be required to take place.

10.15 p.m.

Baroness Gardner of Parkes: I, too, support the amendment simply because I believe that it is part of the deal—if I can so describe it—between the British Property Federation and the Retail Consortium. However, I hope that someone will look at it again. I am slightly concerned about subsection (1C) (b) where it is proposed that the tenant should have an "unrestricted right" to have an independent person reviewing the determination.

I am not completely happy in regard to small tenants. I know that paragraph (b) says that,

    "identity is ascertainable by reference to the agreement".
However, as I understand it, that means that in the original agreement the tenant would be agreeing to a particular person being appointed. I believe that a small tenant signing a lease might not realise what power was being put into the hands of that person. I should like to feel quite confident that it would be a completely independent person. However, I hope that noble Lords will accept the suggestion made by my noble and learned friend the Lord Chancellor that we accept the provision tonight and reconsider it on Report.

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