Commercial Rent (Coronavirus) Bill

(Limited Text - Ministerial Extracts only)

Committee stage
Thursday 10th February 2022 Grand Committee

Moved by

[Lord Grimstone of Boscobel]

1: Clause 4, page 3, line 37, leave out “premises, or parts of premises,” and insert “businesses or premises of a specified description, or parts of businesses or premises”.
Member’s explanatory statement
The amendment would ensure that subsection (3) applies to requirements for the closure of businesses or parts of businesses as well as those for the closure of premises or parts of premises.

[The Minister of State, Department for Business, Energy and Industrial Strategy and Department for International Trade (Lord Grimstone of Boscobel) (Con)]

My Lords, it is a pleasure to debate this important Bill in Grand Committee. I would first like to speak to a group of technical amendments tabled in my name, starting with Amendment 1 to Clause 4. This clause is vital to the Bill. It sets out what is meant by a business being “adversely affected by coronavirus”, with certain rent debts under such businesses’ tenancies being in scope for arbitration. Essentially, businesses or premises that were required by regulations to close during a specified period meet the test. Subsection (3) provides important clarity that a requirement to close at particular times is a closure requirement. Amendment 1 ensures that this provision applies in relation to closure of either premises or businesses, or parts of premises or businesses. I am sure noble Lords will agree that this minor amendment produces important clarification.

Turning to Amendment 4, arbitration under the Bill will provide a legally binding solution to unpaid commercial rent from the pandemic. This is important to give certainty and enable parties to return to normal contractual relations. If a tenant is awarded relief, such as a reduction in the protected rent they must pay, they should not have liability for the rest of the original debt. If a guarantor or former tenant ultimately pays the protected rent following an arbitral award, they should be required to pay only the sum required by the award. This should be the case whether, technically, a guarantee or an indemnity has been provided. Amendment 4 expressly sets out those effects of an award. This is intended to give clarity, as requested in a comment in written evidence in the other place. I am grateful to all those who took the time to give their feedback on the technicalities of the Bill. I am pleased to propose this additional clarity through Amendment 4.

Finally, I shall address Amendments 11 and 12. Schedule 2 contains a provision specifying that the Bill’s moratorium and related provisions on debt claims apply both to tenants and anyone who guarantees the tenant’s obligation. I am sure noble Lords will agree that this is important to ensure that the tenant has a genuine opportunity to access arbitration. Amendment 11 ensures that this provision’s protection applies to former tenants who may be liable for unpaid rent under a business tenancy, whether or not they have entered into an authorised guarantee agreement. Amendment 11 also clarifies that the provision applies whether, technically, a guarantee or indemnity has been provided. This amendment addresses a helpful comment made in written evidence in the other place.

Amendment 12 has the same effect as Amendment 11, but applies to Schedule 3’s moratorium and related provisions on winding-up petitions, bankruptcy orders and petitions.

I hope noble Lords will agree that these technical amendments provide useful clarity. I commend them to the Committee and I beg to move.

[The Earl of Lytton (CB)]

My Lords, far be it from me to delay any part of this important Bill, but I would like to be clear about the Minister’s insertion of “businesses or premises”. There does not necessarily seem to be a direct alignment between the two terms. For instance, is the closure of the business inescapably the product of a prohibition, as opposed to something that is advisory? I refer back to the great debate over whether something was guidance or mandatory. It seems to me that we could be looking at businesses with subsidiary operations and so on. If we are not careful, something that affects one part of a business but not the particular part we are talking about, namely the rent on particular premises, would not necessarily align. I would be grateful if the Minister could clarify what is intended there.

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[Lord Fox (LD)]

With apologies to the Minister, I forgot to complete what I was going to ask with respect to government Amendments 11 and 12. Would they in any way change the relationship with former tenants who have unpaid rent when it comes to the process of recovering that rent? That was not clear to me from what the Minister said, probably because it was not the intention of what he was describing. Can he clarify that they would not in any way downgrade the landlord’s ability to pursue unpaid debt from a former tenant?

[Lord Grimstone of Boscobel (Con)]

My Lords, I thank noble Lords for those points. I will answer them as best as I can because there are some technical issues underlying this. I hope noble Lords will not mind if I have to write in amplification of the answers I give.

First, on the point made by the noble Earl, Lord Lytton, the coronavirus regulations imposed mandated closure requirements on either businesses or premises. Sometimes the run two together but they do not necessarily do so. The Bill applies to all such cases where there was a requirement in the coronavirus legislation so one has to look back to that legislation to understand the difference between businesses and premises in it. However, I will write to clarify that further for the noble Earl.

On the question asked by the noble Lord, Lord Fox, the intention is that the arbitral award, which is binding, will substitute itself for the debt that previously existed. On that basis, it should not apply to the credit rating of the person concerned. Having said that, I guess we all have experience, either directly or through colleagues, of where that perhaps has not flowed through to the outcome as it should have done—in which case, the answer, I am sure, is that one must take it up with a credit rating agency. However, if that were to happen, it would be an error that would then have to be corrected.

[Lord Fox (LD)]

In the likely event that the Bill becomes law, might there be some way for the department to inform the credit rating agencies about this process? The last thing a business needs if it is trying to get back up and running is to find that its credit has been shut down. Some pre-emptive action with the key credit rating agencies might help to alleviate the situation.

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[Lord Grimstone of Boscobel (Con)]

I thank the noble Lord for that suggestion; I will make sure that we look at it and take it up. Again, it may even be something that we can mention in the guidance as a point of information for those affected.

On the noble Lord’s further point, when a former tenant is liable for the current tenant’s obligations, the Bill prevents landlords exercising relevant remedies against them in respect of protected debt. This is during the Bill’s temporary moratorium period, which is considered as the period during which the arbitration system is open to applications or an arbitration is ongoing. That may not have answered the noble Lord’s questions fully, but I will amplify my answer in correspondence with him.

Amendment 1 agreed.

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[Lord Thurlow (CB)]

Perhaps I may address the group on some general points that have been touched on already. I am concerned about whether we in the surveyors’ industry, or wherever the other arbitrators may be sourced from, will be able to provide sufficient numbers of arbitrators. There are mixed opinions on the anticipated number of cases requiring arbitration and there will be a significant difference in their characteristics.

I know that the Bill sets out that the Government will ensure that there will be adequate arbitrators but what will happen if there are not? Arbitrators cannot be trained overnight or sourced quickly. There could be a logjam, which would also spill over into proposals to review the progress of the system.

I turn from Amendment 2 to Amendments 6 and 7. I echo the comments of the noble Baroness, Lady Blake, and the noble Lord, Lord Fox, about cost and proportionate fees for arbitration. One cannot compare an arbitration on 250,000 square feet in Canary Wharf with one on a small shop in the Balls Pond Road. It is a different universe and will require different skills. The sums of money involved are hugely different. The fees must be proportionate and, in particular, must not penalise the small trader or small landlord. It might involve a private landlord with a single shop; we have heard about the multiple traders bullying landlords and the issue would apply there, too. I just wanted to make those two points.

[Lord Grimstone of Boscobel (Con)]

Again, I thank noble Lords for their contributions on this group. I thank the noble Baroness, Lady Blake, and the noble Lord, Lord Fox, for their attention to the important issues raised through their amendments. I am grateful for the constructive debate we have had on this, complicated though it is. I have to say to start with that I very much agree with the noble Baroness about the extreme pressure that businesses have been under during this very worrying time. I hope that this Bill will be a small contribution, at least for some, to easing that worry.

Turning first to Amendment 2, I thank the noble Baroness and noble Lords for their consideration of the issue of ensuring adequate arbitrator capacity and administrative support by arbitration bodies. These are key to achieving our aim for disputes to be resolved quickly. As I said before, we have thought it right to adopt a market-based policy approach. This means that approved arbitration bodies, which have expertise in running schemes like this and mounting these things—they will not have run an identical scheme to this one but they will have run similar schemes in the past because it is, in a sense, their core business—will manage their internal capacity processes to perform their functions in the Bill to the required standard.

I believe that this approach of empowering arbitration bodies to manage their internal workflows is the optimal way to ensure that there is enough capacity in the system to deal with the caseload. Not only have my officials been in deep contact with the arbitration bodies about this but I myself held a round table with some of them earlier in the week. I probed them very hard on these matters and, I must say, I got replies that satisfied me as to their ability to cope with this and put the systems in place. In a sense, their very reputation as arbitral bodies depends on them being able to do things like this.

Of course, adopting a more market-based approach does not mean that we are not taking action to engage with the issues of arbitrator capacity and arbitration body resource capability. As I said, we have been engaging extensively and on an ongoing basis with arbitration bodies in relation to these issues, and we will continue to do so. If tweaks have to be made, we will certainly make them.

Let me give a bit more colour to that. The application process for bodies to become approved contains a question on the number of arbitrators listed with the body that would be potentially suitable for the scheme. This is designed to ensure that the arbitration bodies that are approved will be able to list, and therefore appoint, a sufficient number of arbitrators. In any event, simply looking at the number of arbitrators that arbitration bodies can list underrepresents the capacity in the system because it disregards the fact that an arbitrator will be able to take on more than one case at a time.

The noble Lord, Lord Fox, asked, quite properly, about the geographical dispersion of arbitrators. It is very much our intention in the Bill that this is a documents-based process; to that extent, geographical location is less relevant. Also, our belief is that a lot of this will be conducted online by the arbitrators, so the things in this Bill will not necessarily turn on whether there is a local arbitrator on this.

[Lord Fox (LD)]

I thank the Minister for his answer and accept that position, but I think he would also agree that, in order to assess the viability of a particular business correctly, local knowledge is quite helpful. The idea that, at its extreme, you are sat in a village in Herefordshire conversing with someone in Westminster and doing the process, could create confusion.

[Lord Grimstone of Boscobel (Con)]

I thank the noble Lord for that intervention. Of course, in the cases put before the arbitrator, one would expect either the tenant or the landlord themselves to refer to those local issues, but it is of course absolutely open to the arbitrator to call for more information or evidence to deal with that local point. Indeed, it may well be sensible in many cases to appoint an arbitrator who has local knowledge, but I think that the system will adjust and do that as necessary.

The noble Baroness, Lady Blake, asked whether the outstanding cases—we are down to a number in the low thousands now—are, by definition, likely to be the more difficult ones. Some of them are likely to be more difficult but, frankly, quite a proportion of them will involve people who have just been ignoring this topic, hoping that it will go away and something will turn up. Obviously there is something in the noble Baroness’s point, but there is a variety of factors that may be the reason why people have not yet come forward to settle by themselves. Of course, as I have said previously, it is very much our wish that people settle this themselves when they can.

I was asked about viability—and I will come back to it again later. It is difficult to be overly prescriptive about viability. The Bill deliberately does not define viability specifically because—this comes back to the geographical point from the noble Lord, Lord Fox—arbitrators need to make the assessment in the context of each individual business’s circumstances, especially given the variety of businesses that may use the scheme. It is essential that arbitrators do that, and have the flexibility to do that, to achieve a fair outcome. We will produce more statutory guidance for arbitrators on this, but I have confidence because, in a sense, it is their whole business to be able to arbitrate matters—that is, to weigh up the necessary factors and come to a sensible conclusion.

[Lord Fox (LD)]

I appreciate that, and I am pleased that there will be more statutory guidance. It seems to me that the sources of data should not be the topic under discussion during the arbitration process. Can the Minister give us some sense of the basis on which people are making decisions, while at the same time accepting my point that there are local variations in markets and that this element would take out some aspects of what could be, in the words of the noble Earl, Lord Lytton, gamed?

[Lord Grimstone of Boscobel (Con)]

I thank the noble Lord for that intervention. From talking to some of the arbitration bodies, I know that the way they operate is that, when a case like this comes to a body for it to decide on the arbitrator, normally a list of arbitrators is put in front of the parties for them to choose. This is a thoughtful process, as it were. The list of names that the arbitral bodies put before the parties to choose an arbitrator is done rationally. Frankly, one would expect that, if there are locally based arbitrators to do this, they will be the people on the list; the parties may then choose them. I cannot give the noble Lord an absolute guarantee in relation to that but it seems to me that, sensibly, this will be how the system should, and will, operate.

Turning to Amendment 3, I thank the noble Lord, Lord Fox, for his interest in the publication of awards. We absolutely want to ensure that the public can easily access arbitral awards issued under this scheme. That is why Clause 18 already requires arbitrators to publish an award made, together with the reasons for making it. I am sure that, as this scheme rolls out, if we find that this publicity is not reaching the people it needs to, we will take steps to ensure that it does.

We do not believe it is necessary to require approved arbitration bodies to publish decisions as well, although some may well choose to. In addition, we envisage that as part of its function of overseeing an arbitration, an approved arbitration body would ensure that the award is published as required. Frankly, the convenient way to do that would be on the website of the arbitral body. We are in ongoing discussions with arbitration bodies regarding how to ensure that awards are published in an accessible manner for landlords and tenants who are considering making a reference to arbitration.

I think we are in absolutely the same place on the need for this. I hope I have persuaded the noble Lord that this amendment is not necessary and I request that he does not press it.

Turning to Amendment 5, I thank the noble Baroness, Lady Blake, the noble Lord, Lord Fox, and other noble Lords who have spoken for their consideration of the important issue of arbitration fees and the Secretary of State’s power to cap those fees. I assure your Lordships that we also want to ensure that all those who need to access the scheme can do so. That is why, for example, when arbitration bodies seek approval we are specifically asking them what they intend to do to make sure the scheme is affordable for SMEs.

As I have mentioned, the Bill adopts a market-based approach. Approved arbitration bodies, which have expertise in running and costing similar schemes, will have the function of setting fees. It has been made clear that while fees should be set at a level that incentivises arbitrators to act, it is important that the scheme is affordable for all those who need to access it. Capping fees prematurely could reduce the number of arbitrators able to act and in a sense would compound the problem that we are trying to solve. A cap should therefore be imposed only where there is evidence that it is needed. There is presently no such evidence but, if it were to emerge, the Secretary of State is prepared to exercise the power to cap fees.

[Lord Thurlow (CB)]

Just to add a little substance to the Minister’s point about the proportionality of fees, I think it worth mentioning that in order to present their case to the arbitrator, SMEs in particular will be engaging professionals who charge fees—accountants, surveyors and possibly many others. All this presses upon the delicate P&L of SMEs and, I fear, will have the effect of reducing the numbers that seek arbitration simply because they cannot afford it. That is a supplementary point to the cost of the arbitration. I am just pointing out that there are a lot of ancillary fees.

[Lord Grimstone of Boscobel (Con)]

I thank the noble Lord for that intervention. I understand the point that he is making. Having said that, I think it is right to see how this develops in practice as it moves forward. The Secretary of State has the power to cap fees, but to do that at the beginning could have the perverse effect of worsening the situation by meaning that there will be fewer arbitrators coming forward to do this.

Perhaps I may clarify a point I made earlier about the parties choosing an arbitrator. Formally, of course, the arbitrator is chosen by the arbitral bodies but, from discussion with those bodies, it is clear that they work through with the parties who might be the most appropriate arbitrator to appoint in a certain case.

We do not intend to produce guidelines specifying the factors to be considered in relation to the use of the power to cap fees, but I say categorically that the affordability of the scheme and whether arbitrators are sufficiently incentivised to act will be considered with any other relevant factors, if ever the Secretary of State decides that the power has to be exercised. In conclusion on that amendment, I know that, like us, the noble Baroness and the noble Lords who have spoken are keen to ensure that there are enough arbitrators to administer the scheme, and I therefore ask for Amendment 2 to be withdrawn.

On Amendment 6, which also concerns the Secretary of State’s powers to cap arbitration fees, I am again grateful to the noble Baroness and the noble Lord for emphasising the point about the affordability and accessibility of the scheme, should the power to cap fees be exercised. As I have said before, I agree that these are crucial issues. If the Secretary of State were to exercise the power to cap fees, I can reassure the noble Baroness and the noble Lord that the ability of landlords and tenants to access the scheme and the affordability of arbitration fees would of course be considered, along with other relevant factors such as whether arbitrators are sufficiently incentivised to take on cases. I reiterate that the Government will continue to work with approved arbitration bodies to monitor arbitration fees as well as arbitrator capacity. As I said, the Secretary of State will use these delegated powers only if it seems the right thing to do, taking into account the factors at the time.

The Bill gives arbitration bodies that are experienced at costing such schemes the power to set their own fee levels according to market demand. These fees will be publicised, and it will be possible to compare the fees of one arbitral body with those of another. We will absolutely monitor this and make sure that it is balanced with the other considerations to which I have referred. In conclusion, we will continue to work with approved arbitration bodies to monitor arbitration fees, as well as arbitrator capacity. Therefore, I hope that the noble Baroness and the noble Lord are reassured, and I request that Amendment 6 not be pressed.

On Amendment 7, the noble Baroness has proposed an amendment that would require the Secretary of State to issue guidance to arbitrators on two specific points: how the viability of the tenant’s business should be assessed and over what timescale. I agree that these issues are important, but I hope to persuade her that the amendment is unnecessary.

I hope she would agree that a very large variety of businesses of different sizes in a diverse range of business sectors may use the arbitration process provided in the Bill. In light of that, it is clear that arbitrators need the flexibility to make the assessment of viability against the context in which the individual business operates, considering the different kinds of evidence that may be available. We have to be alive to the danger of being too prescriptive, as a one-size-fits-all approach could lead to unfair arbitration outcomes.

That said, the Government are providing assistance to arbitrators who have to make these assessments. There is a list of factors that the arbitrator must consider when assessing viability in Clause 16. Annexe B of the revised code of practice sets out a detailed non-exhaustive list of the types of evidence that tenants, landlords and arbitrators should consider when assessing the viability of a tenant’s business and the impact of any relief on protected rent debt on the landlord’s solvency.

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[The Earl of Lytton (CB)]

Perhaps I may pick up on a couple of points that the Minister made. It appears that he envisages that the arbitrator will have to use quite a lot of his own discretion. In my way of thinking, that does not fall under the Arbitration Act 1996 and is, in fact, an adjudication process of a rather different nature. He is probably not in a position to answer that right now, and if he would write to me, that would be fine. However, I worry that the way in which the Government see arbitration here is irregular in terms of what most people would understand as the strictures of arbitration.

[Lord Grimstone of Boscobel (Con)]

My Lords, I thank the noble Earl for his intervention. The best answer I can give is that it has been fully discussed with the arbitral bodies whether this is something that they feel the arbitrators they are responsible for can do. I have had complete reassurance on this point, but I will consider it again and write to the noble Earl.

[Baroness Blake of Leeds (Lab)]

I conclude by thanking the Minister for his very full responses to the concerns raised in this group of amendments. It is fair to say there is still some concern that we will probably pursue at the next stages. I wonder whether the Minister can write to let me know when the statutory guidance, particularly on viability, is likely to be made public. Again, we are in difficulty when we have not had sight of the guidance around the Bill. I do not want to open old wounds again, but it is a recurring theme that we have to deal with. Any clarity on that would be helpful.

I am grateful for the responses but, without going through all the detail again, in taking this work forward it is essential that all the parties have confidence in what is being put before them. The issues raised today are consistency, clarity, transparency and fairness. We must make sure that whatever comes through is deemed to have all those principles or qualities, wherever in the country you happen to be. I admit that I share the concerns of the noble Lord, Lord Fox, about local knowledge. Looking at the statistics, it is clear that certain parts of the country have been affected more than others. The stress that those areas are feeling is also not equally shared in relation to some of the big issues we have coming forward.

[Lord Grimstone of Boscobel (Con)]

It may be helpful if I say that I understand the noble Baroness’s point about guidance. It is very much our intention to publish the draft guidance before Report. I will keep the noble Baroness and noble Lords in touch with that. I understand why that question has been asked.

[Baroness Blake of Leeds (Lab)]

I thank the Minister for that intervention. We will look forward with interest to the guidance coming through. It is essential that it comes before Report, if I am allowed to say that. With those comments, and looking forward to further clarification, I beg leave to withdraw the amendment.

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Moved by

[Lord Grimstone of Boscobel]

4: Clause 14, page 10, line 11, at end insert—
“(8A) An award giving the tenant relief from payment of a protected rent debt is to be taken as altering the effect of the terms of tenancy in relation to the protected rent constituting the debt. (8B) Subsection (8A) means, in particular, that—(a) the tenant is not to be regarded as in breach of covenant by virtue of—(i) non-payment of an amount written off by the award, or(ii) failure to pay an amount payable under the terms of the award before it falls due under those terms;(b) a guarantor of the tenant’s obligation to pay rent, or a former tenant who is otherwise liable for a failure by the tenant to pay rent, is not liable in respect of anything mentioned in paragraph (a)(i) or (ii);(c) a person other than the tenant who is liable for the payment of rent on an indemnity basis is not liable—(i) to pay any unpaid protected rent written off by the award, or(ii) to pay an amount payable under the terms of the award before it falls due under those terms;(d) any amount payable under the terms of the award is to be treated for the purposes of the tenancy as rent payable under the tenancy.”Member’s explanatory statement
The amendment would clarify that an arbitrator’s award of relief from payment of protected rent alters the effect of tenancy terms as to the payment of that rent. This means that any other person liable to pay the protected rent is only liable in relation to payments required under the award.

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Moved by

[Lord Grimstone of Boscobel]

8: Clause 27, page 15, line 15, at end insert “adversely”
Member’s explanatory statement
The amendment would bring the language into line with the corresponding wording in Clause 4.

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[Lord Grimstone of Boscobel (Con)]

My Lords, in moving Amendment 8, I am pleased to speak also to Amendments 9 to Clause 27. Both are in my name. Clause 27 provides a power to apply provisions of the Bill again in order to act swiftly in the event of another wave of coronavirus requiring further mandated closures.

Amendment 9 would ensure that the power can be used for mandated closure after the protected period in the Bill, whether before or after the Bill is passed, and whether or not the closure requirement has ended when regulations are made. Amendments 8 and 9 also clarify the meaning of a closure requirement, and more closely align the drafting with corresponding provisions of Clause 4. We have seen that the Covid landscape can change very quickly; Amendments 8 and 9 are therefore to ensure the power is clear and robust for any new waves. I beg to move.

[Lord Fox (LD)]

My Lords, I shall reserve almost all that I shall say about Clause 27 for the next debate—but it is good, if Clause 27 survives, that its language should be consistent with the other parts of the Bill. However, we shall debate its existence later.

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Moved by

[Lord Grimstone of Boscobel]

9: Clause 27, page 15, line 17, leave out subsection (2) and insert—
“(2) A business tenancy is adversely affected by a closure requirement for the purposes of subsection (1) if—(a) the whole or part of a business carried on at or from the premises comprised in the tenancy, or(b) the whole or part of those premises,is of a description subject to a closure requirement imposed at any time after 7 August 2021.(2A) In this section “closure requirement” means a requirement imposed by regulations as a public health response to coronavirus and expressed as an obligation—(a) to close businesses, or parts of businesses, of a specified description, or(b) to close premises, or parts of premises, of a specified description.(2B) In subsection (2A) “coronavirus” means severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2).(2C) The power under this section is exercisable whether or not the closure requirement remains in force when the regulations are made.(2D) Subsections (3) to (5) of section 4 apply for purposes of this section as they apply for purposes of section 4.”Member’s explanatory statement
The amendment would clarify the meaning of terms used in Clause 27 and bring its drafting more in line with corresponding provisions of Clause 4. It would also ensure that the Clause 27 power is exercisable in relation to new closure requirements imposed before the Bill is enacted as well as any imposed subsequently.

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[Lord Thurlow (CB)]

I do not want to make any specific points here, but I echo the very important point made by the Delegated Powers and Regulatory Reform Committee. As a House, we have been assaulted with these clauses with increasing frequency over the past few years. The Delegated Powers Committee has written an unprompted report criticising the adoption of these powers.

On this Bill, I think it unnecessary because we are dealing with a generic problem. I feel that it could be comfortably addressed if there was a need for further extensions as a result of outbreaks. It could be rolled forward, with amendments as required, in primary legislation. The bulk of the work—the hard work—has been done, so I echo the comments in the previous speeches.

[Lord Grimstone of Boscobel (Con)]

My Lords, I am grateful to the noble Lord, Lord Fox, and the noble Baroness, Lady Blake, for notification of their intention to oppose the Question that Clause 27 stand part of the Bill, and for highlighting the concerns expressed by the DPRRC. I also listened carefully to the comments of the noble Lord, Lord Thurlow, of course.

As has been stated in both the other House and this House, we have already seen with the omicron variant that the future of the pandemic is uncertain. I believe that the power in Clause 27 is important because it provides the Government with the ability to take a flexible and targeted approach to reapply any or all of the provisions in the Bill to respond to the specific circumstances of any future periods of coronavirus. None of us can predict what will happen. I assure noble Lords that we will of course always exercise this power in accordance with human rights.

Having said that, we are grateful for the report of the Delegated Powers and Regulatory Reform Committee. I acknowledge that it makes some important points, which I will consider carefully as we prepare for Report.

[Lord Fox (LD)]

I am not sure whether I have to withdraw, but I thank the Minister for his comments. We look forward to consulting between Committee and Report. This is important. I cannot speak for the noble Baroness, Lady Blake, but I suspect that we would both consider it necessary to take this forward in the event that the Minister was unable to meet the DPRRC at least most of the way.

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[Lord Grimstone of Boscobel (Con)]

My Lords, I rise with some sadness, given that this is the last group. I thought that we were getting into the swing of it this afternoon. I should have hoped for further groups in which noble Lords could have demonstrated their expertise.

Amendment 10 proposes a new clause after Clause 27. I thank the noble Lord, Lord Fox, for his contribution and the noble Baroness, Lady Blake. I am also particularly grateful for the support of the noble Lord, Lord Thurlow.

The Government recognise the importance of appropriately reviewing legislation. I would like to reassure the noble Lord and the noble Baroness that the Bill contains appropriate means of monitoring the arbitration system, which is the essence of the Bill, including the awards made by arbitrators. The period under the Bill for making an application for arbitration is six months, and we anticipate that cases should be resolved as soon as possible thereafter.

The Bill already requires approved arbitration bodies to provide a report to the Secretary of State if requested. This can include details of the progress of arbitrations and the awards made. The Bill also requires arbitrators to publish their awards and reasoning. This will provide transparency and help with consistency of approach. If the need arises, the Secretary of State can also issue updated guidance to arbitrators, for example to clarify or add any points that may arise.

It is neither necessary nor beneficial to require publication of a review within just four months of the Bill being passed. That could slow the arbitration process and the prompt resolution that the whole scheme intends, should parties to arbitration and arbitrators await any findings and any new guidance. I appreciate that the noble Lord and the noble Baroness have proposed this with good intentions, but I ask the noble Lord to withdraw his amendment.

[Lord Fox (LD)]

Turning the telescope around the other way, the reason for specifying four months was the Government specifying six months in Clause 9(2). It seems perverse to have a review that comes after the process has essentially ended. That is the problem. I acknowledge the point made by the noble Lord, Lord Thurlow—I shall always remember his name; “That’ll learn you”, as they say where I am from—and I accept his point that three to four months is too short to review this. Therefore, six months is too short for the cut-off point. In a strange way, the noble Lord, Lord Thurlow, kind of makes my concern clear. If we are to review this, the review needs to come when changes can be made and when significant numbers of potential future cases are better served by the process. Does the Minister agree?

[Lord Grimstone of Boscobel (Con)]

My Lords, I think I will stick by my previous comments. I believe that not just the interests of landlords and tenants but those of the country are best served by getting on with this. Even though I respect the points that the noble Lord made, I stick with my previous comments.

[Lord Fox (LD)]

I thank the Minister for his comments, which I clearly do not agree with. Everybody’s interests are best served by getting on with something as long as what we are getting on with is a good thing. As someone who climbs and rambles, I know that heading off in the wrong direction and keeping walking for a period before starting to assess the direction in which one is walking is not a good idea. What one does when one sets out on a journey is check and check again, and make changes. This amendment would make sure that any trimming that is required to add direction is done in time for it to have a meaningful effect on the outcome of the largest possible number of cases. Having said that three times in three different ways, I beg leave to withdraw the amendment.

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Moved by

[Lord Grimstone of Boscobel]

11: Schedule 2, page 19, line 45, at end insert—
“(b) a person other than the tenant who is liable on an indemnity basis for the payment of rent under a business tenancy, and(c) a former tenant who is liable for the payment of rent under a business tenancy.”Member’s explanatory statement
The amendment would secure that references to the tenant include any other persons who are liable under a business tenancy for payment of rent.

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Moved by

[Lord Grimstone of Boscobel]

12: Schedule 3, page 23, line 42, at end insert—
“(b) a person other than the tenant who is liable on an indemnity basis for the payment of rent under a business tenancy, and(c) a former tenant who is liable for the payment of rent under a business tenancy.”Member’s explanatory statement
The amendment would secure that references to the tenant include any other persons who are liable under a business tenancy for payment of rent.