Business and Planning Bill

Baroness Bowles of Berkhamsted Excerpts

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Monday 13th July 2020 Lords Chamber

[Lord Clement-Jones (LD) [V]]

My Lords, I speak in support of Amendment 44, so well introduced by the noble Baroness, Lady Neville-Rolfe. As she emphasised, it is a deregulatory amendment that entirely fits within the context of this Bill. Given her experience running the Better Regulation Unit and on the board of a major retailer, she should know.

This amendment is designed to give retailers the option of carrying out contactless age verification at a distance and automatically. It is supported not only by those representing and directly providing digital solutions, such as techUK, NCR and digital identity providers such as Yoti, but by the leaders of the key organisations involved in the retail trade, the British Retail Consortium and the Scottish Grocers Federation. It has the twin benefits of keeping retail staff and customers safe by assisting compliance with coronavirus guidelines and social distancing, and preventing the sales of age-restricted goods to minors, upholding the principles of Challenge 25—the retailing strategy that encourages anyone who is over 18 but looks under 25 to carry acceptable ID if they wish to buy alcohol.

The relaxation of coronavirus lockdown measures will now see an increase in in-store footfall, a potential rise in abuse and social distancing challenges with queues. Queues in supermarkets in particular create a point of potential congestion that can put staff at risk. Retailers have noted that almost 24% of baskets contain an age-restricted item. As a result of current rules, many customers wait longer than necessary. It can typically take 63 seconds to alert a staff member and carry out an age check when a basket includes an age-restricted good.

Age verification has a British standard, BSI PAS 1296 —Online Age Checking: Provision and Use of Online Age Check Services—which has been approved for use for all products apart from alcohol and has received assured advice from the Association of Convenience Stores. The standard has been worked on by age-verification experts and covers all the aspects important for designing and building a robust age-verification system—namely data protection, security, transparency and effective operation. Such a contactless method would take pressure off store staff, at a time when they are busy and pressured, and when wrong decisions can be made and there is temptation not to ask for ID.

The current conditions of customers wearing face coverings and social distancing make checking physical ID documents for age-restricted goods, in a retail context, much harder for staff. Staff have enough problems with aggressive customers without asking them to remove a mask or face covering that they are wearing under government guidance. As a result, there is a heightened risk of increased verbal, physical and racial abuse, increased coronavirus transmission risk when physically examining Challenge 25 approved ID documents, and the difficulty of matching documents to a customer wearing a face covering.

I have, for some time, been a supporter of age verification through digital identity systems, first legislated for in the Digital Economy Act 2017. It is clear that highly accurate digital age-proofing and identity-checking solutions are available off the shelf in the UK today that can significantly help alleviate issues facing retail staff. They are trusted for right to remain without a formal standard for 3 million-plus people and approved by the Joint Money Laundering Steering Group for financial services in the UK. In-store use of these technologies has been successful in the US and Europe—integrated into self-checkout and automated dispensing machines—but not in the UK, purely due to the current inconsistent regulatory requirements. We are behind other nations as a result, which is ironic given that the UK is playing a leading role in this technology.

In summary, the amendment would protect customers’ health, help with the development of a leading UK technology, reduce cost to retail because it reduces time taken at checkout and self-service, and reduce regulatory burden significantly because it removes the need for a second paper check of ID after the digital check. What can the Government conceivably object to in this amendment?

[Baroness Bowles of Berkhamsted (LD) [V]]

My Lords, I am speaking in favour of Amendment 3 from the noble Lord, Lord Balfe. If anything like the normal timetable had been in existence, I would have added my name to it.

At Second Reading, I asked for clarification over the scope of Clause 1(4)(b), specifically whether it covers supermarkets setting up pavement licences and whether that is good for the hospitality sector. The Minister wrote in reply, confirming that it covers any premises, but I will read into the record some of what the letter says, because of the emphasis it gives:

“This includes shops, such as convenience stores and supermarkets, which you referred to, from which food or drink can be bought. Draft guidance mentions public houses, cafés, bars and restaurants, including other types of food and drink establishments such as snack bars, coffee shops and ice cream parlours, though eligibility goes beyond this. It would include any businesses which sell food or drink, for example theatres and galleries with cafés and bars.


You also raised an important question about whether this is helping the hospitality industry by allowing other premises, such as shops from which food or drink can be bought to apply for pavement licences. Given that indoor space will be limited while social distancing measures apply, we want to provide a temporary process that helps support as many businesses to reopen as possible by allowing them to serve customers outdoors. This process is intended to help give much needed support to the hospitality industry, but given the impact Covid-19 has had on the whole economy, this provision should not be limited just to the hospitality industry when there is an opportunity for other sectors which have also been struggling economically to benefit.”

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Moved by

[Baroness Bowles of Berkhamsted]

24: After Clause 7, insert the following new Clause—
“Outdoor space licences
(1) A person whose use or proposed use of any premises in England is or includes relevant use may apply to the appropriate local authority to extend the licence for relevant use to outdoor areas within the curtilage of the licensed premises (an “outdoor space licence”) and such applications are subject to the provisions specified in paragraphs (a) to (f) that apply to pavement licence applications with “an outdoor space licence” substituted for “a pavement licence”—(a) application provisions under section 2 except for subsection (2)(a), (b) and (e);(b) determination of applications under section 3(1) to (4);(c) duration under section 4;(d) conditions under section 5;(e) enforcement and revocation under section 6 except for subsection (3)(a);(f) effects under section 7(2).(2) Where a person has applied to a local authority for a variation of a licence in respect of relevant use and before that licence is granted the person applies for an outdoor space licence under this section, the person may express to the local authority that they want to withdraw their earlier application when applying for an outdoor space licence, and if the person has paid any fee in connection with that application the local authority to which the outdoor space licence application is made may not require a fee for the outdoor space application.”Member’s explanatory statement
This new Clause creates a fast-track procedure similar to that for pavement licences to provide ‘outdoor space licences’ for areas within the curtilage of licensed premises but not already covered by the existing licence, eg car parks or courtyards.

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[Baroness Bowles of Berkhamsted [V]]

My Lords, this amendment follows up the point that I raised at Second Reading about the use of outdoor spaces within the curtilage of premises that are not spaces covered by the definition of relevant highways and pavement licences. I did not get a reply, which I am sure is an oversight, as the Minister wrote on another matter. I wrote back on Friday, so at least there has been some advance notice about this somewhat fuzzy issue.

Newspapers have been proclaiming that this Bill allows pubs to turn their car parks into beer gardens. One such article was in the Sun on 23 June, headlined:

“Pubs and hotels allowed to turn car parks and grounds into beer gardens to boost economy as lockdown eases”,


and the Mirror said:

“What pubs will look like with beer gardens in car parks as lockdown is eased.”


Even the trade magazine Morning Advertiser said:

“This means pubs and restaurants will be able to use car parks and terraces as dining and drinking areas using their existing seating licences ... thanks to the Business and Planning Bill”.


There are other articles—indeed, so many that it looks like there must have been a briefing.

If that is correct then I am content, but I am confused as to how this is achieved by the Bill if car parks are not part of a relevant highway. So my first question is: are they covered as a “relevant highway” under Part 7A of the Highways Act? I know that they are public places in relation to some driving offences but, as I understand it, they are not highways. A simple look at Part 7A implies that they are not, but who knows what terms one might uncover with more research. In any event, I am also interested in patios, courtyards and other places that might be within the curtilage and not already under the licence. They are clearly not highways. So where is the general new provision? I have proposed one in my amendment just in case it is not there.

Next is the question of whether a licence is needed anyway. My starting point was an awareness that various pubs have already applied for licence variations for car parks and patios. I have also had some emails sent to me on the subject. Some people have the understanding that off-sales cover car park use—on the basis that it is the sale and not the drinking that is licensed—and that the extended off-sales therefore bring them into play if they were not in play already.

However the FAQs about off-sales on the Stafford Borough Council website make the situation clear:

“Q: Can I provide seating for customers of the business, for the purposes of consumption?”


That is for the consumption of off-sales.

“A: No. Seating cannot be made available (and this can include areas not under the control of the premises) and this is not restricted to seating within the premises such as beer gardens and adjoining smoking areas, but would include areas adjacent to the premises which also might include public benches.”


It rules that out: no providing of seating for drinking your off-licence purchases, although local authorities can vary significantly in their levels of strictness.

Then there is the matter of where the sale is made. If there is a bar in the car park, it is clear that the sale is made there. If a table order is taken and paid for in the car park or the beer garden, some people think that is the point of sale, but in the 2002 Valpak packaging case the judge held thatAn article in 2018 about pubs and gardens in the trade magazine Morning Advertiser notes that it is necessary to consider: whether the pub’s outside area is already part of the licence and what rules apply, as restrictions are common, often on time; if it is unlicensed and it is wished to include it then bear in mind there can be objections during the application procedure; that it can be used anyway if it is accompanied by the service of hot food between 5 am and 11 pm as that does not require a licence; and whether it is part of a public highway as then both planning and a pavement licence may be required.

All that, and indeed a lot more, is the background to my amendment, which in simple terms just says that open-space licences should be available on similar terms to pavement licences to cover cases where such a provision is needed. In most instances, non-pavement outdoor spaces are less likely to cause obstruction, and that is a valuable consideration, although they would still need to be treated sensitively with regard to noise and nuisance, especially in residential areas, and for that purpose I have copied in all the parts of the pavement licences referencing such matters. I beg to move.

[Lord Lucas [V]]

My Lords, I am delighted to support this amendment. I hope the Government will consider allowing councils considerable freedom as to what land they allow premises to use, obviously subject to the permission of the council and the landholder. If you look at a rather complicated town such as Eastbourne, there are few places where you can use the pavement, but not that far away there may well be spaces you could allow a premises to use. It gets quite difficult to negotiate the Bill as it is written, but with a bit more freedom for a local council to apply common sense to where they are prepared to allow tables to be put, we could get to a useful outcome. I encourage my noble friend to look at widening the scope of the permissions that the council is allowed to give so that we can find within the confines of a convoluted town the space that our businesses need.

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In summary, the pavement licence process would already allow premises to use adjacent highways, and where it does not we have put in place temporary permitted development rights that could be used. On this basis, I believe the Government have provided sufficient mechanisms to allow businesses to use outdoor spaces, and I therefore hope that the noble Baroness will withdraw her amendment.

[Baroness Bowles of Berkhamsted [V]]

My Lords, if what the Minister says is accurate—and I am sure it is intended to be accurate—I am very happy that my amendment is indeed superfluous. When I looked at the temporary permissions, it seemed to me that they referenced back to the highways, but I am prepared to have another look and to continue the dialogue, just to be absolutely certain that that is the right interpretation. If it is and that is the end of the matter, then we all know a little bit more about the present situation. I am happy to withdraw my amendment.

Amendment 24 withdrawn.

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Moved by

[Baroness Bowles of Berkhamsted]

46: Clause 12, page 21, line 8, at end insert “insofar as such an order would relate to affordability or terms of the credit agreement required by the Bounce Back Loan Scheme.”

[Baroness Bowles of Berkhamsted [V]]

My Lords, I have two amendments in this group and thank the noble Lord, Lord Stevenson, the noble Baroness, Lady Altmann, and my noble friend Lord German for their support. These amendments follow up on points I made at Second Reading about whether it was right to suspend all of Section 140B of the Consumer Credit Act or, as my Amendment 46 suggests, only where it is related to affordability and terms required by the Bounce Back Loans Scheme.

In this context it is important to note that neither Section 140B on court remedies nor Section 140A defining the scope of an unfair relationship is limited to, or specifically mentions, matters of affordability. The court can take all matters into consideration and, if truth be told, there should be no need for any waiving of the section as the government terms for bounce-back loans would be taken into consideration.

We know that the banks want belt-and-braces protection and I would give them that on affordability, but it is wholly wrong to remove every protection, giving banks belt and braces while stripping small businesses naked against other overbearing activity; charges and default procedures immediately spring to mind.

The Minister explained in reply at Second Reading—I can agree with this—that the Government have put conditions to the loan that are intended to ensure it is sustainable, limiting to 25% of turnover with fixed, affordable interest as well as the 100% guarantee. I also agree that the businesses need to take responsibility. Despite that, defaults will inevitably happen because it is unpredictable what the effects of coronavirus will be.

The question then becomes: what governs subsequent behaviour? On the one hand—I am sure this worries the Treasury—what incentives are there for banks to try very hard to get repayment, especially if they get too tough and people like me make a fuss and cause them reputational harm? Is it not easier for them to just rely on the government guarantee? On the other hand, the relationship between a lender—or a lender pressed by government—and a small debtor is inherently one of the powerful against the weak and can be abused.

In the Commons, Kevin Hollinrake said that as co-chair of the All-Party Group on Fair Business Banking he supported

“the suspension of the Consumer Credit Act 1974 with regard to bounce-back loans due to affordability issues,”

and asked:

“but does the Secretary of State agree that it is vital that lenders still comply with the requirement to treat customers fairly in the collection process or if there are debt issues later on and that forbearance is applied?”

The Business Secretary replied:

“my hon. Friend raises an incredibly important point. Yes, forbearance is part of these measures, and we would expect that very much to apply.”—[Official Report, Commons, 29/6/20; col. 52.]

At Second Reading last week the noble Lord the Minister said that the Government were convening workshops with lenders to discuss how they will seek to recover loans where feasible, but none of that guarantees or restrains what lenders will do.

Although the lender cannot require security over personal property, security over the assets of the business is still possible, which may well be the essential tools of the trade, so carefully put out of reach during moratorium in the recent insolvency Act. What is to stop that at the first sign of default? As noble Lords have frequently reminded the Government, it is not the friendly local bank manager who deals with defaults; they go to the hard-nosed recovery units, where even the existing consumer protections seem to have held little sway, because small businesses cannot afford to take the matter to court and the FCA is reluctant to intervene in contracts, one-sided though they may be.

None of this, however, justifies removal of the last-stand method of redress of the courts for matters that are an improper use of unequal power: no protection against gouging behaviour over charges as soon as there is any default; no protection for excessive demands over security of a business’s assets; no preventing the use of the bounce-back loan default to trigger other eventualities, perhaps to force unfavourable loans or restructuring, which might then include instances where personal guarantees have been given. All those possible actions, of types seen in the past, seem to be outside the spirit of the bounce-back loans and the assurance given by the Business Secretary in the Commons, but how will they be prevented or rectified?

Disapplying the court remedy is removing a safety net available in all other circumstances. Why should it not apply here? Further, it seems that corresponding FCA discipline may also be disapplied, and other consumer credit matters have already been disapplied through statutory instruments. Returning to the matter of the workshops with lenders, will the outcome of those workshops be shared with Members of this House or the public?

It is not that I am necessarily expecting the worst behaviour, but the law must be able to address the worst. Therefore, I have put forward two amendments. Amendment 46 is exactly what Kevin Hollinrake said, and states that the disapplication should apply only

“insofar as such an order would relate to affordability or terms of the credit agreement required by the Bounce Back Loan Scheme.”

Amendment 47 says that:

“Repayment, rearrangement, fees or other new requirements may not be imposed on Bounce Back Loans in consequence of terms in or trigger events in other financial agreements with the lender.”


This is to prevent the kind of reach-through that I have mentioned previously.

Finally, I must mention that I understand Amendment 48, in the name of the noble Lord, Lord Stevenson, and his anxiety to get at the statistics of bounce-back loans. I add that, in a year’s time, I will start to become anxious to have statistics on repayments, defaults and forbearance. I beg to move.

[Baroness Altmann (Con) [V]]

My Lords, I support Amendment 46, to which I have added my name, and congratulate the noble Baroness, Lady Bowles, on her vigilance with respect to small businesses that are in a weakened financial state due to the Covid-19 restrictions; and her efforts to assist them in facing the large banks that may be trying to recover bounce-back loans, or penalise struggling firms in ways that were never intended by emergency legislation. I also congratulate the Government on their bounce-back loans initiative. However, I believe that this amendment is necessary to potentially address the asymmetry of power, which is a significant potential threat to the future of many hard-hit SMEs.

SMEs could face draconian recovery tactics, such as were employed by the infamous Global Recovery Group after the 2008 financial crisis, whether in the form of excessive fees or the taking over of business assets. The noble Baroness, Lady Bowles, is right that a court remedy is essential, not least to avoid giving a potential carte blanche to some of the less scrupulous bank executives.

Many banks wish to behave well, but this amendment is aimed at those who may not do so and is trying to anticipate and deter some of the practices that we have seen before. Bounce-bank loans are surely intended to help as many businesses as possible bounce bank, especially SMEs, rather than to offer a heads-you-win, tails-you-lose opportunity to lenders at the expense of business owners who were forced by the Government to suspend or curtail their business’s activity.

I also support the aims of Amendments 47 and 48 and hope that the Minister will listen carefully and agree to bring back amendments on Report that address this potential issue.

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For the reasons that I have set out, I am not able to accept the amendment. I hope that the noble Lord will therefore choose not to move it when it is called.

[Baroness Bowles of Berkhamsted [V]]

My Lords, I thank all noble Lords who have spoken in this debate. In the interests of time I will not go through everything, but the noble Baroness, Lady Altmann, reminded us of the whole GRG saga and that the Consumer Credit Act and provisions for the courts are the ultimate insurance against bad behaviour from banks, which has been witnessed.

My noble friend Lord German reminded us that Section 140A, 140B and 140C, and indeed the Consumer Credit Act in general, are intended to cover loopholes and lacunae and to stop banks being able to get away with inappropriate things, and in particular to stop the weaving in of other conditions.

My noble friend Lady Kramer reminded us about the culture of banks today, and the way they are failing to pass on funds to alternate lenders. So, despite the Minister’s words about how banks have reformed, there remains a question mark over their culture because of that current behaviour in the context of coronavirus and the bounce-back loans. They appear to be putting themselves first. As my noble friend Lady Kramer said, give them a loophole and it will be used. I fear that that is too true. The noble Lord, Lord Stevenson, also indicated his concern about removing the statutory underpinning and questioned whether it was proportionate.

One or two things that the Minister said were reassuring: that the lender cannot apply any fees, which may mean that gouging cannot happen; and regarding assistance and free advice. However, looking at the detail, some other things become more worrying. It tends to be said that there are no personal guarantees, but it seems that that is not actually true: it covers only the primary residence and primary vehicle. There could be other things that would appear not to come under the guarantee. The Government would seem to have made a commitment to disapply the Consumer Credit Act as part of the terms of bounce-back loans. This means that they have promised to disapply primary legislation before any legislation has been passed to allow that. That is an extraordinarily worrying precedent, no matter that we are in an emergency situation. The Government have already disapplied primary legislation and are effectively saying: “We cannot go back on what we have promised”. As a matter of principle, I think that that is something to which I quite profoundly object.

I will have a look at other things that the Minister said. I acknowledge that there are some things in there that show how the Government have tried to fill in for the action that they have taken. So maybe businesses are not quite so naked as I suggested, but it is still a very worrying situation. I will withdraw my amendment now, but I may wish to return to this matter on Report.

Amendment 46 withdrawn.