English Devolution and Community Empowerment Bill (Eleventh sitting)

Debate between Miatta Fahnbulleh and Mike Reader

Committee stage
Tuesday 28th October 2025 Public Bill Committees

[Miatta Fahnbulleh]

Clause 71 and schedule 31 will ban the use of upward-only rent review clauses in commercial leases in England and Wales. Those clauses put commercial tenants at a disadvantage by keeping rents artificially high even when the market declines. In no other credible market would one party be contractually bound to accept only upward price changes, with no recourse to changing conditions. We saw in covid how damaging that can be. We have also heard at first hand from stakeholders and business representatives—including UKHospitality, the Federation of Small Businesses and the British Independent Retailers Association—about the adverse effects that upward-only rent reviews have.

An efficient and dynamic market for leasing commercial property is vital for growth and for the vitality of our high streets. Upward-only rent reviews create an imbalance of supply and demand, contributing to the blight of empty properties that we have seen, ranging from high street shops to empty office floors. The UK is an outlier in continuing to permit those clauses. This ban follows the lead of countries such as Ireland and Australia. We absolutely recognise that the ban creates some initial uncertainty for investors. However, landlords will still have access to a range of lease models, such as stepped rents and inflation-linked leases, that offer predictability and flexibility; and we have committed to consulting on whether to permit the use of rent “collars” via secondary legislation.

It is important to remember that our high streets are more than retail spaces; they are the social and economic heart of our communities. The Government have set out ambitious steps to support high streets through our Pride in Place strategy. This measure is part of that. If we want new businesses to take a chance on a tenancy and if we want resilient high streets, it is essential that the leasehold market works efficiently. I urge that this clause stand part of the Bill.

Government amendment 375 is a technical amendment updating clause 71 in line with the amendments in schedule 31 tabled in my name. The amendment ensures that readers can continue to navigate the scope and effect of those provisions as intended when drafted.

I now turn to Government amendments 376 to 381, 384 to 386 and 391. These amendments work together to clarify the scope of the ban on upward-only rent reviews, ensuring that tenants are provided with protection when it is right that they receive it. Government amendment 376 brings forward a large proportion of these changes. In particular, the new part 1 sets out a new definition of “business tenancy”. It expands the scope of the ban so that a tenant who is still bound by the lease does not lose the protection of the ban simply because they have vacated the premises, have not yet taken occupation, do not intend to take occupation, or have sub-let the whole premises. It is right that tenants receive the protection of the ban in these circumstances. Without the amendment, it is likely that they would be deterred from sub-letting, which might in turn damage their ability to trade successfully.

Part 2 expands the tenant’s ability to trigger the rent review, so that it applies regardless of whether the lease contains prohibited terms. It also applies if the lease was granted in a compliant manner but was later varied to include non-compliant terms. Finally, paragraph 5A of part 3 provides for the ban to apply in circumstances where a lease is granted in a compliant manner but later varied to include non-compliant terms.

Finally, I turn to Government amendment 391 and to amendment 303. To further ensure that tenants are provided with protection when it is right they receive it, amendment 391 replicates new paragraph 1 of new schedule 7A, contained in amendment 376, in schedule 7B. Cumulatively, the amendments will ensure that the enacted ban is robust, clear and applies in the right circumstances.

Amendment 303 would require the Government to undertake a consultation on the impact of the ban on upward-only rent reviews before the provision comes into force. But that amendment is not mine, so I will speak to it later.

[Mike Reader (Northampton South) (Lab)]

It is a pleasure to speak about this issue. I thank the Minister, who has been gracious in giving me a lot of time to discuss upward-only rent reviews. I hope to use a couple of minutes to clarify a couple of points in the Minister’s statement that I do not think completely reflect the evidence that we have heard and, perhaps, the current position of the Bill. I say that in a constructive way, recognising that there is further opportunity to improve the Bill and make sure it delivers what we promised in the White Paper. As the Minister herself says, we have to protect high streets and small businesses, which can often be caught in really challenging upward-only rent reviews. She is completely right that the impact was seen particularly during the covid era.

I will talk about international evidence first and then come back to how we can improve; I recognise that the amendments start to go that way. The Minister mentioned Ireland in particular, which is often cited as one of the great examples of action on upward-only rent reviews; industry there was concerned that sectors would collapse, but actually there was a relatively minimal impact. I am sure that the Minister’s civil servants will argue that that is a great example of why the worries of the Royal Institution of Chartered Surveyors, the British Property Federation, the UK Warehousing Association and agents such as Colliers, which have all written to me in the past week or two to share their concerns, are perhaps unfounded.

The scheme in Ireland was specifically brought in with collars and a floor, which meant that there was protection—that was at the point of introduction rather than through secondary legislation, which I think is important. It was introduced in a very different market with very different interest rates, corporation tax and other factors that drive corporate rents. The challenge with the way the legislation is written at the moment is that it has unintended—

English Devolution and Community Empowerment Bill (Third sitting)

Debate between Miatta Fahnbulleh and Mike Reader

Committee stage
Tuesday 14th October 2025 Public Bill Committees

[Mike Reader]

I declare that I am Hampshire born and bred, being from Romsey. I just ask: why are we so disrespectful of a place like Brownsea island? If it is called “Hampshire and the Isle of Wight”, what about the great Brownsea island, the home of our native red squirrels? Surely “Solent” is more inclusive for all the other islanders who live in the area beyond the Isle of Wight.

[Miatta Fahnbulleh]

I say gently to hon. Members that we absolutely recognise the desire. I have had multiple conversations with the leader of Isle of Wight council, who was enthusiastic about this devolution deal. It is within the gift of constituent authorities to change their name; it is not for Government to impose. I hope that there is now a constructive conversation and relationship among the leaders of all the different parties. The leader is an independent politician, and I hope that in that spirit they will move forward.

I recognise the uniqueness of the name, but what really matters is what devolution will deliver for residents and constituent authorities. I hope that as much energy and time will be put into the nuts and bolts, the bread and butter, and the impact of what we are trying to do through devolution as will be put into the name. However, I recognise the particular sensitivities in relation to the Isle of Wight.

My hon. Friend the Member for Camborne and Redruth spoke about the issue of Cornwall. He has been a long-standing champion of Cornwall and its distinct identity. He has prosecuted the case incredibly effectively, not just in the context of this debate but across the piece. He is a proud Cornishman and I know that he wants the best for his constituents. I have put it on record in Committee, and I do so again, that we recognise the uniqueness of Cornwall. We are keen to continue engaging not just with my hon. Friend, but with other Cornish MPs, to ensure that we recognise that uniqueness and status and, critically, that we are doing a set of things that can enable local leaders to respond to the challenges—

English Devolution and Community Empowerment Bill (First sitting)

Debate between Miatta Fahnbulleh and Mike Reader

Committee stage
Tuesday 16th September 2025 Public Bill Committees

[Miatta Fahnbulleh]

Q We think that strategic planning and the role of strategic authorities within that are quite important—in the context of how we want to “build, baby, build”, to quote my boss, the Secretary of State for Housing, Communities and Local Government. I am interested in your take on how, if we get this right, it will have an impact on the Bill, and critically, where you think we might need to go further to make sure that we are delivering the buildings and the growth that we need?

Catriona Riddell: What is set out in the Bill is going to help to develop things more quickly. We have just talked about viability; that is such a massive factor in everything that we do at the moment. In relation to strategic planning and spatial development strategy, I think the Minister for Housing and Planning, Matthew Pennycook, has referred to it as a spatial investment framework. If you look at it as that, and not as a big local plan, and if it does that role, that is going to set the precedent. It is going to say: “This is where we want to invest.”

They are also long-term plans; they are 10, 20 or 30-year frameworks. Again, that is to start building investor confidence in these areas. What is needed, in terms of building investor confidence, is leadership and that is where the strategic authorities can help. Some of the planning mechanisms in the Bill are really important, but actually, it is more about the wider powers, such as the convening powers and the duty to talk to your neighbouring mayor—the sum of the parts has to add up to a national picture. We do not have a national spatial framework in this country, so the sum of the SDSs has to add up to that national picture. I think the softer powers in the Bill that mayors and strategic authorities will have to bring together stakeholders will be really important.

I would say the measure needs to go further. My understanding of the convening powers is that they are largely about bringing local authorities and the public sector together, but one of the biggest challenges we have is around the infrastructure side of things—with utility companies, such as water companies and electricity companies, that engage at the very end of the process. We need to use these mechanisms—the convening powers—to bring them into the plan-making bit about the spatial development strategy from the start, so that there are no surprises at the end and nobody says, “We don’t have enough water or electricity to plug into these new homes that we have already permitted,” because that is what is happening all over the place. This is about getting the system working up front, much further upstream, so that the decisions on planning applications are much easier further down. The strategic authorities have a huge role to play in that.

The only other, minor change I would mention is on national parks. I think that once we have gone through local government restructuring, all local planning authorities will effectively be a constituent member of a strategic authority. National parks will continue to be local planning authorities. They have plan-making powers and development management powers. At the end of this, they will be the only planning authorities that will not actually be part of the strategic authority, so I guess we need a shout-out to national parks and some thinking about what their role should be in this.

[Mike Reader (Northampton South) (Lab)]

Q Can I pick up on upward-only rent reviews? I recognise the points you made about consultation. The intention is primarily to focus on high streets. Do you think, with the way the legislation is written currently, it is focused on that narrow area, or is it broader? Could we see unintended consequences in things like—this is important to my constituency—logistics and advanced manufacturing?

Ion Fletcher: That is a really good question. Yes, as currently drafted, the Bill applies to all commercial tenancies, regardless of whether they are on the high street or in an industrial park, a data centre or a laboratory.

Upward-only rent reviews have definitely been highlighted as an issue among high street small businesses and in the hospitality sector, and I have a lot of sympathy for businesses that have been on high streets and going through a lot of change and turbulence over the last decade or so. At the same time, they have not really been raised as an issue by occupiers in logistics parks or in office buildings. I guess the main reason is that property costs are a far smaller proportion of their total cost base than for retailers and hospitality businesses.

Larger businesses also tend to be well advised and are aware of the trade-offs that come with upward-only rent reviews. They can allow property owners to give a longer rent-free period, for example, or a bigger contribution to fit-out costs. There is definitely merit in thinking about how the Bill might be more closely targeted at those areas where there is perceived to be more of an issue.

Oral Answers to Questions

Debate between Miatta Fahnbulleh and Mike Reader

Tuesday 15th July 2025 Commons Chamber

[Miatta Fahnbulleh]

We are listening to businesses, particularly small and medium-sized businesses. We have heard companies complain, for example, about being locked into expensive fixed-term contracts. That is why Ofgem is working to deliver blend-and-extend contracts so that businesses can benefit from lower prices. We have heard their frustration at the lack of a redress system, which is why last December we expanded the ombudsman service to 99% of businesses so that they can get redress and financial awards of up to £20,000. We have also heard their frustration about energy brokers, which is why we have consulted on introducing regulation of third-party intermediaries. We will respond in due course.

[Mike Reader (Northampton South) (Lab)]

Last week, the Energy Security and Net Zero Committee heard from Make UK and representatives from the chemical, petrochemical, steel and ceramics industries that closer alignment and collaboration with the EU on energy pricing is critical to reducing bills. That is also recognised in the Government’s industrial strategy. What more is the Department doing to bring that forward quickly?

[Miatta Fahnbulleh]

My hon. Friend makes a good point. Industry voices have been calling for that close alignment, particularly on the emissions trading scheme—we have heard that from UK Steel, the CBI, Make UK and the Energy Intensive Users Group—and we believe that those stronger linkages are the right thing to do to cut red tape at the border, to protect consumers from higher costs and, critically, to boost trade and growth, which the Government are absolutely committed to doing.