Commercial Rent (Coronavirus) Bill Lord Ashton of Hyde (Con) My
Lords, I have it in command from Her Majesty the Queen to acquaint
the House that Her Majesty, having been informed of the purport of
the Commercial Rent (Coronavirus) Bill, has consented to place Her
interest, so far as it is affected by the Bill, at the disposal of
Parliament, for the purposes of the Bill. Schedule 1: Modifications
of the Arbitration Act 1996 in relation to arbitrations under this
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Commercial Rent
(Coronavirus) Bill
(Con)
My Lords, I have it in command from Her Majesty the Queen to
acquaint the House that Her Majesty, having been informed of the
purport of the Commercial Rent (Coronavirus) Bill, has consented
to place Her interest, so far as it is affected by the Bill, at
the disposal of Parliament, for the purposes of the Bill.
Schedule 1: Modifications of the Arbitration Act 1996 in relation
to arbitrations under this Act
Amendment 1
Moved by
1: Schedule 1, page 21, line 19, at end insert—
“(g) in section 74 (immunity of arbitral institutions)—(i) in
subsection (1), for “appoint or nominate” there were substituted
“appoint, nominate or remove”;(ii) in subsection (2), for
“appointed or nominated”, in both places, there were substituted
“appointed, nominated or removed”.” Member’s explanatory
statement
The amendment would ensure that section 74 of the Arbitration Act
(which prevents an arbitration body from incurring liability)
applies to the function under the Bill of removing an arbitrator
on the same basis as it currently applies to the function of
appointing an arbitrator.
The Minister of State, Department for Business, Energy and
Industrial Strategy and Department for International Trade
() (Con)
My Lords, it is a pleasure to lead this Bill on Third Reading. As
we are all aware, this legislation supports the Government’s
important aim of mitigating the impacts of the pandemic. The Bill
does this by protecting certain rent debt and establishing an
arbitration scheme, which has been designed to balance the impact
on both landlords and tenants. It has therefore been gratifying
to see the level of support for the Bill across the House.
Turning first to the government amendment, I am grateful to the
noble Earl, , and the RICS for sharing their
experience and considering the practical applications of the
Bill’s provisions. I said on Report that I would consider and
return to a point about the extent to which arbitration bodies
may have immunity. This technical amendment follows that
consideration.
Section 74 of the Arbitration Act essentially protects an
arbitration body from incurring liability in relation to a
function of appointing an arbitrator. Amendment 1 would provide
that Section 74 also applies where approved arbitration bodies
exercise their function of removal of arbitrators under the
grounds listed in the Bill. The bodies will thereby have immunity
for things done or omitted in the discharge of this function
unless they act in bad faith. I beg to move.
(LD)
My Lords, this amendment is testament to the power of remote
control over this Bill by the noble Earl, , and we on this Bench welcome
it. I am interested that the Minister was able to announce on
Report that a large number of arbitration organisations had
already been recruited to take part in this important activity.
To that end, I am surprised that they did so without some
assurance of immunity as now offered by this amendment; I would
be interested to hear what the expectations of those
organisations were, given that it is only now that that immunity
is emerging. With that small question, we will support the
amendment.
(Con)
My Lords, in answer to the noble Lord, , what I said on Report was that
12 bodies had indicated an interest in applying for this. The
process of approval is under way and, no doubt, this
clarification will come to light and be welcomed by them during
that process.
Amendment 1 agreed.
3.31pm
Motion
Moved by
That the Bill do now pass.
(Con)
My Lords, I start by thanking noble Lords for their thorough
engagement throughout the Bill’s passage through your Lordships’
House. As ever, the erudite contributions of your Lordships have
given rise to constructive and robust discussion of the Bill and
it has been pleasing to see the consensus that we have reached as
a result. In particular, I thank the noble Baroness, Lady Blake
of Leeds, in absentia, supported so admirably by the noble Lord,
, as well as the noble Lord,
, as ever, for his support for and
scrutiny of the Bill. It has been a pleasure working with them on
this Bill following our previous work on the Professional
Qualifications Bill. I am also grateful to the noble Earl, , for his expertise on
arbitration. Furthermore, I give thanks to the noble Lords,
, , and , and my noble friend for their interest in
the Bill.
I also thank the noble Lord, , for his consideration of
the Bill. The noble Lord wrote to me recently to discuss the
focused eligibility of the scheme, on which I will take a moment
to respond. Significant thought has been given to the eligibility
of the scheme. It is important to remember that the capacity of
the arbitral market is limited and, as such, the scheme that this
Bill establishes must be targeted appropriately.
Businesses that were mandated to close were among those hardest
hit by the pandemic. Some of these businesses, such as
nightclubs, were required to close for over 18 months. Evidence
suggests that businesses in the sectors that were mandated to
close are the least likely to have reached agreements on
outstanding rent. In light of this, we consider it a
proportionate requirement that, in order to access the scheme, a
business must have been mandated to close its premises, or
businesses carried on there, in part or in whole.
I am entirely sympathetic to businesses that were not required to
close but were still affected by the pandemic. Alongside the
Bill’s introduction in the other place, the Government published
a revised version of a code of practice for the commercial
property sector. This code of practice can be used by any
business to help it resolve disputes about unpaid commercial
rent, regardless of the business’s eligibility to access the
arbitration scheme. I hope that this provides some clarity to the
noble Lord regarding the purposefully focused eligibility of the
scheme.
I recognise that the Government have made several changes to the
Bill during its passage through your Lordships’ House. I am
pleased that the changes have been well received, which is a
testament to our shared desire to ensure that this Bill is as
clearly drafted and fit for purpose as it can be.
Many of these amendments have been clarificatory or technical—for
example, in confirming that an obligation to close either
premises or businesses is regarded as a closure requirement—as
well as expressly setting out the effect of an arbitral award,
including how it affects the liability of the tenant and of a
guarantor or former tenant. Minor amendments were also made to
Schedules 2 and 3, to clarify the application of certain
provisions to former tenants and guarantors, including where an
indemnity was given.
However, we have also made more significant amendments,
particularly following our extensive interaction with the Welsh
Government and in response to the DPRRC’s report. I thank the
Welsh Government and officials for their positive and extended
engagement. I am extremely pleased that the Welsh Government have
felt content to recommend legislative consent and that the Senedd
has agreed a legislative consent Motion.
Furthermore, I thank the Delegated Powers and Regulatory Reform
Committee for scrutinising the Bill and for drawing the House’s
attention to Clause 28—previously Clause 27—on reapplying the
Bill. We have amended the clause to ensure that its power is
appropriately limited, following the committee’s report. I am
grateful for the support which these amendments have received. I
am also grateful to the Royal Institute of Chartered Surveyors
and to the noble Earl, , for raising the immunity of
arbitration bodies, which prompted the amendment we brought
forward today.
I also thank the stakeholders who will be most impacted by the
Bill. These include arbitration bodies, and tenant and landlord
trade associations. I emphasise, as I have before, that balance,
inclusivity and ease of access are some of the core features of
this Bill. The Government have engaged with these stakeholders at
great length, including at several round tables which I held
myself. They have raised relevant concerns and issues, allowing
us to mould this legislation and the guidance which my officials
are working on—and that we have discussed in previous debates—to
make it as useful as possible. As such, I am extremely grateful
for their expert input.
I am also grateful to the Bill policy and legal team which has
developed this legislation. This includes Carl Creswell, Charles
McCall, Jessica Barnaby, Hamza Shoaib, Radhika Sundaram, Matthew
Beese, Geraldine Haden, Jane Chelliah-Manning, Justine Antill,
Sarah Machen, Louise Dobrin, Simon Burke, Jahan Meeran, Rachel
Campbell, Rebecca Denham, Elaine Anderson, Davy Cowie and Martin
Gunther. This is a most impressive team.
I thank my private secretary, Ben Kerindi, for organising and
managing me—no easy task. I thank the Leader of the House, the
Whips and the Office of Parliamentary Counsel, as well as the
clerks. Finally, I thank my Whip, my noble friend Lady Bloomfield
of Hinton Waldrist.
(Lab)
My Lords, I thank the Minister for his customary courtesy and
thoroughness in handling this somewhat uncontentious Bill. In
fact, the Bill has been so successful that the hundreds of
thousands of cases which were presumed to require arbitration are
now down to either the thousands or the hundreds. They are
certainly a reduced number and that is a credit to the Bill.
I place on record my appreciation for the contributions of the
“Covid 2”—namely my noble friend Lady Blake and the noble Earl,
Lord Lytton—who both provided detailed research, experience and
commitment during the passage of the Bill, latterly from
afar.
Finally, I thank the noble Lord, , in particular for his detailed
understanding of the complexity of the Bill. I also thank the
Bill team for their work and efforts in getting this Bill in
shape. While we still do not know what the term “viable” means
and whether there will be a sufficiency to arbitrate, time will
tell—time which I have now run out of.
(LD)
My Lords, this has been a short process, but an interesting and
important Bill. It is important for those businesses which found
their entire business model cancelled by something over which
they had no control. It is important that we find a way for those
businesses to secure their future by sorting out the past. I
think the Minister would agree with me that the overriding
principle of this Bill has been to ring-fence the debt and then,
through an arbitration process, share in the impact of that debt.
I am pleased to see that the Minister is nodding as I say
that.
The Minister has been sensitive to the advice he has got, and I
am very pleased that the Government were able to agree with the
Welsh Government on how this Bill would apply in Wales.
There was a period at Report when the number of Bill officials
outnumbered the number of Peers two to one. Having heard the list
that the Minister has just totted off, I can see that not all of
them were there even then—but thanks to the Bill team for the
hard work that it put in, and thanks to the Minister and the
noble Baroness, Lady Bloomfield, as well as the noble Lord,
, and the noble Baroness, Lady
Blake. Because of Covid and dentists, we found ourselves depleted
several times during this process, but I also thank my noble
friend Lord Shipley—and, back in the Whips’ Office, keeping the
legislative process on track, Sarah Pughe.
(Con)
My Lords, I thank noble Lords for their generous input on the
Bill throughout its passage through your Lordships’ House. It has
been a pleasure to lead on a Bill that has seen such wide-ranging
support alongside rightful close inspection. I beg to move.
Bill passed and returned to the Commons with amendments.
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