Clause 9 - Period for making a reference to arbitration

Commercial Rent (Coronavirus) Bill – in a Public Bill Committee am 12:00 pm ar 9 Rhagfyr 2021.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Ruth Cadbury Ruth Cadbury Shadow Minister (International Trade) 12:00, 9 Rhagfyr 2021

I beg to move amendment 2, in clause 9, page 7, line 11, leave out subsection (4) and insert—

“(4) A statutory instrument containing regulations under subsection (3) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.”

This amendment would require regulations made under this section to be subject to the affirmative procedure.

Photo of Sheryll Murray Sheryll Murray Ceidwadwyr, South East Cornwall

With this it will be convenient to discuss amendment 3, in clause 9, page 7, line 12, at end insert—

“(4A) The Secretary of State must prepare and publish a report giving reasons for any extension of the period mentioned in subsection (2) and must lay a copy before Parliament.”

This amendment would require the Secretary of State to prepare, publish and lay before Parliament a report giving reasons for any extension to the period for making a reference to arbitration.

Photo of Ruth Cadbury Ruth Cadbury Shadow Minister (International Trade)

Amendment 2 covers a much wider issue around trust and transparency: the way in which Parliament has full, open access to decision making. The amendment is similar to amendments that Labour colleagues have introduced before in other pieces of legislation that we have otherwise been supportive of on the whole, as we are of this Bill.

Amendment 2 would require regulations to be made according to the affirmative procedure. It would ensure that Parliament can fully scrutinise the extension of the existing six-month period in which businesses can go through the arbitration process. The Bill requires regulations to go through the negative procedure, which means that they would be discussed or stopped only if there was an objection. Our amendment would make the procedure affirmative, meaning that Parliament would have to approve them.

In recent days, we have seen that the Government’s approach to public health issues and, indeed, to the wider impacts of coronavirus can change rapidly, and it is crucial that MPs and parliamentarians are able to debate, scrutinise and assess such changes. Our amendment therefore calls for both Houses to approve any extension to the arbitration process, to ensure that it works for businesses and landlords across the country.

Photo of Paul Scully Paul Scully Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy), Minister of State (London)

I thank the hon. Lady for her summary of the amendments. The Bill aims to resolve protected rent debt quickly and support commercial tenants and landlords to return to normal operations as soon as possible. We encourage landlords and tenants to resolve unpaid debt between themselves. The arbitration process is designed to allow for negotiation and for the parties to make considered proposals to lead to appropriate outcomes.

The timeframe for making references to arbitration will encourage a speedy resolution of the disputes in scope, and is meant to deal with a particular set of circumstances at a critical time. We believe that six months is enough time to allow eligible tenants and landlords to apply for the arbitration process. However, if there is evidence that the six-month period is not enough, the Secretary of State can, using the power in clause 9, extend it to allow more time for the eligible parties to apply. Any evidence that the power is needed is unlikely to become available until well after the Bill comes into force; it may not become apparent that such an extension is necessary until close to the expiry of the six-month period. The length of an extension would depend on the circumstances, but would be based on feedback from stakeholders. It would be only for as long as is absolutely necessary.

I appreciate the interest in transparency shown by the hon. Member for Brentford and Isleworth, and I reassure her that the decision to extend would be based solely on evidence from tenants, landlords and arbitrators. Officials will continue to monitor the process if issues with the time period arise.

Regulations to extend the application period may need to be made relatively quickly in order to react, so it is important that the Bill remains flexible in case more time is needed. It remains important for the Government to work with Parliament. None the less, we want to make sure that the process can be resolved as quickly as possible, without any undue delay or concern that landlords and tenants will not have their case heard as quickly as possible. We therefore consider the negative procedure to be appropriate in the circumstances. I welcome the hon. Lady’s contribution, but I hope in this instance that she will withdraw the amendments.

Photo of Ruth Cadbury Ruth Cadbury Shadow Minister (International Trade)

If the two amendments are being considered together, I would also like to speak specifically to the other one.

Photo of Sheryll Murray Sheryll Murray Ceidwadwyr, South East Cornwall

I said at the beginning that we had come to amendment 2, with which it would be convenient to debate amendment 3. If the hon. Lady would like to include her remarks on amendment 3 when summing up, I am happy to allow that.

Photo of Ruth Cadbury Ruth Cadbury Shadow Minister (International Trade)

Thank you, Mrs Murray, that is very helpful. Amendment 3 would require the Secretary of State to prepare, publish and lay before Parliament a report giving reasons for any extension to the period for making a reference to arbitration. Like amendment 2, amendment 3 is crucial in improving and expanding the scope of parliamentary scrutiny. It calls for the Government to publish a report setting out the reasons given for any extension of the existing six-month arbitration process.

As we said on Second Reading, it is crucial that the Bill has the support of businesses and that the arbitration process is transparent and open, which should include any extension of the period in which rent arrears can be brought into arbitration. Our amendment therefore calls for the Secretary of State to publish and lay before Parliament the reasons for extending the arbitration process.

Photo of Paul Scully Paul Scully Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy), Minister of State (London)

I hope that, in my opening remarks, I made clear our reasons for asking the hon. Lady to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Photo of Paul Scully Paul Scully Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy), Minister of State (London) 12:15, 9 Rhagfyr 2021

The purpose of the clause is to specify the time limit for which arbitration under the Bill will be available. It will encourage landlords and tenants to engage and attempt to resolve in-scope disputes in a timely manner. There is a power for the Secretary of State to extend the time limit if it is required. The arbitration process should be seen as a last resort and our strong preference is for landlords and tenants to negotiate using the updated code of practice.

Before either party can make a reference to arbitration, on notification by the applicant that they intend to make a reference, the parties are expected to offer solutions with supporting evidence to try and resolve the matter, meaning arbitration should be a last resort. Under the Bill, parties will have six months to make a reference to arbitration to give them time to go through those steps. The Secretary of State has the power to request reports from approved arbitration bodies to enable him to monitor their progress and also has a delegated power in the clause to extend the six-month period, should monitoring suggest that it is necessary to do so.

Question put and agreed to.

Clause 9 accordingly ordered to stand part of the Bill.