Clause 61 - Rent under tenancies conferring code rights: England and Wales

Part of Product Security and Telecommunications Infrastructure Bill – in a Public Bill Committee am 2:00 pm ar 17 Mawrth 2022.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Julia Lopez Julia Lopez Parliamentary Secretary (Cabinet Office), Minister of State 2:00, 17 Mawrth 2022

I accept the point that the hon. Gentleman is making. I also accept that in some cases rent reductions were much greater than expected. As we discussed earlier in the week, some of those were the result of overly aggressive behaviour by mobile network operators. We need to address some of the challenges that were raised by some of the changes that were made. In the body of case law, we now have a better equilibrium between landowners and operators, which should help to address some of those cases.

On some of the more emotive cases that have been raised with me over my tenure, I have sought to understand the details. Those cases are not always as has been presented, and I am led to believe that, in terms of a lot of the initially very difficult cases that came after the 2017 reforms were initially introduced, we are now in a very different place.

It is vital that there is fairness throughout the UK. As drafted, the Bill provides a clear framework that will not only result in all rental payments being calculated in the same way, but in the ability to renew agreements quickly and cost-effectively. We hope that will help us expand the digital network across the whole of our country. In those circumstances, I ask the hon. Member for Ogmore to withdraw his amendment.

I will now turn to clauses 61 to 65, which deal with the renewal of agreements to which the code applies that have expired or are about to expire. There are several ways in which such agreements can be renewed, depending on the type of agreement and where in the UK it was entered into. The aim of the clauses is to make all the routes to renewal as clear and consistent as possible, so that the process is the same across the UK.

When agreements to which the code applies come to an end, it is important that there is a clear legislative framework in which their renewal can be negotiated and any disagreements dealt with. Making sure that renewal can be completed quickly and consistently not only provides certainty for all parties, but may deliver real benefits for consumers. Renewing such agreements ensures that operators can optimise their use of existing sites to provide greater network capacity and increase access to 5G services.

In England and Wales, there are two statutory routes to renewing the agreements. The first is in part 5 of the code and applies, for example, to most new agreements entered into since the code came into force on 28 December 2017; the other is set out in part II of the Landlord and Tenant Act 1954. Clause 61 applies specifically to agreements that are to be renewed under the second statutory route—that is, under part II of the 1954 Act.

Importantly, the two statutory routes contain different provisions relating to the financial terms of any renewal agreement imposed by a court. Under part 5 of the code, the amount that an operator is required to pay for rights to use private land is calculated on a no-network basis and the fact that the land will be used to host telecoms apparatus cannot be taken into account in assessing the amount to be paid by the operator. In effect, telecoms operators cannot be charged more than anyone else wishing to use the land would be. We think that that is the correct approach and should apply to all agreements to which the code applies.

That valuation framework is not currently available under the 1954 Act, so the no-network assumption does not apply and operators renewing agreements under that statutory route may be required to pay more than they would had part 5 of the code applied. We think the different outcomes are unfair, so the provisions in clause 61 extend the statutory valuation framework in the code to renewal of agreements under part II of the 1954 Act. We think that will result in fairer outcomes and ensure that the financial terms of all agreements to which the code applies that are completed or renewed after the Bill comes into force reflect the same valuation principles.

Clause 62 makes equivalent provision for agreements in Northern Ireland that were entered into before 28 December 2017 and are to be renewed under the Business Tenancies (Northern Ireland) Order 1996, not under part 5 of the code. That will ensure that the same valuation principles underpin the renewal of all agreements to which the code applies across the UK.

The statutory valuation regimes under the 1954 Act and the 1996 order deal solely with the assessment of the rent or the price that an operator is required to pay to keep its apparatus on the land. That is not the only sum a landowner can claim where an agreement is instead renewed under the code, as the code also makes provision for a landowner to recover compensation for any loss or damage that may result from the code agreement. This ensures that landowners are not left out of pocket and can recoup the costs they incur as a result of having telecoms apparatus on their land. There is no equivalent right to compensation in either the 1954 Act or the 1996 order. Clauses 63 and 64 therefore extend the rights of landowners to claim compensation under those provisions.

I hope the Committee will agree to these clauses standing part of the Bill.