The review was always built into the process, because we wanted to look at how the measure was working. What is new is the introduction of the power to introduce a market rent only option, and when that proposal goes before the other place, supporting documentation, such as impact assessments, will also be submitted. Clearly, different quarters have opposing views on what it will mean: some say it will be excellent for business, while others say it will result in concerns for business. People will not necessarily concur and agree about what the exact impact will be, but the Government will produce the documentation to go alongside that amendment when it is tabled in the other place.
The Government’s technical amendments—amendments 34, 35 and 55—deal with the particular issue of franchises. Clause 40 already makes it clear that tied pub agreements are in the scope of the pubs code where tenants pay some sort of fee, such as a turnover fee, rather than rent. Such agreements are often called franchise agreements and it is right that they are covered. The same potential for the abuse of a tie exists, and if franchises were not in scope there would be a sizeable loophole by which companies could evade the code.
Amendments 34 and 35 therefore ensure that franchises are covered by clause 42, which refers to rent assessment and rent review arrangements, which the Secretary of State may rule as void or unenforceable. Amendment 55 provides the Secretary of State with a power to define parallel rent assessments in regulations so that we can ensure there is appropriate flexibility in the approach to cater for franchise pubs. That will allow the final design of parallel rent assessments to take account of further engagement with the industry and public consultation, and through that we will ensure that those assessments are available to all tied tenants of large pub-owning companies.
Amendments 40 and 56 ensure that agreements where the tenant is tied for some or all alcoholic drinks are still covered, even when the tenant does not purchase those drinks from the pub-owning company. We are aware of some franchise agreements where the tenant does not technically purchase drinks from the pub-owning company. The tenant is still contractually obliged to sell those drinks on behalf of the pub-owning company and cannot source them elsewhere, so the amendments are important to avoid a loophole in the legislation.
The Opposition’s amendment 5 seeks to clarify that franchise agreements are in scope of the legislation. I absolutely agree with that view and hope the hon. Member for Chesterfield will be reassured by the Government amendments, which make that crystal clear and address the point by ensuring that no loopholes are being created.
Amendments 38, 39 and 47 to 53 seek to ensure that tied agreements are covered by the protections of the pubs code, whether the tenant occupies the pub under a tenancy or under a licence to occupy. This is another measure to ensure that all tied tenants are protected. Amendments 36, 37, 42, 46 and 54 are technical clarifications to ensure that the provisions of the Bill apply to pub-owning companies and any subsidiary companies they may own.
Finally, amendment 57 provides that all regulations under part 4, other than regulations under clause 61(1)(c), are subject to the affirmative resolution procedure, which,
given the sensitivity surrounding the issues and the interest in them, is absolutely appropriate. I hope the Government amendments will be supported and that hon. Members on both sides of the House will be reassured by our commitment to make further changes in the other place in order to address any concerns.