Small Business, Enterprise and Employment Act 2015

• Citation: 2015 c. 26
• Sections: 455

Section 1 Power to invalidate certain restrictive terms of business contracts

(1) The appropriate authority may by regulations make provision for the purpose of securing that any non-assignment of receivables term of a relevant contract—

(a) has no effect;

(b) has no effect in relation to persons of a prescribed description;

(c) has effect in relation to persons of a prescribed description only for such purposes as may be prescribed.

(2) A “non-assignment of receivables term” of a contract is a term which prohibits or imposes a condition, or other restriction, on the assignment (or, in Scotland, assignation) by a party to the contract of the right to be paid any amount under the contract or any other contract between the parties.

(3) A contract is a relevant contract if—

(a) it is a contract for goods, services or intangible assets (including intellectual property) which is not an excluded financial services contract, and

(b) at least one of the parties has entered into it in connection with the carrying on of a business.

(4) An “excluded financial services contract” is a contract which—

(a) is for financial services (see section 2) or is a regulated agreement within the meaning of the Consumer Credit Act 1974 (see section 189 of that Act); and

(b) is of a prescribed description.

(5) “ Prescribed ” means prescribed by the regulations.

(6) The “ appropriate authority ” means—

(a) in relation to contracts to which the law of Scotland applies, the Scottish Ministers, and

(b) in relation to other contracts, the Secretary of State.

(7) The power of the Scottish Ministers to make regulations under this section includes power to make such provision as the Scottish Ministers consider appropriate in consequence of the regulations.

(8) The power conferred by subsection (7) includes power—

(a) to make transitional, transitory or saving provision;

(b) to amend, repeal, revoke or otherwise modify any provision made by or under an enactment (including an enactment contained in this Act and any enactment passed or made in the same Session as this Act).

(9) In subsection (8) “ enactment ” includes an Act of the Scottish Parliament.

(10) Regulations under this section—

(a) if made by the Scottish Ministers, are subject to the affirmative procedure;

(b) if made by the Secretary of State, are subject to affirmative resolution procedure.

Section 2 Section 1(4)(a): meaning of “financial services”

(1) In section 1(4)(a) “ financial services ” means any service of a financial nature, including (but not limited to)—

(a) insurance-related services consisting of—

(i) direct life assurance;

(ii) direct insurance other than life assurance;

(iii) reinsurance and retrocession;

(iv) insurance intermediation, such as brokerage and agency;

(v) services auxiliary to insurance, such as consultancy, actuarial, risk assessment and claim settlement services;

(b) banking and other financial services consisting of—

(i) accepting deposits and other repayable funds;

(ii) lending (including consumer credit, mortgage credit, factoring and financing of commercial transactions);

(iii) financial leasing;

(iv) payment and money transmission services (including credit, charge and debit cards, travellers' cheques and bankers' drafts);

(v) providing guarantees or commitments;

(vi) financial trading (as defined in subsection (2));

(vii) participating in issues of any kind of securities (including underwriting and placement as an agent, whether publicly or privately) and providing services related to such issues;

(viii) money brokering;

(ix) asset management, such as cash or portfolio management, all forms of collective investment management, pension fund management, custodial, depository and trust services;

(x) settlement and clearing services for financial assets (including securities, derivative products and other negotiable instruments);

(xi) providing or transferring financial information, and financial data processing or related software (but only by suppliers of other financial services);

(xii) providing advisory and other auxiliary financial services in respect of any activity listed in sub-paragraphs (i) to (xi) (including credit reference and analysis, investment and portfolio research and advice, advice on acquisitions and on corporate restructuring and strategy).

(2) In subsection (1)(b)(vi) “ financial trading ” means trading for own account or for account of customers, whether on an investment exchange, in an over-the-counter market or otherwise, in—

(a) money market instruments (including cheques, bills and certificates of deposit);

(b) foreign exchange;

(c) derivative products (including futures and options);

(d) exchange rate and interest rate instruments (including products such as swaps and forward rate agreements);

(e) transferable securities;

(f) other negotiable instruments and financial assets (including bullion).

Section 3 Companies: duty to publish report on payment practices and performance

(1) The Secretary of State may by regulations impose a requirement, on such descriptions of companies as may be prescribed, to publish, at such intervals and in such manner as may be prescribed, prescribed information about—

(a) the company's payment practices and policies relating to relevant contracts of a prescribed description, and

(b) the company's performance by reference to those practices and policies.

(2) For the purposes of this section—

“ company ” has the meaning given by section 1(1) of the Companies Act 2006 (but see subsection (3));

a contract is a “relevant contract” if—

it is a contract for goods, services or intangible assets (including intellectual property), and

the parties to the contract have entered into it in connection with the carrying on of a business;

“ prescribed ” means prescribed by the regulations.

(3) The regulations may not impose a requirement on a company in relation to any time during which—

(a) it qualifies as a micro-entity for the purposes of section 384A of the Companies Act 2006,

(b) the small companies regime under that Act applies to it (see section 381 of that Act), or

(c) it qualifies as medium-sized for the purposes of section 465 or 466 of that Act.

(4) “The company's payment practices and policies” has such meaning as may be prescribed and the information which may be prescribed may, in particular, include information—

(a) about the standard payment terms of the company and whether these are part of any code of conduct or code of ethics of the company,

(b) about payment terms of the company which are not standard,

(c) about the processing and payment of invoices,

(d) by reference to such codes of conduct or standards as may be prescribed and as are applicable to companies generally or to companies of a prescribed description,

(e) about disputes relating to the payment of invoices, including any dispute resolution mechanism that the company uses,

(f) about payments owed or paid by the company due to late payment of invoices, whether in respect of interest or otherwise.

(5) The regulations may require that information published in accordance with the regulations must be approved or signed by such description of person as may be prescribed.

(6) The regulations may require such of the information required to be published as may be prescribed to be given, in such form as may be prescribed, to prescribed persons.

(7) The regulations may make provision for a prescribed breach by a prescribed description of person of a requirement imposed by the regulations to be an offence punishable on summary conviction—

(a) in England and Wales, by a fine;

(b) in Scotland or Northern Ireland, by a fine not exceeding level 5 on the standard scale.

(8) Before making regulations under this section the Secretary of State must consult such persons as the Secretary of State considers appropriate.

(9) Regulations under this section are subject to affirmative resolution procedure.

Section 4 Small and medium sized businesses: information to credit reference agencies

(1) The Treasury may make regulations that impose—

(a) a duty on designated banks to provide information about their small and medium sized business customers to designated credit reference agencies, and

(b) a duty on designated credit reference agencies to provide information about small and medium sized businesses to finance providers.

(2) The regulations must provide that the duty in subsection (1)(a) only applies where—

(a) a credit reference agency makes a request to a bank, and

(b) the business customer to whom the information relates has agreed to the information being provided to a credit reference agency.

(3) The regulations must provide that the duty in subsection (1)(b) only applies where—

(a) a finance provider makes a request to a credit reference agency, and

(b) the business to whom the information relates has agreed to the information being provided to the finance provider.

(4) The regulations may provide that the duty in subsection (1)(b) only applies where other conditions are met, such as the finance provider—

(a) complying with the credit reference agency's terms and conditions, and

(b) providing information on its small and medium sized business customers to the credit reference agency (subject to the agreement of those customers).

(5) The regulations must describe the information—

(a) to which the duty in subsection (1)(a) applies;

(b) to which the duty in subsection (1)(b) applies;

(c) which may be required as mentioned in subsection (4)(b).

(6) The regulations may make provision about—

(a) how a request for information must be made by a credit reference agency or finance provider;

(b) the time period within which information must be provided following a request;

(c) the form in which information must be provided;

(d) how a business may indicate agreement for the purposes of subsection (2)(b), (3)(b) or (4)(b) (and for the purposes of subsection (2)(b) this may include imposing an obligation on a designated bank to include an appropriate term in its standard terms and conditions or to otherwise seek agreement).

(7) The regulations must make provision for the designation of banks and credit reference agencies by the Treasury, and the regulations may in particular provide for—

(a) conditions that must be met for a bank or credit reference agency to be designated;

(b) considerations that the Treasury may take into account before deciding whether to designate a bank or credit reference agency;

(c) the Treasury to consider the advice of another person before making a designation;

(d) the procedure for designating a bank or credit reference agency;

(e) how the list of designated banks and credit reference agencies must be published;

(f) the revocation of a designation.

Section 5 Small and medium sized businesses: information to finance platforms

(1) Where—

(a) a small or medium sized business has applied to a designated bank for a loan or other credit facility, and

(b) the application has been unsuccessful,

the Treasury may by regulations impose a duty on the bank to provide specified information about the business to designated finance platforms.

(2) The regulations—

(a) must provide that the duty only applies where the business to which the information relates agrees to its information being provided to the designated finance platforms;

(b) may require a bank—

(i) to seek the agreement of a business for the purposes of paragraph (a);

(ii) to ask the business for any of the specified information that the bank does not already have;

(iii) to provide the information to the finance platforms within a specified time period.

(3) The regulations may make further provision about the duty in subsection (1), which may in particular include provision about—

(a) the types of loans and credit facilities that trigger the duty,

(b) the circumstances in which an application is to be considered unsuccessful, and

(c) the finance platforms to which information must be provided.

(4) Where a finance platform has received information by virtue of subsection (1), the Treasury may by regulations—

(a) impose a duty on the finance platform to provide specified information to all finance providers requesting access to the information, and

(b) impose a duty on the finance platform to provide specified information about a particular business to a finance provider where—

(i) the finance provider has requested information about the business, and

(ii) the business has agreed to its information being provided to the finance provider.

(5) Information specified for the purposes of subsection (4)(a) must be in such a form that no individual business, and no person associated with the business, can be identified.

(6) The regulations may provide that the duty in subsection (4)(a) or (b) does not apply unless—

(a) the finance provider or business agrees to the finance platform's terms and conditions;

(b) the finance provider complies with specified requirements about the use and disclosure of the information.

(7) The regulations may make further provision about the duties in subsection (4)(a) and (b), including in particular provision—

(a) requiring the finance platform to provide the information within a specified time period;

(b) setting out how a request by a finance provider must be made to a finance platform;

(c) setting out how a business may indicate agreement for the purposes of subsection (4)(b)(ii);

(d) about the time period for which information must be kept by the finance platform;

(e) about the removal of information from the finance platform.

(8) The regulations may make provision—

(a) prohibiting finance platforms from charging fees to small and medium sized businesses, or

(b) permitting finance platforms to charge fees to small and medium sized businesses.

(9) The regulations must make provision for the designation of banks and finance platforms by the Treasury, and the regulations may in particular provide for—

(a) conditions that must be met for a bank or finance platform to be designated;

(b) considerations that the Treasury may take into account before deciding whether to designate a bank or finance platform;

(c) the Treasury to consider the advice of another person before making a designation;

(d) the procedure for designating a bank or finance platform;

(e) how the list of designated banks and finance platforms must be published;

(f) the revocation of a designation.

(10) In this section “ specified ” means specified or described in the regulations.

Section 6 Sections 4 and 5: supplementary

(1) Regulations under sections 4 and 5 may make provision enabling the Financial Conduct Authority to take action for monitoring and enforcing compliance with the regulations.

(2) The regulations may apply, or make provision corresponding to, any of the provisions of the Financial Services and Markets Act 2000 or subordinate legislation made under that Act, with or without modification.

(3) Those provisions include in particular—

(a) provisions about investigations, including powers of entry and search and criminal offences;

(b) provisions for the grant of an injunction (or, in Scotland, an interdict) in relation to a contravention or anticipated contravention;

(c) provisions giving the Financial Conduct Authority powers to impose disciplinary measures (including financial penalties) or to give directions;

(d) provisions giving a Minister of the Crown (within the meaning of the Ministers of the Crown Act 1975) or the Financial Conduct Authority powers to make subordinate legislation;

(e) provisions for the Financial Conduct Authority to charge fees.

(4) Regulations under sections 4 and 5 may make provision that enables complaints about the activities of designated credit reference agencies or designated finance platforms to be dealt with under the scheme established by Part 16 of the Financial Services and Markets Act 2000 (financial ombudsman scheme), and for that purpose the regulations may—

(a) apply, or make provision corresponding to, any of the provisions of that Part or rules made under that Part (with or without modifications);

(b) impose obligations on—

(i) the Financial Conduct Authority;

(ii) the scheme operator (within the meaning of that Part);

(iii) an ombudsman (within the meaning of that Part).

(5) Regulations under section 4 may impose a duty on designated credit reference agencies to provide information received by virtue of section 4(1)(a) or (4)(b) to the Bank of England, and may allow or require the Bank of England to share that information with persons or for purposes specified or described in the regulations; but the regulations must include provision protecting the confidentiality of information so provided.

(6) Regulations under section 4 may provide that a failure to comply with a duty imposed by virtue of section 4(1) may be actionable at the suit of a person who has suffered loss as a result of it (subject to the defences and other incidents applying to actions for breach of statutory duty).

(7) Regulations under section 4 may provide that the following provisions apply to designated credit reference agencies in the same way as they apply to credit reference agencies within the meaning of those provisions—

(a) sections 157 to 160 of the Consumer Credit Act 1974 (duties to disclose and correct information) and regulations made under those sections;

(b) Article 15(1) to (3) of the UK GDPR (confirmation of processing, access to data and safeguards for third country transfers);

(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7A) In subsection (7), “ the UK GDPR ” has the same meaning as in Parts 5 to 7 of the Data Protection Act 2018 (see section 3(10) and (14) of that Act).

(8) Regulations under section 4 may provide a small or medium sized business with the right to apply to a court for an order to rectify, block, erase or destroy data held about the business by a designated credit reference agency.

(9) Regulations under section 5 may impose a duty on designated finance platforms to provide statistical information to the Treasury.

(10) Regulations under section 4 or 5 are subject to affirmative resolution procedure.

Section 7 Sections 4 to 6: interpretation

(1) For the purposes of sections 4 to 6, a business is a small or medium sized business if—

(a) it has an annual turnover of less than £25 million,

(b) it carries out commercial activities,

(c) it does not carry out regulated activities as its principal activity, and

(d) it is not owned or controlled by a public authority.

Regulations under those sections may make further provision for the purposes of determining which businesses they apply to (including provision about the calculation of turnover and the determination of control).

(2) In sections 4 to 6 and this section—

“ designated bank ” means a bank that has been designated by the Treasury by virtue of section 4(7) or 5(9);

“ designated credit reference agency ” means a credit reference agency that has been designated by the Treasury by virtue of section 4(7);

“ designated finance platform ” means a finance platform that has been designated by the Treasury by virtue of section 5(9);

“ finance platform ” means a person that provides a service for the exchange of information between finance providers and businesses that require finance;

“ finance provider ” means a body corporate that—

lends money or provides credit in the course of a business,

arranges or facilitates the provision of debt or equity finance in the course of a business, or

provides, arranges or facilitates invoice discounting or factoring in the course of a business,

and regulations under sections 4 and 5 may make further provision for the purpose of determining which finance providers they apply to;

“ public authority ” means—

a public authority within the meaning of the Freedom of Information Act 2000 (see section 3 of that Act), or

the Advanced Research and Invention Agency;

“ regulated activities ” has the same meaning as in the Financial Services and Markets Act 2000 (see section 22 of that Act);

“ subordinate legislation ” has the same meaning as in the Interpretation Act 1978 (see section 21 of that Act).

(3) The Treasury may by regulations change the figure for the time being specified in subsection (1)(a).

(4) Before making regulations under subsection (3) the Treasury must consult such persons as they consider appropriate.

(5) Regulations under subsection (3) are subject to affirmative resolution procedure.

Section 8 Disclosure of VAT registration information

(1) The Commissioners for Her Majesty's Revenue and Customs may disclose to a person (“P”) any of the information included in the VAT registration of another person (“V”) if the disclosure is for the purpose of enabling or assisting P to assess—

(a) V's creditworthiness,

(b) V's compliance with regulatory requirements relating to financial matters, or

(c) the risk of fraud by V.

(2) But subsection (1) does not authorise the Commissioners to disclose any information which is, in the Commissioners' view, financial information relating to any business carried on by V.

(3) If VAT registration information is disclosed to a person in accordance with subsection (1), that person must not further disclose any of the information unless the Commissioners consent to the disclosure.

(4) If VAT registration information is disclosed to a person in accordance with subsection (3) or this subsection, that person must not further disclose any of the information unless the Commissioners consent to the disclosure.

(5) A person does not contravene subsection (3) or (4) by disclosing a financial assessment made wholly or partly in reliance on the VAT registration information, if the financial assessment itself does not include any VAT registration information.

(6) If VAT registration information is disclosed to a person in accordance with subsection (1), (3) or (4), that person must not use that information except for the purposes of making a financial assessment.

(7) A person does not contravene subsection (6) by using, for any purpose, a financial assessment made wholly or partly in reliance on the VAT registration information.

(8) The Commissioners for Her Majesty's Revenue and Customs may make arrangements with any person about disclosures of information to that person (the “recipient”) under subsection (1).

(9) The arrangements may (in particular) provide for—

(a) a fee to be payable by the recipient for the disclosure of information;

(b) conditions to apply to the recipient in relation to information disclosed (including conditions relating to the transfer, holding and processing of the information);

(c) financial penalties to be payable by the recipient for a failure to meet conditions which apply to the recipient under the arrangements.

(10) The Treasury may, by regulations, amend this section so that it authorises the Commissioners to disclose VAT registration information included in a person's VAT registration for additional purposes.

(11) In this section—

“ financial assessment ” means an assessment of a kind mentioned in subsection (1)(a), (b) or (c);

“ VAT registration ” means registration under the Value Added Tax Act 1994;

“ VAT registration information ” means information of the kind that the Commissioners are authorised to disclose under subsection (1) (as read with subsection (2)).

(12) Regulations under this section are subject to affirmative resolution procedure.

Section 9 Offences for the purposes of section 8

(1) A person commits an offence if the person discloses information in contravention of section 8(3) or (4).

(2) It is a defence for a person charged with an offence under subsection (1) to prove that the person reasonably believed that the disclosure of the information was lawful.

(3) A person commits an offence if the person uses information in contravention of section 8(6).

(4) It is a defence for a person charged with an offence under subsection (3) to prove that the person reasonably believed that the use of the information was lawful.

(5) Section 19(4) to (7) of the Commissioners for Revenue and Customs Act 2005 apply to an offence under this section as they apply to an offence under section 19 of that Act.

(6) This section is without prejudice to the pursuit of any remedy or the taking of any action in relation to a contravention of section 8(1), (3), (4) or (6) (whether or not this section applies to the contravention).

Section 10 Disclosure of exporter information

(1) The Commissioners for Her Majesty's Revenue and Customs may, by regulations, make provision authorising officers of Revenue and Customs to disclose prescribed information about the export of goods from the United Kingdom.

(2) In subsection (1) “ prescribed information ” means information of a kind that is prescribed in the regulations.

(3) But the regulations may only prescribe the following kinds of information—

(a) the commodity code of goods that have been exported from the United Kingdom (a “prescribed code”);

(b) a description of the category of goods covered by a prescribed code;

(c) the names and addresses of persons who have exported goods covered by a prescribed code;

(d) the years and months in which a particular person has exported goods covered by a prescribed code.

(4) Regulations under this section may make such provision as the Commissioners think appropriate in connection with the provision authorising officers of Revenue and Customs to disclose prescribed information (including provision about the manner in which information may be disclosed).

(5) In this section “ commodity code ” means a code or other identifier applied to a category of goods in connection with the preparation of statistics on exports from the United Kingdom (whether or not it is also applied for other purposes).

(6) Regulations under this section are subject to affirmative resolution procedure.

Section 11 Power of the Secretary of State under section 1 of the EIGA 1991

(1) Section 1 of the Export and Investment Guarantees Act 1991 (assistance in connection with exports of goods and services) is amended as follows.

(2) For subsections (1) and (1A) substitute—

(1) The Secretary of State may make arrangements under this section which the Secretary of State considers are conducive to supporting or developing (whether directly or indirectly) supplies or potential supplies by persons carrying on business in the United Kingdom of goods, services or intangible assets (including intellectual property) to persons carrying on business outside the United Kingdom.

(3) After subsection (4) insert—

(5) The arrangements that may be made under this section also include the provision of advice or information.

(4) For the heading of the section substitute “ Arrangements for the support and development of supplies, etc ” .

Section 12 EIGA 1991: further amendments

(1) The Export and Investment Guarantees Act 1991 is amended as follows.

(2) In subsection (1) of section 6 (limit on the Secretary of State's commitments under the Act) for paragraphs (a) and (b) substitute “ 67,700 million special drawing rights ” .

(3) In subsection (3) of that section, for paragraphs (a) and (b) substitute “ 26,200 million special drawing rights ” .

(4) In subsection (4) of that section—

(a) in paragraph (a)—

(i) for “either of the limits” substitute “ the limit ” ;

(ii) omit “£5,000 million or, as the case may be,”;

(b) in paragraph (b)—

(i) for “either of the limits” substitute “ the limit ” ;

(ii) omit “£3,000 million or, as the case may be,”;

(c) omit “but the Secretary of State shall not in respect of any limit exercise the power on more than three occasions”.

(5) At the end of subsection (4) of that section, insert “ after the commencement of section 12 of the Small Business, Enterprise and Employment Act 2015 ” .

(6) After subsection (4) of that section insert—

(4A) The Secretary of State must not in respect of either limit mentioned in subsection (4) exercise the power to make an order on more than three occasions.

(7) In subsection (5) of that section—

(a) omit paragraphs (c) and (d);

(b) in paragraph (e) omit “in foreign currency”.

(8) In subsection (6) of that section, for “(1)(b) or (3)(b)” substitute “ (1) or (3) ” .

(9) In section 7(2) of that Act (reports and returns), leave out “in sterling and in foreign currency”.

(10) In section 13 of that Act (Export Credits Guarantee Department and Export Guarantees Advisory Council), omit subsection (4).

Section 13 Electronic paying in of cheques etc

(1) The Bills of Exchange Act 1882 is amended as follows.

(2) After section 89 insert—

Presentment of cheques and other instruments by electronic means

Presentment of instruments by electronic means

(89A)

(1) Presentment for payment of an instrument to which this section applies may be effected by provision of an electronic image of both faces of the instrument, instead of by presenting the physical instrument, if the person to whom presentment is made accepts the presentment as effective.

This is subject to regulations under subsection (2) and to section 89C.

(2) The Treasury may by regulations prescribe circumstances in which subsection (1) does not apply.

(3) Regulations under subsection (2) may in particular prescribe circumstances by reference to—

(a) descriptions of instrument;

(b) arrangements under which presentment is made;

(c) descriptions of persons by or to whom presentment is made;

(d) descriptions of persons receiving payment or on whose behalf payment is received.

(4) Where presentment for payment is made under subsection (1)—

(a) any requirement—

(i) that the physical instrument must be exhibited, presented or delivered on or in connection with presentment or payment (including after presentment or payment or in connection with dishonour for non-payment), or

(ii) as to the day, time or place on or at which presentment of the physical instrument may be or is to be made, and

(b) any other requirement which is inconsistent with subsection (1),

does not apply.

(5) Subsection (4) does not affect any requirement as to the latest time for presentment.

(6) References in subsections (4) and (5) to a requirement are to a requirement or prohibition, whether imposed by or under any enactment, by a rule of law or by the instrument in question.

(7) Where an instrument is presented for payment under this section—

(a) any banker providing the electronic image,

(b) any banker to whom it is provided, and

(c) any banker making payment of the instrument as a result of provision of the electronic image,

are subject to the same duties in relation to collection and payment of the instrument as if the physical instrument had been presented.

This is subject to any provision made by or under this Part.

Instruments to which section 89A applies

(89B)

(1) Subject to subsection (2), section 89A applies to—

(a) a cheque, or

(b) any other bill of exchange or any promissory note or other instrument—

(i) which appears to be intended by the person creating it to enable a person to obtain payment from a banker indicated in it of the sum so mentioned,

(ii) payment of which requires the instrument to be presented, and

(iii) which, but for section 89A, could not be presented otherwise than by presenting the physical instrument.

(2) Section 89A does not apply to any banknote (within the meaning given in section 208 of the Banking Act 2009).

(3) The reference in subsection (1) to the person creating an instrument is—

(a) in the case of a bill of exchange, a reference to the drawer;

(b) in the case of a promissory note, a reference to the maker.

(4) For the purposes of subsection (1)(b)(i) an indication may be by code or number and need not indicate that payment is intended to be obtained from the banker.

Banker's obligation in relation to accepting physical instrument for presentment

(89C) Provision of an electronic image of an instrument does not constitute presentment of the instrument under section 89A if the arrangements between—

(a) the banker authorised to collect payment of the instrument on behalf of a customer, and

(b) that customer,

do not permit the customer to pay in the physical instrument but instead require an electronic image to be provided (whether to that banker or to any other person).

Copies of instruments and evidence of payment

(89D)

(1) The Treasury may by regulations make provision for—

(a) requiring a copy of an instrument paid as a result of presentment under section 89A to be provided, on request, to the creator of the instrument by the banker who paid the instrument;

(b) a copy of an instrument provided in accordance with the regulations to be evidence of receipt by a person identified in accordance with the regulations of the sum payable by the instrument.

(2) Regulations under subsection (1)(a) may in particular—

(a) prescribe the manner and form in which a copy is to be provided;

(b) require the copy to be certified to be a true copy of the electronic image provided to the banker making the payment on presentment under section 89A;

(c) provide for the copy to be accompanied by prescribed information;

(d) require any copy to be provided free of charge or permit charges to be made for the provision of copies in prescribed circumstances.

(3) The reference in subsection (1)(a) to the creator of the instrument is—

(a) in the case of a bill of exchange, a reference to the drawer;

(b) in the case of a promissory note, a reference to the maker.

Compensation in cases of presentment by electronic means

(89E)

(1) The Treasury may by regulations make provision for the responsible banker to compensate any person for any loss of a kind specified by the regulations which that person incurs in connection with electronic presentment or purported electronic presentment of an instrument.

(2) In this section “ electronic presentment or purported electronic presentment of an instrument ” includes—

(a) presentment of an instrument to which section 89A applies under that section;

(b) presentment of any other instrument by any means involving provision of an electronic image by which it may be presented for payment;

(c) purported presentment for payment by any means involving provision of an electronic image of an instrument that may not be presented for payment in that way;

(d) provision, in purported presentment for payment, of—

(i) an electronic image that purports to be, but is not, an image of a physical instrument (including an image that has been altered electronically), or

(ii) an electronic image of an instrument which has no legal effect; or

(e) provision, in presentment or purported presentment for payment, of an electronic image which has been stolen.

(3) In this section, the “ responsible banker ”, in relation to electronic presentment or purported electronic presentment of an instrument, means—

(a) the banker who is authorised to collect payment of the instrument on a customer's behalf, or

(b) if the holder of the instrument is a banker, that banker.

(4) In this section—

(a) references to an instrument include references to an instrument which has no legal effect (whether because it has been fraudulently altered or created, or because it has been discharged, or otherwise);

(b) in relation to an electronic image which is not an image of a physical instrument, references to the instrument are to a purported instrument (of which it purports to be an image); and

(c) in relation to an instrument which is not a bill of exchange or promissory note, references to the holder are to the payee or indorsee of the instrument who is in possession of it or, if it is payable to bearer, the person in possession of it.

(5) Regulations under this section may in particular make provision for—

(a) the responsible banker to be required to pay compensation irrespective of fault;

(b) the amount of compensation to be reduced by virtue of anything done, or any failure to act, by the person to whom compensation is payable.

(6) Nothing in this section or regulations under it is to be taken to—

(a) prevent the responsible banker claiming a contribution from any other person, or

(b) affect any remedy available to the responsible banker in contract or otherwise.

(7) Except so far as regulations under this section provide expressly, nothing in this section or regulations under it is to be taken to affect any liability of the responsible banker which exists apart from this section or any such regulations.

Supplementary

(89F)

(1) Regulations under this Part may—

(a) include incidental, supplementary and consequential provision;

(b) make transitory or transitional provision or savings;

(c) make different provision for different cases or circumstances or for different purposes;

(d) make provision subject to exceptions.

(2) The power to make regulations under this Part is exercisable by statutory instrument.

(3) An instrument containing—

(a) regulations under section 89A or 89D, or

(b) the first regulations to be made under section 89E,

may not be made unless a draft of the instrument has been laid before, and approved by resolution of, each House of Parliament.

(4) An instrument containing any other regulations under section 89E is subject to annulment in pursuance of a resolution of either House of Parliament.

(5) For the purposes of this Part, a banker collects payment of an instrument on behalf of a customer by—

(a) receiving payment of the instrument for the customer, or

(b) receiving payment of the instrument for the banker (but not as holder), having—

(i) credited the customer's account with the amount of the instrument, or

(ii) otherwise given value to the customer in respect of the instrument.

(6) Section 89E(4) applies for the purposes of subsection (5) in its application to section 89E.

(3) In section 52(4) (bills of exchange: duties of holder on presentment and payment), at the beginning insert “ Subject to Part 4A (presentment by electronic means), ” .

(4) Omit sections 74B and 74C (which provide for alternative means of presentment of cheque for payment by banker).

(5) In section 87 (promissory notes: presentment for payment), at the end insert—

(4) This section is subject to Part 4A (presentment by electronic means).

(6) The amendments made by this section have effect in relation to presentment of instruments after it comes into force, including instruments created before that time.

Section 14 Powers of the Payment Systems Regulator

(1) Part 5 of the Financial Services (Banking Reform) Act 2013 (regulation of payment systems) is amended as follows.

(2) Section 58 (power to require disposal of interest in payment system) is amended as provided in subsections (3) and (4).

(3) In subsection (1), for the words following “interest in” substitute

—

(a) the operator of a regulated payment system, or

(b) an infrastructure provider in relation to such a system,

to dispose of all or part of that interest.

(4) After subsection (2) insert—

(2A) The reference in subsection (2) to a restriction or distortion of competition includes, in particular, a restriction or distortion of competition—

(a) between different operators of payment systems,

(b) between different payment services providers, or

(c) between different infrastructure providers.

(5) In section 108 (relationship with Part 8 of the Payment Services Regulations 2009), in subsection (1)—

(a) for “this Part” substitute “ sections 54 to 58 ” ,

(b) for “obtain access to, or otherwise participate in,” substitute “ obtain direct access to ” , and

(c) for “does not apply” substitute “ applies ” .

Section 15 Target for streamlined company registration

(1) The Secretary of State must secure that, by no later than 31 May 2017, a system for streamlined company registration is in place.

(2) For the purposes of this section and section 16, a system for streamlined company registration is a system which enables all of the registration information to be delivered by or on behalf of a person who wishes to form a company after 31 May 2017—

(a) on a single occasion to a single recipient, and

(b) by electronic means.

(3) “ Registration information ” means—

(a) the documents which must be delivered to the registrar under section 9 of the Companies Act 2006 (registration documents) in respect of the formation of a company;

(b) the documents or other information which must or may be delivered to Her Majesty's Revenue and Customs in respect of registration of a company for purposes connected with VAT, corporation tax and PAYE.

(4) In this section—

“ company ”, “ electronic means ” and “ the registrar ” have the same meanings as in the Companies Acts (see sections 1(1), 1168(4) and 1060 of the Companies Act 2006 respectively);

“ VAT ” means value added tax charged in accordance with the Value Added Tax Act 1994.

Section 16 Streamlined company registration: duty to report on progress

(1) The Secretary of State must prepare a report before the end of each reporting period about the progress that has been made during that period towards putting in place a system for streamlined company registration.

(2) The following are reporting periods—

(a) the period beginning with the day on which this section comes into force and ending on 31 March 2016;

(b) the subsequent period of 12 months ending on 31 March 2017.

(3) The first report must set out the steps which the Secretary of State expects will be taken during the next reporting period towards putting the system in place.

(4) Both reports must include the Secretary of State's assessment as to when the system for streamlined company registration will be in place.

(5) The second report must include an assessment of what steps, if any, the Secretary of State expects to take to put in place a system for the streamlining of other information delivery processes relating to businesses.

(6) The Secretary of State must—

(a) publish each report, and

(b) lay each report before Parliament.

Section 17 Review of regulators' complaints and appeals procedures

(1) A Minister of the Crown must appoint a person for the purposes of this section in respect of each regulatory function to which this section applies (see section 18).

(2) A person so appointed (a “reviewer”) must, in relation to each regulatory function in respect of which the appointment is made—

(a) review the effectiveness during each reporting period of the procedures (both formal and informal) of the relevant regulator for handling and resolving complaints and appeals made by businesses to the regulator in connection with the exercise by the regulator of the function, and

(b) prepare a report about the findings of the review.

(3) In this section “ relevant regulator ”, in relation to a regulatory function, means the person who exercises the function.

(4) The report may include in particular—

(a) an assessment of the extent to which the relevant regulator's procedures of the kind mentioned in subsection (2)(a) are accessible and fair to businesses;

(b) recommendations to the relevant regulator about how the procedures, or the way in which they are operated, could be improved;

(c) recommendations to the Minister of the Crown who appointed the reviewer for any change in the law which the reviewer considers would lead to improvements in the procedures or their operation.

(5) The report must not address, and the reviewer must not make any recommendation in relation to, the outcome of any particular case.

(6) For the purposes of this section, each of the following is a reporting period—

(a) the period of 12 months beginning with the day on which the reviewer is appointed;

(b) each subsequent period of 12 months.

(7) The reviewer must send the report to the relevant regulator and (if different) the Minister of the Crown who appointed the reviewer as soon as reasonably practicable after the end of the reporting period.

(8) Before the end of the period of 3 months beginning with the day on which the relevant regulator receives the report, the regulator must—

(a) prepare a response and send it to the reviewer, and

(b) if the relevant regulator is not the Minister of the Crown who appointed the reviewer, send it to the Minister.

(9) The Minister of the Crown must—

(a) publish the report and the response, and

(b) lay them before Parliament.

(10) The reviewer may by notice require the relevant regulator to provide such documents or other information, in such form or manner as the reviewer may direct, as the reviewer may require for the purpose of exercising functions under this section.

(11) Subsection (10) is subject to any express restriction on disclosure imposed by another enactment (ignoring any restriction which allows disclosure if authorised by an enactment).

(12) In this section “ Minister of the Crown ” has the same meaning as in the Ministers of the Crown Act 1975.

Section 18 Power to specify regulatory functions

(1) The Secretary of State may by regulations specify regulatory functions as functions to which section 17 applies.

(2) “Regulatory function” has the same meaning in this section and section 17 as in the Legislative and Regulatory Reform Act 2006 (see section 32(2) to (4) of that Act).

(3) Regulations under this section may, in particular, specify a regulatory function by reference to—

(a) the person who exercises the function;

(b) the enactment under or by virtue of which it was conferred.

(4) Regulations under this section must not specify a regulatory function of the Commission for Equality and Human Rights.

(5) Regulations under this section must not specify a regulatory function which is—

(a) a Scottish devolved function, that is to say a function the exercise of which would be within devolved competence (within the meaning of section 54 of the Scotland Act 1998),

(b) a Northern Ireland devolved function, that is to say a function which could be conferred by provision included in an Act of the Northern Ireland Assembly made without the consent of the Secretary of State (see sections 6 to 8 of the Northern Ireland Act 1998), or

(c) a Welsh devolved function, that is to say a function which could be conferred by provision falling within the legislative competence of the National Assembly for Wales (see section 108A of the Government of Wales Act 2006).

(6) Regulations under this section are subject to affirmative resolution procedure.

Section 19 Guidance by the Secretary of State

(1) The Secretary of State may issue guidance to reviewers as to the exercise of functions under section 17.

(2) A reviewer must, in exercising any of those functions, have regard to any guidance for the time being in force under this section.

(3) The Secretary of State must—

(a) publish any guidance or revised guidance issued under this section, and

(b) lay any such guidance or revised guidance before Parliament.

(4) In this section “ reviewer ” has the same meaning as in section 17.

Section 20 Independent Complaints Commissioner: reporting duty

In section 87 of the Financial Services Act 2012 (investigation of complaints against regulators), after subsection (9) insert—

(9A) The complaints scheme must provide—

(a) for the investigator to prepare an annual report on its investigations under the scheme, to publish it and send a copy of it to each regulator and to the Treasury;

(b) for each regulator to respond to any recommendations or criticisms relating to it in the report, to publish the response and send a copy of it to the investigator and the Treasury;

(c) for the Treasury to lay the annual report and any response before Parliament.

(9B) The complaints scheme may make provision about the period to which each annual report must relate (“the reporting period”) and the contents of the report and must in particular provide for it to include—

(a) information concerning any general trends emerging from the investigations undertaken during the reporting period;

(b) any recommendations which the investigator considers appropriate as to the steps a regulator should take in response to such trends;

(c) a review of the effectiveness during the reporting period of the procedures (both formal and informal) of each regulator for handling and resolving complaints which have been investigated by the investigator during the reporting period;

(d) an assessment of the extent to which those procedures were accessible and fair, including where appropriate an assessment in relation to different categories of complainant;

(e) any recommendations about how those procedures, or the way in which they are operated, could be improved.

Section 21 Duty on Secretary of State to publish business impact target etc

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 22 Sections 21 and 23 to 25: “qualifying regulatory provisions” etc

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 23 Duty on Secretary of State to publish reports

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 24 Additional matters to be included in reports

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 24A Duty on relevant regulators to assess economic impact etc

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 25 Appointment of body to verify assessments and lists in reports

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 26 Amending the business impact target etc

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 27 Sections 21 to 25 etc: interpretation

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 28 Duty to review regulatory provisions in secondary legislation

(1) This section applies where—

(a) an Act confers a power or duty on a Minister of the Crown to make secondary legislation, and

(b) the Minister exercises the power or duty so as to—

(i) make regulatory provision in relation to any qualifying activity (see sections 29 and 32), or

(ii) amend regulatory provision made in relation to any qualifying activity.

(2) The Minister must—

(a) make provision for review in the secondary legislation in which the regulatory provision is made (see section 30), or

(b) publish a statement that it is not appropriate in the circumstances to make provision for review in that legislation (see section 31).

(3) This section does not apply if or to the extent that the power or duty is to be exercised so as to—

(a) make or amend—

(i) provision imposing, abolishing or varying any tax, duty, levy or other charge, or

(ii) provision in connection with provision falling within sub-paragraph (i);

(b) make or amend provision in connection with procurement;

(c) make or amend provision in connection with the giving of grants or other financial assistance by or on behalf of a public authority;

(d) make or amend provision which is to cease to have effect before the end of the period of 5 years beginning with the commencement date; or

(e) make or amend provision which is subject to review by virtue of existing provision in the secondary legislation.

(4) In this section and section 29 “ public authority ” means—

a public authority within the meaning of the Freedom of Information Act 2000 (see section 3 of that Act), or

the Advanced Research and Invention Agency.

Section 29 Section 28(1)(b): interpretation

(1) This section applies for the purposes of section 28(1)(b).

(2) “ Qualifying activity ” means any activity carried on—

(a) by a business for the purposes of the business, or

(b) by a voluntary or community body for the purposes of the body.

(3) For the purposes of subsection (2) the references to a business or a voluntary or community body do not include a business or a voluntary or community body which—

(a) is controlled by a public authority, or

(b) is acting on behalf of a public authority in carrying out the activity.

(4) The Secretary of State must publish a statement as to how it is to be determined whether a business or a voluntary or community body is controlled by a public authority.

(5) “ Voluntary or community body ” means any of the following—

(a) a trade union (within the meaning of section 1 of the Trade Union and Labour Relations (Consolidation) Act 1992 or Article 3 of the Industrial Relations (Northern Ireland) Order 1992 ( S.I. 1992/807 (N.I. 5) ));

(b) an unincorporated body which does not distribute any surplus it makes to its members;

(c) a charity;

(d) a company limited by guarantee which does not distribute any surplus it makes to its members;

(e) a registered society within the meaning given by section 1 of the Co-operative and Community Benefit Societies Act 2014;

(f) a registered society within the meaning given by section 1A of the Co-operative and Community Benefit Societies Act (Northern Ireland) 1969 (c. 24 (N.I.)) or a credit union within the meaning of the Credit Unions (Northern Ireland) Order 1985 ( S.I. 1985/1205 (N.I. 12) );

(g) a community interest company;

(h) a charitable incorporated organisation within the meaning of Part 11 of the Charities Act 2011 or of the Charities Act (Northern Ireland) 2008 (c. 12 (N.I.) );

(i) a Scottish charitable incorporated organisation within the meaning of Chapter 7 of Part 1 of the Charities and Trustee Investment (Scotland) Act 2005 (asp 10) .

Section 30 Section 28(2)(a): “provision for review”

(1) This section applies for the purposes of section 28(2)(a).

(2) “ Provision for review ”, in relation to any regulatory provision, is provision requiring the Minister to—

(a) carry out a review of the regulatory provision, and

(b) publish a report setting out the conclusions of the review.

(3) A review of any regulatory provision which implements an ... international obligation of the United Kingdom must so far as is reasonable have regard to how the obligation is implemented in ... other ... countries which are subject to the obligation.

(4) A report must, in particular—

(a) set out the objectives intended to be achieved by the regulatory provision,

(b) assess the extent to which those objectives are achieved,

(c) assess whether those objectives remain appropriate, and

(d) if those objectives remain appropriate, assess the extent to which they could be achieved in another way which involves less onerous regulatory provision.

(5) The first report must be published before the end of the period of 5 years beginning with the commencement date.

(6) Subsequent reports must be published at intervals not exceeding 5 years.

Section 31 Section 28(2)(b): appropriateness of making provision for review

(1) This section applies for the purposes of section 28(2)(b).

(2) The circumstances in which the Minister may determine that it is not appropriate to make provision for review include those in which—

(a) a review would be disproportionate taking into account the economic impact of the regulatory provision on the qualifying activity, and

(b) a review would be undesirable for particular policy reasons (such as there being an exceptionally high need for certainty in the longer term).

(3) The Secretary of State may publish guidance about the factors to be taken into account in determining whether it is appropriate to make provision for review.

(4) The Minister must have regard to any guidance.

Section 32 Sections 28 to 31 etc: supplementary

(1) This section applies for the purposes of sections 28 to 31 and this section.

(2) “ Commencement date ” means the date on which the secondary legislation making or amending the regulatory provision comes into force for any purpose.

(3) “ Minister of the Crown ” has the same meaning as in the Ministers of the Crown Act 1975.

(4) “ Regulatory provision ”, in relation to any qualifying activity, means—

(a) provision imposing requirements, restrictions or conditions, or setting standards, in relation to the activity, or

(b) provision which relates to the securing of compliance with, or the enforcement of, requirements, restrictions, conditions or standards which relate to the activity.

(5) But where any of section 30(2), (3), (4)(a) or 31(2) applies by virtue of section 28(1)(b)(ii), the references to regulatory provision are to the regulatory provision as amended by the secondary legislation made by the Minister.

(6) “ Secondary legislation ” means orders, regulations or rules made under any Act.

(7) The validity of any secondary legislation is not to be affected by any question as to whether a Minister of the Crown complied with section 28(2).

Section 33 Definitions of small and micro business

(1) This section applies where any subordinate legislation made by a Minister of the Crown (the “underlying provision”)—

(a) uses the term “small business” or “micro business”, and

(b) defines that term by reference to this section.

(2) In the underlying provision “ small business ” means an undertaking other than a micro business (see subsection (3)) which meets the following conditions (“the small business size conditions”)—

(a) it has a headcount of staff of less than 50, and

(b) it has—

(i) a turnover, or

(ii) a balance sheet total,

of an amount less than or equal to the small business threshold.

(3) In the underlying provision “ micro business ” means an undertaking which meets the following conditions (“the micro business size conditions”)—

(a) it has a headcount of staff of less than 10, and

(b) it has—

(i) a turnover, or

(ii) a balance sheet total,

of an amount less than or equal to the micro business threshold.

(4) The Secretary of State may by regulations (referred to as “ the small and micro business regulations ”) make further provision about the meanings of “small business” and “micro business”.

(5) This section and the small and micro business regulations are to be read subject to any modifications made by the underlying provision in any particular case.

(6) In this section—

“balance sheet total”, “headcount of staff”, “micro business threshold”, “small business threshold” and “turnover” have such meanings as may be prescribed by the small and micro business regulations;

“ Minister of the Crown ” has the same meaning as in the Ministers of the Crown Act 1975;

“ subordinate legislation ” has the same meaning as in the Interpretation Act 1978 (see section 21 of that Act);

“ undertaking ” means—

a person carrying on one or more businesses;

a voluntary or community body within the meaning given by section 29(5) ;

a body which is formed or recognised under the law of a country or territory outside the United Kingdom and which is equivalent in nature to a body falling within the definition of voluntary or community body.

(7) The small and micro business regulations are subject to negative resolution procedure.

Section 34 Small and micro business regulations: further provision

(1) The small and micro business regulations may make provision—

(a) about the calculation of the headcount of staff, turnover and balance sheet total of an undertaking, including provision about the period (“assessment period”) in respect of which they are to be calculated;

(b) for the headcount of staff, turnover and balance sheet total, or a proportion of such, of any undertaking which satisfies such conditions as may be prescribed in relation to another undertaking (the “principal undertaking”) to be treated as part of the principal undertaking's headcount of staff, turnover and balance sheet total.

(2) Conditions which may be prescribed under subsection (1)(b) include, in particular, conditions relating to—

(a) the extent of ownership (whether direct or indirect) of one undertaking by one or more other undertakings;

(b) the degree of control exercised (whether directly or indirectly) by one or more undertakings over another.

(3) The small and micro business regulations may make provision about—

(a) the assessment period or periods in respect of which an undertaking must meet the small business size conditions or the micro business size conditions in order to be a small business or (as the case may be) micro business;

(b) the circumstances in which an undertaking which has been established for less than a complete assessment period is to be regarded as meeting the small business size conditions or the micro business size conditions.

(4) Provision made by virtue of subsection (3) may, in particular, provide that—

(a) an undertaking is a small business or a micro business if it meets the relevant size conditions in respect of each of its two most recent assessment periods;

(b) where there has been only one complete assessment period since an undertaking was established, the undertaking is a small business or a micro business if it meets the relevant size conditions in respect of that period;

(c) an undertaking which is a small business or a micro business does not cease to be such unless it fails to meet the relevant size conditions in respect of two consecutive assessment periods.

(5) The small and micro business regulations may make provision for one undertaking (“undertaking A”) which satisfies such conditions as may be prescribed in relation to another undertaking (“undertaking B”), to be treated as being undertaking B (whether or not undertaking B is still in existence) for such purposes as may be prescribed.

(6) Conditions which may be prescribed under subsection (5) include, in particular, conditions relating to—

(a) the transfer of a business from undertaking B to undertaking A;

(b) the carrying on by undertaking A of a business on undertaking B ceasing to carry on the activities, or most of the activities, of which the business consists in consequence of arrangements involving both undertakings;

(c) the existence of some other connection between undertaking A and undertaking B.

(7) The purposes which may be prescribed under subsection (5) include, in particular—

(a) determining the date on which undertaking A was established (and so the number of assessment periods there have been since it was established);

(b) determining which periods are assessment periods in respect of undertaking A;

(c) calculating the headcount of staff, turnover and balance sheet total of undertaking A.

(8) The small and micro business regulations may provide that an undertaking of such description as may be prescribed is not a small business or a micro business even if it falls within the relevant definition.

(9) In this section—

“ micro business size conditions ”, “ small business size conditions ” and “ undertaking ” have the same meanings as in section 33;

“ prescribed ” means prescribed in the small and micro business regulations.

Section 35 Exclusion of home businesses from Part 2 of the Landlord and Tenant Act 1954

(1) Part 2 of the Landlord and Tenant Act 1954 (security of tenure for business, professional and other tenants) is amended as follows.

(2) In section 23(4) (tenancies to which Part 2 applies) at the beginning insert “ Subject to subsection (5), ” .

(3) After section 23(4) insert—

(5) Where the tenant's breach of a prohibition (however expressed) of use for business purposes which subsists under the terms of the tenancy and extends to the whole of that property consists solely of carrying on a home business, this Part of this Act does not apply to the tenancy, even if the immediate landlord or the immediate landlord's predecessor in title has consented to the breach or the immediate landlord has acquiesced in the breach.

(6) In subsection (5) “ home business ” has the same meaning as in section 43ZA.

(4) After section 43 (tenancies excluded from Part 2), insert—

Further exclusion of home business tenancies from Part 2

(43ZA)

(1) This Part of this Act does not apply to a home business tenancy.

(2) A home business tenancy is a tenancy under which—

(a) a dwelling-house is let as a separate dwelling,

(b) the tenant or, where there are joint tenants, each of them, is an individual, and

(c) the terms of the tenancy—

(i) require the tenant or, where there are joint tenants, at least one of them, to occupy the dwelling-house as a home (whether or not as that individual's only or principal home),

(ii) permit a home business to be carried on in the dwelling-house, or permit the immediate landlord to give consent for a home business to be carried on in the dwelling-house, and

(iii) do not permit a business other than a home business to be carried on in the dwelling-house.

(3) The terms of a tenancy permit the carrying on of a home business if they permit the carrying on of a particular home business, a particular description of home business or any home business.

(4) A “home business” is a business of a kind which might reasonably be carried on at home.

(5) A business is not to be treated as a home business if it involves the supply of alcohol for consumption on licensed premises which form all or part of the dwelling-house.

(6) The appropriate national authority may by regulations prescribe cases in which businesses are, or are not, to be treated as home businesses.

(7) Regulations under this section—

(a) may include transitional or saving provision,

(b) may make different provision for different purposes,

(c) are to be made by statutory instrument,

(d) may not be made unless—

(i) in the case of regulations made by the Secretary of State, a draft of the statutory instrument containing the regulations has been laid before Parliament and approved by a resolution of each House of Parliament,

(ii) in the case of regulations made by the Welsh Ministers, a draft of the statutory instrument containing the regulations has been laid before, and approved by a resolution of, the National Assembly for Wales.

(8) For the purposes of this section, a dwelling-house which is let for mixed residential and business use is capable of being let as a dwelling.

(9) If, under a tenancy, a dwelling-house is let together with other land, then, for the purposes of this section—

(a) if the main purpose of the letting is the provision of a home for the tenant, the other land is to be treated as part of the dwelling-house, and

(b) if the main purpose of the letting is not as mentioned in paragraph (a), the tenancy is to be treated as not being one under which a dwelling-house is let as a separate dwelling.

(10) In this section—

“ the appropriate national authority ” means—

in relation to England, the Secretary of State, and

in relation to Wales, the Welsh Ministers;

“dwelling-house” may be a house or part of a house;

“ let ” includes sub-let;

“ licensed premises ” has the same meaning as in the Licensing Act 2003 (see section 193 of that Act);

“ supply of alcohol ” has the same meaning as in the Licensing Act 2003 (see section 14 of that Act).

(5) Subsections (1) to (4) do not apply to—

(a) a tenancy which is entered into before the day on which this section comes into force;

(b) a tenancy which is entered into on or after the day on which this section comes into force, pursuant to a contract made before that day;

(c) a tenancy which arises by operation of any enactment or other law when a tenancy mentioned in paragraph (a) or (b) comes to an end.

Section 36 Section 35: supplementary and consequential provision

(1) In section 41 of the Landlord and Tenant Act 1954 (trusts), after subsection (2) insert—

(3) Where a tenancy is held on trust, section 43ZA(2) has effect as if—

(a) paragraph (b) were omitted, and

(b) the condition in paragraph (c)(i) were a condition that the terms of the tenancy require at least one individual who is a trustee or a beneficiary under the trust to occupy the dwelling-house as a home (whether or not as that individual's only or principal home).

(2) A dwelling-house which is let under a home business tenancy is to be regarded as being “ let as a separate dwelling ” for the purposes of—

(a) section 1 of the Rent Act 1977 (protected tenancies),

(b) section 79 of the Housing Act 1985 (secure tenancies),

(c) section 1 of the Housing Act 1988 (assured tenancies), and

(d) any other England and Wales enactment relating to protected, secure or assured tenancies.

(3) Subsections (1) and (2) do not apply to the tenancies mentioned in section 35(3)(5).

(4) Subsections (2) and (3) do not limit the circumstances in which a dwelling-house which is let under a home business tenancy is to be regarded as “let as a separate dwelling”.

(5) In this section—

“ enactment ” includes provision made—

under an Act, or

by or under a Measure or Act of the National Assembly for Wales,

“ England and Wales enactment ” means any enactment so far as it forms part of the law of England and Wales,

“ home business tenancy ” has the same meaning as in section 43ZA of the Landlord and Tenant Act 1954.

Section 37 CMA to publish recommendations on proposals for Westminster legislation

(1) Section 7 of the Enterprise Act 2002 (provision by CMA of information and advice to Ministers etc) is amended as follows.

(2) After subsection (1) insert—

(1A) The CMA may, in particular, carry out the function under subsection (1)(a) by making a proposal in the form of a recommendation to a Minister of the Crown about the potential effect of a proposal for Westminster legislation on competition within any market or markets in the United Kingdom for goods or services.

(1B) The CMA must publish such a recommendation in such manner as the CMA considers appropriate for bringing the subject matter of the recommendation to the attention of those likely to be affected by it.

(3) After subsection (2) insert—

(3) In this section—

“ market in the United Kingdom ” includes—

so far as it operates in the United Kingdom or a part of the United Kingdom, any market which operates there and in another country or territory or in a part of another country or territory; and

any market which operates only in a part of the United Kingdom;

and the reference to a market for goods or services includes a reference to a market for goods and services; and

“ Westminster legislation ” means—

an Act of Parliament, or

subordinate legislation (within the meaning given by section 21 of the Interpretation Act 1978).

Section 38 Exemption from liability for bodies concerned with accounting standards etc

(1) After section 18 of the Companies (Audit, Investigations and Community Enterprise) Act 2004 insert—

Power to confer exemption from liability

(18A)

(1) The Secretary of State may by order or regulations provide for the exemption from liability in subsections (3) and (4) to apply to specified bodies or persons (referred to in this section as “ exempt persons ”).

(2) The order or regulations may provide for the exemption to apply subject to specified conditions or for a specified period.

(3) Neither the exempt person, nor any person who is (or is acting as) a member, officer or member of staff of the exempt person, is to be liable in damages for anything done, or omitted to be done, for the purposes of or in connection with—

(a) the carrying on of those section 16(2) activities of the exempt person that are specified in relation to that person, or

(b) the purported carrying on of any such activities.

(4) Subsection (3) does not apply—

(a) if the act or omission is shown to have been in bad faith, or

(b) so as to prevent an award of damages in respect of the act or omission on the grounds that it was unlawful as a result of section 6(1) of the Human Rights Act 1998 (acts of public authorities incompatible with Convention rights).

(5) In this section—

“ section 16(2) activities ” means activities concerned with any of the matters within section 16(2);

“ specified ” means specified in an order or regulations under this section.

(6) Orders and regulations under this section—

(a) are to be made by statutory instrument;

(b) may make different provision for different cases;

(c) may make transitional provision and savings.

(7) A statutory instrument containing an order or regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament, subject to subsection (8).

(8) An order or regulations under this section may be included in a statutory instrument which may not be made unless a draft of the instrument is laid before, and approved by a resolution of, each House of Parliament.

(2) Omit section 18 of that Act (exemption from liability for bodies to whom grants are paid).

(3) In section 66(2) of that Act (provisions extending to Northern Ireland) for “18” substitute “ 18A ” .

Section 39 Regulations about procurement

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 40 Investigation of procurement functions

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 41 The Adjudicator

(1) A Pubs Code Adjudicator is established.

(2) Part 1 of Schedule 1 makes provision about the Adjudicator.

(3) Part 2 of that Schedule contains the Adjudicator's powers to require information.

(4) Part 3 of that Schedule contains amendments consequential on the establishment of the Adjudicator.

Section 42 Pubs Code

(1) The Secretary of State must, before the end of the period of one year beginning with the day on which this section comes into force, make regulations about practices and procedures to be followed by pub-owning businesses in their dealings with their tied pub tenants.

(2) In this Part the regulations are referred to as “ the Pubs Code ”.

(3) The Secretary of State must seek to ensure that the Pubs Code is consistent with—

(a) the principle of fair and lawful dealing by pub-owning businesses in relation to their tied pub tenants;

(b) the principle that tied pub tenants should not be worse off than they would be if they were not subject to any product or service tie.

(4) The Pubs Code may, in particular—

(a) contain requirements as to the provision of information by pub-owning businesses to their tied pub tenants;

(b) require pub-owning businesses, in specified circumstances, to provide the following assessments in relation to their tied pub tenants—

(i) rent assessments, or

(ii) assessments of money payable by the tenant in lieu of rent;

(c) make provision about the information that such assessments must contain and how they are to be calculated and presented;

(d) specify that such assessments must be conducted in accordance with provisions of documents specified in the Pubs Code;

(e) where any document is specified for the purposes of paragraph (d), refer to the provisions of the document as amended from time to time;

(f) impose other obligations on pub-owning businesses in relation to their tied pub tenants.

(5) The Pubs Code may require pub-owning businesses to provide parallel rent assessments in relation to their tied pub tenants in specified circumstances, and in connection with such provision may —

(a) confer on the Adjudicator functions in relation to parallel rent assessments,

(b) require the payment of a fee by tied pub tenants to the Adjudicator in connection with the exercise of those functions, and

(c) make provision corresponding to that mentioned in subsection (4)(c), (d) and (e).

Section 43 Pubs Code: market rent only option

(1) The Pubs Code must require pub-owning businesses to offer their tied pub tenants falling within section 70(1)(a) a market rent only option in specified circumstances.

(2) A “ market rent only option ” means the option for the tied pub tenant—

(a) to occupy the tied pub under a tenancy or licence which is MRO-compliant, and

(b) to pay in respect of that occupation—

(i) such rent as may be agreed between the pub-owning business and the tied pub tenant in accordance with the MRO procedure (see section 44), or

(ii) failing such agreement, the market rent.

(3) The Pubs Code may specify—

(a) circumstances in which a market rent only option must or may be an option to occupy under a tenancy;

(b) circumstances in which a market rent only option must or may be an option to occupy under a licence.

(4) A tenancy or licence is MRO-compliant if—

(a) taken together with any other contractual agreement entered into by the tied pub tenant with the pub-owning business in connection with the tenancy or licence it—

(i) contains such terms and conditions as may be required by virtue of subsection (5)(a),

(ii) does not contain any product or service tie other than one in respect of insurance in connection with the tied pub, and

(iii) does not contain any unreasonable terms or conditions, and

(b) it is not a tenancy at will.

(5) The Pubs Code may specify descriptions of terms and conditions—

(a) which are required to be contained in a tenancy or licence for it to be MRO-compliant;

(b) which are to be regarded as reasonable or unreasonable for the purposes of subsection (4).

(6) Provision made under subsection (1) must include provision requiring a pub-owning business to offer a tied pub tenant a market rent only option—

(a) in connection with the renewal of any of the pub arrangements;

(b) in connection with a rent assessment or assessment of money payable by the tenant in lieu of rent (whether or not it results in a proposal that the rent, or amount of money payable, should increase) ;

(c) in connection with a significant increase in the price at which any product or service which is subject to a product or service tie is supplied to the tied pub tenant where the increase was not reasonably foreseeable—

(i) when the tenancy or licence was granted, or

(ii) if there has been an assessment of a kind mentioned in paragraph (b), when the last assessment was concluded;

(d) after a trigger event has occurred.

(7) The Pubs Code may specify what “ renewal ” means in relation to a tenancy or a licence for the purposes of subsection (6).

(8) In subsection (6) “ pub arrangements ”, in relation to a tied pub, means—

(a) the tenancy or licence under which the tied pub is occupied, and

(b) any other contractual agreement which contains an obligation by virtue of which condition D in section 68 is met in relation to the premises.

(9) In this Part a “ trigger event ”, in relation to a tied pub tenant, means an event which—

(a) is beyond the control of the tied pub tenant,

(b) was not reasonably foreseeable as mentioned in subsection (6)(c),

(c) has a significant impact on the level of trade that could reasonably be expected to be achieved at the tied pub, and

(d) is of a description specified in the Pubs Code.

(10) In this Part “ market rent ”, in relation to the occupation of particular premises under a tenancy or licence which is MRO-compliant, means the estimated rent which it would be reasonable to pay in respect of that occupation on the following assumptions—

(a) that the tenancy or licence concerned is entered into—

(i) on the date on which the determination of the estimated rent is made,

(ii) in an arm's length transaction,

(iii) after proper marketing, and

(iv) between parties each of whom has acted knowledgeably, prudently and willingly, and

(b) that condition B in section 68 continues to be met.

Section 44 Market rent only option: procedure

(1) The Pubs Code may—

(a) make provision about the procedure to be followed in connection with an offer of a market rent only option (referred to in this Part as “ the MRO procedure ”);

(b) confer functions on the Adjudicator in connection with that procedure.

(2) Provision made under subsection (1) may, in particular—

(a) make provision for the tied pub tenant to give notice to the pub-owning business that the tenant—

(i) considers that circumstances are such that the pub-owning business is required to offer the tenant a market rent only option, and

(ii) wishes to receive such an offer;

(b) specify a reasonable period (“the negotiation period”) during which the pub-owning business and the tied pub tenant may seek to agree the rent to be payable in respect of the tied pub tenant's occupation of the premises concerned under the proposed MRO-compliant tenancy or licence;

(c) require the appointment of a person (referred to in this Part as an “ independent assessor ”) to determine the market rent of the premises concerned in a case where, at the end of the negotiation period, the pub-owning business and the tied pub tenant have not reached agreement as mentioned in paragraph (b);

(d) require that appointment to be made by the pub-owning business and the tied pub tenant acting jointly or (where they cannot agree on a person to appoint) by the Adjudicator;

(e) require the Adjudicator to set criteria which a person must satisfy in order to be appointed as an independent assessor;

(f) require that the market rent must be determined by the independent assessor within a specified reasonable period;

(g) specify that the determination of the market rent by the independent assessor must be conducted in accordance with provisions of documents specified in the Pubs Code;

(h) where any document is specified for the purposes of paragraph (g), refer to the provisions of the document as amended from time to time.

(3) The Pubs Code may make provision for—

(a) the tenancy or licence under which the tied pub is occupied, and

(b) any other contractual agreement entered into by the tied pub tenant with the pub-owning business in connection with the tenancy or licence,

as they are in force when a notice is given by virtue of subsection (2)(a), to continue to have effect until such time as the MRO procedure has come to an end (regardless of whether any of the agreements would or could otherwise cease to have effect before that time).

(4) The Pubs Code may, for the purposes of subsection (3), specify the circumstances in which the MRO procedure is to be treated as having come to an end.

Section 45 Market rent only option: disputes

(1) The Secretary of State may by regulations confer functions on the Adjudicator in connection with the resolution of disputes relating to the offer of a market rent only option.

(2) The regulations may, in particular, make provision concerning the resolution of disputes about whether—

(a) circumstances are such that a pub-owning business is required to offer a tied pub tenant a market rent only option;

(b) a proposed tenancy or licence is MRO-compliant;

(c) a determination of the market rent of a tenancy or licence made by an independent assessor has been made in accordance with the Pubs Code;

(d) any other requirement of the MRO procedure has been complied with.

(3) The regulations may, in particular, confer on the Adjudicator the function of determining the market rent of a tenancy or licence in such circumstances as may be specified in the regulations.

(4) Nothing in sections 48 to 52 applies in relation to provision made by virtue of section 43 or 44 but the regulations may include provision which is similar to that contained in or made under those sections.

Section 46 Review of Pubs Code

(1) The Secretary of State must review the operation of the Pubs Code for each review period.

(2) The first review period is the period beginning on the date on which the Pubs Code comes into force and ending 2 years after the following 31 March.

(3) Subsequent review periods are each successive period of 3 years after the first review period.

(4) As soon as practicable after a review period, the Secretary of State must—

(a) publish a report of the findings of the review for that period, and

(b) lay a copy of the report before Parliament.

(5) In particular, the report must set out—

(a) the extent to which, in the Secretary of State's opinion, the Pubs Code is consistent with the principles set out in section 42(3), and

(b) any revisions of the Pubs Code which, in the Secretary of State's opinion, would enable the Pubs Code to reflect more fully those principles.

Section 47 Inconsistency with Pubs Code etc

(1) The Secretary of State may by regulations make provision about terms of a tenancy or other agreement between a pub-owning business and a tied pub tenant—

(a) which are inconsistent with the Pubs Code,

(b) which purport to penalise the tenant for requiring the business to act, or not act, in accordance with any provision of the Pubs Code with which the business is bound to comply,

(c) which purport to provide that a rent assessment or assessment of money payable by the tenant in lieu of rent in relation to the tied pub—

(i) may be initiated only by the business, or

(ii) may only determine that the rent or money payable in lieu of rent is to be increased.

(2) The regulations may include provision about the effect of a term of a tenancy or other agreement being void or unenforceable as a result of the regulations.

(3) Regulations under subsection (1) may make provision about terms of tenancies or other agreements entered into before the date on which the regulations come into force.

(4) A term of any agreement between a pub-owning business and a tied pub tenant is void to the extent that it purports to—

(a) prevent the tenant from referring a dispute to the Adjudicator for arbitration in accordance with regulations under section 45 or in accordance with section 48, or

(b) penalise the tenant for making such a referral.

(5) A term of an arbitration agreement between a pub-owning business and a tied pub tenant is unenforceable to the extent that it is inconsistent with—

(a) regulations under section 45,

(b) section 50,

(c) section 51, or

(d) regulations under section 51(7).

(6) Subsections (4) and (5) apply to agreements entered into before the date on which those subsections come into force, as well as those entered into on or after that date.

(7) The Secretary of State may by regulations make provision about the effect of a term of an agreement being void or unenforceable as a result of subsection (4) or (5).

Section 48 Referral for arbitration by tied pub tenants

(1) In accordance with the following provisions of this section and section 49, a tied pub tenant may refer a dispute between the tenant and the pub-owning business concerned to the Adjudicator for arbitration.

(2) If the Pubs Code specifies that particular provisions of the Pubs Code are arbitrable, a dispute may be referred to the Adjudicator only to the extent that it relates to an allegation by the tenant that the pub-owning business has failed to comply with an arbitrable provision of the Pubs Code.

(3) If the Pubs Code specifies that particular provisions of the Pubs Code are not arbitrable, a dispute may be referred to the Adjudicator only to the extent that it relates to an allegation by the tenant that the pub-owning business has failed to comply with any other provision of the Pubs Code.

(4) If the Pubs Code does not specify whether any of its provisions are arbitrable or not arbitrable, a dispute may be referred to the Adjudicator only to the extent that it relates to an allegation by the tenant that the pub-owning business has failed to comply with any provision of the Pubs Code.

(5) Where a dispute is referred for arbitration under this section, the Adjudicator must either—

(a) arbitrate the dispute, or

(b) appoint another person to arbitrate the dispute.

Section 49 Timing of referral for arbitration by tied pub tenants

(1) This section makes provision as to the period within which a tied pub tenant may refer a dispute to the Adjudicator in accordance with section 48.

(2) Except in the case mentioned in subsection (3), the dispute may not be referred until after the expiry of the period of 21 days beginning with the date on which the tenant notifies the pub-owning business of the alleged non-compliance.

(3) Where the Pubs Code requires a pub-owning business to provide a parallel rent assessment within a period of time specified by the Adjudicator, a dispute which relates to an allegation that the pub-owning business has failed to comply with that requirement may not be referred until the day after the day on which the specified period ends.

(4) In all cases, a dispute may not be referred after the expiry of the period of 4 months beginning with the first date on which the dispute could have been referred.