My Lords, I shall speak to Amendments 3, 5 and 7A in my name, and in support of the other amendments in the group, most of which I countersigned and one that I, mysteriously, did not. I am not sure why, because I agree with it completely. It certainly does not have any lower rating because I failed to sign it.
My three amendments are relatively self-explanatory and I shall be brief, but the Minister should not mistake that brevity for the idea that I do not think they are important. I can speak for longer if necessary. Amendment 3 would ensure that arbitration decisions are easily accessible. The basis for that is that, although we do not have long to get through this process, building up a body of case law, or case decision-making, will be important for consistency. What worries me most is complete inconsistency in how these rulings are made. I think we will come to the last point that the noble Baroness, Lady Blake, made about viability, which is where inconsistency will be most a problem. One starting point is to publish fully and accessibly. It would be better if the Government had their own website which scraped them up and put them all in one place so that people would not have to go to various places but, at the very least, they should be easily available somewhere.
Amendment 5, which has some crossover with parts of Amendment 6, requires the Secretary of State to make regulations specifying limits on arbitration fees. The Minister will see that the word “may” is employed, and I am sure he will tell us that this is a legislative trope and that this is how it is done. That is what I expect. Therefore, it will be sufficient if the Minister stands up at the Dispatch Box and says that such regulation will be brought forward at the earliest opportunity and the word “may” remains in the legislation. That would clearly clarify the Government’s intention as to whether this process will happen.
I apologise for the late arrival of Amendment 7A, and I really appreciate the help of the Public Bill Office and others in drafting it so that it is in scope of the Bill. The aim of this amendment is to put a cap on the level of interest that can be baked into the arbitration. This is important because otherwise it will be a lever used in the negotiation. In other words, the landlord will say, “Yes, I’ll do this deal but I expect interest of X or Y”, and clearly that interest level may not be to the advantage of the tenant. Therefore, putting this in removes that lever from the arbitration process. It knowingly and deliberately moves it so that the negotiation is on different ground. The Minister will have noted that I often speak up against secondary legislation—indeed, we have some coming later—but in this case it seems to me that Amendments 5 and 7A are good examples of what secondary legislation was designed for.
I turn briefly to the amendments in the name of the noble Baroness, Lady Blake. Amendment 2 is a sensible measure to ensure that there are sufficient arbitrators. The Minister has said on occasion that there are sufficient, but to some extent he is relying on the word of the organisations concerned. I think it unlikely that they would say, “No, Minister, we can’t do it”. This amendment forces that assurance process a little harder.
Amendment 6 further supports Amendments 5 and 2, in my view. I thank the Minister for his letter. One element of that was to set out the distribution of potential cases. The question I have is whether the availability matches the potential cases. For example, it seems that there is a concentration of potential cases in the south-east, and it seems likely to me that there is probably a concentration of resources for arbitration in the south-east. But what of the towns where the commercial infrastructure has dwindled and where there are not the people who fit the arbitration photofit that the Minister described? How has the Minister ascertained that those towns, cities and villages, which will need arbitration just as much as the bigger places, will have the supply they need? If they do not have the supply locally, on their doorstep, how will that be supplied otherwise? It is not just whether they are sufficient in the country but whether the footprint of those arbitrators matches the expected need.
Then we come to Amendment 7, the one I did not sign, which is strange because I think it is really important. The questions I asked in the debate before Second Reading were, “What is viability?” and “On what forward data is viability assessed?”. One percentage point on expected interest rates, one or two percentage points different on expected inflation and one percentage point up or down on the RPI are the difference between life and death for a business. When the arbitrator sits down at looks at viability, from where is that arbitrator going to get that data and how can we ensure that the data is consistent? The Treasury and the Bank of England often get it wrong when it comes to forecasting data—with all due respect to the Deputy Chairman’s son, who I believe has the job of making some of that data. The point is that we have to use something. Is it up to the arbitrator to decide which projection for RPI, which interest rate data and which inflation data are to be used? This is the difference.
What does viability mean? Is it wiping your face in the colloquial, is it a 5% return on capital employed or what? What do we mean? How do we make sure that businesses are not shut down that in other places are determined viable? This is a difficult question to answer but it is a crucial point, on which the effectiveness of this legislation will turn.
1.30 pm