Ban On Upward-Only Rent Reviews A Significant Win For Hospitality

Ambition for all regions to take the reins in driving growth has received its biggest boost as the landmark English Devolution and Community Empowerment Bill is introduced to Parliament this week.

The government says the bill allows local people to take back control of their regions, from bolstered rights to save cherished community assets, to a bigger voice in neighbourhood governance and increased powers to their directly elected leaders and mayors so they can unlock housing, transport and jobs in their regions through Local Growth Plans, shifting power from Westminster to those with, the government says “skin in the game”, and rebalance prosperity, deliver economic growth and a decade of national renewal across the nation as part of the Plan for Change.

Rent Review Clause

The bill includes a commitment to ban upward-only rent review clauses in commercial leases.

Trade body UKHospitality has been calling for a ban on upward-only rent reviews since the turn of the century. The previous Labour government committed to implementing a ban in the mid-2000s, before the proposal was derailed due to the financial crash. The Hospitality Sector Council has included the ban as a key ask to drive post-Covid recovery.

Kate Nicholls, Chair of UKHospitality, said:
“Unjust upward-only rent review clauses have been hitting hospitality businesses for years, making rents unnecessarily expensive. They have been punishing the high street and constraining investment, and it’s the right move for the Government to ban them completely.

“UKHospitality has been calling for a ban for decades and I’m very pleased that it is now being implemented.

“This ban, alongside business rates reform and efforts to simplify licensing, are critical to cutting costs and red tape for businesses, and allow hospitality to drive high street regeneration.

“It’s also positive that the Bill doesn’t include any future tourist tax in England. The Government made clear to us that it has no plans to introduce a tax and it was critical they followed through on that promise. We expect that commitment to remain throughout the passage of this legislation.

“The Government should now take this pragmatic approach at the Budget and introduce measures to lower business rates, fix NICs and cut VAT for hospitality. Our businesses are being taxed out and we need to see action at the Budget that allows hospitality to create places where people want to live, work and invest.”

Promise of Change

Deputy Prime Minister Angela Rayner said: “We were elected on a promise of change, not just for a few areas cherry-picked by a Whitehall spreadsheet, but for the entire country. It was never going to be easy to deliver the growth our country desperately needed with the inheritance we were dumped with.”

“But that’s why we are opting to devolve not dictate and delivering a Bill that will rebalance decade old divides and empower communities. We’re ushering in a new dawn of regional power and bringing decision making to a local level so that no single street or household is left behind and every community thrives from our Plan for Change.”

Minister of State for Local Government and English Devolution, Jim McMahon OBE MP said:
“For too long power and opportunity has been concentrated in Westminster and Whitehall while the local councils millions rely on have been frustrated and diminished. This failed approach has held back growth across our country for far too long. Local people see this in the job market, on the high street and in their own household security and prosperity.”

“Devolution begins the work of fixing that, with this Bill delivering freedom to local leaders to make decisions for their local areas in partnership with local communities, unleashing more growth and more opportunities for people as part of our Plan for Change.”

“England has fallen behind from the rest of the globe in modernising how decisions are made, but devolution prioritises people and partnership over paperwork and politics.”

This Bill will deliver changes including 

• Making more local ownership of pubs, shops and social hubs  easier through a new Community Right to Buy meaning communities will have the first opportunity to purchase local assets when they are put up for sale, and be given an extended 12-month period to raise funding. And more local sports grounds will be saved by introducing a new ‘Sporting’ category protection of local assets preserving local character, boosting tourism and keeping community spirit alive.
• Banning Upward Only Rent Reviews (UORR) clauses in commercial leases, which pit landlords against businesses and can make rents unaffordable and cause shops to shut. This will help keep small businesses running, boost local economies and job opportunities and help end the blight of vacant high streets and the unacceptable anti-social behaviour that comes with them.
• A stronger voice for communities with a new requirement for local authorities to put in place effective neighbourhood governance to give residents more of a say in shaping their local areas.
• Quicker action on the changes local people want to see with more rights for Mayors, elected by their communities, to take back control of delivering for their voters’, from new licensing powers for rental e-bikes to new planning powers to set the direction of growth across their areas.
• Boosting economic growth with mayors working across the country to turbocharge the national missions by developing tailor made Local Growth Plans to kickstart local economies and ultimately getting more money in people’s pockets.
• Streamlined powers for Mayors across England to speed up the development of new homes and infrastructure in their areas. This will include a new power to institute Mayoral Development Orders, as well as a streamlined process to establish Mayoral Development Corporations, so that we can replicate the success of projects such as the Olympic Park legacy and attract inward investment right across the country.
• Fixing the cracks in local government through rebuilding the sector from the ground up to be more efficient, local people will get the daily services they deserve and rely on from their Council, like bin collection, whilst also enabling areas to work together over larger areas to deliver the big changes, like integrated transport networks. This will be done through the creation of new ‘Strategic Authorities’ that will boost connectivity and collaboration between Councils.
• Restoring taxpayers’ trust in councils’ spending through fixing the local audit system with the establishment of the Local Audit Office, which will increase transparency, simplify and streamline the system.