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Volume 491: debated on Monday 27 April 2009

To ask the Secretary of State for Communities and Local Government what assessment her Department has made of the effect on small businesses of recent private sector rent increases; and what assistance her Department provides to small businesses in respect of such increases. (270201)

Commercial leases are a matter of private contract. Leases will set out any arrangements under which the rent may be varied during the course of the tenancy, in order to reflect current market values, and will commonly provide for the rent to be decided by an independent third party where the landlord and tenant cannot agree. When business tenancies protected by the Landlord and Tenant Act 1954 are renewed, the rent is restricted to the market value. The Department for Communities and Local Government does not provide direct assistance to small businesses in respect of rent increases, although Small Business Rate Relief is available to those businesses that meet the eligibility criteria.

Both landlords and tenants are affected by the current economic climate and a close working relationship will be of mutual benefit. As a result of Government concern about inflexible leasing practices, the property industry introduced a new voluntary ‘Code for Leasing Business Premises’ in March 2007. The Government look to the code and ancillary documents to promote more flexibility in the commercial property market, and especially to promote greater awareness among small business tenants. Government are monitoring the dissemination, use and impact of the code, and will evaluate the outcome to see if it has made a difference.