This article was first published in Estates Gazette on April 20, 2020
Covid-19 makes no distinction between England and Wales but it does not necessarily follow that the government in each of those countries must respond to it in the same way.
The Wales Act 2017 introduced a “reserved powers” model for Welsh law, so that law-making power was transferred to the National Assembly for Wales on all subjects other than those specifically reserved to the UK parliament. Certain matters relating to health and safety are reserved but other areas impacted by Covid-19 are not.
As a result, some of the Covid-19-related legislation, regulations and initiatives that apply in Wales originate in Westminster and others in Cardiff Bay, so that comparing and contrasting the two approaches – and indeed working out what applies where – is not a straightforward matter.
Primary legislation in Wales
In contrast to Scotland, which has the Coronavirus (Scotland) Act 2020, Wales does not have its own Covid-19-related primary legislation.
The Coronavirus Act 2020 (the Act) is an Act of the UK parliament and received Royal Assent on 25 March 2020. It is a piece of emergency legislation conferring powers to contain the spread of Covid-19, including powers to give directions in relation to events, gatherings and premises. Substantial parts of the Act extend to Wales, albeit with a twist, highlighting the complexities that can arise with legislative devolution.
The Act contains provisions relating to both business and residential tenancies:
Clause 82 of the Act relates to business premises and applies to both England and Wales. It aims to protect commercial tenants by preventing the enforcement of a landlord’s right to forfeit a business lease for non-payment of rent and other sums during the “relevant period”.
The “relevant period” is defined as a period beginning on 26 March 2020 and ending on 30 June 2020, but that end date can be extended repeatedly.
Any extension is at the discretion of, and implemented by regulations made by, the “relevant national authority”. As far as Wales is concerned, that means the Welsh ministers. The ban on enforcement may therefore continue for different lengths of time in each jurisdiction.
The Act also introduces a degree of protection from eviction for residential tenants. Clause 81 requires landlords of most tenancies in the private and social rented sectors to provide tenants with a minimum three months’ notice of their intention to end a tenancy.
Housing is within the legislative competence of the Welsh Assembly. However, the Welsh government agreed that the protection afforded by clause 81 should extend to tenants in Wales.
Initially the measure will be in place for six months, until 30 September 2020. Once again, the “relevant national authority” has powers to extend that end date and also to extend the required notice period from three to up to six months.
It would come as no surprise if the Welsh ministers “go it alone” in terms of such extensions given their independent approach to date in relation to the residential rented sector: the Renting Homes (Wales) Act 2016, once in force, will radically rewrite residential tenancy law in Wales.
As to secondary legislation, several sets of Covid-19-related regulations have already been made in Wales.
An analysis of some of these shows that they are “similar but different” to their English counterparts. To take the Health Protection (Coronavirus Restrictions) (Wales) Regulations 2020 (SI 2020/353) as an example, these were made on 26 March 2020 following the restrictions on commercial activity announced by the UK government on 23 March.
They go significantly further in certain respects than the equivalent regulations in England. For example, the Welsh government has chosen to impose a legal requirement on essential shops and businesses that remain open to take all “reasonable measures” to ensure that a distance of 2m is maintained between any persons on the business premises and also those waiting to enter the premises. The Welsh government has explained that one reason why it has decided to go beyond guidance and include a duty in law is to make it easier to enforce the restrictions. Both the police and local authorities have enforcement powers and those in breach may be subject to financial penalties or charged with a criminal offence.
This is a particularly confusing area for businesses in Wales. The chancellor has unveiled a series of measures to support businesses and some of these extend to Wales, while others don’t.
On the one hand, schemes such as the Coronavirus Job Retention Scheme (furloughing) and the Coronavirus Business Interruption Loan Scheme apply in Wales. On the other hand, the 100% business rates discount announced in the 11 March 2020 Budget for the retail, leisure and hospitality sectors does not. Business rates are devolved and Welsh commercial tenants were left in limbo for several days before the Welsh government announced that retail, leisure and hospitality businesses in Wales with a rateable value of £500,000 or less will get business rates relief for one year.
As other aspects of business support are also devolved, the Welsh government has set out a range of support measures of its own.
Pay attention to the detail
The headline Covid-19-related legislative changes applying to landlords and tenants that have been made to date are similar on either side of the border. However, the fine print is a different story. It is therefore of comfort that the Welsh Assembly and both governments have produced a considerable amount of official guidance.
It will be interesting to see whether there will be an increasing divergence over the coming months, particularly when it comes to the exercise of discretions to extend end dates and notice periods in relation to commercial and residential tenancies.