The Lib Dem leader already seems to have changed the proposal to - and go back to the rule where any venue can put on a performance of un-amplified music by one or two people without a licence.

The following was what was proposed in the Lib Dem supported Private Members Bill.

Live unamplified or minimally amplified music by no more than two performers

12B (1) The provision of a performance of live music within the meaning of paragraph 2(1)(e) of this Schedule, or entertainment of a similar description, or facilities enabling persons to take part in such entertainment, is not to be regarded as the provision of regulated entertainment for the purposes of this Act provided that the music or entertainment is —
(a) performed by no more than two performers; and
(b) either unamplified or minimally amplified.

Neither the proposal contained in the Private Members Bill nor the Lib Dem leader's new one can be described as any sort of a return to the two-in-a-bar rule. This exemption, removed by the introduction of the Licensing Act 2003, applied to amplified music and only applied in premises already licensed to serve alcohol.