Building Safety Bill
Wednesday 21st July 2021
(2 years, 9 months ago)
Commons ChamberRead Full debate Building Safety Act 2022 Read Hansard Text Read Debate Ministerial Extracts
Madam Deputy Speaker (Dame Eleanor Laing)
Before I call the Secretary of State to move the Second Reading motion, the House will not be surprised to hear that there will be an initial time limit on Back-Bench speeches of four minutes, which is likely to reduce later in the day. I say that so that Members can cut out the middle pages of their speeches. I call Secretary of State Robert Jenrick.
The Secretary of State for Housing, Communities and Local Government (Robert Jenrick)
I beg to move, That the Bill be now read a Second time.
Today marks the next significant step on our path to a robust but proportionate building safety regime that delivers high standards of safety for people’s homes, particularly those that are high rise, while providing reassurance to leaseholders, residents and the market that the vast majority of homes in this country are safe. In February, I announced our five-point plan to support leaseholders and address building safety issues: a plan to remove unsafe cladding where it is necessary and proportionate to do so; to provide certainty to leaseholders in the significant minority of buildings that require works; to make industry pay its fair share for its failures and poor practices and ensure a change in the broader culture and attitude of the industry to quality and safety; to create a world-class building safety regime; and to inject confidence and certainty into this part of the housing market, which has been suffering from market failure, with significant detrimental effects for many homeowners across the land.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
Will the Secretary of State give way?
Robert Jenrick
I will do so in a moment, and I will also give way to my right hon. Friend the Member for North Somerset (Dr Fox).
The Bill delivers on our promise to create that world-class building safety regime, but one that is sensible and proportionate, reflecting the true level of risk that living in these buildings poses and thereby safeguarding the broader interests of homeowners and residents.
Today I will set out the key measures in the Bill and update the House on the progress of our plan, including providing further detail on a written ministerial statement that I have just published, representing a significant intervention by the Government and lenders in response to expert advice on building safety in medium and low-rise blocks of flats and the use of EWS1 forms that I commissioned earlier in the year.
Dr Fox
Does my right hon. Friend accept that we have to get away from the term “cladding” as a generic issue and start to focus on genuine fire risk? There is a real danger of us creating unnecessary anxiety and cost where there is little or no increase in fire risk and, what is worse, using taxpayers’ money to remedy non-fire risks that should be the responsibility of the building industry.
Robert Jenrick
I could not agree more with my right hon. Friend. That is exactly the approach that we now need to follow as a country. I hope that the written ministerial statement, which I will come on to explain in a moment, will provide further reassurance to him.
Stephen Doughty
I note the provisions in the Bill for working with the Welsh Government on the levy, the charges and so on, but it is my understanding—I have checked with them today—that the Secretary of State and the Treasury have yet to confirm to the Welsh Government, despite repeated requests, what the consequential will be of the funding announcement that he made many months ago? My residents are deeply concerned, and until the Welsh Government have clarity on the money they are going to get from the UK Government, they cannot proceed with their own building safety fund to deal with these many issues.
Robert Jenrick
I understand the important point that the hon. Gentleman raises. That is really a matter to be directed to my right hon Friends the Chancellor and the Chief Secretary to the Treasury, which is responsible for the management of the Barnett consequentials. I would just point out—this is not a criticism of the hon. Gentleman, who is understandably standing up for his constituents—that the Welsh Government have yet to bring forward a scheme that would use the funding they have already been given by the United Kingdom Government. I appreciate that they would always like to have further funding, but they have not yet spent the money that the Government have already given them.
After the tragic fire at Grenfell Tower, the Government appointed Dame Judith Hackitt to review the current building safety regime and to recommend reform. Her findings were clear. Too often, regulations and guidance were misunderstood or misinterpreted. There was ambiguity around who is actually responsible for the safety of buildings, with insufficient oversight and enforcement. She called for an overhaul of the system, and her recommendations underpin the Bill before this House. We have tested these measures through consultation with industry, with regulators, with local government and with the public, and we have also taken on board many of the recommendations made following scrutiny of the Bill by the Housing, Communities and Local Government Committee. I am grateful to the Select Committee for the work that—
Several hon. Members rose—
Lucy Powell (Manchester Central) (Lab/Co-op)
On a point of order, Madam Deputy Speaker—
Madam Deputy Speaker (Dame Eleanor Laing)
Order. We suddenly have a flurry of activity. Interventions: hold for a moment. Secretary of State: pause for a moment. I call the shadow Secretary of State, Lucy Powell, to make her point of order.
Lucy Powell
On a point of order, Madam Deputy Speaker. I just wondered if I could get your advice. Is it normal practice that, moments before an important debate with dozens of Members down to speak, the Minister lays a ministerial statement about the matter before us that is not yet online so none of us is able to see it, therefore avoiding any scrutiny of the said ministerial statement? Is that in order, Madam Deputy Speaker?
Madam Deputy Speaker
I am sure that it is in order, and that is the question that the hon. Lady is asking me as the Chair. It is in order for the Minister to lay a written statement when he decides it is the right time to do that, but if there is a question of information that the hon. Lady is suggesting ought to be before the House in order to inform Members about the Bill that is before us now, I cannot make a judgment because I do not know what is in that statement. However, if the Secretary of State would care to answer that point, it might help the House.
Sir Mike Penning (Hemel Hempstead) (Con)
Further to that point of order, Madam Deputy Speaker. All the documents that are relevant to this debate on Second Reading of the Bill are on the Table except the written ministerial statement that the Secretary of State has just referred to. For some of us who have been in the Chamber for some hours now, I am sorry, Secretary of State, but that is not acceptable.
Madam Deputy Speaker
The right hon. Gentleman is not speaking to the Secretary of State; he is speaking to me. I cannot see what is on the Table, and the Clerk is not telling me that the right hon. Gentleman is wrong. Let us just clear up this matter.
Stephen Doughty
Further to that point of order, Madam Deputy Speaker. I have just been out to the Table Office and they have no copy of the statement. There is a notice of a statement coming entitled “Housing Update”, but it is yet to be provided to them or online, so Members are unable to get hold of the important information the Secretary of State has just referred to.
Madam Deputy Speaker
I thank the hon. Gentleman for that point of order. Would the Secretary of State care to clarify the matter?
Robert Jenrick
I would be delighted to, Madam Deputy Speaker. A written ministerial statement will be laid shortly, which is market-sensitive. It is difficult to suggest that there is no scrutiny, because I am here before the House to explain that statement in the context of the wider debate. [Interruption.] If the hon. Member for Manchester Central (Lucy Powell) will give me a few moments, I will be very happy to set out, in the remarks I am about to make, exactly what we have agreed with lenders and the position we have come to.
Several hon. Members rose—
Madam Deputy Speaker
Order. The Secretary of State has explained that the reason for the specific timing of the laying of the statement is that it is market-sensitive. If the Secretary of State says it is market-sensitive then I accept that it is market-sensitive. I trust that it will be available very shortly?
Madam Deputy Speaker
Very shortly. I am quite sure that we will be able to facilitate Members holding the Secretary of State to account for the contents of that written statement when it becomes available, because he is here in the Chamber. I trust that it will become available before the Secretary of State concludes his opening remarks.
Robert Jenrick
Absolutely. Thank you, Madam Deputy Speaker. I chose to make the statement directly to the House of Commons and I will come on in a moment to set out the contents of it. The written ministerial statement merely summarises that.
In the actions we have taken and those we take today, we have always prioritised public safety. As I said earlier, the Bill before us will create a strong regulatory regime for all new high-rise buildings. However, it is also important that we put the risk of a fire, and in particular the risk of a fatal fire, into context. It is very low for all buildings of all heights. Dwelling fires have reduced by more than a quarter over the last decade and are now at an all-time low. It is right that we address safety issues where they exist and are a threat to life, but we must do so in a proportionate way guided by expert advice. That is why, through the Bill, we are drawing a very clear line at 18 metres for the enhanced regulatory regime. That is on the advice of building and fire experts that those are the buildings that pose the greatest safety risks in the event of fire spread or structural failure, albeit even there the risk should not be overstated given the low occurrence of fires and the even lower occurrence of fatalities. We are also including hospitals and care homes that meet the height threshold during their design and construction.
Chris Stephens (Glasgow South West) (SNP)
The Secretary of State mentioned discussions with the industry. What can he say to companies in the Glasgow South West constituency, such as Bell Building Projects Ltd, that cannot get the appropriate indemnity insurance because insurance companies will not provide it? That company specialises in cladding. What discussions has the Secretary of State had with insurance companies to enable that company to do cladding across the UK?
Robert Jenrick
I have been working intensively with those in the insurance sector and it is incumbent on them to bring forward products. We do not believe that it is the role of the state to step in and correct the market failure in its totality, but we are bringing forward a product—I will say something more about this later in my remarks—with particular reference to professional indemnity insurance for those assessors who are conducting EWS1 forms or equivalent. That is designed to give them the confidence to take the most proportionate risk-based approach to those assessments, which some are not able to do today.
Jim Shannon (Strangford) (DUP)
I spoke to the Secretary of State beforehand. The charity Electrical Safety First, which promotes sustainable electrical safety, was brought to my attention, and probably to that of a few others in this House. It states that 54% of electrical fires are caused by an electrical source of ignition. Has the Secretary of State had the chance to speak to the Electrical Safety First charity to ensure safety is paramount in the Bill? If not, could he come back to me on that, please?
Robert Jenrick
I would be happy to speak to the organisation the hon. Member refers to or ensure that my officials do so if they have not done so already. Of course, we take the risk of electrical fires very seriously, and the Government have taken a number of steps, particularly in the private rental sector, to ensure higher standards than there are today.
Hilary Benn (Leeds Central) (Lab)
Will the Secretary of State give way?
Robert Jenrick
I will give way to the right hon. Gentleman, and then I must make some progress.
Hilary Benn
I am extremely grateful to the Secretary of State for giving way. He made the point a moment ago that the risk of a fatal fire is very low. Can he therefore explain why thousands and thousands of leaseholders are paying for expensive waking watches, having been told by their local fire services that, unless there is a waking watch, the building will be closed down and all of them will have to leave? There is a clear contradiction between those two positions.
Robert Jenrick
I think the right hon Gentleman makes an important point, and that is one element of the market failure we are seeing today. Waking watches are being used excessively. They can be rip-offs and, in many cases, they can be replaced by modern fire alarms. That is why I created the waking watch relief fund last year, which is assisting with the issue, but has not closed it down entirely. The National Fire Chiefs Council has now produced further guidance, which essentially says that waking watches should be used only in the most exceptional of circumstances, and where they are used, they should be used only for short periods. My right hon. Friend the Home Secretary is taking forward that work with fire and rescue services, and I would like to see most waking watches, barring the most exceptional of circumstances, brought to a close as quickly as possible.
The Bill will deliver improvements across the entire built environment. It will strengthen oversight and protections for residents in high-rise buildings. It will give those residents a greater say and will toughen sanctions against those who threaten safety. Its focus on risk will help owners to manage their buildings better, while giving the home building industry the clear, proportionate framework it needs to deliver more high-quality homes.
Ms Karen Buck (Westminster North) (Lab)
Will the Secretary of State give way?
Robert Jenrick
I will make some progress, if I may, but I will return to the hon. Lady.
While strengthening fire safety requirements in all premises regulated by the Regulatory Reform (Fire Safety) Order 2005 and improving competence and oversight generally, the Bill rightly focuses the new more stringent requirements on those buildings and those issues that pose the greatest risk. It provides a framework to ensure that, during design and construction, defined duty holders have clear responsibilities and that compliance with building regulations occurs. They will have to clear a series of hard stops through the new gateway system for in-scope buildings. In occupation, every building in scope will have an identified accountable person with clear responsibility for safety matters. Importantly, it will be a criminal offence not to carry out these duties effectively, punishable by an unlimited fine and up to two years in prison.
If we are truly to build a world-class regime, then residents must be at its heart. That is why, as well as championing social housing residents through the social housing charter that I created last year, we are giving residents a stronger voice in the system through the Bill, making it easier for them to seek redress and to have their voices heard. The Bill will require an accountable person for a high-rise residential building to engage with their residents and establish a formal complaints process for residents to raise concerns.
These measures are strong, but fair, and they will be overseen by the new building safety regulator within the Health and Safety Executive. The regulator will be equipped with robust powers to crack down on substandard practices, and as I said earlier, it will ensure that proportionality is embedded within its operations.
Dame Judith’s review pointed to an industry that needed significant culture and regulatory change to be fit for purpose, and I am sure I am not the only Member who has been shocked by the recent testimony at the Grenfell inquiry. This has exposed a corrosive culture of corner cutting and at times a cavalier attitude to building safety. We await the findings of the inquiry, and indeed whether criminal proceedings will follow.
The Bill creates powers to strengthen regulatory oversight for firms that manufacture and sell construction products, overseen by the new national regulator for construction products. Crucially, the Bill will have powers to remove unsafe construction products from the market swiftly and to take action against those who break the rules.
Our new regime will help those living in high-rise residential buildings to raise these issues, but we need to expand legal safeguards for everybody, regardless of the type of property they live in. We are strengthening redress for people buying a new build home, through provisions for the new homes ombudsman, which will provide dispute resolution and resolve complaints involving buyers and developers. As Members of Parliament, we all know of examples of shoddy workmanship by developers and of cases where complaints about things ranging from snagging to much more serious issues have not been properly addressed. There will now be a forum where these issues can be settled and consumers provided with the outcome they deserve when making the biggest investment in their lives.
Mr Clive Betts (Sheffield South East) (Lab)
I thank the Secretary of State for the kind words he said about the Select Committee’s scrutiny of the legislation. On the new homes ombudsman, many of us have been shocked by what we have seen from developers of new housing and the cavalier attitude they have towards their developments. Will he confirm that the new homes ombudsman will have the powers to deal with the appalling practice of non-disclosure agreements which some people have been asked to sign in order to get builders who have not built their homes properly to put that right? Will he consider going a step further and requiring the builders of new homes which have faults to put right all similar faults in other homes, just as a car manufacturer would have to do?
Robert Jenrick
Those are two important points. I would like to see the new homes ombudsman be able to take the kind of action that the hon. Gentleman describes. I will have to revert to him on whether the powers exactly allow that. If they do not, that is the kind of issue we should progress during the passage of the Bill. I give way to the hon. Member for Westminster North (Ms Buck) and apologise for keeping her waiting.
Ms Buck
Returning to the issue of waking watch and risk, London now has 900 waking watches, with the number having risen significantly. The London Fire Brigade says that there remain a number of buildings under 18 metres, or seven storeys, that in its view present equal or greater risks than those currently in scope. Will the Secretary of State tell us whether he believes that the LFB is wrong?
Robert Jenrick
As I understand it—I stand to be corrected if I have the wrong information—the 900 figure that the hon. Lady cites was a misinterpretation of the figures that were released earlier. None the less, the actual number is significant, albeit fewer than 900. We want to see waking watches used only in cases where they are absolutely necessary. The recent statement from the National Fire Chiefs Council has suggested that they are being used too often and that they can be reduced significantly. If she has constituents in that situation, as I am sure she does, in the first instance I would recommend that they make use of the waking watch relief fund to install a fire alarm, which can cut the costs very considerably.
This Bill takes an unusual step of retrospectively extending the period during which compensation for defective premises can be claimed—it more than doubles the current period, from six to 15 years. This significant step forward was requested and campaigned for by groups impacted by the cladding issue. We are going further, expanding the scope of the work for which compensation can be claimed also to include future major renovation work to buildings. These measures will not help everyone, but they do provide a step change in redress for raising issues. I hope that, in time, builders will extend their warranties to cover this period and provide the maximum amount of confidence to house purchasers.
Sir Peter Bottomley (Worthing West) (Con)
While my right hon. Friend is considering this point about the extension, will he please consider the point made by Robert Ayling, at Grosvenor Waterside, that the Building Act 1984 provision should be extended to six years after the plaintiff is aware of the defect? I am not asking for an instant answer, but such a measure would help to deal with the current situation very well.
Robert Jenrick
I will give that further thought and revert to my hon. Friend on it.
It was clear after the fire at Grenfell Tower that action was required to address safety concerns with respect to existing buildings, and my predecessors rightly took a safety-first approach, as I have also tried to do. We have provided expert advice and accelerated inspections of all high-rise buildings, and that work continues, with substantial progress having been made by the National Fire Chiefs Council on the building risk review, which is likely to be concluded by the end of the year. We have provided £5 billion in grant funding to carry out vital remediation work targeted at the buildings we know to be at the greatest risk from fire spread—those over 18 metres—and we have banned the use of combustible materials on the external walls of high-rise residential buildings, providing industry with a clear standard for the construction of new builds.
Some 474 buildings have been identified as having Grenfell-type ACM—aluminium composite material—cladding. We are now well on the way to remediating all of those buildings. Over 95% of the buildings identified at the beginning of last year have either completed or started remediation work; 70% of those have now been fully remediated, and that is rising every week. That means that around 16,000 homes have been fully remediated of unsafe ACM cladding, an increase of around 4,000 since the end of last year. Despite many building owners failing to provide adequate basic information, almost 700 buildings with other types of unsafe cladding are proceeding with a full application to the building safety fund. We have already allocated £540 million, which means that owners of 60,000 homes within high-rise blocks can be reassured that their remediation will be fully funded.
We currently forecast that over 1,000 buildings with non-ACM unsafe cladding will receive support of the same form through the building safety fund, providing a guide to the cohort of high-rise buildings where remediation is actually required. That is being progressed by a dedicated team in my Department and our two delivery partners, Homes England and the Greater London Authority. The Government have played their part: the unprecedented £5.1 billion we are providing gives assurance to leaseholders in eligible buildings that unsafe cladding on their blocks will be replaced at no cost to them.
I know that there will be strong feelings across the House about industry needing to fix and pay its fair share for problems that is has helped to cause. I recognise that some house builders have stepped up, too, thus far committing over £500 million for remediation since my statement in February. But some have not stepped up, or at least not in the way I expect them to. Ballymore, for example, has yet to commit to fully funding the remediation of its buildings.
The industry needs to go further. That is why we are introducing a new levy on high-rise residential buildings. We have published today a consultation document on the levy and I welcome views from all interested parties on its design. The levy will sit alongside a tax being developed by the Chancellor to raise at least £2 billion to contribute to the costs of historical remediation. This Bill also introduces the building safety charge to provide residents with clarity and certainty on the costs of building works, and we have listened and ensured that that charge only includes the cost of management of building safety in their building.
As I said at the outset, in bringing forward this new building safety regime we need to take a sensible, proportionate approach driven by expert advice. The Bill ensures that the building safety regulator will regulate in line with best practice principles, be proportionate and transparent, and ensure that the interests of leaseholders are protected. In 2020, only 9% of fires were in flats of four storeys or more. In 2019-20, only 7% of fires spread beyond the room of origin in such buildings. And, while every death is of course tragic, thankfully only 10 people died in 2020 as a result of a dwelling fire in flats of four storeys or more. We strongly believe that our proportionate approach is in line with these facts, ensuring that remediation works are undertaken only where absolutely required, and leaseholders should not be landed with bills for unnecessary work.
Unfortunately, that is not the position today and we need a significant reset. Too many people living in lower and medium-rise buildings have told us of feeling trapped in their properties, held back from selling their homes because of excessive caution in the lending, surveying, insurance and fire risk assessment markets. Understandably, this has caused residents to worry over safety and has led to unnecessary costs. I want to be clear that the vast majority of residents in all homes in this country, including blocks of flats, should not feel unsafe. Driven by these concerns, earlier this year I asked a small group of experts on fire safety to consider the evidence and advise me on the steps that should be taken to ensure a proportionate, risk-based approach to fire safety in blocks of flats. I thank them for their time and their expert advice, which I will publish later today.
The key finding of the experts’ advice is clear: we cannot and should not presume systemic risk of fire in blocks of flats. I quoted some of the statistics earlier, but let me repeat them. Dwelling fires are at the lowest point that they have been since we started to collect comparable statistics in 1981, despite the fact that in 2020 people spent significantly greater amounts of time in their homes as a result of covid restrictions. On that basis, the expert advice includes five significant recommendations to correct the disproportionate reaction that we have seen in some parts of the market. First, EWS1 forms should not be a requirement on buildings of less than 18 metres.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
Will the Secretary of State give way?
Robert Jenrick
If I may, I will finish this point. I am also conscious of time, as many Members want to contribute to the debate.
Secondly, in the small number of cases where there are known to be concerns, these should be addressed primarily through risk management and mitigation.
Thirdly, there should be a clear route for residents and leaseholders to challenge costly remediation work, and to seek assurance that proposals are indeed proportionate and cost-effective.
Fourthly, the Government should work with the shadow building safety regulator to consider how to implement an audit process to check that fire risk assessments are following guidelines and not perpetuating the risk aversion that we are witnessing and which in some instances are taking unnecessary costs to leaseholders.
Finally, fire risk assessors and lenders should not presume that there is significant risk to life unless there is credible evidence to support that. This will ensure that they only respond to the evidence and adopt a far more proportionate and balanced approach.
This advice is supported by the National Fire Chiefs Council and the Institution of Fire Engineers. The Government support and will act on the recommendations. Delivering real change for leaseholders requires a concerted effort from all those actively involved in the market. The Government have in recent weeks been working intensively with lenders, valuers and fire experts in this regard. We welcome the expert advice and support the position that EWS1s should not be needed for buildings of less than 18 metres.
I am pleased that all major lenders have today welcomed this advice, with Barclays, HSBC, Lloyds and others agreeing that the expert advice and Government statement should pave the way for EWS1 forms no longer to be required for buildings below 18 metres, which will further unlock the housing market.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Will the Secretary of State give way?
Robert Jenrick
I will not.
I am extremely grateful to those in industry who have already engaged and shown the necessary leadership. This is a highly complex issue, but the Prime Minister and I expect that the appropriate next steps will be taken expediently. The market is shaped not only by the Government but by lenders, the Royal Institution of Chartered Surveyors, the fire and rescue service, and fire experts. All of us need to act to achieve a market correction and relieve the pressure on homeowners. There can be no bystanders in this action. I am hopeful that other lenders will follow soon, and that RICS will rapidly reflect on the expert advice and update its guidance accordingly. This concerted cross-market approach will open up the housing market for the remaining affected leaseholders.
Robert Jenrick
I will not because I need to conclude my remarks now.
With the Health and Safety Executive, we will explore ways to deliver a fire risk assessment—
Stephen Doughty
On a point of order, Madam Deputy Speaker. I regret to have to raise this matter as a point of order, but the written statement that the Secretary of State has laid makes no clarification about whether this approach applies to England only, to England and Wales, or indeed to the whole UK. Given that it is UK-wide and market-sensitive—there are many leaseholders who will be concerned in all parts of the UK—and given that it applies to UK-wide lenders, with significant financial implications, how can I get an answer from the Secretary of State for the leaseholders who will be watching this debate in other parts of the United Kingdom? It would be very helpful if the Secretary of State could just confirm that point or if he would take a simple intervention to clarify it.
Madam Deputy Speaker (Dame Eleanor Laing)
I thank the hon. Gentleman for what I consider to be properly a point of order. The Secretary of State has most courteously explained to the House that the statement that is now forthcoming is market sensitive. I have had a chance to glance at it and I understand that it is indeed market sensitive, so I can understand, and I think the whole House will now understand, why the Secretary of State issued it at the point that he did.
I have to say to the House that there seems to have been some delay in the Vote Office and in the workings of the House, and for that, on behalf of the House authorities, I apologise to Members and to the Secretary of State. I thank the Opposition Whips for giving me a copy, since nobody else did—
Madam Deputy Speaker
I am still finishing my response to the point of order, Sir Peter.
I think there are some points in the statement that the Secretary of State will wish to clarify. I am not putting a time constraint on him, as I normally would, for finishing his Second Reading speech, because in addition to that speech it would be appropriate for him to take two or three questions on his written statement.
Sir Peter Bottomley
Further to that point of order, Madam Deputy Speaker. The written statement has the number HCWS228; an online search brings up one with a similar number from January 2015. Could the House authorities see whether they can get the statement online so that those Members who are participating virtually also have the chance to read it?
Madam Deputy Speaker
I thank the hon. Gentleman for that point of order and I reiterate it. I wonder whether the House authorities have done that—I do not know but I ask them to do so immediately.
Robert Jenrick
I shall come to the hon. Gentleman, but in answer to the question posed by the hon. Member for Cardiff South and Penarth (Stephen Doughty), my domain as Secretary of State on these matters is within England, but of course the lenders will apply practices at their discretion throughout the whole United Kingdom, so I think his question is probably better directed to the lenders who, following this announcement, will no doubt set out in the coming days how they intend to amend their lending practices in different parts of the United Kingdom. I do not think it is for me to explain the lending practices that they choose to adopt, other than in respect of the quotations that the lenders have given, which I believe will be published later today.
I shall take an intervention from the hon. Member for Sheffield South East (Mr Betts) and then, if I may, I will conclude my remarks.
Mr Betts
This is a very significant statement, and it is difficult to read it quickly and grasp it, but it says that EWS1 forms
“should not be needed for buildings less than 18m. This position is a significant step and one supported by the National Fire Chiefs Council and the Institute of Fire Engineers.”
That is a significant step, so will the Secretary of State explain, if the form is not necessary for those buildings, whether he is saying that, in effect, apart from cladding removal, significant remediation works are not necessary on buildings below 18 metres? Is that what the Government are saying? Because that is a major step in this debate and the House needs a lot more explanation.
Robert Jenrick
The expert advice that I commissioned has concluded that there is no systemic risk to life from purpose-built flats in this country and in particular—this was the question that I asked of the experts—from those flats that are low and medium-rise, meaning those of 11 to 18 metres. The experts’ advice, following on from that, is that they do not see a need for lenders to ask for EWS1 forms in the ordinary course of business. They also recommend that fire risk assessments are conducted in the usual compliance cycle, rather than on demand, in order to satisfy a market transaction such as purchasing or remortgaging a property. They do not conclude—as one would not expect them to do—that all buildings below 18 metres are safe. One can never say that, and there will be buildings that need remediation below that level, but because there is no systemic risk and the number of buildings is likely to be very small, it is not appropriate, in their opinion, which the Government have accepted, that lenders and other parties in the market should act as if there was a widespread and systemic issue. That is a subtle but important change of tone and one that I hope will lead—the initial support of the lenders suggests that this will happen—to a significantly different housing market.
Robert Jenrick
I will, and then I would like to conclude my remarks.
Meg Hillier
On first reading, there are bits of this written ministerial statement that are very welcome, but it raises many questions. I put on record my regret that we have only had this chance to digest it. The Public Accounts Committee and our sister Committee, the Housing, Communities and Local Government Committee, have been looking at this issue, along with hon. Members in this House for several years. We have been making recommendations along these lines. Our constituents have been paying for safety works and dealing with the fear and anguish created by the very issues that our Committees have raised as problems. What the Secretary of State has come to the House with is a start, but why so late, when this issue has been raised by Members of this House and the Select Committee corridor for some time? I am just puzzled by the late timing.
Robert Jenrick
I do not agree with the hon. Lady in this regard. In the immediate aftermath of the Grenfell tragedy, advice was published by Government that sought to provide information to the market where there was a significant absence of expert opinion. The market in the years since then has reacted and taken what I have described as a safety-first approach.
In more recent times we have seen—Dame Judith Hackitt, our expert adviser, has used these words herself recently—extreme risk aversion, and that is leading to fear and anxiety above all for members of the public who have a sense of risk with respect to their homes that is not borne out by the evidence in terms of the number of fires or the likelihood of dying in a fire in a high-rise or a purpose-built flat. Secondly, that risk aversion is leading to other market participants, whether lenders, insurers, surveyors or assessors, seeking remediation of those buildings over and above what might seem to be absolutely necessary to achieve an acceptable level of life safety.
Earlier this year, as I have set out in my remarks today—Members will see this in the written ministerial statement, which merely summarises what I have already said to the House directly in somewhat more detail, which is why I chose to say it to the House directly, rather than simply via written ministerial statement—I asked a series of experts to conduct a serious review and analysis of this issue and to present their findings to me. That is what they have done today, and we are publishing them later. We have chosen to accept those and have worked very closely with as many market participants as we could, bearing in mind the market sensitivity of the issue.
I am pleased that a large number of those organisations have welcomed this step and have chosen in one form or another to support it. I do not want to overstate that, because this is a highly complex market and the Government are merely one player within it. It will now require all market participants to think carefully about what the consequences are for their own practices and organisations. I hope that in time they will strongly support the Government’s position, and that this will lead to a significant market correction to the benefit of all our constituents and the whole country.
I will conclude my remarks simply by noting a few other points within the written ministerial statement. With the Health and Safety Executive, we will explore ways to deliver a fire risk assessment audit process that ensures assessments are carried out in a risk-proportionate way, avoiding unnecessary and costly remediation works where they are absolutely not needed. We will explore options to provide a clear route for residents and leaseholders to challenge costly remediation work. That will be progressed alongside the steps we are taking to ensure a proportionate response to risk is embedded in the market, including: developing guidelines for fire risk assessors, such as, and principally, PAS 9980 and the withdrawal of the consolidated advice note; and launching a Government-backed professional indemnity insurance scheme for qualified professionals conducting external wall system fire risk assessments to help ensure there is sufficient capacity in the market to allow EWS1 forms to be completed in a timely manner, where they are necessary, and that those conducting them feel the confidence and security to be able to do so in the most sensible and proportionate manner.
Taken together, all these measures should provide a measure of reassurance to the market and to those living in blocks of flats of any height. I am hopeful that they will have a significant impact, but of course much depends on the willingness of the other market participants to show leadership and commitment and to work together through these complex challenges.
The fire at Grenfell tower was a terrible tragedy, and those who lost loved ones remain in our thoughts. The issues that became clear following the tragedy are multifaceted, and so our response must be as well. It is clear that the actions we have taken and will continue to take, and the world-class building safety regime delivered by this Bill, should deliver a robust but proportionate regime, meaning that people in this country should never feel unsafe in their home.
I commend this Bill to the House.
Several hon. Members rose—
Madam Deputy Speaker (Dame Eleanor Laing)
Before I call the shadow Secretary of State, and further to the point of order from the hon. Member for Worthing West (Sir Peter Bottomley), the written ministerial statement is now available on the House papers app, and it will very shortly be available on the Parliament website. I hope that means Members who are participating virtually will be able to access it. Again, I apologise on behalf of the House authorities for the shambles after the statement was put in the Vote Office, because it was not then distributed properly here in the Chamber. We cannot blame the Secretary of State for that, as I appreciate the timing was because of market sensitivity.
As I requested that the Secretary of State stay at the Dispatch Box rather longer in order to take points specifically on the statement, he has, of course, made a much longer speech than one would have anticipated and, therefore, the time limit for Back-Bench speeches will be not four minutes but three minutes. I hope Members feel that many of them have already had a chance to ask pertinent questions of the Secretary of State.
Lucy Powell (Manchester Central) (Lab/Co-op)
I do not think the shambles lies with the House authorities. I am afraid the shambles lies with the Secretary of State. It is just not acceptable. I think it is a contempt of this place that we are given a ministerial statement and a new announcement in his speech that are totally relevant to this Bill and the topics we are discussing today.
Members on both sides of the House have spent weeks scrutinising the Bill, scrutinising what it means and preparing what they are going to say in response, and then they are given this piece of paper halfway through the Secretary of State’s speech. Madam Deputy Speaker says that this is market sensitive. Maybe I am naive about these things, but I do not understand what is market sensitive at 3.10 pm or 2.30 pm that is not market sensitive at 3.30 pm. I thought the markets closed at 4.30 pm, but maybe I have that wrong.
I will come on to some of the things in the Secretary of State’s statement shortly, but I will make some progress because, not only has his shambles now made it hard for Members to properly scrutinise the Bill, but it has cut their time. He has probably lost a lot of friends on both sides of the House in the process.
The starting point of this Bill and of our debate today is the awful tragedy at Grenfell tower. Again, we remember the 72 lives lost and stand with the families, friends and community of Grenfell who are campaigning for change. I also put on record my admiration and awe, as homeowners and tenants across the country are dealing every day with the building safety scandal that engulfs our towns and cities. Their tireless campaigning under such very difficult circumstances is beyond impressive.
Of course, people had been ringing the bell about building safety long before Grenfell, including the residents themselves. By 2017, the Government already had two coroners’ reports on previous fires that called for reform, yet they did not act. In the wake of Grenfell, the Government commissioned a review of building regulations, the Hackitt review, and this Bill implements her recommendations. Given that her final report was published more than three years ago, why has it taken so long for this Bill to reach us?
The Hackitt report is damning, finding that the entire system is not fit for purpose. She concludes:
“The ultimate test of this new framework will be the rebuilding of…confidence in the system. The people who matter most in all of this are the residents of these buildings.”
Dame Judith’s conclusion is the test against which the Bill, and now the new ministerial statement, must be set.
It is far too simple and wrong to say that all this is the fault of “shoddy developers”, as the Government have recently asserted. The tragedy at Grenfell, the fires before and the near misses since have happened as a result of many years of deregulation, lack of enforcement and accountability, and a culture where sign-off and inspection can be bought. These issues have been brought to light in the shocking evidence heard by the Grenfell inquiry, which is ongoing.
We support the majority of what is in this Bill, which at last strengthens regulation of high-rise buildings, although it could go further. However, we have serious concerns about what is not in the Bill. It abandons those leaseholders already trapped in the building safety crisis and we will seek every avenue to provide the cast-iron legal guarantees that have long been promised.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Does my hon. Friend agree that the situation that leaseholders find themselves in compounds their ongoing and awful situation? They find themselves without leverage, with service charges that are often unjustified and with difficulty getting resolution for them. This has created much more uncertainty, stress and anxiety for hundreds of thousands of families across the country.
Lucy Powell
My hon. Friend makes an excellent point. Leaseholders have very little recourse and, from the announcements today, their passage of recourse remains incredibly uncertain.
Let me start with what is in the Bill. The first major change sets up the building safety regulator, a key recommendation of the Hackitt report. The regulator will oversee “higher risk buildings,” which have been defined as essentially over 18 metres. The Select Committee raised questions about whether the scope should be extended. The Fire Brigades Union says that 11 metres or four storeys would be a safer threshold, as that is the threshold that firefighters can reach with their ladders. The Secretary of State himself said last year that we should not rely on
“crude height limits with binary consequences,”
that do not
“reflect the complexity of the challenge at hand.”—[Official Report, 20 January 2020; Vol. 670, c. 24.]
The two-tiered system this Bill creates is particularly stark when we look at privatised building control, which will continue to operate below 18 metres. The Hackitt report recognised that choice over building control inspection is a major weakness in the current system, allowing cosy relationships to flourish between developers and the private inspectors they pay handsomely.
The regulator will be the building control body for taller buildings, but not for those under 18 metres, even where other risks could remain. The Government should think again about their arbitrary definition of high-risk buildings.
Secondly, this Bill establishes clear responsibilities for building safety throughout a building’s life, in a golden thread of information. Lack of transparency was a key issue identified in the Hackitt report. The Grenfell inquiry has exposed how some building owners belittled residents as troublemakers rather than keeping them informed about the safety of their homes. The new system must be fully open and transparent to residents and leaseholders.
The need for transparency extends to the testing regime, which the Hackitt report found to be opaque and insufficient. While the Bill sets a framework for the regulation of construction products, the Government have kicked the issue of product testing down the road. This must be re-examined.
Thirdly, the Bill sets up limited mechanisms to recoup costs from developers, through legal action and a levy. The principle of the polluter must pay should apply to the building safety scandal. Labour has long been calling on the Government to take stronger action against developers who cut dangerous corners.
Extending the period in which a developer can be sued is welcome, but residents in many buildings will not be able to take advantage. The relationship of leaseholders and developers is like David and Goliath. Legal action is uncertain, expensive and risky, requiring money that leaseholders simply do not have. It also requires that a company still exists to sue, yet many have disappeared. What is more, given what we know from the Hackitt report and elsewhere, in how many cases can all the blame be legally pinned on a developer, given the failures of the regulatory regime at the time? Very few, I would imagine.
Finally, the Bill makes some changes around the new homes and social housing ombudsmen. After significant delay, some social housing reforms have finally come through, but how will the Secretary of State ensure that the social housing regulator has real teeth?
Although there are things we welcome in the Bill that will improve building safety into the future, there are, as I am sure we will hear from Members across the House, serious concerns about what is missing and the way in which ruinous costs for remediation works will still fall on leaseholders. What began as a cladding scandal after Grenfell has now led to a total breakdown in confidence in most tall and multi-storey buildings. This has now become a building safety crisis affecting hundreds of thousands of people. Young, first-time buyers have gone bankrupt. Couples have put having children on hold. Marriages have broken down. Life savings and assets have gone. Retirements have been ruined. The mental health and financial toll is incalculable.
Fundamentally, the Bill betrays leaseholders who will still face life-changing costs for problems that they did not create and who are trapped in unsellable, uninsurable and unmortgageable homes, notwithstanding some of the Secretary of State’s announcements today, which I fear will do little to resolve the situation. Two Prime Ministers, his two immediate predecessors and the Secretary of State himself have all said that leaseholders should not pay. I agree—I think we all agree in here—so why does the Bill not say it? On at least 17 different occasions in this House, they promised, even to their own Back Benchers, that they would protect leaseholders. We heard during the passage of the Fire Safety Act 2021 that the Building Safety Bill was the place to do so, so where is it? It is not in there.
What is more, legal advice on what is in the Bill says that the betrayal of leaseholders is even worse. As drafted, the Bill bakes in leaseholders’ potential liability. Our legal advice is that clause 124 provides very little additional protections. Their legal opinion is that this Bill in its totality, including clause 99, makes it
“more certain that remediation costs will fall under service charges”—
and be passed on. So on the Government’s fundamental promise to leaseholders, the Bill fails. No wonder they are furious, and bereft.
Of course, I welcome the building safety fund; it is a good thing, and it could provide a solution for many buildings. I have to commend the Secretary of State on getting £5.1 billion out of the Chancellor—he seems to have better negotiating skills than his boss, the Prime Minister. It is a lot of money and it could go some way to resolving the situation if it is properly used, but I do not understand why his financial commitment is not being met with the same zeal and determination to give it proper effect. His approach has so far been blighted by inertia and indifference and is now beset by increasing costs, relying on those in the industry who have created much of this mess to get us out of it. I have to tell him that it is just not working. Even his own Back Benchers accused him of “shocking incompetence”, and I feel that that view might be spreading after today’s shenanigans with his statement.
Let me explain: the scope of the fund is way too narrow and the deadlines for applying too tight, and yet it is being administered far too slowly, with just 12p in every pound of the fund allocated. At its current pace, it will be 2027 before the fund is even allocated. And because there is no grip on the wider issues, as we have been discussing today—such as risk, cost, work quality, accountability and sign-off—nearly all multi-storey buildings are now affected. Even when cladding is removed, a new, ever-growing list of additional seemingly necessary works are added. This means that innocent and drained leaseholders are constantly at the mercy of a system, with no accountability and no confidence in it, with an industry unable to take on risk, cornering a broken market for works, arguing over responsibility and unwilling to insure, mortgage or step up, all the while leaving leaseholders carrying the can. That is why this crisis is now affecting so many and costs keep going up. The truth is that all sense of appropriate risk has gone out of the system. The Secretary of State has talked about that today, and I have heard him say it many times before, but I am not sure what he is doing about it. Notwithstanding what is in his statement today, I still do not know whether this will provide the transparency, the recourse, or the scrutiny that leaseholders need. He says that there should be a clear route for residents to challenge. What would that route be? How would it work? What teeth would it have? He said that there will be more guidelines. What are they? When will they be published? Can we see them? Will this really have the effect that leaseholders need it to have, because time is a luxury that these homeowners simply do not have.
This is not just about the one-off high remediation costs that homeowners are facing today; it is that insurance premiums have gone through the roof, service charges are rocketing, and the waking watch, which we have heard so much about, and other costs are leaving leaseholders paying hundreds of pounds a month extra already.
Recent Government guidance has made the situation worse. Their advice note from January 2020 effectively brought all buildings of any height into scope of the dreaded EWS1 form. After today’s announcement, is that now scrapped? Does that guidance note still exist? [Interruption.] I do not know whether it is in the statement. I did not read it in there. The Secretary of State is pointing to it from a sedentary position. If it is in there, people need to know that now so that we can discuss it, and we should have known it before this debate; it is a very important thing to know. If he wants to come to the Dispatch Box to tell us whether that January 2020 advice note is now effectively scrapped, he can do so, because it is essential that people know that.
Joy Morrissey (Beaconsfield) (Con)
Will the hon. Lady give way?
Joy Morrissey
I am not completely positive, but it did say in the statement that the EWS1 form should not be required in buildings of 18 metres, which is a welcome change. Common sense seems to be prevailing in this debate now. I welcome that announcement. Does the hon. Lady agree that this is something that we have been campaigning on for quite some time and that it is a welcome change to the legislation.
Lucy Powell
Well, it is not actually legislation. The hon. Lady is wrong about that. Yes, of course, we would welcome that. The crucial words that she said there were “should not”, not would not, and that is a different thing entirely. We still need to know on what terms that will be enforced, what recourse would a leaseholder have, and to whom, and what teeth will they have in order to put that into effect. Is it legislation? [Interruption.] I think the Secretary of State is trying to tell me that it is going to be legislation. [Interruption.] Oh, it is just down to the lenders. I will give way to the right hon. Gentleman if he wants to explain.
Robert Jenrick
The hon. Lady seems to misunderstand what an EWS1 form is. An EWS1 form is a product of the lenders and the Royal Institute of Chartered Surveyors. It is not the law and neither is it a product created by the Government.
Lucy Powell
I am fully aware what an EWS1 form is, thank you. Its scope and its effect came about from the advice note that the Government issued in January 2020. If it is a matter for the lenders, what recourse do leaseholders have? There is nothing in the Secretary of State’s statement about recourse and accountability and where the buck stops. That is my central argument here. In the vacuum of leadership, everybody from insurers to mortgage lenders, risk assessors and others are too concerned about their liability, leaving thousands of buildings with endless fire safety requirements, some of which are potentially life threatening, but others are an unnecessary symptom of this crisis in confidence. Who is it that says which is which? Where does that sit? With whom does that lie? The Government cannot leave this to industry and the private sector to sort out. The market cannot sort this, because it is completely broken—the Secretary of State said today that the market was completely broken as if this was news to him. Yet he says that he will not intervene in that broken market. The power is with him to intervene if he wanted to. That is why we have been calling for a building works agency. I am talking about a crack team of engineers and experts appointed by the Government, going block by block, assessing the real fire risk and what remediation works are absolutely necessary; commissioning and funding those works from the building safety fund; and then, crucially, certifying the building as safe and sellable. This rigorous approach would also keep costs down, and the agency can then go after those responsible for costs. It has been done before in Australia and it can be done again here—if the Secretary of State was prepared to step up, lead and intervene rather than leave it to the broken market he describes.
Mr Betts
I keep reading this statement and I am not sure I am any clearer than I was at the beginning. The Secretary of State said that EWS1 forms are not needed on properties below 18 metres because there is no systemic risk across those sorts of buildings. What I am not clear about is whether the lack of systemic risk applies to cladding that is of limited combustibility. Is he now saying that there is no need to remove combustible cladding from buildings below 18 metres, or that there is a need? If there is, is not an EWS1 form needed as part of that process? If it is not, we still do not know who is going to pay for the work.
Lucy Powell
My hon. Friend makes a good point. Of course, there are also many buildings over 18 metres that do not have cladding and are still facing the issues of fire remediation works, some of which may not be necessary. I am not clear whose job it is to decide whether they are necessary, and therefore whether a building can be mortgageable and insurable once again and people can move on with their lives. I am still not sure of that and I still do not feel that the Government are really providing the leadership and intervention that is necessary.
There is huge strength of feeling on these issues, as we can see from the number of Members wanting to speak in this debate. The toll of this crisis is immeasurable. Innocent homeowners want us to work together, and I will work with anyone to protect them from these costs. I am not interested in party political point-scoring, as it happens, but the Government have to step up on these issues.
Returning to the Hackitt test, her ultimate test of this new framework is the rebuilding of public confidence in the system. She says that the people who matter most in all this are the residents of these buildings. The honest truth is that, through the omission of cast-iron protections for today’s leaseholders, this test will not be met. It is not enough to simply will the ends; the means need real determination and focus too. We will work with all sides to protect leaseholders and meet the Hackitt test.
Madam Deputy Speaker (Judith Cummins)
I call Sir Peter Bottomley.
Sir Peter Bottomley (Worthing West) (Con)
Thank you, Madam Deputy Speaker, and welcome.
Paragraph 19 of the National Audit Office report says:
“The Department has acknowledged that only in a minority of cases would it be financially justifiable for building owners to bring legal action to recover money.”
But the building owners will only make a claim if they are indemnified by the residential leaseholders, who do not have the money, so it is not going to happen, and the sums that the Department has reclaimed are very low. What is clearly obvious is that they will not get money from leaseholders. That follows on from the report of a working party set up two weeks after the Grenfell fire by Ted Baillieu, the former Premier of Victoria in Australia, and an architect. It reported within two years. He gave a presentation to the all-party fire safety group and the all-party leasehold and commonhold reform group. As they will not get money from leaseholders, they have to find the problems, fix the problems, fund the problems and then see how to get the money back. We know that the Ministry of Housing has got just over £5 billion from the Treasury. It expects to get perhaps £2 billion back in tax and £2 billion back in levy. If £15 billion is spent, there will be £3 billion back in VAT. So the Treasury seems to make money out of this, and who is left with the £10 billion of funding? The residential leaseholders, who cannot afford it.
It is quite clear that the Government have to do two things: first, as I said to the Secretary of State during his speech, extend the Building Act 1984 so that people can make a claim within six years of knowing that there is a problem; and secondly, make sure that the insurance industry knows that it is ultimately liable for what the architects, designers, component suppliers, builders, regulators and building control groups have done and must get most of the money back by agreement. There is no point in having individual leaseholders, or groups of them, taking legal action; it will not work. I say to the Secretary of State: in this case, please listen to those who know and try to make sure that no examination takes place without leaseholders being part of the committee. They could have told the Secretary of State four years ago that his approach was not working.
We are grateful for some progress, but we need much more.
Patricia Gibson (North Ayrshire and Arran) (SNP)
I want to come on to the written statement by the Secretary of State, which was delivered with breathtaking speed. Before I do so, I remind the House that my husband owns a property that might be affected by the cladding issue.
I want to focus on part 5, which includes provision to establish a new housing ombudsman scheme, with parts 1 to 4 focusing on matters applicable to England and Wales only. While housing is a devolved responsibility, consumer affairs are not, which creates challenges for the housing ombudsman scheme. There are benefits in delivering that scheme on a UK-wide basis, because there are concerns about the fact that 90% of new homes have defects and a quarter of those who move into a new home are unhappy with aspects of the property.
The existing new homes standards code is industry-led and voluntary, so it is welcome that it will be replaced with a mandatory, statutory code to ensure similar standards to those that developers are obligated to meet, topped by an ombudsman, which we hope will have teeth, with powers to require builders to resolve issues or face fines, which will give the code authority and credibility. It is important that the system is established on a UK-wide basis, because builders operate across the UK, so it makes sense to have a single body of rules and standards to ensure improvement across the board.
Because that uniformity across the board will benefit consumers across the UK it is important that Governments across the UK, and in all parts of the UK, are at the table and that their voices are heard. We all want a raising of standards in the building of new homes, so that is an eminently sensible way forward, and we expect that legislative consent would be requested from the Scottish Government. That consent would be granted if it were in the interests of the people of Scotland. Consent and dialogue with the Scottish Government must not be a box-ticking exercise—it must be genuine.
I want to say a few words about the written statement that was delivered breathtakingly quickly today. The Secretary of State said in his statement that addressing the risk in the cladding of properties should focus on “management and mitigation” instead of “costly remediation work”. We do not know what he means by “costly”, because people in some properties below 18 metres face costs for the stripping of cladding that are more expensive than the properties themselves. We are told in the statement that costly remediation work can be challenged, but there is no detail about how that can be done, so the content of the statement is quite vague. We are told that lenders have welcomed this advice, but we do not know how quickly those affected by the cladding issues will see a change in the behaviour of lenders and insurers.
Has the Secretary of State had specific talks with the insurance industry? Has he had discussions with the Association of British Insurers? We simply do not know, as the statement does not tell us. In February this year, the Secretary of State said:
“Insurers should be pricing that risk correctly and not passing on those costs or even profiteering”.—[Official Report, 10 February 2021; Vol. 689, c. 342.]
However, having read the written statement, it is not clear whether he had any dialogue with insurers before publishing it.
The statement says that there will still be repayment costs not exceeding £50 a month, so there is still no cap and we do not know what the final bill will be for those affected. I wonder whether the Secretary of State has actually been looking at or taking an interest in what is happening in Scotland. The Scottish Government have moved towards a single building assessment for properties that may be affected by the cladding issue, which will provide clear evidence of the total need for remediation. That allows the Scottish Government to identify the buildings that are at risk and inform their owners exactly what measures need to be taken.
That could release people from safety and mortgage lending concerns. It may, in the end, save homeowners hundreds of thousands of pounds that they might otherwise have had to pay for individual external wall fire review forms. The cost of the single building assessment is to be met by the Scottish Government, and once it has been established, remediation will be targeted to the buildings most at risk. That is an important innovation. I see echoes of it in what the Secretary of State has said today, but it was too vague for me to be sure.
It is interesting that today’s statement focuses on buildings below 18 metres. When we debated this very issue at the end of June, I challenged the Secretary of State, because The Sunday Times reported that a key civil servant was recorded telling fire engineers that 18 metres was the cut-off point in the first place because the Government
“haven’t got time to come up with a better number”.
I wonder whether the randomness of 18 metres is behind much of what we have heard today, but of course no one in the House, except the Secretary of State, has had time to properly digest it.
The new housing ombudsman in the Bill is welcome, provided that it is implemented in a way that is respectful of devolution and, in the future, prevents some of the shocking problems we have seen in the cladding scandal, which has turned so many lives upside down. It is important that we understand that the powers of the housing ombudsman will not be retrospective, so it offers very cold comfort for those living through the cladding and fire safety nightmare right now. I fear that the Secretary of State’s statement today has done nothing to properly address that.
For all those reasons, it is clear that more needs to be done to address the current safety scandal, which the Bill does not do. This scandal continues to blight the lives of those living in flats that they have been told are dangerous, but we are told today, “Well, do you know what? That might not really be the case. We’ll need to think about it a wee bit more and talk to the banks.” That is not good enough.
People are living in flats that cause them concern, we still do not have any answers on insurance, and we still do not have any proper insight into how the scandal will be resolved fully. The £5.1 billion that the Secretary of State likes to trumpet does not even touch the sides, and whatever else the Bill offers, it offers nothing to the people currently living in homes that are making them lose sleep and that they cannot sell.
Stephen McPartland (Stevenage) (Con) [V]
Once again, I am here to ask the Secretary of State to provide support to protect leaseholders from the devastating mental and financial costs of historical fire safety defects. Leaseholders are drowning under mountains of debt in properties they cannot sell or remortgage, and they are going bankrupt right now, with devastating interim costs mounting up, insurance premiums up thousands of per cent., and waking watches that are not even regulated by the local fire service—and we are four years on from the tragic events of Grenfell.
Leaseholders have done nothing wrong, but in January 2020 the Secretary of State created a market failure, and we have a responsibility to clean it up. His written ministerial statement today could reverse some of the damage he did, but, as speakers have already suggested, it will need to be put into legislation to provide real, practical support to leaseholders and not just rhetoric. Today’s statement could be a huge victory for leaseholders in buildings under 18 metres, but only if it means that the Secretary of State is withdrawing the January 2020 consolidated advice note for building owners of multi-storey, multi-occupied residential buildings; otherwise, it is just weasel words.
I want to believe the Secretary of State, and I hope that the written statement has just reactivated the value of hundreds of thousands of properties that had no value earlier today. However, leaseholders need to know today whether it means that buildings under 18 metres are no longer required to undergo extensive remediation costs. What about buildings that have already had EWS1 inspections and are currently facing huge bills?
The Bill runs to over 200 pages, but only clause 124, totalling two pages, deals with remediation costs for lease- holders. That single clause is so weak that it is pretty much pointless—it could be considered to have been complied with by an email having been sent. We cannot continue to abandon leaseholders. We must support them, but the Bill does not do that, so I will seek to amend it with colleagues.
I repeat once again my desire for the Government to work with me and colleagues to help get this right. I would like nothing more than to see Government amendments to protect leaseholders on Report that I can support and bang the drum for. I do not want taxpayers to pick up the bill, nor do leaseholders or responsible freeholders want taxpayers to pay. We all want those who are responsible to pay. To help leaseholders, I will table amendments to apply the Housing Defects Act 1984 to cladding and fire safety defects. That would empower the Government and local authorities to help leaseholders and provide the funds.
Clause 57 sets out a mechanism for collecting levies. We could try to amend that so that the Government could set a separate levy on new house building, with that money redirected to fire safety defect remediation for existing buildings. I will table amendments that would provide for recovery of VAT on remedial works so that they are VAT-free and ensure that the Government create an indemnity scheme like Flood Re or the Motor Insurers’ Bureau.
Mr Clive Betts (Sheffield South East) (Lab)
Welcome to the Chair, Madam Deputy Speaker. It is good to see you there.
The Housing, Communities and Local Government Committee did pre-legislative scrutiny on the Bill—it is a technical Bill, which we went through line by line and made recommendations—and I think that shows how the House should operate. I thank the Government, and the Minister for Building Safety and Communities in particular, for taking it seriously, responding to all our points in great detail and talking to us about it.
The Committee still have some concerns and wrote again to the Minister the other day about what we think is missing. One thing, of course, is building control. Developers should not be able to appoint their own building control inspectors, because that is a conflict of interest.
On risk, it is not height alone that makes buildings risky. A one-storey care home is potentially risky, and that must be taken into account in the role of the building safety regulator.
The Government are to come forward with proposals on the qualifications and training of everyone working on high-rise buildings. That is really important, because currently an electrician rewiring a flat in a high-rise development does not have to be qualified. Their employer must be part of a competent person scheme, but the individual does not have to be qualified anywhere in the building industry. Those matters need addressing now in the Bill.
Seema Malhotra
I thank my hon. Friend for all the work he does on his Committee. He made an important point about the independence of building control. Does he agree that it causes a considerable lack of confidence when people who have bought properties find they have no recourse and that there is a real question about the role of local authorities in building control?
Mr Betts
There are major issues about the independence of building control not just on the highest-rise buildings but right throughout the building industry. The Select Committee report drew attention to that.
On product testing, we await the Government’s proposals. Hackitt identified that the product testing regime is broken and needs fixing, and the Committee stands by its view that if a product that has gone to testing and failed a test comes commercially to the market, that information should be made available publicly. That is important information. The Government rejected that recommendation, but I hope they might consider it further.
It is very difficult to make comprehensive sense of the statement published today. I hope that the Secretary of State will accept an invitation to come to the Select Committee after the summer recess and discuss the matter with us in more detail. Whatever the statement says, it still leaves out buildings over 18 metres that have defects that are not just about cladding. Even when cladding defects have been put right, people are facing bills of £50,000 that they cannot afford. Where is the help for those leaseholders? It is not anywhere in the Bill.
I turn to buildings between 11 and 18 metres. I do not understand how the Secretary of State can say that systemic defects were not found in those buildings. Where does cladding fit into that? Will the removal of combustible cladding from buildings between 11 and 18 metres no longer be required? If it is still required, who will pay for it? The Government floated the idea of a loan scheme, but there is no reference to that in the Bill. Has the loan scheme been ditched? We need clarification on these important issues because leaseholders need certainty that they are not going to have to face these bills.
There are important issues in the Bill. It is generally to be welcomed. There are still issues that we want the Government to go further on, but the explanation in this statement of who is going to pay for some of the costs that the building safety fund does not cover is still an essential matter that the Government need to think again about.
Sir Mike Penning (Hemel Hempstead) (Con)
Welcome to the Chair, Madam Deputy Speaker, and perhaps I should declare an interest as a former firefighter and a former fire Minister.
I took the promise of the Housing Minister, who is a good friend and an honourable Gentleman, that the previous Bill, the fire Bill, was not the vehicle in which to bring forward measures to protect the leaseholders in my constituency. I tabled or signed some amendments as probing amendments, but then withdrew them, and I took a lot of flak from leaseholders in my constituency, who said I had let them down. I am not going to let them down with this Bill, because it was supposed to address their concerns.
Thousands of my leaseholders are trapped within their properties. Thousands of them have already paid unbelievably large amounts of money which they cannot afford, and even if they could afford to pay it is morally wrong in the first place.
Royston Smith (Southampton, Itchen) (Con)
While I understand that the ministerial statement was late in being shown to us, does my right hon. Friend agree that there is much in it to be optimistic about?
Sir Mike Penning
I agree. There is a lot in it that is good. I did not have a chance to read it while the Secretary of State was still making his speech because I am not that brilliant at doing such things, but I have read it since the Secretary of State sat down and there are some good things in there. There are questions about it and I hope to serve on the Bill Committee; I hope those on the Treasury Bench listen to me on that, although that might be slightly difficult for Ministers.
I completely agree with my hon. Friend the Member for Stevenage (Stephen McPartland), I agree with the Chairman of the Select Committee, the hon. Member for Sheffield South East (Mr Betts), and I agree with much that was said from the Opposition Front Bench as well. This should not be party politics; this should be about what is right and what is wrong. This is a homeowning nation, and that includes freeholders and leaseholders, and the party I am proud to be a member of is a home- owning party.
On Grenfell, I pay huge respect to the families who lost loved ones or whose loved ones were injured, and to my former colleagues who went in the right direction with their paramedic friends and the police when the rest of the public quite rightly got out of the way— the bravery of the firefighters at that incident is to be commended.
However, there are issues that are not addressed in the Bill. This is not all about cladding. It is about the remedial works people are being charged for and the fire watch. I have heard of situations where residents in one block—a fairly low-rise block, actually—were told they could not have any mats outside their front doors. As a former firefighter, I think that is bonkers. They were told to take pictures of the wall in the communal areas. That is not what went wrong at Grenfell; what went wrong at Grenfell was a systematic failure across the picture—including within the fire service, to be fair. I was trained on high rise and in high-rise fires we told residents to stay in their flats. We told them they were safe in the stairwell, but often they would not be.
There is one area that fascinates me. We have heard about insurance and keep talking about insurance premiums, but where are the insurance companies paying out on premiums paid by the developers and contractors? When I was a builder I could not walk on to a building site without having liability insurance.
We can do this; we did this as a Government when the mesothelioma Bill went through this House and we compensated people dying from asbestos who could not find an insurer or a contract. The Government intervened to compensate those families and loved ones, and that is what we will have to do here, too.
I will be joining my colleagues on amendments that we have signed, and if I cannot serve on the Bill Committee what a great opportunity there will be for me on Report, not because I want to be difficult, but because I want to get this right for leaseholders. I was promised the previous Bill was not the answer. This has to be the answer to put things right.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
I very much welcome the fact that this House is acting to address the systemic problems identified in the Hackitt review. I also welcome a number of specific measures in the Bill—for example, the new standards proposed for product safety and for professionals involved in the design and construction of buildings.
What I cannot welcome and what I find particularly objectionable, given what so many have faced over recent years, is the financial cost this Bill will impose on leaseholders if left unamended. That imposition will be felt in part as a result of provisions set out on the face of the Bill. Whether it is the direct cost of the proposed building safety charge or the costs of duties imposed on principal accountable persons that will inevitably be passed on, this Bill will see leaseholders pay out billions of pounds over the coming years to finance the new regime it establishes. Imposing charges of that magnitude on already hard-pressed leaseholders cannot be right, and the Bill in my view needs to be amended to ensure a more equitable apportionment of the costs of the new regime.
This Bill will also impose costs on leaseholders as a result of what it does not contain. In his opening remarks, the Secretary of State cited the extension of the Defective Premises Act 1972, the limitation period changes and the provisions in the Bill that require landlords to take reasonable steps to recover remediation costs, but he knows as well as I do that these measures will only offer limited protection at best.
What the Bill singularly fails to do, despite, as others have said, the perfectly clear indications given by Ministers during the passage of the Fire Safety Bill that this was the legislative vehicle by which to do it, is to meaningfully protect all affected leaseholders from the costs of remediating historical cladding and non-cladding defects and associated secondary costs, irrespective of circumstance. It must be overhauled so that it does, because if not now, then when do we act to protect all those caught up in this crisis, and if not by this piece of legislation, then what other?
I have no intention of voting against the principle of the Bill today. We need a version of it on the statute book as soon as possible. But I say to the Secretary of State very plainly that without amendments to guarantee that all leaseholders are fully protected, he will not get this Bill through without a fight.
The very fact that we are legislating for a radical overhaul of building regulations and fire safety highlights just how flawed the present regime is. We cannot surely, in good conscience, ask any blameless leaseholder to pay to make good what is, after all, a failure of Government-designed regulation and of industry practice. So I urge the Government to work with Members from across the House to ensure that, come Third Reading, this Bill does right by each and every one of the victims of the building safety scandal.
Royston Smith (Southampton, Itchen) (Con)
For the avoidance of doubt, I refer the House to my declaration in the Register of Members’ Financial Interests; I do not think this does affect me, but just in case and for the avoidance of doubt.
I really hoped that we would have resolved the awful situation for leaseholders during the passage of the Fire Safety Bill, but of course we all know that did not happen. During those many debates, the Government told us that the McPartland-Smith amendments to the Fire Safety Bill were defective and the Fire Safety Bill was not the place to deal with who pays for remediation. The Government said that the Building Safety Bill was the Bill to address those issues. We now know that the Building Safety Bill in its current form does nothing to address the fundamental issue: leaseholders should not and will not have to pay.
Too many issues have been deemed fire safety defects when they are not. The Secretary of State and his statement have referred to it, but it cannot be repeated often enough. Most people in high and low-rise apartments are safe. Most buildings are not dangerous. Not all cladding is flammable. I am not sure, Madam Deputy Speaker, what you would have to do to ignite a wooden balcony, for example. But people living in properties with those features cannot sell and have extortionate insurance bills. Some simple changes such as smoke alarms and fire alarms and a realistic reinspection would make the properties that are currently dangerous safe again. I hope that the written statement becomes legislation and will go some way to address that. If we look at the properties that should not be failing EWS1 and we remove them from the process, the remaining buildings could be remediated far more quickly. Most properties would then see their values restored and the market will again operate successfully.
There are of course other issues, and in summing up, I hope the Minister will explain why insurers have apparently been let off the hook. Every development has professional indemnity insurance. It is the law. As soon as there is a complaint, the insurers are informed. As soon as they are informed, they should start the process of settling any claims. Why are they allowed to remain in the shadows while innocent leaseholders pick up the tab? Is it not time for us to name and shame the insurers that covered the risk of development, but have not offered to put right the defects?
One solution is a levy, as house builders now accept. They know, as I know and everyone else knows, that that is the only way out, and they want out of this nightmare as quickly as everyone else. They are suffering reputational damage for issues that were no more their fault than the fault of the leaseholders; it was down to regulation and legislation, and the failure of the insurance companies, which have some way to go on that. Taxpayers should not pick up the tab, but they can underwrite the remediation not covered by insurance. The levy can then pay back the underwriting and everyone can go back to living in a safe property, which is what they deserve to do.
Ms Karen Buck (Westminster North) (Lab)
As others have said, the Bill represents progress in implementing the recommendations of the Hackitt review, but it will not come into effect until a full five years after the Grenfell tragedy. In those five years, hundreds of thousands of leaseholders have lived their lives under the fear of fire, under a threat to their own personal safety and under the fear of being trapped in unsellable, non-mortgageable properties and bearing costs that they are completely unable to fund. In a number of cases, those costs exceed the value of the property when they purchased it.
What we know—we will obviously be digesting the contents of the written statement as well—is that the Bill will not do enough to overcome the damage that has been done to leaseholders or to compensate them for the costs they have already borne and will continue to bear, and that further amendments will be essential before the Bill passes into law. I was particularly struck, during the Secretary of State’s opening speech, that the waking watch has now been dismissed, in many cases, as a scam and as being unnecessary. It is a bit rich of the Government to say that, when the waking watch has been the principal means of protection that has been relied on to ensure the safety of those living in high-rise properties. People who have been paying for such waking watches over these last years will listen with amazement to what the Government are now saying and to their glib dismissal of a scheme that they themselves have been relying on.
Even five years after Grenfell, there is still clear evidence that the necessary culture changes in the building industry have not taken place. As the London Fire Brigade says, there are still developers who are gaming the system and cutting corners, and there is clearly still not a level playing field to protect the interests of the only people—the tenants and the leaseholders—who are entirely blameless in this.
I want to make a particular point that does not get covered enough. Although the fire safety and building safety problems have been a catastrophe in terms of their personal impact on leaseholders, there are also significant implications for the social housing sector. Housing associations have faced remediation costs of £10 billion, and the consequence of that is a dramatic fall in the house building programme and in the investment that is necessary to deal with other safety, repair and maintenance issues in that sector. Those tenants and those people in housing need should not also be the victims of a crisis that they had no part in, and the social housing sector must be fully compensated for its actual costs in the months and years to come.
Paul Maynard (Blackpool North and Cleveleys) (Con) [V]
Thank you, Madam Deputy Speaker, and welcome to the hot seat.
I want to highlight just one aspect of building safety that I do not believe has been covered either in the Bill or in the debate so far today. Safety on stairs might seem to be rather a niche issue compared with the many issues around fire safety that we are discussing, but it has to be more than just a case of “watch where you’re going”. As the Royal Society for the Prevention of Accidents has discovered, falling on stairs is a significant cause of death, stretching into many hundreds per year. For every one hospital admission caused by a burn, there are 235 caused by falls.
The impact of these falls is felt disproportionately by older people, and even when a fall is not fatal, it is often the first stage of a persistent decline. Falls create fear, they impact on confidence and wellbeing, and they lead to people being moved out of their own homes and into care homes, in many cases never to return. I represent a predominantly elderly constituency and I am in no doubt about the importance of stair safety to maintaining independence in the home for as long as possible, but I am also someone with cerebral palsy, and I know that it is not just the elderly but people like me who have to be exceedingly careful when navigating staircases.
There is an existing industry standard, British standard 5395-1, regarding how stairs should be constructed, including rules on the dimensions of stairs and handrails. Stairs built to the British Standard lead to 60% fewer falls. Although it has been the standard since 2010, it has not, as yet, been enshrined in law, and is therefore often not used by builders. I have written to the building safety Minister asking for the Bill to include a mandate for the British standard to be applied in all new build homes, and I plan to propose such an amendment should he not give me sufficient satisfaction.
It is worth noting that this cause is backed by both private and social housing providers. It will create a level playing field in house building, but, more importantly, it will massively reduce the number of falls on stairs in the future, easing the burden on A&E and ambulances, and saving many families from unnecessary and premature tragedy.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Thank you, Madam Deputy Speaker, and I welcome you to your position.
I must declare an interest in that I am a leaseholder in an affected block, although, happily for me and for my neighbours, the developer who built the block is footing the bill for everything. I am surrounded by scaffolding, and cladding is being removed at this moment.
The Bill is welcome, but it has taken a long time to get here, and, as others have said, it does not solve the problem completely. I want, in my brief remarks, to acknowledge and reflect everything that was said by my hon. Friend the Member for Manchester Central (Lucy Powell). She summed up the challenges, while making it clear that for us this is not about scoring cheap party political points: we need to resolve the situation for all our constituents throughout the country. We recognise that legislation is one step along the way, four years on from the Grenfell disaster, but there is nevertheless a long gap—a long time lag—between legislation and action.
Let me give a recent example. The Public Accounts Committee, which I have the privilege of chairing, recently examined the work of the Office for Product Safety and Standards, which has only just assumed responsibility for product safety in this sphere and has not yet developed a methodology for its delivery. I am making no criticism of the OPSS, which has a job to do, but it has only just taken it on—and this is 2021, four years since the Grenfell disaster. That is an example of how a small delay in the Government can mean a very long delay for the thousands of our constituents who are really suffering.
The Government delay has further compounded the situation. From the beginning, a number of us have been talking about there being too few fire safety surveyors, and there has been confusion over the EWS1 forms. I have not enough time to go into the written ministerial statement, but I concur with what was said about that by my hon. Friend the Member for Sheffield South East (Mr Betts). The insurance and mortgage industries are adding to the costs and uncertainty by doing what they do, with no recognition from the Government that some of the statements they themselves have made have caused those problems, which they should have been better at predicting.
The pots of money are welcome, but they are smaller than what is needed. I think that the Father of the House, the hon. Member for Worthing West (Sir Peter Bottomley), summed it up very well: we must get leaseholders off the hook, and then the Government must be very canny—and all of us will support them—in trying to secure the money from developers. We must also look at social housing. Support for today’s leasehold victims is at the cost of future housing for tenants and future leaseholders, at a time when housing supply is a Cinderella to the Government’s policy of fuelling demand.
Today’s extraordinary written statement came so late that I hope the Secretary of State will agree to appear before our sister Committee, the Housing, Communities and Local Government Committee. There are important questions to be asked, and I think that all our inboxes will be flooded over the next few days. We still need skills to do this work, and I urge the Minister to look at delivering that as well as this legislation. We also need clarity on the levy, and on legal action, which is out of the price bracket of most of our constituents on top of the bills that they are already paying.
This situation needs to be tackled. The Bill is a start, but there are many people still living in limbo.
Dr Matthew Offord (Hendon) (Con) [V]
There are measures to be welcomed in the Bill, but a great deal more is required. I am pleased that the Government have listened to the Housing, Communities and Local Government Committee, which recommended that the Bill be amended
“to explicitly exclude historical costs from the building safety charge.”
However, it appears that the Government do not believe that the Bill will completely protect leaseholders from remediation costs. The explanatory note states:
“The Building Safety Bill does not make leaseholders liable for the cost of undertaking capital works, for example removing unsafe cladding.
However, where existing leases allow for these remediation costs to be passed on, the Building Safety Bill will bring forward measures to protect leaseholders, by placing additional duties on the building owner to explore alternative cost recovery routes before passing costs to leaseholders.”
Costs can still be passed on if building owners can show that all other avenues have been exhausted. Consequently, the Bill is focused on constructing and maintaining new buildings, rather than fixing safety issues in existing blocks.
I welcome the Government’s decision to extend the limitation period of the Defective Premises Act 1972 to protect future leaseholders, but it is not particularly viable for others given the inherent difficulties of taking legal action against well funded developers who are likely to continue to argue that buildings met regulatory approval at the time of their construction. The Government are fully aware that potential defendants in some cases no longer exist or are insolvent, and that the legal costs of taking action are likely to outweigh the costs for remediation works. That is in addition to the stress and time it would take for legal action to conclude.
The Bill contains no detail on the forced loan scheme for leaseholders in medium-rise buildings and no help whatever for those in low-rise buildings. I understood that details of the cladding tax loan scheme would be forthcoming in the March Budget. However, now the guidance is that we will have to wait until September for an idea of how the scheme will work. Finally, there has been no real movement on the urgent and expensive issue of building insurance premiums and the unaffordable costs people are being forced to pay right now for interim measures.
However, the Minister will be pleased to learn that I will be voting for the Bill today on Second Reading, as it is the only lifeline available to my constituents who are facing financial despondency, but I will be looking for amendments in Committee and on Report. Many people have bought these properties, whether as their first property or as subsequent later properties, and have invested not only their lives but their savings and their financial future on the basis of bricks and mortar. We cannot allow demands to be sought against them that will fundamentally bankrupt many of them. It is a Conservative principle that we encourage people to buy their own homes. Now these people need our help and support, we must not leave them failing.
Barry Gardiner (Brent North) (Lab) [V]
I am not sure what is worse for leaseholders: the fact that they are in constant fear because their homes are not safe, the fact that they cannot afford to make them safe and are being harassed by greedy managing agents, or the fact that they are trapped in their flats without any easy option to sell and move on with their lives. Today’s statement and the Bill do not fundamentally change that for all the reasons the Father of the House, the hon. Member for Worthing West (Sir Peter Bottomley), set out in his brief but excellent speech.
During the passage of the Fire Safety Bill, Ministers promised that these issues would be addressed in the Building Safety Bill. Lord Greenhalgh said:
“it is unacceptable for leaseholders to have to worry about costs of fixing historic safety defects in their buildings that they did not cause”
and that
“building owners are responsible for ensuring the safety of residents”,
and he said that they should
“protect leaseholders from the costs of remediating historic building defects.”
I do not know what the correct term in Parliament is for someone who make promises that they do not keep, but I know what they call them on the streets of Brent North: they call them a Government Minister.
Extending the scope and duration of the Defective Premises Act 1972 in the Building Safety Bill shows that the Government do not understand the extent of the problem. I ask the Minister to explain to my constituents who live in the Wembley Central development how it will help them. The original developer of their homes, St Modwen, has washed its hands of these defective properties. It sold them to an offshore company in Jersey in 2018, following the introduction of the new building regulations. It was in partnership with Sowcrest, which is now in a very convenient liquidation. So who exactly does the Minister think my constituents can chase here? What are the Government prepared to do about buildings with obscure corporate ownership?
I first contacted St Modwen in 2017, immediately after the Grenfell tragedy. It repeatedly assured me that the buildings were safe and in 2018 confirmed in writing that no fire safety defects had been identified. I am now told that the cladding on this building is the same as that used in Grenfell Tower and the fire safety report has identified fire stopping defects throughout the construction process. In May this year, St Modwen agreed to a takeover bid of £1.2 billion from Blackstone. Can the Minister tell me how this Bill will make them accountable for their actions? It was not the leaseholders who decided to use flammable cladding or to leave out fire stopping in voids or cut corners—developers made those decisions. My constituents have neither the deep pockets nor the legal expertise to fight these corporate chameleons, who start off in London and end up in Jersey as a different company. This Bill shows that the Government either do not understand or do not care. The companies can afford lengthy litigation; leaseholders cannot.
Finally, the Minister must explain why there is so little progress on the building safety fund. I wrote to St Modwen on 23 June. I still await a response. I have written to Fidum, the new managing agent for the new owners. I asked it about its application to the building safety fund for the removal of unsafe cladding. I have received no response, but Fidum now tells residents that it missed the closing date of 30 June for the second application because it is still waiting to have eligibility—
Joy Morrissey (Beaconsfield) (Con)
I welcome the Secretary of State’s statement that the EWS1 forms should not be required for buildings below 18 metres; lenders were insisting on EWS1 forms, despite buildings not meeting the proper criteria in the new guidance, so it is a welcome announcement. I also welcome the announcements in the written statement on working towards market correction with regard to the total risk aversion that we are seeing in the market from lenders and surveyors, and the absolute stagnation in the market.
However, I echo the concerns raised by my hon. Friend the Member for Stevenage (Stephen McPartland) and by the Father of the House, my hon. Friend the Member for Worthing West (Sir Peter Bottomley), regarding leaseholders and the issue of clause 124. I would like to see much greater levels of legislation to support leaseholders. I am speaking on behalf not just of the leaseholders, but of the parents of leaseholders in my constituency—parents in Beaconsfield, Marlow, Flackwell Heath and Iver who have given their life savings to help support their child to buy their first home, usually in London. The children of my constituents are now stuck in homes that they cannot afford to move out of because of the spiralling cost of insurance and the cost to the leaseholder that has been incurred because of the building safety regulations.
I ask that we consider how to help leaseholders. These are Conservative voters and the children of Conservative voters, who are now frustrated and angry that they cannot move up the housing ladder. We need to consider a way forward for them and remember that they have done what we Conservatives say that we always want to do: enable people to buy a home and get on the housing ladder. We are blocking them from moving forward. I ask the Secretary of State please to consider further action to help and support leaseholders.
Matt Rodda (Reading East) (Lab)
I welcome you to your place, Madam Deputy Speaker. It is a pleasure to speak in this important debate and to follow colleagues from across the House.
The Bill is a step forward. However, I have very serious reservations. I will build on the points made by my hon. Friend the Member for Manchester Central (Lucy Powell) and other colleagues across the House, including the Father of the House, the hon. Member for Worthing West (Sir Peter Bottomley).
First, it is important to focus on the single most important weakness of the Bill, which is that many thousands of existing leaseholders will not benefit from it. They are going to be penalised with exorbitant costs —far above what they could possibly pay off—due to the way in which the Government are tackling this deep crisis and the insufficient funding to make good the very serious problems with leasehold properties around the country that have become more and more apparent in the four years following the Grenfell disaster. It is simply deeply unfair that people who bought properties in good faith, in Reading and across the country, should have to pay enormous sums of money to make those properties fire-safe and to deal not only with cladding, but with a range of other issues that I will address in my short speech.
There is also the serious issue of properties under 18 metres. In my area, many blocks are under 18 metres high. I am sure that colleagues across the House will have the same issues in their constituencies. The residents in those blocks deserve to be treated much better by the Government and the industry. Let me give colleagues a small example by describing a desirable, beautifully designed block with an attractive foyer that is central to the town and next to one of the rivers in Reading—a great place to live in many ways, but in the case of a fire potentially a dangerous rabbit warren of small corridors, from which it would be difficult to escape. The block contains a huge amount of fire safety problems and residents may have to pay £150,000 each to get them put right. The problems include: issues with fire doors and with the doors into flats; a lack of internal partitions, meaning that a fire could rip through a block that contains more than 100 separate flats; and a whole range of other difficult problems. Those issues are not addressed by the Bill and they need to be.
I wish briefly to mention the confusion about the EWS1 form and lack of information until the very last minute. There are serious issues with getting the forms and it is right that the Government look into them, but it surely cannot be right to present that information as a written statement on the eve of the debate. I ask the Secretary of State and his colleagues to reflect on that, because it caused a great deal of confusion and concern today and was perplexing.
Let me say equally briefly that there is already a model for how to resolve this issue, and that is the Australian model, as mentioned by colleagues from all parties. Ultimately, it is a question of leadership from the Secretary of State.
Bob Blackman (Harrow East) (Con) [V]
As a member of the Select Committee on Housing, Communities and Local Government, I had the opportunity to spend many hours scrutinising the draft Bill as we conducted pre-legislative scrutiny. I am delighted that the Government have adopted almost all the recommendations that we made, but there are concerns.
One issue is that some of the language used in the Bill is not exact enough. It is clear that what will matter is the regulations that underpin this extremely complicated and complex Bill, which will need to be ironed out over the next 18 months before it becomes operational. Of course, that gives rise to further problems. There will be no excuse whatsoever for a developer that is currently developing a new high-rise building or, indeed, planning one in future not to abide by the rules and regulations that will be introduced when the Bill becomes law. They will have to do that. However, there is concern about the historical elements of fire safety defects, as well as the remediation of unsafe cladding.
We have to split the issue into a number of areas. There has clearly been much progress on the remediation of unsafe cladding, which is welcome, but fire safety defects have been excluded from almost everything on offer from the Government thus far, and developers are trying to wash their hands of the matter. As right hon. and hon. Members from all parties have said, leaseholders are being presented with huge bills right now. They do not have 18 months to wait to resolve the issues, so we need urgent action. We were promised that the details of the fourth loan scheme would be introduced at the time of the Budget. I assume that we will have to wait for the autumn Budget as opposed to the spring Budget, because so far we have not seen the details of how that will operate. That detail is vital for people so that they can know how to plan.
The reality is that the people in the middle of this—the innocent parties, we have to remember—are the leaseholders. The building owners and the people who developed the buildings in the first place are the ones who put the buildings up. The one excuse to which they can cling is to say that they adhered completely to the rules and regulations that were in place when they put the buildings up perhaps five, 10 or even 20 years ago. If that is the case, the Government have to find a way to fund the remediation, because the Government were responsible for putting in place the regulations. If the regulations have been blatantly ignored, it is clear that the building owners and developers must remediate the buildings and fire safety defects without any charge to leaseholders whatsoever.
The Bill is a good start to the process and I welcome it. I welcome its going into Committee, and we must get it through to safeguard leaseholders.
Dr Kieran Mullan (Crewe and Nantwich) (Con) [V]
I welcome the fact that the Bill will give residents and homeowners more rights and make homes throughout the country safer. It seeks to improve the whole fire safety regime from start to finish.
In my constituency in 2019, we had the terrible fire at the Beechmere retirement complex that destroyed the building, leaving more than 150 people without their homes and with their belongings destroyed. I pay tribute to Cheshire Fire and Rescue Service for its work in battling the blaze and I thank the local heroes who helped residents to evacuate. What happened at the building is, of course, at the front of my mind. We are still to find out the cause of the fire, and I have met Cheshire Fire and Rescue Service regularly to push it to conclude its investigations so that people get answers.
Although the focus of this debate has rightly been on external cladding and high-rise buildings, we must ensure that we use this moment of fire safety reform to act on risks across the board. I want to focus on asking the Government to go further and be more prescriptive with those buildings that use timber or that house or are used by vulnerable people, irrespective of building height. What I wish to talk about relates to approved document B and building bulletin 100, but I am sure the Minister will understand my raising those issues in the context of the Bill.
On the issue of timber, the Beechmere building was timber-framed and what happened seemed to reflect what has happened at many other fires in similar buildings. There is a wealth of long-standing concerns about the use of timber, and not just in relation to external frames. There are particular concerns about how in a timber building post-completion works and modifications can easily destroy fire safety measures. We must ensure that that risk is properly addressed.
On the second issue, we must think more carefully about restrictions based on what a building is used for. It is proportionate to make specific mandated additional requirements for buildings such as schools and care homes, which house people who will struggle to evacuate. An example of such a requirement would be for sprinklers. I and my colleagues on the all-party group on fire safety and rescue have highlighted that automatic fire sprinklers are compulsory in new care homes in Wales and Scotland but not in England—the same is true in respect of schools. Research conducted by the National Fire Chiefs Council found that in almost 1,000 fires over five years in buildings where sprinklers were fitted they controlled or extinguished blazes in 99% of cases. Automatic fire sprinklers save lives and allow children back into the classroom sooner.
I know that the Secretary of State wants a dynamic, responsive system that is not overly prescriptive, but at this stage, when we cannot yet know what a whole new regime is going to deliver in terms of better decision making on a building-by-building basis, we should be more cautious and risk adverse, and have an approach that mandates specific measures such as sprinklers for certain building types and additional measures for certain building materials such as timber, regardless of height. I welcome the Bill and the reforms it will make to building control and building regulations, but it is vital that the Government go further and provide additional protections to certain buildings, so that we can all be confident that the buildings we live, work and learn in are as safe as possible.
Daisy Cooper (St Albans) (LD) [V]
There are two ways to look at this Bill: we can look at what is in it, and we can look at what is not in it. I welcome the proposed building safety regulator and the move to finally establish the principle that there must be an accountable person, but there is much where the Bill is seriously and dangerously lacking. The Bill still uses height, not risk, as the primary criterion for where regulation kicks in. The arbitrary and discredited 18-metre cut-off must be dropped, and risk factors must be taken into account, especially in schools and care homes.
On public registers, in the Bill Committee for what became the Fire Safety Act 2021 I proposed that the Government create a register of qualified fire risk assessors. The Minister for Crime and Policing assured me that he was working with the industry to introduce such a register, and so I withdrew my new clause. So where is that measure now? Will the Secretary of State table an amendment to create that register, as well as a register of safe building materials?
On the EWS1 form, I do not even know where to start on today’s rushed announcement. I was asking about this for buildings last September. Some of my constituents have put their lives on hold for the best part of a year and now it transpires that they may not even need that form.
Finally, we were promised that the plight of leaseholders would be addressed in this Bill. We were assured time and time again that the Fire Safety Act was not the right place for things because this Bill was coming down the track. Leaseholders do not have the deep pockets or legal expertise to pursue giant corporations as the Government are suggesting. The Government just need to stump up the cash, make homes safe and then use their power to make polluters pay. It is really simple; it has been done in Australia and it is an off-the-shelf solution that has been shown to work. Surely the Government realise that they must now bring forward protections for the tens of thousands of leaseholders who were promised by the Prime Minister that they would not be made to pay for fire safety defects not of their making, because if he does not, Members of this House will fight tooth and nail, working across the House, to deliver justice for building safety victims.
Mark Logan (Bolton North East) (Con) [V]
The telly has been showing horrific scenes of flooding across the globe recently. What is infuriating is the more overtly man-made mini-flooding that my constituents in Holden Mill and Astley Bridge have been exposed to. We are talking about water ingress where what were once penthouses have become unwanted pools, decompartmentalisation leading to fire risk and issues associated with cladding, all of which are liable to increase costs for the tormented people living there. With today’s Bill, this Government, this Secretary of State and this MP have the chance to put things right for the people of Holden Mill.
The proposed reforms are welcome, particularly the extension of the Defective Premises Act 1972 and the limitation period. However, clause 124 is unlikely to be in place for at least a year and leaseholders risk having to pay ruinous costs for months to come. The only real route of redress against culpable parties is usually through costly litigation, so will the Department outline the provisions in place to help cash-strapped leaseholders and management companies pay for legal action involving extensions to the limitation period?
Some 20% of residents in the Cottonworks, a mill that has been converted into dwellings in my constituency, are affected by water ingress due to poor conversion by the developer PJ Livesey. Despite insurance cover with the National House Building Council, my constituents are facing a potential shortfall in excess of £1 million. These residents are living in torrid circumstances, and leaseholders have already had to pay into a levy, on top of service charges, to cover temporary measures concerning PJ Livesey’s alleged failings in relation to fire compartmentation. The timing of the levy could not be worse, and it is vital that these future costs are not passed on to innocent leaseholders.
How do we ensure that responsible and culpable parties do not abuse the statute of limitations by simply running down the clock? Some 280 leaseholders at the Cottonworks could face further levies, and they fear not being able to fund legal action. These companies—I am sure there are many such cases across the country—have slopey shoulders regarding poor workmanship, ping-ponging my constituents from company to company. I will be voting with the Government, standing shoulder to shoulder with these residents in Astley Bridge and across the country.
Finally, the intention to create a system of duty holders throughout the design, construction and occupation of high-risk buildings is welcome, but can the Minister and the Department assure my constituents that this will be applied retrospectively, finally providing residents with the power to make someone—
Rushanara Ali (Bethnal Green and Bow) (Lab) [V]
I begin by paying my respects to all those who lost their lives in the Grenfell Tower disaster, and to their family members and relatives who continue to campaign to protect others in our country. I also pay tribute to all those in my constituency who have been campaigning, as we have a large number of blocks with ACM cladding and other safety risks.
Although I support many aspects of this Bill, it is clear that the Government are missing an opportunity to protect the hundreds of thousands of people who need protection. That is why it is important that, although the building safety fund is welcome, the Government should look to provide additional funding for those blocks that are not getting the funding they urgently need. The companies that are responsible should pay. As I have argued time and again over the past four years, it should not be on our residents to have to go after the companies. The Government should be going after the companies. The Government have not done enough; they need to do much more.
When the Grenfell Tower disaster happened, the then Prime Minister said that we should “do whatever it takes” to protect our people. Yet, year in and year out, many of us on both sides of the House have campaigned and are still arguing about funding and support for our constituents.
Despite what the Secretary of State said today, the Fire Brigades Union has said that the building safety fund completely ignores unsafe buildings beneath the arbitrary 18-metre limit. As he admitted, there are still people at risk. He mentioned 10 people who have died, and that is 10 too many. It is important that this Government do not create a trend of callous disregard for human life. Our constituents have had to live in fear during lockdown in dangerous ACM-clad properties.
In Poplar and Limehouse, Tower Hamlets, we saw a fire in a block with ACM cladding in May, and it was described by The Sunday Times as being
“‘minutes’ away from being another Grenfell Tower.”
In our borough there are 291 buildings at risk, which is why we need the Government to take action, to improve the Bill and to accept the Labour amendments and other sensible amendments that have been proposed.
In Claremont Court, Tower Hamlets Community Housing has applied to the building safety fund, like other housing associations in other blocks. While some have received some funding, others have been rejected for no good reason. I hope that the Secretary of State will look at those cases again.
Hilary Benn (Leeds Central) (Lab)
Last Saturday, I attended a demonstration at Leeds Dock in which my constituents—leaseholders affected by the scandal—talked about the anxiety, the stress and the potentially crippling financial costs they face if they are asked to pay to fix their homes. They really feel that nothing has changed. Now, had they been able to see Ted Baillieu from Victoria state speak last week, as referred to by the Father of the House, the hon. Member for Worthing West (Sir Peter Bottomley), they would have been blown away by his direct, no-nonsense approach. Those three words—“find, fix, fund”, and then go after the people who are responsible —should be the guiding light of the Government’s approach. My question to Ministers is: when will we see in the UK the kind of comprehensive approach that we are seeing in Victoria in Australia?
I appreciate—we all do—the money that the Government are putting in, but there are so many other faults in buildings apart from unsafe cladding that replacing the cladding will not make them safe. To take one example, the Richmond House fire was just under two years ago. It was below 18 metres, yet we are told that it was the absence of proper cavity barriers and fire breaks that allowed the fire to spread. I say to Members: watch the video. It is absolutely terrifying.
Luckily no one was killed, yet it is precisely fire defects of that sort, which we know are being discovered on countless buildings, that are not covered by the Government’s funding offer, because the Government are funding the removal of dangerous cladding. Ministers know—we have told them time and again—that lease- holders do not have the money to pay to fix those defects. If the defects are not fixed, those buildings will remain classed as unsafe. Presumably if they are a serious risk, they will continue to have waking watch and insurance bills, which will drain the accounts of innocent leaseholders.
My second point is: where is the plan to manage the most dangerous buildings first? At the moment, the order in which they are fixed depends on the speed with which managing agents and freeholders either pay for it themselves or apply to the building safety fund. We do not actually know the full extent of the problem; there is no comprehensive list. Offering 15 years instead of six is fine, but useless, because not a single leaseholder I have spoken to will be able to put the money up and take the risk of suing someone when they might lose after seven years and face another bill. They have enough to worry about at the moment.
I look forward to working with others on a cross-party basis to support amendments to the Bill, so that finally my leaseholders can look at the Bill when it is finished and say, “Right. We have a plan to deal with this”. Then all our constituents can get on with their lives, because that is what they want and what they deserve.
Peter Aldous (Waveney) (Con)
Technically speaking, the issue that I wish to highlight—the need for the more widespread fitting of sprinklers—does not fit neatly within the currently narrow scope of the Bill, but with some amendment it can and, quite frankly, the matter has been ignored for far too long, and it is appropriate to highlight it on the Second Reading of a Bill on building safety.
Ten years ago this month, the Wessex Foods factory on the South Lowestoft industrial estate was burnt to the ground. Fortunately, no one lost their lives, but 150 people lost their jobs, surrounding businesses were seriously disrupted, and it took 10 days to fully extinguish the fire, during which every firefighter in Suffolk attended the scene. Some 52 million litres of water was used, much of it finding its way in a contaminated form into nearby watercourses.
That turmoil would have been avoided if the factory had been fitted with sprinklers. If it had been, the firefighters who first attended the scene would have spent just four minutes on site. In the intervening 10 years, what has been done to promote the greater use of sprinklers? In previous Parliaments, we have had good debates, ably led by our former colleague, Jim Fitzpatrick, and my hon. Friend the Member for Southend West (Sir David Amess), but nothing has been achieved. In fact, we are going backwards, as the Government are proposing changes to the “Building Bulletin 100: Design for fire safety in schools” guidance that will mean automatic fire sprinkler systems will be required in only a very limited number of schools—far fewer than intended under the current BB 100.
Despite urban myths, the case for sprinklers is compelling. They save lives and jobs, and they prevent environmental degradation. Some people may worry about their cost, and I do not deny that in some circumstances retrofitting will present challenges, but making their use mandatory will unleash innovation, through increased manufacturing and the enhanced design and layout of buildings.
A small, but significant, step to achieving the more widespread use of sprinklers is to use this Bill to amend the Building Act 1984 and the 2010 building regulations, so as to give the Secretary of State the power to make regulations to facilitate the protection of property. I urge the Government to seriously consider this when the Bill is in Committee.
Rebecca Long Bailey (Salford and Eccles) (Lab) [V]
Sadly, this Bill is deficient in many areas. It focuses on higher-risk buildings, currently defined as those over 18 metres, leaving the safety of residents in buildings under 18 metres unclear. Does today’s EWS1 announcement now mean that combustible cladding under 18 metres should be ignored?
The issue of funding is still not adequately addressed. As the Government well know, the building safety fund only covers unsafe cladding, yet 70% of buildings surveyed have non-cladding fire and safety defects. Providing cladding remediation funding for buildings over 18 metres, yet forcing leaseholders in buildings under 18 metres to pay, is simply unjust. As Inside Housing has previously reported, even the minority of leaseholders who could apply for loans potentially face waiting for years.
As for social landlords, the National Housing Federation has stated that, “Social housing providers will be forced to draw money from improving tenants homes in communities to fund remediation.” This is staggering.
To address these inequities, the Government plan simply to extend limitation periods to 15 years, but that will still require leaseholders and social landlords to stump up the initial cost themselves, if they do not qualify for the building safety fund. Legal processes for the recovery of such funds could take years and be very costly, if the developers and contractors even still exist.
This proposal would not help leaseholders in my constituency at Transport House, who face bills of more than £100,000 each, as they fall shy of the 15-year period, and nor would it help the tenants and residents of Sovereign Point.
Aside from the unsafe conditions such residents are forced to live in every day, the mental strain takes its toll. In a survey by UK Cladding Action Group, 90% of leaseholders said their mental health has deteriorated and a fifth—a fifth—have had thoughts of suicide and self-harm.
Let us be clear: the only way to protect both leaseholders and tenants from the unfair costs of the crisis they did not cause is for the Government to provide upfront remediation funding, then recoup the cost from those responsible for those safety defects. As we have heard, they managed to do that in Australia, so this Government can manage to do it here.
Sir David Amess (Southend West) (Con)
Since last October, the all-party parliamentary group for fire safety and rescue, which I chair—and I am delighted to see so many of its members participating in the debate—has responded in detail to four Government consultations on various aspects of fire and building safety. A further consultation was launched by the Department for Education on 27 May in relation to the revised fire safety design guide for new schools. In a nutshell, that proposes to remove in the future the requirement for automatic fire sprinkler protection for all but a very few new schools. This is not acceptable and I am delighted that it was raised at Prime Minister’s questions today.
We are suffering from consultation overload and we could really do with a road map as to how all these pieces of work fit together. Last Thursday was my third meeting with the noble Lord Greenhalgh on fire and building-related issues since 23 June. Only last week, during a joint meeting that I chaired with the all-party parliamentary group for disability, we heard a most distressing account of a disabled resident trapped on the 23rd floor of Grenfell Tower whose son carried her down through the smoke and flames at 2.30 am, one and half hours into the fire. Her husband tragically perished, having jumped from the building.
One significant issue raised by both the APPG and the National Fire Chiefs Council in their previous responses to the Regulatory Reform (Fire Safety) Order 2005 consultation was that there remains a fundamental disconnect between the non-worsening conditions of building regulations and the expectations of continuous improvements through the fire risk assessment process set by the fire safety order. Regulation 4 of the Building Regulations 2010 states that where the work did not previously comply with schedule 1, the new work, when complete, should be
“no more unsatisfactory in relation to that requirement than before the work was carried out”—
meaning that the general fire precautions may never get improved to modern standards. This runs contrary to the principles of prevention outlined in the fire safety order—that premises’ risk assessment should adapt to technical progress and reduce overall risk within buildings.
Non-worsening provisions are resulting in lost opportunities to improve building safety. An example is the refurbishment of Lakanal House following a multiple-fatality fire. The London fire commissioner told the coroner that automatic fire sprinkler protection would have prevented the death of six residents who died if it had been installed. Subsequently, the coroner recommended to the then Secretary of State that he should encourage social housing providers in high-rise blocks of over 18 metres to consider retrofitting automatic sprinkler protections. I say to my right hon. Friend the Minister: we must never make the same mistakes again.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
My warmest congratulations, Madam Deputy Speaker. I think everybody welcomes the new and enhanced regulatory regimes for building safety in the Bill, but, as many Members have stated, I am equally concerned about the action that is needed now to make existing homes and products safe and to stop leaseholders from being hit with catastrophic bills from building owners to fix historic failures. I also want to put on record my concerns about a statement being issued in the middle of an opening speech presenting the Bill. I think it is absolutely appalling.
Moving on to Dame Judith Hackitt’s report, she concluded that it was the construction industry’s prevalent culture that was undermining building safety. She referred to procurement regimes that were not fit for purpose. In relation to building safety, she added that
“unhelpful behaviours such as contract terms and payment practices which prioritise speed and low cost solutions, exacerbate this situation.”
She concluded that poor procurement and payment practice
“provide poor value for money”
and produce “poor building safety outcomes.” She recommended that contracts’ payment terms and practices should be recorded as part of a proposed digital building safety file. I could not agree more with her conclusions.
There is a toxic culture in too many parts of the construction industry, where fly-by-night firms benefit by accepting the lowest-price jobs achieved by poor payment practices to their supply chain. This Bill provides a unique opportunity to deal with not just the scandal of unsafe buildings, but the scandal of the manipulation of late-payment practices by large, unscrupulous construction companies. Evidence given to Committees of this House following the Carillion collapse revealed the appalling abuse of tier 1 contractors such as Carillion. In spite of my Bill in 2019—the Public Sector Supply Chains (Project Bank Accounts) Bill—to tackle the misery that so many small construction companies continue to face and to protect them from becoming insolvent, as nearly a thousand did after Carillion’s demise, absolutely nothing has been done.
Almost six years on from the Business Department reviewing the practice of retentions that harms thousands of small businesses by depriving them of much needed cash flow, it has sat on its hands. Based on figures provided by the Department in October 2017, every day, almost £1 million-worth of retentions is lost by firms—mainly small businesses—because of upstream insolvencies. Today, according to insolvency specialists, almost 100,000 firms in the industry are under severe financial stress. Small construction firms are having to grapple with the massive cost pressures of their base and many are facing the issues that I have talked about. If an industry is free of the widespread and egregious treatment—
Felicity Buchan (Kensington) (Con)
I welcome the Bill. It will be very important in transforming our regime of building safety and in putting residents and high rises at the forefront of that regime. Building safety is incredibly important to me. The tragedy of Grenfell Tower happened in my constituency, and London is home to 55% of all high rises and intermediate buildings, many of which lie in central London.
I hope the Bill will also change the culture of the building industry and the building products industry. I have been shocked by some of the revelations coming out of the Grenfell inquiry: how the system was gamed and how it was pushed to the nth degree. We need to change that culture; residents and safety must come first.
I warmly welcome many parts of this Bill, including the building products regulator and the ability of that regulator to take building products off the market and to prosecute those who try to sell products that do not meet the mark. I also welcome the fact that the time period to sue for defective premises will go from six years to 15 years, and the announcement that we heard this afternoon on EWS1 forms will be critical.
Clearly, there are details on which we need confirmation. RICS guidance will be important. It will be important to have confirmation that the consolidated advice note will be withdrawn, and we also need clarity as to what will happen to EWS1 forms that have already been issued. Will they stay or will they not? Potentially, this is a very significant development for leaseholders.
There are issues on which we need to work across the House. We need to agree the scope of the measures. Yes, they currently apply to buildings above 18 metres, but the Bill has the capacity to increase that scope, so we need to focus on that. Very importantly, we need a taskforce within the Ministry of Housing, Communities and Local Government that will look at buildings case by case, because there are so many buildings that are throwing up very unique circumstances that we need to deal with. One is Collier House in my constituency.
Alison Thewliss (Glasgow Central) (SNP)
I wish to speak briefly on a few issues that affect my constituents.
First, I heard the intervention earlier from the hon. Member for Cardiff South and Penarth (Stephen Doughty), who asked about the quantum of Barnett consequentials for Wales. The Secretary of State said that the Welsh Government have not devised a scheme for existing consequentials yet. This becomes a bit of a strange paradox, because it would be daft for a Government on a fixed budget to commit to spending more than they have, and they cannot plan for that. If a devolved Administration were to establish a scheme without the certainty that the money was coming, they would then be considered irresponsible. Therefore, it needs to be made clear what those additional consequentials are for the devolved Administrations.
The Scottish Government have proceeded on the basis of the £97 million allocated to the Scottish Parliament and have set up the Scottish Government single building assessment scheme, which prioritises by risk. I pay tribute to Kevin Stewart MSP who, as Minister, spearheaded much of this work. There have been more than 100 expressions of interest in the scheme, but in order to ensure that it reaches as far as it can, the consequentials have to be made absolutely clear so that the problem can be tackled.
Let me take the opportunity to pay tribute to those in my constituency who have championed their fellow residents, including Lisa Murray of the Verde Residents Group and Hector Thomson and Barry Cooper of the Lancefield Quay Residents Association. Hector and Barry told me of the difficulties that they have had in obtaining building insurance for the development of which they are a part. There are hundreds of flats in that development and their insurance was suddenly withdrawn on 23 December 2020, leaving them very worried over the Christmas period about what would happen.
Contrary to what the Secretary of State has said, there is a failure in the market. He mentioned Aviva, but my understanding is that it has a limit of £50 million, whereas for Lancefield Quay it is £75 million. I understand that Aviva also has a bar on commercial property as part of that. Sure enough, there is an Indian restaurant at the bottom of Lancefield Quay, which will be exempted from securing coverage if that is indeed the case.
I urge the Minister to solve that problem. People are being offered insurance that is comprehensive but entirely unaffordable—or just about affordable, but not for everyone; at Lancefield Quay there are some people who cannot afford the insurance payments—so they do not have the comprehensive coverage that they think they need. There are implications if someone proceeds without adequate coverage for their mortgage, I understand, so that their property is not properly insured. The Minister needs to look at those issues and find a solution, because this is not working at present, and the Bill does nothing to address that. I also urge the Minister to look at issues with VAT and building materials, because at the moment, the Government are profiting from the work that is being done and residents are not.
Mr Deputy Speaker (Mr Nigel Evans)
The winding-up speeches will begin at 6.40 pm, with the Minister at 6.50 pm.
Brendan Clarke-Smith (Bassetlaw) (Con) [V]
First, I believe that the Bill is the right measure to deal with the cladding issue, and I fully appreciate the reasons why the Fire Safety Act 2021 was not necessarily the right vehicle. There is plenty to celebrate in the Bill, and we must recognise that. I particularly welcome the announcement in the House from the Secretary of State on the use of EWS1 forms not being required for buildings below 18 metres. I know that people would like clarification on cases in which EWS1 forms already exist and whether they will be voided, so we would like to hear more about that. The clarification that there is no systemic risk for buildings under 18 metres and that the market is now expected to act is normal, leading to a market correction, is welcome.
Extreme risk aversion has caused some of the problems, as Dame Judith Hackitt referred to, and we can now begin to address it. It is encouraging to hear from the Secretary of State that lenders welcome the clarification, and making sure that we take with us other players in the market, including insurers, is the next logical step. As the hon. Member for Sheffield South East (Mr Betts), the Chair of the Housing, Communities and Local Government Committee, mentioned, we thank the Secretary of State and his Department for responding to the points that the Select Committee made and acting on the vast majority of the recommendations, taking our comments into account. One principle that we have always held is that leaseholders should not pay.
The building safety fund is welcome, and £5.1 billion will go a long way in tackling many of the problems. The £30 million waking watch fund is a great help, although I think there are still problems that some people would regard as unresolved. It is important to recognise that the Bill is about far more than cladding. We have already announced new, robust legal requirements for builders and the materials that they use, which is very much needed and follows the recommendations from the Grenfell inquiry. Giving homeowners the right retrospectively to seek compensation for shoddy construction for up to 15 years will benefit a great number of people, as will doubling the period in which residents can bring legal claims against developers for substandard workmanship.
No one should be left living in an unliveable home. While the Building Safety Bill cannot solve every problem on its own—I am sure that there will be many further discussions—I support it, and it is a fundamental step in the right direction.
Justin Madders (Ellesmere Port and Neston) (Lab)
I first place it on the record that I co-chair the all-party parliamentary group on leasehold and commonhold reform with the hon. Members for Worthing West (Sir Peter Bottomley) and for St Albans (Daisy Cooper). Ably assisted by the Leasehold Knowledge Partnership, we have been looking at issues surrounding building safety for some time. We had an informative meeting last week, alongside the fire safety and rescue APPG, with Ted Baillieu, who co-chaired the Victoria cladding taskforce and gave a frank and compelling account of his experience when his state dealt with many of the issues covered by the Bill. Put simply, we take his advice that Government have to take a far bigger role in sorting this out than currently envisaged, and will have to dig far deeper into their pockets. It is better to learn from his experience and bite the bullet now, rather than let things drift unsatisfactorily for a few more years before coming to the inevitable conclusion.
I say that partly because the biggest concern is not the expense or the uncertainty but the time it will take to get any kind of restitution. It could be years, and leaseholders—the young couple who cannot start a family; the professional in fear of bankruptcy—cannot wait that long. Too many lives are on hold, and we must not underestimate the mental toll on someone of knowing every day that they are living in a potential death trap and there is nothing they can do to get out of it. These people cannot wait.
Although the Bill is step in the right direction, it feels that, for many, resolution is still years off, and it may yet come with a heavy price tag. The only certain winners from this legislation will be the lawyers, who will have a plethora of new legal avenues to argue over.
Let us start with the extension of the limitation period. On the face of it, that is a positive thing, but it does not create any new rights; it only extends existing ones. As the Bill makes clear, the 15-year rule is available only if it somehow does not impact the developer’s human rights. Of course, developers are always going to claim that it will, so the first field day for the lawyers will be arguing over that.
Critically, of course, the extension is available only if the developer is still in business. As we know, many are not. Even if the extension does increase the number of people who can take legal action, they will still face the same hurdles of expensive litigation. If the developer is still in business and worth suing, it will be in a far stronger position to fight the action than the leaseholders. The inequality of arms in litigation will be immense.
Despite the Government’s repeated promises in recent months, there are no guaranteed means of forcing regulators and developers, who are the architects of this crisis, to be held to account. The inquiry into Grenfell continues, but it is already clear that the materials used there should never have been used. Some of those materials were certified as safe at the time but never should have been. Cladding systems had been designed by architects, planners and fire engineers, costs were knowingly cut, and safety concerns were ignored. Leaseholders are the only truly innocent party in this mess, but they still face the biggest burden to fix it, and that is wrong.
Gareth Bacon (Orpington) (Con)
I rise in support of the Bill, which introduces a number of crucial safeguards for residents while reforming the building safety system so that appropriate checks and balances are strengthened. Notably, the Bill brings forward recommendations from the Dame Judith Hackitt review, and it adds to the progress made by the Fire Safety Act 2021 and the greater clarification of rules concerning the use of EWS1 forms.
I very much welcome the written ministerial statement that was provided today about buildings under 18 metres no longer requiring an EWS1 form. Although it is probably slightly overdue, it is extremely welcome news, and it will go down very well with my constituents.
The Bill has many positive elements, which I would have liked to touch on. However, due to the time limit, I will have to skip over them, because I do have a couple of concerns about the Bill. The first relates to clause 124, which my hon. Friend the Member for Stevenage (Stephen McPartland) first touched on.
I agree with the principle that landlords must take cost recovery avenues to avoid passing on costs directly to leaseholders, given, of course, that leaseholders bear absolutely no responsibility for cladding being put on their buildings in the first place. However, there is currently no legal obligation on landlords to seek cost recovery for remediation before passing the costs on to leaseholders. Although the Bill acknowledges that, it is insufficiently clear as to any potential remedy. Clause 124 stipulates that the landlord must seek other cost recovery avenues before passing those costs on. What happens if they are unable to obtain such funding? What happens to the leaseholders then? What protections will be in place for them? The Bill does not clarify that sufficiently.
The London Fire Brigade has highlighted a further issue, which has potentially huge significance. Developers often open a subsidiary company when they are building new developments or refurbishing existing projects. When those projects are complete, standard practice is for the subsidiary company to be closed down by the parent, and the parent company rarely retains legal liability for the premises that have been remediated. There is a danger that that will leave leaseholders liable for all costs resulting from negligent work by developers and their contractors.
Having said that, I believe that those issues can be addressed as the Bill proceeds through the House. Indeed, I hope that the Minister will be able to provide clarity on them in his closing remarks today. In totality, I believe that the Bill takes great strides in improving building safety, and I will be supporting its Second Reading this evening, albeit with the hope that it may be strengthened as it proceeds.
Rachel Hopkins (Luton South) (Lab)
Despite repeated promises to make buildings safe and protect leaseholders, and four years on from Grenfell, hundreds of thousands of people still live in unsafe homes and millions are caught up in the building safety crisis. Leaseholders are facing costs of hundreds of pounds a month for service charges, insurance premiums and waking watch, before even getting into remediation costs. The Government’s building safety fund excludes buildings under 18 metres, it is not distributed on the basis of risk, and just 10p or 12p in every pound of the fund has been allocated. There is also uncertainty about who will cover the cost of other fire safety defects and interim safety costs.
I appreciate that this debate has been very technical, but we must ensure that the voices of those leaseholders trapped in dangerous buildings are heard, and I want the Minister to hear testimony from people in Luton South. Tom, who lives in the Point Red building, says:
“We are left with terrible uncertainty, unable to move on with our lives, not knowing if we are going to be bankrupt and homeless by the end of the year. We sleep in a death trap every night.”
This afternoon’s statement and the added issue around the EWS1 forms is yet another layer of uncertainty, as it stands. Tom is a primary school teacher and his partner works with vulnerable children. The key workers we have relied on over the past 15 months have been forced to the edge of ruin month after month due to the life-ruining costs of fixing a problem they did not create. Will the Minister respond to Tom and his partner? How does he propose that they raise money to pay the remediation costs that are not covered by Government funding? It may be a shock to Conservative Members, but we do not all have trust funds or multiple assets to fall back on.
The mental health of innocent leaseholders has severely deteriorated, and the Government should ensure that they can access free support to reduce some of their anxieties and worries. The Bill needed to include explicit legal protections to ensure that millions of pounds of building safety remediation costs are not passed on to innocent homeowners and tenants. I support Labour’s call for a new building works agency that would go block by block to identify which works need doing, and then fix, fund and, crucially, certify them as safe and sellable at the end to allow leaseholders to finally move on with their lives.
The Housing, Communities and Local Government Committee’s report stated:
“It would be unacceptable and an abdication of responsibility to make them contribute a single penny towards the cost of remediating defects for which they were not responsible.”
This should not be the leaseholders’ burden to bear. It is developers that created the crisis by putting profit before protections. How can it be that property developers, who make millions each year, are protected, while teachers, nurses, shopworkers, transport workers, carers and pensioners are left to pick up the bill?
David Simmonds (Ruislip, Northwood and Pinner) (Con) [V]
I very much welcome this Bill, which is an extremely important step towards ending the anxiety that has particularly affected very large numbers of private leaseholders of modest means. I welcome, in particular, the comments of my hon. Friend the Member for Orpington (Gareth Bacon) about the challenge posed by subsidiary companies.
Let me turn to a couple of other points that are important to make in the context of the passage of this Bill. Local authorities, on the whole, have moved extremely swiftly to remediate any risks that they could through measures such as waking watches and physical changes to buildings. On the whole, the public sector has been very responsible in its role as a landlord and in ensuring that the finance was there so that the work that was needed could be done. The private sector has been a much more mixed picture. Some developers deserve praise for taking responsibility, even if it was not their fault and they had acted in good faith, for putting right problems that posed risks to leaseholders, but clearly others have chosen to walk away by putting businesses into liquidation.
While Government cannot know the risks that are posed by the inside and the outside of every building and structure in the country, I urge Ministers to be as clear as possible, particularly with the finance and the property industries, about what the requirements are to fulfil the expectations of this Bill. The situation that some of my constituents faced with EWS1 forms, for example, was a result in many ways of a lack of clarity and understandable caution on the part of that industry in going for the belt-and braces option, even though it was not required in the vast majority of transactions that were undertaken, which had the double effect of gumming up the system and ensuring that people who really needed the work to be done could not find appropriately qualified professionals to do it. So can I urge that we are really clear about what is required and also what is not required?
I would also ask Ministers to consider the representations from councils such as my own in Hillingdon and Harrow, which have in many cases outstanding local authority building control departments, so that we can ensure that the recommendations for practical change outlined in the Bill to ensure that building control work is done to the highest possible standard learn from the best practice already there in the market. We must make sure that those things only government can do are done correctly and appropriately by government, and also that those at the sharp end like local authorities have the powers they need. But, overall, this is a big positive step in the right direction.
Sir Robert Neill (Bromley and Chislehurst) (Con) [V]
It is a pleasure to follow my hon. Friend the Member for Ruislip, Northwood and Pinner (David Simmonds). I agree with everything he said, and also with the observations of my hon. Friend and neighbour the Member for Orpington (Gareth Bacon).
The importance of getting these details right is absolutely critical. I hope, first, that, while welcoming the changes to the EWS1 forms, we can have clarity as to when they will come into force, because at the moment many contractors are sending people on RICS courses, but will that be needed? Secondly, what broader cultural change is going to be achieved within the sector?
There is lots to welcome in the Bill, and I shall support it on Second Reading. In particular, the establishment of a modernised framework of fire safety and regulation in building safety overall on the back of the Hackitt review is an important and welcome reform. However, as has been pointed out, there are areas where, frankly, the Bill will require improvement. The issues around clause 124 and the protection of leaseholders, especially where there are historical defects, remain critical.
Although much work has been done—I recognise that—and much money has been put in by Government, the problem is actually growing as more and more instances of substandard workmanship come to light. I have referred to Northpoint in my constituency on a number of occasions in this House, but to that now I can add residents in Iconia House and Azuria House on Homesdale Road, where defective cladding is now coming to light; and two new builds—recent work—in Ringers Road, William House and Henry House. So this is a scandal, frankly, of poor workmanship that will not go away, and the Government are going to have to grasp the nettle even more ambitiously than they have so far.
Where there is clear evidence that a developer has failed to build in accordance with the then extant regulations and in accordance with proper practice, of course they should be pursued and should pay. But there are problems in that practically, because we have to have a solvent developer to go after in the first place, and in many cases, as has been pointed out, we do not. Where it transpires that buildings were built in accordance with the then regulations, and those regulations were not themselves adequate or fit for purpose, I have to say to the Minister that Government are the corporate owner of those regulations, so Government must bear the costs of meeting the undeserved loss to leaseholders, who have acted entirely in good faith through all of this. There may be ways to try to recover that in due course, but cash flow they do not have, particularly as they have unsellable, un-mortgageable properties and are already up to the eyeballs in debt because of the cost of waking watch. So still more has to be done to the Bill to improve the protection of leaseholders, and that is the message I think we need to give tonight.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
Since 2018, I have raised the issue of dangerous cladding on at least seven different occasions in the House, but for hundreds across my Slough constituency, I am frustrated by the lack of progress that has been made on ensuring we never have a repeat of the horrors of Grenfell and that our building safety regulations are overhauled. So I welcome the Second Reading of the Building Safety Bill and its return to the House, and its inclusion of steps that regulate and strengthen the quality and safety of building homes.
Sadly, it is what this Bill omits that concerns me most —namely, the lack of concrete protections for leaseholders to ensure that they will not be responsible for fire safety costs. So I stand here today to repeat desperate pleas from residents in Slough and beyond to a Government who do not appear to be listening. On behalf of the occupants of West Central, Rivington Apartments, Lexington Apartments, Nova House, Kingswood House, Foundry Court and Ibex House, I implore the Government to pay attention, because protecting leaseholders is not only the right thing to do—it is what has been repeatedly promised to them. Seventeen times Government Ministers have reassured leaseholders that they should be shielded from fire safety costs, with the Prime Minister just last year noting that
“no leaseholder should have to pay for the unaffordable costs of fixing safety defects that they did not cause and are no fault of their own.”—[Official Report, 3 February 2021; Vol. 688, c. 945.]
So my question to the Minister is: where will these legal protections actually come from? As it currently stands, leaseholders could still be liable for costs after the building owner has
“explored alternative cost recovery routes.”
Characteristically, the Government response is delayed, limited and inept. We need a national cladding taskforce to truly establish the extent of dangerous cladding, supported by a building works agency to certify work as safe so that flats can become sellable and action is taken against those who caused the crisis in the first place. Leaseholders and local councils such as Slough Borough Council should not be responsible for remediation costs; leaseholders did not build their homes or clad them in dangerous materials, and they certainly did not approve them as safe. Their only crime is saving tirelessly in fulfilling their dream of home ownership, and how have they been rewarded? By going to bed at night in fear for their lives, with an ever-growing bill to simply make their homes fire safe, and the looming risk of bankruptcy and the loss of their jobs as a result. So I call upon the Government to act with urgency for the hundreds of thousands still suffering. We need to definitively end this nightmare for those in Slough and beyond in our country.
Marco Longhi (Dudley North) (Con) [V]
It is always a pleasure to see you in the Chair, Mr Deputy Speaker.
I worked in construction over several years, during which time I was involved in the construction of purely retail buildings, houses and flats, and I have also worked on oil rigs. I should note for the Register of Members’ Financial Interests that I am also a landlord, so ensuring homes and other buildings are safe is very real to me.
My experience has given me some insight into building safety, and fire safety in particular, and I have often witnessed a disconnect between policy makers, developers, building inspectors and home buyers. Day-to-day practicalities can show up well-known policies to be out of touch, and it is home buyers who always face the consequences of this reality.
The Minister will know of my support for what the Government are trying to achieve, and it makes complete sense to target remedial activity at buildings posing the highest risk, but there remains a question of fairness, which is quite separate to risk. A careful balance needs to be struck as both taxpayers and leaseholders have no fault in what has happened, yet it seems that both may be suffering financial consequences.
While small buildings generally face lower safety risks, this should not mean that leaseholders should be financially worse off for living in them, compared with those in higher-rise properties. Developers, specifiers, inspecting bodies and insurance companies should be paying up. That is why it is so important that the Bill seeks to tackle bad practice head-on, especially by the introduction of retrospective action on substandard homes.
Inspections have highlighted further building faults such as missing fire breaks, wooden balconies and combustible insulation. The repair costs alone could be more than £25,000 per flat. There is no provision for support with these repairs, which would be required before a fire safety certificate could be issued—unless of course this has changed due to today’s statement. Home buyers would not be privy to these liabilities as the conveyancing process would not have highlighted the possibility of these risks even existing at point of purchase. I raised the question of risk awareness at the conveyancing stage for all manner of risks in my ten-minute rule Bill.
We need a Bill that will deliver a more robust regulatory system that will ensure all homes are built to the highest safety standards, so no one is ever left feeling unsafe in their home again, and the regulatory system must itself be accountable.
Geraint Davies (Swansea West) (Lab/Co-op) [V]
Four years on from the Grenfell disaster, hundreds of thousands of people are still in unsafe homes and trapped in blocks, unable to move or to sell their properties—in ongoing chronic uncertainty with the added trauma of thinking that they could be consumed by fire. This is not their fault. They are not able to fund the works and they are not able to recover the costs. The answer is clear: only the Government are in a position to assess the work, fund it, fix it and then recover the costs in a systematic way, as appropriate, from insurers and developers, and to fund the residue from taxpayers. Individuals are not in a position to do that.
If the total cost was, say, £15 billion, much of it would be recovered. The cost of that in the first instance would be the interest of around £150 million a year. This year, the Government are saving £14 billion in interest costs on debt because of lower interest rates, so that cost—the £150 million to fund the £15 billion to fund everything—basically represents 1% of the savings they have made this year. It is therefore completely wrong and unnecessary that they should dither and delay. People’s lives have been blighted, their finances have been torpedoed, their mental health is in tatters and it is completely unnecessary.
The Government subsidised second-home purchasers with stamp duty in England to a total of something like £5 billion. That was completely unnecessary, because interest rates actually went down during covid and there was no need to prop up the housing market. So much for levelling up! If the Government are serious about levelling up, they should put their money where their mouth is. They should support first-time buyers, low-income buyers and the low-income homeowners who have been left in this paralysis.
The Government should immediately evaluate this situation, as the Welsh Government are doing in Wales. They should find it, fund it and fix it, and then recover the cost from the developers and insurers. There is no excuse for delay. Justice should be done. People are rightly angry and I would be happy to join them outside Parliament in protest before that becomes illegal in the autumn. Let’s get moving and get people sorted out on this tragic issue.
Mrs Maria Miller (Basingstoke) (Con) [V]
I welcome the Bill, which requires a fundamental overhaul of our building industry’s attitude towards the quality of new homes. For too long, the biggest five builders have squeezed out smaller local home builders, whose reputation for quality is central to their business. The Bill makes build quality central to everyone’s business. First and foremost in the debate today, however, we need to speak up for those who have been impacted by the building industry’s current fire safety regulatory failure. Those directly affected by the tragedy at Grenfell are always in our minds, but so are the people who own homes in high-rise flats. They continue to shoulder the worry resulting from construction work that has failed fire safety tests.
The Government have acted rapidly, and many residents have already benefited from the Government’s £5 billion fund for remedial works, particularly the waking watch relief fund. Building operators have also been able to get in-principle agreements for significant fire safety remedial works, but the worry for residents remains because some building owners might be cautious about starting remedial works without clear sight of what happens if additional problems are discovered. I do not think that the Government can write a blank cheque, so what additional assurances can the Minister give, because this legislation is not explicit in stopping freeholders passing on the cost of remedial works to leaseholders?
Back in 2017, residents raised concerns with me about domestic fire alarm systems in high-rise buildings and the lack of understanding among residents about how they worked, so I am really pleased to see reflected in the Bill today my ten-minute rule Bill of March 2018—the Fire Safety Information Bill—which required residents of high-rise buildings to be provided with far more fire safety information.
My constituents have raised other issues such as how complex building ownership structures can be dealt with, particularly when they allow owners to be disconnected from fire safety in the buildings they own. Could that be referred to the building safety regulator? Disabled and vulnerable people need to be able to visit a building and to leave it if a fire occurs. Is the Minister looking further at personal evacuation plans and whether they are up to scratch?
I very much welcome the new homes ombudsman, which was called for in 2015 by the all-party parliamentary group for excellence in the built environment in a report that I co-chaired following my constituents experiencing problems with build quality. I really support the Bill, but residents need us to recognise the worries that they still have. By putting in place a £5 billion fund to cover remedial works, the Government are clear that they do not want the costs to fall on the shoulders of leaseholders. What more can be said to make that clearer?
Daniel Zeichner (Cambridge) (Lab) [V]
The Bill is both welcome in that we have waited for it for so long and totally unwelcome in that we all know it will not solve so many of the problems. On behalf of so many of my constituents who have been locked in an absolute nightmare, I am incandescent with rage about the Government’s utter hopelessness, and I am not the only one.
MPs across the House will have had the same conversations and same site visits. A couple of years ago, for me it was Berkeley Homes and its hugely expensive properties in the centre of Cambridge. They were lovely looking properties but catastrophically poorly constructed—so much so that they literally had to be taken apart. As that was done, it revealed the slapdash built on the cavalier. There were joists hanging in the air not connected to anything, pipes not connected, and waste water expected to run uphill. When exasperated purchasers looked to those who had made a fortune out of them to offer some help, they were met with a wall of denial and obfuscation—the only reliably sound wall. What about the National House Building Council and other organisations supposedly there to provide redress? They were partners in crime. Unbelievable, one might have thought. Where was the local building control? That had been outsourced, too. Rip-off Tory Britain, complete with massive bungs from those developers.
We used to think that other countries had corrupt systems. I am afraid that is what we have here—a corrupt, broken system. The question is: do the measures in the Bill give any hope for the future? The new homes ombudsman has been awaited for almost as long as I have been in this place—goodness knows how many times it has been promised—and if it is finally going to happen, that is good, but there is nothing here to address past failures.
I named one developer in Cambridge, but frankly I could name most of them. Barratt, Countryside, Bovis—it is a lost list of shame. Twice in the past few weeks I have been in Trumpington with distraught residents looking at sloppy work and areas left unfinished. The skate park got the developer its planning permission, but now the kids have to scramble over fences and fight through weedy undergrowth and past dead trees—they were never watered—to get to it. No one ever takes responsibility because everything is subcontracted. How convenient. The only problem is that the unfortunate residents cannot subcontract living there. Maybe we should arrange a house swap with some of those who have made such rich pickings.
There is so much more to be said, but let me make one observation raised by the Local Government Association on the provision for duty holders to choose their building control regulator. As the LGA says:
“By requiring regulators to remain in competition with ‘approved inspectors’ for the majority of buildings, the Bill leaves in place one of the root causes of the current crisis.”
Absolutely it does that. It beggars belief that that should be allowed to continue. The LGA goes on:
“Compliance with regulation cannot be a commodity and local authority building control should not be left to tackle non-compliance in buildings over 18m while simultaneously having to compete with private businesses for work in out of scope buildings, often owned by the same developers.”
Let us think about compliance with regulations as a commodity—it really is absurd. I want independence. It really is not complicated. The fact that the Conservative party cannot grasp that simple fact goes to the heart of why it is totally unfit to be in charge.
Florence Eshalomi (Vauxhall) (Lab/Co-op)
I am pleased to speak in this long-awaited debate on such an important Bill. I put on record how disrespectful it was both to Members of this House and to leaseholders that the Secretary of State chose to release details of a major policy shift just minutes before the debate began, making proper scrutiny impossible. Will he urgently clarify whether his announcement on EWS1 forms for buildings under 18 metres will apply retrospectively?
Since I was elected 18 months ago, I have raised the issue of dangerous cladding with fire safety Ministers in this House on 14 separate occasions. Each time I have raised it, the Government’s answer to my question has always been the same: wait for the Building Safety Bill to come to Parliament.
I welcome the elements of the Bill that strengthen the fire safety regime for high-rise buildings, but I am afraid that the legislation before us today is woefully short of what is required to address properly all the issues facing leaseholders. It fails to protect them from extortionate charges for interim safety watch. It fails to ensure their homes are mortgageable, so that they have the basic right to move. Instead of rescuing leaseholders from this financial nightmare, it enshrines in law additional costs in the form of a new building safety charge estimated to cost leaseholders up to £42 a month— £42 a month that many of them simply cannot afford. That is why my question to the Secretary of State is urgent and needs clarification. Home ownership is an aspiration to be applauded, yet leaseholders who bought their homes in good faith have simply been hung out to dry.
I would also like to echo the comments made by the right hon. Member for Basingstoke (Mrs Miller) about fire evacuation plans for disabled leaseholders. Where will that be addressed? I hope the Minister will reflect on all these injustices and take time over the summer to relax. Unfortunately for a number of my constituents, they do not have the same luxury. They are still living in dangerous buildings wondering how on earth they will address that and pay for these costs.
Ministers promised that the Building Safety Bill would finally address the cladding scandal. I urge them to think again and end this cladding scandal nightmare for our leaseholders.
Richard Burgon (Leeds East) (Lab)
Four years on from the Grenfell fire, a fire that killed 72 people and shone a tragic light on the reality of how race, class and inequality shape the lives of working-class people in our country, we are still yet to see the changes needed to make housing safe. Four years later, hundreds of thousands of people are still living with unsafe cladding and other fire safety problems. Millions are caught up in the wider building safety crisis, yet the Government have had to be dragged kicking and screaming to make any small steps forward in the Bill—a Bill riddled with major flaws. It must be amended as it passes through this House.
The Bill, together with the statement that the Secretary of State has published today, is as it stands a betrayal of those who needed the Government to step in and support them following Grenfell. Despite the promises of Conservative Ministers, many leaseholders are still having to pay. Without decisive Government action, they will pay more in the future. Legal advice for the Labour party found that the Bill will make it more likely, not less likely, that leaseholders would have to pick up the costs of fixing cladding issues.
Four years on from Grenfell, what explains the inadequacies of the Bill before us today? What explains the four years of foot-dragging and the four years of refusal to deliver the protections that leaseholders need? This year, dodgy contracts have been exposed and the stench of corruption has grown ever stronger, with polls showing that most people see this Government as corrupt. Well, those people will not be reassured by the fact that developers who build flats with unsafe cladding have donated £2.5 million to the Conservatives since Grenfell and that Conservative MPs have then voted time after time after time to block amendments to protect leaseholders from the cost of removing dangerous cladding. Nor will they be reassured that, according to the anti-corruption body Transparency International, £1 in every £5 donated to the Conservative party since 2010 came from those with substantial interests in the housing market. And, of course, we have a Housing Secretary who admitted to unlawfully signing off a £1 billion housing project which saved a Conservative party donor millions of pounds.
Tory MPs and the Government, if they want, can show that they are not in the pockets of developers by backing amendments that will come to ensure that the cost of building safety remediation is not passed on to innocent homeowners and tenants. It is remarkable that if the Minister himself were not here, not a single Conservative MP would be on the Conservative Benches today—not good enough. Members should back the amendments to improve the Bill.
Taiwo Owatemi (Coventry North West) (Lab) [V]
The tragedy of the Grenfell Tower fire exposed serious failings on fire and building safety, and I echo my colleagues’ concerns that four years after that devastating event the Government still have not learned all the fundamental lessons.
My chief concern is that this Bill makes absolutely no provisions that prevent existing and new buildings under 18 metres from using the same flammable cladding materials that were used on the Grenfell Tower. As 18 metres is about six storeys high, if this Bill passes in its current form any building under six storeys will be able to use dangerous flammable cladding that would wreak devastation upon its occupants if there were a fire. In my constituency, most new homes would not be protected from fires caused by unsafe building materials, and neither would most school buildings, care home buildings and small businesses. All the Government have chosen to do is advise that dangerous, highly flammable materials be removed from these buildings. As I am sure we are all aware, Government guidance without any legal backing or funding is completely toothless, so I urge the Government to reclassify all buildings with dangerous cladding as high risk, not just the high-rise buildings in our big cities.
This Bill also does far too little to protect leaseholders from the financial burden of making their homes safe. Right hon. and hon. Members have repeatedly asked the Government to draft protections for leaseholders caught up in the cladding scandal. Just last year, the Prime Minister stated that he was
“determined that no leaseholder should have to pay for the unaffordable costs of fixing safety defects that they did not cause”.—[Official Report, 3 February 2021; Vol. 688, c. 945.]
Where, then, is that determination today?
Despite years of promises and reassurances from this Government, they have not gone nearly far enough to protect leaseholders. Instead they have done quite the opposite. For example, they have pointed triumphantly to their policy of extending from six to 15 years the period in which a leaseholder can sue for wrongful costs under the Defective Premises Act. However, the National Audit Office published a report last year that stated that the Government have
“acknowledged that only in a minority of cases would it be financially justifiable…to bring legal action to recover money.”
In other words, the Government have already acknowledged that this new policy, supposedly designed to protect leaseholders, will protect almost nobody and make almost no difference. I ask the Government to put their money where their mouth is and protect leaseholders from footing a bill that they have unfairly inherited.
Fleur Anderson (Putney) (Lab)
I rise on behalf of every leaseholder in Putney, Roehampton and Southfields who is living in an unsafe building, paying the price for the irresponsibility and incompetence of others, and feeling let down by the Government and this Bill, which is so late and so flawed. I stand here on behalf of those at the Riverside Quarter, the Swish building, the Filaments development, the Radial development, Hardwicks Square, Whitelands Park, Mill Court, Norstead Place and the rest of the 25 developments in Putney and Southfields in my constituency currently on the wrong side of the building safety scandal.
I stand here on behalf of those whose lives have already been ruined and those whose lives will be ruined in the future unless the Government get this Bill right. Dreams of home ownership have turned into an absolute nightmare. People are furious in my constituency, and I have met so many of them. The way in which the victims—and they are victims—have been treated is a disgrace. One block in Wandsworth that has unsafe cladding has been turned down by the building safety fund and each leaseholder is now facing a £37,000 bill for remediation for the cladding. What will this Bill do for them? Behind the speeches, briefings and legislative noise are millions of leaseholders trapped in unsafe homes, suffering unimaginable stress, anxiety and emotional anguish, and they still feel totally abandoned.
The building safety fund is a mess. Just 12p of every pound of that fund has been allocated. At this rate it will take until 2027 to allocate the fund, and meanwhile people are living in fear. I recently asked the Government how many applications they have received for the building safety fund. That is a simple question, and the answer was that
“it will not be possible to answer this question within the usual time period.”
They do not know how many applications have been received, yet applications are being serviced on a first come, first served basis.
This Bill is a step in the right direction, but it is very late and there need to be some serious changes. The Government need to take much more of a role. They need to take action to stop the ever-increasing waking watches, insurance premiums and service charges resulting from building safety mismanagement. There need to be no more costs and no building safety charge, which is in this Bill. There needs to be explicit legal protection to ensure that all leaseholders in unsafe buildings, regardless of height—no 18-metre rule—will not have to pay for their remedial works.
This Bill should not be so reliant on residents having to take up legal action to make their building safe. That is too high a barrier to result in the changes needed. There will be inequality and it will leave unsafe buildings staying unsafe. The building safety fund must be increased. Applications must be based on fire safety risk rather than be first come, first served, and they must be speeded up. As other Members have said, we must learn from the Government of Victoria and have a building works agency. My leaseholders should have a Bill that does not have a devastating effect on so many people’s lives and that makes future buildings safe.
Paul Blomfield (Sheffield Central) (Lab) [V]
The debate on this Bill is framed by the Prime Minister’s promise that
“no leaseholder should have to pay for the unaffordable costs of fixing safety defects that they did not cause and are no fault of their own.”—[Official Report, 3 February 2021; Vol. 688, c. 945.]
Let me dissect that pledge. There were no conditions on the height of the property, none on when it was built and no limit to the nature of the defects.
The Prime Minister was right to make that pledge because, along with the developers who built them, those who live in these unsafe properties have been let down by comprehensive regulatory failure. The failure of successive Governments, as the Prime Minister said, is no fault of leaseholders. The Government are responsible for the problem and must take responsibility for resolving it, which this Bill does not do.
Throughout this crisis, I have regularly met affected leaseholders across my constituency. I pay tribute to Sheffield Cladding Action Group, which has done so much to raise their concerns. I met the group shortly after the Fire Safety Act 2021 was passed without amendment. They were understandably upset that it did not put an end to their misery, but they looked to the Building Safety Bill for a solution because the Building Safety Minister, Lord Greenhalgh, and other Ministers had said that this Bill would offer the “correct legislative approach” to fulfil the Prime Minister’s pledge. But clearly it does not.
Since the publication of the Bill, constituents have been in touch to point out how little it does to protect them from historic costs. They have said that making it a legal requirement for building owners to exhaust “all other avenues” before passing on costs fails them, too, as it gives building owners a free pass to avoid costs so long as they find an excuse. The problems they face include issues other than cladding. That was part of the Prime Minister’s promise, but it is not covered by the Bill.
Extending to 15 years the period within which people have the right to sue developers does not help many of my constituents whose homes were built earlier, such as the one who pointed out that he was 14 years old when his building was completed. Those who will get the opportunity to pursue developers say that the Government know it is not a real option for most leaseholders. How can they take on the legal costs and, with their resources already depleted by all the bills they have faced, tackle the corporate lawyers of the major developers? And what of the companies that have been wound up?
Let us remember the reason for this Bill. It is not just the lives that have been destroyed or the people who have been bankrupted, although they have been, but the thousands of buildings that have been found to be unsafe. By putting unaffordable costs on to thousands of leaseholders, those buildings will remain unsafe. The Government must face up to their responsibility, make buildings safe and then use the full resources of the state to recover the costs from those responsible. If they will not do so willingly, this Parliament needs to force them to do so by amending the Bill over the weeks ahead.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
I welcome that the UK Government have accepted all the findings and recommendations of the independent review of building regulations and fire safety, and I am glad to see the Bill establish the Health and Safety Executive as the new building safety regulator and a more stringent regulatory regime for higher-risk residential blocks. However, I draw the UK Government’s attention to the recommendations of Zurich Insurance, which notes that limiting the scope for regulation to just those blocks risks missing a generational chance to improve the regulation environment overall.
To ensure that tragic disasters such as Grenfell never befall us again, we need a culture change in the building industry, with clearer lines of accountability and responsibility—a more responsible building industry at all levels, from design through to construction, management and refurbishment. I will focus on the specific aspects where greater responsibility is needed and where the Bill does not go far enough—the construction product testing process.
In the Bill, we find a much-needed renewed focus on construction products, and their regulation and testing, as had been signalled by the Hackitt report. The aim of the Bill to create a statutory list of defined safety-critical products is welcome, but it should be accompanied by an associated examination of safety-critical applications and product systems. The Hackitt report criticised the product testing and marketing regime for being too “opaque”, which could be resolved by making the results of some product tests publicly available. A system of reliable third-party certification and accreditation for those performing construction product testing would also go a long way to ensuring greater trust in the system, and would prevent the risk of testing being carried out by those not competent to do so. This third-party certification should benefit from an extensive oversight process, including an impartiality committee at a national level to ensure an even playing field and even application of certification across schemes.
The Bill takes important steps at last to make the changes to building regulation that we have long awaited since Grenfell, although it is important to note that many of the changes stipulated by the Bill will take until the year 2023 to take effect—a delay of frustrating length to these much-needed reforms. I hope that the Government continue to engage with the all-party parliamentary fire safety and rescue group, of which I am a member, with the aim of ensuring a future regulatory regime that is efficient, gives residents a greater voice, and enjoys the trust of communities and industry alike.
Kim Johnson (Liverpool, Riverside) (Lab) [V]
I appreciate the opportunity to speak in this important debate.
Time and again, we have heard Members across the House relay the nightmares that hundreds of thousands of our constituents are facing—trapped in a building safety crisis that was not of their making, forced to pay astronomical bills, and suffering significant mental health problems and the ever-present fear of living in an unsafe home. In Liverpool, 10% of buildings are still covered in dangerous cladding and there are 30,000 leaseholders in Liverpool, Riverside who are facing bills for things other than cladding to make their homes safe. On top of that, they are facing increasing insurance premiums of up to 500% and are being forced to foot the bill for a situation that they did not create. This will have a particularly serious impact on the social housing sector, with councils and local authorities forced to divert scarce resources in order to address fire safety failures.
Merseyside Fire and Rescue Service has lost more than a third of its funding in the past decade and the same proportion of its firefighters. A decade of Tory austerity and deregulation has created this building safety crisis. Let us call it what it is: a criminal dereliction of responsibility by those in power, who are more concerned with putting money in the pockets of their developer donors than with protecting the people they serve—putting profit before people.
One pensioner living in my constituency told me that he has been sent a bill of nearly £20,000 and has no savings and no way of paying. Two doctors who have worked tirelessly to protect and care for our community throughout the pandemic tell me that the crisis has trapped them in a flat that they cannot sell, unable to start the life that they had planned elsewhere and fearing being faced with a mountain of further debt and/or bankruptcy.
I have asked this before, and I will continue to ask until justice is served and the safety and future of my constituents and the people living in this crisis across the country is secured: can the Minister look me in the eye and tell me how he sleeps at night, knowing that his Government’s deregulation programme has left hundreds of thousands at risk in their homes? I ask him what it will take for this Government to act to fix historic failures, and alleviate the unbearable financial pressures caused by their deregulation and the greed of developers.
It is the Government’s responsibility to assess and identify the buildings that are unsafe, and to make the necessary changes with the utmost urgency. This Bill is not only a missed opportunity, but an absolute betrayal of every single one of the residents who are now at risk in their own homes. The statement issued by the Secretary of State this afternoon does nothing to allay any of the fears of leaseholders; it is entirely inadequate, and it lets those leaseholders down.
John McDonnell (Hayes and Harlington) (Lab) [V]
In the final minutes of the debate, perhaps I can provide some time for the words of one of my constituents. The latest email that I have received says this:
“The impact of the Fire Safety Scandal on leaseholders’ mental health is considerably underestimated”
by the Government.
“From the many messages on Twitter and Facebook, there are millions of devastated lives and souls in the country. Many families and young adults had to live through not just the pandemic during the last 18 months, but also the added anxiety of the unfolding and ever growing Fire Safety Scandal.
It is a triple hit for so many leaseholders: the pandemic, then losing jobs or being furloughed on smaller salaries (with the constant threat of losing their jobs if their employer would go bust) and then the ever increasing costs of the Cladding scandal. This government has totally ignored the cries of its citizens for help.
Knowing that there is a ready solution to the issue in Australia—which could easily be adopted in the UK as well…shows that the Government is simply not interested in fixing the problem for innocent leaseholders. The contempt—with which they treat their citizens—is truly shambolic.”
I received that email from one of my constituents this week, and I think that it reflects the views of hundreds of them.
In opening the debate, the Minister mentioned Ballymore. I am dealing with Ballymore; I have dealt with Ballymore since it first submitted a planning application to build apartment blocks in my constituency. I welcomed the news of developments that would provide homes for local residents, but not a single one of the planning gains that Ballymore promised has been delivered. It went bust, and was then bailed out by the Irish Government.
Subsequently—and since this scandal has hit us—Ballymore initially refused to meet and seriously discuss with residents the problems that they were facing. My constituents demonstrated, so Ballymore is now meeting them and having proper discussions, but it threatened them that if they demonstrated again, it would end the talks. Now it has applied for the building safety fund, but will not give any assurances that it will cover the full costs of what my constituents are facing until it knows what resources from the fund are available to it.
This continuous blackmail—and, indeed, emotional blackmail—of my constituents is simply unacceptable. As the email from my constituent made clear, it is having a direct impact on their mental health. We are facing a pandemic of mental health problems because of the covid crisis, but this adds to it. It requires Government intervention which is serious, which takes responsibility, but which then pursues the developers to ensure that they are held accountable as well.
Mr Deputy Speaker (Mr Nigel Evans)
Because it is almost Christmas, Jim, we are going to give you a bonus minute. Four minutes! I call Jim Shannon.
Jim Shannon (Strangford) (DUP)
You are most kind, Mr Deputy Speaker. Thank you so much. I will share the time with anyone who wants to intervene.
I am very pleased to be able to speak in this debate. To be No. 53 in the call list and to get in is quite an occasion. I sat in the Chamber for two days at No. 53 in order to speak on the second day of that two-day debate, but this time we have done it all in one day.
I spoke about this topic not so long ago, and I am proud to be here to speak briefly in a Second Reading debate. I welcome the commitment of the Government and the Secretary of State, having had discussions with him and the Under-Secretary of State for Housing, Communities and Local Government, the hon. Member for Walsall North (Eddie Hughes). I know the Minister personally, and I value his friendship. I am very pleased that the Government are making an honest-to-goodness attempt to address these safety issues. Others have mentioned what has not been done and what does not appear in the legislation, which I think is rather unfortunate.
I wish to make some comments about electrical safety, an issue in which the hon. Member for North Ayrshire and Arran (Patricia Gibson) and I have a particular interest and on which we speak whenever the occasion arrives. This necessary piece of legislation needs proper scrutiny and time to be debated, because people’s lives depend on its content. The Bill is a real opportunity to protect lives and property by reducing the number of fires caused by electrical sources of ignition in higher-risk residential buildings.
The clauses on electrical safety have been removed from the Bill. I spoke to the Secretary of State and he told me that he was not aware of this issue, so I ask the Minister to reassure me that those clauses have not been removed or, if they have, that safety is paramount and will not be affected in any way.
The Bill allows for a new regulator with the aim of implementing a new scheme for high-risk buildings, over- seeing the performance and sustainability of all building controls and supporting the competence of those who work in the industry, which is crucial as confidence can be knocked by previous tragedies. A crucial element of the Bill that needs to be reinforced is in respect of resident engagement strategies that aim to educate residents and make them accountable for compliance action. We always wish to see anything that improves the co-operation, partnership and relationship between a tenant or an owner and the landlord. This makes them aware of the risks and allows for communication between builders, contractors and residents. The Bill is not perfect, but we hope that we can move a stage further to making it better tonight.
The charity Electrical Safety First is worthy of a mention as it highlights the importance of sustainable electrical safety. In England, 54% of all electrical dwelling fires are caused by electrical sources of ignition. Three examples are Grenfell Tower, Shirley Towers in Southampton and Shepherd’s Court in London. Those tragic events show the fatal risk that electrical incidents pose to people in their own homes. More time must be committed to the prevention of electrical fires, and I am keen to ensure that the Government move in the correct way and ensure that we make that happen.
The Government need to address the issue of external building safety precautions and internal building issues such as damp, mould and efficient air-conditioning. The shadow Minister, the hon. Member for Weaver Vale (Mike Amesbury), and I have spoken on this issue on a number of occasions. I am chairman of the all-party parliamentary group on healthy homes and buildings and know that the issue of air conditioning and the need to address mould and damp in houses is so important. We should take all necessary and reasonable precautions to ensure that homes and buildings are safe for families and people.
I finish with this: the Bill will introduce a much-needed overhaul of building changes, including the revamping of flammable cladding, the investigation of inappropriate materials and a central safety-lane approach. Despite the challenges of the pandemic, progress has been made on accelerating building safety measures. I wholeheartedly welcome this step to improve building standards—and I thank you, Mr Deputy Speaker, for the Christmas present as well.
Mike Amesbury (Weaver Vale) (Lab)
It is an honour and a pleasure to follow the hon. Member for Strangford (Jim Shannon) as the 54th speaker on the call list.
I thank nearly every Member from all parts of the Chamber—Members have spoken powerfully and with insight in this Second Reading debate. I put on the record that I found the last-minute publication of the written statement both discourteous and disrespectful to Members from all parties. That point was reiterated as a point of order and Madam Deputy Speaker raised her concerns as well.
As the shadow Secretary of State for Housing, my hon. Friend the Member for Manchester Central (Lucy Powell) argued eloquently and powerfully, this is an occasion that requires the best of all parliamentarians, and that we put any vested interests aside and step up to respond urgently to the building safety crisis. Our concerns are focused on what is not in the Bill, rather than the new regulation landscape it creates for building safety with the Building Safety Regulator, the new housing ombudsman and improved standards, which are all very welcome. We will certainly support those measures, although in some cases we may amend them as we go forward in the journey of the Bill.
The Executive—the Government and Ministers before us—must listen not only to the Opposition, but to those voices on the Government Benches that are growing in number. Ministers must listen to all stakeholders, who will provide evidence throughout the Bill’s journey over the coming months in both this House and the other place. We all have a shared goal of providing a voice and justice for the millions of leaseholders and residents across all our areas and of making buildings and, vitally, people safe more than four years on from Grenfell when 72 people tragically lost their lives.
Those leaseholders include people like Will from UK Cladding Action, who spoke recently on the TV about the many complexities of his personal experience of the building safety crisis, which the measures contained in the Bill must have an impact on. He referred to the pressures in terms of mental health. Indeed, that point was eloquently raised by my right hon. Friend the Member for Hayes and Harlington (John McDonnell) in regard to his constituents.
There are key questions to ask. Does the Bill help Will from UK Cladding Action as a leaseholder to pay an invoice for £30,000 that recently arrived through his letterbox? My hon. Friend the Member for Salford and Eccles (Rebecca Long Bailey) spoke about constituents in her patch who have just had bills for £100,000. Unfortunately, the plain answer is no. Will the Bill deal with the horrendous and astronomical rise in insurance premiums that Members from all parts of the Chamber have highlighted in today’s debate? Again, the answer is an unequivocal no.
Will the Bill change the size and scope of the building safety fund to help constituents in places such as the Decks in the Runcorn part of the constituency of my hon. Friend the Member for Halton (Derek Twigg)? One part of the development is below 18 metres but still at risk, as it contains all the toxicity of the building safety crisis, and the other is above 18 metres. The Bill definitely will not help the likes of Julie and those constituents in Runcorn.
In fact, speech after speech and case after case from the 42 members who got in to speak today has shone a light on the open and painful wounds of what is missing from the Bill. To give some examples, my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) highlighted the dreadful impact of the EWS1 system. We are still having flats valued at zero, unsellable and un-mortgageable. Today, at the very last minute, we get a written ministerial statement claiming that the Government are going to change the marketplace. In fact, lots of the content seems to be recycled and reproduced from a statement that was spun some months ago, but I will ask the Minister a number of questions.
Will the guidance note issued in January 2020 be withdrawn? It is essential that it is. Will the matter be legislated for? Do those buildings below 18 metres, which now seemingly do not require an EWS1 form, have to have cladding removed? Do they have to have remediation for all the other things, whether that is missing firebreaks or inappropriate construction, such as the use of timber, as some Members have mentioned? We need answers to those questions. It is very important. Leaseholders need answers to those questions.
Some hon. Members referred to the black hole of the building safety fund. Martin from the excellent Leasehold Knowledge Partnership, who the Father of the House, the hon. Member for Worthing West (Sir Peter Bottomley), knows very well, referred to the application process as tantamount “to knitting fog”. Indeed, “Inside Housing” today highlights the case of a building in Wandsworth that meets the height threshold but has been rejected by the fund. I urge the Minister to correct this wrong. While the Minister and his team are at it, why do they not make sure that more than 12p in every pound of that fund is getting out of the door?
The Chair of the Housing, Communities and Local Government Committee has made a strong and consistent point about the need to include social housing providers within the scope of the fund, a point echoed by the Local Government Association and the National Housing Federation. The much-trumpeted £5.1 billion for cladding remediation would not have come about if it were not for those brilliant campaigners at the End Our Cladding Scandal campaign, who were not going to be ground down or quiet in their quest for justice. There were 17 promises made by Ministers, including the Prime Minister, that people would not have to pay historical remediation charges. That promise has not come to fruition in the 217 pages of this Bill.
We are also yet to see the details of the unwanted loan scheme, which has failed in Victoria, Australia, let alone a bold and just “polluter pays” approach directed at many of the Government’s friends and donors in the big developers community.
In opening the debate, the Secretary of State referred to clause 124, purporting to amend the Landlord and Tenant Act 1985 to protect leaseholders from costs relating to historical defective work, a point highlighted by the Father of the House, the hon. Member for Worthing West. It simply reasserts the status quo of requiring the landlord to pursue insurance, public grant and warranty claims that have not worked so far. Like much of the Bill, it makes reference to secondary legislation to follow, with no details or protection for leaseholders.
The Secretary of State also referred to the inclusion of section 38 of the Building Act 1984 and the retrospective changes to the Defective Premises Act 1972, a legal remedy to bring an extension from six to 15 years and the right to bring actions against developers responsible for shoddy building work. It sounds great in theory, but will the Minister highlight how many times this David and Goliath approach has been successful under the current six-year regime?
Will the Minister also advise the House of how leaseholders will pursue the special delivery project vehicles set up and closed down by developers, or where they will get the millions of pounds to pursue claims? How long will the counter-claims by developers, which will follow and be made under human rights legislation, take? It seems that the Minister has designed a job creation scheme for lawyers, a frenzy of litigation and further delays.
As my hon. Friend the shadow Housing Secretary asserted, we need a cast-iron legal guarantee to protect leaseholders from historical remediation costs. We will be working on a cross-party basis for amendments to achieve just that.
Finally, we are calling for the establishment of an interventionist building works agency, not dissimilar to that in Victoria, Australia, to get a grip on the crisis through assessment of risk, from building to building, from start to finish, with a crack team of experts in this field. It is find, fund, fix and recover, with a “polluter pays” principle. The hundreds of thousands of leaseholders trapped in this living nightmare deserve nothing less, and they require all the willing to step up and do the right thing. Let us make good law together beyond Second Reading.
The Minister for Housing (Christopher Pincher) [V]
This is the first and I trust the last time that I will have to speak from the virtual Dispatch Box, but I am afraid that self-isolation rules allow me no other option.
I begin by thanking all right hon. and hon. Members across the House for their contributions to this debate. I know that this is a highly emotive subject, and understandably so. I particularly want to pay tribute to my hon. Friends the Members for Blackpool North and Cleveleys (Paul Maynard), for Harrow East (Bob Blackman), for Bolton North East (Mark Logan), for Waveney (Peter Aldous), of course for Kensington (Felicity Buchan), and for Dudley North (Marco Longhi), my right hon. Friend the Member for Basingstoke (Mrs Miller) and the Father of the House, my hon. Friend the Member for Worthing West (Sir Peter Bottomley), for their thoughtful contributions.
Mercifully, as my right hon. Friend the Secretary of State said in his introduction to the debate, the spread of fire in high-rise buildings is rare, and it is becoming more rare, but as he also made clear, it is all too clear what can happen when those responsible for designing, building and managing those buildings fail—tragedies such as Grenfell can happen. That is why it is this Government’s absolute priority to make sure that such a tragedy never happens again. The contributions from across the House firmly reiterate just how important it is to pass this Bill to restore confidence—confidence among residents in their own safety and confidence in the wider housing market. Safety is our paramount concern, and I can assure the hon. Member for Strangford (Jim Shannon) of that.
We see this as a landmark Bill. It represents the greatest improvement to building and fire safety in a generation. It is flagship legislation that will spearhead our wider safety programme to ensure the proportionate management of risk in buildings. It will require building owners to manage safety risks to the same high standards as the best do—it will be a system where there are clear safety responsibilities for those responsible for the design, construction, completion and occupation of high-rise buildings, where they must demonstrate that they have effective and proportionate measures in place to meet those responsibilities, and where they are accountable to the regulator and to their residents.
A number of colleagues across the House have made some very important points and, in the short time that I have, I would like to address a number of them. The first is proportionality, which was discussed by my hon. Friends the Members for Southampton, Itchen (Royston Smith), for Bassetlaw (Brendan Clarke-Smith) and for Orpington (Gareth Bacon), to name three. It is hugely important that we take a proportionate approach to the safety of tall buildings and all buildings. The industry must take note that risk aversion is causing unnecessary financial burdens to homeowners. Remediation works should only ever be undertaken where absolutely necessary. We must not spend taxpayers’ money where it is unnecessary to do so, or ask hard-pressed leaseholders to pay for works that do not need to be done. Our Bill takes a proportionate approach. It rightly focuses on mitigating and managing risk and targeting activity only where action is needed.
The new building safety regulator is being established in the Health and Safety Executive, precisely because of its experience overseeing safety case regimes and its record of delivering robust yet proportionate regulation. The requirements of the Bill will help to ensure that proportionality is embedded in its operations.
Building owners and managers, along with lenders and insurers, need to ensure that they, too, take a proportionate approach to risk in blocks of flats whatever the height. In line with the expert evidence that we have published today, EWS1 forms should not be a requirement on buildings below 18 metres. Lower-rise blocks should not need them, and lenders should not ask for them. The consolidated advice note, which was born out of the need for safety information in the aftermath of the Grenfell fire, will now be retired.
Any concerns that do exist about existing buildings should be addressed primarily through risk management and mitigation. For many thousands of people, the “computer says no” approach to risk and valuation has been hugely unfair and distressing. It must become much more proportionate. That is what our measures are intended to do—to get the market moving again, as my hon. Friend the Member for Beaconsfield (Joy Morrissey) called for. I hope that they will also address some of the concerns raised by my right hon. Friend the Member for Hemel Hempstead (Sir Mike Penning).
I want also to assure the House that the Bill in no way absolves the sector from responsibility for paying its way. Indeed, it will place more and greater duties and responsibilities on developers, construction companies, building owners and managers than ever before, embedding the principles of safe design and construction right from a building’s inception. The new regulator will have the skills and resources to pursue those who refuse to meet their responsibilities. We will strengthen criminal penalties throughout the Bill, making offences imprisonable for up to two years, and making directors and managers criminally liable if they decide that their companies should act unlawfully.
Those who can pay must pay. Through the Bill, we will further cement developers’ contributions to the cost of remediation, as well as increase the ability of building owners and leaseholders to seek redress. Specifically, part 3 of the Bill contains a provision to introduce a levy, which will apply to high-rise residential buildings and will be paid by developers. That complements the residential property developer tax that the Chancellor will bring forward. Together, those will contribute more than £2 billion for remediation.
I also want to respond to concerns raised by Members including my hon. Friend the Member for Bolton North East regarding the right of homeowners to seek redress. The Bill will give millions of homeowners new rights to seek redress for shoddy workmanship, extending the period during which they can claim from six years to 15 years. It will empower building owners, leaseholders and homeowners to take legal action, clamping down on rogue developers and their owners.
I urge all who have fallen victim to shoddy work to use the newly extended liability period to consider whether litigation is right for them and to explore who, or which group of them, can best take action. I trust that the Bill will also encourage developers and freeholders, aware of the new additional rights of their customers, to act responsibly and quickly to deal with concerns before they reach the courts.
As well as redress, the Bill will provide residents with a greater voice. It will strengthen the voice of residents and leaseholders through a statutory residents panel, while a formal complaints process will give residents the confidence to raise issues and escalate them where needed, including to the building safety regulator.
I am conscious that it is nearly 7 o’clock. I am conscious, too, that there will be plenty of opportunity in other debates in the House, in Committee and on Report to debate the Government’s proposals further. So let me conclude by saying that we are leaving no stone unturned in our pursuit of a regime that is both proportionate and comprehensive. We have tested, we have consulted, we have analysed and we have done it all at considerable length, and we have now produced a Bill that I believe we should all support—a Bill that will confront the building safety issues that no Government have dared to tackled before, and a Bill that will force industry to take collective responsibility for the safety defects that they have created and support a change in culture so that residents’ concerns are listened to, problems are identified and dealt with early, and tragedies such as Grenfell never happen again.
I thank everyone who has taken part in the debate and all those who have contributed to the development of the Bill. I commend it to the House.
Question put and agreed to.
Bill accordingly read a Second time.
BUILDING SAFETY BILL (PROGRAMME)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Building Safety Bill:
Committal
(1) The Bill shall be committed to a Public Bill Committee.
Proceedings in Public Bill Committee
(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 26 October 2021.
(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.
Proceedings on Consideration and Third Reading
(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which proceedings on Consideration are commenced.
(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.
Other proceedings
(7) Any other proceedings on the Bill may be programmed.—(David T. C. Davies.)
Question agreed to.
BUILDING SAFETY BILL (MONEY)
Queen’s recommendation signified.
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Building Safety Bill, it is expedient to authorise the payment out of money provided by Parliament of:
(a) any expenditure incurred under or by virtue of the Act by the Secretary of State, and
(b) any increase attributable to the Act in the sums payable under any other Act out of money so provided.—(David T. C. Davies.)
Question agreed to.
BUILDING SAFETY BILL (WAYS AND MEANS)
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Building Safety Bill, it is expedient to authorise:
(1) the charging of fees, charges and levies under or by virtue of the Act; and
(2) the payment of sums into the Consolidated Fund.—(David T. C. Davies.)
Question agreed to.
Mr Deputy Speaker (Mr Nigel Evans)
I will now suspend the House, and suspension will be followed by a statement by Victoria Atkins on the strategy for tackling violence against women and girls.
Building Safety Bill
Wednesday 19th January 2022
(2 years, 3 months ago)
Commons ChamberRead Full debate Building Safety Act 2022 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 19 January 2022 - large print - (19 Jan 2022)
16:01 - The House divided: - Ayes: 181 / Noes: 301 - Question accordingly negatived.
The Minister for Housing (Christopher Pincher)
I beg to move, That the clause be read a Second time.
Madam Deputy Speaker (Dame Eleanor Laing)
With this it will be convenient to discuss the following:
Government new clause 21—Amendment of the Government of Wales Act 2006.
Government new clause 22—Architects: Appeals Committee.
New clause 3—Remediation costs and Building Works Agency—
“(1) The remediation costs condition applies where a landlord has carried out any fire safety works to an applicable building in consequence of any provision, duty or guidance arising from—
(a) the Housing Act 2004;
(b) the Regulatory Reform (Fire Safety Order) 2005;
(c) the Building Safety Act 2021;
(d) any direction, recommendation or suggestion of any public authority or regulatory body;
(e) such other circumstances or enactment as the Secretary of State may prescribe by regulations or in accordance with subsection (9), below.
(2) If the remediation costs condition is met, then the costs incurred by the landlord in connection with those matters may not be the subject of a demand for payment of service charges, administration charges or any other charge permitted or authorised by any provision of any long lease.
(3) Any demand for payment which contravenes this section shall be of no force or effect and will have no validity in law.
(4) Any covenant or agreement, whether contained in a lease or in an agreement collateral to such a lease, is void in so far as it purports to authorise any forfeiture or impose on the tenant any penalty, disability or obligation in the event of the tenant refusing, failing or declining to make a payment to which this section applies.
(5) The remediation costs condition applies to demands for payment before the landlord incurs the costs in the same way as it applies to demands for payment made after the costs have been incurred.
(6) The remediation costs condition does not apply where the landlord is a company in which the majority of the shares are held by leaseholders or where the landlord is an RTM company.
(7) Within six months of the day on which this section comes into force, the Secretary of State must create an agency referred to as the Building Works Agency.
(8) The purpose of the Building Works Agency shall be to administer a programme of cladding remediation and other building safety works, including—
(a) overseeing an audit of cladding, insulation and other building safety issues in buildings over two storeys;
(b) prioritising audited buildings for remediation based on risk;
(c) determining the granting or refusal of grant funding for cladding remediation work;
(d) monitoring progress of remediation work and enforce remediation work where appropriate;
(e) determining buildings to be safe once remediation work has been completed;
(f) seeking to recover costs of remediation where appropriate from responsible parties; and
(g) providing support, information and advice for owners of buildings during the remediation process.
(9) The Building Works Agency shall also have power to recommend that the Secretary of State exercises his power under clause (1)(e) in such terms and to such extent that it sees fit. If such a recommendation is made, the Secretary of State must, within 28 days, either—
(a) accept it and exercise the power under clause 1(e) within 28 days of acceptance; or
(b) reject it and, within 28 days of rejection, lay before Parliament a report setting out the reasons for rejection.
(10) In this section—
(a) ‘fire safety works’ means any work or service carried out for the purpose of eradicating or mitigating (whether permanently or temporarily) any risk associated with the spread of fire, the structural integrity of the building or the ability of people to evacuate the building;
(b) ‘applicable building’ means a building subject to one or more long leases on the day on which section comes into force;
(c) ‘service charge’ has the meaning given by s.18, Landlord and Tenant Act 1985;
(d) ‘administration charge’ has the meaning given by Schedule 11, Commonhold and Leasehold Reform Act 2002;
(e) ‘long lease’ has the meaning given by sections 76 and 77 of the Commonhold and Leasehold Reform Act 2002;
(f) ‘RTM company’ has the meaning given by section 113 of the Commonhold and Leasehold Reform Act 2002.
(11) This section comes into force on the day on which this Act is passed.”
New clause 4—Building Safety remediation and works: zero-rating for Value Added Tax purposes—
“(1) The Value Added Tax Act 1994 is amended as follows.
(2) In section 35(1A)(b) at the end leave out ‘and’.
(3) In subsection 35(1A)(c) leave out the final full stop and insert ‘, and’.
(4) After subsection 35(1A)(c) insert—
‘(d) building safety remediation or building safety works of the type described in item 4A of the table in paragraph 1 of Group 5 of Schedule 8 to this Act.’
(5) After subsection 35(2) insert—
‘(2A) For the purposes of subsection (2), the Commissioners shall make regulations providing for a period of not less than 6 months to be open for claims for repayment of VAT in relation to supplies under subsection 35(1A)(d) where the date of supply is between 14 June 2017 and 31 July 2022.’
(6) In the table at paragraph 1 of Group 5 of Schedule 8, after existing item 4 insert new item 4A—
‘The supply in the course of—
(a) remediation of any defect in any external wall of any building containing two or more residential dwellings; or
(b) remediation of any defect in any attachment to any external wall of any building containing two or more residential dwellings; or
(c) the installation of a new or upgraded communal fire alarm system, other than to replace a communal system which has reached the end of its working life, or a communal system which has broken down as a result of failure to make reasonable repairs over time; or
(d) remediation of any internal or external defect other than a defect described in paragraphs (a), (b) or (c); or
(e) any building safety works carried out by an accountable person under section 86 of the Building Safety Act 2021
of any services related to the remediation.’
(7) In the table at paragraph 1 of Group 5 of Schedule 8, in item 4 replace ‘item 2 or 3’ with ‘item 2, 3 or 4A’.
(8) After note 24 insert a new note as follows—
‘(25) For the purposes of item 4A in the table above—
“defect” means anything posing any risk to the spread of fire, the structural integrity of the building or the ability of people to evacuate the building, including but not limited to any risk identified in guidance issued under Article 50 of the Regulatory Reform (Fire Safety) Order 2005 (S.I. 2005/1541) or any risk identified in regulations made under section 59 of the Building Safety Act 2021;
“external wall” has the same meaning as in Article 6 of the Regulatory Reform (Fire Safety) Order 2005 (S.I. 2005/1541);
“remediation” means any step taken to eradicate or to mitigate a defect, including employment of any person temporarily or permanently to assist in evacuation of any part of a building, and whether or not the defect in question existed at the date any dwelling in the building was first occupied. Remediation does not include anything required in consequence of omitting to effect reasonable repairs or maintenance to all or any part of the building over time, or anything which is the responsibility of the occupant of a dwelling in the building.’
(9) This section comes into force on 1 August 2022.”
This new clause allows recovery of VAT on building safety remedial works paid since 14 June 2017 and makes future supplies of materials, goods and services for building safety remediation projects zero-rated for Value Added Tax.
New clause 5—Fire safety defects and defective dwellings—
“(1) The Housing Act 1985 is amended as follows.
(2) In section 528(1)(a) leave out the final ‘, and’ and insert ‘, or’.
(3) After section 528(1)(a) insert—
‘(aa) buildings in the proposed class are defective as a result of their external walls or any attachment to the external walls, whether as a result of the design or construction of the external walls or the attachment in question; or
(ab) buildings in the proposed class are defective as a result of anything which in the opinion of the Secretary of State poses a building safety risk or the ability of anyone to evacuate the building, whether or not the building is a higher-risk building, and’
(4) In section 528(1)(b) for ‘paragraph (a)’ substitute ‘paragraphs (a), (aa) or (ab)’.
(5) In section 528(1)(b) at the end insert ‘, or in the opinion of the Secretary of State is materially difficult to mortgage, insure or sell compared to non-defective dwellings.’
(6) After section 528(4) insert—
‘(4A) A designation may identify any part of a building or class of buildings, any design feature, any material used in the construction of that building, any error in workmanship or installation or anything missing from that building, whether or not it should have been included when the building was constructed.
(4B) A designation may be made if the defect requires the employment of any person, whether on a permanent or temporary basis, specifically to assist with the evacuation of that building or part of that building.’
(7) After section 528(6) insert—
‘(7) In this section—
“building safety risk” has the same meaning as in section 59 of the Building Safety Act 2021.
“external wall” has the same meaning as in Article 6 of the Regulatory Reform (Fire Safety) Order 2005 (S.I. 2005/1541).
“higher-risk building” has the same meaning as in section 62 of the Building Safety Act 2021.’
(8) In section 559(1)(a) omit the final ‘, and’ and replace it with ‘, or’.
(9) After section 559(1)(a) insert—
‘(aa) buildings in the proposed class are defective as a result of their external walls or any attachment to the external walls, whether as a result of the design or construction of the external walls or the attachment in question; or
(ab) buildings in the proposed class are defective as a result of anything which in the opinion of the local housing authority poses a building safety risk or the ability of anyone to evacuate the building, whether or not the building is a higher-risk building, and’
(10) In section 559(1)(b) for ‘paragraph (a)’ substitute ‘paragraphs (a), (aa) or (ab)’.
(11) In section 559(1)(b) at end insert—
‘or in the opinion of the local housing authority materially difficult to mortgage, insure or sell compared to non-defective dwellings.’
(12) After section 559(4) insert—
‘(4A) A designation may identify any part of a building or class of buildings, any design feature, any material used in the construction of that building, any error in workmanship or installation or anything missing from that building, whether or not it should have been included when the building was constructed.
(4B) A designation may be made if the defect requires the employment of any person, whether on a permanent or temporary basis, specifically to assist with the evacuation of that building or part of that building.’
(13) After section 559(6) insert—
‘(7) In this section—
“building safety risk” has the same meaning as in section 59 of the Building Safety Act 2021;
“external wall” has the same meaning as in Article 6 of the Regulatory Reform (Fire Safety) Order 2005 (S.I. 2005/1541);
“higher-risk building” has the same meaning as in section 62 of the Building Safety Act 2021.’
(14) This section comes into force on the day this Act is passed.”
This new clause is suggested before clause 126. This new clause amends Part XVI of the Housing Act 1985 (originally enacted as the Housing Defects Act 1984) to empower the government and local authorities to designate dwellings with cladding and fire safety defects as defective and to provide grant support for remediation.
New clause 6—Duty on the Secretary of State to report on designations under Part XVI of the Housing Act 1985—
“(1) Within the period of six months beginning with the day on which this section comes into force, the Secretary of State must—
(a) consider the financial impact on leaseholders in England and Wales of building safety advice given by his department since 14 June 2017; and
(b) in conjunction with the Treasury and the Prudential Regulation Authority, consider the impact of building safety advice given by his department since 14 June 2017 on the supply of mortgage finance for leasehold flats in England and Wales; and
(c) publish a report setting out his determination, in light of the factors identified in paragraphs (a) and (b), as to whether designations under section 528 or section 559 of the Housing Act 1985 would improve conditions for leaseholders, or would improve the supply of mortgage finance for leasehold flats in England and Wales.
(2) If the Secretary of State’s report under subsection (1) concludes that designations under section 528 or section 559 of the Housing Act 1985 would improve financial conditions for leaseholders in England and Wales, or would improve the supply of mortgage finance for leasehold flats in England and Wales, then at the same time as publishing his report he must—
(a) make arrangements to provide all necessary funding;
(b) make the appropriate designations under section 528 of the Housing Act 1985; and
(c) advise local housing authorities to make appropriate designations under section 559 of the Housing Act 1985.
(3) Before making any regulations bringing into force any section in Part 4 of this Act, the Secretary of State must make arrangements for—
(a) a motion to the effect that the House of Commons has approved the report prepared under subsection (1), to be moved in the House of Commons by a minister of the Crown; and
(b) a motion to the effect that the House of Lords to take note of the report prepared under subsection (1), to be moved in the House of Lords by a minister of the Crown.
(4) The motions required under subsections (3)(a) and (3)(b) must be moved in the relevant House by a Minister of the Crown within the period of five calendar days beginning with the end of the day on which the report under subsection (1) is published.
(5) If the motion tabled in the House of Commons is rejected or amended, the Secretary of State must, within 30 calendar days, publish a further report under subsection (1) and make arrangements for further approval equivalent to those under subsection (2).
(6) The Secretary of State shall make a further report under subsection (1) at least every 90 calendar days beginning with the day of any rejection or amendment by the House of Commons under subsection (5) until otherwise indicated by a resolution of the House of Commons.
(7) In this section—
‘leaseholder’ means the registered legal owner of a long lease; and
‘leasehold flat’ means a flat owned by a leaseholder; and
‘long lease’ has the same meaning as in section 76 of the Commonhold and Leasehold Reform Act 2002.
(8) This section comes into force on the day this Act is passed.”
This new clause is suggested before clause 126. It places a time-limited duty on the Secretary of State to consider making designations under Part XVI of the Housing Act 1985 to provide funding for cladding and fire safety remediation and for Parliament to approve the plans for doing so.
New clause 7—Building Safety Indemnity Scheme—
“(1) There shall be a body called the ‘Building Safety Indemnity Scheme’ (referred to in this Act as ‘the Scheme’).
(2) The purpose of the Scheme shall be to collect money from levies and to disburse the money raised from those levies in the form of grants to leaseholders to pay all or any part of the following types of costs—
(a) remediation of any defect in any external wall of any building containing two or more residential units; or
(b) remediation of any defect in any attachment to any external wall of any building containing two or more residential units; or
(c) remediation of any internal or external defect other than a defect described in paragraphs (a) or (b); or
(d) any building safety works carried out by an accountable person under section 86; or
(e) any other cost of a type specified by the Secretary of State in regulations made under this section.
(3) The Scheme may disburse money for the benefit of leaseholders in any type of building, whether or not a higher-risk building and whether or not the building was first occupied before the coming into force of this Act.
(4) The levy imposed by the Scheme shall be determined by reference to each of the following—
(a) the Scheme’s best estimate of the reasonably likely total cost of grants to cover any type of cost described in subsection (2);
(b) the Scheme’s best estimate of the costs of raising and administering the levy; and
(c) the Scheme’s best estimate of the costs of processing applications for grants to leaseholders and disbursing funds to leaseholders from monies raised by the levy.
(5) Members of the Scheme subject to levies shall include the following—
(a) any person seeking building control approval;
(b) any prescribed insurer providing buildings insurance to buildings containing two or more residential units, whether or not the buildings are higher-risk buildings;
(c) any prescribed supplier of construction products subject to regulations made under Schedule 9 to this Act;
(d) any prescribed lender providing mortgage finance in the United Kingdom, whether or not secured over residential units in higher-risk buildings; and
(e) any other person whom the Secretary of State considers appropriate.
(6) The Scheme is to consult with levy paying members before determining the amount and duration of any levy.
(7) The Scheme must provide a process by which leaseholders, or persons acting on behalf of leaseholders, can apply for grants for the types of costs specified in subsection (2).
(8) The Scheme must provide an appeals process for the Scheme’s decisions regarding—
(a) the determination of the amount of any levy; or
(b) the determination of any grant application.
(9) A building control authority may not give building control approval to anyone unless—
(a) the person seeking building control approval is a registered member of the Scheme, or that person becomes a registered member of the Scheme before the building control approval is given; and
(b) the person seeking building control approval pays all levies made on that person by the Scheme before the building control approval is given.
(10) The Secretary of State must provide that any regulations made under Schedule 9 to this Act provide, as a condition of approval of any regulated construction product, that any prescribed supplier of such a product—
(a) is a registered member of the Scheme, or that prescribed supplier becomes a registered member of the Scheme; and
(b) that the prescribed supplier pays all levies made on that person by the Scheme.
(11) Any liability to pay a levy under this section does not affect the liability of the same person to pay an additional levy under section 57 of this Act.
(12) Within a period of 12 months beginning with the coming into force of this section, the Secretary of State must make regulations providing for—
(a) the appointment of a board to oversee the Scheme;
(b) the staffing of the Scheme;
(c) the creation and maintenance of a public register of members of the Scheme;
(d) the preparation of the best estimates described in subsection (4);
(e) the amount, manner and timing of payment of the levies on members of the Scheme under this section;
(f) the process of joining the Scheme;
(g) the process of leaseholders applying to the Scheme for grants towards any of the types of costs specified in subsection (2);
(h) the process for handling any appeals against decisions of the Scheme on any levy or any grant;
(i) the Scheme to make an annual report to Parliament; and
(j) any other matters consequential to the Scheme’s operation.
(13) Regulations made under this section are to be made by statutory instrument.
(14) A statutory instrument under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.
(15) In this section—
‘building’ has the same meaning as in section 29;
‘building control approval’ has the same meaning as in paragraph (1B)(2) of Schedule 1 to the Building Act 1984;
‘building control authority’ has the same meaning as in section 121A of the Building Act 1984;
‘defect’ means anything posing any risk to the spread of fire, the structural integrity of the building or the ability of people to evacuate the building, including but not limited to any risk identified in guidance issued under Article 50 of the Regulatory Reform (Fire Safety) Order 2005 (S.I. 2005/1541) or any risk identified in regulations made under section 59;
‘external wall’ has the same meaning as in Article 6 of the Regulatory Reform (Fire Safety) Order 2005 (S.I. 2005/1541);
‘higher-risk building’ has the same meaning as in section 59;
‘prescribed’ means prescribed by regulations made by the Secretary of State;
‘remediation’ means any step taken to eradicate or to mitigate a defect, including employment of any person to temporarily assist in evacuation of any part of a building, and whether or not the defect in question existed at the date any residential unit in the building was first occupied. Remediation does not include anything required in consequence of omitting to effect reasonable repairs or maintenance to all or any part of the building over time, or anything which is the responsibility of an occupant of a residential unit within the building;
‘residential unit’ has the same meaning as in section 29.
(16) This section shall come into force on the day this Act is passed.”
This new clause is suggested after clause 126, requiring the government to establish a comprehensive fund, equivalent to the Motor Insurers’ Bureau, to provide grants to remediate cladding and fire safety defects of all descriptions, paid for by levies on developers, building insurers and mortgage lenders.
New clause 8—Implied terms in residential building and residential renovation contracts—
“(1) Every residential building contract is to be taken to contain terms that—
(a) the residential unit is fit for the purpose of ordinary residential occupation and is likely to remain so for a reasonable period if kept in appropriate repair;
(b) the residential unit in question is constructed in all material respects as described or stated on the approved plans;
(c) the residential unit is not subject to any building safety risk;
(d) the materials incorporated in the residential unit are as described in any approved plans;
(e) the materials incorporated in the residential unit are of satisfactory quality;
(f) the design of the residential unit is of a reasonable standard;
(g) the design of the residential unit is prepared with reasonable care and skill;
(h) all works in connection with the construction of the residential unit are executed with reasonable care and skill; and
(i) the residential unit complies in all material respects with all applicable statutory requirements and with all applicable building regulations in force as at the date of completion.
(2) Every residential renovation contract is to be taken to contain terms that any renovation works—
(a) do not render the unit unfit for the purpose of ordinary residential occupation;
(b) do not create any building safety risk;
(c) do not involve the incorporation of materials in the residential unit which are not as described in any approved plans;
(d) do not involve the incorporation of materials in the residential unit which are not of satisfactory quality;
(e) are executed with reasonable care and skill; and
(f) do not render the residential unit materially non-compliant with any applicable statutory requirement or with any applicable requirement of building regulations in force as at the date of completion.
(3) For the purposes of subsections (1) and (2), where the residential unit forms part of a building consisting of two or more residential units, the internal and external common parts of that building necessary for the reasonable occupation of any of the residential units are also to be taken to be subject to the same terms.
(4) A residential unit is fit for the ordinary purpose of residential occupation if it would be regarded as such by a reasonable person and taking into account—
(a) the ordinary costs of repair and maintenance of that residential unit by reference to that unit’s location and specific characteristics;
(b) any marketing materials provided before the sale of the residential unit in question; and
(c) whether that unit was marketed, designed or intended to be occupied by any particular class of persons, whether by age, by gender or by physical or mental disability.
(5) For the purposes of this section—
(a) a matter is material if it would be considered material if known or discovered by a reasonable purchaser of that residential unit before completing a purchase of that residential unit on ordinary commercial terms;
(b) a design is of a reasonable standard if a designer of average competence would have produced the same or a similar design;
(c) a material is of satisfactory quality if it would meet the requirements for satisfactory quality of goods under section 9 of the Consumer Rights Act 2015; and
(d) a material is as described if it would meet the requirements for description of goods under section 11 of the Consumer Rights Act 2015.
(6) The terms taken to be included in any residential building contract or residential renovation contract are enforceable by any owner of the residential unit provided or renovated under the contract in question.
(7) A term of a residential building contract or a residential renovation contract is not binding on the owner of a residential unit provided or renovated pursuant to that contract if it would exclude or restrict any liability in relation to the terms implied by this section.
(8) The reference in subsection (7) to excluding or restricting a liability also includes preventing an obligation or duty arising or limiting its extent.
(9) An agreement in writing to submit present or future differences to arbitration is not to be regarded as excluding or restricting any liability for the purposes of this section.
(10) In this section—
‘approved plans’ means any document submitted as part of obtaining building control approval;
‘building control approval’ has the same meaning as in paragraph (1B) of Schedule 1 to the Building Act 1984;
‘building safety risk’ has the same meaning as in section 59, whether or not the residential unit is in a higher-risk building;
‘higher-risk building’ has the same meaning as in section 62;
‘owner’ means the registered legal owner of the residential unit from time to time, including any trustee holding a beneficial interest on behalf of a third party and any transferee or assignee of the original owner;
‘residential unit’ has the same meaning as in section 29;
‘residential building contract’ means a contract made in the course of business involving work on or in connection with the construction of a residential unit (whether the dwelling is provided by the erection or by the conversion or enlargement of an existing building);
‘residential renovation contract’ means a contract made in the course of business involving work on an existing residential unit, except where it is expected that, on completion of the work, it will have ceased to be a residential unit or will otherwise have ceased to exist.”
This new clause, proposed to be inserted after clause 128 strengthens consumer rights for future buyers by implying terms that houses and flats are built, and are renovated, to reasonable standards of quality and compliant in all material respects with the law and with building regulations.
New clause 9—Implied terms: limitation—
“(1) The Limitation Act 1980 is amended as follows.
(2) After section 5 insert—
‘5A Time limit for actions related to breach of implied terms in residential building contracts and residential renovation contracts
An action in respect of the breach of the term implied into a residential building contract or a residential renovation contract by section (Implied terms in residential building and residential renovation contracts) of the Building Safety Act 2021 may not be brought after the expiration of 25 years from the date on which the cause of action accrued.’”
This new clause provides for a 25 year limitation period for breaches of the terms implied by the amendment proposed above.
New clause 10—Implied terms: mandatory insurance—
“(1) No member of the new homes ombudsman scheme created by this Act may offer for sale or sell any residential unit unless —
(a) every potential purchaser is provided on request with an accurate written summary of the terms of a prescribed policy applying to the residential unit when completed; and
(b) in accordance with any relevant regulation made under this section, or under section 131, or under section 132, the person offering for sale or the seller of the residential unit arranges a valid prescribed policy and provides a copy of a valid prescribed policy given to the purchaser of the residential unit on the day of the transfer to the purchaser of legal title in the residential unit.
(2) Any person in the course of business providing a residential unit under a residential building contract or renovations to a residential unit under a residential renovation contract must obtain a valid prescribed policy.
(3) No term of any residential building contract or residential renovation contract is enforceable unless a valid prescribed policy is in force in respect of such a contract.
(4) Within a period of six months beginning on the day this section comes into force, the Secretary of State must make regulations prescribing insurance terms for the purposes for this section, including—
(a) the creditworthiness of any insurer or warranty scheme under this section;
(b) the name of any warranty scheme which in the opinion of the Secretary of State achieves the purposes of this section;
(c) the minimum terms of any insurance or warranty under this section;
(d) that any policy or warranty scheme also provides reasonably adequate cover for any claim under sections 1 and 2A of the Defective Premises Act 1972 and section 38 of the Building Act 1984;
(e) a policy term or a warranty term of not less than the limitation period for making claims under any term implied into a residential building contract or residential renovation contract by this Act; and
(f) to bring into force section [Implied terms in residential building and residential renovation contracts] and section [Implied terms: limitation].
(5) Regulations made under this section are to be made by statutory instrument.
(6) A statutory instrument under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.
(7) In this section—
‘new homes ombudsman scheme’ means the scheme established under section 129;
‘prescribed’ means prescribed in regulations made by the Secretary of State, whether under this section, or under section 131, or under section 132;
‘residential building contract’ has the same meaning as in section [Implied terms in residential building and residential renovation contracts];
‘residential renovation contract’ has the same meaning as in section [Implied terms in residential building and residential renovation contracts]; and
‘residential unit’ has the same meaning as in section 29.
(8) This section shall come into force on the day this Act is passed.”
This new clause provides that members of the New Homes Ombudsman Scheme may not sell any new flat or house unless they provide insurance for 25-years to cover breach of implied terms as to quality.
New clause 11—Limitation Period for claims under section 38 of the Building Act 1984—
“(1) Section 38 of the Building Act 1984 is amended as follows.
(2) In section 38(4) after ‘includes’ insert ‘economic loss,’.
(3) After section 38(4) insert—
‘(5) No right of action for damages for economic loss under this section shall accrue until any person to whom the duty is owed has actual knowledge of breach that duty.
(6) Notwithstanding anything in subsection (5) or any regulations made under this section, an action for damages for economic loss under this section shall not be brought after the expiration of twenty-five years from the date the breach of duty occurred.
(7) For the purposes of subsection (6), where there is more than one actionable breach of duty causing economic loss and the breaches in question occurred on different dates, then time runs only from the date of the last such breach.
(8) Any right of action under this section other than a right of action for damages for economic loss shall be subject to section 11 and section 14A of the Limitation Act 1980.’
(4) This section shall come into force at the end of the period of two months beginning on the day on which this Act is passed.”
This new clause proposed for the Building Act 1984 enables claims for recovery of monetary damages (economic loss) and provides that the time limit for claims start when a resident becomes aware of a breach, subject to a 25-year longstop date.
New clause 12—Abolition of the rule preventing recovery of economic loss in certain actions relating to damage or defects in buildings—
“(1) In any prescribed statutory action for damages, there is no bar to recovering economic loss.
(2) In any action for damages for negligence in relation to the construction or renovation of any residential unit, other than an action for damages to which section 11 or section 14A of the Limitation Act 1980 applies, there is no bar to recovering economic loss.
(3) This section shall apply to any right of action accruing on or after the day this section comes into force.
(4) For the purposes of this section —
‘prescribed statutory action for damages’ means any action for damages for breach of section 1 or section 2A of the Defective Premises Act 1972.
‘residential unit’ means any dwelling or other unit of residential accommodation, including any internal or external common parts of any building necessary for the occupation of that residential unit.
(5) This section shall come into force at the end of the period of two months beginning on the day on which this Act is passed.”
This new clause abolishes the rule preventing the recovery of economic loss from developers and other professionals in claims for negligence and in claims under the Defective Premises Act 1972.
New clause 13—Leaseholder Costs Protection—
“(1) This section applies to a relevant building where a landlord has carried out any fire safety works to a building in consequence of any provision, duty or guidance arising from—
(a) the Housing Act 2004;
(b) the Regulatory Reform (Fire Safety Order) 2005;
(c) this Act;
(d) any direction, recommendation or suggestion of any public authority or regulatory body; and
(e) such other circumstances or enactment as the Secretary of State may prescribe by regulations.
(2) If any of the conditions in subsection (1) are met, then the costs incurred by the landlord in connection with those matters may not be the subject of a demand for payment of service charges, administration charges or any other charge permitted or authorised by any provision of any long lease.
(3) Any demand for payment which contravenes this section shall be of no force or effect and will have no validity in law.
(4) Any covenant or agreement, whether contained in a lease or in an agreement collateral to such a lease, is void insofar as it purports to authorise any forfeiture or impose on the tenant any penalty, disability or obligation in the event of the tenant refusing, failing or declining to make a payment to which this section applies.
(5) This section applies to demands for payment before the landlord incurs the costs in the same way as it applies to demands for payment made after the costs have been incurred.
(6) This section does not apply where the landlord is a company in which the majority of the shares are held by leaseholders or where the landlord is an RTM company.
(7) For the purposes of this section, a relevant building is any building containing one or more residential dwellings let on a long lease.
(8) In this section—
‘administration charge’ has the meaning given by Schedule 11 to the Commonhold and Leasehold Reform Act 2002; ‘fire safety works’ means any work or service carried out for the purpose of eradicating or mitigating (whether permanently or temporarily) any risk associated with the spread of fire, the structural integrity of the building or the ability of people to evacuate the building;
‘long lease’ has the meaning given by sections 76 and 77 of the Commonhold and Leasehold Reform Act 2002;
‘residential dwelling’ means any dwelling or other unit of residential accommodation, including any internal or external common parts of any building necessary for the occupation of that residential unit;
‘service charge’ has the meaning given by section 18 of the Landlord and Tenant Act 1985;
‘RTM company’ has the meaning given by section 113 of the Commonhold and Leasehold Reform Act 2002.
(9) This section comes into force on the day on which this Act is passed.”
This new clause prevents the costs of any fire safety or building safety remedial works being passed on to leaseholders.
Amendment 2, in clause 126, page 133, line 17, at end insert—
“(d) In respect of remediation works completed before the coming into force of this section, apply for any refund of VAT due under section 35(1A)(d) of the Value Added Tax Act 1994 and credit the whole amount of any such refund received to leaseholders pro-rata in accordance with the terms of the lease.”
This amendment is consequential on NC4. Where works have already been carried out, this new subclause requires the landlord to obtain any retrospective VAT refund and to credit the whole amount of that VAT refund to leaseholders.
Amendment 5, in clause 127, page 135, line 29, leave out
“at the time the work is completed”
and insert
“when any person to whom the duty under this section is owed has actual knowledge of breach of that duty.”
This amendment provides that time to make a claim in respect of building renovations under section 2A of the Defective Premises Act 1972 only runs from the date a resident has knowledge of the breach, subject to a 25-year longstop.
Amendment 6, in clause 127, page 135, line 33, at end insert—
“(9) Notwithstanding anything in subsection (8), an action for damages for breach of the duty in this section, insofar as that action relates only to the original work in question, shall not be brought after the expiration of twenty-five years from the date the work in question is completed.”
This amendment provides that time to make a claim in respect of building renovations under section 2A of the Defective Premises Act 1972 only runs from the date a resident has knowledge of the breach, subject to a 25-year longstop.
Amendment 4, in clause 128, page 136, line 1, leave out “15 years” insert “25 years”.
This amendment proposes a longer period for claims under the Defective Premises Act 1972 and the Building Act 1984 considering the recent history of cladding and fire safety related defects and retrospective guidance issued by the government.
Government amendment 41.
Amendment 7, in clause 128, page 136, line 11, at end insert—
“(2A) In section 1(5) of the Defective Premises Act 1972 for ‘time when the dwelling was completed’ substitute ‘time when any person to whom the duty under this section is owed has actual knowledge of breach of that duty’.
(2B) After section 1(5) of the Defective Premises Act 1972 insert—
(6) Notwithstanding anything in subsection (5), an action for damages for breach of the duty in this section, insofar as that action relates only to the original construction of the building in question, shall not be brought after the expiration of twenty-five years from the time the dwelling is completed.’”
This amendment provides that time to bring a claim for damages under section 1 of the Defective Premises Act 1972 only runs from the date a resident has knowledge of a breach, subject to a 25-year longstop in relation to claims related to failures during the original construction.
Government amendment 42.
Amendment 8, in clause 128, page 136, line 19, leave out subsection (5).
The Human Rights Act 1998 already protects defendants’ rights in relation to retrospectively extended limitation periods. Removing subsection (5) removes the material risk a court may construe clause 128 in a way that means it has no practical benefit and will lead to years of costly litigation for leaseholders.
Amendment 9, in clause 128, page 136, leave out line 27 and line 28.
This amendment is consequential to Amendment 8 because the defined term “Convention Rights” is no longer required.
Government amendment 43.
Amendment 10, in clause 128, page 136, line 29, leave out “90 days” and insert “2 years”.
This amendment allows a period of up to 2 years, instead of 90 days, to obtain the necessary expert evidence required to issue viable claims under the Defective Premises Act 1972.
Government amendments 44 to 55.
Amendment 3, in clause 132, page 139, line 17, at end insert—
“(f) require members of the scheme under paragraph (a) to obtain policies of insurance that meet the requirements of section (Implied terms: mandatory insurance).”
Government amendments 56 to 58.
Government new schedule 2—Amendments in connection with the new homes ombudsman scheme.
Government amendment 71 and 72.
Government amendment 59.
Government amendment 62.
Government amendments 65 to 69.
Christopher Pincher
It is a great pleasure to report to the House, to move the Government’s new clauses and to be able listen to the important debate that we will have on the Bill’s remaining stages. Over the past few months, the Bill has been subject to scrutiny and debate not only in Committee but through ongoing debate in this House, in the other place and, indeed, throughout the country.
Only last week, my right hon. Friend the Secretary of State for Levelling Up, Housing and Communities updated the House on our progress in addressing the ongoing issues and protecting leaseholders. We have brought the Bill forward on Report because we are clear that it needs to move forward, but we are conscious that further work needs to be done to it and look forward to working with parties from across the House and with interested parties to ensure that it is further improved in the other place.
Stephen Timms (East Ham) (Lab)
Will the Minister confirm that the Government intend to table amendments in the other place to implement the statutory protection for leaseholders announced last week by the Secretary of State? By the time that the Bill is debated there, can we expect amendments to have been published so that we can consider them?
Christopher Pincher
I am grateful to the right hon. Gentleman for his question. As I said, we are introducing the Bill at this stage because we are conscious that it is very important, and we need to get it through both Houses. However, as my right hon. Friend the Secretary of State said in his statemen on 10 January, we want to ensure that we look closely to improve the appropriate legislative and statutory protections for leaseholders, and we will have to do that in a parliamentary way, which will of course include the other place.
Several hon. Members rose—
Christopher Pincher
Crikey. I give way first to my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill).
Sir Robert Neill (Bromley and Chislehurst) (Con)
I am grateful to my right hon. Friend for the undertaking to bring forward such matters in the other place and for listening to colleagues’ representations on a number of important issues. Given the pressures on business in the other House, will he assure us that there will be time properly to debate the amendments and that they will include important issues such as clarifying the position on internal developer fire safety defects—where there has been a defect that is the fault of the developer and/or regulatory failure and not anything else—just as much as external defects, and consequential costs that stem from those failures such as waking watch? Those are important issues, so I hope he will ensure that we have a proper debate and clarification on them in the other place.
Christopher Pincher
I am grateful to my hon. Friend. Of course, the time made available for debate in the other place is for the other place to determine, but I am sure that the business managers in both Houses have heard his points. I certainly want to ensure that there is adequate time to debate properly what are somewhat technical and detailed matters so that, working across party and with members of the Select Committee on Levelling Up, Housing and Communities, we can properly get the Bill right.
Hilary Benn (Leeds Central) (Lab)
Further to the answer given to my right hon. Friend the Member for East Ham (Stephen Timms), will the Minister explain why the statutory protection that the Government are considering will apparently not extend to leaseholders not living in their flats? I know of at least one constituent of mine who was forced to leave his flat and rent it out as that was the only way he could raise the money to pay for the waking watches and insurance bills. Given that he is just as much a victim as those still living in their flats, why should protection against unreasonable costs not be extended to people such as him?
Christopher Pincher
I am grateful to the right hon. Gentleman. He will know, as the House does, that building safety and the challenges that leaseholders face are very complicated. The House will also know that we have committed to help those in shared ownership, for example, by making it easier for them to rent out their properties if that is a means of ensuring that they can pay their mortgages. I assure him that we will look closely and work collegiately and collectively across parties, and with other interested parties, to ensure that such issues are effectively and appropriately debated and addressed.
Bob Blackman (Harrow East) (Con)
My right hon. Friend has done a stoic job in taking the Bill through its various stages. The other place is under incredible pressure in dealing with Government legislation, as my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill) mentioned. It is clearly up to business managers there how much time they allocate to amendments and so forth, but will he commit that when the Bill comes back to us with the Lords amendments, we will get a chance to debate them—and, if necessary, correct them and improve them—rather than just a 60-minute debate where hardly anyone gets an opportunity to debate the issues?
Christopher Pincher
I am grateful to my hon. Friend. The business managers in this House, if not the other House, will have heard his points—he has got a pretty loud voice—and will want to ensure that appropriate, adequate debating time is made available to deal with these technical and detailed issues. As I said, I believe that business managers will have heard what has been said by him and by right hon. and hon. Members and will react accordingly.
Several hon. Members rose—
Christopher Pincher
I will give way to the Chairman of the Select Committee on Levelling Up, Housing and Communities, and then I probably ought to make a little more progress, having thus far read out only one paragraph of my opening remarks.
Mr Clive Betts (Sheffield South East) (Lab)
It was very well read, though.
I re-emphasise the point raised by the hon. Member for Harrow East (Bob Blackman). The Select Committee will have a very short but very thorough inquiry into the issues that the Secretary of State rightly raised in his statement to the House last week and the follow-up, but debating time in this place is an issue. The Minister’s answer is very helpful because the Lords will have lots of time, and then it is normal for us to have one hour to consider their amendments. The Bill needs a full-day debate because the amendments that the Government intend to make, following consultation with industry, are key to resolving the issue. I appreciate what the Minister said, and I hope the business managers are as supportive when they come to allocate time.
Christopher Pincher
The hon. Gentleman and others remind me of what is often said of politics: even though everything that can be said has been said, not everybody who could say it has said it. He has just spoken for the entire House, and it is of course for the usual channels to determine the time allocated for debating and disposing of business, but the point of view of both sides of the House has thus far, very early in the debate, been heard.
Several hon. Members rose—
Christopher Pincher
I will make a little progress before giving way, if I may.
I have been delighted to talk to colleagues on both sides of the House, following the statement by my right hon. Friend the Secretary of State. I draw the House’s attention to the comments of my hon. Friends the Members for Southampton, Itchen (Royston Smith) and for Ipswich (Tom Hunt), who cannot be with us today because they are on parliamentary business elsewhere. They commissioned me to tell the House that they are very pleased with the direction of travel set out by my right hon. Friend the Secretary of State. They are pleased with the Government’s commitment to continue working with parliamentarians to protect leaseholders and to hold to account those responsible for building defects. If they were here, they would support the Government in the Lobby this afternoon.
I am sure we will address some difficult and challenging questions in this debate. Before we do, I am keen to introduce a group of Government amendments that I trust will be welcomed.
Catherine West (Hornsey and Wood Green) (Lab)
The Minister is generous in giving way. Could he reassure leaseholders in the Roundway in Wood Green that, after several years of lobbying both me and the Government, not only will the whole of the cladding costs be covered under this arrangement but their mortgage issues will be resolved?
Christopher Pincher
The hon. Lady is a doughty campaigner on behalf of her constituents in the Roundway and elsewhere. I do not want to speak about specific buildings, which probably would not be appropriate because I do not know the detail, but we certainly want to make sure that we agree proper leaseholder protections across political parties and with interested parties. We will make amendments to that effect, as well as a suite of non-statutory interventions to make sure the people who ought to pay do pay.
Several hon. Members rose—
Christopher Pincher
I will give way a little more later. I am conscious that I have already spoken for a little while, and there are a number of new clauses and amendments that the House will want to debate and on which Members will want to make their views plain.
The Government are committed to improving redress and consumer protection for home buyers in new buildings. I am therefore pleased that we have introduced access to the new homes ombudsman scheme. Amendments 49, 50 and 72 introduce several changes to the new homes ombudsman provisions to enable them to work practically in Wales and Scotland, and to ensure that the scheme includes provision of information to Ministers in the devolved Administrations.
In addition, amendments 47, 48 and 71 and new schedule 2 remove barriers to enable the new homes ombudsman to work jointly with existing ombudsman schemes and clarify provision of co-operation between the ombudsman and other redress schemes. To ensure that the provisions work for home buyers across our nations, any differences in law and custom and practice will be respected.
Amendments 45, 56 and 57 include requirements for the Secretary of State to consult the devolved Administrations before making arrangements for the scheme. We want that consultation to be meaningful and our intention is to make sure that consideration is given to the views of the devolved Administrations at an appropriate time and before key decisions are taken about the ombudsman regime.
Amendments 54 and 55 confer a power on the relevant national authority for England, Scotland and Wales to add the meaning of the term “developer” in the new homes ombudsman provisions, through regulations as appropriate and following a discussion with other relevant national authorities.
New clause 20 makes provision for how Welsh and Scottish Ministers may exercise that power. New clause 21 makes sure that the devolved Administrations are not restricted from bringing forward legislation to alter the ombudsman’s statutory functions in relation to that territory’s future by disapplying a restriction in the Government of Wales Act 2006.
Finally, our intention is for the new homes ombudsman to work jointly with the other redress schemes and ombudsmen, and the amendments clarify that intention, removing barriers in existing legislation.
Janet Daby (Lewisham East) (Lab)
Will the Minister say how he will keep his promises to leaseholders to ensure that they will not bear the cost of the building safety crisis?
Christopher Pincher
As I have already said, we want to work across the parties to make sure that leaseholders are properly protected and that those who should properly pay the costs of defective fire safety work bear that cost. I have said it from the Dispatch Box, and, on 10 January, the Secretary of State made the same commitment. We will work through the passage of the Bill to make sure that those protections are in place.
Christopher Pincher
I give way to the hon. Gentleman and then I shall make some further progress.
Jonathan Edwards
I am extremely grateful to the Minister for giving way. I welcome the ombudsman. Uncompleted estates have been a big issue in my constituency, and I welcome the consultation with the Welsh Government. May I take him back to the intervention from the right hon. Member for Leeds Central (Hilary Benn) about people who are landlords and leaseholders in one property and the need to include them in the scheme. In the spirit of that consultation—whatever compensation scheme comes forward will be administered in Wales by the Welsh Government—can he tell me what discussions he is having with the Welsh Government about that specific group of people who are very worried about the situation at the moment?
Christopher Pincher
I am grateful to the hon. Gentleman for his support for the proposals in general. I can assure him that my officials work closely with officials in the devolved Administrations and we will continue to do so, again, as an example of working with interested parties to make sure that issues are properly addressed.
New clause 22 relates to appeals against registration decisions made by the Architects Registration Board. The new clause gives applicants for registration the opportunity to appeal a decision made by the board or the registrar to remove or refuse to enter or re-enter a person’s name onto the register. Without that, registrants removed under the new competence regime, to be introduced with clause 137, and first-time registrants will only have recourse to the High Court. The costs of an appeal made to the High Court could be prohibitive.
Amendment 58 will allow the board to delegate its prescription responsibilities to the prescription committee, giving it greater flexibility while maintaining oversight of the prescription of qualifications. Amendments 65 and 69 are consequential to that change.
I now turn to our proposed amendments on redress. The Bill Committee debated section 1 of the Defective Premises Act 1972 in significant detail; I recall that the hon. Member for Weaver Vale (Mike Amesbury) made several concise and incisive interventions. Section 1 allows a claim for compensation to be brought through the civil courts when a dwelling was “not fit for habitation” on completion. The limitation period in that Act currently stands at six years, which means that a claim must be brought within that period following the completion of the defective works.
Matt Rodda (Reading East) (Lab)
I ask for the Minister’s further reassurance on some points of detail that relate to these amendments. First, around half of the buildings in my constituency that have difficulties associated with them have non-cladding-related problems. Those include internal compartmentalisation that has been improperly finished. Indeed, in Queens Wharf in Reading town centre, the building owners estimate that nearly £1 million of work needs to be carried out. These are often very large sums. In other cases, the problem is wooden cladding, wooden balconies or a range of other things. Do the amendments relate to these problems, or to flammable cladding only?
Christopher Pincher
The Defective Premises Act has been in effect since 1972, so there is a significant body of case law that those wishing to bring an action, and indeed the courts, will be able to refer to, to determine whether a premises is defective and therefore whether an action should be successful. I am happy to write to the hon. Gentleman with further detail, but I can assure him that the Act is of long standing and has been well used, and there is a body of case law that can be applied.
John Redwood (Wokingham) (Con)
Is there any right of redress to the regulatory authorities in local government, such as building inspectors and others, who were responsible for signing off on these schemes?
Christopher Pincher
We certainly want to ensure though the Bill, that the building control mechanism and the industry are improved. I think that a suite of measures, including the introduction of better building control measures, the retrospection of the Defective Premises Act and further work that we may choose to do, working across parties, will help ensure that a very complicated and detailed set of challenges, which have emerged recently but have been developing over many years, are properly addressed.
Sir Mike Penning (Hemel Hempstead) (Con)
I want to clarify, should I be lucky enough to catch Madam Deputy Speaker’s eye later, where my speech might be going. This is retrospective legislation, and that is fantastic—if we can track down the freeholder, the developer and the insurer. If they cannot be tracked down, where does that burden come? Surely we can find a way—I may suggest this in my speech, but I wonder whether the Minister has thought of a way—by which the unfairness of the impact of what we are now prescribing in the Minister’s legislation on those in cases where we cannot find them, as opposed to where we can, can be resolved.
Christopher Pincher
I am grateful to my right hon. Friend for the forewarning of what his speech may contain. I would say to him that quite apart from the body of case law that exists with respect to the 1972 Act, and quite apart from the fact that even if a company has become defunct directors can still be held liable for the decisions made, as it were, “on their watch”, the challenges that he has described are the sorts of things that we will want to discuss in this place and in the other place, across parties, to ensure that such challenges are addressed.
Christopher Pincher
I will give way to the hon. Gentleman in a moment, but I am conscious that I have been speaking for 22 minutes and that there are one or two other remarks that I ought to make before the House has an opportunity to debate the new clauses and amendments.
Since the introduction of the Bill, it has become clear that a number of buildings affected by cladding and other serious fire safety defects were completed prior to 2007. We have listened to hon. Members from across the House who wanted a route to redress for those buildings. I pay tribute to my hon. Friends the Members for Stevenage (Stephen McPartland), for Kensington (Felicity Buchan), for Bromley and Chislehurst (Sir Robert Neill) and for Wimbledon (Stephen Hammond) and my right hon. Friend the Member for Hemel Hempstead (Sir Mike Penning), as well as a great many Opposition Members.
That is why we tabled Government amendment 41, which will retrospectively extend the limitation period for section 1 of the 1972 Act to 30 years, meaning that there will be access to this route of redress for buildings completed from mid-1992 onwards. That represents a substantial extension beyond the current six years. I recognise that changing the law in this way is unusual and that 30 years represents a long limitation period. However, I consider that the exceptionality of the current circumstances in respect of cladding and other serious fire safety defects warrants the longer retrospective limitation period of 30 years.
Several hon. Members rose—
Christopher Pincher
I shall give way to the hon. Member for Blackley and Broughton (Graham Stringer) and then to my hon. Friend the Member for Stevenage.
Graham Stringer
The Minister is being extraordinarily generous with his time. The Government have moved a good distance to get all-party support for what they are doing and to take the burden away from leaseholders. However, I suspect that in many cases, the people responsible for the defects will have liquidated themselves and will no longer be there. Is not one possible solution that a charge be put against the land, so that neither the leaseholder nor the taxpayer has to pay? Has he considered that?
Christopher Pincher
We will consider all proposals that are put to us to see whether they work and to ensure that leaseholders are protected. As the Secretary of State said in his statement, we will conduct a series of summits with the sector to put people on notice that they must pay for the problems they have caused. If they will not do it voluntarily, we will find a means of requiring them to do so.
The hon. Gentleman was wrong to say that I am being generous with my time. In fact, I am being generous with the House’s time. I propose to be less generous in future, but not before I have allowed my hon. Friend the Member for Stevenage to intervene.
Stephen McPartland (Stevenage) (Con)
I would like to thank the Minister on behalf of a number of leaseholders around the country, because our amendments asked for only 25 years and the Government have gone further with 30 years. I put on the record my thanks to the Government for that.
Christopher Pincher
I am grateful to my hon. Friend. I assure him that the 30-year retrospection is what we decided on; it is not a typo and it should not read 25 years.
The prospective limitation period will remain at 15 years, as is currently proposed, which still represents a substantial extension beyond the existing six years. In a small number of cases, the retrospectively extended limitation period will expire very soon following the commencement of the provision. We believe that it is important that the extended limitation period is of practical benefit in the case of all buildings that fall within scope. That is why we have proposed adding section 4B(4) to the Limitation Act 1980 through clause 128, which will ensure that there is always a minimum amount of time to lodge a claim under section 1 of the Defective Premises Act for buildings whose limitation periods will be revived for a very short period of time.
As introduced, the Bill provided for an initial period of 90 days in which action relating to defective premises could be taken when the extension was about to run out. I agree with several of my hon. Friends that 90 days is an insufficient amount of time to take the necessary advice and lodge a claim, which is why we are bringing forward amendments 42 and 43 to extend the initial period to one year. That means that those in any buildings completed between mid-1992 and mid-1993 will always have one full year in which to lodge their claim, once this Bill and its provisions apply. These amendments will ensure that the retrospectively extended limitation period can be of practical benefit in the case of all buildings in scope, and I trust that the House will support them.
Clause 127 expands the scope of the Defective Premises Act to include refurbishment works, and a technical amendment in the next group will ensure that this commences two months after Royal Assent, ensuring that this important new safeguard against shoddy workmanship is taken up as soon as possible. This was a debate that we had, and agreed about, in Committee. I am grateful to my right hon. and hon. Friends, and indeed to colleagues across the House, for debating these matters and for tabling amendments in this area, but I hope that in the light of what I have said from the Dispatch Box they will feel able to withdraw their amendments.
Caroline Lucas (Brighton, Pavilion) (Green)
I want the Minister to clarify one last thing before he sits down, because although other hon. Members have raised it, I am still not entirely clear what reassurance there is for our constituents who are leaseholders experiencing problems that are not related to cladding. Others have raised the issues of internal partitions, roof spaces and so forth, and the Minister has referred to other legal channels that may be available, but can he tell me clearly now what reassurance there is for leaseholders who are not facing cladding problems but are facing other fire defects? Will the legal protections that he is offering extend to them?
Christopher Pincher
We will work with parties across this House—across both Houses—and with interested parties to ensure that these issues are properly understood and debated.
Daisy Cooper (St Albans) (LD)
Will the Minister give way?
Christopher Pincher
No, I will not.
We want to ensure that these matters are properly debated and properly agreed. We also want to ensure, through a suite of mechanisms such as the extension of the Defective Premises Act and working with the sector to ensure that it pays for the defects it has caused, that this issue for leaseholders, which has gone on for far too long, is finally put to bed. This group of Government new clauses and amendments make key improvements to the Bill and extend its benefits to include the whole of Great Britain. I hope therefore that Members across the House will feel able to support the new clauses and the new schedule and allow them to stand part of the Bill.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
It will not have escaped your notice, Madam Deputy Speaker, that I have taken on this Bill in its final stages, so I must begin by thanking my hon. Friends the Members for Manchester Central (Lucy Powell) and for Weaver Vale (Mike Amesbury) for their prodigious efforts during its earlier stages. I also want to thank my hon. Friends the Members for Liverpool, West Derby (Ian Byrne), for Brentford and Isleworth (Ruth Cadbury), for Luton South (Rachel Hopkins), for Jarrow (Kate Osborne) and for St Helens South and Whiston (Ms Rimmer) for so ably scrutinising it in Committee.
The issues covered by the Bill have been extensively set out in debates on Second Reading and in Committee. I have no intention of seeking to reprise them this afternoon, but before I turn to part 5 of the Bill and the consideration of the amendments related to it, I feel it is incumbent on me briefly to restate why we believe this legislation is so important. As the House knows, on 14 June 2017, 72 men, women and children lost their lives in an inferno fuelled by the highly combustible cladding system installed on the outside of their 24-storey tower block in north Kensington. That tower block was also compromised by a range of other fire safety defects. I put on record once again our admiration for the survivors and the bereaved of the Grenfell Tower fire and for the wider Grenfell Tower community, who continue to seek not only justice for their families and neighbours but wider change to ensure that everyone is safe in their home.
Catherine West
Does my hon. Friend agree that it is extremely important that we give the debate the time needed to remember the loss of life and the community that survived that terrible moment in our shared history?
Matthew Pennycook
My hon. Friend is absolutely right. I hope that, as Members consider the Bill and amendments, they have the chance to reflect and to remember why it is going through.
One does not pre-empt the Grenfell Tower inquiry’s conclusions in stating that the horror of that dreadful June night was the product not only of pernicious industry practice, but of state failure—the failure of successive Governments in presiding over a deficient regulatory regime, and the failure to act on repeated warnings about the potential lethal consequences of that fact. The Hackitt review detailed a deeply flawed system of regulation and argued for a radical overhaul of it. To the extent that the Bill delivers on the recommendations of Dame Judith’s report, we remain supportive of it and want to see a version of it on the statute book as soon as possible, given that four and a half years have elapsed since the Grenfell tragedy; however, the House knows we have serious concerns about what is missing from the Bill, and particularly its failure as drafted to provide robust legal protection for leaseholders facing ruinous costs—a point already made by several hon. Members on both sides of the House—for remediating historic cladding and non-cladding defects. In the absence of such protection, the Opposition are clear that the Bill will fail to meet what Dame Judith described as
“The ultimate test of this new framework”,
namely,
“the rebuilding of public confidence in the system.”
As we have heard, part 5 deals with remediation and redress, as well as assorted provisions relating to safety and standards. In Committee, my hon. Friends raised concerns about the limitations of clause 126, which seeks to ensure that landlords take “reasonable steps” to pursue other potential means of recovering the costs before passing them on to leaseholders. We of course believe it is right that landlords be forced to exhaust all means of funding remediation works other than passing on costs to leaseholders, whether that be seeking redress from the original developer in cases where the two are not the same, exploring a claim against a warranty, or applying for grant funding; however, we remain of the view that this provision gives leaseholders extremely limited protection in practice and we want that to be supplemented with additional provisions for maximum legal protection against the costs of remediating all historical defects—an objective that I know is widely shared across the House, as evidenced by the numerous amendments on the amendment paper today relating in one way or another to leaseholder protection. I will speak on that issue in more detail later in my remarks.
Clause 128 relates to limitation periods and makes changes to the operation of the Defective Premises Act. We supported the proposed expansion of the Act but remain of the view that there are considerable practical obstacles to leaseholders’ successfully securing redress via that mechanism—a point made by the right hon. Member for Hemel Hempstead (Sir Mike Penning) and my hon. Friend the Member for Blackley and Broughton (Graham Stringer)—not least given the prevalent use of special purpose vehicles precisely to avoid liabilities of this kind. We believe that the Government are in general overplaying the significance of litigation as a solution of the building safety crisis.
Hilary Benn
While of course we all welcome the extension, in practical terms, our constituents who have, staring at them from the table, bills for sums of money that they cannot afford, will not be in a position to start a legal action that may take several years, at enormous cost and risk and with no guarantee that it will reach a satisfactory conclusion, as my hon. Friend is so ably pointing out. It is not an answer to the problems that so many of our constituents are facing now.
Matthew Pennycook
My right hon. Friend, as so often, is absolutely right that it is an uphill struggle for leaseholders to get together to begin legal action of this kind. He also raises the highly pertinent point that there is nothing in the Bill that prevents freeholders today from passing on costs to those blameless victims of the crisis.
Kate Green (Stretford and Urmston) (Lab)
Does my hon. Friend agree that there is a real opportunity here for the Department to link up with the companies registrar and companies law, and to use the options that exist there to take action early against directors who repeatedly set up these special purpose vehicles, repeatedly carry out substandard developments, and repeatedly liquidate those companies, leaving no assets for leaseholders to act against, and who it appears are in no way acted against, either proactively or reactively, under companies law or by Companies House?
Matthew Pennycook
My hon. Friend makes a very good point, which she has made in other debates in this place with regard to unscrupulous developers operating in her constituency. Changes to company law certainly warrant further consideration in that respect.
Sir Peter Bottomley (Worthing West) (Con)
May I add the problem that leaseholders do not have an interest in a brick of their building and that a claim would need to be made on their behalf by the freeholders to the landlord, who would require indemnity costs from the leaseholders who cannot pay?
May I, through the hon. Gentleman, suggest to the Government that between now and the House of Lords they consider taking a right to take the potential claims by the landlords on behalf of leaseholders into a public agency which can make a public claim against the developers, builders, architects, surveyors, building specification and building controllers, so that money can be brought back from those who were responsible, not the innocent leaseholders who are not?
Matthew Pennycook
I thank the Father of the House for that intervention. That is a very good suggestion, which I hope the Minister will take on board and give some considered thought to.
Notwithstanding our concerns with regard to the limitations of the Defective Premises Act, we argued forcefully in Committee for the Bill to be revised so that the period for claims under the 1972 Act be extended from six to 30 years, rather than from six to the 15 years the Government proposed. In response, the Minister urged my hon. Friends to withdraw our amendment on the grounds that a 15-year limitation period was appropriate and indeed that any further retrospective extension beyond 15 years would increase the chances of the legislation being tested against the Human Rights Act and found wanting. Because that argument was never convincing, we are extremely pleased that the Government have reconsidered their position on this matter in the light of the case made by my hon. Friends in Committee, and have brought forward amendments 41 and 42, which provide for that 30-year limitation period, as well as changes to the initial period. We fully support both amendments.
We also believe that new clauses 11 and 12, proposed by the hon. Members for Stevenage (Stephen McPartland) and for Southampton, Itchen (Royston Smith), warrant support. If the Government genuinely believe that litigation has a significant part to play in helping to fix the building safety crisis, they need to give serious consideration to permitting a limited class of claims relating to pure economic loss, rather than just actual physical damage.
Clauses 129 to 134 concern the new homes ombudsman scheme, the creation of which we support, albeit, as the Minister will know, with some concerns about its operational independence and the composition of the new homes quality board. While we remain unconvinced that the new ombudsman and the new code will lead to a step change in developer behaviour and thus a marked increase in the quality of new homes, we see no issue with the scheme being expanded to cover Wales and Scotland, so we support the various Government amendments to that effect under consideration today.
Finally, I want to turn to amendments relating to the fundamental and contentious issue of leaseholder liability. I know I need not detain the House for any great length of time on why it is essential that greater legal protection for leaseholders be put on the face of the Bill.
Janet Daby
My hon. Friend is making excellent progress. My constituents living in unsafe homes due to unsafe cladding feel trapped and isolated in their homes. Does he agree that the Government need to work with lenders to see if properties caught up in the cladding scandal can be sold and re-mortgaged?
Matthew Pennycook
My constituency neighbour, who shares many of the same case load issues relating to the building safety crisis as I do, is absolutely right. A lot that flows from the Secretary of State’s statement last week depends on lenders, insurers and other stakeholders agreeing with the Government’s approach. We wait to see whether that bears any fruit. We know there have been occasions when the Government have made announcements and the industries in question have not responded as the Government expected.
For many leaseholders across the country, lots of whom are first-time buyers who diligently saved to purchase their homes, all but the most superficial remediation and secondary costs will simply be unaffordable. The reason the building safety crisis has caused and continues to cause such abject misery is because so many blameless leaseholders not only feel trapped in their homes physically, mentally and financially, but because they feel let down by the Government. Despite allocating significant public funds to cover the costs of remediation for some buildings and repeatedly promising that all leaseholders should be fully protected, the Government nevertheless, until very recently, had only committed to shielding a proportion of leaseholders from unaffordable costs, which were defined by one Minister a few years ago, if memory serves, as “anything short of bankruptcy.” I must make it clear to this Minister that it has come as a bitter blow to the countless blameless leaseholders across the country who have already been hit with huge bills, both for remediation works and for interim fire safety measures, that the Secretary of State made clear in his statement last Monday that the Government have no plans to secure retrospective financial redress for them. We think that Ministers need to think again about that issue. However, he did commit in that statement, repeatedly and clearly, to bringing forward amendments to the Bill to provide leaseholders with the “most robust legal protection”, extending to
“all the work required to make buildings safe.”—[Official Report, 10 January 2022; Vol. 706, c. 291.]
Given that he rarely misspeaks, that clearly suggests historic non-cladding and historic external wall-related defects. I hope that the Minister can confirm as much today when he responds on this group of amendments.
That robust legal protection for leaseholders is what this legislation must contain, and it is disappointing that no Government amendments providing for it have been tabled for consideration today.
Matthew Pennycook
I am going to make some progress, if the hon. Member will forgive me. That legal protection must be delivered as a matter of urgency and in a way that brings immediate protection for leaseholders, because, as I have said, there is currently nothing, aside from the limited clauses in the Bill requiring them to take reasonable steps before they do, to prevent even more freeholders from passing on costs, as we know many are in the process of doing, even now, including several in my constituency, such as the Comer Group in the case of Mast Quay in Woolwich. As well as providing for the establishment of a building works agency, which we believe remains necessary if the Government are to ensure that the pace of remediation across the country is accelerated and that works are properly carried out and certified, our new clause 3 seeks to provide the maximum legal protection possible for leaseholders facing potential costs to fix historic cladding and non-cladding defects, irrespective of circumstance.
Jonathan Edwards
I fully support Labour’s new clause 3 and if there is a vote on it, I will be supporting it, particularly as subsection (6) would protect the small buy-to-let landlords the right hon. Member for Leeds Central (Hilary Benn) has referred to and I referred to in an intervention. As the hon. Gentleman knows, the scheme in Wales will be administered by the Welsh Government, so may I take it and inform my constituents that new clause 3 will be the basis of the scheme that we see apply to Wales, where Labour is in government?
Matthew Pennycook
It does apply to England and Wales, and I think that as a general point the Government need to co-operate much more closely with the Welsh Government on action on the building safety crisis.
As I was saying, new clause 13, proposed by the hon. Members for Stevenage and for Southampton, Itchen, does the same and we fully support it, as well as their new clauses 5 and 6. We will seek to divide on new clause 3 today, simply to reinforce to the other place the importance we attach to the issue of leaseholder protection, but we do want to work constructively with the Government on this matter in the period ahead, in the light of the change of tone and approach signalled by the Secretary of State last week. We hope that the absence of Government amendments providing for robust leaseholder protection today simply reflects the fact that they are not yet finalised and that we can expect them to be tabled, perhaps along with an amendment implementing a version of the polluter pays proposal, in the other place in due course. The Minister has had a couple of chances to answer this point and obfuscated to a certain extent, so I would appreciate it if he would clarify whether that is indeed the case in his closing remarks on this group, because many leaseholders across the country are seeking certainty on that point.
Mr Betts
Does my hon. Friend agree that there is a fundamental point here: if for individual blocks of flats we cannot track down the developer or whoever else was involved in the construction and get them to pay through the legal process, and if the Secretary of State’s charm offensive does not persuade the industry as a whole voluntarily to cover these costs, would it not be absolutely wrong if the costs were, effectively, passed on to the social housing sector through cuts in the Department’s budget? Is the alternative, therefore, to look at an extension of the levy or taxation scheme to make the industry pay if it will not voluntarily agree to do so?
Matthew Pennycook
The Chair of the Select Committee is absolutely right; it would be a travesty if the Government or this Department were forced to raid the affordable homes programme to cover the costs of fixing the building safety crisis. In those circumstances, they would have to look at other options, such as those he has set out.
I will finish by using this brief opportunity to put to the Minister four issues relating to those expected Government amendments on leaseholder protection that arise directly from the commitments made by the Secretary of State last week. The first issue relates to the point mentioned by my right hon. Friend the Member for Leeds Central (Hilary Benn) in his intervention: which leaseholders will any such robust legal protections cover? The Secretary of State’s statement last week caused a great deal of confusion in that area, so can the Minister clear up the matter today by making it clear that any such protections will apply to all leaseholders, not just leaseholder-occupiers and certainly not just the leaseholders that the Government deem, based on some unknown or unworkable criteria, to be deserving?
Several hon. Members rose—
Madam Deputy Speaker (Dame Eleanor Laing)
Order. I remind the House that today’s proceedings are divided into three. This is the first group of amendments, new clauses and new schedules that relates to part 5 of the Bill. There will then be another stage on Report that will allow Members to speak to amendments on the other parts of the Bill. After that, there will be Third Reading. Members should not make general speeches about how they feel about the Bill at this point; this part of the proceedings very specifically relates to part 5.
As all the Back-Bench amendments to part 5 have been tabled by Mr Stephen McPartland, I will call him to speak first. At this point, I am not putting on a time limit, because I hope that we will manage without one, but we have less than an hour left for this part of the Bill, so I hope that Members will bear that in mind.
Stephen McPartland
In the interest of helping with time, I assure you, Madam Deputy Speaker, that after what the Minister said and the conversations that we have had in the past few days and overnight, we will not be pressing any of our amendments, which are probing amendments, to a vote at the end of the debate. That will hopefully help the next debate.
Like you, Madam Deputy Speaker, I saw many hon. Members on both sides of the House stand to signal that they wish to speak. I will try to keep my remarks as brief as possible so that some of them get more than their normal three minutes on this issue. They are all watching eagerly, so I will do my best.
I start by recording my thanks to the Minister, the Secretary of State and the Prime Minister. The Prime Minister’s intervention has been key in getting us to where we are on leaseholders. He has personally got involved and tried to ensure that we can support them. It is a subject that is close to his heart. To be frank, without his personal intervention and support, we would not have got to where we are, which is a good place for leaseholders.
Millions of leaseholders up and down the country are watching this debate and they are terrified about what is happening to them. They have had the fear of bankruptcy hanging over them for several years. We have been running this campaign for the past 18 months. In fairness to the Government and the Minister, we now have over £9 billion of Government support put forward with other funds on top, so it would be churlish of us, with the very technical amendments I am going to speak to shortly, to try to hold the Government to these specific issues. The Minister, the Secretary of State and the Prime Minister himself have made it clear that they are very keen to work with us and cross-party to improve the Bill in the Lords and when it comes back to this House, and for that I put on record my thanks.
Jonathan Edwards
I congratulate the hon. Member on his amendments and his work on this issue. Does he agree that there is a requirement to move with haste? A constituent of mine who has contacted me is facing a bill of £25,000, with a demand for £5,000 by the end of this month, so the Government really need to move very quickly.
Stephen McPartland
I completely accept that point, and the hon. Member will know that we are all in the same position. Every single community is affected up and down the country; there are millions of leaseholders.
The new approach that the Government are taking mirrors a lot of what we want in our amendments on these issues. For example, a number of the amendments I am going to speak to refer to redress. We asked for a period of 25 years, and the Government have come forward with 30 years. We asked for the time in which someone can make a claim to be extended from 90 days to two years, and the Government have come forward with one year. That demonstrates the communication going on behind the scenes and what we are trying to do to deliver success for leaseholders. In some ways, it does not really matter what our opinions are in this place; what matters is what we deliver for those millions of leaseholders up and down the country, so that they do not face bankrupting bills and huge mental health issues.
Sir Peter Bottomley
Without the calm persistence of my hon. Friend and our hon. Friend the Member for Southampton, Itchen (Royston Smith) in this parliamentary year and the one before, we would not have got this far and, on behalf of 1 million leaseholders in all parts of England and Wales, may I say that we are grateful for their efforts? Will they please keep going?
Stephen McPartland
I am very grateful to the Father of the House, and I would like to thank the cladding groups up and down the country, such as End Our Cladding Scandal UK, the UK Cladding Action Group and the Leasehold Knowledge Partnership. I record my thanks to the Father of the House and all my colleagues on both sides of the House who have done everything they can to get us to a position where we are working together to secure something that is in the best interests of leaseholders. The way in which the tone has changed, as all of us who have been working on this Bill have seen, and the way in which we now feel we can give the Government room to try to improve the Bill, give us great hope.
A number of the amendments—new clauses 4 to 13 —are specific technical amendments to give the Government examples of how we could fix the problem. The Government have tabled 70 amendments, but of course they still have to come forward with the amendments that we want in the Lords, otherwise the Bill will come back to this House and we will be in the same position, so I think it is important that we continue our efforts.
One of the issues facing leaseholders was the real frustration that VAT is levied on some of the costs. We are asking for the VAT to be scrapped, because when the Treasury puts forward £5 billion, £1 billion of it will be going back to the Treasury automatically; the frustration is understandable. Another example we give is how a previous defects Act—the Defective Premises Act 1972—could be used, as it was for properties with prefabricated concrete. The legislation exists, and these leasehold properties could be incorporated in it. There are a variety of other amendments on technical points, and they are the means of giving the Government examples of how we can support leaseholders.
There is a huge opportunity with new clauses 4 to 13 for the Government to think a little further outside the box. For example, I have a property in my constituency, Vista Tower—one of the famous properties—where the remediation costs are £15 million for 73 flats. The leaseholders paid £200,000 for their flats, and their remediation costs are £212,000, so hon. Members can understand what we are doing and why we originally got involved in this debate. Those people are beyond bankrupt. The mortgage companies are losing money, and that was before the leaseholders got into paying over £300,000 for waking watch and all the other interim costs that have added to the bills.
The Government have come with us and are working in a place where we can try to fix the problem, but there is still a lot more to do. Collectively across the House, we have to find a way forward. For that particular property, with the announcement that the Secretary of State made, leaseholders’ costs went from £200,000 down to £60,000. If we can get commitments from Ministers to include internal developer-responsible fire safety defects such as missing firebreaks, where the developers illegally constructed the building, leaseholders’ costs will collapse again.
I keep asking the Minister every time he looks at me, speaks to me or walks past me whether he will commit to protecting leaseholders in law with his amendments in the Lords. Obviously we all want that, and it is what leaseholders want, because we want to be in a position legally where we can say to a management company or freeholder, “You can’t charge them for this, and you can’t tell them”—as the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) has referred to—“that they’ve got 28 days to make this payment.” That is ridiculous, and it is not fair. The Government are working with us and listening to us, but there is a lot more work to do. I would like to continue working with the Government to ensure that we get out there and protect leaseholders.
Madam Deputy Speaker is now staring at me, so I shall bring my remarks to a swift conclusion. I would like to thank everybody who supported us throughout the campaign. We are not there yet, but we are very close to getting there and supporting millions of constituents up and down the country. I will not be pressing my amendments.
Mr Clive Betts (Sheffield South East) (Lab)
The principle that leaseholders should not have to pay for issues that are not their responsibility, as they bought properties in good faith, was first established in the Select Committee report in July 2018. I congratulate the hon. Member for Stevenage (Stephen McPartland) on the excellent work he has done in pursuing this issue from the Conservative Benches. The Select Committee, on a cross-party basis, has pursued it as well. I checked today, and we have done five separate reports, all of which have said that leaseholders should not have to pay. The hon. Member for Harrow East (Bob Blackman), who is in his place, has been party to all those discussions and reports. We have worked on an absolutely cross-party basis, as is correct. It is welcome that the Secretary of State made his statement the other day and effectively confirmed that as well. We have made it clear that this problem does not just apply to cladding; it applies to other defects as well. That has been an important issue, which the Government did not accept to begin with but have now got to the point of accepting.
The Government have responded with the initial money to deal with the aluminium composite material cladding that was on Grenfell, and then with the £1 billion—extended to £5 billion—building safety fund. That has been a step forward, but it will not cover the totality of the cost. We on the Select Committee have said right from the beginning that those who are responsible for defects on individual buildings should have to pay, but we recognise the impossibility of leaseholders taking on legal actions and being successful with them. Certainly, the Government are stepping in and adding some weight to try to involve the developers of buildings—the building firms that did the construction work—and the product suppliers. Of course, an awful lot of responsibility lies with them; Dame Judith Hackett’s report identified how many of the suppliers of products and materials were hawking their wares from one testing station to another until they found one that approved them. That is completely unacceptable, and they should be held to account as well. In the end, there will be many buildings for which even the owners, and certainly the initial developers, cannot be properly traced, and there may have to be a responsibility placed on the whole industry.
I come back to the point that I just raised with my hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook): what happens if the industry does not volunteer the money that is necessary? Let us make it clear that social housing providers are already having to pay some of the costs. On the initial scheme for ACM cladding, social housing providers were treated equally with private owners. That has not been the case since with the building safety fund. A social housing provider has to show almost extreme distress to get any money.
What is happening now? An interesting article in Inside Housing says that social housing providers, particularly housing associations, are passing on 500% increases in service costs—not just to leaseholders, but to tenants. It is absolutely wrong that among people living side by side in a flat, the leaseholder should eventually be protected through the legislation that we hope eventually to see from the Government, which is to be welcomed, while the tenant next door has to pay extra costs—not merely for their own flat, but possibly to take up the costs on the flat next door, which is now owned by a leaseholder. That cannot be right, that cannot be fair, and that cannot be just. The challenge is to treat social housing tenants the same. We are hearing evidence all the time—from housing associations, the National Housing Federation, the Local Government Association and councils—that the costs that are being incurred by social housing providers are not merely adding to the costs of their tenants but mean that they are cutting back on future house building programmes. That is what is happening and it has to be addressed.
Andy Slaughter (Hammersmith) (Lab)
It is happening now on a very large scale. This is what one of my major social landlords said about remedial works:
“The cost of this…is in the tens of millions of pounds and has led to us having to significantly reduce our development plans and slow down some of the investment work that we had planned to complete in our existing homes. If we were to try and fund the costs of this work for our leaseholders…this would effectively mean that social housing rents were being used to subsidise costs for leaseholders.”
It is robbing Peter to pay Paul.
Mr Betts
Absolutely. We have those immediate problems with the costs that are being borne by social housing providers.
If, in the end, the Government cannot get the money from the industry on a voluntary basis, and the Treasury is saying that there will be no extra money from the central pot and no extra taxation or levy, then there will be a cut to the Department’s own programmes, which effectively means the social housing programmes for the future. That will be another cutback to the badly needed homes that should otherwise be built. I say to the Minister and to my own Front-Bench colleagues that, in the end, these are the principles that we have to achieve: no costs on leaseholders, no costs on tenants, and no cuts to the future social house building programme either.
Several hon. Members rose—
Madam Deputy Speaker (Dame Eleanor Laing)
We have less than three quarters of an hour left, so I will have to impose an initial time limit of four minutes on Back-Bench speeches.
Bob Blackman
It is a pleasure to follow the hon. Member for Sheffield South East (Mr Betts), the Chairman of the Select Committee. He and I have spent many happy hours poring over this draft Bill, in the first place, and, going forward, different reports.
Essentially, there are four separate categories on remediation that fit within the Building Safety Bill. The first, as everyone agrees without question, is, for tall buildings of seven storeys and above, removing the cladding and making the building safe. The second is the buildings of six storeys and below for which the Government came up with the forced loan scheme. I am delighted to see the death of that scheme. I could never see how it was going to work, so that is good news. The other two categories are the tall buildings with fire safety defects and the buildings of six storeys and below with fire safety defects. We can all agree that the one set of people who should not have to pay for remedying this are the leaseholders, because they never designed them and they never knew anything about them before they moved in. However, this scandal still goes on. Only last week, a planning application was presented to the planning committee at Tower Hamlets for a building of 52 storeys with only one staircase as a route to escape. The building industry does not show any signs of correcting what has been done, so we have to correct it.
I take my right hon. Friend the Minister’s remarks seriously. I look forward to the amendments that are going to be moved in the other place that I hope we can then debate here. However, these are very complex areas and there are immense questions to be answered. I well remember that when we debated the Bill that became the Fire Safety Act 2021, we were told that protecting leaseholders should not be done then but we should wait for the Building Safety Bill—and here we are, right now. The crunch issue is that leaseholders up and down the country have received enormous bills. Some have made arrangements to pay; some have even paid them. They are told, “Tough—you’ve paid and you won’t be compensated as a result.” If we had moved the amendments to the Fire Safety Act, we would have protected those leaseholders, but we failed to do so.
As I have said to the Secretary of State, I welcome his commitment to resolve this issue, but I trust that when we come to the amendments on remediation, we will do two things. The first is that we will retrospectively put a date on what happens. It will not be acceptable to wait until this Bill becomes law and facilitate the unscrupulous individuals who may bill the leaseholders between now and then, which would be outrageous.
The other issue that is terribly important in this whole process is that at some stage, with regard to all the buildings that we are talking about, someone signed off on their being in accordance with regulations. Insurance covers that particular aspect, so here is an alternative solution. Given that insurance companies insured the people who signed these buildings off, and they were clearly not in accordance with the regulations at the time, let us make claims against the insurance companies that still exist and could be made to pay for this remediation. That would be a much better solution than either the taxpayer paying or robbing the leaseholders. It would at least give us some protection.
I welcome the Government amendments, and I welcome the conversion that has taken place in the Department to what the Select Committee said in the first place. We are making progress. We are almost there. We have only a little a little way to go before every single one of our recommendations has been endorsed. We look forward to that happening, and indeed to having a Bill of which we can all be proud, which protects leaseholders and protects the industry for the future.
Patricia Gibson (North Ayrshire and Arran) (SNP)
Let me begin by echoing the sentiments expressed earlier. We must be mindful of all those who died tragically in the Grenfell fire, which prompted much of the work that we are debating today.
The majority of the Bill relates only to England or to England and Wales, so I will necessarily keep my remarks on behalf to the Scottish National party short. I am sure that that will be music to many ears in the Chamber.
We can all agree on the necessity and the importance of raising the standards of conduct of developers. House buyers need to have confidence in the safety and quality of their homes, which is why the Scottish Government support the principle of the new homes ombudsman scheme proposed in part 5 of the Bill. Housing is devolved to the Scottish Parliament, who could devise their own provisions for a Scottish system, but the benefits of having a single system to operate on a UK-wide basis are self-evident. However, it is also true to say that the scheme must fully meet the needs of Scotland, so this Bill ought to confer greater powers to Scottish Ministers, similar to those of the Secretary of State. It is essential for part 5 to acknowledge and respect the devolution settlement. The Secretary of State and, I am sure, the Minister will understand that SNP co-operation in relation to the new homes ombudsman scheme in no way diminishes our opposition to the form and intention of the United Kingdom Internal Market Act 2020.
It is fully expected that meaningful consultation will minimise the risk that the ombudsman scheme is contrary to the wishes and aspirations of the Scottish Government, so that homeowners in Scotland can benefit from it. If that turns out not to be the case, the Scottish Government have the option to withdraw from the scheme without contractual penalties and other repercussions. No one would wish to see that happen, and we need to be assured that the Minister and the Department will work, and continue to work, in a collaborative, consultative and collegiate way with the Scottish Government to deliver the scheme for Scotland.
In that spirit, I say to the Minister that given the confusion and delay over issues of cladding, nearly five years since the tragedy of Grenfell, we need a clear commitment that he will work constructively with the Scottish Government to provide clarity about consequential funding, so that the Scottish Government can plan their response appropriately. Will he tell us how much funding there will be, and when it will be delivered to Scotland?
I understand that the Secretary of State has committed himself to working with the Scottish Government on these matters—and no doubt the Minister has done so as well—but certainty is important. I am sure the Minister will understand that, so I am keen to hear what he has to say about the timing, levels and delivery of the funds that Scotland can expect.
Felicity Buchan (Kensington) (Con)
Let me begin by paying tribute to my constituents and the community of north Kensington.
I welcome the Bill, and I welcomed last week’s announcements that leaseholders in intermediate buildings would not have to pay for the remediation of cladding and other fire safety defects. I understand from the Minister that this will be incorporated in legislation in the other place. I want to stress how crucial it is that we get that right: it is critically important that we have robust legal protection for leaseholders. I welcome the statement that those on the Front Bench will listen to all good ideas, but it is important for us to be able to put this into practice quickly and effectively. I ask the Minister, as did my hon. Friend the Member for Harrow East (Bob Blackman) and the Chair of the Levelling Up, Housing and Communities Committee, the hon. Member for Sheffield South East (Mr Betts), to ensure that when the Bill comes back to this place, there is the opportunity for full debate and full scrutiny.
A number of Members said that some developers and freeholders have been behaving very badly, and I have such a situation in my constituency. Leaseholders in Collier House have paid for the remediation and the building is eligible for an existing fund, yet the building owner, outrageously, will not apply for those moneys. He does not want to get involved because the leaseholders have already paid. Such situations are clearly wrong in terms of how people should behave. I ask the Minister, as colleagues have, to ensure that we look to remedy situations where leaseholders have paid and take that into consideration. We need to find solutions, because they paid thinking that they were doing the right thing, and they may now be out of pocket as a result.
In conclusion, I very much welcome the direction of travel. However, it will be critically important to get the proposals right in the other place, and I ask that we have the opportunity for full scrutiny of what the other place decides.
Matt Rodda
I offer my support to the hon. Member for Kensington (Felicity Buchan). My thoughts are still with her community five years after the disaster. I am sure that the whole House would echo that support for her community.
I also thank the Minister for allowing me to intervene and for partially addressing my points. However, I want to expand on them, because they are very relevant to our discussions. The challenges for many people in my community will come from the sheer complexity of the situation. It is extremely stressful for many leaseholders and tenants, as Members across the House have said. It is very difficult for them to live in buildings with enormous problems. In many cases, they have suffered from these problems for some years, living in a period of prolonged stress and difficulty—both emotional and financial stress—and I look forward to working with the Minister and the Government to try to deal with this very serious problem.
I will highlight some of the practical difficulties that we need to tackle, as the shadow Minister, my hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook), mentioned. The great difficulty for many residents in my constituency and others is that the routes to redress are limited. In many cases, the legal route that the Minister outlined will be extremely difficult.
Perhaps I can describe the type of blocks that I am referring to. Many of the cases in Reading and in Woodley—a town next to the main town of Reading—involve low-rise blocks, so there has been a delay because they are lower- rise. There are problems from issues other than cladding, and many tenants and leaseholders live in these blocks. In one of the biggest neighbourhoods in Reading, there is a large area called Chatham Place, with a series of blocks and a series of different problems, including wooden cladding, balconies and a range of other things. There is also a combination of leaseholders and social housing tenants in the same block. There are multiple problems, and the Minister is right to explore the legal route to redress, but there are very serious challenges because of the difficulty of getting a group of people together to take action and of tracing the legal entities, companies, developers—in some cases, the developers are overseas—architects and the range of others involved. I ask the Minister to work with Opposition Members to look at the issue again and explore other avenues for toughening up the Bill. I look forward to the Lords amendments and I ask him to come back and look at this Bill again in more detail.
I wish to make two other points, also on behalf of local authorities and housing associations. The first point, which was raised with me by a local council that represents a town centre ward in Reading, was the difficulty, even now, for local authority officers to understand the exact guidance on different types of cladding. The issue of flammable insulation in walls was raised with me and there does not seem to be a clear answer on that. Secondly, in my area, housing associations were some of the first building owners to take action. However, as was rightly mentioned, these housing associations and their tenants could inadvertently be penalised. Please will the Minister look into that and provide reassurance?
Sir Robert Neill
I restate my welcome for the Minister’s tone and approach to the Bill, as well as that of the Secretary of State, and I pay tribute to my hon. Friend the Member for Stevenage (Stephen McPartland). The Minister’s approach does enable some of us to support the Government in the Lobby tonight when we might have been tempted to do otherwise, given their clear undertaking to look at the substance—at any rate—of the significant number of amendments in my hon. Friend’s name, which I and many other Conservative Members have signed. We look forward to taking that forward.
I stress again in particular that leaseholder protection is critical. The right hon. Member for Leeds Central (Hilary Benn) made an important point on that, and as someone who has spent all his working life involved in litigation of one kind or another, I can tell my right hon. Friend the Minister that the legal route is always a risky one and always an expensive one.
The real problem that we need to deal with is the position of residents such as mine in Northpoint in Bromley. Their flats are unmortgageable, they have exhausted their funds on a waking watch and other remedial measures, and they cannot realistically rent out their flats—perhaps some can—so it is not realistic to suggest that collectively or individually they could fund legal action against their landlord, which is an offshore property trust. I have nothing against giving leaseholders the ability to litigate—where that can be done, that is fine—but that will not be the answer for many people, so we need a fail-safe system to protect them. The best route is a form of liability clearly falling on the developer. That is supported by the Law Society, which recognises the value of litigation in its right place but also its limitations, and I hope that the Government will work with the Law Society, which has real expertise in such matters, to strengthen the provisions.
I turn to finding a means of capturing the consequential defects, which I have previously raised with the Minister. We have done a lot on that already—I welcome what was done with the waking watch relief fund and so on—but there are still a number of areas not yet explicitly covered by the Bill’s provisions where the fault, and therefore the cost on the leaseholder, flows clearly and demonstrably from the regulatory failure or the failure by the developer to build in accordance with the regulations then in place. My right hon. Friend and I have talked about the protection required for that—I am glad that the loan scheme has gone, because that was not fair—which could be some form of insurance arrangement, or the Government by some means funding the cash flow to enable works to be done and recouping that through a levy system from those in the industry who are at fault in some way. I think that would be perfectly workable. He has moved a good way towards that, and I ask him to continue talking to those involved about taking that one stage further to deal with that important issue.
Finally, I specifically commend to the Minister new clause 10, which stands in my name and that of a number of hon. Friends, which is about the 25-year post-sale insurance cover. That is really important. Again, the Law Society supports the measure, and I think that there is a lot of recognition of the good sense of that from the insurance sector, too. If he could take that on board, that would remove a great deal of risk of future litigation, should—heaven forbid—things go wrong in the future.
We have had a constructive set of proposals from the Government, but there is still more to do. I thank the Minister, but I hope that, in the spirit in which he started, he will take away the means to work constructively across the House to deal with people who are in an appalling situation through absolutely no fault of their own. That is what we need to stress time and again.
Daisy Cooper
When we started on the Fire Safety Bill, I tabled the first amendment to the Bill to try to protect leaseholders from these unimaginable, eye-watering costs. The Government said repeatedly that that Bill was not the place for it. Eighteen months on, we have had a huge cross-party effort, and while we are considering this second piece of legislation there is still no guarantee to protect leaseholders from those costs in law. The Government’s tone has changed, and I welcome that, but their position has not. I welcome talk about working cross-party and collaboratively, but I urge the Minister and the Government to make clear assurances on the record today, because I do not believe that the good will displayed in the House will last much longer if we do not get better answers.
The Secretary of State announced last week that the loan scheme will be scrapped and that cladding costs will be covered for buildings over 11 metres. Where is that statutory protection? It should be on the amendment paper today, and we should be discussing it in this House, not kicking it into the long grass.
On non-cladding problems and fire safety defects, the Minister must be aware that since the Secretary of State made his announcement last week there has been a huge rush of bills and enforcement notices because freeholders think they can get away with suddenly asking leaseholders to pay for these first safety defects. Will the Minister make a strong statement at the Dispatch Box today that he intends to issue a moratorium on freeholders issuing such enforcement notices, as that is what is needed?
I welcome that action under the Defective Premises Act will be extended to 30 years, but the Minister knows as well as I do that, as we showed in Committee, the current legislation is condemning leaseholders to years and years of litigation, litigation, litigation. In some cases, they may have to take their freeholders to court twice before they can take those responsible to court. That is not a satisfactory situation.
The Government keep saying that they want to work with freeholders and developers to find a voluntary solution, but cladding victims and fire safety victims have given the Government the answer time and again. They are asking the Government to stump up the cash to make homes safe and to use their power to go after those responsible.
I listened very carefully to the Minister’s carefully crafted answers on when we might see some of these legal protections. I note that the Bill’s Second Reading in the House of Lords is scheduled for the start of February, yet the Secretary of State has indicated that he wishes to continue his discussions with those responsible until March. When questioned by other hon. Members on whether the House of Lords will see these amendments, the Minister said it “may include” in the other place, not that it “would include”. Will he make a clear commitment from the Dispatch Box today that the statutory protections announced last week will, in fact, be amendments to this Bill, that those amendments will be introduced in the other place, and that sufficient time will be provided in this House for us to discuss them? If the Government make any attempt to railroad this Bill through without those protections in place, he will have a very significant cross-party fight on his hands.
Sir Mike Penning
I do not think there is a conflict, but I refer to my entry in the Register of Members’ Financial Interests. As an ex-fireman, although my concerns and thoughts are with the victims of the Grenfell fire and their families and loved ones, I say that we must put on the record our thanks to the emergency services, and particularly the firefighters, who have to live with what they saw—most of them will never have seen such an incident in their life. They went in one direction while, quite understandably, the public went in the other.
I do not disagree with anything I have heard in the House today. My constituency neighbour, the hon. Member for St Albans (Daisy Cooper), and I are as one. If this is not sorted in the other House, as promised, we in this House will sort it. That is not a threat but a promise. The Minister, the Secretary of State and the Prime Minister, as we heard, have been brilliant in changing direction. They realised the risk that no thought at all had been given to leaseholders.
I declare an interest because my daughter has a leasehold property. When she bought it, why would she have dreamed that this situation would occur and she would face such penalties?
When I intervened on the Minister, I said I would mention a way out. Those hon. Members who have been here long enough will remember that I took the Mesothelioma Act 2014 through this House. The Act compensated people whose lives, through no fault of their own, had been devastated by asbestos. We could not fine the insurers, the companies, the directors or the shareholders, so they had suffered and they had not got compensation. This Bill is an opportunity to resolve the problem for leaseholders where we cannot impose fines.
There is no reason why leaseholders should drag themselves through the courts. We are trying to sort the matter out in this House. We should put a levy on the insurers. Without any doubt, the insurers got the premium from these companies, because otherwise they would not have been allowed to build the properties, so liability insurance was in place. The fact that we cannot find the developers—some have gone offshore in parts of my constituency—is irrelevant now. If we can find them, fine, but if not, we will levy the insurers.
We do not need to reinvent the wheel. We have already done it with the mesothelioma Bill. Originally, we gave the victims 80% of the compensation that they would have got through the courts. Eventually, we gave them 100%. This House was unanimous in its support of the Bill as it went through its stages. It was probably one of the easiest Bills that I have taken through the House—apart from having to pronounce mesothelioma, which, to this day, still troubles me, as Members may have notice.
This is an option that I have mentioned to the Minister before. I have said that his civil servants can come and talk to me, or to anybody at the Department for Work and Pensions who took that legislation through. I am more than happy for that to happen. Sadly, though, no one has talked to me about this—I am gently looking towards the civil servants in the Box, which I am not meant to do. This is a great opportunity to right a wrong that we can see coming down the line here.
Sir Peter Bottomley
Were claims to go through the courts, they would be aimed at the developers, the builders, the architects, the surveyors, the component suppliers, the building controllers and the building regulations specifiers, all of whom were insured or operating under Government. We need to get them altogether around the table and say, “What will be the total liability?” We would save the lawyers’ costs and get the money in very fast. Leaseholders will be protected. Their homes will be safe and they will be saleable.
Sir Mike Penning
The Father of the House is absolutely right. When we put to the insurers this idea that they should compensate those people whose lives and loved ones had been affected by the asbestos, did they like it? No, they hated it. They fought tooth and nail not to do it, but we did it, and we did the right thing. When we come to part 5, Mr Deputy Speaker, I hope to catch your eye again.
May I just touch on a point that many colleagues have raised today? If people, in fear of threatening letters from lawyers and bailiffs, paid the remedial costs on their lease in good faith, how can it be right for us in this House to say that they did the wrong thing, while the people who held off paying those costs did the right thing? That sticks in my throat. It cannot be right that we penalise people who feel that they did the right thing. I said this to the Secretary of State during his statement. I am not saying that he dismissed it; he probably just thinks it is very difficult. Yes, it is very difficult, but that is what this place is for—when things become difficult, we resolve the problem. We have an opportunity with the insurers.
As we have heard from Members across the House, these bills are dropping on people’s doorsteps now, and it is happening in my constituency. They are innocent people who have done nothing wrong other than wanting to get on the housing ladder. Today we have an opportunity to address this. I agree with my hon. Friend the Member for Stevenage (Stephen McPartland) that we do not need to move these amendments now. We will wait to see what happens when the Bill goes to the Lords, but by golly we will move them if it comes back.
Hilary Benn
The one thing that has united the House today has been support for the principle embodied in new clause 13. There is a huge burden of expectation now on the shoulders of the Minister and the Secretary of State because of the commitment that was given in the recent statement, and we are all anxious to see how the Government intend to fulfil it.
The right hon. Member for Hemel Hempstead (Sir Mike Penning), whom it is a great pleasure to follow, asked earlier what happens if the funds are not forthcoming from those who are still in existence who were responsible. The answer is that there is a mechanism already in place, which is the levy that the Government previously announced. I have no objection to adding insurers to those who are levied, because it is a collective failure on the part of the industry. That is the point. Even if we put on one side debates about cladding, for every one of the buildings that have been discovered to have missing fire breaks, I can guarantee that the plans specified that the fire breaks should be installed, but they were not. As a result, we have a generation of shoddy, unsafe buildings and it is our constituents who are feeling the pain.
Secondly, once we have sorted out who is paying, we really have to find a way of getting the work done. I must say to the Minister that having observed, as we all have, the back-and-forth between managing agents, freeholders, developers and the building safety fund, we can see that that is not a very efficient way to solve the problem. That is why the buildings works agency approach that my hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook) spoke about earlier is such a good idea. It is a good idea for two reasons. First, we would have a body whose job was to find, fix, fund and then recoup through the levy that we have discussed, which would be quicker. Secondly, it would avoid the stand-offs that are taking place. I have seen one case where the expert advisers to the building owners have said that the zinc cladding on wooden battens is not safe, but the building safety fund has said that it is.
Another reason that the Government should adopt our proposal for a buildings works agency is that it would be the perfect vehicle to review the safety assessment of all of the buildings, which the Secretary of State spoke about last week, and in the end be the referee—the judge and the jury—that says what is safe, what works and what work needs to be done.
Kelly Tolhurst (Rochester and Strood) (Con)
I want to thank hon. Members across the House for the work they have put in. I also pay tribute to the Minister, whom I have spoken to on a number of occasions about the issues facing my constituency. I know that the Government have been listening and working really hard with colleagues to get to a place where people can be satisfied. As has been mentioned, the landscape is really complicated and the Government are trying to right some wrongs of the past.
I very much welcomed the Secretary of State’s statement last week, but I want to echo what has been said by colleagues across the House about what comes next and the protection that we will give to leaseholders. For example, at the Wharf in my constituency there has been a lack of clarity and transparency from the management company about the cladding and fire safety works that need to be carried out. The management company, Y&Y, is in the process of taking the leaseholders to a first-tier tribunal to award costs, adding a 5% commission. Since the statement last week, I have asked the management company if it could please pause this activity until the Government have moved further, but it has said that it will continue to go to the first-tier tribunal for costs. That will put some of the leaseholders in a really difficult position. Some of the people occupying those properties will not be able to pay those bills if the management company goes ahead with its actions before they have been given any security by the Minister, so I want to labour that point. We are also talking about historical payments that have been made, but this is happening as we speak.
Sir Mike Penning
One option for someone with a freehold property is normally to claim on their buildings insurance’s legal protection. A leaseholder has to pay the premium to the freeholder but does not have any protection. This is another area of the law that could be changed.
Kelly Tolhurst
My right hon. Friend is quite right. I welcome many of the amendments, and I welcome a lot of what is in the Bill. I am pleased with the extension on limitations.
During covid, a fire ripped through a building on the Causeway in my constituency. Again, it is not a high-rise block and is under 18 metres. Other hon. Members have mentioned firebreaks and the lack of such work. Coincidentally, further structural defects have been found in the investigation work carried out after the fire. They would not have been found if the fire had not ripped through the building in 2020.
As my right hon. Friend the Member for Hemel Hempstead (Sir Mike Penning) and my hon. Friend the Member for Harrow East (Bob Blackman) said, these buildings have been signed off. I was a marine surveyor in a previous life, and if I had signed off the builds of boats that had major defects, my professional indemnity insurance would have had to pay out and I might not have got insurance next time around because of my poor performance. How is it acceptable that people can sign off such buildings and give certificates to the residents—our constituents—who buy them? That gives the residents confidence in the quality and safety of what they are buying. We need to look at the insurance argument; it is a valid point. To be frank, it is a scandal that those poor individuals have bought those buildings. The profession has a lot to answer for, as far as I am concerned.
Ultimately, I want to press the Minister on what assurances and comfort he can give my constituents who are watching the debate and who have been following the Bill with bated breath for many months, hoping that it will be their salvation.
Shabana Mahmood (Birmingham, Ladywood) (Lab)
I shall speak to Opposition new clause 3 and to the amendments that, although they will not be pressed to a vote this evening, would protect leaseholders from the costs of not only cladding removal, but the remediation of non-cladding defects.
I can hardly believe that it is four and a half years since the horrific fire at Grenfell, and still we are fighting for the robust legal protection that leaseholders in my constituency and across the country need and deserve. It is too easy to assume that removing cladding is the beginning and end of the scandal; the costs of remediating non-cladding fire safety defects are just as ruinous, and blameless leaseholders should not be picking up those costs. I have seen for myself the extent of fire safety defects at various buildings in my constituency, including the Brindley House development, where the scale of the missing firebreaks and other defects was truly shocking. The people who were responsible for putting up that building were grossly negligent and, in my opinion, complete cowboys.
The regulatory failure whereby buildings were declared fit for human habitation when they contained defective or inappropriate fire safety measures, or when those measures were wholly absent, is staggering. When there were negligent and dishonest practices, the costs of remediation should not fall at the feet of my constituents. A commitment to full legal protection for leaseholders from all costs—both for the removal of dangerous cladding and for the remediation of all other fire safety defects—should have been added to the Bill today, because those issues are not new and have been the subject of intense debate for years.
Ministers and their officials know full well the contours of the debate and the issues at stake, so it is not good enough that the Government did not make such amendments today. Instead, we will have to wait to see whether full legal protection is made available when the Bill goes to the other place. We may understand parliamentary procedure and the different staging posts of a Bill, but to my constituents watching from the outside, every single staging post feels like a slap in the face when they are not given the full protection that they need and deserve.
I associate myself with the comments that have been made about insurance, particularly professional indemnity insurance, but I want to mention the increased insurance premiums that many of our constituents have faced across the country. I have been writing to the Government, the FCA and others for more than two years to ask for action against the insurance industry for the huge increase—the hike—in premiums that our cladding-affected leaseholders have faced. That increase bears no resemblance to the mitigations that our constituents have paid for to decrease the risks in their buildings.
People have paid hundreds of thousands of pounds for new fire alarm systems and internal compartmentation to try to bring the risk down in their buildings, yet that is never reflected in the insurance premiums that they have to pay. That is unconscionable. There are big questions for the wider insurance sector to answer, in addition to the buildings industry. It seems to me that someone who has profited from, for example, charging a building in my constituency an insurance premium of £700,000 in total, which has never come down, has some big questions to answer.
I hope that when the Minister brings the Bill back to this place, we get the time for adequate debate and the further amendments that we need. I hope that we take action on insurance and perhaps even—God help us—implore the FCA to do its job and stand by our constituents, who deserve the regulator’s protection. When the Bill comes back, I hope that it addresses all those issues, as it is high time that the Government did right by leaseholders.
Christopher Pincher
I congratulate right hon. and hon. Members on their contributions to this important debate and to the amendments that we are debating. In the short time that I have, I will say that I entirely agree with my hon. Friend the Member for Stevenage (Stephen McPartland) and the hon. Member for Birmingham, Ladywood (Shabana Mahmood), who raised the terrible plight faced by her constituents at Brindley House, as did the Mayor of the West Midlands, Andy Street. Too many people, for far too long, have been far too worried. We have to end this scandal.
Several hon. Members asked whether we intend to bring forward legal protections in the House of Lords. I assure the House that we do. We certainly want to ensure that all leaseholders in medium and high-rise buildings, who live in them or who used to live in them but have had to move out and sub-let because of the situation in which they find themselves, will have put in place the robust legal protections to which my right hon. Friend the Secretary of State referred. We want to work cross-party and with interested parties to ensure that those robust protections are right.
We believe that leaseholders should not be asked to pay anything further until those legal protections are in place, as was raised by several hon. Members on both sides of the House. I encourage any hon. Member who is aware of demands from freeholders that their leaseholders pay to make me or my officials aware of that demand.
I am also grateful for the points raised by my right hon. Friend the Member for Hemel Hempstead (Sir Mike Penning) and my hon. Friend the Member for Rochester and Strood (Kelly Tolhurst) about the, shall we say, peculiarities of the insurance system. Some of those are wider issues that go beyond the Bill, but I am happy to discuss how we can resolve such issues with them.
I will certainly work collaboratively with the hon. Member for Reading East (Matt Rodda). I am conscious that my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill) is right that there are limitations through mitigation, but the law can change the culture. That is part of the point of bringing forward the Bill—to change the culture of the sector.
We will instigate a summit with the sector to ensure that it pays what it owes, and if it will not pay voluntarily, we will introduce appropriate mechanisms to ensure that it does. I am conscious that the Father of the House, my hon. Friend the Member for Worthing West (Sir Peter Bottomley), referred to the Defective Premises Act 1972. I may have misheard him, but I think he suggested that that Act is not available for use by leaseholders. That is not correct. Leaseholders are able to avail themselves of the Act, as may any freeholder.
I am conscious, Mr Deputy Speaker, that I have only 14 more seconds in which to speak. Let me reassure Members that we want to work across the House to bring forward sensible legal protections in amendments in the other place, and we will do that as soon as may be.
Christopher Pincher
I beg to move, That the clause be read a Second time.
Mr Deputy Speaker (Mr Nigel Evans)
With this it will be convenient to discuss the following:
New clause 1—Review of payment practices and building safety—
“(1) The Secretary of State must, within 60 days of the day on which this Act is passed, establish a review of the effects of construction industry payment practices on building safety in general and on safety in high-risk buildings in particular.
(2) The review must, in particular, consider—
(a) the extent to the structure of the construction market incentivises procurement with building safety in mind,
(b) the extent to which contract terms and payment practices (for example, retentions) can drive poor behaviours, including the prioritisation of speed and low cost solutions and affect building safety by placing financial strain on supply chain,
(c) the effects on building safety of other matters raised in Chapter 9 (procurement and supply) of Building a Safer Future, the final report of the Independent Review of Building Regulations and Fire Safety, published in May 2018 (Cm 9607),
(d) the adequacy for the purposes of promoting building safety of the existing legislative, regulatory and policy regime governing payment practices in construction, including the provisions of Part II of the Housing Grants, Construction and Regeneration Act 1996, and
(e) recommendations for legislative, regulatory or policy change.
(3) The Secretary of State must lay a report of the findings of the review before Parliament no later than one year after this Act comes into force.”
This new clause would put an obligation on the Secretary of State to review the effects of construction industry payment on practices on building safety and to report the findings to Parliament.
New clause 2—Building regulations: property protection—
“(1) The Building Act 1984 is amended as follows.
(2) In section 1 (Power to make building regulations), after subsection (1)(f), insert—
‘(g) furthering the protection of property’.
(3) In Schedule 1 (Building Regulations), in paragraph 8(5A)—
(a) after ‘1(1)(a)’ insert ‘(d), (e) and (g)’;
(b) after ‘flooding’ insert ‘and fire’.”
This new clause would add “furthering the protection of property” to the list of purposes for which building regulations may be made under the Buildings Act 1984, and extends the purposes for which persons carrying out works on a building may be required to do things to improve building resilience.
New clause 15—Duty of social landlords to undertake electrical safety inspections—
“(1) A social landlord of a residential dwelling in a high-rise building must—
(a) hold a valid Electrical Installation Condition Report (EICR) for that dwelling;
(b) provide to the tenant of the dwelling, including any new such tenant—
(i) a copy of that EICR, and
(ii) a document explaining the provisions of this Act;
(c) handle any valid complaint about the safety of the electrical installations of the dwelling in accordance with subsection (5).
(2) A person who fails to comply with a duty under subsection (1) commits an offence.
(3) A person guilty of an offence under this section is liable on summary conviction to a fine.
(4) A complaint is valid if—
(a) it relates to the safety of the electrical installations of the dwelling;
(b) it is made in writing by, or on behalf of, the tenant of the dwelling; and
(c) it is not frivolous or vexatious.
(5) The landlord must investigate any valid complaint within 28 days of receiving that complaint.
(6) If such an investigation shows that the electrical installations are unsafe, the landlord must rectify the situation using a qualified and competent person within 28 days of the completion of the investigation.
(7) If the landlord believes that a complaint is not valid they must write to the tenant within 28 days of receiving that complaint explaining why they do not think it is valid.
(8) In this section—
a ‘valid Electrical Installation Condition Report’—
(a) is dated within the last five years;
(b) covers the whole fixed electrical installation of the dwelling;
(c) has a satisfactory outcome;
(d) was completed by a qualified and competent person; and
(e) is based on the model forms in BS 7671 or equivalent;
‘social landlord’ has the same meaning as in section 219 of the Housing Act 1996.”
This new clause requires social landlords to ensure the safety of electrical installations in high rise buildings and is intended to reduce risk of spread of fires between flats.
New clause 16—Duty of leaseholders to undertake electrical safety inspections—
“(1) A leaseholder of a residential dwelling in a high-rise building must—
(a) hold a valid Electrical Installation Condition Report (EICR) for that dwelling; and
(b) provide a copy of that EICR to a person specified by the Secretary of State.
(2) A person who fails to comply with subsection (1) shall—
(a) initially receive a written request from the specified person to provide the EICR; and
(b) if he or she fails to comply with such a written request, be liable to a civil penalty.
(3) The Secretary of State shall, by regulations, nominate who the specified person shall be.
(4) In this section a ‘valid Electrical Installation Condition Report’—
(a) is dated within the last five years;
(b) covers the whole fixed electrical installation of the dwelling;
(c) has a satisfactory outcome;
(d) was completed by a qualified and competent person; and
(e) is based on the model forms in BS 7671 or equivalent.”
This new clause requires leaseholders to ensure the safety of electrical installations in high rise buildings and is intended to reduce risk of spread of fires between flats.
New clause 17—Staircase standards—
“The Secretary of State must, within 6 months of the day on which this Act is passed, consult on regulations requiring staircases in all new build properties to comply with British Standard 5395-1.”
New clause 18—Property flood resilience—
“(1) The Secretary of State must, before the end of the period of six months beginning on the day this Act is passed, use the power under section 1 of the Building Act 1984 to make building regulations for the purpose in subsection (2).
(2) That purpose is to set minimum standards for the safety of new build public and private properties in England for—
(a) property flood resilience,
(b) flood mitigation, and
(c) waste management in connection with flooding.
(3) The Secretary of State must by regulations establish—
(a) a certification scheme for safety improvements to domestic and commercial properties in England made in full or in part for flood prevention or flood mitigation purposes, and
(b) an accreditation scheme for installers of such improvements.
(4) The scheme under subsection (3)(a) must—
(a) set minimum standards for the improvements, including that they are made by a person accredited under subsection (1)(b), and
(b) provide for the issuance of certificates for insurance and assurance purposes stating that improvements to properties have met those standards.
(5) The scheme under subsection (3)(a) may make provision for the certification of improvements that were made before the establishment of the scheme provided those improvements meet the minimum standards in subsection (4)(a).
(6) In setting minimum standards under subsection (4)(a) the Secretary of State must have regard to the minimum standards for new build properties under subsection (1).
(7) The Secretary of State and local authorities in England must take all reasonable steps to make data about flood prevention and risk relevant to building safety publicly available.
(8) The duty under subsection (1) extends to seeking to facilitate use of the data by—
(a) insurers for the purpose of accurately assessing risks to buildings, and
(b) individual property owners for the purpose of assessing the need for property flood resilience measures.”
This new clause would establish minimum standards for property flood resilience measures in new build properties and in improvements to existing building designed to increase safety protections for flood prevention and mitigation purposes, and require local and national government to make data available to support this.
New clause 23—Building control: independent appointment—
“In section 47 of the Building Act 1984 (giving and acceptance of initial notice), in subsection (1)(a) after ‘approved inspector’, insert ‘who has been chosen by a system of independent appointment, prescribed by regulations made by the Secretary of State.’”
This new clause, along with Amendment 73, is intended to remove choice of building control body from those carrying out all building work.
New clause 24—Building Safety and Local Authorities—
“(1) The duties performed by the regulator under section 31 of this Act in respect of relevant buildings must be performed by the local authority that exercises building control functions in the area in which the building is located.
(2) In this section ‘relevant building’ means a building—
(a) under 18 metres in height, and
(b) comprising more than one dwelling.”
New clause 25—Building Safety Regulations for multi-occupancy dwellings—
“The Secretary of State must by regulations amend paragraph 1 of Schedule 1 to the Building Act 1984 to apply to all buildings that comprise more than one dwelling.”
Amendment 1, in clause 3, page 2, line 13, at end insert—
“(aa) furthering the protection of property, and”.
This amendment would require the building safety regulator to exercise its functions with a view to furthering the protection of property, which is intended promote longer term protections for occupant safety and reducing fire damage and cost.
Amendment 74, in clause 30, page 18, line 17, at end insert—
“(3A) In making regulations under this section, the Secretary of State must have regard to the ability of residents to evacuate a building, taking into account the vulnerability of residents and the number of means of egress.”
This amendment is intended to ensure the Secretary of State has regard to the ability of residents to evacuate a building when revising the definition of higher-risk building.
Amendment 73, page 60, line 7 leave out clause 45.
This amendment, along with NC23, is intended to remove choice of building control body for those carrying out all building work.
Amendment 75, in clause 57, page 79, line 23, at end insert—
“(5) The regulations must exempt any relevant application made by or on behalf of a registered social landlord for the provision of social housing as defined under section 68 of the Housing and Regeneration Act 2008.
(6) A ‘relevant application’ under subsection (5) means an application of a description specified in regulations made by the Secretary of State.”
Government amendments 11 to 40.
Government amendments 60 and 61.
Government amendments 63 and 64.
Government new schedule 1—Special measures.
Government amendment 70.
Christopher Pincher
I am happy to set out this group of new clauses and amendments that I hope will be non-contentious as they relate to special measures.
Let me briefly remind the House that special measures orders are a last-resort regulatory intervention that will be invoked if there has been a serious failure or multiple failures by the accountable person to meet their duties under part 4 of the Bill. The new clauses and amendments, beginning with new clause 19, provide for the special measures regime to operate in high-risk buildings across all housing tenures. They also ensure that a special measure order cannot be circumvented by a recalcitrant accountable person, including in respect of a situation in which an accountable person sells their interest in the building and tries to avoid being bound by the special measures order.
New clause 19 introduces new schedule 1, which will encompass the special measures provisions and replace clauses 104 to 113. I shall refer to the paragraphs in the schedule as I address the House. Proposed new paragraph 9 is a new provision that provides for a financial management proposal. This will detail how the accountable person will fund the relevant building safety expenses across both leasehold and rented buildings that are subject to special measures. The financial management proposal sets out the estimated expenses, the measures that they will fund and the special measures manager will undertake, and the apportionment of payments if there is more than one accountable person.
Proposed new paragraph 10(3)(b) ensures that for commonhold buildings a special measures manager may carry out the functions of a receiver of commonhold building safety assessments. This aligns with the provisions on the building safety charge and ensures that the manager is remunerated and can carry out their functions for such a tenure of building. Amendments 33 to 35 are supporting provisions for special measures in common-hold buildings.
Proposed new paragraph 12 is a new provision that ensures financial propriety and provides that any payments received by a manager further to the proposal are deposited into an account to be held on trust. Proposed new paragraph 16 gives power to the Building Safety Regulator to provide financial assistance to the special measures manager to enable it to carry out its functions.
Proposed new paragraph 18 provides for a proactive regulator who will review key aspects under the special measures order and, where necessary, apply to vary the order if the regulator considers that any of the functions or terms require amendment.
Proposed new paragraphs 20(7) to 20(9) provide that on the discharge of a special measures order, the tribunal must direct the special measures manager to prepare a reconciliation of those accounts held on trust and may direct final payments from the manager or accountable persons as appropriate.
Proposed new paragraph 22 creates provisions that ensure that while it is in force the terms of a special measures order will be binding against an incoming accountable person, while the outgoing accountable person remains liable for any contraventions under the order and any debts that may have been incurred prior to the transfer of ownership.
A swathe of Government amendments—Nos. 11, 12, 16 to 28, 31 and 32, 36, 40, 61, 63 and 70—are consequential amendments that make changes relating to special measures due to the provisions now appearing in new schedule 1. Amendments 33 to 35 provide for changes to provisions to ensure that special measures operate effectively for commonhold, high-risk buildings. Together, these amendments and new provisions will ensure that a special measures intervention will operate effectively across buildings, regardless of tenure.
Amendments 14 and 15 are, again, minor technical changes to the process of registration of high-risk buildings. Amendment 14 simply clarifies the meaning of registration, while amendment 15 makes it clear that the building safety regulator has the powers to update the register of high-risk buildings beyond the initial registration application. The amendment will therefore make sure that the register is kept up to date and is fit for purpose. Amendments 29 and 30 are on the protection from forfeiture and amend clause 122. They amend it so that leaseholders can be assured that they have the same protections against forfeiture of a lease as those that already exist in relation to the service charge. They are consequential amendments that ensure that statutory protections against forfeiture apply to relevant leases where there is a requirement to pay a building safety charge. We want the same procedural rights to apply to the building safety charge regime as apply to the service charge. The amendment extends service charge protections for leaseholders who default on payments or challenge the reasonableness of a charge to the building safety charge.
Finally, the Government have tabled another small batch of minor or technical amendments that are either consequential to other changes or correct clauses in the Bill. Four technical amendments are consequential to amendment 1, which I introduced earlier, relating to the new homes ombudsman. Amendments 59 and 62 remove the regulation-making power to add the description of “developer” for the purposes of the new homes ombudsman provisions from the scope of the general provision about powers to make regulations. This is because new clause 20, in respect of the regulations, means that we can ensure that Scottish and Welsh Ministers, as well as the Secretary of State, have bespoke powers. Amendments 66 and 67 adjust the territorial extent of the provisions about the new homes ombudsman scheme now that that the scheme will operate across Great Britain, and territorial extent issues are also dealt with in new schedule 2, which contains a consequential amendment related to the new homes ombudsman. [Interruption.]
Finally, I heard from my right hon. Friend the Member for Beckenham (Bob Stewart), who has not yet risen—
Christopher Pincher
He has risen—I am doing your work for you, Mr Deputy Speaker—and I will give way to him.
Bob Stewart
I thank my very good friend for being so nice to me—decent of him. In sum, all these special measures are devices to ensure that, once people are identified as culpable to fix the problem, they are pinged and have to do it. Is that correct?
Christopher Pincher
My right hon. and gallant Friend, as ever, is on or near the money. The point of the changes is to make sure that the accountable person is indeed accountable, so they do what it says on the tin.
Amendment 13 makes it clear in the Bill that an accountable person who allows occupation of a single residential unit or more in part of a higher risk building, as defined in clause 62, without a relevant completion certificate has committed a summary offence, and the guilty person is liable for conviction up to a maximum summary term. Amendment 60 allows regulations made under clause 71 to be subject to the affirmative procedure. Clause 71 sets out the parameters of the part of the building for which an accountable person is responsible. Amendment 64 provides that the consequential amendments in schedule 5 relating to the Parliamentary Commissioner Act 1967—an Act we all know well—and the Freedom of Information Act 2000 extend to all of England, Wales, Scotland and Northern Ireland. Amendment 68 provides that clause 127 is automatically commenced two months after Royal Assent.
The amendments, while hardly scintillating, will help to improve the Bill and make it ready for scrutiny by our colleagues in the other place. I trust that my hon. Friends and Opposition Members have listened closely, with care and attention, have absorbed all the points I have made, and that they will support the amendments.
Mr Deputy Speaker (Mr Nigel Evans)
Before I call Matthew Pennycook, I ask colleagues who are trying to catch my eye that they please make sure that they address the new clauses and amendments in the group before us, not those in the previous group.
Matthew Pennycook
Scintillating they may not be, but it is still a pleasure to respond for the Opposition to the remaining proceedings on consideration. I will first deal briefly with several of the non-Government amendments selected, before taking the opportunity to ask the Minister several specific questions relating to Government new clause 19, new schedule 1 and various other amendments relating to special measures and protections against forfeiture. I hope he is able to answer at least some of them.
New clause 1, which stands in the name of my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams), who sadly cannot be in her place today because she has contracted covid, is a straightforward amendment that would place on the Secretary of State an obligation to review the effects of behaviour in the construction industry that have a negative impact on building safety, such as contract terms and payment practices that prioritise speed and low-cost solutions, and to report findings to this House. We support the new clause fully and urge the Government to give it due consideration.
New clause 18, which stands in the name of my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy), would establish minimum standards for property flood resilience measures in new-build homes. In response to my hon. Friend last week, the Secretary of State made it clear that “more could be done” on this issue. I hope my hon. Friend gets a chance to make her case in more detail in due course, and that the Minister will give serious consideration to her new clause and to what might be done through future planning legislation to drive up standards when it comes to flood mitigation and resilience.
New clause 15, which stands in the name of my hon. Friend the Member for Hammersmith (Andy Slaughter), would extent the electrical safety inspection duties that currently apply in the private sector to social landlords. It is straightforward and we believe it warrants support.
New clause 16 would extend the same duties to leaseholders. Although we do not want extra burdens to be placed on leaseholder-occupiers—those who sub-let are of course required to have the relevant certification anyway—and we do want further assurances that the provision would not duplicate powers and duties that the Bill confers on the building safety manager, we support in principle steps to ensure the safety of electrical installations in high-rise buildings and to reduce the risk of fire spreading between flats.
Andy Slaughter
My hon. Friend is a logical and fair man, and he will appreciate that there is an anomaly here. If a leaseholder rents out their property, as we have heard some are forced to do, they will be a private landlord and will be obliged to carry out these checks, but they will not be if they are living in the property themselves. In the name of safety, there has to be consistency. Not only landlords of high-rise blocks but social landlords and resident leaseholders need to do this, and the cost is estimated to be about £30 a year per flat.
Matthew Pennycook
I agree there is an anomaly, and I agree that we need consistency. I very much hope the Government give further thought to what might be done to achieve that objective.
The Opposition support new clause 23 and amendments 73 and 74, which derive from the Select Committee’s recommendations, and I hope the Minister will constructively respond to them in due course.
On Government new clause 19 and new schedule 1, which will replace clauses 104 to 113, and various related amendments, we fully accept the need for special measures in cases where a given accountable person fails to discharge their duties under the new regime, including the appointment via an order secured by the regulator at the first-tier tribunal of a special measures manager who will take on the management of risk in a given building in such instances.
We also support the changes made to the special measures arrangements by new schedule 1, such as the change to enable the regulator to provide financial assistance to the special measures manager by way of loans or grants. However, we would be grateful if the Minister provided some clarification on those parts of the new schedule that allow for payments to be made by the accountable person to the special measures manager if expenses exceed what can be raised by way of the building safety charge. Will he give a commitment this afternoon that those additional payments will not be able to be charged to leaseholders?
Building height was debated extensively in Committee and warrants a brief mention in relation to this group of Government amendments, because the Bill’s arrangements for special measures still apply only to higher-risk buildings, defined as those of at least 18 metres in height or of at least seven storeys—I note that new clauses 24 and 25, in the name of the hon. Member for St Albans (Daisy Cooper), directly address this.
Eighteen metres has always been a crude and arbitrary threshold that fails adequately to reflect the complexity of fire risk. It is absolutely right and long overdue that the Government made it clear last week that 18 metres will no longer be the difference between whether an affected leaseholder is protected by the state from the costs of remediation or made to take on a forced loan and long-term debt, although leaseholders will still face ruinous costs for the remediation of buildings under 11 metres. That requirement will not be entirely resolved by the withdrawal of the January 2020 consolidated advice note, and we urge the Minister to ensure those people are also protected financially.
Leaving aside whether a more proportionate approach to fire safety risk results in a reduction in the number of medium-rise buildings that ultimately require remedial works, many of them will clearly remain designated as high risk and will therefore require remediation. Can the Minister confirm that it is the Government’s intention eventually to bring high-risk buildings under 18 metres into the purview of the regulator and the gateway system once the regime has been given a chance to bed in and deal with the most complex high-rise cases?
Lastly, amendment 29 will extend existing protections against forfeiture of a lease on the ground of non-payment of a service charge to non-payment of a building safety charge. We do not oppose this amendment as it rebalances, even if only marginally, the disparity in power between a landlord and leaseholder when it comes to the building safety charge. This directly relates to our previous debate on part 5. No provisions prohibiting forfeiture would be necessary if the House had accepted any amendment, whether it be new clause 3, new clause 13 or potential forthcoming Government amendments, that provides sufficiently robust legal protection for leaseholders in all circumstances.
The difficulty of considering amendments on Report when other amendments that are likely to have a direct bearing on their operation, were they to be accepted, have not yet been tabled is that, if no amendments are made to provide legal protection for leaseholders against the costs of remediating historical defects, we would be concerned that amendment 29 could inadvertently incentivise freeholders to sue for unpaid building safety charges. I therefore ask the Minister and his officials to consider revising the amendment to make it clear that failure to pay a building safety charge can never be used as a basis for forfeiture, rather than merely regulating the process by which forfeiture takes place, as the amendment does in its present form.
Peter Aldous (Waveney) (Con)
New clause 2 and amendment 1, which stand in my name and are kindly supported by the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy), add “the protection of property” to the list of purposes for which building regulations may be made under the Building Act 1984, and require the Building Safety Regulator to carry out its work
“with a view to furthering the protection of property”.
In many respects, in terms of drafting, these are tweaks to the Bill, but they could have far-reaching and positive consequences. Modern methods of construction and the increasing compartmental sizes of industrial and commercial buildings are leading to more challenging and larger fires, which put lives at risk and also cause enormous social, economic and environmental consequential damage. That is exactly what happened at Wessex Foods in Lowestoft 11 years ago, in July 2011. If adequate property protection measures—in the form of sprinklers, in that instance—had been in place, a huge amount of disruption would have been avoided, and the firefighters would have been back at their station in four minutes.
If the consideration of “property protection” were added to the Building Act and the building regulations, we would secure a significant double dividend: greater safety for people, including firefighters, and more sustainable buildings. It is far better to be preventing fires than to be putting them out. I should therefore be grateful if the Minister gave serious consideration to accepting new clause 2 and amendment 1, so that the Building Act can be amended to provide for the protection of property. These proposals have the support of professionals across the fire sector: the National Fire Chiefs Council, the Fire Sector Federation, the Fire Brigades Union, the Fire Protection Association and the Institution of Fire Engineers.
The new clause and amendment would provide an appropriate framework for the future fire safety of building design, and we would therefore know that homes, schools, care homes, student accommodation and all industrial and commercial buildings had adequate property protection and fire prevention measures built in at the start, so that we were not putting people—including firefighters—and property at risk. As I have said, I should be grateful if the Minister considered these proposals.
Daisy Cooper
I will speak very briefly about amendment 75 and new clauses 24 and 25, all of which stand in my name and are supported by the Local Government Association.
Amendment 75 is pretty straightforward. At present, the Bill lacks clarity in relation to social housing providers. This amendment to clause 57 would make registered social landlords exempt from the additional financial burden of the building safety levy. I think it unacceptable that council and housing association tenants have to subsidise the failures of private developers under this scheme.
The purpose of the two new clauses, taken together, is to introduce a more stringent building safety framework that would apply to multiple dwellings under 18 metres in height as well as those above. We have already heard from hon. Members about how crude the 18-metre cut-off is and how it has no basis. Indeed, many of us remember seeing a leaked video of an adviser to the Government saying that that figure had been plucked out of the air.
These two new clauses, taken together, would prevent having a two-tier building safety regime. I ask the Minister to respond to the amendment and the new clauses to see whether the Government might be willing to adopt them all during the passage of the Bill.
Paul Maynard (Blackpool North and Cleveleys) (Con)
I rise to speak to new clause 17, which stands in my name.
The Minister, probably more than anybody else in this Parliament, already knows that I have a tendency to fall over. Because I am teetotal, this is not down to drink either. Indeed, I suspect that every single Member here will know someone—a friend, a loved one or a relative—who has had a fall on the stairs. They are a silent killer and claim the lives of over 700 people every year, as well as thousands more who suffer injuries and lose their independence.
Finding a solution to the issue of flammable cladding has proven fiendishly complex, as we know from our time here, but for staircase safety it should be, and indeed is, simple. A British standard already exists that reduces falls by a staggering 60%: British Standard 5395-1. It means that stairs must have a minimum size of “going”—the horizontal surface on which one treads—and a maximum rise in height limiting steepness and providing enough surface area on which to step. Provision of easy-reach handrails is also required for staircases to be compliant. While such staircases hardly look different at all to the naked eye, their impact on preventing falls is remarkable.
British Standard 5395-1 has been in place since 2010 but never enshrined in law as a requirement, so today I am proposing this new clause, alongside the hon. Member for Sheffield South East (Mr Betts), for whose support I am most grateful. This is the result of ardent campaigning by the UK’s leading accident prevention charity, the Royal Society for the Prevention of Accidents, but also, crucially, major players in the housing industry such as the Berkeley Group. Industry wants this regulation. It wants a level playing field where there is one simple rule for all to adhere to. Because I am only calling for the standard to be applied to new-builds, there will be negligible cost and no need for retrofitting.
I can almost hear what the Minister is about to tell me—that it is uncommon to use primary legislation to enshrine such a standard into law. The Government will argue that our focus should be outcome-based rather than legislating on method, but I might point to regulation 7 of the building regulations, on combustible materials, which is in itself descriptive and sets out how the industry must achieve that particular regulation. If the outcome that we are all aiming for is safety of stairs, then the status quo is simply not working, and hundreds of people are dying every year from something that could so easily be prevented: I refer back to the 60% figure. If the Government have some other way to achieve such a reduction in preventable death in the home, then I am all ears, as many people have often pointed out to me. Independent safety campaigners such as RoSPA are confident from the statistics that this simple measure will save more lives than perhaps anything else in the entire Bill.
Genuine low-hanging fruit does not come along very often in politics, and I would like the Minister to grasp it when he sees it. He may not wish to satisfy me by granting me the agreement of the Government to the new clause. He has spent many years working on this with me trying to keep me satisfied and happy, but failed. Now he has his chance to redeem himself after 12 months of horror. Will he at least agree to meet me to discuss how we can take this matter forward? He can make my day by saying, yes, the Government agree. He can give me a minute of happiness and take forward Conservative party harmony, so rare these days, just by agreeing to meet me. I look forward to hearing what he might just have to say.
Andy Slaughter
I will speak briefly to new clauses 15 and 16, which are in my name and which relate to electrical safety. They seek to extend the requirement for five-yearly checks on electrical equipment to resident leaseholders and to social landlords, where these already apply and in fact apply more widely than just to high-rise residential buildings and private landlords.
We have quite rightly spent a lot of time this afternoon talking about the effects on leaseholders, and we have strayed into other territory and exposed other deficiencies in the Bill in relation to the requirements for social landlords and tenants, what types of building are covered and, indeed, as we heard from the hon. Member for Harrow East (Bob Blackman), how certain types of buildings now being constructed are still being constructed with many of those faults.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
I rise to speak in favour of new clause 18. This amendment seeks to tackle the Government’s currently laissez-faire approach to flood protection, which are known as property flood resilience measures, by introducing minimum national flood protection standards in new builds.
The reasoning behind this amendment is the inevitable change to our climate and the fact that we are going to see more flooding in this country, and it feels as though our legislation is not keeping up with the reality we all face. As the shadow spokesman, my hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook), said, the Secretary of State did acknowledge in his response to me on the statement that “more could be done”. Therefore, I really do hope that the Government go away, have a look at the amendment I am putting forward, and consider how we can increase flood protections as part of building safety.
Currently, local authority planning departments can choose what property flood resilience measures they introduce as part of their pre-commencement conditions. In reality, that means that adjacent local authorities have different requirements for property flood resilience, flood mitigation and water management measures, even if they are rated in the same flood zone. In Hull, we have very strict flood resilience measures, as the House can imagine—we are an area that floods—but if the surrounding local authorities are not as strict on flood mitigation, we end up with the flood water from those areas, which creates more of a problem for an area such as Hull. That is why we are talking about having the same level right across the country. Even if a part of the country does not flood at all, the new clause seeks to ensure that they still need to take flooding seriously because if they do not, it will lead to problems upstream for somebody else—excuse the pun.
The new clause would also address the lack of clarity about effective PFR measures by looking at a proper accreditation scheme, which would include installers. In the same way that we have gas safety certificates and other safety measures, as well as energy efficiency ratings that are set and established and which everybody understands, the new clause would do the same thing on flooding so that people know they get a certain standard of flood protection in their property and in new builds.
In 2021, Flood Re proposed that lower premiums should be offered on policies where property flood resilience measures have been installed, but the insurance industry says that the lack of standards and proven efficacy makes it very difficult to assess premiums. If the new clause introduced standardisation and a certain standard was set, people could say to insurance companies, “This property has reached a certain standard, so there should be some reflection of that in the premium you’re offering.” This proposal is about looking at a certification scheme.
To further help insurers and the public, the new clause would create a requirement that all the relevant available data held by bodies such as the Environment Agency and local authorities on flood mitigation measures should be made publicly available. This is about trying to make premiums cheaper for people. Insurers purchase flood mapping data to aid them in setting premiums, and the better information they have, the more accurate their insurance premiums will be. At the moment, as I am sure the Minister knows, householders in some parts of the country cannot get any flood insurance if their property has been built after 2009. This proposal attempts to address that issue as well.
Climate change is causing heavier and more frequent flooding, and we currently have 6.3 million homes in the UK at risk of flooding, without any property flood resilience measures. That should be a cause for extreme concern, yet the Government are failing to address it and, in fact, flooding is not mentioned anywhere in the Bill. It is irresponsible and reckless to allow new builds to continue to be built in this country without really strong property flood resilience measures, because we need our homes to be fit for the future. Without positive action from the Government, tens of thousands more homes will be built without the protection they need. This is another housing scandal in the making, so I urge the Minister to go away and look at improving provisions on flooding as part of this Bill.
Mr Deputy Speaker (Mr Nigel Evans)
I call Clive Betts, who has tabled amendment 73 and 74.
Mr Betts
And new clause 23, but let me comment briefly on two other new clauses. New clause 17, which was tabled by the hon. Member for Blackpool North and Cleveleys (Paul Maynard), is about safety on stairs and ensuring that stairs built in new properties conform to British standards. He is absolutely right and I have put my name to the new clause. Each year, 300,000 people are admitted to A&E because of falls on stairs. That is a staggering figure and anything that we can do to reduce that has to be considered. This proposal is not a difficult one; as he said, it should be easy to implement and cost-free because it would be in new properties. Making sure that the stairs are wide enough and have proper handrails is not rocket science, and I hope that the Minister might indicate agreement on that in future, even if he cannot agree to the new clause today.
I just want to make it clear that nothing I am saying here is meant to try to improve harmony in the Conservative party—that is not something I want to be associated with, as the hon. Member for Blackpool North and Cleveleys indicated. However, I am more than happy to have harmony with him in promoting new clause 17.
My hon. Friend the Member for Hammersmith (Andy Slaughter) is right that there should be similar standards for social tenants in social rented properties. The Select Committee on Levelling Up, Housing and Communities has an ongoing inquiry into the regulation of social housing, and if he could drop a note to the Committee as evidence so that we can take account of his proposals, that would be useful.
I turn to new clause 23 and amendment 73 in my name, which reflect what the Select Committee has looked at. Building control has come up as an issue as a result of the Hackitt review. Dame Judith Hackitt made it clear that two of her concerns about the construction industry were: the whole culture of the industry with its race to the bottom; and—this goes alongside that—conflicts of interest.
In the previous debate, I mentioned conflicts of interest on approvals for products in the industry, with suppliers hawking products around until they found someone—a friendly approver—who would approve them. Building control is the same—it is about the developer finding someone less likely to give them difficult scrutiny. The Government have addressed that for the highest-risk buildings, for which in future building control will be appointed by the regulator. However, for all other properties the developer can say, “Yes, I’ll have you to do my building control” or, “I won’t have you, because you gave me a difficult time with the last property I built.” That is not acceptable.
We need someone to approve a building who is independent of the developer. The Committee has gone on record on that several times, and we recommended it when we scrutinised the draft Bill. So far, the Minister has come back with, “The Government don’t agree.” I hope that at some point the Government will reconsider, because that seems to be a fundamental principle and something that will make all buildings safer in future. It would provide security for the owners, occupiers and tenants that their buildings have been approved by someone independent of the developer.
Kate Green
This is exactly the point. My constituents are deeply concerned as a result of some developers’ unscrupulous behaviour in appointing inspectors and building control approvers who they know will give them an easy ride. My hon. Friend may be familiar with the case of New Lawrence House in the constituency of my hon. Friend the Member for Manchester Central (Lucy Powell), which has the same developer that turns up often in my constituency. The issue was not that there was a definite intent to collude with the developer but that it was easier to turn a bit of a blind eye. Leaseholders in my constituency are worried about that real issue, so I strongly support his amendments.
Mr Betts
I am not aware of the particular scheme that my hon. Friend mentions, but unfortunately it is all too common that concerns are raised after the event about the quality of building control. It can sometimes be that an independent building control inspector approved a development, but all too often it is someone appointed by the developer, and that is not right. I am sure that the Minister will not have a conversion when he responds to the debate, but I hope that he might consider that this needs addressing in the future.
Let me turn to amendment 74, which is about the buildings in scope for the new regulatory regime. The Select Committee has been on the record as welcoming the Government’s approach to stronger regulation with the new Building Safety Regulator under the umbrella of the Health and Safety Executive. We supported all that, with one or two questions and reservations in our response on the draft Bill, but we said that the scope of that regulation should eventually be expanded to include other buildings. I think that the Government accept that in principle but do not want to lay down on the face of the Bill the other factors that might be taken into account to expand that scope of regulation at a future date.
Apsana Begum (Poplar and Limehouse) (Lab)
I rise to speak in support of amendment 73, tabled my hon. Friend the Member for Sheffield South East (Mr Betts), and amendment 1, tabled by the hon. Member for Waveney (Peter Aldous). The Bill renames “private approved inspectors” “building control approvers”. Not just amendment 73 has touched on the issue; other Members have done that through other new clauses and amendments. I wish to express my support for the Fire Brigades Union’s opposition to those private inspectors, which, as it argues, undermine professional local authority building control and weaken building safety regulation.
Amendment 1 is about the Building Safety Regulator. Again, I share the alarm expressed by the Fire Brigades Union that the Building Safety Regulator would be permitted to seek private sector involvement if the fire authority cannot assist. Surely it is obvious why private firms cannot be given licence to sign off on fire safety matters relating to higher-risk buildings. Fire safety is a matter for professional firefighters, not profiteers, and it is not clear how the new Building Regulations Advisory Committee will be constituted. I would be grateful if the Minister could say more about that.
Many of us would like to see the Government re-establish a statutory fire safety advisory body, with guaranteed representation for trade unions and residents. As the Bill progresses, I would like to see legislation and provision that apply to all residential buildings above 11 metres in height, an idea that has been echoed by Members of all parties. Any new regime should apply to other multi-occupancy institutional or residential buildings, which was also touched on in various amendments.
It would be helpful to hear from the Minister whether the Government have any plans to introduce a threshold height at which two staircases are required in order to provide means of both resident escape and firefighter entry. As he will no doubt be aware, concerns were raised that the plans for Ballymore’s proposed 51-storey development in Cuba Street in my constituency included only a single fire escape for a building that would have been two and half times the height of Grenfell tower.
Elsewhere in my constituency, the recent fire at Ballymore’s New Providence Wharf, where the fire spread between multiple floors and the ventilation system failed, led to smoke spreading throughout the building. That demonstrates the potential shortcomings of relying on stay put evacuation policies, so it would be helpful to know whether the Government have any plans to commit to addressing that in the Bill.
Andy Slaughter
I congratulate my hon. Friend on the work that she has done to draw wider attention to the Ballymore application, and indeed it has now been withdrawn. That is happening everywhere, however: on the border of my constituency, one over 50-storey block is already under construction and three others are in planning with, again, one staircase each. It is ridiculous to say that the stay put policy is the answer to that, because post Grenfell, people will not stay put and we understand exactly why.
Apsana Begum
I thank my hon. Friend for making that point strongly. I share his concern that there is too much of a free pass in that situation and such buildings should just not be allowed to be presented. On his point, the Cuba Street development has been withdrawn for now, but it is only paused. It will come back and there is no guarantee that all the problems will be addressed, so it would be helpful to know whether the Government have any plans to address that issue and, if not, whether they will commit to a national independent review of stay put policies, particularly given that the Cuba Street proposal was allowed under existing building regulations.
At present, there are insufficient fire safety inspectors after decades of cuts and increased workloads. It is urgent that the fire and rescue service is properly funded and resourced, because people have a right to be safe in their own homes. The Bill is a small step forward, but it does not resolve the overall building safety crisis across the UK. In the words of the Fire Brigades Union, it is at best
“a sticking plaster over a gaping wound unless the whole regime rebuild around need rather than profit.”
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
I rise to speak in support of new clauses 1, 2, 15, 16 and 23. The events at Grenfell Tower were devastating, with the tragic loss of 72 lives, which shocked us all. Words will never adequately describe the pain felt by the families and friends of the victims. Later, though, as light was shed on the extensive preventable failings that led to the disaster, justifiable anger followed.
I am glad to see the Bill progress through this place, but it should not have taken almost five years. I welcome the Secretary of State’s recent announcement that leaseholders in England will not face the astronomical costs of remediating unsafe cladding. I am pleased that the Government have taken a moral stance on the issue.
Unfortunately, there are still gaps that must be plugged, and I hope that the Minister’s promise of statutory protection against all building safety defects will materialise. For my constituents, I hope that the Government will engage in a constructive dialogue with the Scottish Government to ensure that leaseholder protection can be extended across the UK fully funded.
There is still a glaring lack of clarity and the Government must facilitate funding being available across the devolved Administrations to achieve an equal standing. Although much of the Bill has limited territorial extent, there are some key areas that apply across the UK and in Scotland, such as the testing and inspection of construction products.
Early last year, it was announced that the independent panel on the safety of construction materials would review the testing system and how it can be strengthened so that product safety confidence can be restored. The industry is still awaiting the report’s publication, which prompts the question of how we can fully scrutinise the Bill’s measures without knowing what the review found. Can the Minister provide a definitive date for when it will be available? Will he also provide an update on the establishment of a national regulator for construction products?
As it stands, there are a limited number of private product testing companies, and fewer still of the accredited bodies’ testing sites, which means limited access to the furnaces that are used to test all combustible building materials and products. Subsequently, there are huge delays in products moving through the testing system.
Some companies are reporting delays of up to six months to test their products. The accredited sites are managed by private sector companies, and as demand increases and supply decreases, the price set by those bodies climbs. Concerns have been raised that that model incentivises the maximising of profit over the quality of testing.
The Government must also be cautious not to create widespread quality disparity between existing buildings and new ones of any height. While preservation of life is of course the most key consideration, the lifespan of buildings must be protected too. Buildings such as schools, hospitals and care homes, which hon. Members have mentioned, should have a mandatory requirement for sprinklers. By making such buildings as safe and resilient as possible, human life is protected, yes, but many other things too. Schools are pillars of the community. Where do those students go to learn if their school burns down, or for a hospital, where do the patients go? What delays will essential services suffer?
The Bill is a mammoth piece of legislation and it is easy to look at each single part in turn to make it digestible, but a key finding in Dame Judith Hackitt’s review was that there needs to be a holistic, whole-building approach to fire safety. We ought to apply that principle here and take a whole-Bill approach, to truly understand how it will work in practice.
Christopher Pincher
I am grateful to all Members across the House for their contributions to the debate. I will speak in response to the non-Government amendments first and then, as I progress through my remarks, pick up the points that have been raised about the Government’s amendments.
New clause 1 was tabled by the hon. Member for Oldham East and Saddleworth (Debbie Abrahams), who is not in her place; we wish her a swift recovery. I thank her for raising the matter, and I recognise that the issue that she has embedded in her amendment is intended to address the fact that the poor adversarial practices in the way that payments are charged and made within the built environment can lead to unsafe, low-quality building safety outcomes as well as poor value for money.
I assure all hon. Members that we agree that the issue is important. There is already work across Government to ensure that fair and prompt payment practices are addressed with industry—such as the construction playbook, which captures commercial best practice and specific sector reforms, outlining the Government’s expectations of how contracting authorities and suppliers, including in the supply chain, should engage with each other. That is resetting the relationship between the construction industry and the Government. It is focused on delivering a more sustainable, modern industry, better able to deliver high-quality built assets for its clients.
We published guidance as a result of work set up with the Construction Leadership Council and the procurement advisory group, alongside our recent announcement. We will now work with industry to implement the principles of that guidance as widely as we can. We support industry to lead its own important culture change to deliver the very significant changes being brought forward in the Bill. There is existing legislation—part II of the Housing Grants, Construction and Regeneration Act 1996—that aims to create a framework for a fair and prompt process of payment through the construction supply chain and the resolution procedure for disputes. The intention in that framework is to ensure that it is implemented throughout the construction contract.
Turning to new clause 2 and amendment 1, tabled by my hon. Friend the Member for Waveney (Peter Aldous), our assessment is that the new Building Safety Regulator has the right two objectives to deliver this critical mission, and adding a further objective around property protection would not be necessary or beneficial.
The Bill provides the Building Safety Regulator with a broad statutory objective to improve the standard of buildings, which enables it to consider the overall performance of buildings. Meeting this objective could involve the regulator looking at such specific areas highly relevant to property protection such as security, resilience and fire safety. Therefore, we do not believe that an additional objective is necessary. Adding a specific Building Safety Regulator objective on property protection would also confuse and dilute its mission—that issue was raised in Committee. I think there was agreement across the Committee that we do not want to confuse or obfuscate the responsibilities of the Building Safety Regulator as it is set up and beds in. We want a proportionate regulatory regime that avoids putting undue and unnecessary pressures on leaseholders, but we also want to make sure that the regime builds in and beds in effectively, so I hope my hon. Friend will feel able to withdraw his amendments.
Christopher Pincher
I beg to move, That the Bill be now read the Third time.
This Bill represents the biggest overhaul of building and fire safety legislation in a generation, and today’s proceedings represent a significant staging post on our shared journey towards a regime that is more robust and more proportionate. In a modern liberal democracy, living in a home where you feel safe should be a basic human right, but sadly, for thousands of people up and down our country, this most reasonable of expectations does not tally with their current experience. This Bill is going to right that wrong by replacing an outdated building system with one that is attuned not just to where we are in 2021 but to how we protect people in 2031, 2041 and for many years beyond. We recognise from the outset the need for new legislation to be based on the solid foundations of independent and objective expertise, which is why, as Members across the House will know, we are delivering on the recommendations set out by Dame Judith Hackitt in her independent review of building regulations and fire safety.
It will not have escaped the House’s attention that while we have been scrutinising the Bill line by line in Committee and on Report, my right hon. Friend the Secretary of State has been pressing ahead with wider reforms on issues that have plagued this sector for years. My right hon. Friend the Prime Minister and the Secretary of State have set about restoring much-needed common sense to our building safety regime, through the Secretary of State’s statement on 10 January and the Prime Minister’s remarks earlier during Question Time.
There has been progress since the Grenfell Tower tragedy, but our view in Government is that the pace of rectifying high-rise buildings with dangerous and unsafe cladding has not married up to the gravity of the situation, so we must move more effectively and more quickly. That is why we have brought the Bill to the House today to complete its remaining stages, so that it can progress smoothly and quickly to the other place where the robust legislative protections that we have outlined in previous statements can be properly and sensibly made. The Bill can then come back to this House for proper scrutiny, and I am sure that the business managers—the usual channels—will ensure that appropriate time is made available for it to conclude. We must complete this Bill. It has been on the stocks for far too long. Too many people have suffered too much, and we must, through this legislation and through the suite of measures the Secretary of State announced in his statement on 10 January, right the wrong that has been done to too many people. I commend the Bill to the House, not as the end but as the end of the beginning.
Matthew Pennycook
I would like to start by thanking the Bill team, the Clerks, the House staff and the Library specialists for facilitating the debates in the House on this important piece of legislation, as well as all those hon. and right hon. Members who have contributed to the proceedings, particularly those on both sides who took it through Committee over a great many weeks last year.
The impetus for this Bill, and what I am sure has been at the forefront of our minds throughout its passage to date, is the horrific fire at Grenfell Tower four and a half years ago. As I suggested on Report, it is not pre-empting the Grenfell Tower inquiry’s conclusions to state that the horror of that dreadful June night in 2017 was the product not only of pernicious industry practice but of state failure: a failure that involved successive Governments presiding over a deficient regulatory regime, and a failure to act on repeated and clear warnings about the potentially lethal consequences of that fact. That is why the Government and industry have a shared responsibility to make all buildings safe and to resolve the building safety crisis fully and finally, in a way that protects all those living in dangerous buildings who bear no responsibility for it whatsoever.
To the extent that the Bill implements the recommendations of the Hackitt review, provides for a stronger regulatory framework for building safety and ensures clearer accountability on the management of risk in buildings over their lifecycle, we support it. We welcome the improvements made on Report, and we want to see a version of the Bill given Royal Assent as soon as possible,
However, this Bill leaves a range of fire safety issues unresolved, from the lack of a national strategy on how to evacuate high-rise buildings to the absence of a requirement to plan for the escape of disabled residents. The Bill is not in itself a panacea for the building safety crisis. Even on its own terms, we have argued that it could and should have gone further in several important respects, whether in relation to the arbitrary definition of height or the issue of product testing.
We have concerns about the Bill’s implementation, specifically whether the new building safety regime will be able to function as intended and whether the new building safety regulator within the Health and Safety Executive, which the Bill makes responsible for all aspects of the new framework, has the resource and capacity to perform all the complex tasks assigned to it.
Hoping that the hard deadline will conjure the necessary outcomes, whether in relation to building control, skills shortages or ongoing concerns about indemnity insurance, is not good enough and we intend to monitor closely whether the new regime operates effectively in practice. We are disappointed that, despite the clear strength of feeling across the House and following our extensive debates, we are being asked to send this Bill to the other place without changes having been made to provide robust legal protection for leaseholders who are facing ruinous costs for remediating historical cladding and non-cladding defects. The Opposition have been clear throughout the Bill’s passage that, without changes to provide for such robust protection from all costs, it will fail what Dame Judith described as the “ultimate test” of any new framework, namely the rebuilding of public confidence in the system.
The House will have noted the extremely legalistic language that the Minister used on Report in response to several questions on whether the Government will table amendments in the other place on leaseholder protection, on when they plan to do so, on what those amendments will look like and on whether this place will have sufficient time to debate them. Do not underestimate the degree to which expectations have been raised by the repeated and unambiguous commitments the Secretary of State made last week to amend this Bill in pursuit of protection for leaseholders in relation to all the work required to make buildings safe.
For all the gaps raised by the Secretary of State’s statement and all the obvious gaps that remain in his new plan, leaseholders across the country who are caught up in this scandal drew comfort from his words, believing them to be a signal that the Government are finally prepared to honour the promises given by successive Secretaries of State and Ministers from the Dispatch Box that leaseholders will be fully protected.
That the blameless leaseholders at the centre of this crisis should be protected is, we believe, incontrovertible. The mental and financial toll this crisis has taken on them is incalculable. Lives have been put on hold, relationships have broken down, retirements have been ruined and countless hours have been forever lost as a result of spending evenings and weekends researching, lobbying and campaigning. In far too many cases, savings have vanished entirely and homes have been lost to bankruptcy.
The Secretary of State spoke last week of the injustice of asking leaseholders to pay money they do not have to fix a problem they did not cause. He was absolutely right, but if it is unjust that leaseholders pay in the future, it surely follows that it is unjust that so many have already paid or are being asked to pay now. The Government must look at financial redress and how it might be secured.
When it comes to protecting leaseholders in the future, we forcefully made the case throughout the Bill’s passage for the maximum legal protection for all those facing potential costs to fix historical defects, irrespective of circumstance. On Report we asked the Minister to give serious consideration to several issues of concern arising directly from the Secretary of State’s commitment to amend the Bill to achieve that.
We support the passage of the Bill tonight because we want the recommendations of the Hackitt review to be implemented and a stronger safety regime to be put in place as soon as possible, but we await the tabling in the other place of the promised amendments on leaseholder protection. We sincerely hope that when the Secretary of State says he intends to protect leaseholders from paying any costs, he truly means it, and that consequently the Bill will not be yet another forestalling, but will deliver justice finally for all the blameless victims of the building scandal.
Several hon. Members rose—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. Before I call the next speaker, I just want to say that we have a fair number of people who want to speak and not an enormous amount of time, so please bear that in mind. I call Sir Peter Bottomley.
Sir Peter Bottomley
To use the words of a former Prime Minister, I agree with Matthew. I thank the hon. Member for Greenwich and Woolwich (Matthew Pennycook) for his contribution to Third Reading, and thank the Minister, who over the months has moved progressively—if I may use that expression in relation to a Conservative—to do many of the things that, frankly, ought to have been done within months of Grenfell, if not before.
I have two major regrets. One is that the reaction to Grenfell was to make it party political, even though most of the 12,000 buildings affected were not built by Tory councils and have problems just as great as those at Grenfell. The second, which is a different point, is that when the sad crash in the tunnel in Paris, in which three people died and one survived, occurred, the media, instead of saying on the first day that the survivor had been wearing a seatbelt and the three who died had not and that the driver was twice over the legal limit, allowed that point to be lost behind the paparazzi story. If the truth had come out straight away, the number of deaths in Europe over the next year would have been halved.
In terms of fire safety and building safety, in my view it was wrong to say that 18 metres was the cut-off point. It may have been arbitrary that that was the highest level the fire could get to, but analysis of the risk to people in homes is that most deaths are at lower heights, not higher ones. We have also learned lessons on dealing with fires that will not be forgotten.
The Bill goes a long way to meeting some of the needs that were reasonably obvious at the beginning. The underlying problem is that Dame Judith Hackitt was not, I think, properly briefed on the law on residential leasehold, and that caused the mis-steps that are now beginning to be put right. I hope that as a result of the Secretary of State’s consultations with people such as Philip Rainey and other barristers and solicitors who are expert in this field, we will be able to modify the simple polluter pays principle into a practical measure.
We need to stop homes being lethal. We need to stop legalities getting in the way of justice and effective action. We want to take away the financial burden and nightmare from residential leaseholders. We want to make sure that social landlords are not left with the costs that, frankly, should not be theirs. We have a lot more progress to make. It is a matter of faith in the Government that, together with the amendments made today—I congratulate the parliamentary draftsmen and the officials in the Department on the progress they have made so far—we can hope to see further progress and better amendments and supplementary ones tabled in the House of Lords, which can come back here and be both successful and acceptable.
I have two further points for the Minister. Outside this Bill, we look forward to the Law Commission reforms being put to Parliament in an effective way. Last, on the question of forfeiture, which has come up occasionally in today’s debates, I want there to be no question that a leaseholder’s equity should be forfeited just because their home is sold to pay some debt. We must change the law to say that any remaining equity goes back to the leaseholder and is not put in the hands of the landlord. William the Conqueror was king over 950 years ago. His feudal memory should not be continued in our housing system. It is time to enact in practice provisions that the House of Commons passed in law—ineffectively—in 2002. Let us have justice for residential leaseholders.
Paul Blomfield (Sheffield Central) (Lab)
I am pleased to have the opportunity at this point, before the Bill progresses to the other place, to speak about some of the issues that will need to be addressed in the amendments that have been promised by the Secretary of State on protection for leaseholders—issues about which, today and for quite some time, there has been cross-party concern. I pay tribute to thehon. Member for Stevenage (Stephen McPartland) for the work that he has done in this regard, and to the Father of the House, the hon. Member for Worthing West (Sir Peter Bottomley), for his contribution over a long period.
On both sides of the House there is clearly a consensus on what needs to be done, which has been reflected in the debates this afternoon, and it is right that there should be, because we are seeking to address a glaring injustice facing leaseholders who are victims not just of developers but, as was pointed out by the Chair of the Select Committee, myhon. Friend the Member for Sheffield South East (Mr Betts), of regulatory failure, for which we are responsible and over which successive Government have presided.
It is unfortunate that we have been debating the Bill so soon after the Government’s announcement last week, before the Secretary of State had the opportunity to table his amendments so that they could receive the scrutiny they deserved. However, his statement did constitute a step forward. Some of my constituents who have been affected met him before the statement, and they shared my view that while the narrative was good and the direction of travel felt right, there remained too many unanswered questions. I want to set out briefly the concerns that they have, which must be addressed in the Government’s amendments in the other place.
Residents of Mandale House, for instance, made an application to the building safety fund for cladding work, 80% of which was rejected because—my right hon. Friend the Member for Leeds Central (Hilary Benn) mentioned this earlier—the juxtaposition of zinc and timber failed to meet the current criteria. That left them facing bills for tens of thousands of pounds. In the Metis Building there is a problem with wooden balconies, while in Wicker Riverside the problem is compartmentation. Those problems clearly affect many other buildings as well, in my constituency and across the country. We therefore need an absolute assurance that the statutory protection will cover all non-cladding remediation.
Residents of Mandale House face a further problem, in that their developer is no longer in business. We know that is a problem in hundreds of buildings. Companies have failed, or have been deliberately collapsed to enable them to avoid responsibility. It needs to be made clear that those leaseholders will not be overlooked, and that the Government will give them full support in respect of all safety remediation costs.
One of my constituents in the Millsands building asked for reassurance that support should be provided for leaseholders not in occupation of their flats. As my right hon. Friend the Member for Leeds Central pointed out, many have been forced to leave to raise the funds to try to pay the bills demanded of them. Others have left as their families have grown. They have done the sensible thing: they have moved on and used the rental income from their property to fund their new house. For some, the investment was the use of a lump sum to provide a retirement income in a solitary flat. As the right hon. Member for Hemel Hempstead (Sir Mike Penning) argued earlier, those people are victims too, and they need to be fully supported. We also need a statement sending a clear message to freeholders and developers that they must not rush to carry out work in order to avoid their responsibilities by imposing costs on leaseholders now, before the protection becomes part of legislation.
There is another issue, faced by my constituents in Wicker Riverside, a building from which residents were evacuated just before Christmas 2020 because of fire safety concerns. They have a problem with insurance—not that of rising costs, on which other Members commented earlier and for which there should be compensation, but the fact that no insurance company will provide cover for their building. They have been uninsurable for more than a year. That is an untenable position that the Government must, and could, act to address. I have discussed the issue with Ministers.
Finally, there is overriding concern about how long the process proposed by the Government will take, as legal action drags on and there is resistance from developers and others whom the developers may hold accountable and endless litigation. There is a risk that the problem, rather than being solved, will be prolonged for a very long time indeed. If the Government are confident that money can be recovered from developers, they could and should simply act to fix all the faults now and then use the full resources of the state to recover the money from those responsible. That way, as Members on the Opposition and Government Benches have said throughout today’s debate, no costs will fall on those who have no responsibility for the predicament they are in.
Stephen McPartland
I am grateful for the opportunity to speak on Third Reading. I am hopeful this evening and, like many Members from all parties, I am grateful to my hon. Friend the Member for Southampton, Itchen (Royston Smith), to the Father of the House, my hon. Friend the Member for Worthing West (Sir Peter Bottomley), and to colleagues across the House who have worked so hard to get us where we are today.
This is a huge Bill that tries to deal with some of the after-effects of the tragic events at Grenfell Tower. I have been to meet residents at New Providence Wharf, who have also had a very difficult time. Some of the issues they have had are heartbreaking and it is incredibly difficult to speak to them and hear what they have been through. We talk about fire safety in this place, but meeting people who were involved in fires and who were trapped in properties really brings it home.
I understand why the Government want to bring the Bill forward as quickly as they can. They have tabled 70 amendments and I understand their desire to work with Members across party lines to get to a much better place in respect of the bits we want. Although it is a very large Bill, a lot of us in the Chamber are focused on a small part of it: the provisions on leaseholders and leaseholder protections. That is the bit on which my colleagues and I mainly focus. It is important for me and for leaseholders up and down the country that they are not held responsible for historic fire safety defects and construction defects.
Let me remind the House where we have come from. When we started our campaign about 18 months ago, the Government’s original offer was around £20 million to deal with these issues. After the statement from the Secretary of State last week, we are now on course to have more than £9 billion of Government support, with probably another £100 million for waking watch, alarms and a variety of other issues. The Government have moved forward massively.
I do not always support the Government but, in fairness to them, on this issue we have asked and they have negotiated. There is a new tone and a new willingness to work both across party lines and within the governing party to resolve this issue for leaseholders, so we have hope. Tonight, millions of leaseholders up and down the country, many with huge mental health issues and facing massive financial ruin, have hope. That hope encourages us to believe that we may finally come to a position where we can resolve things for those millions of leaseholders.
We are in the position we are in because, although a lot of people will not realise this, the Prime Minister has intervened directly on a number of occasions to get us to a state in which we can support each other, negotiate and get more than £9 billion-worth of support for leaseholders, which is an amazing achievement. I am delighted with the work we have done behind the scenes to get us to where we are. Because of that hope and the constructive way in which the Government have worked with us behind the scenes, we want to give them the room to work with us a bit further and to table amendments in the House of Lords to protect leaseholders in law. That is what we want—that is our first request.
The second request that I continue to make is that amendments are made to protect leaseholders in respect of internal fire safety defects and not just external ones. At Vista Tower in my constituency, which has more than £15 million-worth of remediation costs, the fire breaks are missing. They would have been in the plans and signed off by the developers and the building regulatory regime, but they are missing. We have to think about how we can support constituents like that.
Sir Peter Bottomley
Will my hon. Friend allow me to add to what he is saying? The insurance companies are claiming premiums that are 10 or 20 times higher than before because there are additional fire risks. All this work should lead to reduced fire risks. Will he support me in asking the Government to get together with the technical sides of the insurance companies and the Competition and Markets Authority to get those insurance premiums back down to what they were before so that leaseholders may pay £300 a year to insure a building they do not own rather than £3,000 a year?
Stephen McPartland
I completely support the Father of the House, as he knows, in all matters.
It is important that the Government have accepted the principles of everything that we have asked for throughout this 18-month campaign. I am very grateful for that. With all the technical details, that campaign has demonstrated how complicated this issue is and the many millions of people and tens of thousands of buildings it affects in many different ways. In fairness to the Minister and the Government, it is very difficult to put all that into a Bill, so they do need time. As long as they are prepared to work with us, we are prepared to give them that time so as to support leaseholders and ensure that they do not have to pay for these historical fire safety defects.
I have one final request for the Minister on behalf of those constituents of mine in Vista Tower who have been affected by the building being no doubt shoddily built and not to the plans of the time. Will the Government be prepared to provide support so that those leaseholders can take action against the original developers, or will the Government take the action on their behalf, because a lot of these leaseholders have been going through this for a number of years and no longer have the mental resilience or ability to take these fights on and take legal actions for the next five or 10 years in the courts? Will the Minister provide further support to those leaseholders? Will he agree to continue to meet and work with me so that we can ensure that leaseholders are not held responsible and they are the innocent parties throughout this crisis?
Caroline Lucas
It is a pleasure to follow the hon. Member for Stevenage (Stephen McPartland). I pay tribute to all his work on this issue, and the work of the hon. Member for Harrow East (Bob Blackman), the Select Committee and many others.
There is much to welcome in this Bill, but I want to return to the issue of leaseholders, which is still one of the most worrying outstanding issues. I welcome the fierce determination that I have heard from Members in all parts of the House to make sure that we will not rest until we ensure that that protection for leaseholders is absolutely written into the Bill. I welcome the spirit of the Secretary of State’s statement last week, including the recognition that leaseholders are blameless in the scandal. He said that
“it is morally wrong that they should be the ones asked to pay the price.”—[Official Report, 10 January 2022; Vol. 706, c. 283.]
I agree, but unfortunately there is still too much lacking in this Bill. Like the gaps and defects in my constituents’ homes, there are gaping holes that still need fixing, including the firm commitment that we need to ensure that the burden for repairs, including non-cladding remedial work, does not fall on leaseholders. I am disappointed that the Minister has been unable to offer us more reassurance on that point.
This is not just about determining who will pay for construction defects. We need to know when they are going to pay, what happens should they refuse, and exactly what costs will be covered when they do so. What will happen in March if there is deadlock and developers do not agree to the £4 billion suggested in the Secretary of State’s letter to the residential property developer industry? What assessment have the Government made of the need for housing associations to access funding collected from the industry to cover the costs of leaseholders and to ensure that the delivery of social housing is not impacted by the fall-out from this crisis? What measures will be put in place to end individual legal disputes about liability if developers or manufacturers of materials, for example, refuse to accept liability for defects of their making?
I want to focus on one particular issue, which comes down to the fact that many developments are owned by absent and faceless freeholders via asset management companies. That means that getting something that should be very simple, like the signature of a freeholder on an application form, is very far from being straightforward, especially when offshore companies appear determined to avoid paper trails that might lead back to them at a later date. Let me give an example. On Friday, leaseholders at Stepney Court in my constituency received legal papers from their managing agent, FirstPort Property Services Ltd. They were horrified to be told that FirstPort intends to recover the estimated £4,912,000 for repairs from the leaseholders if the application to the building safety fund is not successful. That will mean that constituents such as the single working mother who paid £60,000 for a 25% share of her property will be lumbered with a repair bill of £110,000. That is not fair and it should not be allowed to happen.
All the while, the head lessee of those residential properties, Abacus Land 4 Ltd lurks in the background. Its role in the saga remains unclear, but what we do know about the elusive Abacus is that it is registered in Guernsey. It is administered by the asset management company, Long Harbour. Although I recognise that Abacus is not the developer, the mystery surrounding it and the confusing chain of accountability suggests that it is an example of what is at the very heart of the scandal: faceless investors making money out of shoddy, substandard and often downright unsafe housing.
It is not okay for freeholders to hold leaseholders to ransom. It is not okay for freeholders to hold up building safety fund applications by refusing to sign paperwork while, in the meantime, tightening up their legal positions before doing so. It is not okay for the Government to allow that to happen.
Last week, the Secretary of State said that he was “clear about who should” be “remedying failures”. He said:
“It should be the industries that profited, as they caused the problem, and those who have continued to profit, as they make it worse.”
He went on to say:
“I have established a dedicated team in my Department to expose and pursue those responsible.”—[Official Report, 10 January 2022; Vol. 706, c. 283-284.]
Let us see that come to fruition and see what that really means on the face of the Bill.
Stepney Court is just one of multiple blocks in the New England quarter of my constituency where defects have been identified and residents are battling with those responsible. Will the Minister ensure that his team looks into the problems facing residents in the area, where unpicking the responsibility for where remedial work lies has led to unacceptable delays in accessing support from the building safety fund? It is not just Stepney Court; residents in Embankment House and Temple House are still waiting for a decision on their application, too.
To be clear, on who should pay, we need guarantees that the buck will not be passed to those who, frankly, cannot pay. I have scores of constituents who are trapped in properties that they cannot sell—mortgage prisoners who cannot move on. I have more than 1,000 constituents living in dangerous homes. They need guarantees that issues other than cladding will be covered in the Building Safety Bill, whether that means missing fire breaks, compartmentation, defective fire doors, wooden balconies or other construction defects. They need to know that they will not have to wait years for that to happen. They need certainty that the Bill, along with the commitments in the Secretary of State’s statement last week, will ensure that the wait for work to make their homes safe finally ends. Allowing people to remain living in unsafe homes is highly dangerous. It needs to end, and the Bill is the opportunity for the Government to address past failings as well as to look ahead. I hope that they will act with the speed and certainty that our constituents all need.
Rebecca Long Bailey (Salford and Eccles) (Lab)
It is nearly five years since the tragic events at Grenfell Tower, yet thousands of my constituents in Salford and Eccles still live in fear. Some live in cold, draughty flats, having waited years for already removed cladding to be replaced, and for so many leaseholders every day, the bills for interim fire safety and increased insurance premiums rack up. They cannot move, they cannot sell, they struggle to get credit and the mental toll increasingly becomes unmanageable.
When the Secretary of State informed Parliament last week that he
“will pursue statutory protection for leaseholders and nothing will be off the table”—[Official Report, 10 January 2022; Vol. 706, c. 285.]
it was welcome news, but we have been here before, have we not? All his predecessors have conveyed warm, fluffy, non-binding statements to the House about protecting leaseholders, but we have seen very little action. The Minister must understand why my constituents have asked me why we are not legislating to protect them today in the Bill. There have been no clear assurances from him today, sadly, that the amendments that will be tabled in the other place will comprehensively include all leaseholders and indemnify them against all fire safety defect costs and ancillary costs that they may have incurred over the past few years.
The absence of that protection raises many more unanswered questions, which I hope the Minister will address. For example, what about my residents who have already received financially devastating demands for payment? Will he confirm what they should do? Should they ignore those demands in the hope that the Government legislate? How will he protect them when they face forfeiture and losing their home, or worse, bankruptcy?
Furthermore, there is ambiguity once again about the non-cladding fire safety defects in the majority of the affected buildings in my constituency, so will he confirm what specific actions he will take to ensure that residents and leaseholders are protected from the costs of non-cladding fire safety defects in buildings of all heights?
What about the sums spent so far? I am informed that many sinking funds in my constituency have already been wiped out by virtue of fire safety investigations and other interim fire safety costs. In addition, residents have already been paying directly for interim costs and increased insurance premiums. Will they be able to claim a refund, and will that be legislated for in the other place?
Finally, I must highlight the significant and unacceptable delays both in the completion of the fire safety works themselves and in processing building safety fund applications. A number of housing association blocks in my constituency have been without cladding for some years now, leaving many residents living in freezing conditions, and numerous other private residential buildings are reporting significant delays at the Department for Levelling Up, Housing and Communities in signing off funding agreements within the building safety fund.
If the Secretary of State cannot get the limited amount of money the Government have already committed out the door, how can he assure us that any wider package he announces will be more expedient in the future? What action are the Minister and the Secretary of State taking to fast-track, expand and train up new specialists in the supply chain to carry out the urgent work required at pace?
My constituents simply deserve two urgent things from the Government: first, to have their buildings made safe as part of an urgent national building safety mission; and, secondly, to be protected from the costs of a fire safety crisis they did not cause. Sadly, as drafted so far, this Bill delivers neither. I hope the Minister reflects on the amendments that will be required in the other place and delivers the safety and protection that my constituents deserve.
Florence Eshalomi (Vauxhall) (Lab/Co-op)
I start by paying tribute to the many hundreds of Vauxhall residents who have contacted me in my short two years as Member of Parliament for Vauxhall. They have been contacting me even though they are suffering sheer mental stress, contacting me even though at times they feel that there is no end to this nightmare, contacting me because they have been trapped in homes they are unable to sell and contacting me, frankly, because some of their properties are unsafe. At every stage of my continued efforts on behalf of Vauxhall leaseholders going through that anguish and uncertainty over the last two years, the Bill has been held up by the Government as the solution that would finally bring an end to this crisis. Regrettably, it does not.
The Bill is a step in the right direction in the fight to ensure that nobody has to live in a death trap and a fire trap like Grenfell Tower, and as a legislator I support the measures to keep my constituents safe. I therefore welcome the essential changes that will bring an end to the shambolic safety regime that led to the Grenfell tragedy, and the introduction of a regulator to oversee that. I also welcome the new Secretary of State’s change of approach to the question of leaseholder liability, which has clearly become one of the most clear injustices I have seen in politics. It is clear that the Bill will give leaseholders important new rights to challenge freeholders and developers when negligence has occurred. I am pleased, too, that the Government finally agree that no leaseholder living in a building of under 11 metres will pay for the cost of cladding remediation in the future, for which my Opposition colleagues have been calling for many months.
However, we must not pretend that the Bill achieves what it should have done. Millions of leaseholders who have been in a position of deep uncertainty for years will still be there after today, reliant yet again on warm words from the Government and the good will of profit-making companies that have done their best to evade that at every turn. I understand why so many Vauxhall constituents simply do not trust that promises will be delivered on, which is why it is so disappointing, frankly, that much of what was in the Secretary of State’s statement last week is not included in the Bill.
A lot has been said about the inconsistency of saying that leaseholders should be protected from cladding costs while leaving them on the hook to pay for the extortionate cost of other defects, and I add my full support to Members from across the House who have spoken out against that. There are several ongoing issues that the Bill does nothing to address, such as the extortionate insurance premiums and other secondary costs before remediation is completed. Let us be clear that leaseholders will be meeting those unjust costs for years until decisive action is taken.
Most importantly, both the Bill’s provisions and the Secretary of State’s announcement last week appear to apply only to future contexts. Where does that leave the millions of leaseholders caught up at various points along the way of that lengthy scandal? What does the Bill do to empower leaseholders who had their assessment before the recent changes in Government policy and believe that unnecessary work has been recommended for their building? Where is the help for leaseholders whose flats are unsellable until that remediation work is complete but who have been told that they will have to wait many years? They are trapped. The Government have known about all those issues for far too long and have done nothing while leaseholders have suffered. Today, they had the opportunity to accept amendments that would have fixed them, but yet again they chose to turn a blind eye.
With a heavy heart, I welcome the Bill, because it will make my constituents living in high-rise buildings safer. The Minister, in his opening statement, said that living in a home where you feel safe is a basic human right, but many of my leaseholders in Vauxhall still do not feel that they have that right. I lament another missed opportunity to rescue leaseholders from the scandal.
Rachel Hopkins (Luton South) (Lab)
I refer the House to my entry in the Register of Members’ Financial Interests. As a member of the Levelling Up, Housing and Communities Committee and having set on the Bill Committee, I welcome many of the Bill’s provisions. However, as a point of principle, no innocent leaseholder should have to remediate any historical cladding and non-cladding defects. We have heard that point made so well across the Chamber all afternoon.
Key now is what the Bill does not include, rather than what it does. We have heard much about the amendments that the Government propose will be considered in the other place, and I reiterate the call that we must have a full debate on the Bill’s return to the House to ensure those statutory protections for leaseholders. The proposal to make developers pay £4 billion for cladding removal in buildings under 18 metres is unclear on how quickly developers will be asked to pay and what measures the Government will take if they refuse. Without immediate compulsion, the process threatens to continue to be drawn out, with innocent leaseholders trapped in properties that they cannot sell and paying bills that they cannot afford. Does the Minister think it is right that social landlords have paid millions more than developers to fix the building safety scandal at the cost of delivering new social homes? I hope that we will see urgent action to appease concerns raised by leaseholders and Members across the House and to allay genuine concerns that it is one rule for council and social landlords and another for the Government’s developer friends.
We have yet to see the clarity that we expect on specific parts of the Bill for the significant numbers of leaseholders who face huge bills to fix non-cladding defects. If the Secretary of State is serious about ending that injustice, leaseholders must be protected from the cost of covering all historical defects. I reiterate the point made by many that those who created the crisis must be made to fix it.
I press the Government again to listen to leaseholders about how the ordeal has affected their mental health. Leaseholders in Luton South have told me how their mental health has suffered severely because of their fear of debt and bankruptcy and the pressure of the situation. One constituent told me how the threat of bankruptcy threatened their professional title and, therefore, their career. The scandal has prevented people from moving on with their lives—it is a form of purgatory.
When we discussed mental health in Committee, the Minister suggested that leaseholders should refer to their GPs, but we know how many pressures they are under. The Guardian has reported that officials have told leaseholders to call Samaritans. Both suggestions are simply inadequate. I repeat the ask that I made of the Secretary of State during last week’s statement for specific mental health support for affected leaseholders. We have had much debate today and through the consideration of this Bill that has been very technical and about buildings, but I stress again that this is about people and how they are affected. We must ensure that the leaseholder and tenant voice is heard as the Bill continues through its process.
The point has been made more than once, both today and over the past four years, that a disaster such as Grenfell must never happen again. The insufficient action for nearly five years shows the need for an interventionist Government to make people safe, as the market alone is incapable of doing that. I support my party’s calls for the Government to set up a building works agency that would go block by block assessing risk, commissioning necessary fire safety work, certifying that work and pursuing those responsible for the costs. I look forward to hearing from the Secretary of State with regard to those issues.
Innocent leaseholders need action. Comprehensive measures must be implemented to prevent this disaster from ever happening again.
Andy Slaughter
There is not an issue before this House that causes me as much concern as the safety of residents living in high-rise blocks from the risk of fire. That has been the case since August 2016 when there was a very serious fire at Shepherd’s Court in my constituency, which I spoke about earlier today. Fortunately, there were no casualties, but a full evacuation of an 18-storey block was required. Then, 10 months later, we had the fire at Grenfell, the absolute horror of which stays with me every day. Grenfell is only about a mile from where I live, and for 72 people to lose their lives in those circumstances is just so appalling that we cannot spend enough time, or do enough, to ensure that that never happens again in the future. Yet we have had other serious fires since that time.
Grenfell led to the identifying of many faults, including external cladding, poor management, poor construction and maintenance, and the people who live in social housing in particular not being taken notice of. It also made us look at the whole issue of fire safety, which is what the Bill purports to do, and in that way Grenfell opened the door on many other issues as well. If the speech of the Minister who opened the Third Reading debate was reflected in the Bill, I would be delighted, because he announced it as a tour de force, or a tour de raison, and said that it would resolve all the issues, but it just does not. The Government’s approach has been piecemeal. It is the proverbial Swiss cheese, still full of holes, and there is a great lack of clarity. I say that with no pleasure at all. Let me give, in just a few minutes, a non-exhaustive list of the issues that I either still cannot comprehend or know are not properly covered in the Bill.
We started off with the building safety fund applying to buildings over 18 metres tall, and that was extended to one type of cladding, aluminium composite material cladding, and then to another, hydraulic power unit cladding. We have now had a recent announcement from the new Secretary of State—I hope I have understood this correctly—that there will be a request to private developers to provide £4 billion, with a veiled threat of enforcing that in some as yet unspecified way, in order to deal with buildings between 11 and 18 metres. I am not even sure whether this covers all types of cladding and external wall issues. Does it cover wooden balconies or wooden panelling, for example? I do not think that it does.
The issue has been raised several times, including today and in the statement, of non-cladding defects in buildings above 11 metres. I am not clear whether these will all be covered, yet all these things represent clear and present dangers of fire and fire spread. What about tall buildings that are not specifically residential, such as hospitals and hotels, but still pose risk to people, including vulnerable people, who sleep in them? What about buildings below 11 metres, which, either because they are of a particular construction or because of their use—for example, care homes and schools—also pose risk? We have heard nothing of that either.
This is an example from my own borough, and it is not a rare example. There are often developments where there are interlinked buildings above and below 18 metres. What has often happened is that, quite rightly, the landlord has got on with remedial works, probably because they have to do so in order to apply to the building safety fund within the time limit. They have obviously also done work on parts of the structure below 18 metres, but now they are told that leaseholders will not be able to recover the funds. That is a Catch-22 that has not been addressed in the Bill.
Earlier we touched on the issue of social landlords and tenants, and on the fact that they are both being made to pay through the nose. That money is coming out of those landlords’ other funds, which would otherwise be used for new home developments or the repair, maintenance and management of existing homes, and there has not been a clear response from the Government on that either.
My hon. Friend the Member for Poplar and Limehouse (Apsana Begum) and the hon. Member for Harrow East (Bob Blackman) spoke of the fact that, every day, planning applications are going forward that do not comply with best practice. We heard the extreme example of blocks over 50 storeys tall that have a single staircase. What about the issue of stay put evacuation policies? What about alarm systems? What about sprinkler systems? What about ensuring, as I mentioned in dealing with electrical safety matters earlier, that all dwellings in a high-rise block are dealt with equally? Those are all pregnant questions, which I do not see being answered in the Bill at all.
Until we start to deal with this issue comprehensively, the Bill will only begin to scratch at a real problem. Yes, it is a real problem. I do not say it is a party political problem; it has developed over many decades. I think we are all shocked to find out that building standards are so low in this country, but now we know that, we have to do something.
My final plea is this: can we have transparency from the Government? I have followed organisations such as openDemocracy. Ever since Grenfell, a whole series of freedom of information requests have been resisted and pushed back, first through the inquiries unit in the Cabinet Office, and secondly through the now notorious clearing house that used to be run by the Secretary of State for Levelling Up. Last Friday, I saw an article published by openDemocracy that showed that they are still doing this—they are still trying to withhold information that is being legitimately requested. The irony is that the person to whom they went for assistance on how to withhold that information was a lady called Sue Gray. I hope that the practice of advising colleagues on how not to be frank and full in displaying information on such a subject will not carry over into other aspects of her work, but that is one further illustration of how we are so far away from dealing with this problem. I cannot sleep easily at night knowing that my constituents cannot sleep easily at night because the risk to them of, at worst, a repetition of Grenfell, or of something less dramatic but still problematic, is still there and has not been addressed by the Government over the last five years.
Mr Betts
As my hon. Friend the Member for Luton South (Rachel Hopkins) said, the Bill is a response to Grenfell, and the intention must be to make sure that such a tragedy never happens again. That is a clear objective that everyone can share.
The Bill before us is welcome. It does many good things, and I would like to think that the Levelling Up, Housing and Communities Committee has helped in the process. We have had five inquiries and five reports, which I think have pushed the Government in the right direction, although probably not as far as we would want them to go in some respects. Certainly, the provision of funds for cladding removal, the initial move on the ACM cladding, the £1 billion and the extension of the building safety fund to £5 billion have all been welcome. That is something the Select Committee has recognised. Nevertheless, we are still in an imperfect position—we hope it is a position in progress, as the Minister has explained. I still want to see the objectives that I set out earlier to be met: that leaseholders, who are not responsible for these mistakes, should not have to pay; that tenants, who are not responsible, should not have to pay; and that there should not be cuts in the social house building programme to pay for this.
We welcome the Secretary of State’s recent announcement, and we are going to hold a short inquiry—it will be short in how quickly we are going to do it, but not short in the detail—to follow up on it. We join the Secretary of State and the Minister in wanting to ensure that those responsible for these defects are held to account and that the whole of the construction industry, in its widest sense, including product manufacturers, insurance providers and everyone else, ultimately has to pay for these costs. That is absolutely right.
To summarise, as the Minister rightly said, we are not, on Third Reading, at the end of the process, but at the end of the beginning. I welcome the Government’s and the Minister’s commitments to bring the issues back to this House for detailed consideration once they have been considered in the other place.
Two other issues need to be addressed in due course. We cannot legislate for one of them, as Dame Judith clearly identified: regulation is important, but there has to be a complete change of culture in the construction industry. The objective of that industry for too long has been to get around regulation; whatever regulations are in place, it has found ways to avoid them and to cut corners. That cannot continue, and that is a major challenge; we share the challenge but this is going to be very difficult to achieve. Parts of the industry have woken up and recognised this, but other parts hope that this will all go away and they can carry on as before. That cannot be allowed to happen.
Finally, let me return to the comments made by the Father of the House, who has done magnificent work in pushing the case for leaseholders and leasehold reform. After we have, as we hope to do, got this Bill and subsequently the Act into a form that we can all thoroughly support, we will then move on to dealing with the issue of leasehold reform in full. I offer again to the Government the Select Committee as a way to look at that proposed legislation in draft form. It is going to be complicated and detailed, but I think there will be cross-party support in principle for it. So I hope that the Government will look at bringing that forward in draft form. We will look at it and scrutinise it rapidly but thoroughly in the Select Committee. By doing that, we can make that also a better piece of legislation.
Christopher Pincher
Given all I said previously, I would not want to be accused of detaining the House and the swift passage of the Bill, beyond simply saying thank you to everyone at the Department for Levelling Up, Housing and Communities, particularly my officials who are in the Box and several who are not, and Lord Greenhalgh, who have worked so assiduously to bring the Bill to its current stage, where we can all agree to it today. I also wish to thank the Chairman of the Select Committee, the hon. Member for Sheffield South East (Mr Betts), for his help and support, and we look forward to further collaboration with the Committee.
I congratulate all Members from across the House for their campaigning zeal: the Father of the House, my hon. Friend the Member for Worthing West (Sir Peter Bottomley); my hon. Friend the Member for Stevenage (Stephen McPartland); my hon. Friend the Member for Eastbourne (Caroline Ansell); the right hon. Member for Leeds Central (Hilary Benn); the hon. Member for Vauxhall (Florence Eshalomi); and many others who have worked so very hard to on behalf of their constituents to make sure that their concerns are addressed. I am glad that we are able to support the Bill tonight, and I wish it well on its swift passage to the statute book.
Question put and agreed to.
Bill accordingly read the Third time and passed.
Business of the House (Today)
Ordered,
That, at this day’s sitting, the Speaker shall put the Question necessary to dispose of proceedings on the motion in the name of Mr Jacob Rees-Mogg relating to Committee on Standards not later than one hour after the commencement of proceedings on the motion for this Order; proceedings relating to the motion on Committee on Standards may continue, though opposed, after the moment of interruption; and Standing Order No. 41A (Deferred divisions) shall not apply.—(Amanda Solloway.)
Building Safety Bill
Thursday 20th January 2022
(2 years, 2 months ago)
Lords ChamberRead Full debate Building Safety Act 2022 Read Hansard Text Amendment Paper: Consideration of Bill Amendments as at 19 January 2022 - large print - (19 Jan 2022)
Building Safety Bill
Wednesday 2nd February 2022
(2 years, 2 months ago)
Lords ChamberRead Full debate Building Safety Act 2022 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 19 January 2022 - large print - (19 Jan 2022)
The Minister of State, Home Office and Department for Levelling Up, Housing & Communities (Lord Greenhalgh) (Con)
My Lords, it is a privilege to open the Second Reading debate of this landmark Bill today. I will never forget the events that led us to this moment, nor the 72 people who lost their lives in the most appalling circumstances in the largest loss of life in a residential fire since the Second World War. The fire at Grenfell Tower in the early hours of 14 June 2017 should never have happened. The legislation we are bringing forward today is part of our wider reform to make sure that something like this tragedy can never happen again.
We cannot bring back those who lost their lives on that terrible day, and nothing can undo the errors that led to their deaths. Yet, if anything is to come from this disaster, it must be the lessons that we have learned from the mistakes that were made. That is why the Government appointed Dame Judith Hackitt to review the current building safety regime and recommend wholesale reform. Her findings were unequivocal and clear. Too often, regulations and guidance were misunderstood or misinterpreted. The drive to do things quickly and cheaply—the noble Earl, Lord Lytton, mentioned the concept of value engineering—meant that concerns were ignored and safety was not prioritised. There was ambiguity around who is actually responsible for the safety of buildings, with insufficient oversight and enforcement.
Dame Judith called for a complete overhaul of the system, and her recommendations underpin the Bill, with a golden thread that will ensure that, henceforth, people remain safe in the homes that we build for them. The Bill is unapologetically ambitious, creating a world-class building safety regulatory regime that holds all to the same high standard. The Fire Safety Act, which we will commence shortly, was the first legislative step towards delivering meaningful change following that dreadful tragedy. The Building Safety Bill represents the next step, delivering significant improvements to both the regulatory framework and industry culture, creating a more accountable system.
The Bill will deliver improvements across the entire built environment. It will strengthen oversight and protections for residents in high-rise buildings and give them a greater say, and will toughen sanctions against those who threaten their safety. Its focus on risk will help owners manage their buildings better, while giving the homebuilding industry the clear, proportionate framework it needs to deliver better, higher-quality homes. It is proportionate and strengthens fire safety requirements in all premises regulated by the fire safety order. It rightly focuses the new, more stringent requirements on those buildings and issues that pose the greatest risk.
To that end, we are strengthening our regulation of high-rise residential buildings which are over 18 metres or above six storeys in height, whichever is reached first; those buildings pose the greatest safety risks in the event of a spreading fire or structural failure. We are including hospitals and care homes that meet the height threshold during their design and construction. We will establish a robust link between safety, design, construction and occupation, with stringent duties to ensure safety throughout the building’s life cycle.
The Bill provides the framework to ensure that, during the design and construction, defined duty holders have clear responsibilities for compliance with building regulations, including fire and structural safety. They will have to clear a series of hard stops, through the new gateway system for in-scope buildings.
In occupation, every building in scope will have an identified accountable person with clear responsibility for safety matters. Their duties include registering the building with a new regulator, building an evidence and risk-based safety case, and the continued evaluation of potential hazards. Importantly, it will be a criminal offence not to carry out these duties effectively, punishable by an unlimited fine and up to two years in prison.
We are giving residents a stronger voice in the system through the Bill, making it easier for them to seek redress and raise concerns. The Bill will require an accountable person for a high-rise residential building to engage with their residents and establish a formal complaints process for residents to raise concerns. Both the accountable person and the responsible person for premises regulated by the fire safety order will be required to provide residents with access to key building safety information.
These measures will be overseen by the new building safety regulator within the Health and Safety Executive. The regulator will be equipped with robust powers to crack down on substandard practices. It will oversee the safety and standards of all buildings and will provide important independent advice to government on building safety and standards. It will support a significant improvement in the performance and competence of industry and building control professionals.
The Bill ensures that the regulator will regulate in line with best practice principles, being proportionate and transparent and targeting activity where action is needed. Crucially, it will act to ensure that proportionality is embedded within its operations and in its work with accountable persons to assess buildings.
I turn now to construction products. The testimony we have heard at the Grenfell Tower Inquiry has been shocking to say the least and has exposed a culture of corner-cutting, Spanish practices and disgraceful behaviour by an industry that has compromised building safety. We intend to put a stop to this. Following the Grenfell Tower fire, we banned the use of combustible materials on the external walls of high-rise residential buildings. The Bill creates powers to strengthen regulatory oversight for firms that manufacture and sell construction products and, crucially, powers to remove unsafe construction products from the market and take action against those that break the rules. The Bill will improve the standards of our construction products oversight regime.
The polluter must pay; developers and construction product manufacturers must be held to account. Residents must be protected against substandard materials, workmanship and practices that make homes unsafe. Our new regime will help address these issues for high-rise residential buildings, but we need to expand legal safeguards for residents wherever they live. That is why the Bill retrospectively extends the period during which compensation for defective premises can be claimed by over double the current period—from six to 15 years prospectively and by 30 years retrospectively —to make sure that the failures of the past can be addressed. This is a significant step forward, and we are going further, expanding the scope of the work for which compensation can be claimed to include future renovations.
We are also strengthening redress for people buying a new-build home through provisions for the new homes ombudsman scheme that will provide dispute resolution and resolve complaints involving the buyers of new-build homes and developers.
We also know that we must go further to protect innocent leaseholders, who are the victims, from bearing the financial burden of this crisis. I thank your Lordships, in particular my noble friends Lord Blencathra and Lord Young of Cookham and the noble Lord, Lord Stunell. I could not forget the noble Lord, Lord Kennedy, as well for being ever so helpful during these debates. I also thank the noble Earl, Lord Lytton, the noble Baroness, Lady Pinnock, and, of course, the right reverend Prelate the Bishop of St Albans, who has been an inveterate campaigner on behalf of leaseholders. This is a hugely important issue; it is important that we continue to do our best collectively to protect leaseholders.
The Secretary of State in the other place has been unequivocal in his determination that leaseholders living in their own flats in medium and high-rise buildings will not pay a penny to remediate unsafe cladding. We have scrapped proposals for loans and long-term debt for medium-rise leaseholders. We have allocated a further £27 million to help bring the misuse of waking watches to an end, and we are working towards making sure that leaseholders are protected from the risk of forfeiture relating to historical building safety issues, until a new industry-developed system is in place. But we know that more is needed. We will also explore further statutory protections for leaseholders and we will bring forward proposals for this House to consider at the earliest opportunity. I look forward to working with your Lordships on the Opposition Benches, with the Liberal Democrats, with the Cross-Benchers, and even with my own awkward squad, to ensure that this 143-clause Bill perhaps adds the odd extra clause and is the best possible Bill that we can take forward and get on the statute book.
The Government have accepted their share of responsibility and made significant financial provision—over £5 billion—through the ACM remediation programme and the building safety fund. Some developers have already done the right thing and provisioned or are funding remediation works. We are also seeing that among registered providers. But too many others have failed to live up to their responsibilities; in some cases, they are not engaging at all with government. We cannot keep looking to the taxpayer to keep bailing out this failing industry: we must get the polluters to pay.
We have already announced a £2 billion tax on the biggest residential developers through the residential property developer tax and a further levy on developers building tall buildings through the Building Safety Bill, and we are now engaged with industry to ensure that it pays its fair share for fixing cladding problems, rather than the leaseholders. I point out that where both private developers and social housing organisations have developed land, they are equally culpable if they put up unsafe buildings and they must pay. Our expectations are clear: industry and the owners of land, such as registered providers, should fix the buildings they were responsible for. They need to contribute to a wider fund to ensure that remaining buildings are remediated to protect leaseholders.
In a round table held with the Secretary of State, senior executives from the country’s biggest developers agreed that leaseholders should not pay. We continue to engage with them on how they will deliver a fully funded action plan by early March. We are also acting directly to make sure that those who manufactured dangerous products, built unsafe buildings and knowingly put lives at risk are also properly held to account. We have had a similar meeting with construction products manufacturers. I was shocked that Arconic, one of the manufacturers of the material used on Grenfell, did not show up; that is completely unacceptable. We have been clear in our intent: industry needs to develop real proposals to fund this crisis. If it does not agree a solution soon, we will, if necessary, impose one in law.
The Bill represents the most radical revision of our building safety regime in generations. It is a complete overhaul of safety management, putting residents’ safety at the absolute heart of our reform. I commend the Bill to the House.
Baroness Hayman of Ullock (Lab)
My Lords, I begin by saying that we welcome the Bill, which will bring about the long-awaited changes to the building safety regime following Dame Judith Hackitt’s independent review. I also thank my noble friend Lord Kennedy for the huge amount of work he has done on the Bill so far.
As the Minister reminded us, we must not forget why Dame Judith’s review and this legislation are so very important. He reminded us that in June 2017, 72 men, women and children lost their lives in an inferno fuelled by the highly combustible cladding system that had been installed on the outside of their tower block. We should remember that that tower block was also compromised by a range of other fire safety defects.
Four and a half years on from the Grenfell Tower fire, thousands of residents across the country continue to live in a state of constant fear over the safety of their homes and the cost of putting right past failures. Although we welcome the Bill and the recent promised government amendments, we have concerns that without further changes to provisions affecting leaseholders, it will still fall short of meeting the objective of learning all the lessons of the Grenfell Tower fire and fail completely to restore public confidence in our building system.
I will outline our concerns to the Minister and I hope that his response will provide further positive reasons as to why we can look forward to government action on the outstanding concerns. First, we believe that the Bill’s definition of “higher-risk buildings” could be strengthened to take into account the vulnerability of residents. The Minister mentioned the fact that the Government have modified the definition of higher-risk buildings to now include care homes and hospitals that meet an 18-metre height threshold. However, that still excludes often vulnerable people living in buildings below that threshold from access to vital protections under the new regulatory system. We believe that all supported accommodation should be included, regardless of its height.
I now turn to funding protections for leaseholders. Does the Minister agree that leaseholders in all affected buildings, regardless of their height, should be protected from covering any costs related to past regulatory failings, and that should include cladding and non- cladding fire safety defects? That protection should be retrospectively extended to leaseholders who have already made significant out-of-pocket investments in remediation works. The Government and the housing and development industries must be prepared to fund, in full, both cladding and non-cladding remediation works. As it stands, the Bill simply does not go far enough to address these issues.
We strongly agree with the Minister that developers must be held to account and I was pleased to hear him say that if this does not happen, law will be brought in to ensure that it does. So I would be interested to hear from him more about how that would take place. The Minister recognised that not all of industry has stepped up. How are the Government going to ensure that industry, right across the board, will play its part and pay the funds that it has been asked to? How will the Government continue to play their part and supply the funds that are needed? The Minister rightly said that a lot of money has been promised but this is a huge issue, with many residents very much out of pocket.
We need to make sure that the twin objectives of fixing the building safety crisis and delivering new and improved social housing can be delivered simultaneously through the Bill. Concerns have been raised that the housing building funds could be plundered. Could I please have some assurance from the Minister in that area?
I mentioned that all remediation costs should be covered retrospectively. Can the Minister advise leaseholders as to how they are expected to go about reclaiming those costs? When will the Government publish their promised amendments to provide concrete assurances to leaseholders that they will not be liable for those remediation costs? Will we be seeing those amendments in Committee?
The provisions of the Defective Premises Act currently stipulate that a leaseholder can make a legal claim for compensation if their dwelling is unfit for habitation, as long as the claim is made within six years of the building being constructed. We welcome the amendment made in the Commons that extends that eligibility period from six to 30 years and that claims can now be made for defects arising from refurbishment works. Another crucial change is that leaseholders will be able to make claims retrospectively if their claims fall within the eligibility period. However, we have concerns that the cost and time implications of making a legal claim against developers will prevent many leaseholders from benefiting from this measure. Will the Minister think about what the Government could do to clarify this because it would be helpful if, in the first instance, they said that they expected building owners and freeholders to make a claim as they are more likely to have the capacity to do so than individual leaseholders? That expectation would also reflect the legal duty for building owners to prove that they have carried out their due diligence on finding all possible sources of funding that do not rely on leaseholders paying.
We also welcome the Bill’s changes to the fire safety order, mentioned by the Minister, which introduce the duty for fire risk assessments to be completed by competent professional, and the improvements to residents’ access to safety information about their buildings. However, it is unclear whether this duty for responsible persons to share fire safety information extends to prospective residents and residents who are not leaseholders but tenants in a building. If the Minister could clarify that, I would be very grateful. This clause could be strengthened by clarifying that responsible persons must proactively share fire safety information, including fire risk assessments in full, with prospective and current residents, including both leaseholders and tenants.
I turn briefly back to the area of most concern to leaseholders: the funding of the cost of cladding remediation and building safety. The Labour Party has been clear in debates both in this House and in the other place that leaseholders should not have to pay to fix this crisis. The Minister confirmed that this is the Government’s point of view as well. Overall responsibility for funding building safety work has to lie ultimately with the Government to ensure that this happens.
It is also clear that industry has played a role in making decisions that have compromised the safety of buildings and has a part to play in shouldering the burden of costs. The Minister spoke about the recent announcement by the Secretary of State, which we very much welcomed, about the Government aiming to recover costs from developers for cladding remediation. But, as has been asked before, how does this help leaseholders who live in buildings with non-cladding-related defects, who also face excessive charges to make their homes safe? The Bill must protect all leaseholders facing costs for fire safety defects that they did not cause.
We recognise the Government’s efforts to increase the building safety fund, but unfortunately the amount allocated is still not enough. Can the Minister reassure this House that the funding shortfall will not lead to a “first come, first served” allocation? This may mean that building owners with less experience of managing large refurbishment and construction projects will lose out, as it could take them longer to get together the information and evidence necessary to properly complete an application to the fund. This could include buildings where leaseholders exercise their right to manage, for example, or where there are projects with additional complications.
The Government need to find a solution that can make all homes safe, regardless of height, without passing on the burden of cost to leaseholders. The residential property developer tax and the building safety levy are very welcome, but will the Government ensure that the right measures are in place to prevent any unintended loss of affordable housing through lower Section 106 commitments?
The cost of waking watch has been a huge concern for many people, and I was pleased to hear the Minister talk about this. It is really good that in December the Government announced a £30 million waking watch relief fund and that this has now been increased. However, the fund still fails to reimburse leaseholders who have already paid out for interim waking watch costs and does not consider those who continue to need a waking watch as well as a fire alarm. Can this be looked at again?
To answer all these outstanding concerns, Labour has called on the Government to establish a new building works agency. This single body, which would be accountable to Ministers, would decide what works are necessary and commission and pay for them, then sign off the building as safe at the end of the process. The building works agency would work closely with local authorities and fire chiefs, who have been gathering data and are well placed to know how to manage projects locally. It would also have the legal powers to pursue those responsible through the courts if necessary. Keeping people safe in their own homes should not be a political issue, so will the Minister at least consider this very practical suggestion, given in good faith from the Opposition Benches? Will he work with both Labour and other noble Lords as the Bill goes forward to Committee so that we can continue to address concerns and improve this important piece of legislation?
In closing, I put on record my huge respect for the survivors and the bereaved of the Grenfell Tower fire and for the wider Grenfell Tower community, who continue to seek not only justice for their families and neighbours but wider change to ensure that everyone is safe in their own home. I know the Minister has worked hard to bring forward this legislation and I thank him for his diligence, yet there are still improvements that could be made. I offer him our full support in making a good Bill even better.
I look forward to listening to the debate today, and in particular to the valedictory speech of the right reverend Prelate the Bishop of Winchester. I wish him well for the future.
Lord Stunell (LD)
My Lords, I start by declaring my interests as they appear in the register. I am the honorary president of the National Home Improvement Council and an honorary fellow of the Institute of Civil Engineers. For two years, I was the Minister with responsibility for building regulations in DCLG.
We must never forget the 72 deaths at Grenfell Tower or the injuries and trauma arising directly from gross failures by professionals at every stage of the construction process, refurbishment and its regulatory oversight. I first aimed to tackle the long-standing dysfunction of regulation in the industry in my Sustainable and Secure Buildings Act 2004. Section 8 on certification and Section 9 on appointed persons gave a power to the Secretary of State to bring in what we now call the “golden thread”. Sadly, those powers remained unused for the following 18 years.
It will not surprise your Lordships that I and my colleagues give an enthusiastic welcome to this overdue Bill. We want to see its speedy passage and quick implementation. My noble friend Lady Pinnock and others will spell out the urgency of all necessary repairs being carried out on the tens of thousands of existing homes that have been found to have fatal flaws in their construction, with full financial protection for innocent leaseholders.
The bold ministerial words uttered so far have cut no ice with leaseholders who face five-figure bills and threats of repossession. Evidence of action is needed. Repairs must be undertaken without delay; bills settled by those who caused the problem, and families made safe in their home. If the developers push back, and the Secretary of State finds himself in the High Court, that must not be a reason to leave leaseholders almost literally swinging in the wind—with no cladding or insulation, and with enormous bills for waking watch and for their basic heating.
Speed is also needed so that the construction industry can get on with the job. It cannot invest in the right skills and training, nor develop competencies without the certainty provided by this legislation.
Of course, not all this can be put into the Bill. We shall certainly vigorously press the Government to explain their intentions more clearly when we consider the draft statutory instruments alongside our further considerations on the Bill. This way, we can assist the Government in producing a coherent scheme of regulation that will be fit for purpose. Such an examination will help to ensure that there is a speedy transition from where we are now to where we must be, so that we do not create another green homes grant fiasco. That landed without notice on an unprepared industry and was scrapped within six months.
The long title of the Bill is helpfully comprehensive and inclusive. It makes,
“provision about the safety of people in or about buildings and the standard of buildings”.
However, the specifics addressed in the Bill are quite narrow. Only a small class of buildings will come under the new rules. Only one aspect of their design, construction and occupation is to be regulated by the building safety regulator. As it stands, the regulations and monitoring of other measures required for the avoidance and mitigation of fire in all other buildings will remain subject only to the existing regulatory regime. This system is certainly not rigorous. The British Woodworking Federation estimates that there are 600,000 unfit fire doors currently installed in the United Kingdom. Is the Minister satisfied with this? Does his department simply accept that regulatory failure of fire protection is acceptable, as long as it is not in a high-rise building? We will want to test these points in Committee and will invite the Minister to bring more buildings into scope.
A further gap in robust regulation is that even in high-risk or high-rise buildings, however defined, the application of all other parts of the regulations will be subject only to the existing failed compliance system, with the failing inspection service still responsible for regulatory oversight of that building’s energy performance and weather resistance or climate resilience—among other things—with no golden thread, no long-term monitoring and no accountability.
So, for instance, when zero carbon is not achieved in a high-rise block and faults in design or construction or subsequent alterations emerge, those leaseholders would be no further forward than they are now. It could even be that the same residents in the same flats in another 10 years face bills for remediation of failed insulation, unless, of course, the building safety regulator is also to take on the monitoring of those other parts of the building regulations. The rule should be “One building, one building regulator” for all aspects of building regulations, and we will want the Minister to face up to that in Committee.
The current regulatory system for building construction is manifestly not fit for purpose, regardless of a building’s height, complexity or fire risk, or whether the building inspector is from the private or local authority sector. This Bill is a necessary response to the tragedy of Grenfell, but it is also a once-in-a-lifetime opportunity to fully reform that failed system and we will put our views about how that might be done to the Minister in Committee.
Finally, the architecture of the Bill is complex, with an array of new structures, new professions and new roles as a means of achieving its ends. It is not by any means simple or intuitive, and we will be seeking clarification and refinement at Committee stage so that we have a workable and understandable structure that will produce safe buildings well into the future.
This complex Bill is very much welcomed on this side. We want to see it proceed quickly and be implemented smoothly. We must guarantee that the terrible tragedy of Grenfell can never be repeated. We must ensure that the innocent are safeguarded from the folly, carelessness and greed of those who have committed the offences and that those thousands of residents already caught up in the nightmare of unfunded remediation are fully protected. Our work on further stages of this Bill will be to work with the Minister to make sure that we achieve that.
Lord Best (CB)
My Lords, my contribution to this debate relates to the new homes ombudsman, the scheme that will be established by the provisions in Part 5 of the Bill. I declare past interests as the previous chair of the Property Ombudsman and chair of the Government’s working group on regulation of property agents.
Among the catalogue of criticisms of this country’s major housebuilders, redress for buyers of defective properties and victims of shoddy workmanship, scams and dodgy deals deserve our urgent attention. We are all familiar with the long list of ways in which the volume housebuilders have let us down—building safety, yes, but also poor design, low space standards, soulless estates, broken promises to provide affordable homes, exorbitant profits and bonuses for bosses, leasehold scams, sales agreements that contain unfair conditions and excessive charges, lack of investment in training, skills, and apprenticeships, building on greenfield sites when brownfield development would be far more appropriate, and building out only at a speed which ensures continuing scarcity and ever-higher prices. We need also to confront housebuilders’ defective workmanship and dreadful consumer/customer service in responding to entirely justified complaints by home buyers. It is excellent that the Government are seeking in this Bill to address this issue.
The proposal for a new homes ombudsman came from two reports by the All-Party Parliamentary Group for Excellence in the Built Environment, supported by the Construction Industry Council. I declare my interest as a vice-chair of that APPG alongside my noble friend Lord Lytton. Our first report, in 2015, entitled More Homes, Fewer Complaints, commended the idea of a new homes ombudsman. Our second inquiry, in 2018, spelled out how an ombudsman could drive up standards and improve consumer rights. It was skilfully chaired by Eddie Hughes MP, who is now the very Minister responsible for implementing the initiative. He says in his foreword to our report:
“I have been contacted by many MPs with despairing constituents who have implored them to help achieve redress from housebuilders refusing to rectify poor workmanship … Consumers desperately need greater leverage to drive a change in this culture”.
Submissions received by the inquiry from home buyers described how builders failed them, making buying a new home, as one first-time buyer said,
“the worst decision of their life.”
Surveys show that well over 90% of home buyers have experienced snags or defects when moving in, and in over 70% of those cases the problem has never been fully resolved. We are a very long way from zero-defect construction. It is quite extraordinary that the new house buyer has to expect snagging difficulties, problems with doors and windows not fitting properly, leaks and cracks. If cars—vastly more complicated things than houses, with thousands of working parts and the capacity to travel safely at speed—can be purchased without defects then why not static, solid, basic houses?
So it is very good news that we are now to have an ombudsman to whom the home purchaser can turn. There have been concerns over the suggestion that the industry-based New Homes Quality Board, rather than the Secretary of State, might appoint the ombudsman and write their code of practice. This could undermine public trust and lead to accusations that the housebuilders were pulling the strings.
My short list of questions today to the Minister, whom I congratulate on bringing forward this legislation, relates to the powers that the new homes ombudsman will possess. In essence, I am asking: will the ombudsman have real teeth?
First, could the Minister confirm that the new homes ombudsman will have the power to expel a housebuilder from the redress scheme—for example, for non-payment of compensation to a buyer—and that this would mean, quite properly, the ombudsman having the power to stop any further sales by a builder since they could not continue to sell homes if no longer in the scheme?
Secondly, will the ombudsman be able to award high enough levels of compensation to deter bad practice?
Thirdly, in common with many ombudsman schemes, will this ombudsman have the power to undertake own-initiative investigations around issues likely to justify multiple complaints, without each complainant having to make a separate case, and will it be able to publish guidance accordingly?
Fourthly, to avoid sharp practices and eliminate detrimental clauses in the small print, will the ombudsman be able to require the use of standardised sales contracts?
Fifthly, can it be that the ombudsman will have jurisdiction only for the first two years after a purchase, bearing in mind that defects often emerge after that date and that warranty providers exclude all the builder’s smaller defects that can make life miserable? The Legal Ombudsman, for example, can take action up to six years after a problem has been identified.
Sixthly, will the ombudsman be able to specify that builders use only approved warranty providers that have passed a rigorous assessment?
Seventhly, will the ombudsman be able to ban non-disclosure agreements—“gagging orders”—which some builders, for fear of gaining a poor reputation, have insisted on from buyers whose homes have been subject to remediation?
Eighthly, will the ombudsman publish its decisions, to name and shame offenders and exonerate the others?
Lastly, will the ombudsman be able to extract a sufficient levy from the housebuilders to resource all the work necessary to deal with what I suspect will be a multiplicity of complaints from all over the country?
I look forward to hearing the Minister’s response and, I hope, to being able to support this important ingredient in the Bill.
Baroness Sanderson of Welton (Con)
My Lords, I welcome today’s debate, and I thank my noble friend the Minister for his commitment to this issue. It is appreciated.
We all know the importance of the Bill before us today and we all know what led to its creation: the devastating fire at Grenfell Tower. It was a tragedy that shocked and shamed the country, yet more shocking still has been the evidence that has since come out of the public inquiry. Listening to all those involved makes for a deeply depressing experience. With the notable exception of RBKC, no one is ever to blame. It is always someone else’s fault, someone else’s problem.
Take the architects involved in the refurbishment. Apparently, they did not have design responsibility; that was the contractors’—except the contractors say that they delegated it to the cladding subcontractor. But no, hold on a minute, the cladding subcontractor says that the design compliance was not its job but the job of—wait for it—the architects. As for the companies that made the cladding, Arconic, Celotex and Kingspan —no, none of this was their responsibility. Never mind that the inquiry evidence shows that they manufactured or provided products that they knew or suspected to be dangerous for buildings of above 80 metres. Nor, apparently, was it the fault of the bodies responsible for testing and certification—bodies that have been accused of being too close to their customers and failing to provide the necessary protections.
Worse even than all this is the casual disregard—the flippancy—shown by pretty much everyone involved, at every level, in an industry that is supposed to have safety at its core. It is impossible to convey, so here they are in their own words, as heard at the public inquiry. An email from a senior staff member at Local Authority Building Control about the wording of a certificate, wrongly asserting that Kingspan’s insulation could be used on high-rise buildings, states:
“This issue has been burning for a LONG time though, hasn’t it? (Get it!!!!) Why is it raising its head again all of a sudden?”
An email between the contractors, fire engineers and architects, about the need to install strong fire barriers, says:
“There is no point in ‘fire stopping’, as we all know, the ACM will be gone rather quickly in a fire!”
Messages between employees of Kingspan discussing the rating of their material as class 0, or non-combustible, state:
“Doesn’t actually get class 0 when we test the whole product tho. LOL.”
An email from Grenfell’s fire risk assessor to the council’s tenant management organisation, after the LFB contacted them asking for help in identifying vulnerable persons, said:
“I would say you have nobody that this refers to … If you identify anybody now questions like why were they not included in the buildings FRA spring to mind. A good response I believe would be thank you for this information if we find anyone in the future we will let you know.”
For reference, while some updating did later take place, 15 of the 37 residents classed as vulnerable and disabled died in the fire.
This, then, was the culture of a truly broken industry. Within this, I fully appreciate that the role of government must also be looked at, and it will be considered by the inquiry shortly. I also appreciate, however, that that must not take away from the huge strides that the Bill will make.
Before I get on to that, I have one question for my noble friend the Minister. Incredible as it seems, post Grenfell and after all we have learned, the regulations still allow for tall residential buildings with only one fire escape staircase. Last month, it came to light that plans for two such developments in London are being rethought after concerns were raised locally and by the LFB.
Dozens of other countries require two or more escape stairs in such buildings, and I would like to know whether we will consider doing the same. It seems an anomaly when the Bill will do so much to fix the system, including the building safety regulator; new competence requirements for anyone carrying out design or building work; gateway points to ensure that building regulations compliance is considered at every stage of design and construction; and an accountable person who will ensure that residents are given a voice in decisions that concern the safety of their buildings. These changes are all designed to ensure that a tragedy such as Grenfell never happens again. While I understand that there will be improvements to make, regarding cladding remediation in particular, I urge noble Lords to bear in mind the fundamental reason for the Bill: that no one has to endure what the residents endured that night.
I declare my interest as a community adviser on Grenfell. I have worked with many members of the community since the days immediately after the fire. I have witnessed their strength and dignity in the face of so much suffering. I have heard what happened to them. It is not something that they like to talk about but, with kind permission, I want to tell one man’s story.
He grew up in Grenfell Tower and his mother and sister still lived there. On the night of the fire, they were trapped on one of the upper floors. His sister called him, leaving the line open as he rushed from his home in north London. Standing inside the cordon area, he saw his friends at the windows. He watched the flames engulf the building, as he remained on the phone to his sister. Despite her deteriorating situation she kept insisting she was okay, until finally she began to fade away. He heard a banging on the floor and then silence. At this point, he thought he had lost his mum too but, 30 seconds later and for the first time in the early hours of that morning, he heard her voice. She was struggling for breath and said her last words: “I can’t breathe, I can’t breathe.” He stayed on the phone, unable to cut off the call, hearing only the sound of the fire but hoping against all hope that maybe they would be okay, maybe someone would rescue them. It took him over an hour before he finally managed to switch off his phone.
Can noble Lords imagine how difficult that must have been and how difficult the reliving of that moment must still be? That is the reality of Grenfell. That is why the Bill is before us today—and it is why we must do everything we can to ensure its safe passage through this House.
Baroness Warwick of Undercliffe (Lab)
My Lords, I am pleased to join others in welcoming the Building Safety Bill to the upper House and I congratulate the Minister on its introduction. The tragedy of the Grenfell fire four years ago exposed huge concerns about building safety in relation to both fire safety and building standards more generally. The Bill is a hugely important piece of legislation in our efforts to ensure that a tragedy like the fire at Grenfell Tower can never happen again.
Housing associations across the country have been working since June 2017 on assessing and remediating building safety risks in thousands of blocks. As chair of the National Housing Federation, the representative body of housing associations in England—I declare that interest—I have come to understand and appreciate the depth and breadth of the crisis.
It is the priority of the sector to ensure that safety concerns can be identified and addressed as quickly as possible to help residents feel safe in their homes. So many of us will remember from the passage of the Fire Safety Act that progress towards ending this crisis has been delayed and prolonged by seemingly intractable funding challenges, not least for innocent leaseholders facing huge bills.
That is why I very much welcome the announcement that the Secretary of State made in the other place on 10 January that the Government will protect leaseholders from the costs and make developers, contractors and manufacturers pay to fix the building safety issues that they caused. The Government are right to make those who profited from unsafe building practices pay. This important step will enable us to start the process of charting a course out of the crisis.
As I have mentioned many times in this House, housing associations are not-for-profit organisations providing affordable homes for those on the lowest incomes. To cover the costs of remediation on buildings where social renters live, housing associations are already expecting to spend in excess of £6 billion on building safety works. As a consequence, housing associations are now less able to improve their current homes or build new ones.
The National Housing Federation’s 2021 survey found that 12,900 homes, more than 10% of affordable new homes to be built over the next five years, have already had to be cut to prioritise spending on building safety. I welcome confirmation from the Secretary of State that leaseholders of buildings owned by social housing providers will have access to the new funding to avoid these costs spiralling further. However, like others, I would welcome clarity from the Minister on the Government’s approach to non-cladding costs, and whether funding recouped from industry will be allocated for this purpose.
I know that the housing association sector is committed to working closely with the Government to find a fair and sustainable solution to our housing prices that balances both making buildings safe and enabling new homes to be built. I was delighted to hear the Secretary of State refer to building social housing and improving existing homes as a core mission of his department. However, I was worried that correspondence from the Treasury made public at the start of the year suggests existing departmental budgets would need to be used, should it not be possible to recoup money from industry. That is why I hope that the Minister will assure us today that the affordable homes programme will be protected to avoid any further reductions in the delivery of much-needed affordable housing.
I also want to support the Government’s evidence-based approach to assessing and managing risk in buildings. It is right that, where safety issues present an unacceptable level of risk, they are fixed with urgency; it is also right that, if risks can be eliminated and effectively minimised without vast building works, these options should be explored and, where suitable, implemented. I welcome the launch of PAS 9980 to aid this transition. We are in the early stages of implementation, and it is not yet clear how it would truly impact on how mid-rise buildings are treated and, in truth, what impact it will have on the amount and costs of work needed on buildings between 11 and 18 metres. I understand that the Government have already undertaken a survey of such buildings to ascertain a view on this; I also believe that close monitoring of the implementation of PAS 9980 could greatly help the Government, building owners, tenderers and lenders in understanding the evolving situation. Will the Minister commit to publishing the findings of the Government’s recent survey, and what plans does he have to monitor the approach to proportionality?
Finally, I welcome the part of the Bill that introduces a new homes ombudsman scheme—and I declare an interest as the chair of the Property Ombudsman. I wholeheartedly agree with the points made by the noble Lord, Lord Best—indeed, I would like to see the ombudsman report directly to Parliament. I just want to emphasise that, at a time when public and particularly home-buyer confidence is so low, the need for transparency and absolute real and perceived independence is crucial if the Government are to reassure homeowners that the ombudsman has teeth. Only that way will they have the trust and confidence in the redress or reassurance that they receive from the ombudsman. This is especially true when property developers do not comply with a decision; there needs to be a clear and transparent mechanism for enforcing decisions, in the worst case removing businesses from membership, and communicating this to existing and potential home-buyers. That enforcement should apply not just to financial redress but to implementation of recommendations to drive better outcomes for all.
This urgently needed Building Safety Bill has the potential to provide safety and security to those whose homes have wrongfully been built with safety risks. I hope that it will create a future in which the horrors of an event like Grenfell are no longer possible. The housing association sector wants to work with government to ensure that the Bill is as effective as possible at delivering that ambition.
Baroness Brinton (LD) [V]
My Lords, I declare my interest as a vice-president of the Local Government Association and as vice-chair of the All-Party Parliamentary Fire Safety and Rescue Group. I look forward to hearing the valedictory speech of the right reverend Prelate the Bishop of Winchester. He was formerly general secretary of the Church Mission Society. At that time, I remember an imaginative fundraiser when the then Reverend Graham Kings led a camel from Oxford to Cambridge to raise funds for rural Kenyan schools. I did the last day of that walk, and I have to say that the camel was mobbed as we finished it. Large amounts of funds were raised, and there was lots of media coverage—CMS objective achieved. I wish the right reverend Prelate well in his retirement.
It is worrying that, five years after Grenfell, the necessary cultural changes in the building industry have still not happened. We know that there are too many developers prepared to game the system, despite the Grenfell inquiry and Dame Judith Hackitt’s review. There still is not a level playing field to protect tenants and leaseholders, not only on who should pay the costs, so ably explained by the noble Baroness, Lady Sanderson, but more broadly on the other deeply unsatisfactory breaches of safety, beyond cladding, which also make people’s homes unsafe. I also echo her comments about two staircase exits in high-rise buildings—that is absolutely vital.
Other breaches of building regulations are not covered, such as a lack of compartmentation and electrical standards still not being met, both of which are high-level risks for fire and the spread of smoke and fire. Without compartmentation, staying in your flat is worthless. Doors that do not meet fire safety standards have caused deaths in common parts, including on emergency exit stairwells. There was a fire in a block of flats in Tower Hamlets just two days ago, where smoke escaped into the stairwell and residents trying to get out were overcome. As with cladding, leaseholders are having to pay for all this work to be put right, even though developers have a clear responsibility for not building unsafe buildings, and refurbishment companies ignore the original fire and building regulations. This is totally unjust.
Over the last two years, the All-Party Parliamentary Fire Safety and Rescue Group has responded in considerable detail to the plethora of government consultations on fire and building safety, and I am grateful to the Minister for attending our meetings on a fairly regular basis. Last year’s consultation from the DfE proposed to remove the requirement for sprinklers in all but a very small percentage of new schools. Twenty years ago, as a former chair of governors of my local primary school, I saw it burn to the ground. The disruption to the pupils’ education over the next two years cost Cambridgeshire County Council many times more than even the retrofitting of sprinklers would have cost. To not even put sprinklers into new schools is just unacceptable.
The case for sprinklers is compelling in high-rise blocks, as well as non-residential buildings. They save lives, they can save jobs and precious education, and they prevent damage to the environment by reducing the severity of fires. As a result of the multiple-fatality fire in 2009 following the refurbishment of Lakanal House, the London Fire Commissioner told the coroner that automatic fire sprinkler protection would have prevented the deaths of six residents. Subsequently, the coroner recommended to the then Secretary of State that he should encourage social housing providers in high-rise blocks of over 18 metres to consider retrofitting automatic sprinkler protection. Can the Minister say if the Government will now accept this recommendation?
Both the All-Party Parliamentary Fire Safety and Rescue Group and the National Fire Chiefs Council in their previous responses to the Regulatory Reform (Fire Safety) Order 2005 consultation said that there remains a fundamental disconnect between the non-worsening conditions of building regulations and the expectations of continuous improvements through the fire risk assessment process set out by the fire safety order. Regulation 4 of the Building Regulations 2010 states that, where the work did not previously comply with Schedule 1, the new work, when complete, should be
“no more unsatisfactory in relation to that requirement than before the work was carried out”—
meaning that the general fire precautions may never be improved to modern standards. This runs contrary to the principles of prevention outlined in the fire safety order—that premises’ risk assessments should adapt to technical progress and reduce the overall risk within buildings.
The all-party group also noted that Dame Judith Hackitt concluded that the construction industry’s prevalent culture was undermining building safety. She referred to procurement regimes that were not fit for purpose. In relation to building safety, she added that
“unhelpful behaviours such as contract terms and payment practices which prioritise speed and low cost solutions, exacerbate this situation.”
She concluded that poor procurement and payment practice
“provide poor value for money and poor building safety outcomes.”
She recommended that contracts’ payment terms and practices should be recorded as part of a proposed digital building safety file. Does the Minister agree with these conclusions?
I thank the Local Government Association for its briefings on the provision for duty holders to choose their building control regulator. It says:
“By requiring regulators to remain in competition with ‘approved inspectors’ for the majority of buildings, the Bill leaves in place one of the root causes of the current crisis.”
It absolutely does. It is quite extraordinary that it should be allowed to continue. The LGA goes on:
“Compliance with regulation cannot be a commodity and local authority building control should not be left to tackle non-compliance in buildings over 18m while simultaneously having to compete with private businesses for work in out of scope buildings, often owned by the same developers.”
My honourable friend Daisy Cooper MP has repeatedly asked, since the passage of the Fire Safety Act 2021, if the Government will consider the creation of an independent register of qualified fire risk assessors. At the time, she was told it was being considered, and withdrew an amendment from that Bill on that basis, but nothing has happened. Can the Minister say whether this register is now planned, as well as a register of safe building materials?
Finally, what will be in the regulations is critical. Some of the language used in the Bill is not exact enough; what will matter is the regulations that underpin this extremely complicated Bill, which will need to be ironed out before it becomes operational. I hope that during the passage of the Bill, the Minister will be able to clarify some of these key issues at the Dispatch Box to give your Lordships’ House confidence that we will finally see regulations that will protect lives, ensure accountability by those who have not followed the standards and protect buildings.
Lord Aberdare (CB)
My Lords, I welcome the Building Safety Bill, and its provisions to implement the recommendations of the Hackitt report following the Grenfell Tower tragedy. In particular, I was glad to hear the ambitions stated by the Minister that it should represent a complete overhaul of the culture of the construction sector. In so doing, it presents an opportunity to tackle issues that have bedevilled the sector for many years, with a damaging effect on safety and quality. Many of these affect smaller construction firms and their relationships with the larger contractors for whom they work, as well as their ability to invest in improving their skills, quality, productivity and, of course, safety. I shall focus specifically on the issue of cash retentions.
The Hackitt report states:
“Payment terms within contracts (for example, retentions) can drive poor behaviours, by putting financial strain into the supply chain. For example non-payment of invoices and consequent cash flow issues can cause subcontractors to substitute materials purely on price rather than value for money or suitability for purpose.”
There is broad consensus in the sector that action is needed on retentions, and that this requires legislation. The Government have indeed been exploring the options and have conducted a number of reviews and consultations over the years. But their insistence on seeking
“industry-led solutions, rather than further regulation”—[Official Report, Commons, Building Safety Bill Committee, 26/10/21; col. 455.]
to quote the current Construction Minister, Christopher Pincher, during Committee in the other place, has resulted in stalemate. With the industry inevitably divided between the beneficiaries and victims of retentions, this makes consensus unrealistic, if not impossible.
There have been some welcome steps forward. The snappily titled Guidance on Collaborative Procurement for Design and Construction to Support Building Safety, produced by the procurement advisory group set up by the Minister’s own department and issued just last month, reiterates the Hackitt report finding. It states:
“The use of cash retentions can also interfere with cashflow and can undermine the principles on which collaborative relationships are based. Arguably, any collaborative relationship should exclude the use of cash retentions. If exceptional circumstances require a retention, then it should be held in an account ring-fenced by a trust arrangement.”
I say amen to that, but it will not happen without government action. Ministers regularly give assurances that they recognise the importance of the issue. To quote Christopher Pincher again:
“I also recognise—I think we all do—the argument that poor, adversarial practices can lead to unsafe, low-quality building safety outcomes, as well as poor value for money.”—[Official Report, Commons, Building Safety Bill Committee, 26/10/21; col. 454.]
There is work going on in other government departments, notably BEIS, including through the Construction Leadership Council, which it co-chairs with industry, and which has a business models work- stream looking at how to eliminate retentions. The CLC has endorsed the road map produced by Build UK which aims for an end to retentions by 2025, but the road map on its own will not bring this about.
There are other steps that the Government could take. It is disappointing that there is no reference to discouraging retentions in the government-sponsored The Construction Playbook that sets out much positive guidance on procurement. It is hardly helpful that some departments, notably the Department for Education, continue to use retentions. Perhaps the Minister could say whether we can expect any progress in those areas.
We have seemingly endless reports, advisory groups, workstreams, road maps, guidance and good practice models, but without the essential legislative underpinning it seems unclear how the Hackitt report’s warning that poor payment culture leads to poor and unsafe buildings will be addressed. Meanwhile, retentions will continue to impact safety and quality.
I would welcome a clear indication from the Minister about which option the Government now favour: an outright ban on retentions, a trust arrangement such as a retention deposit scheme or some combination of both, and how they see any such approach being implemented, given the need for Government to give a lead. After all these years of reviews and consultations, a clear direction and plan are needed if the aspiration of resolving retentions by 2025 is to be met, so that smaller construction businesses, such as those represented by Actuate UK and previously by the Specialist Engineering Contractors’ Group, can rely on receiving funds due to them and are no longer hamstrung in their ability to invest in the training, skills and technology that are essential to ensuring safety.
I hope the Minister will say something in his response about how the specific concerns expressed in the Hackitt report about the impact of poor payment practices such as retentions on safety and quality will be addressed by the Bill’s new regulatory regime, and indeed how his department will ensure that the guidance provided by its procurement advisory group will be implemented.
This Bill will be—or should be—crucial in changing the culture of the construction sector in relation to safety and quality. Perhaps the Minister will tell us why taking long-overdue action to mitigate the impact of retentions on safety should not be included in it as one of the unsafe industry practices that the Bill seeks to address.
Lord Young of Cookham (Con)
My Lords, like others, I welcome the introduction of this Bill, which will help restore confidence in homes built by the UK construction industry after the damaging revelations of recent months. If the Government’s ambitions for home ownership are to be achieved, buyers must have confidence in the homes they are buying and so must lenders.
I join others in wishing a long and happy retirement to the right reverend Prelate the Bishop of Winchester who, when I was a Member of Parliament for Hampshire, had responsibility for my spiritual health.
I want to refer to the helpful covering letter that my noble friend the Minister wrote to us on 20 January, entitled “Introduction of the Building Safety Bill” and, in particular, to the section headed “Protecting Leaseholders from Unnecessary Costs”; I do so alongside the Statement on building safety made in the other place by the Secretary of State on 10 January. My noble friend’s letter says:
“The Secretary of State recently announced that leaseholders living in their homes should be protected from the costs of remediating historic building safety defects.”
Amen to that, but none of the subsequent paragraphs in the letter, or indeed anything in the Bill at the moment, gives a guarantee that this will be done, nor do they explain how it will be done. Hence the need for further amendments, to which I will return in a moment.
The next paragraph of the letter covers one of the building safety defects—namely, cladding—but not others. It makes it clear that the costs are to be met by a scheme funded by industry, alongside a further push to make sure that developers fix the unsafe buildings they built. Again, amen to that, but it follows that unless and until industry pays, the work will not be done, and the last thing leaseholders want is more delay.
The initiative to get the industry to contribute voluntarily is commendable but the volunteers are not going to pay for other peoples’ buildings; their shareholders would complain if they did. We know that many of the offending companies either cannot pay or will not pay. At the moment, leaseholders have no bankable guarantee that their buildings will be fixed with someone else paying. I welcome all the recent initiatives to help leaseholders and applaud the work of my noble friend the Minister for his tireless campaign behind the scenes but, as he recognised in his opening remarks, we are not there yet.
Now we have to turn to the Statement I referred to earlier, which clearly stated:
“We will take action to end the scandal and protect leaseholders.”
The Secretary of State went on to say:
“We will make industry pay to fix all of the remaining problems and help to cover the range of costs facing leaseholders.”
The Statement concluded:
“I can confirm to the House today that if they do not, we will impose a solution on them, if necessary, in law.”
When pressed by an Opposition MP, the Secretary of State said in reply:
“She specifically requested that we provide amendments to the Building Safety Bill to ensure that there is statutory protection for leaseholders. That is our intention—we intend to bring forward those amendments—and I look forward to working with her and colleagues across the House to provide the most robust legal protection.”
So the Secretary of State must have some idea of the sorts of amendments that he plans to bring forward.
Later, he clarified what he meant by statutory protection:
“First, we will make sure that we provide leaseholders with statutory protection—that is what we aim to do and we will work with colleagues across the House to ensure that that statutory protection extends to all the work required to make buildings safe.”—[Official Report, Commons, 10/1/22; cols. 285-91.]
Note that that commitment extends to all building work, not just cladding. Again, this is all very good news, and I commend the work of my noble friend for pressing for those commitments. However, it raises some questions—I appreciate that my noble friend may not have all the answers, but he may be able to reply in general terms.
First, many leaseholders are currently threatened with repossession, eviction and bankruptcy because at the moment they are currently legally liable for the bills, which the Secretary of State has recognised are in no way their fault. They have been promised statutory protection—but statutory protection from what, and from when? Are buy-to-let landlords included, and what about private leaseholders in blocks owned by social landlords?
Does this protection cover all the work done for which they have been invoiced but not paid; does it cover invoices only from the date of the Statement? Does it become operative only when the necessary legislation is passed? Does it cover only cladding or—as one of the quotes I just referred to implies—all safety work? Should it be retrospective, as the noble Baroness, Lady Hayman, suggested in her opening remarks? Leaseholders need clarity on these issues, and they need it now.
Then, if both the statutory protection and the legislation to oblige industry to pay are to be included in this legislation—again, as the Secretary of State implied—that is a high legislative hurdle in a very short timescale. What progress has been made in drafting the necessary clauses? They are bound to be controversial if they are to be effective, and the House is allergic to Henry VIII clauses.
I and my noble friend Lord Blencathra—the so-called Awkward Squad; an unusual name for two former Conservative Government Chief Whips—are willing to help tackle the issues that will need resolving. How does one define a delegated powers clause which allows the Government to decide the meaning of “defective construction”, particularly if there has been no breach of building regulations? Will there be an appeals procedure? How do we do this without delaying essential remedial work? Will some sort of credit facility be available until the cash comes in? Will the scheme be proof against ECHR challenge?
How do we enforce against foreign companies domiciled overseas, where they have wound up the offending subsidiaries—and, if we cannot, how will the resulting shortfall be met if no more funds are available from the Treasury?
I hope my noble friend has some of the answers, not just for the sake of concluding our debate this evening but for the sake of leaseholders, who will be hanging on every word of his reply.
Lord Shipley (LD)
My Lords, I agree very strongly with what the noble Lord, Lord Young of Cookham, said. First, I remind the House that I am a vice-president of the Local Government Association. I welcome the Bill strongly. I think I will be happier if it includes, in addition to residential buildings over 18 metres, all high-risk buildings, and I hope we will take that further in Committee.
The disaster at Grenfell represents one of the biggest failures of public policy in recent decades. The report of Dame Judith Hackitt in May 2018 said that the current system was not fit for purpose, so it is vital that this new system works. This Bill represents a fundamental reform of the building safety system. It may have taken four years to get to this point—which is a long time—but it seems to me that it is four years well spent. Of course, even the best systems for securing safety will depend on the people who carry out the new processes. I will say something more about that in a moment.
But first, I want to approach the Bill from the perspective of a new occupant of a high-rise residential block. I would want to feel confident that I knew the following before I moved in: is there more than one lift and more than one staircase? Are there secure emergency exits? What are the evacuation rules? Have they been tested and does everyone know what they are—or do we stay put in a fire? Are there high-quality fire doors in common areas that are kept closed, and high-quality fire doors as part of my own property, such as my front door? Are there sprinklers—and if not, why not? Have the building materials been tested properly and are they safe? Who is responsible for safety? Is there a named person monitoring my block to whom I can go with concerns? Are there regular residents’ meetings to raise issues of concern? Are the results of fire safety inspections public for residents to read? Is it clear what I have to do myself to maintain safety, and what penalties might there be for non-participation? Are there regular electrical safety checks, and who undertakes and registers these?
We will explore many of these issues in Committee, and some, of course, lie in the Fire Safety Act 2021. But the success of this Bill will all depend on the people carrying it out: their training, competence and understanding of their role, and the golden thread of information held in one place, which is a such an important part of the procedures in the Bill. In the end, of course, it is everybody’s responsibility to make sure that Grenfell can never happen again.
As the Minister said in his letter of 20 January, this is a complex and technical Bill. Importantly, there are a lot of new roles in it, and they all seem to be necessary. There are responsible persons, accountable persons, principal accountable persons, duty-holders, clients—who will have to approve the competence of the principal designer and the principal contractor—other designers and contractors, building safety managers, registered building inspectors, building owners, insurers, and the new homes ombudsman. And there will be others, not least the national regulator for construction projects. It will be vital that everybody knows who is responsible for what exactly, and that there is a regular review of them undertaken through the building safety regulator and the Government.
The crucial role will be that of the new building safety regulator within the Health and Safety Executive, who will have the key role in bringing together the fire and rescue services and local authority experts, including the building control staff, to make regulatory decisions. It will be critical that the regulator drives ahead with improving competence within the sector and within the unified building control profession common to the public and private sectors. This system will work only if everyone working as part of it has the required set of knowledge and expertise.
Much will depend on the gateway structure—which I strongly welcome—so that the risks are evaluated at every stage of a new building’s design and construction. In particular, in terms of gateway 1, I would like to be clearer about what actions are being taken to improve training. It will matter because it relates in part to the planning system, both in terms of application and the permission itself. I submit that local government planning authorities will need to give some substantial thought to the training of councillors.
I wish the Bill well. It is really important and I commend all those involved in getting us to this position because it is a substantial achievement. I hope that the Minister may agree to some system of annual reporting to Parliament on the working of the new structure, that roles are clear and that the blame culture has been significantly reduced, if not eliminated. I hope he will give further thought, too, to how competence will be assessed and reported.
Perhaps I may raise one other issue, which relates to permitted development rights. Are the Government thinking of restricting those rights when office blocks are converted into residential flats of whatever height?
I hope it will not prove the case that too much is being left to secondary legislation. It would be helpful to see as much further information as can be brought forward in Committee and on Report as possible; otherwise there will be a great deal of work to do in assessing that secondary legislation. That said, I commend the Bill.
Lord Crisp (CB)
My Lords, like other noble Lords, including the noble Lord, Lord Shipley, I commend the Bill and very much welcome the concurrent announcements on funding. I come to this from a health background. Health, housing and buildings are intimately connected. However, I have to say that I have been on a learning curve and have talked to a lot of people over the past few days, including architects, builders and others.
I have heard about exactly what the Minister, my noble friend Lord Best and others have commented on: the crisis in construction. As some have said to me, there is a race to the bottom, with people getting away with what they can and a culture in which clients stand back and architects no longer have responsibility for quality. As one person said to me, quality has been devolved to the contractor, so people are marking their own homework or, as the noble Baroness, Lady Sanderson, said, shifting blame from one to the other. This is a systemic issue and not about individuals. I am delighted that the Minister and the Government have ambitions to address that system.
I recognise that the immediate focus is on high buildings and the response to Grenfell, that the matter is urgent and that this has been a long time coming. However, there is a tension here between that short-term ambition and the wider remit of the Bill. Like other noble Lords, I have enormous sympathy for the families of those who have died and am deeply moved by the stories we have heard in your Lordships’ Chamber and elsewhere—as well as by the pressure and problems that people have faced over the past four years, waiting to know what will happen to their investment, home or whatever. The Bill cannot avoid these wider issues and I do not really think that the Government want to.
The noble Baroness, Lady Brinton, and other noble Lords reminded us that the Hackitt report talked at length about culture change and the need to force things to be done differently. I welcome the framework that has been developed around accountability, responsible officers and the golden thread. I should be interested to understand in Committee and on Report how those will be worked out in more detail.
We also need a change in how we think about safety—not as a narrow technical concept about freedom from immediate injury but as something much broader, perhaps more common-sense, linking to health and well-being. It should be a concept that people would recognise. If they were thinking about safety in buildings, they would think about damp, cold, poor air circulation and buildings where falls are likely to happen on the stairs, as well as fire and electrical faults that cause fire, and much more—a wider concept of safety. All that is, of course, appropriate to the Long Title of the Bill, which is to make
“provision about the safety of people in or about buildings and the standard of buildings”.
There are links here to so much else across government and to Bills that are coming or are already in front of your Lordships’ House. That is particularly important at a time when we perhaps move on from the pandemic, when we have seen the importance of people’s homes in their lives. If there is a vision for this country, it must include decent homes and buildings that are safe in all the aspects that I have talked about. After all, homes are part of the fundamental foundation for much of our lives.
There are obvious links with the Health and Care Bill going through the House. A number of noble Lords mentioned the importance of the links between health and housing, recognising that until 50 or 60 years ago health and housing were covered by the same Secretary of State. There is overwhelming evidence of the relationship between people’s mental and physical health, and the design of their homes and neighbourhoods. That is set out by Public Health England and includes a wide range of structural and place-based factors, from the need for active travel and walkable streets to reducing air pollution, and to minimum space, accessibility and light standards. It is said that all that costs the NHS in the region of £1.4 billion a year, but what is the wider cost to individuals and society?
As regards the levelling-up White Paper and other Bills to come, we all know that people on lower incomes tend to live in poorer-standard homes in poorer environments and have poorer life expectations as a result. I will not, at this stage, ask the Minister how this Bill intersects with the new policies for levelling up, although no doubt that will come up again in Committee.
In Committee I will raise an amendment on safety having a wiser definition—something more like freedom from the risk of harm arriving from the location, construction or operation of buildings that may injure the health and well-being of the individual. The Building Safety Bill is an opportunity to change fundamentally the way we deliver homes and places with multiple benefits to people—a real culture change. Putting safety, in the sense that I am talking about it, at the heart of decision-making would be a positive legacy from the challenges of the pandemic and a response to the tragedy of Grenfell, and would match the ambition at the heart of the levelling-up agenda.
On that note, it is my great privilege to hand over to the right reverend Prelate the Bishop of Winchester for his valedictory speech.
The Lord Bishop of Winchester (Valedictory Speech)
My Lords, by the end of the 19th century, there had been a significant evolution in the quality of housing, particularly in England. The standout feature of this development is the terraced house. In contrast to continental Europe, our towns and cities abound with terraced houses of all kinds, appealing to nearly all levels of income. The Victorians had strict building regulations for terraced housing and in my own diocese there was also the innovation of a cavity wall system in the city of Southampton. Alongside this development came improvements in safe drinking water and sewerage management. The combination of good housing and water management facilitated good health. Put simply, caring for building safety is caring for the health of our nation. Building regulations are crucial.
Positively, safe housing implies shelter, comfort, security and privacy. It also implies protection from people, pests, hazards and disease. Thus building regulations must require the co-ordination of all those involved in housing provision around the core value of safety as an aspect of national health and well-being. My episcopal friend, the right reverend Prelate the Bishop of Manchester, will say more about this in his speech. Here, perhaps I may take this opportunity to offer a short reflection on my time in this House, as I take my leave at the end of this week and retire in Plymouth, where there are many terraced houses.
From these Benches we do not often show our theological workings in speeches. During my time here, I have come to see the importance of a social imagination shaped by what Jesus often talked about and taught us to pray about: that God’s kingdom come and his will be done. With a social imagination of God’s justice, truth, mercy and love, both the weighty concerns of our nation and the minutiae of legislation can be opportunities for the coming of the kingdom. With such an imagination, we may dare to believe that God’s kingdom comes in fashioning good legislation for the better ordering of our national life and its common good. Hence the importance of fair distribution of safety costs, as emphasised by the right reverend Prelates in the recent fire safety debates. As a Member of your Lordships’ House, I have participated using the agreed procedures for our debates, but I am also motivated by a concern that the love of God is made visible in the love of neighbour. My hope is to see God’s kingdom come enacted in practical legislation. It is from this perspective that our daily prayers invoke the wisdom of God in all our decision-making.
During my time, I have been most concerned with the institutions of further and higher education, so it has been a privilege to have participated in debates on Bills on these issues. For many, the institutions of FE and HE, both colleges and universities, become anchor institutions for students’ personal development and flourishing, and in their preparation and skilling to contribute to our society. If we are to “build back better” and “level up” our communities, we must continue to invest in, sustain and hold accountable our FE and HE institutions. I have urged for both a diversity of provision, and a co-ordination of enterprise between FE and HE. Accessible and, I hope, inspirational vision documents for FE and HE have been published by the Church of England during my time. While these are faith documents, they express their perspectives in the language of a social imagination that we may all share: wisdom, community, virtue, common good, vocation, transformation and hope.
I thank all those who have supported me: my episcopal colleagues, particularly the Convenor of the Lords spiritual, the right reverend Prelate the Bishop of Birmingham; the parliamentary support team, led by Richard Chapman; and especially my parliamentary assistants, not least my son, Johnny Dakin, who was seconded on a work placement as part of his first degree, and latterly Madeleine Hayden, who also worked tirelessly to promote FE and HE in church forums. The Reverend Gary Neave has been an outstanding colleague and has supported my FE and HE work. To the doorkeepers who remind Bishops about our forthcoming prayer duties: thank you for the personal nudge. I also acknowledge my unique link with Black Rod in our shared responsibilities as officers of the Most Noble Order of the Garter. I am glad not to have drawn anything other than felicitous attention from that office during my time.
It has been a privilege to be in your Lordships’ company during the years of my tenure. I shall retire with many good memories of informative debates, and of having had the opportunity to play a tiny part in the great traditions of this House as it seeks to inform and revise the legislative programme of Her Majesty’s Government. Deputy Lord Speaker, and through you, Lord Speaker, may God grant you wisdom and strength as you oversee this House. And may the building regulations that apply to our national housing stock be applied to the renovations of this great Palace of Westminster, that the health of all here be enriched and prolonged.
The Lord Bishop of Manchester
My Lords, I count it a great privilege to speak following the valedictory speech of my right reverend friend the Bishop of Winchester. He has indeed been a powerful advocate, both in your Lordships’ House and in the Church, for our nation’s further and higher education sector. In that capacity, he has also been a great personal supporter and encouragement for me, in my own rather modest efforts at lifelong learning. Along with this, his passion for the global Anglican Communion and his strong links with Africa will be much missed, both in this House and in the House of Bishops of the Church of England. We all wish him a long, happy and fruitful retirement, and indeed pray that he will be safe in his new home.
In turning to the substance of this debate, I declare my interests as set out in the register, as chair of Wythenshawe Community Housing Group and as deputy chair of the Church Commissioners for England, both of whom are substantial residential landlords. Last year the Archbishops’ commission on housing reported, with recommendations for both Church and State. In the debate in this House, my most reverend friend the Archbishop of Canterbury drew attention to the five principles which underlie the findings of that commission: that every household should have a home that is sustainable, safe, stable, sociable and satisfying. As he said in that debate,
“from almshouses to housing associations, (the Church) has for centuries been involved in the provision of decent places to live. We do not do this just to be nice—we are not an NGO with a pointy roof—but because we believe that Christ commands us to love our neighbour.”—[Official Report, 24/3/21; col. GC 38.]
We on these Benches heartily welcome this Bill as a means to progress the principles enshrined in the Coming Home report.
The proposed building safety regulator is particularly welcome. As the chair of a housing association, I am familiar with the work of the regulator in that part of the housing sector, where regulation is seen as not simply about punishing bad practice, but as promoting good practice. I welcome this, not least since theologically I am drawn far more to the advocacy of virtue than the denunciation of sin.
While I accept that the regulator of social housing has a particular role as a consequence of the state funds that support the sector, I struggle to agree that issues of safety are substantially different between different forms of tenure. I hope that as this Bill progresses, we will be able to clarify and, where need be, strengthen the regulator’s role.
Many noble Lords have already drawn our attention to the fire safety scandal in medium- and high-rise buildings. I deliberately do not refer to it as a cladding scandal; while it may have come to our attention through the tragic loss of life at Grenfell Tower, what has been exposed is much wider. It has been my privilege this last couple of years to support the campaigning efforts of the Manchester Cladiators. These are ordinary men and women who purchased properties in good faith, and now find their homes are technically worthless. Not only that, but they face unaffordable costs in terms of remediation works and in paying for interim measures.
I am proud that my housing association has spent a considerable sum to remediate taller buildings, and without requiring leaseholders to pay for the work. But that does not come without a cost. As the noble Baroness, Lady Warwick, has already said, many housing associations are now cutting newbuild plans in order to focus spending on building safety. We need both safe homes and more homes. I urge the Minister, whose understanding and sympathy have helped move matters forward significantly in recent months, to press on his colleagues, perhaps particularly in Her Majesty’s Treasury, that the one-off costs of remediating a crisis that has built up largely unacknowledged and over many years should not be taken from the budgets required for the regular ongoing work of building the new affordable homes that this nation badly needs.
For many of us in your Lordships’ House, this matter will not have been rectified until two things have happened: that all affected properties can be bought, sold and insured at their full, true value, with mortgage providers content to lend against that full value and that this is achieved without the costs being borne by the leaseholders. In that category, I include individuals who have sublet properties that they had to move out of, and now cannot sell. Meeting these two criteria will require the legislation we pass to cover not only buildings of over six storeys or 18 metres in height, but to encompass buildings of four storeys or 11 metres tall, which I believe is the height standard supported by the Fire Brigades Union, whose members attend fires in such properties. I welcome assurances from Her Majesty’s Government that they will seek to bring forward new provisions as the Bill progresses. I and my friends on these Benches will be scrutinising those amendments carefully as well as considering support for other amendments as noble Lords may bring before us.
I will end my remarks by quoting Scripture. On the matter of building safety legislation, Deuteronomy Chapter 22, Verse 8, reads as follows:
“When you build a new house, you shall make a parapet for your roof, otherwise you might have blood guilt on your house if anyone should fall from it”.
If I may be permitted a pun, they were building on biblical foundations—foundations laid in that book around 3,000 years ago. We must consider not only parapets, but the general safety of our building.
For today, we are seeking to find the right legislation that will protect our fellow citizens in their homes. It is a sacred duty—if we fail, we risk drawing that same blood guilt on this House. I welcome this Bill and look forward to supporting and strengthening it as it progresses through your Lordships’ House.
Baroness Eaton (Con)
My Lords, I declare my interest as recorded in the register.
I am delighted to be making a short contribution to this very welcome Bill. I congratulate the Minister and his team, as have others this afternoon, on the content of this long-awaited and very necessary Bill. I know that all noble Lords taking part today recognise the necessity for the Bill to be passed speedily, and hope that all our contributions bring about a positive outcome. I join others in giving warm wishes for the retirement of the right reverend Prelate the Bishop of Winchester, and hope he recognises that a good life does exist after life in the House of Lords. We thank him most sincerely for his very thoughtful contribution to this very important debate.
Dame Judith Hackitt’s review, Building a Safer Future, recommended a culture change within the construction industry. It also said that this had to be underpinned with more emphasis on competence and regulatory oversight.
A number of noble Lords have mentioned professional compliance. I note from the briefing I received from the Architects Registration Board that Clauses 130 to 132 directly change its responsibilities and powers in a very positive way. Professional regulation has an important role in creating a culture of safety in all buildings. The public, who use the services of professionals such as architects, have the right to expect that, once qualified, they are competent and that they will maintain and develop skills and knowledge throughout their working lives. At present, the only way to assess continuing development is if there is a disciplinary complaint. Clause 130 will give the power to ensure that continuing professional development is carried out throughout an architect’s career. The Bill also gives powers to publish disciplinary orders against an architect on the register. Clause 130 will help promote public confidence in the profession and deter incompetence and poor professional conduct.
Architects are not the only professionals involved in the construction industry. We heard the most alarming tales from my noble friend Lady Sanderson of buck-passing between professionals after the Grenfell tragedy. I am sure the House would value more information from the Minister as to how the Bill will help raise the bar of competence of other professionals, including approved inspectors.
As a member of the RoSPA presidential team, I was shocked to hear the statistics behind stair accidents in the United Kingdom—43,000 hospital admissions every year is a horrifying number. For many, a fall on the stairs will lead to injuries from which they can never fully recover. An accident on the stairs can cause irreparable damage—not only physical injury but also loss of confidence. Such a fall can rob someone of their independence, resulting in the need for residential care. From there, the burden is often passed on to family members and the NHS. Safer stairs would mean safer homes, and that in turn would mean not only that many lives would be saved but also that their quality would be infinitely improved. The numbers clearly show that stair accidents are a more silent, but more preventable, danger than fires. The number of hospital admissions caused by falls, compared to those caused by burns, is in the ratio 235:1. Our staircases are a very real danger, hiding in plain sight.
Simple solutions to complicated problems are hard to come by, but enshrining the most up-to-date industry standard for stairs into law represents genuine low-hanging fruit. It is a cost-free, industry-approved, ready-made measure which would create a 60% reduction in falls in new builds. As the issue of stair safety is of interest and concern to so many, will the Minister support regulations to ensure that the existing British safety standard is incorporated into the Bill?
I know that including regulations on the face of a Bill is sometimes viewed as inappropriate. I believe there is precedent for including standards such as this in primary legislation. For example, the recent ban on combustible materials has come about by updating Regulation 7 of the Building Regulations 2010. Where legislation can be used to make buildings safer at no extra cost to the taxpayer, surely it is wise to do so. Leaving regulations to secondary legislation can be a long drawn-out process.
With such high numbers of accidents on staircases, speed of implementation is essential. I look forward to my noble friend’s comments.
Baroness Young of Old Scone (Lab)
My Lords, Grenfell was, and still is, a safety scandal and a tragedy. The subsequent wrangling as to who should be responsible for remedying fire safety in unsafe buildings is an even bigger tragedy and scandal. I commend the account of the noble Baroness, Lady Sanderson, who really brought home just how tragic the incident was. It is important that this Bill passes your Lordships’ House, though with improvements, and I hope that Grenfell can be a watershed moment for wider safety in homes. Apart from high-profile tragedies, there are daily, small and quiet tragedies taking place in terms of building safety that could, through the simple amendment already suggested by the noble Baroness, Lady Eaton, be remedied in this Bill to save lives.
As the noble Baroness, Lady Eaton, said, there are clear statistics about the profile of falls on stairs which bear repetition. They claim the lives of more than 700 people in England every year and are the cause of 43,000 hospital admissions. It is estimated that the most up-to-date British standard on stair design, if adopted, would reduce falls in new homes by 60%. Even though this standard has been in place since 2010, it is only guidance and not a legal requirement. In most new homes, it is simply not happening. Housebuilders go in packs. Unless they are all mandated, none of them will stick their head above the parapet—I hope we are not talking about the parapet that the right reverend Prelate the mentioned.
This Bill could make implementation of the standard statutory and save not only lives but misery for many people. As the noble Baroness, Lady Eaton, said, there are precedents for making such standards statutory. The standard is tried and tested and was subject to extensive consultation at the time of its introduction more than 10 years ago. The Royal Society for the Prevention of Accidents—which I thank for its briefing—has now taken views extensively on making the standard statutory in new homes. It has spoken to homebuilders, private and social housing providers, local government and fire chiefs, and no one seems to be against such a move.
The risk from falls on stairs is increasing as the proportion of older people in the population grows—I am sure that this phenomenon is of interest to Members in your Lordships’ House. In addition, it is a fascinating fact that, in all age groups, feet are getting bigger. Overstepping traditional stair tread sizes causes falls. Falls on stairs are problematic for fire evacuations, yet modest increases in the size of stair treads, the provision of handrails and slip-resistant measures have a disproportionately beneficial effect. The standard can be implemented in new homes at minimal or no cost. I hope that the Minister will grasp the opportunity to incorporate this affordable, simple and effective measure into the Bill to save lives and reduce life-changing injuries.
In the other place, the Minister deferred the issue to the building safety regulator. We should not have to wait for the regulator to be established, to gather evidence to identify emerging issues in the safety and performance of buildings, including staircases, and to make recommendations to Ministers, who will consider whether change to standards or guidance is needed. That seems to me a rather long and tortuous process, when the evidence of the effectiveness of the measures and the severity of the risk is already available. The standard has existed for 11 years. The guidance has not worked. This Bill provides the opportunity to tackle these hundreds of small, quiet tragedies that happen every year. I look forward to the Minister’s response.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I declare my interest as set out in the register. I congratulate the Minister on his passionate introduction to this important Bill—a Bill that is the result of the terrible tragedy at Grenfell Tower. Dealing with the safety of high-rise buildings, whether they provide homes for families or offices for workers, is vital in a society that prides itself on looking after everyone, no matter their circumstances. The Bill is detailed and complex and, although it deals mainly with high-rise buildings, it has other sections dealing with local government building control.
Fire safety, regardless of cladding issues, has always been an aspect of dwellings that are likely to house occupants, whether this is an HMO or a block of flats designed for family units. Having spent some time in the past sitting on a fire authority, I wonder whether the capacity of the fire service has been considered in relation to the provisions of this Bill. As arson has decreased over the years—thank goodness—the emphasis of the fire service has shifted from mainly firefighting to mainly prevention, which is always better than cure.
There are a number of new regulators and enforcers in this Bill. There is a requirement for a principal accountable person to be specific to each building within scope. Those buildings out of scope will be dealt with by local building control. Will local authorities have sufficient capacity and financial resources to fulfil these new complex conditions? Each building will require a building assessment certificate. There will be duties to co-operate, communicate, co-ordinate and appoint competent people. I will return to this competence shortly. For each building, there are three gateways which must be completed, and certification given, before the building can be occupied. I welcome these stringent measures designed to ensure safety and save lives.
Much of the detail will come forward from the Secretary of State through secondary legislation. Trading standards will have its enforcement powers extended to meet the new regulatory requirements. I welcome this, but I wonder whether trading standards will also have sufficient resources to meet these new demands. This leads me on to whether there will be serious issues, including on construction-product testing, and the inspection, competence and skills of fire risk assessors. Ensuring a sufficient supply of fire-risk assessors, installers, building managers and responsible persons who are competent is key. How will the Government ensure that there are sufficient skilled and competent people to fulfil these vital roles?
There is the FE sector, which uses regulated qualifications to train the workforce, including vocational qualifications, NVQs. There are also many qualifications offered by several awarding organisations that can be mapped and amended to use as a platform for upskilling the workforce and to show competence. Are the right people in place to implement this? The supply of competent people to carry out these roles is vital.
The independent review into the testing of construction products has not yet been published. How can Parliament effectively scrutinise the Building Safety Bill without sight of this report? The House does not know what progress has been made to establish a national regulator for construction products to enforce new rules and ensure that the materials used to build homes are safe. Can the Minister say when is this likely to happen?
There are currently a small number of accredited certification bodies with cladding-testing sites in the UK. This means a limited number of furnaces available to test all combustible building and construction material and products, including fire doors. This has led to a delay in lead time for furnace testing. Will manufacturers, therefore, be able to ensure capacity to service the industry? Certification bodies at testing sites are managed by private sector companies, and the woodworking and joinery sector has serious reservations about the increasing price of testing, as demand increases and there is limited supply. This could lead to increasing prices as the call of shareholders becomes louder, measured against the quality of service and provision?
As I said earlier, fire safety is not just about cladding. On 17 June 2020, the results of the 2019 fire door inspection scheme were published. There were more than 100,000 inspections on more than 2,700 buildings. Of the buildings inspected, 37% had sleeping accommodation, 25% housed the elderly and 5% housed disabled people or people with cognitive needs. From the doors inspected, 76% were condemned as not fit for purpose, and 57% were deemed to need small-scale maintenance. The top reasons for condemning the doors were: excessive gaps around doors that had not been installed correctly; poorly adjusted door closers; poor smoke seals; and non-compatible expanding foam. Only 24% of doors inspected had third-party certification and were installed and maintained correctly.
It would seem that private sector involvement in the fire safety of buildings, especially doors, has led to lower standards, as feared by the FBU. Leaving cladding to one side, properly fitted, effective doors are essential to prevent the spread of fire and provide safe havens and methods of escape during a fire. It is necessary to have sufficient qualified, trained fire inspectors, ensuring that the internal issues around fire safety are dealt with effectively, especially where central staircases are in place, protected by working fire doors. I look forward to the Minister’s response to this debate, and I fully support the Bill.
Lord Etherton (CB)
My Lords, I also warmly welcome this Bill and the Minister’s introductory words. I am also very grateful to the right reverend Prelate the Bishop of Winchester for his thoughtful comments.
I support the call by many, including the Law Society, for the Government to identify sufficient funding to cover the full cost of cladding remediation to ensure that no leaseholder faces the prospect of picking up the bill themselves, regardless of block height. However, I am concentrating on a situation in which that has not yet happened: a situation that was alluded to by the noble Lord, Lord Young of Cookham. It is probably going to take years for this situation to be resolved, either by payment of compensation to have remediation work carried out or by compelling developers to carry out the remediation work themselves. In the meantime, there is an obviously liability that needs to be addressed by someone on whom it will fall.
In this period of time, when there is still work to be done, and at a cost, the relations between the landlord and the tenant are governed by the terms of their lease. In cases of leases of less than seven years, there is no problem, because the landlord cannot recover the costs of repair and maintenance from the tenant. In the case of leases of more than seven years, there will almost inevitably be obligations on the landlord to repair common parts, including the exterior, but expenses will be recoverable, in whole or in part, by way of a service charge payable by the tenant. That situation is, unless something else comes into play, as I said, likely to continue for a considerable period of time.
My comments are really directed to the position of the landlord in relation to these service charges, and against the background that many small, residential, tenanted blocks of flats are owned not by large, profitable property companies but by private individuals. They are not necessarily wealthy but may have wanted some additional income—people who have bought to let or invested their personal pension in a residential block. There may be a situation in which all or some of the tenants have bought the freehold, or indeed the common parts may be held by way of commonhold.
The issue of how these costs in relation to remediation are to be addressed in this interim period—if I can call it that—is found in Part 5 of the Bill. The effect of Part 5 is to provide for amendments to be made to the Landlord and Tenant Act 1985. I am concerned with the provisions that require the landlord to, among other things,
“take reasonable steps to ascertain whether monies may be obtained from a third party in connection with the undertaking of the remediation works and, if so, to obtain monies from the third party”.
That is a mandatory requirement, not one dependent on discretion.
New Clause 20D(3), to be inserted into the 1985 Act, says:
“In subsection (2)(b) the reference to obtaining monies from a third party includes obtaining monies … pursuant to a claim made against … a developer … or … a person involved in carrying out works in relation to the building.”
A further new subsection provides that if there is a “failure to comply” with that obligation,
“a tenant may make an application for an order that all or any of remediation costs are not to be regarded as relevant costs to be taken into account in determining the amount of any service charge payable by … the tenant”.
Part 5 envisages that in this interim period the landlord is under a requirement to, among other things, take steps to see whether there is a claim and to pursue it. If the landlord—whether a he, a she or an it—fails to do so, there can be an application to the court for an order that the service charge is abated in consequence. As I see it, the difficulty with this is that it will cause the most enormous amount of dispute. Who is to say how much a landlord of the type I have described should properly spend on a claim?
Everybody is agreed—I certainly agree—that it would be quite wrong to expect leaseholders to undertake costly and complex litigation. This sort of dispute in relation to defective building work is among the most expensive, long-drawn-out and complex of all litigation—there is a special court designed to deal with it, the Technology and Construction Court.
Equally, it seems quite wrong for the landlords I have described—the private landlords, not the large companies—to have to involve themselves in exactly the same type of litigation. Indeed, I expect that, were they to do so, the tenants might well say, “I’m not going to pay because you should never have spent so much money on it”. You are left with a dilemma in which steps must be taken by the landlord in relation to potential third-party claims, but there is no indication at all of what would be reasonable. How much money should be spent? For how long should the claim just be advised upon? How long should it continue?
There is a provision that:
“The Secretary of State may issue guidance about the taking of steps under subsection (2),”
which I have referred to,
“and may revise or withdraw any issued guidance … proof of compliance with any applicable guidance may be relied on as tending to establish that there was no such failure.”
I urge the Minister and the department to consider very carefully indeed whether it is appropriate to require all landlords to take those steps as a mandatory matter in view of all the costs and the absolutely inevitable dispute between tenants and landlords in relation to who is to bear those costs as reasonable service charge costs.
One solution might be to provide in the guidance, if not in the Bill, that the amount to be spent will be reasonable if it is limited to, let us say, a proportion of the annual rents. There must be some kind of qualification to prevent yet more disputes and more distress.
Lord Naseby (Con)
My Lords, it has been my privilege to be involved in public and private housing for over 50 years now. I was chairman of the housing committee in the London Borough of Islington from 1968 to 1971 and represented Northampton South—the main, central part of Northampton—on a fourth-generation development plan. I looked back on the Bills that have passed since I got into Parliament in February 1974 and can think of no Bill more important than the one before us. Having done that little bit of research, I am thankful that my noble friend on the Front Bench will take charge of it and see us through the challenging package ahead of us.
I want to pick out one or two areas that have not been spoken about this evening. Property protection is not a consideration of the fire safety building regulations. Currently, the fire safety building regulations are based on a consideration of life-saving only—and quite rightly so. The life-saving limitation means that the sole focus of the fire safety building design is the safe evacuation of all occupants in the event of a fire. While life safety is clearly paramount, the consequence of this approach is that it leads to the design of disposable buildings—not the most technical term in the world—which too often results in disproportionate damage when fire strikes. My understanding is that Her Majesty’s Government have commissioned some research to assess the merits of a property protection consideration. I hope we can discuss that in Committee, and I look forward to taking part in that discussion.
Being at the ripe age of 85, I was going to say something about safer stairs, but my noble friend Lady Eaton covered it more than adequately. I back her up and will be happy to join her if she tables an amendment to enshrine British Standard 5395-1 in law. I will support her on that.
I came relatively fresh to this whole business; obviously, I was well aware of the tragedy of Grenfell. The more I look it, the more I think we now seem to be in slight danger of differentiating one type of leaseholder from another. In a Bill as comprehensive as this, that would not be a sensible move. Fundamentally, all leaseholders—whether owner-occupiers or individual landlords—should be treated equally. Not to do so is not only unfair but, I suspect, unnecessary. Buy-to-let landlords and owner-occupier leaseholders face the same problems with developers, through no fault of their own. We also find certain developments where there is a mixture, so in my judgment it would be invidious to deal with just one category rather than another.
On the Bill as it stands, the “golden thread” referred to by Judith Hackitt in her final report is very welcome. It seems so vital. I have had the privilege of working in the aviation industry and being an RAF pilot. Every plane that is made has a logbook and a life history of that plane. We see how vital that is, even in today’s world with sophisticated engineering, given the tragedy of the recent Boeings that crashed. You need that history to know how to change and develop. I think it will be welcomed by the industry.
I also looked at the construction products and testing facilities. Some industries test at great length, but I am afraid it is very weak in this industry and we really need to toughen that up. The original problem at Grenfell probably lay with that cladding and its combustibility.
That is enough from me, other than just to make one point. The Bill needs to be implemented successfully. There needs to be a situation in which industry is fully prepared to operate under the new regulatory scheme and it is very important for industry to be provided with clarity and timescales. I know the Secretary of State feels very strongly about this but in my experience, as someone who has been in politics a long time, it is no good shouting at people; you have to work with them. You have to be a bit devious and find a way through the back door. I urge my noble friend to persuade his right honourable friend to do just that.
Lord Foster of Bath (LD)
My Lords, I begin by again offering my condolences to the friends and family of those who died in the tragic Grenfell Tower fire and remind the House that, like my noble friend, I too had a brief stint in DCLG as the Minister with responsibility for building regulations. Like all noble Lords who have spoken already, I am broadly supportive of the Bill so, with the limitations of time, I just want to raise three issues that I think should be included in the Bill and will help the Minister achieve his objective of making it the best possible Bill.
The Bill makes provision for the safety of people in or about buildings and the standard of buildings, so we should be considering the impact of poor-quality homes on the safety of the people who live in them, a point raised by the noble Lord, Lord Crisp, and by both right reverend Prelates. However, the Building Research Establishment’s chief executive claims:
“Millions of individuals and families are living in unhealthy housing—a reality that is having a huge impact on the NHS.”
According to one study, that costs the NHS in England alone £1.4 billion a year.
Even more worrying is the number of deaths caused by poor-quality homes. Based on the most recently available ONS figures for excess winter deaths, the fuel poverty charity National Energy Action has estimated that well over 8,500 people died from cold in the winter just two years ago, with the charity’s CEO, Adam Scorer, commenting:
“Low incomes, high energy costs and poor heating and insulation all combined to leave them in conditions which were unfit to help them survive the cold weather.”
Of course, given the significantly rising fuel bills that we now have, we could see even higher death rates in future years unless action is taken.
We still have over 13.5 million homes deemed below band C on the energy performance rating. Over 3 million such homes are occupied by families deemed fuel-poor—people who simply cannot afford to stay warm. Given that the impetus for the Bill was the tragic Grenfell fire, we should also recognise that the number of poorly insulated homes is rising as dangerous cladding, which provided heat insulation, is removed from other blocks, leading to newspaper headlines such as:
“The tower block where they put foil behind the radiators and wear dressing gowns all day to keep warm … this is life in Malus Court”
as that tower block is stripped of its cladding. A major energy insulation programme is urgently needed.
The Government have already set themselves two extremely welcome targets. First, all fuel-poor households should be brought up to EPC band C by 2030 and, secondly, all other households should be brought up to EPC band C by 2035. However, to give the industry the confidence it needs to invest, these targets should be enshrined in legislation. We have heard today, and had it confirmed half an hour ago in the Minister’s letter to us all, that placing targets in law is right for the levelling-up programme, so I certainly believe it is right for the home energy efficiency target. I have a Private Member’s Bill to this effect, but I would be very happy to hand it over to the Minister so that he can include it in this Bill, so that the Government’s promises are turned into legal realities. I look forward to his reaction.
I turn to another issue. The disastrous fires at Grenfell Tower in 2017, Shepherd’s Court in 2016 and Lakanal House in 2009 were all started by faulty electrical goods. Electrical Safety First has calculated that in the last five years there were 1,169 fires in high-rise blocks of flats attributed to faulty electrical domestic appliances. It has undertaken investigations into the safety of electrical products sold online, finding that 14 out of 15 electrical products randomly purchased online were unsafe. It found white goods that had been recalled by the manufacturer because they were potentially unsafe still being sold to consumers on online marketplaces. The Office for Product Safety and Standards reported that of 29 unsafe electrical products it had identified, 27 were listed for sale on online marketplaces.
The Government say in their UK product safety review that they are
“committed to ensuring that only safe products can be placed on the market now and in the future”,
but it seems these fine words do not apply to the increasing number of electrical goods bought online. Electrical Safety First believes the current regulatory provisions are inadequate. The NAO refers to
“gaps in regulators’ powers to regulate online marketplaces”
The PAC shares the same view, noting that
“under current legislation, online marketplaces are not responsible for the safety of products sold by third parties on their platforms.”
Can the Minister explain why
“ensuring that only safe products can be placed on the market”
appears to apply to shopping on the high street but not to online marketplaces? Will he use the Bill to remedy this omission? At the same time, can he explain why, contrary to the promise in the social housing White Paper that standards in social housing should be the same as in private housing, a private landlord has to ensure the safety of electrical installations but a private residential owner or social landlord does not? Does he acknowledge these problems and, again, does he accept that the Bill could be used to solve them?
Finally, picking up on a point just raised by the noble Lord, Lord Naseby, and earlier by my noble friend Lady Brinton, I suggest the Bill should address the perverse situation under the building regulations whereby if all the occupants of a building escape safely from a fire but the building is totally destroyed, the outcome is considered a success. This “life safety limitation” provided by the regulations, which significantly influences the design of buildings, should be revised. After all, the outcomes of the Worcester Park and Beechmere care home fires in 2019 and the Bolton Cube fire in 2020 were surely not successes as 23 families, 150 residents and 200 students lost their homes and property.
This should be changed by making a proportionate property protection consideration part of the basis of the fire safety building regulations, requiring a legally enforceable but flexible system for fire safety building design, appropriately tailored for all types of building and delivered through guidance on the appropriate use of, for example, compartmentation and active fire suppression systems to restrict fire spread. I am grateful that the Minister has already started a review of that; I look forward to hearing what it says. While many details need clarification and there are omissions that need to be added to the Bill, this is an important Bill and I commend it.
Baroness Bennett of Manor Castle (GP)
My Lords, I believe I can make this a full cross-House welcome for the Bill—rather a rare occurrence. I join others in warmly welcoming the tone of the Minister’s speech. With its regular repeats of the campaigners’ hashtag “polluter pays” and the promise to take on board proposed amendments from your Lordships’ House, it truly is a breath of fresh air. I can only congratulate the Minister and the Government.
I note how this shows that campaigning works. After uncountable long hours of effort from affected residents, petitioning, marching, letter-writing and social media campaigning, the people who, through no fault of their own, find themselves in unsafe, faulty, terrible standard buildings are today being heard in your Lordships’ House. I hope that they will get some sense of repayment from that. If only the residents of Grenfell —who before the terrible tragedy tried so hard to get officialdom to listen to their safety concerns—had been listened to, then 72 people might be alive today. There is a lesson there that I hope Ministers will take note off. Experts by experience are indeed experts about their lives and environment and need to be listened to.
As so many speeches thus far have demonstrated, there is much to do in improving the Bill, ensuring that it covers all the dangerous buildings that it should, particularly those occupied by vulnerable residents, as the noble Baroness, Lady Hayman of Ullock, highlighted, as well as the crucial issue of fire doors, as highlighted by the noble Lord, Lord Stunell, and many others. What could be more basic and surely solvable than that? As many other noble Lords have noted, a lot of the focus has been specifically on cladding, but there are so many other issues, and it is crucial that the Bill does not become overly focused on cladding at the cost of those other issues. Following on from the noble Lord, Lord Foster of Bath, who talked about fire suppression systems, there has often been an ideological resistance in the UK to sprinklers, but we really need to rethink that for many types of buildings. On the structure of the Bill, the idea that housebuilders will just hand over their ill-gotten gains to cover the damages at the Government’s request is surely a fantasy. The Bill needs to demand full, complete recompense.
However, rather than running down the already well-travelled list of the ways in which this Bill needs to be improved, I will briefly take a broader view. I cannot help thinking that the Bill Office was perhaps demonstrating a better quality of engineering than many buildings in putting me after the noble Lord, Lord Foster, given the point he made about building safety more broadly and cold homes—I would add to that homes that overheat, given the increasing number of heatwaves that we will experience in the climate emergency—being a risk to life which should be covered in this Bill.
We have the poorest quality housing in western Europe—draughty, poorly insulated and expensively relying on gas for heating and cooking, which has, as we increasingly understand, significant health impacts as well. I foresee long conversations with the Bill Office about scope, but a home that kills its vulnerable resident with excessive heat, or that sickens and kills them through biting cold, is one that is deadly. That has to be a building safety issue. This is an issue that the Government seem astonishingly reluctant to tackle after their green homes grant fiasco. I note that the big announcement today on levelling up fails to address this issue—astonishingly, given how much of a factor it is in the terrible quality of life and the poverty in so many of the areas in this country that the scheme is supposed to address.
The Bill also needs to at least start to address the enormous systems disaster that is the building sector. I have no doubt at all that, this morning, inadequately trained workers were putting the finishing touches on buildings that are dangerous and that will be moved into by unsuspecting residents—or possibly suspecting residents, who still have no choice in the matter. The CEOs of our mass housebuilders should be forced to have the speech of the noble Lord, Lord Best, embedded on their phones, playing morning and night, to show them what society thinks of them and their companies. They have operated for the profit of the few at the cost of the rest of us, as in so much of our society. That financialisation has to be challenged, treated as morally unacceptable and made legally impossible. I acknowledge that this is something that we cannot fix just with this Bill, however much your Lordships’ House improves it—and I am sure that we will improve it massively.
It is interesting to take a global perspective and see the other parts of the world with building safety crises similar to that in the UK. In the US, in Florida, there was the dramatic, awful, deadly Champlain Towers South collapse, which was recently explored in-depth by the New York Times. It demonstrated that in the building boom there in the 1980s, regulatory corners were not cut but rather bulldozed through, and now there is a legacy of incredibly dangerous buildings in an incredibly difficult and dangerous environment. In Australia, the University of New South Wales’s City Futures Research Centre looked at 635 apartment buildings in Sydney. Its report—called Cracks in the Compact City, if noble Lords want to look it up—found that 42% of blocks had water problems, 26% had cracking problems and 17% had fire safety issues. One building, built just six years ago, was in danger of immediate collapse.
What ties together these countries? Neoliberal politics and, attached to that, a particular ideology that “cutting red tape” is how to set societies on a better way forward. It is important to highlight that because, as we are here in your Lordships’ House today, we see the Government embracing the need for regulation, forced by tragic circumstances and dedicated campaigning. They are accepting the need for so-called red tape, which actually forms the rules that keep us and the environment safe.
At the same time, we have a press release from No. 10 that tells us that a
“‘Brexit Freedoms’ Bill will be brought forward to end the special status of EU law and ensure that it can be more easily amended or removed”.
It tells us there will be a
“Major cross-government drive to cut £1 billion of red tape for businesses”.
Applying that approach is what forces us to be here today, trying to rebuild essential systems of regulation that were slashed away in an orgy of deregulation. We can do much today to force the repair of walls, the replacement of fire doors and the renovation of dangerous balconies. Changing our economic and government system is a much bigger task that this Bill demonstrates is urgently needed.
Baroness Featherstone (LD)
My Lords, I too welcome the Bill. I say to the Minister opposite that if he takes on board all the wonderful knowledge, expertise and advice that has been offered to him today, he will have a sensational Bill.
Baroness Featherstone (LD)
That is okay, we have the time.
I want to illustrate a number of issues by bringing the actualité of one small block of 45 apartments in Guildford that was just completed in 2016. The block is not 18 metres tall, but it is facing a raft of costly issues to do with fire safety. The End our Cladding Scandal group highlighted these problems because, as it said,
“There may be more funding for cladding … but the burden of paying for repairs for other serious safety defects—lack of compartmentation, missing fire breaks, shoddy building work—has still not been lifted from leaseholder shoulders, whatever their building’s height.”
This Bill is such an opportunity to do the right thing.
Leaseholders and shared owners in this block have been aware since early on of several issues—snagging, I guess you would call them under normal circumstances —but then came the tragic and terrifying fire at Grenfell. Since then, there have been many concerns over the fire safety of these apartments. It is the case that Metis Homes wrote to confirm that the cladding material was not the dangerous type used on Grenfell. However, in late 2019, mortgage companies were requesting EWS1 forms—external wall system surveys—in order to grant loans against any property that had cladding. While the legal requirement was only for buildings over 18 metres high, which the block that we are talking about is not, none the less, those same mortgagees required EWS1 forms of the residents of this block. In June 2020, they were given a B2 rating—a fail—because although the cladding was fine, the fixing method and the insulation were not. Also noted were the lack of fire barriers—compartmentalisation—and the wooden balconies. It has been very difficult, nigh impossible, for residents to get clear, detailed information on any fire safety risks to the apartments. The builders, Metis, and John Lewis/Waitrose, which owns the retail space below the apartments, have all completed an invasive survey, but will not disclose the information to the residents. Can we not make access to such information mandatory?
The block of flats had its AGM last week. It is clear from the information provided to residents at that AGM that the fire safety issues for the apartments are extensive and the likely cost of remedial work is £5 million. The developer, Bowmer and Kirkland, is unwilling to accept liability, and therefore the cost of the works is likely to fall on the residents. However, as I said, the fire issues at the apartments relate to insulation and how it has been glued to the building, not the cladding; therefore, I do not believe they will be able to benefit from the remediation funds being made available as part of the Bill. Surely such defects should be covered, not just the cladding: a fault is a fault and danger is danger.
Residents were also informed this week that an enforcement notice has just been served by Surrey Fire and Rescue Service because not enough action has been taken by the management company and, as a result, alarms are going to be installed. Where is the cost to the management company for not taking appropriate action? Where is the forcing mechanism? There must be detriment to the management for lack of proper conduct.
To make matters worse—and this is a relatively small bill—the cheapest quote was £29,000, and that includes 2.5% of managers’ costs, and the residents have been advised that the cost will be split between private and social housing residents, with the former paying £600 and the latter £1,200. The housing association has said that it will cover the £1,200 but has given no assurance that it will not recharge it back to the shared ownership residents via rent or service charges. As a result of the uneven split in charges, there is real concern about how the £5 million remedial bill will be split. Even if the £5 million were split equally between the 45 apartments, that is £104,000 each, which is a massive sum that is likely to be unaffordable for the leaseholders, especially shared-ownership leaseholders, who, on average, paid £200,000 for a 50% share of their apartment and often used all their savings to do so.
In the Commons debate on the Bill, the problem of leaseholders facing other fire defects was raised and the Government were questioned on whether they would extend legal protections afforded by the Bill to them as well. The Minister replied:
“We will work with parties across this House—across both Houses—and with interested parties to ensure that these issues are properly understood and debated.”—[Official Report, Commons, 19/1/22; col. 381.]
I suggest to the Minister that understanding and debating are not enough: that will not change things. The Government must bring forward amendments—assuming they do not accept all of ours—attributing costs to those responsible. That has to be the way forward.
As far as I can tell, nothing in the Bill would address a plethora of other fire defects. More pertinently, some of these residents are terrified. They have already had a fire. How that fire started is unclear, but the automatic opening vents failed. It was only because a resident heard an alarm going off inside a neighbour’s flat and went to investigate that more damage was not done and lives were not lost.
Those residents—and no doubt thousands experiencing the same things across the country—urgently need legal protections within the Bill extended so that they are not left to foot crippling bills that should be paid by those responsible for the defects. The potential economic and human cost of not providing this protection is huge and totally unacceptable.
Baroness Grey-Thompson (CB)
My Lords, I, too, welcome the Bill. I am not a housing expert, but I have been motivated to speak in this debate due to the significant number of disabled people who have been in touch to express their serious concerns. I declare my interests. I am president of the LGA and, when in London, I stay in a block of flats. This debate has made me strongly consider my personal safety.
Like others in your Lordships’ Chamber, I have received many emails about the costs of remedial work and the impact on people’s lives. It has become apparent that many disabled people have become marooned in their flats, which they, like others, bought in good faith. Disabled people spend an enormous amount of time thinking about accessing and egressing accommodation. They have to take account whether there is a fire lift or whether the lift gets turned off in an emergency. They have to think about evacuation procedures, such as whether it is safer to remain in their flat or to leave; whether there is a refuge or place of safety—they are quite different things—and whether to choose to use an evac chair or an evacuation sledge. That is a difficult choice, as the latter means, for me, giving up my only means of mobility. It is not stepping out of a pair of shoes.
I know from personal experience that finding accessible accommodation that is also affordable and vaguely near where you want to live is incredibly difficult, and you can then become tied into it. Any disabled resident living in a flat under the Regulatory Reform (Fire Safety) Order 2005 has been entitled to have a “suitable and sufficient” fire risk assessment, but one disabled resident who got in touch with me told me that the initial advice in case of emergency was to stay in their flat, but when they sought independent advice they were told to leave because, for the particular block of flats they lived in, if they were there for more than 20 minutes, their chance of survival was severely reduced.
A recent article in the Disability News Service stated that the Government had awarded to CS Todd Associates the contract to produce new fire safety guidance. The same consultants stated in 2011 that it was “usually unrealistic” to expect landlords to put in place arrangements for disabled people to evacuate blocks of flats in the case of an emergency. It also wrote the LGA guidance, which had to be withdrawn, and the British standard, which also had to be withdrawn.
I am also very concerned by comments that have been sent to me by a member of the Fire Safety Forum. I apologise if the comments have been taken slightly out of context, but they do need interrogating. A member of that forum wrote about “what fun” they would have
“watching Rudetube videos of the poor disabled people crawling on their hands and knees down smoke filled corridors when the common parts of the fire alarm system operates to tell them to get out in to the corridors because there is smoke in there. It all promotes equality, because the able bodied people will have to go on their hands and knees too when the smoke layer gets too low, rather than staying in the safety of their flats.”
I am happy to share the links with the Minister and his team. The name alongside those comments is Colin Todd. Even if the word “unrealistic” has been misunderstood or poorly defined—because I recognise the complication of providing a plan in what can be difficult and changing circumstances—it feels as if disabled people are being told that they should not get in anyone else’s way and do not have a chance of evacuating the building.
I understand that the Minister has responded to the request to look into this and said that the contract was awarded according to the correct procedure. I learned this afternoon that a letter has been sent on behalf of some disabled residents to the Home Office asking that the award of this contract be rescinded.
On researching for this debate, I was reminded that, many years ago, I was on a plane and—please bear with me—I was going to an athletics competition. Without anyone ever telling me, I always knew that the chance of me getting off a plane in an emergency was virtually zero. That is why I taught my daughter, from the point she could understand—probably about 18 months old—that if we were ever in that situation, she had to get herself off the plane. On this particular trip I had given up my day chair, was in my seat right at the back with other athletes, and a member of the cabin crew came to tell me that if the plane went down, not only was I not going to get off, but I should not get in other people’s way. Furthermore, no one from the crew, whatever the circumstances, was going to come back and help me off. This is how disabled people feel in these circumstances.
I cannot begin to imagine what anyone went through on 14 June 2017, and I thank the noble Baroness, Lady Sanderson of Welton, for her incredibly moving speech. As reported by Disability Rights UK on 31 March 2021 on the evidence sessions:
“Fifteen of the 37 disabled residents”—
of Grenfell Tower—
“died in the fire that killed 72 people”.
That means that 40% of the disabled people who lived in the tower died.
So I ask the Minister: can he understand why disabled people are so angry, and is it not reasonable that a disabled person should have a plan and have at least a chance of getting out of a building in an emergency? When will Her Majesty’s Government be releasing the outcome of the consultation on personal emergency evacuation plans, which closed on the 19 July last year? Finally, will the Minister offer his reassurance that he will do everything possible to protect disabled people through this Bill as, at the moment, there is little reference to them?
Baroness Jolly (LD)
My Lords, I feel privileged to follow that speech but also somewhat at sea, so I will default to what I was going to say anyway.
The Government’s Notes describe the Bill as:
“A Bill to make provision about the safety of people in or about buildings and the standard of buildings”.
As we have heard, it was introduced to avoid life-changing horrors such as we witnessed with the Grenfell fire, causing the death of 72 residents. I would not want to diminish the significance of that disaster, but we ignore another issue that has been taking place in homes for years: falls on the stairs. They are a hidden killer, claiming the lives of 700 people in England every year, with a further 43,000 admitted to hospital. Staircase accidents do not make the news. While tragic disasters such as the Grenfell fire quite understandably horrify us when they occur, staircase falls happen so regularly that they go completely under the Government’s radar. I should declare my interest as another member of the RoSPA presidential team.
For every hospital admission caused by a burn, there are 235 caused by a fall. That is why I am tabling an amendment to the Bill to ensure that staircases in our homes are built to the correct industry standard, BS 5395-1. It has existed since 2010. It has been thoroughly tested, evidenced and assessed by industry, and, as the Minister will confirm, it has been tested by government. However, having been introduced, it was never enshrined in law; it exists only as a standard and, as such, is just a recommendation.
RoSPA, which for over a century has led the way in taking an evidence-based approach to mitigating and managing risk, has consulted widely with house builders and industry bodies. The amendment that I will be tabling has the backing of the housing industry, including the Berkeley Group and Orbit Housing, because building firms recognise that the existing British Standard 5395-1 would make stairs safer at almost zero excess cost. It would also create a legal benchmark and a level playing field for everyone.
The difference between staircases built to the British Standard and most other staircases is minimal to the naked eye, but hugely significant. The British standard requires a larger surface area for the foot to tread and places a maximum steepness on the height of each stair. It also mandates a handrail on both sides. These simple changes reduce the risk of falling by an absolutely staggering 60%. The fact that such an industry standard exists but is not widely used is beyond belief. Countless lives would be saved and so much heartache avoided if we simply enshrined this simple standard in law. Very few amendments to Bills are as uncomplicated and straightforwardly beneficial as the one that I hope to table. It would save more lives than anything else in the Bill. I feel privileged to be part of an organisation that has saved thousands of lives over the last 100 years, and it is no exaggeration to say that this amendment could save thousands more.
Stair accidents are a silent killer because by their very nature they do not make headlines; they happen one at a time, usually to older people, and they are so commonplace that we take them for granted. Staircase deaths occur incrementally, so that only by viewing the bigger picture does the scale of the problem become clear. Making stairs safer by design is essential for ensuring that future generations do not die on the stairs at the alarming rate that our generation does. By outlawing the use of unsafe stairs in new builds, the problem would be steadily weaned out and a fresh page turned.
Given the focus on new builds, we think this would be straightforward; it would cost nothing extra but would save countless lives. I would be delighted if the Government supported the amendment that I am going to table, which calls for the Secretary of State to consult on regulations requiring staircases in new builds to comply with the British standard. If the Minister would like to meet me, I would be delighted to discuss this further.
The Earl of Lytton (CB)
My Lords, all these wonderful speeches are a hard act to follow. I declare that I am a fellow of the Royal Institution of Chartered Surveyors, a valuer and a patron of the Chartered Association of Building Engineers, so this is familiar territory. I very much welcome the Bill and the opportunity that it presents to discuss the issues. I thank the Minister for his comprehensive introduction, his engagement, his openness and above all his vigour. However, I believe the Bill needs improvement in scope and function.
First, a bit of advice. The Minister’s letter of 20 January suggests that the department will investigate the governance of RICS. With respect, that ship has sailed. Following a report by Alison Levitt QC, the noble Lord, Lord Bichard, was asked by RICS last December to look into its governance and purposes—so, as ever, we should wait for that report.
The Government should be wary of criticising insurers, managers and valuers for overreaction to safety risks. Proportionality is based on good information and consistent technical advice, so the withdrawal of the consolidated advice note and its replacement with PAS9980 does not necessarily put the genie back in the bottle. Perceptions of risk pervade the property sector. Valuers reflect but cannot uninvent market sentiment. RICS sets standards for consistent analysis and reporting but cannot override the market, which is why, with full support from valuers and the wider industry, it retains the application of EWS1, including low-rise buildings with cladding, and has published a detailed justification.
Noble Lords may recall that a low-rise modern block of flats in Worcester Park was completely destroyed by fire in September 2019—unrelated to cladding, I understand, and, thankfully, nobody was injured. While human life is of first importance, instances of total loss of buildings influence insurance risk. Cladding apart, as we have heard, compartmentalisation, fire stopping and so on are issues regardless of building height, so it is self-evident that low rise does not of itself negate the risk to buildings and occupants, which is why the scope of the problems has grown.
The Bill will create the role of “accountable person”. Dame Judith Hackitt’s recommendation that there be a single individual is logical in administrative terms, but people are now nervous about taking on that responsibility. Residents’ management companies are often populated by volunteers, few with knowledge of building construction and maintenance. Collective freehold ownership and commonhold do not resolve this issue, so management professionals are extremely concerned about this.
My next point is about accreditation, particularly of those who have reason to design, specify, supervise or carry out works to residential properties, most especially those forming part of larger buildings. That certainly needs to be tightened. As HSE is now to have oversight of responsible persons, it should be working with all professions and accreditation bodies to ensure consistent standards without excessive cost.
My main point, however, is about financing the remediation of dangerous cladding and other fundamental defects in construction. I welcome the Government’s announcement to protect leaseholders from remediation costs. However, the details and scope are as yet unclear. Without a range of mechanisms for raising the necessary funds quickly, leaseholders may well continue to live in unsellable, risky and high-cost buildings.
The Government demand that industry steps up to the mark and voluntarily pays for its mistakes, but I remain concerned about reliance on that. Whatever welcome pledges of support are made, the Government need to ensure that they are bankable at an early date, so that any necessary fallback measures can be enacted in the Bill.
It is obvious that remediation of unsafe buildings must proceed with redoubled urgency, and unaffected buildings need to be signed off rapidly, so scaling up the inspection capacity is vital. Innocent leaseholders of all types—I make no exclusions—must be protected from the costs of remedying critical construction defects. They have purchased in good faith on the basis of fitness for purpose, and I do not exclude social landlords.
We need to concentrate minds. Responsibility for serious defects in original construction or refurbishment rests squarely with those who designed, specified, constructed or supervised the works, or who made false claims for construction products. Those responsible should not be allowed to collectivise their liability through an overall levy and thus avoid individual blame, or the culture will simply persist. The taxpayer should not fund this, other than to ensure a legislative framework, robust administration and the early generation of remediation funds, and to provide a fallback where all else fails. Funds already allocated should be for bridging and safety-net purposes and not deplete other areas of departmental funding. Protracted legal proceedings and justice according to bank balance must be avoided. This should be overseen by an independent national entity, although the joint inspection team may have a role in assessing buildings and collecting evidence.
These are the principles behind what is known as the polluter pays amendment, which has been gathering momentum for some months. I pay tribute to the Minister for his engagement with this and to those whose persistence has developed the concept to an advanced stage. I hope the Government will adopt it. Polluter pays would create strict liability where it is found that buildings did not meet relevant standards at the time work was carried out. That liability would cover interim safety measures and insurance premium increases. Once defect and involvement are known, liabilities towards owners would be established on a joint and several basis, so blame would not need to be apportioned. It would provide a relatively simple appeals system via the First-tier Tribunal to prevent leaseholders facing an unequal contest with large corporations. These liabilities need to be taken on the chin: no tax breaks, side deals, concessions or sweeteners—just the same transparent rules for everybody.
Successive Governments may have failed to regulate adequately after the Building Act 1984, but that Act did not remove anything from the principles of the building regulations, the British Standards Institution, codes of practice and other documents. Since 1965 the requirements have been clear, but elements of the construction industry have simply evaded obligations and everyone knows it.
We cannot allow the responsibility of the neglectful few to burden society at large or damage the wider industry reputation, or we will never deal with the perverse incentives to cut corners long term. The human toll is acute and practical imperatives need high standards of corporate ethics, shouldering of responsibility to rebuild sectoral confidence and, above all, speed. This need has never been greater. I look forward to working with the Government to seize the opportunity for real and lasting change under the Bill for the relief of freeholders, for national credibility in construction and in the interests of justice.
Baroness Fox of Buckley (Non-Afl)
My Lords, it is a pleasure, though daunting, to follow the noble Earl, Lord Lytton, who has been a fount of knowledge on the issues in the Bill. It is a significant Bill, one which many have been waiting for, because its provisions will have far-reaching consequences for so many householders and the whole industry of building construction. It is also a very technical Bill, which I have struggled with and am unlikely to be able to contribute to in detail in Committee. However, for Second Reading, I thought my recent experience as a leaseholder might be useful.
In April 2020, in the depth of the first lockdown, there was a house fire in my council block of maisonettes in Haringey. The fire rapidly spread across the roof of the block and created a huge blaze. Thankfully, no one was hurt, but 17 fire engines and a lot of shaken up people later, the whole block had suffered major water damage. I and all the families were evacuated and we thought that would just be for a couple of months. In reality, the due date for return is this April, two years after the fire. This delay has had a devastating impact on many people, my neighbours more than me. The reason I am telling noble Lords this is not for sympathy but to note that sometimes it is not the safety of a building, or even the fire, that causes the suffering, but the officialdom that handles it. In this instance, the context was Covid restrictions and a safety-first approach that became an excuse for inexcusable inaction and inhumane indifference. An atmosphere of excessive precaution over the coronavirus led to a local government housing department seeming to seize up and consign leaseholders and tenants to being made effectively homeless for two years.
I tell this tale because one concern I have is that there are always dangers in responding to something as horrific or emotional as the Grenfell tragedy—a danger that we bend the stick and focus on zero risk and safety first above all other considerations. This can lead to unintended consequences, so now there is a scramble to require building owners to review a fire-risk assessment on all residential buildings. But this can be a time-consuming and expensive business. Most importantly, we need to ask whether it is proportionate or necessary on such a wide scale.
Southwark Council has recently announced extra-intrusive fire safety checks in hundreds of its high rises, involving not only surveys of outside buildings and communal areas but the council being able to
“enter homes with a camera.”
It also
“may need to open up walls and ceilings.”
This is not because of any defined risks; it seems to me that it is an exploratory “just in case” fishing exercise. While it is posed as putting tenants’ safety first, we must ask whether this sort of action, which is massively disruptive for households, addresses the top safety threat to people in south London. The LGA has noted its concerns about these new financial burdens and the impact of such surveys and all the remediation that has to happen on social housing blocks. It warns that the burden for this
“will fall on council housing revenue accounts and housing associations, punishing social housing tenants and those on the waiting list.”
The point is that the vast majority of homes in the UK are safe. The Minister himself noted in his very helpful letter that evidence suggests that only a small proportion of fires in high-risk buildings escape the room of origin, and that there is a general downward trend in the number of deaths from fires in people’s homes over the last two decades. Thank God for that. Overall, the evidence shows that risk is low across all accommodations and buildings. Partly, we need to consider whether blanket mandates affect priorities and resources.
The LGA queries whether height is an effective determinant of risk or too simplistic, sometimes neglecting other factors such as vulnerability of occupants. This catch-all also treats all buildings of over 18 metres as dangerous when they are not, forcing the use of
“scarce resource unnecessarily which could be deployed to life-saving effect elsewhere.”
The mandate to investigate every building and for historical remediation to happen is explained as a way of reassuring residents and leaseholders that their homes are safe, rather than it being a necessity. I worry, however, that sometimes reassuring measures might inadvertently create a disproportionate sense of escalating fear among the public. I suggest, therefore, that we do not allow the horrors of Grenfell and the egregious negligence there to create the impression that we should all be fearful in our homes all the time. That is one reason that I am glad the Bill stresses throughout that the new building safety regime will be proportionate rather than overuse the precautionary principle.
The phrase “health and safety gone mad” might be a caricatured take on those who are cavalier about regulations and whether there are some destructive features of health and safety culture that can lead to, for example, a focus on myriad possible risks rather than clearly defined dangers, and a micromanagement of unknown risks, with everything seen as a potential hazard. This can lead to a defensive focus on compliance and the proliferation of petty regulations that mean we lose sight of the regulations that really matter. In turn, all this might lead to formalised procedures in which box-ticking can usurp human judgment and create an army of new box-ticking bureaucrats and a new industry of layers upon layers of regulators, with new roles that can be very confusing. Already, we can see that these new layers of bureaucracy are creating a skills crisis and a capacity problem.
Of course, I am keen to see more fire engineers, surveyors and so on, but with the new focus on competence and the upskilling of those presently involved in building construction, we must avoid also suggesting that there is widespread incompetence. I worry about inadvertently demonising the 2 million people involved in the construction industry. I urge noble Lords to avoid characterising the majority of contractors, designers, builders and architects as incompetent cowboys cutting corners. Is this name-calling not just another part of blame culture? It might be that I have a disproportionately high number in my family who work in the construction industry, but I do think we need a balance.
This industry is crucial to building the desperately needed new homes, hospitals and factories and to making the levelling-up agenda concrete. We do not want them all demoralised, stuck in endlessly continuing professional development seminars, tangled up in—yes—red tape and treated with suspicion as dodgy, hostile players by the public. We must resist the temptation, therefore, to demonise everybody in this game.
The Deputy Speaker (Lord Lexden) (Con)
My Lords, the next speaker, the noble Baroness, Lady Harris of Richmond, is taking part remotely. I invite the noble Baroness to speak.
Baroness Harris of Richmond (LD) [V]
My Lords, never again must we be faced with the shocking sight of a tower-block of flats being consumed by raging flames. We watched in horror those devastating scenes, and later listened to the harrowing stories from the survivors of that awful conflagration. Their stories are seared in my memory, and I echo many noble Lords’ comments on this.
This Bill proposes welcome improvements to regulations, which should have been foreseen long ago and acted on. It is to our shame that it has taken the loss of the lives of 72 people for us to see what a terrible dereliction of duty the whole building establishment had allowed to occur over many years. We watch today, almost five years on from the appalling Grenfell tragedy, cladding that was known at the time to be lethal still having to be removed from high-rise buildings, because only now are the Government facing up to their responsibilities and offering help in the shape of a £5 billion fund for those living in the most vulnerable or, as the Bill puts it, higher-risk buildings.
It also proposes revising the regulatory framework for construction products, I therefore hope that we will never see the likes of Kingspan, which provided much of the insulation in the cladding on Grenfell Tower, being a chosen business. That insulation, Kooltherm K15, was known to be lethal and Kingspan’s employees knew it too, as the inquiry found out. Another company, Celotex, used hidden, non-combustible boards to make sure that it got through safety checks—and so it goes on. We can only hope that the Bill will prevent rogue companies such as these getting any building contracts for this type of work ever again. Can the Minister assure me that the new building regulations will root out those contractors long before they can be allowed to build again?
The current Secretary of State for Levelling Up, Housing and Communities, the right honourable Michael Gove, has finally woken up to the fact that the Government’s proposed loan scheme for all the remediation work was a complete non-starter, and stated that no householder living in their own flat would have to pay a penny to fix unsafe cladding. He gave the building industry, as we have heard from the Minister, two months to agree to a financial contribution scheme, but only for buildings between 11 and 18 metres in height. Has the industry agreed a suitable financial contribution? What is going to happen to the thousands of leaseholders of flats that are less than 11 metres high, who also have to face the cost of removing their unsafe cladding? Will the Government ensure that they, too, are compensated, after years of trying to get housing associations and private landlords of these properties to take responsibility for the removal of the cladding? Those tenants have for far too long been ignored and vilified for asking too many questions and making a fuss.
Reading the Bill, it seems to me that there are large number of scrutineers of future building projects. I worry that it could be a case of too many cooks being able to mask rogue elements of the building trade, allowing them to slip through the regulatory net. As my noble friend Lord Shipley has stated, there are the Building Safety Regulator, registered building inspectors, the Building Regulations Advisory Committee, the Industry Competence Committee, authorised officers, the Health and Safety Executive, duty holders, principal accountable persons—who have to appoint building safety managers—all before we get to the Golden Thread through the gateway regime, which, as I understand it, is supposed to ensure compliance throughout the whole of a new build.
Clauses 80 to 84 explain this, and continuing clauses set out the responsibilities of the accountable persons. Those clauses are interesting to me, and I am concerned to know how they will work in practice. A great deal of responsibility will rest on the shoulders of these people, and I worry that this position could be used as a scapegoat in any future structural failings of a building. Clauses 100 to 103 set this out.
I share the concerns expressed by the Royal Institute of Chartered Surveyors that the Bill may create a two-tier system of regulation—especially, as I mentioned earlier, given that no provision has yet been made for the risks in low-rise buildings. It goes on to emphasise that the industry does not yet have qualified individuals to undertake the onerous duties of the accountable person. What is the Government’s response to that? Where are they going to get those highly skilled people? The Chartered Institute of Building was equally concerned about these issues, which it believes will be crucial to the practical implementation of the Bill.
Overall, we must welcome this Bill as another step in the long journey of holding our building regulators and suppliers to account for past catastrophic failures, but it is in the implementation of all its proposals that we will be watching carefully and assessing whether this Government keep their word and ensure that the awful sight of the Grenfell Tower in flames will never happen again.
Lord Thurlow (CB)
My Lords, I declare conflicts of interest in owning two buy-to-let flats in London and as a member of the RICS for some 30 years. This Bill is long-awaited; Grenfell is nearly five years ago, and the Bill is long overdue. It sets out clear improvements in the system going forward, and I am keen to support it in principle, but I believe that it contains inadequate protections for existing leaseholders, particularly occupiers of existing older buildings, and certainly including those below the 18-metre height restriction or seven-storey levels.
Other noble Lords have talked about this, too. The principal thrust of the Bill is, of course, to protect lives, particularly those of residents. Yet looking at the Bill, I question whether it is not more building focused than people focused. Of course, one leads to the other, but the focus should, I think, be on the people, and that will manifest itself in different ways. One example is in costs of occupation, which are going to rise as a result, through additional service charge recoveries. It is wrong to expect tenants to pay 100% of the annual costs anticipated by the Bill. Another example is access to redress for leaseholders; the process sounds straight- forward but, as we have just heard, for many it will be a formidable mountain to climb, with layers of bureaucratic overlaps, probably requiring costs that many can ill afford. I hope that the Minister will confirm that this will not be the case. I was much encouraged by his remarks at the beginning of this debate.
For those living in older buildings with a heightened fire risk, particularly since Grenfell, the costs have sometimes been crippling. As we have heard, there have been huge remediation costs, soaring insurance costs, waking watch Bills and the mental health consequences for many, to say nothing of being bled dry financially, with no prospect of selling at value. We have all heard of examples. The Minister refers to protecting leaseholders, but will it be comprehensive? If this Bill sets out to protect people, leaseholders should be at the front of the queue.
I would like to touch on building ownership. Excluding social housing, existing private residential blocks may belong to City institutions or public property companies, transparent organisations. Many will belong to private property companies; some belong to private individuals—and this number is likely to be much higher than most people realise. Many are discrete operators attempting to remain below the radar and anonymous. They can camouflage ownership, probably further protected by managing agents to whom the owners themselves will sometimes be very closely linked. This will confuse and frustrate leaseholders, who will easily give up their quest for redress. I know there are provisions for building safety managers, accountable persons and regulators, but without transparent ownership, I do not understand how redress can be effectively enforced in all cases. I think there should be transparent ownership details available, identifying owners or shareholders rather than corporate vehicles often registered offshore, as the noble Lord, Lord Young of Cookham, referred to in his speech.
Let us consider why investors own these assets. They are investments; they expect to receive rents, net of all costs. Costs are usually redirected to residents via service charges. As I mentioned, the Bill is likely to increase those annual charges to occupiers. I suggest these costs should be paid by the building owners, or at least be shared. It is not enough to assume investors may protect their investments by deflecting unexpected costs on to their residents to protect returns: their assets are, after all, being improved. I repeat: I believe the future costs set out in the Bill should be more equitably shared.
For occupiers, rights of redress are critical. I have mentioned some of the practical difficulties, but the Hackitt report stated that this Bill should reassert the rights of residents. It will not be easy nor cost-free, as items creep into service charge bills. The costs of fire safety works could be shared between freeholders and leaseholders, though there is a strong case to exempt leaseholders altogether. One normal risk of property ownership is things going wrong. Every property owner with an old house or a flat in an old building knows that it goes with the territory. Insurance is available and is the owner’s responsibility. This should not be a tenant risk; however, it usually is.
What of older buildings which fall short on safety grounds, those below 18 metres or the seven-storey threshold? I join many others in referring to this sector—in particular the noble Baroness, Lady Harris, just now. These deserve more attention, particularly to protect leaseholders from risks and costs. I would not want to live in an old building on the sixth floor, just below the 18-metre threshold, which did not make the Bill’s cut, and be trapped up there, six storeys up. If there is to be a height limit, there is a strong case for two or three floors. What then of vulnerable people? We have heard about this too. If this Bill really wants to put the interests of residents first, these out-of-scope buildings should be included but treated differently as circumstances and assessors consider appropriate. I hope the Minister will reconsider the scope criteria.
In summary, I do not have time to add to the comments on defective materials and the laudable “polluter pays” principle, which I support. It is excellent to note that leaseholders are indeed to be protected. The more effective regulatory framework for testing and approving building products is overdue. Nor do I have time to discuss offences set out under the Bill, but I think penalties should be high. I look forward to the forthcoming government amendments, and I hope protection for leaseholders will run robustly as a central tenet throughout.
Lord Blencathra (Con)
My Lords, first, I declare a personal interest as a leaseholder of a flat near here, which will qualify for some fire remedial works and was built by one of the big four, who collectively raked in almost £4 billion in 2020. I give a warm welcome to the Bill, particularly the creation of a regulator. However, of particular interest to me are the parts on high-risk buildings and other safety measures. While I welcome these, I believe that we now have an opportunity to go much further.
When the Bill left the Commons, we did not have my right honourable friend the excellent Michael Gove as Secretary of State, so the Bill does only half of what it needs to do. Then on 10 January we had the superb Statement from the SoS, repeated here by my noble friend Lord Greenhalgh, setting out all the actions the Government propose to take to really sort out the cladding problem and protect leaseholders. We all owe a deep debt of gratitude to the Minister: I know that he has been arguing for all the things that were in that Statement and he had the good fortune to get a new Secretary of State who agreed with him and had the guts to go for it. I congratulate him on his rather feisty introduction of the Bill today. I also congratulate the noble Lord, Lord Best, on his outstandingly succinct description of today’s construction industry—what the Spectator last year called the house mafia.
What did the Secretary of State say on 10 January? He set out the range of actions and initiatives he wanted to take. These were in two broad categories, which could be classed as leaseholder protection measures and “polluter pays” measures. He said in the Statement repeated by my noble friend that he would take action against those who mis-sold dangerous cladding and insulation and those who profited from the consequences of Grenfell. He would review government schemes and programmes to ensure there were commercial consequences for any company responsible for this crisis and refusing to help fix it. He would take powers to exclude any company from government schemes and impose proportionate risk assessments on organisations such as the RICS and powers to review the operation of the RICS.
He would set a higher expectation that developers must fix their own buildings, and possibly issue instructions to insurance companies. There would be statutory protection for leaseholders from certain building costs and protection of leaseholders from eviction and forfeiture. He would introduce a residential property development tax and a building safety levy, and there would be new collaborative procurement guidance on removing the incentives for industry to cut corners and to help stop the prioritisation of cost over value, and possibly put that on a statutory footing. That is what the Secretary of State said he wanted to do. I am absolutely certain that, if my right honourable friend Michael Gove had been in post one year ago, most of those provisions would be in the Bill today, but now we have the chance to add them.
I do not intend, in Committee, to add just a few new clauses; rather, I have asked the Public Bill Office to draft two whole new Parts to add at the start of the Bill. One Part would be on leaseholder protection, with clauses setting out that no leaseholder will have to pay for any fire-related remedial work. I want leaseholder protection to be first and foremost in the Bill as a new Part 1, or a new Part 2 at the very latest. I want clauses defining what fire-related remedial work is, and what buildings it should apply to; clauses prohibiting freeholders and leaseholders from gold-plating remedial works to add to the value of their property portfolio. For example, if wooden decking balconies have to be replaced, leaseholders must be protected from freeholders replacing them with, say, bronze-covered aluminium or Italian marble flooring, making lease- holders pay.
Then I need clauses setting out alternatives to cladding replacement for low-risk buildings and permitting the Secretary of State to prepare new risk assessments. These could replace those compiled by the Royal Institution of Chartered Surveyors—and I want to put in a legal power to review its modus operandi, since it has not exactly covered itself in glory over the past three years, I submit to the noble Lords behind me. Finally, in this Part, I want a clause creating a scheme similar to the Flood Re agreement between the Government and insurers to keep down the cost of flood insurance, but in this case covering fire insurance.
The other new Part will contain “polluter pays” provisions or schemes for fire hazard remedial works. In it, I want to have clauses setting out that developers will be primarily responsible for the costs of all remedial works. Where they have created special purpose vehicles which they have now wound up, then the holding company will be liable. All contractors who supplied materials which were not fit for purpose, whether or not approved at the time, will be liable. Where we cannot find the developer or their special purpose vehicle, or their holding company, or their contractor, or their supplier, then the whole industry should be liable and pay through a levy system that will raise a lot more than £5 billion. Clause 57 does not go far enough, since it applies to future bills and not to bad ones of the past.
Now, clearly, my proposals—if I lay them before the House—will impact on current company law, laws of limitation, the Building Act and a host of other Acts. There may be ECHR concerns and concerns about retrospectivity. But we have never had a problem such as this before, where companies have made billions from flawed construction in the past. I submit that it is therefore right that we reach back in time to make them pay to remedy it now. They did it, not the leaseholders. Therefore, those parts of the Bill will need to be more skeletal than I would have approved of last week when I was still the chair of the Delegated Powers Committee.
Lord Blencathra (Con)
Ahem. We will also need some Henry VIII clauses to make those changes to existing Acts of Parliament. It is a tall order, but in the time we have, we can do it. We cannot at this stage set out all the details in new clauses since we do not know exactly what powers and provisions we will need. However, we can draft sufficiently wide regulatory powers to deal with all eventualities. Naturally, I want these to take the affirmative procedure so that there is some element of proper parliamentary scrutiny.
Simply look at Clause 57. Five out of the eight new subsections begin with the words “regulations may” or similar, so the Government have already taken wide regulatory powers. In any case, no matter when we take forward a primary Act—in this Bill, next year or in two years’ time—we will still need extensive regulation-making powers for all the details. I say let us do it now so that all those who have raked in billions from property deals see that this Government and this Parliament mean business—I have almost finished.
I know that my amendments will have dozens of technical flaws and will need beefing up and filling out. But that is what government lawyers and the Office of the Parliamentary Counsel are for. All I want to do is set the parameters of the action we need to take—and we need to take that action because lease- holders, as the innocent parties, demand nothing less. We need to take it so that all developers and contractors see this sword of Damocles hanging over their heads, because that is the only way they will ever pay up.
I look forward to debating this further in Committee and to getting support from your Lordships, if not for the exact details then at least for the concept of my amendments. In the meantime, I warmly support the Bill.
Lord Jordan (Lab)
My Lords, this Bill was born out of a disaster—one that saw many people killed and injured in their own homes. The Bill, which we all support, will enact measures to prevent that happening again. Tonight, however, we have heard that many more needless deaths and injuries are still happening now in homes, which the Bill could and should take steps to prevent.
I too declare my interest as a vice-president of RoSPA, which is leading a campaign to significantly reduce these injuries and deaths occurring in homes across the country by making staircases safer. The campaign’s objective has earned itself a strong base of cross-party support in the other place, and we are now hoping that your Lordships will demonstrate the same unity and bring about the passing of an amendment embedding safe stairs in law.
Your Lordships have heard that the amendment will simply ask the Secretary of State to consult on regulations requiring staircases in all new-build properties to comply with the latest industry standard for stairs. This would not be a case of requiring existing properties to replace staircases, nor would it be a case of inventing a new stair safety specification from scratch. We have an existing construction industry standard that is already proven to be safer and is approved by industry. All we ask is that this standard is legally mandated for new-build homes, putting safety into building design.
We will not find a better or easier opportunity to make houses in this country safer at such a minimal cost. We should not turn it down. Nor should we accept the Government’s excuse that primary legislation is not the right place for this amendment. There is ample precedent for mandating standards in this way. An indefensible argument must not stand in the way of saving lives.
The statistics around staircase accidents, including the human and economic costs, are horrifying and unacceptable. We all take it for granted that falls on stairs will happen, but do we really take on board what that means when we hear that every year 700 people lose their lives and thousands more continue to go through pain, suffering and loss of independence because of bone-shattering accidents? We must not forget that the homes we build today must still be standing long after we are gone. It is certain that, if we do not make stairs safer now, lives will be lost. However, an amendment to the Bill that requires a safer standard for stairs in newly built houses will leave a life-saving legacy for future generations.
Baroness Pinnock (LD)
My Lords, this has been an excellent debate on a Bill that is widely supported across the House. I remind noble Lords of my interests as a member of Kirklees Council and as a vice-president of the Local Government Association.
First, a question: why is it that regulation is seen by some as an unnecessary obstacle to business until a tragedy occurs? It has taken, as I think all noble Lords have said, the deaths of 72 people at Grenfell Tower nearly five years ago for building safety to be taken seriously once more. To respect the memory of the 72 and all those whose lives have been scarred forever by that dreadful fire, the Bill must provide the deep-seated reforms that are essential to prevent a repeat of Grenfell. Secondly, the Bill absolutely must ensure that existing leaseholders and tenants do not pay for any of the remediation work, such as replacing flammable cladding and rectifying construction failures such as the failure to include fire breaks.
Noble Lords from across the House have rightly welcomed the Bill, which will make sure that legislation and regulation reflect modern construction methods and materials. It is, as my noble friend Lord Stunell described, “a once in a lifetime opportunity to regulate what is currently a dysfunctional industry”. Unfortunately, the Government have failed to grab that opportunity fully and define new standards of housing construction and accountability for those standards for all new housing. As my noble friends Lord Foster and Lord Stunell pointed out, here was an opportunity to set new standards for energy insulation, expectations for zero-carbon homes and heightened fire safety features; and for a step-change improvement in regulation, inspection, and enforcement. However, the Government have chosen to focus on a narrow element of the housing construction industry: that of so-called higher-risk buildings. That is truly a missed opportunity.
On the proposals in the Bill, Dame Judith Hackitt’s 2018 report, Building a Safer Future—which I have read—proposed a systemic reform of building regulation, and the Bill is incorporating into legislation the safety system that she laid out. The framework, which creates a hierarchy of responsibilities, is a considerable improvement on the existing position. The new building safety regulator will be embedded within the Health and Safety Executive, which seems appropriate and positive. Duty-holders, responsible for different aspects of design and construction, will be accountable to the new regulator. What is not clear are the skills and expertise that are required, as my noble friend Lord Shipley said, and whether these already exist and need to be codified or whether there will be delays in implementation because new training programmes will be necessary.
Once a higher-risk building is occupied, a whole new, and costly, regime is proposed. Leaseholders already pay considerable sums for a managing agent or equivalent posts, which are not regulated—anyone can set up as a managing agent, with no experience of property management. The Bill proposes the role of “accountable person”. Does the Minister anticipate that managing agents will take on that role? As the accountable person will be responsible for appointing a building safety manager, can the Minister explain what qualifications this postholder will have, the anticipated additional cost to leaseholders and the accountability of this postholder to those required to pay for the work?
I was speaking to leaseholders only yesterday. One said to me that she already pays a service charge of £6,000 a year, and that it is estimated she will have to pay a further £2,000 on top of that for a building safety manager. There surely has to be a better way forward than piling costs on to leaseholders—I think it was the noble Lord, Lord Thurlow, who referred to that. Can the Minister explain whether these posts will be expected to report to the building safety regulator?
What powers will residents have in this new regime, either as tenants or leaseholders? I appreciate that there will be a new ability for tenants to refer complaints straight to the ombudsman, but what rights will leaseholders have to ensure that they are getting value for money from these new posts? Will all inspection reports be made available to all residents? Will they have a right to challenge overcharging for these new posts and for any repairs that are deemed necessary? There is the opportunity in this Bill to strengthen the rights of leaseholders, one for which I am sure we will be placing amendments in Committee because, unfortunately, it is an opportunity that is being missed at the moment.
My noble friends Lord Stunell and Lady Brinton rightly pointed to the disaster that is the existing building inspection system. At the heart of this particular problem was the decision, 20-plus years ago, to enable developers to appoint their own building inspectors, under contract to that company and therefore hardly independent. Perhaps some of the construction failings exposed post-Grenfell are a consequence. The part-privatisation of building control also denuded local government of building inspectors. That, combined with the very large cuts to local government funding, meant fewer inspectors and therefore a less tightly regulated system for construction. Light-touch regulation can have dreadful consequences in this sphere.
Many noble Lords, including my noble friend Lady Harris, spoke about construction materials, and rightly so. The Grenfell Tower Inquiry is exposing some of the irregularities, or indeed worse, by manufacturers and suppliers. A single clause, Clause 128, attempts to remedy this. However, it would be helpful if the Minister could explain the system for testing new products. My noble friend Lady Bakewell of Hardington Mandeville highlighted issues around fire doors in this regard.
I would like to know from the Minister what role the British Research Establishment and the British Board of Agrément will have in testing and recommending building products. They are not mentioned in the Bill. It will be good to hear the Minister’s response to that, and to the very interesting suggestion from the noble Lord, Lord Crisp, of taking a wider view of safety. I look forward to discussing that proposal further. This falls in line with many noble Lords who have raised the issue of safe staircases—that would come into that general sphere. There is room, within the Bill, to make amendments to that effect.
Last of all these issues, but in no way least, is the failure so far of the Government to make practical and realistic responses to the cladding and remediation crisis. Just a few weeks ago, the Secretary of State made a bold announcement, in which he said that:
“Government must take their share of responsibility”,—[Official Report, Commons, 10/1/22; col. 283]
that manufacturers have shown “insufficient contrition”, that those who profited will pay the price, and that leaseholders are “blameless”.
The aim is to extract £4 billion from the companies that developed the buildings in order to pay for the removal of dangerous cladding from blocks between 11 and 18 metres. It is absolutely based on the polluter pays principle. I congratulate those leaseholders who have campaigned tirelessly for four years to get to the position we have today, where everyone across this House has confirmed they are in support of that principle. However, achieving that aim looks increasingly difficult. The noble Lord, Young of Cookham, emphasised how difficult it is going to be. I read in the media, only last week, I think, that developers are already consulting their legal advisers, which undoubtedly means they do not wish to pay and will find a means not to. What then? The Government appear rightly to have turned to materials companies to also contribute. Can the Minister tell the House the total sum that has so far been contributed by both developers and materials companies?
There is an urgent need to know, as invoices for remediation are with leaseholders now. The deadline for payment is this coming April, for many of them, and housing experts expect numerous defaults unless effective action is taken by the Government. Will the Minister let the House know when action will be taken to fulfil the promise made by the Government—which I applaud—that leaseholders will not have to pay a penny piece towards remediation? They need to know; we need to know.
As the Minister well knows, leaseholders face not just the costs of the removal of unsafe cladding—ACM cladding and other types that are flammable as well—but of construction failings, such as the lack of fire breaks. The Government have stated that leaseholders will not have to pay. We need to see essential steps taken to ensure they are not burdened with these totally unaffordable bills. Until we know, this will not do. Leaseholders have done everything right and nothing wrong; they are completely innocent victims in this building safety scandal.
This is a complex Bill with positive intent. Opportunities for more comprehensive reform have been missed and some elements will need to be amended to fulfil the aims that we all have to improve the Bill and, in the words of the Hackitt report, build a safer future. I look forward to working with the Minister and colleagues from across the House to make what is already a good Bill a much better one, and to make sure that leaseholders do not pay a penny towards remediation costs.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, it is not normal for the Opposition Chief Whip to respond to a Second Reading debate, but Members will be aware that I have been involved with these issues for some considerable time. I have also missed the noble Lord, Lord Greenhalgh, very much, so I thought that with him leading on this Bill and it being such an important issue, I would have to make an appearance. Maybe I will be part of the Chief Whips Awkward Squad from now on. I am not sure that the noble Lord has missed me, or my amendments, as much. I have my Oral Question on Monday on issues very pertinent to this Bill, as he knows.
First, I need to make a number of declarations of interest to the House. I am a vice-president of the Local Government Association, a non-executive director of MHS Homes Ltd and chair of the Heart of Medway Housing Association. I also own a home on a leasehold basis.
Secondly, I pay tribute to the right reverend Prelate the Bishop of Winchester for his service to the House. He has been a Member of this House for 10 years, and we have benefited from his wise counsel. I note his interests in Africa and education, and I say to the right reverend Prelate that we enjoyed his wonderful valedictory speech very much and congratulate him on it. We will miss him very much, and we wish him well in his retirement.
Thirdly, can I say how much I welcome the Bill before us? It does much of what needs to be done to improve building safety and the building safety regime that needs to be in place to protect people and give them the reassurance they need to live their lives without feeling constant worry, and without being faced with bills they cannot afford for matters they are not responsible for causing or creating.
For too long, elements of the building industry have had a poor attitude to safety, in terms of construction, materials and the verification processes to ensure safety and compliance. I see this Bill very much as another step along the way to driving that culture out. It is not and can never be acceptable that this culture exists. The tragedy in all this is that the catalyst for change was the fire at Grenfell Tower on 14 June 2017, with the loss of 72 lives, and the campaign by Grenfell United following that tragedy. Its campaign goes on, and there will be more to be done when we get the report of the second phase of the Grenfell Tower inquiry.
I very much agree with the comments of the noble Baroness, Lady Sanderson of Welton, about buck-passing and, importantly, the attitudes she highlighted when she read out some of the comments in those emails. It is utterly disgraceful, and that is the culture that needs to be dealt with. The arrogance of the former leadership of Kensington and Chelsea Council needs to be called out as well.
But, of course, there were heroes. There were heroes on the night: the firefighters who went into the burning building; other emergency responders; the contractor who went in and turned the gas off; the local community that responded; the officials from both local and central government who supported the community; and, of course, the community itself and Grenfell United. They all showed people working together selflessly for the benefit of others. They are the best examples of humanity—but we have also seen the worst examples as well.
I have to say, as I have many times before, that the Prime Minister’s constant attacks on the FBU irritate me. Let us be absolutely clear: the FBU—the firefighters’ union—and the firefighters, the heroes, are the same people. We cannot attack the union and then say what great people the firefighters are. That does annoy me. I have called on him many times before to apologise, and I expect that I will be waiting a long time for that to come along, but I want to put that on record.
As we have heard, many of the proposals contained in the Bill build on the review led by Dame Judith Hackitt and the consultation that followed, which had submissions from the Local Government Association, the National Housing Federation and others. I join with the right reverend Prelate the Bishop of Manchester in his tribute to the Manchester Cladiators and the other “cladiator” groups around the country. The justness of their campaign has been clear for all to see. They are not going to go away; there is more to be done. Their cause is just, and we support them very much.
I have criticised the Government from the Dispatch Box many times on this issue, often about the speed of all this. We have got here, finally, with the Bill, and that is great. But the Bill is not sufficient. Dame Judith’s report was published in May 2018, nearly four years ago. Looking at the issues in the Bill, you could never accuse the Government of acting in haste. I note that there was a draft Bill in the other place, and important work has been carried out, but we now need to quickly get on, get the Bill through this House and improve things.
Having said that, as the Official Opposition, we certainly intend to table several amendments to seek to challenge the assumptions in the Bill and to make improvements to it where we think it necessary, and we will divide the House if we must. I am aware that the Government made several commitments in the other place to bring forward amendments to address issues raised there. We look forward to having early sight of these amendments and to having constructive discussions around them and the way forward.
Looking at the Bill itself, I welcome the proposal for the establishment of the building safety regulator and the proposal that the Health and Safety Executive should be the regulator. I ask the noble Lord, Lord Greenhalgh, to set out whether he himself is satisfied that the funding mechanism is adequate, proportionate and financially robust enough to enable the building safety regulator, local authorities and fire and rescue services to go about their important roles efficiently and effectively and to deliver on the promises and commitments made. I fully support the duty to co-operate that will exist for local authorities and fire and rescue services, but, as I have said, we need to be confident that the funding streams and mechanisms are fit for purpose to deliver what is required.
I am also clear that the Bill cannot be seen as separate from the Fire Safety Act. I ask the noble Lord in responding to the debate to address the issue of the responsible person under the fire safety order, the accountable person under the Building Safety Bill, and how that comes together. We cannot create a situation which will cause more difficulty and confusion. We must have clarity here in terms of roles, responsibilities, obligations and what can and cannot be charged for.
I welcome the changes to the fire safety order, which introduces a duty for a fire risk assessment to be completed by competent professionals. As my noble friend Lady Hayman of Ullock said, the issue of height in determining risk has been questioned here today, and many noble Lords across the House have accepted the point that many buildings under 18 metres equally have issues and need to be classified as high risk. I hope that the Government can come forward and publish the findings of their report on the recent survey on buildings between 11 metres and 18 metres, so that we can see the points they looked at there.
Issues such as methods of construction, the number of protected means of escape and the number of vulnerable residents in the building have all been raised by other noble Lords, and we need to take them into account. I very much believe that the definition of higher-risk buildings needs to be broadened to cover the points that I and others have raised. Can the noble Lord, Lord Greenhalgh, also comment on those matters in his reply to the debate?
I am conscious that there have been so many questions that the noble Lord cannot respond to them all, so maybe he could take a leaf out of the book of the noble Lord, Lord Bourne of Aberystwyth, and write us a round-robin letter covering all the points. That was one of the great things that the noble Lord always did, so maybe the noble Lord, Lord Greenhalgh, could do that to cover all the points raised to make sure that nothing slips by, as it were.
We have talked many times over the past four years about the problems that leaseholders living in buildings affected by either cladding concerns or other building safety issues have faced. While the Government have moved on the issue of cladding—I thank the noble Lord very much for his own work on that—clearly lots more work needs to be done and other issues need to be addressed, and I am sure they will be raised in the course of the Bill going through this House.
I have a few questions for the Government. How will they ensure that industry plays its part and pays for the fund it has been asked to pay for? How will the Government continue to play their part and pay the funds needed to end the crisis while ensuring both that funding is affordable and that social housing supply is protected? It is really important that money is not taken from the social housing fund to fund this work. How can leaseholders who have already paid remediation costs get their money back? That is a really important issue for the leaseholders.
I agree with the noble Lord, Lord Stunell. The Minister’s words and the action for leaseholders are very welcome. I very much support these.
My noble friend Lady Warwick of Undercliffe raised important issues with which I agree and to which I am sure the Minister will respond when he replies to the debate. How can we ensure that housing associations will have access to funding to carry on their important building work, delivering for people as well?
Can we have clarity on for which works additional funding can be recouped, and which the industry will cover? Can the noble Lord, Lord Greenhalgh, confirm that the affordable homes programme will be protected in full and ensure that the existing departmental budget will not, as I said, be used as a backstop for the funding if the building industry does not come forward with the money we expect?
I fully endorse the remarks of the noble Lord, Lord Young of Cookham. He raised really pertinent questions for the Minister to answer in the course of the Bill’s passage through this House. They are the matters on which we need answers, otherwise we will have lots of amendments on Report to deal with those points, which need answering.
The noble Lord, Lord Shipley, made a very important point about the use of converted office buildings as flats, which need to be fully integrated into the fire safety regime. I welcome the changes to provisions relating to the Defective Premises Act, that claims will be able to be made retrospectively for leaseholders and the eligibility extension to 30 years.
Like the noble Lord, Lord Foster of Bath, I support the calls by Electrical Safety First, and I pay tribute to the work of that charity in campaigning for mandatory electrical safety checks in both social rented homes and leasehold properties. It is important to understand that we have mandatory electrical safety checks in the private sector but not in the social sector or leasehold properties. All three types of tenure, however, could be found in the same block of flats. Unless all three types are checked to ensure that they are correct, the building is not safe. It is important that we bring social housing and leasehold properties up to the same standard, otherwise the buildings are not safe. I hope we can discuss this further and get it agreed while the Bill goes through the House.
Like the noble Lord, Lord Stunell, I very much support the calls from the British Woodworking Federation on the issues of construction, product testing, inspections and the competence of fire risk assessors, installers and building managers. I could not believe these shocking figures: of the 100,000 inspections carried out, 76% of fire doors failed their inspection. This is an absolutely appalling situation and its own scandal, which needs to be put right.
The noble Baroness, Lady Eaton, my noble friends Lady Young of Old Scone and Lord Jordan, the noble Lord, Lord Naseby, and others raised the campaign for safer stairs. Again, this is a very simple change that we want to get through in the Bill. I look forward to the amendment being tabled; it is one that these Benches will certainly support if the House is divided.
I agree with the noble Lord, Lord Foster of Bath, who has called for home energy efficiency targets to be enshrined in law. I hope the noble Lord, Lord Greenhalgh, can take up the offer from the noble Lord, Lord Foster of Bath, to take his Private Member’s Bill on board. I am sure that would be welcomed by all sides of the House.
The noble Baroness, Lady Grey-Thompson, who gave a very powerful speech about building fire safety, highlighted how evacuation procedures are completely inadequate for disabled people. The number of disabled people who lost their lives in Grenfell Tower is absolutely tragic and shocking.
The noble Earl, Lord Lytton, with his tremendous experience, outlined the problems with leasehold and commonhold. His point about reliance on the industry stepping up and what happens when it does not needs to be addressed by the Minister in his response today. The polluter pays amendment is great and could work well, but what if it does not? Could we examine what would happen? We also need to look at that. What could be the robust mechanism behind it to ensure that it works?
The noble Lord, Lord Thurlow, highlighted some of the inadequacies in the Bill, particularly in regard to leaseholders and their means of redress for problems. He speaks with great experience and authority on these matters and the Government should listen to his remarks, which would help the Bill through the House.
I enjoyed the speech of the noble Lord, Lord Blencathra, and look forward to considering his amendments. We may well support them and cause more problems for the noble Lord, Lord Greenhalgh. I very much look forward to that.
In conclusion, there is a general welcome for the Bill. Members right across the House want it to become law quickly. Legitimate concerns have been raised in the House that need addressing. Legitimate questions need answering. The Government need to respond and table amendments quickly in response to the concerns raised and have those discussions. However, as always, I am hopeful of positive engagement with the noble Lord, Lord Greenhalgh. He always does so and I thank him for that. There is no desire to divide the House but, equally, if we have to do so we will. Finally, as I said, we would be grateful if the Minister could confirm that he will send that round-robin letter because it is impossible to respond to all the points. I would not want anything to slip through the cracks.
Lord Greenhalgh (Con)
My Lords, I really enjoy the tutorials I get from the noble Lord, Lord Kennedy. I shall do my best to start at a high level because this is a serious debate. There have been a lot of expert contributions and I have, as noble Lords will know, listened carefully to them all. I should start by saying that when I joined the Government I was told that I could have any job I wanted and was then assigned building safety and fire. The offer changes as one goes through the process.
It means that I have spent some time thinking about the root causes of the Grenfell Tower tragedy. I like to think about things and today we are addressing two of the fundamental root causes. That is why the Bill has the support of this House. We saw a corrosive construction industry culture that needs addressing and the Building Safety Bill seeks to do that. That is why it is so important. We also have, as admitted by my right honourable friend the Secretary of State in the other place, a building safety regulatory system that is, frankly, broken. That is why we need the Bill and we are all keen to make sure that it gets on to the statute book. That is important.
I also want to respond as Fire Minister to the comments of the noble Lord, Lord Kennedy, about the ordinary firefighter and the Fire Brigades Union. I engage; I met Andy Dark and Matt Wrack last week and will engage with them again. However, it is important to reflect that, as regards the Manchester Arena attack and the night of the Grenfell Tower tragedy, there are lessons to be learned for fire and rescue services. We must not mistake the need for reform, which should get widespread support from this House. As Fire Minister, I am about to publish a White Paper that will seek to reform professionalism and ensure that we get better people into the fire and rescue service. The paper will also look to improve governance. It should not prove particularly controversial and will, I hope, have widespread support. However, the reform agenda does not take away from the fact that the ordinary firefighter goes forward into danger, rescuing people’s lives. They certainly have my support and, I am sure, the support of everybody in this House.
It is virtually impossible to respond to the contributions of 32 speeches in the time available. We are then going on to Committee, where the Bill will be debated in depth in the unfortunately slightly less well-lit Moses Room—although it is now dark in here without natural light. We will, however, have an opportunity to debate these matters at length during the passage of the Bill.
First and foremost, we need to understand the issues around scope. This Bill affects the whole built environment. The new building safety regulator will be responsible for building regulations, looking at standards and competence and working with the British Standards Institution to set the competence of the professionals involved in the development of all the built environment.
I want noble Lords to realise that it is important to set the high-risk regime at an appropriate level. If we say we want everything in the high-risk regime then, frankly, the building safety regulator will fail. There are 12,500 high-rise and 77,000 medium-rise buildings—the lower one goes, the more buildings there are. It is very important to have an appropriate scope for the high-risk regime and not ask too much of a new fledgling regulator who exists in shadow form. I hope noble Lords will be patient about scope. This does not mean that it will not widen over time, but we need to start in the right place.
I really enjoyed the valedictory speech of the right reverend Prelate the Bishop of Winchester. I do not think I have heard the right reverend Prelate speak before, but I listened to almost every word. While I do not think the Palace of Westminster is an example of remediation at pace, I completely agree that “caring for building safety is caring for the health of our nation.” That is absolutely right. It is one of the reasons why I am passionate about this ministerial brief. It is very important that we get this right, and I thank the right reverend Prelate for raising it in that way.
As someone who loves history, I recognise that the Victorians did not get everything right, but they got the built environment right. They worked off pattern books. They built some of the finest homes that—like the Romans’—will probably last for a thousand years. We must get back to those principles of quality that the Victorians pioneered and that the Edwardians followed. Somewhere along the way, we lost the culture of building quality in this country.
I also single out my noble friend Lady Fox of Buckley—although she is not my noble friend because she is not on these Benches. She raised a very important point. The proportionality needs to be right in both council homes and social housing, as well as in private housing. There are people who profiteer from this stuff; they create a disproportionate approach and people pay for that. I was approached, not about a council home, but about Saxon House—a home in Sutton—where, essentially a cowboy did an EWS1 form and failed it. This caused untold stress and misery. A young man, called George Martin, managed to challenge it. It is important that we stop in their tracks those who are not acting properly. I involved the police in that case and supported the leaseholders in Saxon House. It is important to have a greater sense of proportion when approaching this crisis. We must remember that some people simply want to profiteer from a problem that has effectively been built up over 30 years. It is shameful to see such instances.
I was given a list of everyone who referenced protecting leaseholders and the polluter pays principle. I could spend the next 40 minutes reading out everybody’s names. In trying to answer all the questions, I will pick out those from my noble friends Lord Blencathra and Lord Young. In essence, we have made a commitment to protect leaseholders and make the polluter pay. Voluntary contributions can go so far, but we want this in law. From my noble friend Lord Blencathra I have learned about a framework—a toolkit in my language—for protecting leaseholders and getting the polluter to pay. The Government will bring forward amendments—I think the deadline for Committee is Valentine’s Day, 14 February. We will be ready to debate many of these amendments at the next stage of this Bill, although some may not be ready. Some are not government amendments. I have been working very hard and listening very carefully to Steve Day, whom the noble Earl, Lord Lytton, has been championing. I have put him in touch with lawyers with real expertise. Professor Susan Bright of Oxford, a land lawyer of the highest quality, has been helping to draft an amendment —now known as the Bright-Day amendment, which is better than the dark night amendment. I hope that this will be ready for noble Lords to consider, although it has not yet gone through government processes. We want every tool in the toolbox to make sure that we protect leaseholders and make the polluter pay.
The comments from the noble Baroness, Lady Warwick of Undercliffe, were very interesting. I want to find out more about the statistic she quoted. It is staggering to think that many registered providers put £6 billion towards remediating their own housing stock. The leading developers have made provision of no more than £1 billion for their share of this crisis. I therefore pay tribute to the registered providers who are doing the right thing and making their buildings safe and not relying entirely on the probably £300 million or £400 million of taxpayers’ money that has gone towards remediation. However, that is a small fraction of the amount of money that the noble Baroness referred to. That is a very useful contribution toward resolving this crisis, because of the balance sheets of the G15, whose shoulders are considerably broader than the average leaseholder and shared owners who live in their homes. That is a tribute, and I look forward to having a summit with the National Housing Federation and leading registered providers to see how we can move forward in that vein.
I was a little disappointed when I saw a tweet that a small number of registered social landlords were effectively engaging a lobbying agency to try to promote ways to stop leaseholders being able to pursue claims. That is not the way to go. We have to recognise that there are people who are doing the wrong thing, and we have to encourage them—whether they are developers or registered providers—to do the right thing by leaseholders.
I thank the noble Baroness, Lady Grey-Thompson, for sharing her speech, but it got to me quite late; it really struck me, and stopped me in my tracks. I got to know some disabled leaseholders who are leading the campaign, Claddag. Sarah Rennie and Georgie Hulme are incredible people, and I want to be pointed to some other examples. When it comes to public procurement —I declare my interest as someone who has been in local government for 20-odd years, although I never became a vice-president of the LGA; I do not know what I did wrong—it is important that we look at that. However, public procurement has the potential for litigation and there are all kinds of things that, as a Minister, I cannot do. I hear what the noble Baroness says, and there is an intention to do all we can to help disabled people to live safely in their home, whether in high-rises or medium-rises. I want to give her that assurance as the Minister responsible.
I have known the noble Lord, Lord Best, for a long, long time. He asked around 15 questions about the new homes ombudsman. I spent the weekend talking to my honourable friend Natalie Elphicke, who is interim chair of the New Homes Quality Board. She assured me that the governance is clear—although they seek contributions from developers to pay for this scheme, they have no say in how it is run. I was reassured by her clear explanation. While the detail of the scheme is going to follow this legislation, I can confirm that the Bill explicitly allows the new homes ombudsman scheme to expel members—that is one assurance that I can give. The scheme must also include provision about the enforcement of determinations made by the ombudsman that may include expulsion from the scheme, alongside setting out the circumstances in which an expelled member would be able to rejoin the scheme. I hope that gives some assurance.
The noble Lord, Lord Shipley, and the noble Baroness, Lady Hayman of Ullock, wanted to know about information for residents. Existing leaseholders and landlord-owners of flats will be able to request building safety information from the accountable person and to share this with prospective purchasers and tenants. Transparency is an essential way of getting this new system to work.
I have not had the benefit of the British Woodworking Federation information about fire doors, but I am pretty shocked by the numbers that have been quoted in this debate. I am aware, of course, that some of the newer fire doors perform far less well than some of the older ones. In many cases, the older the fire door, the better it performed. There is a real fundamental issue with the construction products testing regime carried out by the BRE or the BBA—we have to recognise that it is broken. That is why the previous Secretary of State asked for a construction products testing review. We are not that far away from having the report. We have a draft; I do not know how long it will be, but it is not miles away from being made public. We are looking at it very closely in draft form, but the usual phrase is “in due course”.
I was very struck by the speech of my noble friend Lady Sanderson, someone who has been a community adviser to the Grenfell bereaved and survivors and lived this since the night of Grenfell, along with Nick Hurd, the Prime Minister’s adviser on Grenfell; it is a fantastic way of staying connected with the community. It was a buck-passing culture and a pass-the-parcel approach that led to a lot of the tragedies we have seen. No one takes ownership or responsibility; frankly, that is why we need this Bill. My noble friend rightly questioned whether we should continue to build high-rises with a single staircase. That is a very important point that we need to look at and find out how to address.
The noble Lord, Lord Shipley, and I have one thing in common: we were at Procter & Gamble. I was there in the 1980s and 1990s, but he was probably there in the 1960s.
Lord Greenhalgh (Con)
The 1970s, okay. One of the things it taught you was to really distil your arguments down and to learn things over time. The noble Lord specifically asked whether we could review this on an ongoing basis. I take that suggestion as a very sensible one. Any Government—this Government in particular—need to do things and then see whether they work, review and reflect, and try to take that on board. I do not know whether I have overstepped the mark as a Minister, but I think that is a very sensible suggestion.
We will ensure that we improve competence. One of the things we must recognise is that, to improve competence, which was raised by the noble Lord, Lord Shipley, you need to establish what competence is. That is one of the things we are doing very carefully; it is being done by officials and the shadow building safety regulator. You then have to find out how the accreditation will work, and I know that UKAS and others want to step forward and do that. That will all happen as a result of this Bill.
The noble Lord, Lord Aberdare, gave a really thoughtful speech on something that was new to me, so I appreciate his contribution on cash retention. The Government continue to work with industry on the future of retention payments in the construction industry. However, I am told that there is not a clear consensus as to what may replace the practice, so there is more work to be done. I thank the noble Lord for raising an important issue.
The noble and learned Lord, Lord Etherton, raised Part 5 and the duty on landlords, and asked whether we were going to cause litigation by setting unreasonable demands on landlords. He also came up with a solution. I really appreciate him raising that issue; leaseholders need as much protection as possible. We are requiring landlords to seek claims only where reasonable, but we note the noble and learned Lord’s suggestions for the guidance, and we will take them on board as we continue with the passage of the Bill.
The noble Baronesses, Lady Jolly and Lady Young of Old Scone, the noble Lord, Lord Jordan, and my noble friends Lady Eaton and Lord Naseby all mentioned the Safer Stairs campaign. As someone who has an elderly father—sadly, my mother did not survive the first wave of Covid—I worry. The thing I worry most about, as someone gets frailer, is staircases. I almost have to declare a personal interest. It is important that we look at staircase standards and recognise how best to achieve that end point, so that new builds have the right level of minimum standard. That does not mean it has to be enshrined as a maximum standard, but we have to work out what we would be proud of as a minimum standard in regulations. I thank noble Lords for raising this issue.
I think it is ironic that one of the sponsors of this campaign is Berkeley homes, because Richmond House, which someone mentioned, is of course a Berkeley build, as is Worcester Park, which really was a shoddy building, although luckily there was no loss of life there. Some developers who normally build good stuff have built things that they should be ashamed of. It is ironic that Berkeley is sponsoring what is a very noble campaign—none the less, I support it.
The noble Lord, Lord Foster, raised electrical safety. I am sure we will work through some of his suggestions—along with pretty much everything else he is interested in—in Committee. I have the briefing and I understand the issue; it is something that we have debated many times.
The noble Baroness, Lady Pinnock, raised building safety managers, and I have the note that was prepared by ARMA and IRPM on this. I hear the concerns about cost, and we take those concerns extremely seriously. There is not a one-size-fits-all approach, and if you are not prescribing how you do it, we do not see why you cannot have a property manager continue to discharge the functions of a building safety manager, going to the expertise only when it is needed. Think of the equivalent in healthcare: you typically go to a GP but see the specialist only when required. I have some sympathy with the issue, but I think that we are not being prescriptive about it, and so it should not be used as an excuse by managing agents to whack up the prices for leaseholders.
I welcome the clear cross-party support from so many noble Lords. There is broad support for the principles set out in a Statement by my right honourable friend the Secretary of State in the other place, on 10 January. We will continue to work with your Lordships —even the noble Lord, Lord Kennedy—and by working together we will ensure that homes are safe for future generations. It is a worthy ambition. I commend the Bill to the House.
Building Safety Bill
Monday 21st February 2022
(2 years, 1 month ago)
Grand CommitteeRead Full debate Building Safety Act 2022 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 98-I(b) Amendments for Grand Committee (Supplementary to the Marshalled List) - (21 Feb 2022)
Lord Foster of Bath
“(aa) furthering the protection of property, and”Member’s explanatory statement
This amendment would require the building safety regulator to exercise its functions with a view to furthering the protection of property, which is intended to promote longer term protections for occupant safety and reducing fire damage and cost.
Lord Foster of Bath (LD)
My Lords, as we begin the Committee stage of this important Bill, born out of the tragic Grenfell fire, I reiterate my condolences to the families and friends of those who died in it.
I wish the Minister fortitude as he looks forward to what I suspect will be a very long period of the various stages of the passage of this Bill. We all wish him well and hope that he will have a sympathetic approach to many of the important amendments that we will be debating over the coming days, including Amendment 1 and the proposed new clause in Amendment 12, which I am moving today.
At Second Reading I argued that the Bill should address the perverse situation under the current building regulations in which, if all the occupants of a building escape safely from a fire but the building is totally destroyed, the outcome is considered a success. I believe that the life-safety limitation provided by the current regulations, which significantly influences the design of buildings, should be revised to take account of the protection of property.
My amendments would achieve that by adding furthering the protection of property to the list of purposes for which building regulations may be made; extending the requirements of persons carrying out works on a building to cover building resilience; and widening the scope of the building safety regulator’s functions to further the protection of property. The benefits would include longer-term protection with, therefore, more time for occupants to escape; improved safety for firefighters and reduced fire damage and environmental pollution; and reduced costs of rebuilding and replacing lost items.
At Second Reading I mentioned several recent fires in a range of building types as evidence of the need for such measures. Last week, the Sunday Times included an article looking back at one of the fires that I mentioned: the 2019 fire that destroyed the Worcester Park residential block in Richmond. The article noted that the London Fire Brigade arrived within nine minutes but could not save the building. Twenty-three flats were destroyed in minutes, and, although all 60 residents escaped safely, they lost everything. The article describes the impact: the girl who lost her A-level notes in the blaze and whose predicted grades dropped and she lost her university place; the social worker who received a fire brigade commendation for warning neighbours of the fire but who lost his job because of the trauma caused by the event; and several residents who invested their savings in shared-ownership flats in the block who now cannot find similar properties in the area because house prices have risen by over 13% since the fire. No lives were lost, but the impact was incalculable.
How did a relatively new building end up being destroyed in minutes, and at such risk to the occupants? The building owner claims that:
“The cause of the fire was never identified but the building ‘performed’ as it was supposed to, allowing everyone to get out safely.”
The owners of the Croydon self-storage warehouse gave a similar answer when challenged as to how a fire there in 2018 could completely destroy its warehouse and the possessions of 1,200 clients. They said the building met the fire safety building regulations. The same was said by those responsible for the Beechmere care home, Walsall’s Holiday Inn, Chichester’s Selsey academy, Northamptonshire’s brand-new 40,000 square meter Gardman warehouse, Bristol’s Premier Inn and countless other buildings. In each, the outcome was deemed a success, even though the buildings were destroyed and contents lost.
The current Bill does not address this failing. Indeed, it would not even have covered most of the buildings I mentioned, since they would anyway have been out of scope. But every time a home, a school or a business is destroyed by fire, lives are disrupted at great personal, social, environmental and economic cost. Fires do not need to be so dangerous and costly, but unfortunately it seems that the increased use of modern methods of construction and larger compartmental sizes in industrial buildings is resulting in larger, and hence more challenging, fire incidents. Moreover, at a time when we are striving to make buildings more sustainable, the regulations appear to allow for what are, in effect, disposable buildings.
In the other place, when this issue was raised, the Minister there said little, merely commenting that it would be wrong to complicate the role of the new regulator, yet as our Minister knows, the Government are already conducting research into property protection. I hope that when he responds the Minister will bring us up to speed on the progress of that research and how he sees property protection fitting into the regulations.
This is a wide-ranging Bill, primarily designed to address the failings highlighted by the Grenfell tragedy, and of course it must do so, but it should also be forward-looking and designed to secure the safety of people in or about all buildings. My amendments seek to ensure a safer, more resilient and sustainable built environment. I beg to move Amendment 1.
The Deputy Chairman of Committees (Baroness Fookes) (Con)
The noble Baroness, Lady Brinton, is taking part remotely. I invite her to speak.
Baroness Brinton (LD) [V]
My Lords, I declare my interest as a vice-president of the Local Government Association.
I shall speak to a number of amendments in this group, broadly divided into two areas. The first follows on from my noble friend Lord Foster’s introduction to the protection of property and the powers of the regulator. The second relates specifically to the safety of buildings and disabled people.
On the first issue, much of the focus among the public and in the debate in the run-up to the Bill coming to your Lordships’ House has been on cladding and the height of buildings. As was discussed specifically at Second Reading, a far wider range of safety, construction and adaptation issues have emerged as secondary issues, generally meaning that too many buildings are not complying with even the old building safety regulations. Life safety is not the only issue: far too many new buildings these days are being constructed in an unsafe way. The level of complaints against builders is the highest it has ever been, and my noble friend Lord Foster of Bath outlined that very clearly.
Secondly, I want to focus on the issues that disabled people face when they are asked to get out of a building, in the event of either a fire or a fire alarm. I am really looking forward to hearing the contribution of the noble Baroness, Lady Grey-Thompson, after her excellent speech at Second Reading.
I have not always used a wheelchair, but I still use a stick on various occasions, and I have to say that there is nothing more frightening than trying to leave even a low-level building coming downstairs with a stick with people racing past you. It was probably the second time I had to come out of a building for a fire alarm when I realised that I was as much a danger to the people trying to race past me as I was to myself, because of the risk of falling. Over the years, I have twice been in hotels where the fire alarm has gone off in the middle of the night—once, when I was trying to use my stick. The second time, because I was in my wheelchair, I had been told to report to the safety zone, which I did, and was told that someone from reception or the fire officers would come up, transfer me to the evac chair and take me downstairs. Twenty minutes later, I was still sitting there.
I have to say to noble Lords that this also happened to me in Portcullis House about five or six years ago. As a result—all credit to the House authorities—that was remedied and there is now a new arrangement. But when you are sitting there and you do not know whether it is a fire or a fire practice, and you cannot get out of your own accord, it is extremely alarming.
The use of PEEPs—personal evacuation emergency plans—is excellent, provided that they work. I have used them in workplaces, homes, hotels and guest houses. I was in charge of building some new disabled accommodation at Selwyn College when I was bursar there more than 20 years ago, and although they were not called PEEPs in those days, creating a confident document so that students, their friends around them and the college staff understood the needs of that particular disabled person was vital to them having confidence about being able to evacuate the building in the event of an emergency. The difficulty that we face today, highlighted especially by Grenfell, is that these documents are not in place.
Many disabled people are very concerned that the Home Office has appointed safety consultants CS Todd & Associates, who have been given a new contract worth over £200,000. This organisation was responsible for drafting and editing a fire safety guide for the LGA that said it was “usually unrealistic” to expect landlords to put arrangements in place for disabled people to evacuate blocks of flats in the event of an emergency. That is an interesting turn of phrase, because, as we know, there were a lot of disabled people in Grenfell and flats are increasingly being built, so evacuation for disabled people is vital.
I especially thank disabled campaigning group Claddag, a leaseholder action group led by disabled people who have decided that they will take the Home Secretary to court on this contract. They and the Disabled News Service are really highlighting this issue. It is important to note that, six years on from Todd’s advice, two-fifths of the disabled residents in Grenfell Tower lost their lives because there were no special arrangements in place to get them out safely. The fire service has recognised that the “stay put” advice for residents in high rise blocks must be changed, but there is no evidence from either the Government or from CS Todd & Associates that things have changed. In fact, a further set of advice has been published by Colin Todd on behalf of BSI that repeated this same arrangement.
That is why we need the amendment in the name of the noble Baroness, Lady Grey-Thompson. There is an adage in the disabled world that says, “no decision about us without us”. This is fundamental to human safety and human life. It is vital that the specific needs of disabled people are taken into account in the Bill.
Baroness Neville-Rolfe (Con)
My Lords, I was not expecting to speak after the noble Baroness, Lady Brinton, so I will not comment on her proposals but will wait to hear other comments. I thank the noble Lord, Lord Foster of Bath, for introducing the first group of amendments, and very much endorse what he said about the sad victims of Grenfell. I was thinking that taking fire safety and buildings away from the fire brigade, as we did about a quarter of a century ago, may have had some sad and perverse effects. I refer to my interests in the register, notably as a non-executive director of Secure Trust Bank and as the owner of property that is sometimes rented out. I am also proud to be chair of the Built Environment Committee and to see distinguished colleagues here today.
I was sorry not to be able to speak in the long and interesting debate at Second Reading. However, I remind noble Lords of my involvement in the Fire Safety Bill and the concern I expressed very early on about the position of leaseholders and their inability to sell property because of the uncertainties and the problems with the dreaded EWS1 form, which we will come on to. I look forward to debating the Government’s recent package later, but for now I turn to the regulator and his or her functions, the subject of this group.
Lord Crisp (CB)
My Lords, I will speak to Amendment 4. In doing so, I thank the noble Lords who have put their names to the amendment. I am very grateful to the noble Lord, Lord Young of Cookham, who is in his place but who I know cannot stay for the whole debate, and to the noble Lord, Lord Blunkett, who I believe is probably somewhere on the M1. I am grateful to the noble Lord, Lord Stunell, who will bring his great experience and insight to bear when he speaks.
As the awful tragedy of Grenfell revealed to us, and as those working in the industry already knew, the construction industry is in a very poor state on a number of different fronts, from quality and basic standards of all kinds to the supply of housing and the prevailing culture. Whether we worked in the industry or not, we were all deeply shocked by the Grenfell tragedy, and it is this that is the origin of the Bill. I recognise, therefore, that priority must be given to the immediate issues arising from Grenfell and that the Bill cannot address everything that needs to be done to tackle the problems in the construction industry. But it cannot ignore them either.
The Long Title says that the Bill makes
“provision about the safety of people in or about buildings and the standard of buildings”.
The Bill indeed picks up some of this, addressing the golden thread and cultural change, for example. Other noble Lords have addressed this in other amendments, including my noble friend Lord Lytton in his amendments on what is now called the perpetrator pays principle, on which I hope to speak later in Committee.
I originally wanted to press for a set of broad-based standards in construction, brought together around the aim of promoting health, safety and well-being. However, given the imperative of addressing the issues directly related to Grenfell—I am sure the Minister will appreciate this—I and the other signatories have gone for a deliberately simple amendment that makes only a start in that direction. Indeed, I hope that the Minister and the Government will welcome this amendment and see it as a contribution to their wider goals of levelling up and driving cultural change in the sector—something that I hope the Government will build on in levelling-up legislation and elsewhere.
Turning to the specifics of the amendment, it clarifies the meaning of “safety” to include health and well-being. It makes clear that the building safety regulator should consider human health and well-being in discharging its building functions. In practice, this means that the regulator, being part of the Health and Safety Executive, needs to consider health and well-being as part of safety when it exercises building functions under Clauses 4, 5 and 6 of the Bill and its functions under the Health and Safety at Work etc. Act 1974 and the Building Act 1984.
Even without our experience of Covid, there was growing evidence that showed that people’s homes and neighbourhoods have a direct impact on their physical and mental health. Cold, damp, overcrowded and cramped conditions, pollution and inaccessibility for older and disabled people all directly impact on mental and physical health and well-being and constrain opportunity. The quality of our homes and neighbourhoods is one of the foundations of our life and our life chances. The experience of Covid has simply dramatically reinforced all these points.
This is about opportunity for people, life chances and social justice. It is about enabling the people of this country to thrive. The way we organise and design our built environment matters to people and to a series of the Government’s policy initiatives, not least those dealing with health inequality, net zero and levelling up. These conditions also matter in considering our resilience as a country in the face of resurgent and indeed future pandemics. The problem is that the way we regulate homes now fails to secure the minimum standards vital to people’s well-being. This, as the Government’s levelling-up agenda recognises, is a major issue in securing social justice. People on the lowest incomes often suffer the poorest and most insecure housing conditions and live in neighbourhoods with the worst pollution.
This amendment is important because safety is currently undefined in the Bill, so it is simply not clear whether what I would call these common-sense aspects of safety relating to people’s health and well-being should be considered by the building regulator. This lack of clarity is unhelpful because the safety of people is generally defined as an absence of health risks or harms. I note that health and well-being have definitions in UK legislation, so their insertion into law would not be novel. It is also important to note that these issues are not covered by planning or other existing regulations; put simply, planning legislation has no legal obligations of any kind that relate to the health and well-being of people.
I will make one final point on cultural change before I sum up my argument. There is a problem with all regulation when it is written too tightly that people deliver on the specific and do not address the bigger issues—hitting the target but missing the point, if you like. I am sure there are people associated with Grenfell who are arguing that they followed the letter of the law while of course missing the far bigger point. We must not miss this opportunity to take a holistic view on safety. Do we want a future where we have regulated appropriately for fire but, to take just one example that the Committee will address, let people fall down unsafe steps, even though we know what can be done to prevent it? I believe it is necessary to make it clear that this wider definition will inform the decisions of the regulator. I believe that knowing that attention has to be paid to wider concerns of health and safety will also help drive cultural change in the sector as a whole. What I am proposing is about not more regulation but better regulation. Indeed, I believe that, in the longer term, going further and requiring developers to build homes that promote health, safety and well-being will help bring together some of the contradictory elements of the planning and building regulations. That, however, is for another time.
In conclusion, I well understand that the Government cannot make the level of change to the construction industry that is necessary within a single Bill or set of regulations, and I commend them for what is in the Bill. This is why I said at the beginning that we have deliberately added only this simple amendment. This definition allows for the consideration of people’s basic and common-sense needs such as freedom from pollution and damp; safety; access to green space and natural light; accessibility, including safe stairs; heat requirements; and security.
While the amendment is limited to clarifying the scope of the responsibility of the building regulator, it enables the beginning of a new approach to regulation in which human health and well-being are core to the delivery of building safety. I very much hope that the Minister will see this as a contribution to the Government’s goal of making appropriate provisions in the Bill about the safety of people in or about buildings and the standard of buildings.
I have heard it said that we are building the slums of the future. Here the Government have an historic opportunity—very sadly created by this dreadful tragedy—to reverse that trend and help create homes, buildings and neighbourhoods that we can be proud of. I hope that the Government will accept this amendment as an important step on that journey.
The Earl of Lytton (CB)
My Lords, as this is the first time that I have spoken at this stage of the Bill, I declare my interests as a chartered surveyor and member of various property-based organisations. I am also a patron of the Chartered Association of Building Engineers.
The noble Lord, Lord Foster of Bath, is absolutely right to say that, while the preservation of human life must be front and centre, by the same token buildings must be designed to retain their fundamental integrity for specified periods of time, at the very least—as set out, half an hour for this, one hour for that and so on. Noble Lords know this only too well. There are of course many reasons why this is necessary. The total destruction of a building was so graphically illustrated by the fire in Worcester Park, the downstream effects of which were described by the noble Lord, Lord Foster, in its destruction of livelihoods, life chances and, in particular, people’s confidence in their homes—I think this is the point the noble Lord, Lord Crisp, was getting at in his amendment. It casts a shadow across families and down the generations. Anybody who understands the concepts of trauma theories knows that; I am no expert, but I know that it happens. Beyond the utter undesirability, the cost, the insurance risk, the potential risk to firefighters and the general spread of contagion, there are compelling reasons why buildings must retain their integrity: structural, compartmentalisation, spread of flame and so on.
The building regulations, going back to 1965—which were the set of regulations in force when I was at the College of Estate Management studying what has become my lifelong trade and calling—include mandatory standards. There is a secondary aspect in parallel with those, which is the advisory approved documents and guidance. It is really important to understand that there were two different streams running in parallel.
One of the industry failings that has occurred—accompanied, I must say, by a failure of regulatory oversight—is on the part of those who were entrusted to make sure that buildings were constructed in accordance with the mandatory requirements and the best practice set out in the advice. The failing has been to assume that everything you needed to know was contained in this advisory guidance that went in parallel with the regulations. That is wrong. I can do no better than refer to, as I understood them, the opening remarks of counsel for the Government in the final stage of Sir Martin Moore-Bick’s inquiry, when he made precisely this point.
If you follow slavishly the approved documents under part B of the building regulations, which is principally to do with fire, you will lead yourself astray, because it says “should”, “could”, “might” and all those sorts of things. You are dealing with advisory documents concerned with how you may be able to do it this way, or you may be able to do it that way. In other words, the regulations produce the mandatory test first and foremost, but all these other advisory documents then provide suggestions on how you might achieve it.
I strongly support Amendments 1 and 4 because this is about people and the security of their homes. It is about inclusion, decent design and, ultimately, outcome-based policies. The noble Lord, Lord Crisp, kindly gave me a quick trailer on the “perpetrator pays” amendments, of which more anon. However, I finish by again following the noble Lord, Lord Foster, in saying to the Minister—who I know has really driven this policy forward; I give him great credit for producing this Bill—that I will do everything I can to assist him in making wise choices and accepting appropriate amendments when they are moved.
Baroness Grey-Thompson (CB)
My Lords, I declare my interests: I am the president of the Local Government Association and, when in London, I stay in a block of flats. I have a number of amendments in this group. Amendment 9 is the most substantive but my name is also attached to Amendments 4A, 7A, 7B and 147A.
I tried not to test the Committee’s patience by adding “and disabled people” to every part of the Bill I could, but I am looking for more specific recognition that disabled people need greater support and protection than they currently have. If they are not specifically mentioned, disabled people will be forgotten, however good the intention right now may be. There are several important parts where explicitly mentioning disabled people would add significant value, such as on residents’ panels. Of course, there are many types of impairment —we are not one homogenous group—but bringing in additional or different knowledge would be useful for a far greater number of people.
I listened to the experience of the noble Baroness, Lady Brinton. It is what disabled people think about every single day. In every building I go into, I automatically start thinking about how I would get out if there was a fire. The noble Baroness and I could probably spend most of the afternoon listing all the instances when we have been left near or on staircases, but I take my personal responsibility very seriously. I can still get down a flight of stairs in my wheelchair as long as I have a handrail to hold on to. I can do it reasonably quickly; when I was an athlete, I could do it incredibly easily. However, I know that, as I get older, it will get harder and my ability to get out will become more challenging.
One time, I was in an office block when the fire alarm went off. It was not a drill. There was one evacuation chair—absolutely fantastic—but there were two wheelchair users on that floor. We looked at each other and worked out who needed the evac chair the most. I went down five flights of stairs in my wheelchair. Since Second Reading, more disabled people have got in touch with me to explain their fears but also to let me know about some solutions they have been given. Quite frankly, they were ludicrous, which is why we need to have different things included in this Bill.
In situations like this, we often see that the solutions that non-disabled people come up with are very much based on the medical model, rather than the social model, of disability and do not take into account a disabled person’s reality or life. It was once suggested to me, not in relation to this Bill, that it would be far easier if disabled people had a curfew so that they went home at night and we knew where they were. It was a really serious suggestion; I struggled not to laugh at it, I am afraid. If anything vaguely approaches that in Committee, I hope noble Lords will understand if I push back on it quite strongly. Tagging disabled people is not a sensible solution to this problem either because it absolves us from our responsibility to change how we think about disabled people. We need to be more forward-thinking and, in essence, we need to future-proof the decisions we take.
Specifically on Amendment 9, in another place, the right honourable Mr Christopher Pincher said:
“The Secretary of State can already consider the vulnerability of residents when making regulations.”—[Official Report, Commons, 19/1/22; col. 435.]
However, I do not think that this goes far enough. I know that there are likely be suggestions about including information in a premises information box; that is interesting but, again, it does not go far enough. We need to consider the needs of disabled people. I very much welcome a discussion with the Minister and the Bill team to think about how we can find the right wording, not just by sticking “and disabled people” at every point in the Bill but by genuinely helping disabled people to make it better.
At Second Reading, I asked the Minister when the personal emergency evacuation plan consultation would be published. On 3 February I asked a Question for Written Answer about this, and the noble Baroness, Lady Williams, answered on 17 February that it would be
“once the views of all individuals and organisations who contributed have been carefully considered.”
She stated that the timeframe would be “shortly”. I know that “shortly”, in parliamentary terms, can be quite a wide timeframe. Can the Minister provide any update on what it means in this context? This piece of work would be incredibly useful in helping us navigate this Bill.
I am expecting some sympathy from the Minister, although possibly not much movement. Obviously, I will take away his comments from this debate, but will return on Report with amendments in this area and divide the House on ensuring that we have protection for disabled people.
I will speak very briefly to the amendment of the noble Lord, Lord Blencathra. He apologises for not being here today; he is trying to get down to London—when he spoke to me this morning he was stuck somewhere around Penrith. He is hoping to be here very shortly. He messaged me to say that, with his amendment, he wanted to add buildings below 18 metres that pose a special risk—not to tie the Secretary of State’s hands but to give the option of complete flexibility to define “buildings” and alter any of the definitions in the section. As he expressed passionately at Second Reading, we have no idea what will be found when proper inspections take place, but there are flats that have been converted from office blocks and box flats with no windows.
Most of his amendments are in the form of “regulations may”. He made it very clear that, when he chaired the Delegated Powers Committee, he would have deplored such a formulation of words, but he recognises that a number of provisions in the Bill must inevitably be skeletal. He also said that taking the power does not mean that it has to be used and it certainly does not imply a commitment to undertake fire remedial work on all buildings, even those under 11 metres which may still be four storeys high.
Lord Stunell (LD)
My Lords, it is a great privilege to follow on from what the noble Baroness has outlined. I strongly support what she has been saying. I will speak on a couple of other points that have been raised so far, particularly on Amendment 4 and what the noble Lord, Lord Crisp, said, and on what my noble friend Lord Foster proposes in his amendment.
However, I will first deal with the point just raised. It is not about a theoretical code; there are absolute, actual conflicts between the requirements which fire officers, for instance, dictate in relation to fire doors—how soon they should shut, and so on—and the requirements of what someone with mobility problems needs to pass through that doorway. These issues are not resolved at the moment; they are not just the subject for soft words but for reconciling the tensions and devising ways to find solutions to those problems. I could make the same point about railings and barriers, where what is required for fire safety is often in conflict with what disabled people need.
Apart from the generality of the points made by the noble Baroness, Lady Grey-Thompson, I say to the Minister that there are really specific regulatory pitfalls; things which, if you implement them very mechanically, have internal conflicts which need to be resolved. I very much hope the Minister can, at least during the passage of this Bill if not today, undertake to consult both fire officers and the disabled community on rational ways of solving or at least ameliorating those difficulties.
Amendment 4 was very ably proposed by the noble Lord, Lord Crisp. He has made the central point, which is that there is an important difference between having a set of regulations which are really a complicated algorithm or tick-box—where if you have got everything right you have simply passed, and that is it—and having legislation which sets out the overall purpose of having any regulations or rules at all in the first place. That is where this amendment comes fully into play. It says that safety has a wider import than simply what we mean by making a building fire safe; it is about what we mean by making it safe to live in in the long term.
When I looked at page 82, I was interested to see that Clause 60(8) says that regulations can be made under this provision where there is a significant risk of deaths or
“serious injury to a significant number of people.”
It is clear that, if you think about buildings as things which kill people, far more people are killed by buildings which are damp, leaky and dangerous than by buildings which catch fire. Asthma and bronchitis deaths caused by poor housing form a significant fraction of the health service’s burden during the winter months. That broader outlook or vision of what we actually mean by making a building safe—creating a safe home for people—lies at the heart of this amendment. I very much hope that the Minister will be able to respond to it with a very generous spirit.
I would perhaps urge the Minister on a more practical point: later in the Bill, we shall consider the establishment of residents’ engagement strategies for buildings. I am not sure quite how he envisages those will work, but at some point a large group of residents in a particular building will meet and tell its owners what they believe needs to be done to make their building safe. The Minister has led a council and been to residents’ meetings, so he knows the kinds of things which are raised at them. I would bet that, by 10 complaints to one, they will be about damp, draughts and leaks as against fire doors that do not close properly. Those residents’ engagement groups are going to give a lot of grief to those who run the system in the future. Including this overall vision of what safety and well-being mean within the compass of the Bill and the scope of the new regulatory environment would be one very good way to show that there will be a route for residents to have their complaints, whatever their nature, about their lack of well-being or safety in their home addressed by the legislation.
Having spoken on Amendment 4, of course I strongly support what my noble friend Lord Foster said about the property situation. My support may be irrelevant but I notice that the National Fire Chiefs Council strongly supports this provision, as do the Institution of Fire Engineers and the Association of British Insurers. They all support the inclusion of property risk alongside life safety risk in the regulatory structure that we erect for the Bill. I very much hope that, as with Amendment 4, the Minister will be able to give us a very satisfactory outcome on Amendment 1 from my noble friend Lord Foster.
Baroness Hayman of Ullock (Lab)
My Lords, first, I thank the noble Lord, Lord Foster, for his clear introduction to his amendments.
Noble Lords may remember that the Minister said at Second Reading that
“Dame Judith called for a complete overhaul of the system, and her recommendations underpin the Bill, with a golden thread that will ensure that, henceforth, people remain safe in the homes that we build for them. The Bill is unapologetically ambitious, creating a world-class building safety regulatory regime that holds all to the same high standard.”—[Official Report, 2/2/22; col. 916.]
We certainly applaud this ambition, but making high-rise residential buildings safe requires much more than action to stop fire spreading. There is also an urgent need to prevent those fires from starting in the first place and to look more broadly at what building safety means. We therefore support the amendments in the name of the noble Lord, Lord Foster, which are designed to make buildings safer and to increase resilience. As the noble Lord said, it is important to improve protections and safety for firefighters and for residents, to give people more time to evacuate the building and to make it less likely that the building itself will be completely destroyed.
The Minister of State, Home Office and Department for Levelling Up, Housing & Communities (Lord Greenhalgh) (Con)
My Lords, I was not expecting to be in what the Romans called a frigidarium for this stage of the Bill. It is positively bracing. I am sure that as the week wears on we will get a slightly more normal temperature. It is already slightly better, so it clearly just takes a bit of time.
I will try to capture each group of amendments in three words or fewer. I am going to call this group the “widening the scope” group of amendments—that is three words. I will go through each amendment in turn. In practice, I have sympathy with every idea that has been put forward. However, I would like noble Lords to consider that the more we widen the scope, the greater the risk that we will actually fail in the first duty of any Government, which is to keep people safe. Our focus has to be based on what it is reasonable to expect from a new regulator in the Health and Safety Executive. So, although I have sympathy, I will resist this group of amendments, because, when we talk about high risk, the scope has to be necessarily tight in order to give the HSE the chance to grow as a regulator and to implement this regime properly.
However, I thank noble Lords for their contributions to this first group of amendments. I believe that this is a landmark piece of legislation and a necessary one. I can feel the broad support that it has from all sides of the House, and I look forward to further debates in Committee. There has already been good discussion in this grouping, and I am grateful for the commitment from all noble Lords to improve the Bill and to reform building safety more generally. I have listened to the concerns raised by noble Lords and I thank them for their helpful contributions. As I said, I will respond to them all in turn.
I start by talking about the fire which the noble Lord, Lord Foster of Bath, mentioned. It is true that it was a staggeringly awful fire, even though there was no loss of life, and the noble Lord captured that very well in his speech. I have spent quite a bit of time trying to learn the lessons of the near misses, if you like, so I have met Geeta Nanda, chair of the G15, who I have known for some time. She is also the chief executive of the Metropolitan Thames Valley housing association, which manages Richmond House within Worcester Park, which consists of 23 households of shared owners. I have also met Dean Summers—on Zoom; I have not met him in person—who took over from Sean Ellis, and I had a meeting with him as the new managing director of St James.
It is fair to say that Richmond House, which was built in 2011 by the Berkeley Group—St James is part of the Berkeley Group—was built in a shockingly bad way. It was built without internal compartmentalisation and certainly would never have passed the building regulations at the time. There was also inadequate fire-stopping, which is one of the reasons why the fire spread so quickly. Candidly, it is absolutely right that the Berkeley Group pays for its replacement and addresses all the losses suffered by the shared owners. I am very interested in that, and I have asked for a report from the housing association and Berkeley on progress on doing precisely that. The building was not built in line with building regulations, so it should not have happened. It is a four-storey building and is under 11 metres, which, according to the building regulations, should not have been able to happen, so we have an example of someone having signed off a building that should never have been signed off. That is the lesson of Richmond House.
Sometimes regulation does not work. That, for me, is the lesson. The other lesson is that fire is a tragedy, not just when you lose lives but in the opportunities lost. This Bill does a lot to make housing overall safer, and we will have much better housing stock over the next 30 years than we have had in the previous 30 years.
Baroness Neville-Rolfe (Con)
Another problem at Worcester Park might have been the failure to implement the building regulations. I have found building regulation enforcement very patchy. There has been a lot of very aggressive enforcement of building regulations in my lovely county, yet here there has obviously been a disaster with building regulations. Is enforcement of the regulations not also important, and will that be improved by our work here?
Lord Greenhalgh (Con)
I think we need to ensure the competence of enforcement and that it works, and the competence of the people who assess buildings and sign them off as fit for human habitation. In the same way with crime where we want an absence of crime, we want an absence of these problems. Yes, we need to improve enforcement and there needs to be the strong arm of the law. That is why we want to have a strong regulator in this new regulator under the HSE. We have Housing Act powers for local authorities to intervene. The fire service has powers under the fire safety order. There are lots of powers and lots of regulators that can step in and do something about it. In this case, they all failed. Yes, we need to strengthen them. We understand a lot more about the inadequacies of some of the built environment, but my noble friend is right that we also need to strengthen enforcement.
I thank the noble Lord, Lord Foster of Bath, for his amendments. On Amendment 1, I hope noble Lords will agree that the regulator should exercise its functions in line with its first objective: to secure the safety of people in and around buildings. I am concerned that adding additional objectives for the new building safety regulator could distract from this mission. The Bill provides the regulator with a broader objective to improve the standard of buildings. Achieving this could involve the regulator improving regulatory standards relevant to property protection, such as security, resilience and fire safety, so the regulator’s remit already extends to considering these issues.
Adding a specific objective for property protection would have two main downsides. First, it would put property protection on a par with resident safety as a priority for the regulator. The Government believe that the regulator should prioritise residents’ safety and do not want the regulator to be distracted from that. There is a risk that a specific requirement always to consider property protection would result in the regulator favouring solutions that go beyond what is required for residents’ safety. The second downside is that this amendment risks skewing the building safety regulator’s oversight function. The Government intend the regulator to use evidence to identify emerging issues with the safety and performance of buildings and to make recommendations to Ministers on regulatory changes where needed. A property protection objective would distract the regulator from using evidence to identify and rectify the most pressing issues, which might, for example, relate to net zero and sustainability rather than property protection.
The pre-legislative scrutiny committee considered property protection but found that the existing objectives are a sensible starting point—I emphasise “starting point”. The committee suggested that the Government keep this under review. We are committed to doing this through the provision in Clause 135 for a regular independent review of the effectiveness of the regulator and the wider regulatory system.
Turning to Amendment 12, there are already powers for building regulations to cover specific aspects of building resilience. We believe that it is better that building regulations are targeted on specific issues rather than open-ended requirements. However, we recognise that, for residential buildings, further research into property protection is warranted. The impact of the loss of a home is significant, so we are taking this forward as part of the technical review of approved document B on fire safety. I thank the noble Lord for suggesting these amendments and respectfully ask him to withdraw Amendment 1.
Lord Greenhalgh (Con)
I am the Minister with responsibility for fire as well as for building safety, and I will ensure that it is published in weeks and not months or years. Noble Lords will know that we have consulted twice now on PEEPs. I am pretty clear about the way forward, and it is about time that we as a Government came forward with a response. I recognise the pressure to do so sooner rather than later, and thank the Committee for raising the issue.
I recognise the concerns that have led to noble Lords laying these amendments and assure them that the Bill makes provision for the building safety regulator to consider a wide range of factors that influence the level of risk in categories of building before making recommendations or providing advice as to which categories of buildings should be considered higher risk.
I thank noble Lords for their contributions, and I hope I have given reassurance to enable them to withdraw and not press their amendments.
Lord Foster of Bath (LD)
My Lords, we are at a very early stage of consideration in Committee of this Bill, but I have to say that it is following a pattern that I have experienced on many occasions during the passage of other Bills. It was summed up beautifully by two comments. The first was from the noble Lord, Lord Crisp, who said in his excellent speech, proposing an excellent amendment, that the Bill cannot do everything but that there are some issues that we simply cannot ignore. Some of those issues have already been raised. For example, the noble Baroness, Lady Grey-Thompson, made an excellent speech, backed up by my noble friend Lady Brinton, in which she talked about the need to give disabled people more protection than is currently the case.
My proposal relates to the inclusion in the Bill of the protection of property, and the proposal from the noble Lord, Lord Crisp, relates to the need for safety considerations to include health and well-being. I say to the noble Lord that, later on, I will move Amendment 121, which concerns one such health and safety issue, the improving of the energy efficiency of existing buildings—something I desperately wish could be implemented immediately because, like everybody else, I am absolutely freezing at the moment. Sadly, 13 million homes in this country are so badly insulated that a lot of people suffer every day, and it is not just the odd inconvenience like the one we face today.
The second comment that shows how typical this pattern is was from the noble Baroness, Lady Grey-Thompson. At the end of her remarks, she said that she is expecting sympathy but not much movement. That is what we have just heard from the Minister today: a lot of sympathy and a clear understanding of the issues, along with probably a personal desire to do far more, but, in reality, a resorting to the usual things that Ministers—I am guilty of having done it myself—say from the Dispatch Box. Excuses were used, such as that we should not extend the scope because that would cause confusion. I ask the Minister to look at what the Government are doing in relation to Ofcom, the one regulator the Government never say cannot have its scope extended, with 300 additional staff having just been added to deal with the internet safety Bill. The other excuses are that this will be kept under review and that something will be available in the coming weeks.
The Minister has asked us not to press our amendments and that I withdraw mine. I cannot speak for other people, but these are all important issues to which I am sure we will return at future stages of our deliberations in Committee. I beg leave to withdraw the amendment.
Lord Stunell
“(3A) In exercising a building function (other than an excepted function) the regulator may exercise the powers given by virtue of section 8 (certification of work) and section 9 (Appointed Person and management of works) of the Sustainable and Secure Buildings Act 2004.”Member’s explanatory statement
This amendment would pass certain powers of the Secretary of State contained in the Sustainable and Secure Buildings Act 2004 to the regulator.
Lord Stunell (LD)
My Lords, I apologise to noble Lords; my usually invisible hearing disability got in the way there.
Amendment 3, in my name and that of my noble friend Lady Pinnock, joins up very neatly to what the Minister said in his speech winding up the previous debate. He wants the regulator to have a fire safety oversight of all buildings, not just the high-rise ones; he wants to see high standards in all buildings. That is exactly what I want to achieve, which is why I have tabled this amendment.
The Deputy Chairman of Committees (Baroness Fookes) (Con)
The noble Baroness, Lady Brinton, wishes to take part remotely. I now invite the noble Baroness to speak.
Baroness Brinton (LD) [V]
My Lords, I support both amendments in this group so helpfully introduced by my noble friend Lord Stunell. We heard in our debate on the previous group of amendments about the wide range of safety concerns, from fire and flood to methods of construction and fitting out, which mean that some buildings are at risk. I should declare my interest as the vice-chair of the All-Party Parliamentary Fire Safety and Rescue Group, and I thank the many Fire Ministers who have appeared before it, including the current Minister and indeed a previous Minister, who spoke just now.
I support the ideas about the golden thread as outlined by my noble friend Lord Stunell. Amendment 3 does that. Frankly, I thank him for owning up to the fact that he did not do this when he was a Minister. The all-party group has, over the years, argued for this policy to be part of the fire safety protocol.
The amendments in the name of the noble Baroness, Lady Hayman, and supported by my noble friend Lady Pinnock, have a key safety issue: the power to prevent a developer’s ability to pick their own regulator. It is right that it is the public building regulator, the Local Authority Building Control, that is the sole regulator.
The bonfire of regulations just over a decade ago has meant that this field has become murky and filled with a lot of organisations that may indeed have close relationships. There was one day when the all-party group heard from a whistleblower who told us that, in the past, there has been unacceptable practice when the developer or owner of a building has had the ability to pick and choose the inspector, in this case, but it could have been a regulator. Fire safety inspectors were booked to come and check the fire safety doors—the front doors of flats and those on the stairwells—and that they were still the right ones that would manage the 40-minute fire safety tests. The managing agents for the building asked for a delay of a week, which was granted. The whistleblower said that it had been noticed by a number of residents that a series of doors were removed and replaced with other doors during that week—which of course passed all the tests—and, the week after the inspection, all the old doors were put back.
There has to be a mechanism for a regulator to start picking up on, and being concerned, when organisations are not playing by the rules. Those alarm bells can best be raised by the independent Local Authority Building Control.
Lord Shipley (LD)
My Lords, I will speak to Amendment 135 in my name, which was referred to a moment ago by my noble friend Lord Stunell, and which I intend as a probing amendment. I should say that I am a vice-president of the Local Government Association.
I raised this issue at Second Reading, as the Minister will recall, and the question of whether permitted development rights would continue as now when this Bill is enacted, in respect of the conversion of office blocks to residential accommodation of any height. Amendment 135 seeks to clarify the matter. It says that
“Nothing in the Town and Country Planning (General Permitted Development) (England) Order 2015 … permits development which would convert offices to residential accommodation if such development is contrary to the provisions of this Act.”
I am grateful to the Public Bill Office for the help in drafting those words.
I simply say to the Minister that I hope he will clarify that this is government policy. If it is, that fact should be in the Bill to avoid any doubt. I look forward to the Minister’s assurance, because it would be inappropriate—as my noble friend Lord Stunell said—if a different set of rules were to apply to a conversion from office to residential than would apply to a residential block always designated as that. This amendment aims to clarify that the permitted development route cannot be used where it would be contrary to the provisions of this Act. I hope the Minister will agree that this is a very important issue.
Baroness Hayman of Ullock (Lab)
My Lords, I will look briefly first at Amendment 3 in the name of the noble Lord, Lord Stunell. As we know, the proposed building safety regulator will be responsible for implementing and enforcing the new regime and will monitor the safety and performance of all buildings, with the aims of securing the safety of people in or about buildings and improving standards. The noble Lord, Lord Stunell, went into a lot of detail and clearly laid out all the reasons behind his amendment, so I will not go over the ground that he has covered.
I just make the point that amendments have been made to the Health and Safety at Work etc. Act to reflect this, so the amendment from the noble Lord, Lord Stunell, would also bring those necessary powers contained in the Sustainable and Secure Buildings Act into this Bill and would, as the noble Lord said, be in accordance with the recommendations of the Hackitt report. This seems a practical and sensible approach.
The noble Lord, Lord Shipley, in his Amendment 135, raises the issue of office to residential conversions, which are being actively encouraged by the Government. We need to consider any associated building safety issues with that policy. The noble Lord asked the Minister for clarification on this, and I think that this clarification is important so that we all know exactly what implications there will be. I will be interested in the Minister’s response to that.
I have a number of amendments in this group. I will first speak to Amendments 11 and 43 in my name—I thank the noble Baroness, Lady Pinnock, for her support on them. Combined, they will ensure that the more stringent building safety framework applies not just to buildings over 18 metres but to those under that, where they are multiple occupancy dwellings. We believe the Building Safety Bill, in its original draft and as amended in Committee in the other place, fails robustly to confirm whether the gateway system will apply to buildings under 18 metres where there are multiple occupancy dwellings. This will create a two-tier system where buildings below 18 metres will face less rigorous safety regulations than those over 18 metres.
Baroness Pinnock (LD)
My Lords, I apologise: I was not here at the beginning of Committee due to flooding on the track. There was no electricity on the lines so the north was cut off—my part of the north, anyway. I draw the Committee’s attention to my register of interests as a vice-president of the Local Government Association and a member of Kirklees Council. I will speak particularly to Amendment 11, which I have co-signed with the noble Baroness, Lady Hayman.
It is clear that the role of building inspector is absolutely critical in ensuring that buildings comply with approved plans and are built in accordance with building regulations. It is also evident from tragic incidents and residents’ concerns that some buildings have been constructed in breach of building regulations —we have already heard that this afternoon—and that the constructors have managed to get away with it. This Bill is an opportunity to scrutinise these issues and agree a more effective inspection process.
The Bill proposes the new role of building safety regulator to be the ultimate voice for inspection and advice on building safety. The regulator will be part of the wider Health and Safety Executive; that seems right to me. The HSE is a respected body with wide expertise in safety matters. Building safety and inspection need simplicity for clarity, as well as relevant expertise, training and access to advice.
The regulation and inspection of building safety in the Bill fall into two distinct parts: construction and post construction. It is the construction part that we are dealing with now. On the construction element, the Bill provides for the building safety regulator to be to building inspector for buildings over 18 metres. I can understand that, because such buildings are more complex and the safety risks are greater, but there has never been an explanation as to why it is 18 metres. I look forward to the Minister explaining why, apart from historical reasons, 18 metres is the cut-off point.
Of course, the definition of high-risk buildings—or “higher risk”, as they are now described—includes, as I understand it, care homes and hospitals. Can the Minister let us know whether the building safety regulator will be responsible for those buildings as well? It is positive that there will be a register held by the BSR for registered building inspectors, although it is not clear what qualifications and experience will be required to be such an inspector.
I turn to buildings under 18 metres, which do not have quite the same inspection regime, as we have heard. This complicates matters; we need simplicity. The BSR remains the final adjudicator. However, where the Bill falls short is in the complicated regime that is created for buildings under 18 metres. The Hackitt report made absolutely clear the need for accountable persons at each and every stage of construction—the gateway process—yet those waters are muddied for buildings under 18 metres. I thought I heard the Minister intimate earlier this afternoon that the powers of the building safety regulator may be extended to include buildings below 18 metres; perhaps he can make that clear.
Accountability is absolutely critical and, if the Committee gets my point, it should be an accountability that can be recovered. Building inspectors come and go but the one certain place where documents can be stored is in a local authority, because it has legal requirements to keep documents for a great many years. Given the argument from the noble Baroness, Lady Hayman, it seems to me that keeping building control within a local authority as the adjudicator for all buildings under 18 metres would be right. It is a question of having not just a regulator in a far-off place dealing with these buildings but people on the ground who know and understand the issues, the builders, the challenges in each area and how those challenges can be overcome. Some of that will be lost if there is this complexity about inspection in buildings below 18 metres.
On Amendment 43 in the name of the noble Baroness, Lady Hayman, the schedule absolutely should include buildings in multiple occupancy, which clearly have different challenges for building safety. Quite often, they can be older buildings that have been divided up into flats. Unless there is oversight of what goes on, those buildings could easily create building safety concerns. We all know of old buildings where we live—well, I guess a lot of us do—and where we have concerns about those that have been divided up. You fear for the safety of folk in them because of the lack of fire doors and escape routes, so this amendment, too, gets my wholehearted support.
The noble Baroness, Lady Hayman, has proposed Amendment 127 on flood resilience. I can tell the Committee that, certainly where I live, there will be more attenuation tanks under the ground than houses above it. I kid not; they were 10 or 15 metres long and three or four metres deep in a recent planning application. These issues are really important because more construction is taking place, if not exactly on flood plains, because that is not permitted, but where the flood risk is at level 2 or 3. Almost the worst thing that can happen to buildings is for them to be flooded. Where I live, the sirens went this weekend and people had parts of their homes flooded. That was in previously built homes; let us make sure that, in future, flood resilience for homes is part of the regulations under the Bill. Otherwise, we are just building homes to flood. Where I live, as I say, there is certainly a lot of concern on new-build estates that that will be the case.
Lord Thurlow (CB)
My Lords, I want to say a few words on PDR. It has been well exercised. First, I should declare my interests: I have practised for many years as a chartered surveyor and have two buy-to-let properties.
PDR is mentioned specifically by the noble Lord, Lord Shipley, in Amendment 135 and in Amendment 43 by the noble Baronesses, Lady Hayman of Ullock and Lady Pinnock. I think that PDR is a time bomb, I am afraid; I am sorry to say that. Conversions of redundant office buildings allowed as of right led to poor-quality developments. They are multi-let properties with many risks involved, and they are very recent conversions. They are taking place as we speak with little supervision. Developers who ignore the simple standards of fenestration, minimum square footage for a decent life, thermal insulation and other such things, as is happening today, are unlikely to respect building safety issues. PDR was hasty legislation. It was poorly thought through, then there was a scramble to tighten it up as it was extended. It is essential that this Bill addresses the PDR problem. I started by saying that it is a time bomb. If the Bill does not address it, it will go off. There will be tragedies as a result of PDR and those in society who are least able to defend themselves often end up as the tenants.
Lord Greenhalgh (Con)
My Lords, I think I should start by dealing with something that probably relates to the previous group. I am sorry that so many noble Lords have had such arduous journeys to get to the Moses Room today and then, having journeyed so far and so slowly, come to a Room that is so positively chilling. It is quite arduous at the best of times.
Just for clarification, in answer to the noble Baroness, Lady Pinnock, the high-risk regime includes hospitals and those care homes of six storeys and above. Essentially, it is those around 18 metres—there or thereabouts—but not in occupation, because different regimes apply to them, although the fire safety order applies to the whole built environment. I hope that gives clarity on the current scope.
I set myself the task of trying to encapsulate quite a varied set of amendments in each group in three words or fewer. I have called this the “strengthening building regulations” group: I will try and get three words down to two the next time I have to do this. I thank noble Lords for their contributions to what has been an interesting debate. I will respond to each amendment in turn.
I thank the noble Lord, Lord Stunell, for his amendment giving the building safety regulator the power to make building regulations under paragraphs 4A and 4B of Schedule 1 to the Building Act 1984, as inserted by the Sustainable and Secure Buildings Act 2004. However, I am afraid that the Government will not be able to accept this amendment as his intention has already been met in the Bill. We are introducing a more stringent regulatory regime in design and construction for higher-risk buildings, as defined in Part 3. The higher-risk regime will be the responsibility of the building safety regulator. We are also making wider changes to the Building Act 1984 that will apply to all buildings.
I point out to your Lordships that Sections 8 and 9 of the Sustainable and Secure Buildings Act 2004, referred to in the amendment, insert paragraphs 4A, under “Certification of work”, and 4B, under “Appointed person and management of works” into Schedule 1 to the Building Act 1984. As part of our improvements to the 1984 Act, the Bill repeals those paragraphs and replaces them with more effective powers via Clauses 32 and 33. These are more effective, stronger and wide-ranging powers. Clauses 32 and 33 provide powers for building regulations to set procedural requirements relating to building control, the issue of notices and certificates and requirements regarding appointments. They include setting out duties to be imposed on relevant persons in relation to building work. We also consider that the power to make building regulations should remain with the Secretary of State. This will ensure a consistent approach to all buildings; the Bill already provides that the building safety regulator will be able to advise the Secretary of State should it consider changes to the building regulations to be necessary. I thank the noble Lord for suggesting these amendments and respectfully ask him not to press them.
I always get worried—this is a new combination, as they say—when an amendment brings the noble Baronesses, Lady Hayman and Lady Pinnock, together. On Amendment 11, it is the Workington warrior and the Yorkshire terrier combined. I am trembling in my boots at the thought of Amendment 11 but let us look at it carefully. I thank the noble Baronesses for raising this important matter but I am afraid that the Government will not be able to accept this amendment. The Bill takes a proportionate approach to building control. In the new system, all building inspectors, regardless of whether they work for local authorities, the building safety regulator or registered building control approvers, will need to register with the building safety regulator. As part of the registration process, they will have to demonstrate their competence by meeting certain criteria.
A new framework of operational standards rules will define the minimum performance standards that building control bodies must meet, and the building safety regulator will monitor and analyse the performance of building control bodies to drive up standards across the sector. Registered building control approvers and building control authorities will need to obtain and consider the advice of a registered building inspector before carrying out certain building control functions and use a registered building inspector to undertake certain activities. This greater scrutiny and accountability will provide greater incentive to ensure all buildings, including non-higher-risk buildings, are safe. With that explanation, I respectfully ask the noble Baronesses not to press their amendment.
I turn to Amendment 43. I thank the noble Baroness, Lady Hayman, for raising this important matter. I am afraid the Government will not be able to accept the amendment, as our assessment is that it would not achieve its intended effect. I assure the noble Baroness that paragraph 1 of Schedule 1 to the Building Act 1984 already allows for the making of provision in the building regulations for all categories of buildings, as do the new powers that we are taking in Clause 32.
We are introducing a more stringent regulatory regime in design and construction, led by the building safety regulator, for high-rise residential buildings, care homes and hospitals that are 18 metres or more in height, or at least seven storeys, known in the Bill as “higher-risk” buildings. Those buildings to which this more stringent regime applies have been chosen to ensure that the regulation is proportionate to the level of risk, should a spreading fire or structural failure occur. We do not think it appropriate to apply the entire regime to all buildings. However, where appropriate, we intend to make elements applicable to all buildings, such as the duty-holder and competence requirements, which will apply to all building work where building regulations apply.
I turn to Amendment 127. I again thank the noble Baroness, Lady Hayman of Ullock, for raising matters relating to flood resilience. I appreciate the passion with which she outlined her desire to get this issue addressed, particularly in new homes, but I am afraid the Government will not be able to accept this amendment. I assure her that there is already a well-established regulatory system in place to ensure new homes have necessary flood-mitigation measures in place. The National Planning Policy Framework is clear that inappropriate development in areas at risk of flooding should be avoided. Where development is necessary, it should be made safe and resilient without increasing flood risk elsewhere. Policies in that framework must be taken into account in preparing the local authority’s development plan and are a material consideration in planning decisions.
The new clause that the noble Baroness, Lady Hayman, has proposed would require flood resilience measures to be introduced into the building regulations. Statutory guidance to the building regulations, in approved document C, already promotes the use of flood-resilient and resistant construction in flood-prone areas. Part H of the regulations also sets requirements for the rainwater and surface water drainage of individual buildings. The main sewerage system for a development is governed by the sewerage undertaker for the area—for example, Thames Water. The sewerage undertaker has the ultimate responsibility for ensuring that drainage systems for new developments are built to a resilient standard that minimises flooding, and these duties sit outside the building regulations system.
I thank the noble Baroness for suggesting the amendment. I hope I have reassured the Committee that the Government already have well-established means of making sure that consideration of flood risk and flood mitigation is thoroughly accounted for in the planning system, and that approved document C already promotes flood-resistant and resilient construction. For these reasons, we believe that introducing new requirements into the building regulations is not necessary.
I thank the noble Lord, Lord Shipley, for reminding me that I should probably declare my commercial and residential property interests—none of which has any cladding issues—as set out in the register, specifically on the amendment around permitted development rights because I have benefited from those in the past, though probably will not do so in the future. I recognise the risk that he has outlined and that is why I thought I should declare those interests.
Amendment 135 seeks to ensure that homes delivered under permitted development rights—PDR—for change of use to residential meet the provisions of this Bill. I thank the noble Lord, Lord Shipley, for raising this important matter, but I am afraid the Government will not be able to accept this amendment. This is getting quite repetitive, really, is it not? However, the noble Lord is raising an important point and I assure him that planning permission, whether granted by a permitted development right or following an application to the local planning authority, does not remove the need to comply with other legal requirements. That means all new homes and buildings must meet, for example, the relevant building regulations and fire safety requirements, as well as any other legal requirements required under other legislation, regardless of whether they are permitted through a permitted development right or following an application for planning permission.
We introduced a number of new requirements into the planning system, called planning gateway 1, from 1 August 2021. These ensure that fire safety matters as they relate to land-use planning are incorporated at the planning stage for schemes involving a relevant high-rise residential building. For schemes that use permitted development rights, a similar requirement has been introduced. Through new prior approval processes, proposals to create a relevant high-rise residential building under the rights require submission of a statement about the fire safety design principles, concepts and standards that have been applied to the development. Consultation by the local planning authority with the Health and Safety Executive is required for residential buildings of 18 metres or more in height or seven or more storeys, whichever is reached first.
Once again, I thank noble Lords for this interesting debate. I hope that I have given some reassurance on each amendment, and that noble Lords will now withdraw or not press their respective amendments.
Lord Shipley (LD)
Can the Minister give us clarification on Amendment 135? He said that new homes and buildings are covered by existing legislation and will be covered by this Bill when it becomes an Act, but does the wording “new homes and buildings” include the conversion of offices, which are old buildings, to residential? I understand that this is a complex area but I wonder whether the Minister is willing to write on this point so that it is on the record.
Lord Greenhalgh (Con)
I thank the noble Lord for giving me that get-out. He is absolutely right that this is a complicated matter. You often have an old office building from which you create a new residential dwelling. We will check whether that is included in the purview of this Bill, and I will write to the noble Lord on that matter.
Baroness Pinnock (LD)
Permitted development rights are not about just the conversion of offices into homes. Where I live, many old mill buildings have been converted. Some of them, particularly the one called Titanic Mills, are very large. There are additional risks in those buildings. Will the elements in this Bill apply to those conversions as well?
Lord Greenhalgh (Con)
I will combine the letter for the noble Lord, Lord Shipley, and the noble Baroness, Lady Pinnock. Essentially, they want an answer to this question: “If you take a non-residential building, whether it is an office block or a Yorkshire mill, and you create a residential dwelling, will that be in scope when it comes to a new build?” The start point does not matter—it is non-residential—so is it included? I will answer both noble Lords in writing and lay a copy in the Library.
Lord Stunell (LD)
My Lords, we have had an interesting debate. It might be summarised by the Minister saying, “Don’t worry, it’s already all in the Bill and everything’s in hand.” I say to the Minister that we shall want to look very carefully to see the extent to which it is, or is not, in the Bill.
On the interaction between the two clauses to which the Minister referred—Clauses 32 and 33—with Clause 30, which is entitled “Higher-risk buildings etc”, the essence and nub of my amendment on this aspect is to ensure the capacity for the building safety regulator to get straight in as necessary with every building, not simply higher-risk buildings. The Minister seemed to tell me that Clauses 32 and 33 achieve this. I will look carefully at that. If that is the case, I will be absolutely delighted, but if it is not, I shall come back again.
I beg leave to withdraw the amendment.
Lord Stunell
“(3A) In any higher-risk building within the meaning of subsection (3)(a) where works are proposed to be carried out that would require the regulator to be the building control authority by virtue of Part 4 the regulator shall be deemed to be the building control authority for all of those works.”Member’s explanatory statement
This amendment would require that in any higher-risk building the whole of any works undertaken are within the scope of one building control authority only.
Lord Stunell (LD)
My Lords, I will try to do a little better than last time, when I completely ignored my noble friend Lord Shipley. I apologise to him.
I very much hope that the Minister will be able to dismiss this amendment with the same dispatch as he did on my previous amendment because it seeks to achieve that for each building there can be only one regulatory authority and there is no circumstance where a higher-risk building has another regulator at work—another person supervising and signing off completions. There seem to me to be two situations in which, as I understand it, the Bill is not absolutely decisive on that point, as set out in Amendments 5 and 10.
The first relates to a situation where comparatively minor works may be carried out in a higher-risk building which do not, of themselves, directly affect fire resilience. It would therefore seem quite possible for that application to be under the regulatory eye of somebody other than the building safety regulator. That might be a private regulator or a local authority building control body. There are circumstances, and we could examine them in more depth if we need to. The second is that there are currently a number of trades and businesses which are self-certified: electrical works and heating works are self-certified, as are drainage and plumbing works, to a significant degree, and rewiring, internet and IT networks are in the same situation. Those self-certified cases, including, incidentally, replacing windows and so on, may result in the piercing of firewalls, the cutting through of cavity barriers or a loss of airtightness. Of course, a loss of airtightness means a loss of smoke-tightness, which can be vital in a fire situation.
What I want to hear from the Minister is that this loophole—or area of concern—that I have briefly outlined to the Committee is in fact covered by yet another clause somewhere in the Bill that deals with the issue completely. I hope that the Minister can give us a very quick, simple and straightforward reply. It will all be worked out for him on his piece of paper, and I look forward to hearing that, but if it is not forthcoming, we will of course want to return to this later because it is of central importance that we do not have divided authority or, indeed, work sneaking through, if you like, under self-certification, which inadvertently contributes to a diminution of the safety of that building.
There are plenty of practical examples at the moment. The reports I have had from the Greater Manchester Fire and Rescue Service about fires in what used to be my constituency say that many residential fires of this sort are triggered by tradespeople who cause fires by their activities when they are carrying things out. Very often, they are the people who have cut through the cavity walls and the fire compartmentation, thus contributing to the damage that happens. This is not a hypothetical situation, and it is an important matter, which I hope the Minister will be able to satisfy us is covered by the drafting of the Bill. I beg to move.
The Principal Deputy Chairman of Committees (The Earl of Kinnoull) (CB)
My Lords, the noble Baroness, Lady Brinton, will be participating remotely, and I invite her to speak now.
Baroness Brinton (LD) [V]
My Lords, just before I speak to the two amendments in this group, I ask the Minister whether I might be copied into the answer about permitted development rights on the previous group. We had an interesting case in Watford three years ago, where a small industrial unit was converted under permitted development rights into 15 tiny flats, and not one of the upstairs flats had windows. At the time, the planning inspector, who overruled the borough council, commented that it was within the rules and that planning permission was not required. Even the size of the flats was outside of the scope: normally, the minimum should have been 39 square metres; the largest flat was 22 square metres and the smallest was 16 square metres. I would be grateful if I could see the Minister’s written response.
I support both Amendments 5 and 10 laid by my noble friend Lord Stunell and signed by my noble friend Lady Pinnock. Dame Judith Hackitt talked about the importance of absolute clarity on who is responsible for which element of safety and control. The mistake in recent years has been to allow a multitude of different arrangements that have enabled a culture where matters of safety are somebody else’s problem; hence Dame Judith Hackitt’s focus in her report on the golden thread.
My noble friend Lord Stunell has talked eloquently about the issues thrown up by self-certification. I will not repeat his points, other than to say that destroying compartmentation by remediation works much reduces all other safety features, if not makes them redundant. I echo his concerns about that, and I would welcome the Minister’s response in order to see whether that is covered by the new arrangements. If it is not, these amendments should be given serious consideration.
Baroness Pinnock (LD)
My Lords, I will just say how important these amendments are. Although they are brief and innocuous on the surface, they are fundamental to building safety. In the Grenfell Tower inquiry, it became clear that the window replacement was not as satisfactory as one would hope and that the gaps between the window frames and structure of the building were filled with a flammable material. That is why the second amendment in the name of my noble friend Lord Stunell is so important.
That is just one example. Electrical safety is also critical. Self-certification is all very well, but having oversight, as the Hackitt report points to, helps to create clarity and accountability and to ensure that there is proper documentation. I hope that the Minister will be able to put our minds at rest but, if not, it is certainly one of the areas that we will want to pursue at the next stage of this debate.
Lord Khan of Burnley (Lab)
My Lords, I speak very briefly to Amendments 5 and 10 in the names of the noble Lord, Lord Stunell, and the noble Baroness, Lady Pinnock. I thank the noble Lord for presenting his amendments in such an eloquent manner and just want to reiterate the case for clarity from government on these important amendments, which we on these Benches agree with.
These amendments are asking for the whole of the works to be considered under one building control authority. It is important to recognise the case that is made here, which is that, under the doctrine of self-certification, there is a big gap. By supporting these amendments, I hope that the Minister can address the concerns of the noble Lord, Lord Stunell. The noble Baroness, Lady Pinnock, provided a good example and emphasised the Hackitt report’s references to accountability and making things clearer.
I echo the concerns of the noble Baroness, Lady Brinton, about who is responsible. This amendment would put the whole of the works under one regulatory authority, and situations in which remediation works could lead to other building safety effects would be addressed clearly. This would be better overall for home owners and for the safety of citizens. I look forward to hearing from the Minister.
Baroness Scott of Bybrook (Con)
I thank the noble Lord and the noble Baroness for raising this important matter. I am afraid that the Government will not be able to accept these two amendments, but I assure your Lordships that their intention has already been met in the Bill. The building safety regulator will be the building control authority for building work on higher-risk buildings as defined under Part 3. Clause 32 provides new powers to set procedural requirements in building regulations to govern building work. These powers will provide the basis for the new gateways process for creating new higher risk buildings and a new refurbishment process when carrying out certain building work on higher-risk buildings.
The noble Lord, Lord Stunell, and the noble Baroness, Lady Pinnock, brought up very specific issues and situations. I will make sure that we write on those, because they are very specific and I do not have briefings on them, although I can say that minor works will still be covered by self and third-party certification, as the noble Lord, Lord Khan, said. However, the BSR can inspect those works if it wishes to, so it will keep an eye on them and will use its powers to do that. On trade and business self-certification and on window replacements, which the noble Baroness, Lady Pinnock, mentioned, I will get a specific answer to noble Lords and put a copy in the Library.
The building safety regulator will be solely responsible for overseeing compliance with all aspects of building regulations, not just fire and structure, when building work is carried out on higher-risk buildings. This responsibility will not be split between the building safety regulator and the relevant local authority. Furthermore, these amendments refer to the building safety regulator acting as
“the building control authority by virtue of Part 4.”
The meaning of the term “building control authority” is inserted into the Building Act 1984 by Clause 31 and does not relate to Part 4 of the Bill, which is concerned with higher-risk residential buildings when they are occupied. In addition, Clause 31 provides the legal framework to enable the building safety regulator to be the building control authority for building work carried out on higher-risk buildings. It also provides that on multibuilding sites where one or more of the buildings are higher-risk buildings, the developer may, for convenience, seek an agreement with the building safety regulator that it will be the building control authority for the whole site, including in respect of any low-rise buildings.
I thank noble Lords for suggesting these amendments, but with that explanation I respectfully ask the noble Lord to withdraw his amendment. I will write.
Lord Stunell (LD)
I thank the Minister for her reply and shall await the letters with the greatest interest. A central point here is who notifies who and who knows when stuff is going to happen. For instance, in the current situation, whether it is installing a new boiler or a new window or having some electrical work done, the work is not necessarily commissioned by the owner—it might be by the flat occupier or the leaseholder. On the completion of those works, a certificate is issued to the client and, as I understand it, a copy goes to the building control authority and goes on to its register. It is a post hoc situation; it is not cleared in advance.
I want to see what is in the letter and to understand clearly that we have not left any loopholes, perhaps literally loopholes through which smoke can go or fire can spread. If it is not already clear, we want to see an improved Bill, a strengthened Bill, and we in no way want to weaken it or make it more difficult to enforce or enact. We shall be watching. Having said that, I beg leave to withdraw the amendment.
Lord Stunell
“(2) The regulator must within two years of this section coming into force carry out and publish an assessment of the benefits and costs of measures on improving the safety of people in or about buildings relating to—(a) fire suppression systems;(b) safety of stairways and ramps;(c) certification of electrical equipment and systems;(d) provision for people with disabilities.(3) The regulator’s assessment may—(a) make proposals in accordance with section 7(2) for regulations in respect of any of these matters, and(b) identify and give notice of such other matters relating to safety of people in or about buildings that they determine require further examination.”Member’s explanatory statement
This amendment seeks to ensure that major issues of public concern about safety in buildings are addressed in a timely way.
Lord Stunell (LD)
With Amendment 6, we are in completely different territory. Second Reading produced many concerns felt by noble Lords about different aspects of the fire safety and building safety situation. Many arguments were advanced, with great strength, on what should be done about them. Some of those appear as one-off amendments which we shall debate subsequently; when we get to them, the Minister may say exactly what he has already said earlier today—that it is inappropriate to put into primary legislation some of the very specific matters people have been calling for.
Having that in mind, but not wishing to lose the importance of dealing with those concerns, we have tabled this amendment to set out a process whereby the building safety regulator will, in a timetabled review, look at each of those concerns raised at Second Reading and produce a report within two years with recommendations on what should happen. As the building safety regulator, it will also have the ability to give its views on other issues that merit investigation to improve building safety.
The list in proposed new paragraphs (a), (b), (c) and (d) is not necessarily exhaustive; we are trying to establish the principle that, for those matters which are clearly of public concern and in some cases the concern of authorities and regulators of systems themselves—chief fire officers being one example—there is a timetabled and formal way to take them forward and bring them back to the Minister and this Parliament for consideration.
I will also speak to Amendment 149 in this group, which refers to a regulatory audit from the building safety regulator, again to make sure that we hear in Parliament about the progress being made. We are very concerned to understand how the Government see that link between the regulator and the Secretary of State and between the Secretary of State and Parliament, to make sure that progress continues to be made in a measured but effective and rapid way to solve the problems we are tackling in this Bill.
Again, I look forward to hearing the Minister explain all the different reasons why it is not sensible to do this, but we will want to push the matter. I suggest that, if he is looking for a way to respond effectively to those advocating particular solutions, such as work on sprinklers, to be incorporated in the Bill, we have provided a process here which allows that to take place in an ordered, measured way. I beg to move.
The Principal Deputy Chairman of Committees (The Earl of Kinnoull) (CB)
My Lords, the noble Baroness, Lady Brinton, is participating remotely, and I invite her to speak now.
Baroness Brinton (LD) [V]
My Lords, I shall speak specifically to Amendment 6 but I endorse the others, for reasons that will become apparent. One thing we have all become aware of, post Grenfell and the Hackitt review, is concerns about repeat problems emerging, whether they are systemic ones to do with the way a building has been built or newly emerging issues. They happen time and again, and yet the industry, councils and Parliament do not seem to learn from them. I shall give one brief illustration to explain.
In my role as health spokesperson for my group in the Lords, I know that we are increasingly concerned about some of the mould and damp issues increasingly found in more recent 1960s buildings, to which landlords have been very slow to respond. There is clearly a public health issue where especially children and the clinically vulnerable remain at risk and become ill, and yet there does not seem to be a mechanism to provide a review to make sure that there is learning from this, especially since it is happening across the country.
The other amendments in this group set out a swathe of mechanisms to ensure transparency and accountability for the BS regulator, the Secretary of State and Parliament. Returning to Dame Hackitt’s review, these amendments would be a strategic element to push the culture change that she sought, to make sure that those who have some responsibility have to look at a higher level to make sure that buildings are safe and are dealt with, and that the costs, both in building and in human experience, are monitored.
Baroness Neville-Rolfe (Con)
Briefly, I support the idea of review clauses and of learning from mistakes. Obviously, I have not been a Minister in this area, but I was a Minister in other areas and I did agree, occasionally, to review clauses where people had concerns. I found that the reports that came along two years later—if one survived that long—were actually extremely useful, and ensured that the Civil Service system was behind the objectives of the Bill. Exactly what one would put in a review clause is another question. I would certainly want added some of the points I made earlier—which the Minister helpfully said were contained in a code of practice for regulators—bringing up the agenda the sort of good practice we have seen at some of our better regulators, such as the HSE. I hope the Minister will think about whether there is scope for a review clause to help on some of these issues.
We talked about sprinklers. As people know, I have run supermarkets, so I have had practical experience of all these different fire safety methods. Certainly, when sprinklers were put in, it took away a lot of headaches, provided you could secure the water supply. That sort of innovation—whatever the new ones are; AI or whatever—can form part of a review process two, four or six years later.
Lord Foster of Bath (LD)
My Lords, Amendment 129 in my name proposes to add a short new clause to the Climate Change Act 2008. Section 56 of the 2008 Act says:
“It is the duty of the Secretary of State to lay reports before Parliament containing an assessment of the risks for the United Kingdom of the current and predicted impact of climate change.”
All I am seeking is to put in something to make more precise the need to refer to the impact of climate change on buildings and to say something about the location of those buildings that will be affected. It would require the Secretary of State to include in a report an assessment of the risks and the locations of such threats to buildings caused by climate change. We all know only too well, just today, the real problems we are facing because of climate change, yet climate change is not mentioned in the Bill at all. The amendment aims to rectify that.
Baroness Hayman of Ullock (Lab)
My Lords, Amendments 6 and 149 in the name of the noble Lord, Lord Stunell, draw attention to timing and delivery. For example, his Amendment 6 would ensure that safety is dealt with in a timely fashion. If we consider that this spring it is five years since the Grenfell tragedy and that progress on that has been painfully slow, with leaseholders waiting many years for any kind of justice to be done, people need to know that with the passing of this Bill there will be no further delays. We agree with the noble Lord and would certainly strongly support a regulator’s assessment within a two-year period that would aim to improve safety.
Amendment 149 looks at a requirement for regular reporting to ensure transparency and accountability to Parliament of the enhanced building regulations regimes. Again, we very much support it; it is similar to Amendment 134 in my name, which would force the Government to publish annual reports on data collected as part of the implementation and monitoring of this Act, when it is passed, as well as steps to increase transparency. I am sure all noble Lords would agree that transparency, accountability and monitoring are important to instil confidence and deliver the ambition in this Bill.
The noble Lord, Lord Foster of Bath, spoke to his Amendment 129. Having heard from him, it is very much in the same spirit as my Amendment 127 on flood resilience, which we debated in an earlier group. Of course, his amendment would force the Government to publish an assessment of the impact of climate change on building safety, including coastal erosion and flooding, both of which are huge concerns where I live in west Cumbria. I am sure he will not be remotely surprised to know that I am extremely pleased to offer our very strong support on this amendment.
Looking at the amendments in my name, first, Amendment 89 would force the Secretary of State to publish an estimate of how much leaseholders have spent on building safety remediation work each year for the past 10 years. We have tabled this because it is disappointing that there is still no robust legal protection for leaseholders who face ruinous costs for remediating historical cladding and non-cladding defects. We know that, despite the long catalogue of people and organisations who can be held to blame for many of the failings on building standards, up to now the leaseholder has been expected to foot the bill. These bills, as the Minister knows, involve huge sums on many occasions.
During Committee in the other place, evidence was taken from some of those who have been badly affected: Alison Hills, Stephen Day and End Our Cladding Scandal. They all talked about the enormous bills they face and the fact that they simply cannot afford to pay them. If we are to resolve this issue so that affected leaseholders are properly compensated, we need to know how out of pocket they really are. My Amendment 89, by forcing the Secretary of State to publish this estimate, would provide information and enable us to properly give full recompense.
My Amendment 126 would force the Government to publish an assessment of the effectiveness of the Homes (Fitness for Human Habitation) Act 2018, plus proposals to increase the number of homes which would comply with that Act. We need to ensure that all homes, existing and new build, are of the highest standards. We have heard many examples from people in our discussions and debate today where this simply is not the case and has not happened.
We think it is important that the Government should publish an assessment of the effectiveness of that Act. I hope that the Minister would in particular be sympathetic to this amendment because his Government brought in that important legislation, and any legislation has to be complied with to be truly effective. This amendment would provide that reassurance and remind rogue builders that minimum standards simply must be met, so I await the Minister’s response with great interest. I hope I will see him tearing up his speech to prove the noble Lord, Lord Foster of Bath, completely wrong.
Lord Greenhalgh (Con)
My Lords, we come to the—I am sorry, it is the turn of the noble Baroness, Lady Pinnock.
Baroness Pinnock (LD)
The Minister is far too eager.
During the course of the debate on this group of amendments, it has struck me that the challenge of this Bill is that it is primarily in response to a terrible tragedy. That has meant that the scope of the Bill is quite narrow, in response to the terrible Grenfell fire—perhaps rightly so but then, from what we have heard, opportunities to improve building safety do not come round that often. So it is not surprising that noble Lords across the piece are trying to say, “Why don’t we include this?” An opportunity to do so will not come again for a long time.
The passionate argument made by my noble friend Lord Foster is a case in point. Climate change is the most serious challenge facing all of us. If we do not address the building regulations to deal with the challenges it poses, we are definitely missing an opportunity. I apologise for my cough; it must be all this sitting and standing on crowded trains. Excuse me; I am okay. There is an opportunity for the Government to think about including the issues of the particular challenges of climate change as they relate to buildings during the debates on the Bill, otherwise it is an opportunity lost.
On Amendments 6 and 149 in the name of my noble friend Lord Stunell, who has spoken on them and to which I have added my name, building safety is not just about construction; it is about the safety of people once they live in them. Having been a councillor for a long time, I have heard about a number of issues from private sector and housing association tenants. The dangers of stairways in particular often come up. That is the reason for Amendment 6 in my name and that of my noble friend. We need to consider those risks and how they are going to be addressed. If people are concerned about them, what are we going to do about it? There is no obvious way of doing that at the minute.
Any new system—such as the one we have now, which is quite complicated in parts—ought to be reviewed. There is a huge gulf between theoretical improvements to building safety and actual improvements. Does the new system work? I bet that parts of it will not; that is almost inevitable. So let us agree to Amendment 149. I know that the Minister is going to stand up and say, “All the others I have said no to, but this one is such a good idea that we will agree to it”.
Lord Greenhalgh (Con)
My Lords, I am getting used to the free-wheeling nature of these debates. I apologise that I stood up before the noble Baroness, Lady Pinnock, had her say.
There is no doubt that a large part of this is focused on high-risk, high-rise residential buildings, not least because of the tragedy of Grenfell, which followed the tragedies in Lakanal House and Garnett Court. We have also had near misses, such as the Bolton Cube, which was just under 17 metres and is one of the reasons why we talk about the cut-off being six storeys or more as it was a very big near miss.
There is that focus but, equally, it is fair to say that the Building Safety Bill also encapsulates building regulations for the entire built environment and makes a contribution to increasing competence among key actors, such as approved inspectors, duty holders, the accountable person and the building safety manager, to ensure that buildings in occupation remain safe. There are contributions around competence that will have wider benefit but what the noble Baroness said is right: this is very much part of our response to a broken regulatory system that we need to fix. I think that we recognise the need to do precisely that collectively in this Committee.
I thank noble Lords for a lively debate. This group of amendments is essentially around new reporting requirements. I shall respond to each amendment in turn.
The noble Lord, Lord Stunell, opened this short debate with Amendment 6 and the noble Baroness, Lady Brinton, spoke on it. I thank them for raising this important matter but I am afraid that the Government will not be able to accept the amendment. I pay tribute to my noble friend Lady Neville-Rolfe with her background as a civil servant who took that expertise to play a leading role in a supermarket. She did not mention which one but I know it was Tesco—every little helps—because I remember when she was in that position. It is important to reflect on when we can hold the Civil Service to account, as she put it. I understand where my noble friend is coming from, even if I do not accept it on this occasion.
Our assessment is that this amendment would unnecessarily prescribe issues to which the regulator must attend. I must also point out the unintended effect that this amendment would have in effectively restricting the regulator’s work to a limited list of subjects. Such prescription could unwittingly narrow the scope of the regulator’s focus and efforts. Furthermore, the imposition of a time limit could have the perverse effect of constraining the assessments being sought only to factors that can be determined within the timescales afforded.
I assure the noble Lord and the noble Baroness, Lady Brinton, that their intention to ensure that major safety issues are reviewed and assessed by the regulator has been met through the measures in the Bill. The building safety regulator will have a duty to keep the safety and standard of buildings under review and to be transparent about its work, reporting annually on the delivery of its functions under the Health and Safety at Work etc. Act 1974, and Clause 3 stipulates that it must be transparent.
I can also assure your Lordships that the specific areas of building safety identified in the proposed amendment are actively being considered by the Government under research projects being undertaken with the help of academia and stakeholders. These projects include the technical review of approved document B, which includes research on means of escape in blocks of flats, including stairways and ramps, and means of escape provisions for people with disabilities. As I am sure the noble Lord and the noble Baroness are aware, the Government have already conducted an assessment of the effectiveness of sprinklers as a means of fire suppression and, in 2020, we changed the statutory guidance so that sprinklers should be provided in all new residential buildings more than 11 metres in height, as opposed to the previous 30-metre threshold. I want to thank the noble Lord and the noble Baroness for raising this important matter and hope that I have been able to assure them that all aspects of building safety are of importance for the Government.
Before turning to Amendment 89, I pay tribute to Alison Hills and Steve Day, who were mentioned by the noble Baroness, Lady Hayman of Ullock. I got to know Steve Day in particular, but also Alison Hills. They worked very hard on constructive amendments which will help the thinking around getting the polluter to pay, because they are victims. In the case of Steve Day, it is a sign of triumph, because he is part of a group of people who, in their spare time, without pay, essentially fought a big developer to get it to pay for the remediation of their building, bit by bit. We need to pay tribute to these heroes who work tirelessly on behalf of their fellow residents to get the polluter to pay; they are people for whom I have huge fondness and regard. It is right that some people have shelled out huge costs and have not been able to get the polluter to pay, and there are many orphaned buildings—if you like—for which we cannot easily find out who is liable to pay. The question is, how do we deal with that? That is something that we as a Government recognise that we need to have an answer to, but let us leave that until a later part of this Committee stage. I am sure we will return to it on Report.
Turning to Amendment 89, on which the noble Baroness, Lady Hayman of Ullock, spoke, I thank her for raising this important matter, but I am afraid that, again, the Government will not be able to accept this amendment. The Government remain committed to ensuring that those responsible are held to account to protect leaseholders from unaffordable costs, but our assessment is that the amendment would not constitute an appropriate use of the Government’s time and resources. The amendment would require the Secretary of State to quantify the impacts for any leaseholders who may have carried out remediation of cladding and fire safety defects over the past 10 years, regardless of the nature and scale of the works.
I draw the attention of the noble Baroness to the amendments tabled on 14 February, which make clear that freeholders with links to developers and those with the resources to fund remediation in full must do so. In other cases, the contributions of leaseholders will be subject to a legal cap. The new schedule to be inserted before Schedule 9, tabled on 14 February, also provides the Secretary of State with the power to make regulations providing for the recovery of sums due that have not been paid. These amendments ensure that leaseholders will no longer be susceptible to large costs. The supplementary requirements that would be introduced by Amendment 89 would therefore present an unnecessarily onerous task that would increase costs and burden to the Government, where resources could be better employed. I thank the noble Baroness for raising this important matter and assure her that this Government are committed to ensuring that those responsible are held to account to protect leaseholders from unaffordable costs.
Turning to Amendment 126, I again thank the noble Baroness, Lady Hayman, for raising this important matter. Unfortunately, the amendment would have the effect of unacceptably increasing the burden on the Government at a time when we are concentrating on our programme of reform and raising standards in rented homes.
The 2018 Act built on the existing regulatory framework and empowered tenants, for the first time, to take action in the courts for breach of contract if their home was unfit to live in. That is why we supported it. It is right that this is in addition to, but separate from, enforcement of standards by local authorities, which we also strengthened in 2016. There is therefore limited benefit in requiring officials to spend time interrogating court records when we are, at the same time, concentrating on building on the 2018 Act and further raising the standard of rented homes, higher even than the requirement introduced by the Act. We will do this by consulting on introducing a legally binding decent homes standard in the private rented sector and by reviewing the decent homes standard itself, and we will provide more detail in due course.
I now turn to Amendment 129. I wish the noble Lord, Lord Foster of Bath, had provided my speaking notes as he has such command of detail. It is quite incredible and testament to his long-term passion, commitment and interest in the subject. I certainly learned a lot about the almost dystopian future that certainly my children—probably not me—will to have to deal with. It is probably why school-age kids are so nervous about this. It is horrendous. Amendment 129 raises a very important issue and while the Government will not be able to accept this amendment, I hope to reassure the Committee that Clause 5 already makes appropriate provision for this and that risks to buildings as a result of climate change are already being dealt with through existing locally driven action.
Clause 5 places a duty on the building safety regulator to keep under review the safety and standards of all buildings. This would include advising industry and government on research into new or emerging risks, such as those presented by climate change. The regulator will also advise on and prepare proposals for changes to building regulations. Climate change mitigation and adaptation are intrinsic components of the building regulations and will remain so. We also recognise the importance of ensuring local authorities work with their communities to understand the risks buildings may face as a result of climate change. However, the amendment would duplicate existing locally driven action; for example, the requirement on lead local flood authorities to assess flood risks across their area through the local flood risk management strategy or the requirement for local authorities to develop the best approaches to managing the risk of coastal erosion and flooding through shoreline management plans and local planning policies.
I turn now to Amendment 134 and will respond to Amendment 149 at the same time. I thank the noble Lord and the noble Baronesses for raising how we monitor the effectiveness of the Bill and hope to reassure them that the Bill makes appropriate provision for monitoring. Dame Judith Hackitt’s independent review recommended that we ensure that the new system works through regular independent reviews. Clause 135 requires that these reviews happen at least every five years and that the resulting report must be published. In addition, the building safety regulator must report annually on the performance of its functions under the Health and Safety at Work etc. Act 1974. Clause 3 further stipulates that the regulator must be transparent and accountable. The Government intend that the regulator’s published strategic plan, required by Clause 17, will set out further detail on what it must report on.
Finally, the Bill ensures that crucial aspects of the new system are included in the regulator’s annual reporting, notably engagement with residents under Clause 19 and mandatory occurrence reports, which can help industry track safety issues, under Clause 20. Further reporting requirements risk duplication, complexity and additional bureaucracy. Amendment 149 would also require the Government to report on the exact number of certified building safety managers and fire risk assessors when certification is not a function of government under the Bill. In light of the strong existing provisions, I hope that I have provided sufficient reassurance and that your Lordships will be content that the Government have fully addressed the concerns raised in the amendments.
Baroness Blower (Lab)
I have a question about flooding in London. I am sure the noble Lord is aware of an article in the Observer yesterday—I declare an interest in that I live in Shepherd’s Bush, where a month’s worth of rain fell in one day in July last year. The point of this article was that in London very many people live in basements, which are at serious risk of flooding, and it suggests that people may drown in their own homes if there is flash flooding. The further aggravating point is that no one seems to be aware how many people live in such basements.
I simply ask the noble Lord whether there is any intention to take a strategic look across London; there are clearly responsibilities on local authorities but, at the London-wide level, there seems to be no requirement to look at this. I would be very interested to know what he thinks, particularly in light of Hammersmith and Fulham having been afflicted so badly.
Lord Greenhalgh (Con)
My Lords, I have some experience of this, having led the council that includes Shepherd’s Bush and Hammersmith and Fulham for six years. Even in that time, there were significant incidents of flooding in basements and quite serious concerns. It did not just happen in Shepherd’s Bush, but from Hammersmith and Fulham right up to Old Oak, and it is the same for many inner London boroughs that have basements as well. It was a very significant issue for local authorities, but I think it is quite proper that the mayor, as the first port of call, should have strategic oversight of how we develop the built environment in our capital city. I expect the mayor to take a lead role on this, if I were to pick any level of government. At a national level, I am the Resilience Minister and am happy to take away anything else we need to do to address the specific concerns the noble Baroness has raised, because it is important we recognise that this is a real risk to our built environment, which will get worse in the coming years.
Lord Stunell (LD)
My Lords, I listened carefully to what the Minister had to say. Here we are, on the first day in Committee, with one set of amendments dismissed for one set of reasons and an absolutely contrary set of reasons given to deal with this one. Previously, the case was that we should not add any extra duties to the list of requirements of the building safety regulator because it would confuse it; now the risk is that, by listing only four things, we are limiting the scope of the building safety regulator to take on additional things.
I would have thought that, if in two years we had reports before us on what to do about fire suppression systems and whether the safety of buildings would be enhanced—and, if so, to what effect—by making some changes to the current regulatory environment; if we had a similar thing on the safety of stairways and ramps, on which a number of noble Lords spoke eloquently at Second Reading; if we had the certification of electrical equipment and systems properly analysed by the building safety regulator, with the expertise it can bring, and a proper evaluation of their importance, or lack of importance, brought back to us; if we had provision for people with disabilities, which the noble Baroness, Lady Grey-Thompson, and my noble friend Lady Brinton spoke about so eloquently earlier; if all those matters could be brought back in two years, the building safety regulator would have done a real service to the safety of homes in which people live and would have answered many of the questions and put in train solutions to many of the concerns that noble Lords raised at Second Reading.
I absolutely do not believe that that limits the subjects the building safety regulator might be able to get to grips with. In case it did, the amendment goes on to say that it should also
“give notice of such other matters relating to safety of people in or about buildings that they determine require further examination.”
That is the “and anything else” requirement to go with those four. I do not accept that the Minister’s criticisms of this amendment are right—there may or may not be other criticisms he could have made, but he did not choose to do so. Although I will withdraw this today, I give notice that this will certainly come back at a later stage.
Lord Stunell
Member’s explanatory statement
This amendment seeks to allow flexibility in the operation of the Building Advisory Committee.
Lord Stunell (LD)
My Lords, this amendment relates to the operation of the building advisory committee itself and of its constituent parts. Clauses 9 to 11 of the Bill put in place not just the building safety regulator but three components of it. One is the building advisory committee, the second is the committee on industry competence, and the third is the residents’ panel. All three will clearly exercise vital parts of the function of the building safety regulator, not just in relation to high-rise buildings—higher-risk buildings—but to the whole of the building stock of this country.
The Bill goes on to define what the functions and powers shall be of the various constituent parts. For instance, the committee on industry competence will establish and maintain a body
“with the competence of persons in the built environment industry … with the following functions”,
which are then listed,
“and any other function that the regulator considers appropriate”.
Those are the vital words saying that the committee on industry competence has a wide brief that can be widened further.
Clause 11, on the residents’ panel, says that the regulator will
“establish and maintain a committee with the functions mentioned in this section”,
which are all listed,
“and any other function that the regulator considers appropriate”.
The surprising thing about the building advisory committee, bearing in mind that what has triggered this whole Bill and the legislation that goes with it is all about buildings themselves, is that it has a much more limited brief. It has listed functions, but no capacity for any other function that the regulator considers appropriate. We are setting up in primary legislation a part of that body that cannot be modified as time goes on in the same way as the other two can be.
Therefore, this amendment would simply introduce the phrase
“and any other function that the regulator considers appropriate”
so that it applied to the building advisory committee as well as the other two parts. It will be fascinating to hear what the Minister believes is a good argument for the omission of those words in Clause 9—other than a drafting error—when compared with their use in Clauses 10 and 11.
Also in this group of amendments is the question of whether Clause 12 should stand part of the Bill. Clause 12 states that
“The Secretary of State may by regulations amend or repeal any of sections 9 to 11”,
which, in other words, is the three bodies underneath the building safety regulator: the building advisory committee, the committee on industry competence, and the residents’ panel. The Secretary of State may, by regulation, amend or repeal any of those, and
“The regulations may make consequential amendments of this Act.”
In other words, the Secretary of State will have the capacity to step in, independent of the primary legislation that sets this up, not just to change the functions of these bodies but to get rid of them completely. They could repeal any of Section 9 or delete it completely and then there would be no building advisory committee.
This is a detailed point but for me it comes to light because the building advisory committee takes the part of what used to be—and, for that matter, still is—the Building Regulations Advisory Committee. The new committee is the BAC; the previous one was the BRAC, and the interesting thing is that it was very nearly abolished in 2010. Ministers of the day did not know exactly what BRAC was or did but were very keen to get rid of extraneous organisations that they saw as being on the payroll and contributing to red tape.
As the Minister with responsibility for building regulations at that time, I had some idea of what the Building Regulations Advisory Committee did, which was to supply a great deal of free specialist advice to the department on the implications and likely consequences of regulatory change. When I discovered that its total budget was £20,000, of which something like £12,000 was actually a notional sum about the committee occupying space and having the very part-time use of the civil servants who serviced it, I resisted the abolition of BRAC. I am happy to report that it was not abolished. I would not say that it was either my greatest or only triumph as a Minister, but I can report that the Building Regulations Advisory Committee was rescued from ministerial interference at that point, by good fortune rather than good political management.
I should think the Government have subsequently been rather grateful that they did not abolish BRAC, because it has been a useful buffer between ministerial responsibility and the regulatory outcomes leading to Grenfell. Indeed, evidence has been given to the Grenfell inquiry about the role of BRAC leading up to the fire, and its role in the whole architecture of support to the department in its regulatory function.
I put it to the Committee that the building advisory committee is replacing the Building Regulations Advisory Committee, with the important difference that BRAC was statutory and could not be abolished by Ministers. The only reason why the debate came to light in 2010 was that there was a deregulation Bill and it was proposed, in a long list of bodies, to stick that committee in. So I ask the Minister: why are the Government restricting the committee’s scope? Why do they want the power to abolish it, behind the back of Parliament, when that committee’s predecessor was entrenched in statute and gave a great deal of good value, for no cost at all? This seems to be entirely against the grain, and indeed the reputational impact, of what we are trying to achieve with the Bill. I beg to move.
Lord Khan of Burnley (Lab)
My Lords, the noble Lord, Lord Stunell, has eloquently outlined Amendment 7 and Clause 12 to the Grand Committee. I want to ask the Minister—the noble Baroness, Lady Scott—a few questions about the wider committees.
We on these Benches welcome the establishment of the three committees: the building advisory committee, the committee on industry competence and the residents’ panel committee. It is important to ask what the work of these committees is and how will it be funded. This is quite a broad question, so the Minister may wish to come back to me at some stage. Could she also provide details of how the committees will be staffed? How will the Government ensure that this committee will be independent from government?
The noble Lord, Lord Stunell, outlined the concerns. We on these Benches also emphasise that Amendment 7 is very simple—it would basically just add an extra line to be consistent with Clauses 10 and 11 relating to the other two committees. I am sure that the Minister could add those words regarding the building advisory committee.
Baroness Scott of Bybrook (Con)
My Lords, I thank the noble Lords, Lord Stunell and Lord Khan, for raising these important points, particularly the role of the building advisory committee and its functions.
I will first respond to Amendment 7. I hate to say this again, but I am afraid the Government will not be able to accept the amendment. We seem to have said this all afternoon, but I sincerely hope to reassure the House that the Bill already makes appropriate provision in Clause 9 for a wide set of functions for the committee.
Clause 9 provides for the establishment of a new expert advisory committee—the building advisory committee—as recommended by Dame Judith Hackitt in her independent review. The building advisory committee is to be established by the building safety regulator. That is important: it is a committee under the building safety regulator. It will provide expert advice and information to the regulator about matters connected with any of the regulator’s building functions, except those functions relating to the competence of persons in the built environment industry and registered building inspectors. This will include validating and assuring technical guidance, such as approved documents, to ensure that it is fit for purpose. Clause 9 will play an important part in ensuring that the building safety regulator has access to the support and expert advice required to enable it to deliver its critical work. That is why I respectfully ask the noble Lord, Lord Stunell, to withdraw his amendment.
I turn to the question of Clause 12 standing part of the Bill. I first thank the Delegated Powers and Regulatory Reform Committee and noble Lords today for their scrutiny of the delegated powers in the Bill. I am sensitive to the concerns that have been raised about Clause 12. The Government believe that the Bill sets up the right committees for the near future, but the Bill also needs to enable the building safety regulator’s committee structure to adapt and improve over the longer term through these delegated powers. We have heard many challenges about the future of building in Committee this afternoon and it is therefore important that there is flexibility within the system.
The Government included Clause 12 because of expert advice from the Health and Safety Executive, as the future building safety regulator, that this is needed to enable its committee structure to adapt and improve. This reflects HSE’s more than 40 years’ experience delivering regulation at an appropriate distance from government. Since 1974, HSE has needed to change its industry and subject advisory committees to reflect industrial, technical, legal and administrative developments. This has resulted in HSE having a rich mix of advisory and stakeholder-led bodies.
I hear the concerns about any use of this power to remove a statutory committee and so offer noble Lords additional reassurances. First, the Government would bring forward regulations to repeal a statutory committee only after a recommendation from the building safety regulator that this is needed as part of changes to improve the working of the regulatory system. Secondly, the Bill provides that such regulations would be subject to the affirmative procedure. Therefore, this House can hold the Government to their assurance that the regulations will not be brought forward without a specific recommendation from the regulator and a convincing case about how it will improve the regulatory system. With those assurances that this power is intended only to ensure the new regulatory system works well over time, I suggest that this clause should stand part of the Bill.
On the detailed questions from the noble Lord, Lord Khan, I do not know whether I have details on funding, staffing and independence. Oh, I have—that is very timely. The statutory committee sits within the building safety regulator. Its activities will be funded by the regulator through a mix of central government grant funding and fee income. Once the amount of funding is decided, we will make sure that noble Lords get a letter. I assume that the same will be the case on staffing—that how it is staffed will come down from the regulator to the committee—and that it will be independent.
Lord Stunell (LD)
My Lords, I slightly got the impression that I might even have got a draw on one of those, and I thank the Minister for her reply. In relation to Clause 12, we will want to see the detail of what the Minister has said. It is somewhat reassuring that she understood the concerns that have been expressed, and we look forward to examining it in more detail.
I have to say that she did not do quite such a convincing job on why the building advisory committee should be treated in a different fashion from the committee on industry competence or the residents’ panel. If the whole point of the procedure in Clause 12 is to stop the fossilisation of a set of structures in primary legislation and to give the possibility of changing them as time goes on, which is really the argument she deployed, it does not seem consistent with that line of reasoning that she has been resisting giving some flexibility to how the building advisory committee uses its functions, acting obviously under advice from the building safety regulator itself. That may well be something we come back to. Perhaps the Minister might like to think, in terms of her reply and the reason she gave for retaining Clause 12, about why that search for flexibility in the longer term is not an argument that also applies to Clause 9 in respect of its difference from Clauses 10 and 11.
Lord Blencathra (Con)
I am very grateful to the noble Lord, and I apologise for interrupting. I merely wish to apologise to the Committee for not having been able to speak to my amendments today. I got to London five hours later than I had planned. We had a bit of a breeze, and it was not a breeze getting here. I am very grateful to the noble Baroness, Lady Grey-Thompson, for introducing them and I apologise once again to the Committee. It is a pity in a way as they were my smallest amendments. I have a few larger ones later on, so I was hoping today that I could show the Committee that I can be very brief on occasion.
Lord Stunell (LD)
Before concluding, can I say that the Minister, if I can speak on his behalf, was very sad to have missed your speech, which he expected to be one of great eloquence? That having been said, I beg leave to withdraw the amendment.
Building Safety Bill
Thursday 24th February 2022
(2 years, 1 month ago)
Grand CommitteeRead Full debate Building Safety Act 2022 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 98-III Third marshalled list for Grand Committee - (24 Feb 2022)
Lord Blencathra
Lord Blencathra (Con)
My Lords, I rise to move Amendment 13 and to speak to Amendments 14 and 15 standing in my name. First, I declare a personal interest in that I am a leaseholder in a block of flats near here which qualifies for remediation work; we may have wooden balconies and other bits and pieces not technically covered.
Quite simply, I have tabled these amendments because I believe that the penalties for big building corporations are ridiculously light. I accept that for the single trader plumber, electrician or brickie, the magistrates’ court might suffice, but I say to my noble friend the Minister that it is preposterous to permit the Persimmon or Berkeley Homes of this world to be taken to a magistrates’ court for breaches of the law and fined a mere £200 per day that the breach continues. Theoretically, a magistrates’ court could impose an unlimited fine for breaches of the amounts imposed, but those amounts are trivial. Contrast that to the Health and Safety Executive, where last year the average fine was £140,000 and it fined the National Grid £4 million. Not a single person was killed in that incident, but the HSE believed that the National Grid’s records were inadequate and fined it £4 million.
In 2019, the Competition and Markets Authority fined three construction firms £25 million, £7 million and £4 million for indulging in a concrete pipe price-fixing ring. In 2021, another two firms were fined £15 million for fixing groundworks contracts—and these companies were not the large, mega housebuilding firms we all know and love. If the CMA can impose those levels of fines on small and medium-sized companies which have not compromised safety, why on earth should we even countenance four construction monoliths—which, in 2020, posted profits of £3.8 billion—getting a fine of £200 per day for breaching building regulations? That is why I believe we need to hit them hard, and the penalty in my amendment is the construction cost of the building they broke the law constructing, and that cost would double for each month that they fail to remedy it.
Let us emulate the CMA, which says:
“In calculating financial penalties … the CMA takes into account a number of factors including the seriousness and duration of the infringement, turnover in the relevant market, any mitigating and/or aggravating factors, deterrence and the proportionality of the penalty relative to each company’s individual circumstances.”
I simply suggest, in conclusion, that if that is the modus operandi of the CMA, it should be the modus operandi when we are tackling huge building firms which have breached building regulations. The big corporations need to be hit hard. Our penalties at the moment may be appropriate for the single plumber and electrician but not for the Berkeley Homes of this world, to name just one. I beg to move.
Lord Best (CB)
In the absence of others, I rise to speak to Amendments 94A, 94B and 97A, which seek to strengthen the hand of the new homes ombudsman. At Second Reading, I congratulated the Government on introducing this new dispute resolution service. I noted just how important it was for consumers to have an accessible and effective means of handling their numerous complaints against shoddy workmanship, building defects and appalling service in rectifying these problems, not least by the oligopoly of volume housebuilders.
My concern has been that the new homes ombudsman will not have sharp enough teeth to deal with these powerful players, and at Second Reading I posed a number of questions to the noble Lord the Minister accordingly. He was able to give me some reassurance on the independence of the new ombudsman from the industry. The housebuilders will be required to fund the ombudsman’s costs and will have a major say on the New Homes Quality Board, which will oversee the ombudsman service and agree the code of practice to be used, but the Minister assured me that the independence of the ombudsman will be preserved.
Subsequently, I have received a lengthy and extremely helpful briefing from the chair of the New Homes Quality Board, Natalie Elphicke MP. From that it is clear that considerable effort has gone into ensuring the genuine independence of the new arrangements from the influences of the housebuilding industry. I am grateful for those reassurances and for other details of the work that has been going on behind the scenes, which I hope will now receive the publicity it deserves.
Only Parliament in statute can endow the ombudsman with legal powers, and two of my amendments before the Committee today are intended to bolster the ombudsman’s jurisdiction to achieve better behaviour by the housebuilders. At present, the Bill makes provision for the ombudsman to make “make recommendations” about changes that developers and housebuilders should make to improve standards of conduct or standards of quality of work where,
“following the investigation of a complaint the ombudsman identifies widespread or regular unacceptable standards of conduct or standards of quality of work”.
This is good stuff, and making recommendations to this end is an admirable task for the ombudsman. However, making recommendations is not the same as placing requirements upon the builders to up their game. Amendments 94A and 94B add a power for the ombudsman to go further and place “improvement requirements” on the members of the scheme—that is on all the builders and developers selling homes, where widespread unacceptable standards of conduct or quality of work are found.
Amendment 97A seeks to strengthen the ombudsman’s hand in another way. At present, the remit of the ombudsman only covers any faults, defects, snagging problems and so on during the first two years after a new-build home is purchased. Certain defects that emerge after two years would be the subject of a claim under the 10-year warranty, which is a compulsory part of the sales process. The trouble with this cut-off of two years for the ombudsman is that the warranties thereafter do not cover all kinds of issues that may not be catastrophic defects but are, none the less, aggravating problems that can cause endless anxiety, annoyance and cost to the purchaser.
One example is that roofs are not covered when properties are converted into new homes. A more commonplace example might be a buyer trying to get a French window repaired or replaced who raises this with the builder within the first few months but does not take it to a formal complaint to the ombudsman until after the two-year time limit is up. Or the buyer has a plumbing problem that gets fixed but returns, gets worse and finally leads to an ombudsman complaint, only to discover that the issue is now too late to be considered.
Amendment 97A would enable the owner to take a complaint to the ombudsman up to six years after the property was first purchased, where the complaint cannot be dealt with under the warranty. It will not be possible to complain about the warranty to the Financial Ombudsman Service, which handles redress in relation to warranty providers, because these warranties do not cover snagging and minor defects. Most warranties are pretty tightly drawn and some are worse than others. There is a strong case for giving the ombudsman the power to insist upon all warranties satisfying proper quality standards.
But specifically in relation to the housebuilders, what the consumer needs is for their complaint about the multiplicity of things that the builder gets wrong to be handled by the new homes ombudsman without the buyer being told that they are out of time. The purchaser may simply have been giving the builder the benefit of the doubt, or the particular defect may not have emerged immediately, or the buyer was just not sure of their rights. Two years is simply not long enough. Six years matches the traditional time for liability in other circumstances, as in the Defective Premises Act. The Legal Ombudsman, for example, will investigate claims up to six years after a relevant incident is reported.
While not detracting from my congratulations to the Government on bringing forward the proposals that will create a much-needed new homes ombudsman service, I believe that these amendments—which would place requirements for better behaviour on all house- builders and support the consumer for six years, instead of two, after their purchase—would sharpen the ombudsman’s teeth and help ensure that the new arrangements can make a real difference to the performance and behaviour of this industry.
Baroness Pinnock (LD)
My Lords, we were waiting for the government Minister to introduce his amendments, so that we can then respond.
The Minister of State, Home Office and Department for Levelling Up, Housing & Communities (Lord Greenhalgh) (Con)
Sorry, my Lords, I am just learning as we go, as they say. I really admire this House because, obviously, this is the day following the night when Ukraine, a sovereign state, was invaded by Russia, and yet the serious business of government continues, as we consider this group of amendments. I always distil groups of amendments into three words or fewer, and I can do this one in two: these are “technical amendments”—it is not that hard really.
Before introducing the government amendments, let me start by saying that I have listened to speeches from two of my favourite speakers—everyone should have favourites. I have known the noble Lord, Lord Best, for some time; let us say that I was in my prime when we first met—a young man, with a future ahead of me—and we went off for a retreat in Windsor Castle, where Richard—the noble Lord—and I thought about big thoughts. I have a lot of sympathy for what the noble Lord said, but I shall read out my speech. However, the bottom line is that he has raised important points about how we can strengthen the new homes ombudsman—indeed, we need to make sure that the complaints process works across all types of housing and all type of tenures.
I should say to the noble Lord that we are probably going to look at this in a different way, so if I come across in any way negative, it is not because I do not agree with him, but we need to find the right vehicle to do this, which is probably, as I said before, through improved warranties. It is an absolute shocker that the warranty system for housing, which is the single biggest expenditure for an individual, is so poor—a point that the noble Lord, Lord Kennedy, has brought up on a number of occasions—and I have met with the warranty providers. We need to ensure that we extend the period of coverage that is available when you buy your own home. The period is slightly longer for public or social housing, where it is 12 years, but it is 10 years for private housing—and that in itself is odd, as these are still homes, whether they are social homes or private homes. So I thank the noble Lord, Lord Best, for his thinking.
My absolute favourite rhetorical speaker is my noble friend Lord Blencathra. To be honest, I always remember to declare my interests because he always starts off by declaring his interests, so I declare all my interests—residential and commercial property interests—as set out in the register. I follow my noble friend in doing that. Also, I love the passion with which he says that, actually, it is important that people who break the law are penalised. Effectively, he is saying that what they have done is a crime and they should pay a lot of money for it, and I completely agree with those sentiments. If I in any way seem to be resisting in my speech, he will know—he has been in government and understands these things—that I am with him in spirit.
I will now speak to my amendments, which are government Amendments 17, 18, 19, 20, 22, 27 and 29. These technical amendments make changes to Clause 41 and Schedule 5, to create an information sharing gateway between the regulatory authorities of the building control profession in England and Wales. The information sharing gateway also extends to a person to whom the regulatory authority has delegated registration functions under new Section 58Y.
Some registered building control approvers and building inspectors will operate in both England and Wales. These amendments will ensure that, if the regulatory authority in one nation identifies that a cross-border registered building control approver or building inspector has breached professional conduct or operational standards rules, it can share this information with the regulatory authority of the other nation, if appropriate. The regulatory authority of the other nation may then wish to take investigatory action to discern whether similar breaches are taking place by the same registered building control approver or building inspector in their jurisdiction. These amendments will therefore ensure that regulatory bodies can share information with one another to effectively regulate the building control profession.
Baroness Hayman of Ullock (Lab)
Could the Minister slow down a little? I do not know where I am any more. Could he start that group again? I am trying to make some notes on what he is saying.
Lord Greenhalgh (Con)
I am sorry; I will slow down. Amendment 23 is a drafting change to Clause 52 and should be read alongside Amendment 26, which amends the same section of the Building Act 1984. Amendment 26 is a tidying-up amendment and is consequential on the repeal of Section 16 of the Building Act 1984, provided for by paragraph 20 of Schedule 5.
Amendment 133, to Clause 135, relates to the requirement for a regular, independent review of the building and construction products regulatory system, which must cover the effectiveness of the building safety regulator. This minor amendment defines the regulator’s functions to be covered by this review, using the same definition of those functions as in Part 2 of the Bill.
I turn to government Amendments 21, 25, 30, 41, 42, 61, 138 and 146. They do three things. First, they extend the application of the Building Act and building regulations to work on Crown buildings and by Crown bodies. The Government believe that the ownership of a building should not determine whether the new building safety regime, or building regulations requirements, should apply. There should be a consistent approach in how building safety legislation operates across the whole life cycle of a building.
Parts 2 and 4 of the Building Safety Bill apply to the Crown by virtue of Clause 137. The arrangements during the design and construction stages are being implemented by way of changes to the Building Act and, in due course, through building regulations. To apply the requirements for gateways and the golden thread to Crown buildings, the Building Act and the building regulations will need to be applied to work on Crown buildings. This new clause does that.
There is an uncommenced provision in Section 44 of the Building Act which would allow the substantive requirements of building regulations to be applied to the Crown. The drafting of that section has limitations, however, so we consider it better to start afresh by repealing and replacing Section 44. There are also some necessary exclusions to reflect that the Crown cannot be subject to criminal sanctions.
Secondly, the amendments make provision about the application of the Building Act and building regulations to work on the Palace of Westminster and other buildings on the Parliamentary Estate. At Second Reading, the right reverend Prelate the Bishop of Winchester asked in his valedictory speech that the building regulations should apply to the restoration of the Palace of Westminster. This change to the Building Act will ensure that happens.
Finally, this new clause provides that if, in future, a building on the Parliamentary Estate came within scope of Part 4 of the Bill, that part would apply, subject to equivalent exclusions to those which affect how the Building Act and building regulations are being applied to the Crown and Parliament. These new sections of the Building Act and the Bill therefore ensure a consistent approach to building safety for Crown and parliamentary buildings.
Finally, I turn to government Amendments 90, 91, 95, 96, 97, 98, 99, 100, 101, 102, 103, 104, 105, 106, 142 and 143, which relate to the new homes ombudsman provisions and expand them to Northern Ireland. These provisions have already been expanded to Scotland and Wales, so this ensures that new-build home buyers will have improved protection when things go wrong, no matter where they live in the UK.
Amendments 97 and 98 enable the provisions to work practically in Northern Ireland as a consequence of extending the scope of the provisions. Amendments 90, 91, 100, 103, 104, 105 and 106, include consultation requirements so that the Secretary of State must consult the relevant department in Northern Ireland designated by the First Minister or Deputy First Minister acting jointly before exercising powers concerning the scheme, or consult the Executive Office in Northern Ireland when a department has not been designated. The Secretary of State must consult the Northern Ireland Executive before making arrangements for the scheme, before making regulations requiring membership of the scheme, and arranging for that requirement to be enforced, and before a developers’ code of practice is issued, revised or replaced, either by the UK Government or by a third-party scheme provider with the Secretary of State’s approval.
Amendment 99 confers a power on the relevant national authority in Northern Ireland to add to the meaning of the term “developer” in the new homes ombudsman provisions in relation to homes in Northern Ireland, through regulations as appropriate, and following consultation with the other relevant national authorities. Amendments 95 and 96 include provision so that any externally run new homes ombudsman scheme involves the provision of information to the department in Northern Ireland designated by the First Minister and Deputy First Minister acting jointly.
I hope that your Lordships will be pleased that the government amendments in my name today will help to deliver the effective implementation of the new regulatory regime, as well as providing redress for homeowners across the union.
Baroness Pinnock (LD)
After that rapid run-through of about 40 amendments in this group, I shall respond to all of them as follows.
The first three amendments are in the name of the noble Lord, Lord Blencathra, and I have to say that I have a lot of sympathy with what he said. Too many times, when new homes are built in the ward where I live and which I represent—and I declare again my interest as a councillor in Kirklees—roads are not completed to adoptable standards, because that is a good way of saving money. You sell the homes and move on quickly, and it is then really hard for enforcement to be effective, especially when the fines imposed are paltry in relation to the costs of enforcement. So I have a lot of sympathy with what the noble Lord, Lord Blencathra, has said, and I hope that the Government could look again at that element of the building safety regime.
The next amendments referred to are those in the name of the noble Lord, Lord Best, Amendments 94A, 94B and 97A, about the new homes ombudsman. I agree completely with what the noble Lord, Lord Best, has said—and the Minister is nodding, so I assume that he does too, and will make changes at Report. That is excellent. It is especially about the issue in relation to Amendment 97A, about extending the time limit to six years. People buy a new home, starry-eyed, and move in—excited, obviously—then one or two snagging issues arise; they try to get them resolved, they fail to do so, time runs out, the two years has gone and they have nowhere to go. So it is an excellent move to extend that to six years.
In my capacity as a local councillor, I have had to try to help people, and I have to say that I have failed, because we did not have these powers in place at the time, to do with people for whom simple things like plumbing was not done adequately. Their kitchens were being flooded out, and nobody would take on the responsibility because their time had run out. So I totally endorse the views expressed, and the hope expressed by the noble Lord, Lord Best, that the timeframe for the new homes ombudsman should be six years.
I heard what the Minister said before he introduced his great long list of amendments: that the Government were considering extending the warranties for new homes from 10 years. The trouble with warranties, unless they are really tightly worded, is that developers can find a loophole. You end up with a new home owner on their own trying to get recompense from a powerful business—often a David and Goliath situation and, in this case, David often does not win. That is why I support the move of the noble Lord, Lord Best, to give the new homes ombudsman—him or her; would it not be good if it was a woman?—power to deal with defects in new homes.
That brings us to the many government amendments that the Minister introduced, which he called technical. I always worry when Ministers call amendments technical. It is like saying, “Don’t worry about these. We will rush them through, nobody will notice and you might regret what we have to say.” I am pleased that he was very clear that the building safety regime will apply equally—I hope this is what I heard—to all buildings, regardless of where they are in the UK, be they Crown buildings or, indeed, the Palace of Westminster. I would love to have a discussion about the impact that will have on the restoration project.
Extending the scope of the Bill to include the devolved Governments has been rather rushed over. I have here the Welsh Government’s legislative consent memorandum on the Bill, in which the Senedd says that its consent is required to Clause 126, to which the Government have an amendment, about remediation and redress. I seek from the Minister some explanation that the Government will not ride roughshod over the powers of the Senedd. We have devolved Governments in three parts of the UK, and we need to respect their powers and work with those Governments. I am sure they would work with the Government as long as they do not try to act quickly, not get their consent but try to rush over them. That is no way to work.
I have here a long paper, which I am sure the Minister has seen, which outlines exactly what the Senedd hopes the Government will do. I am sure his civil servants will be able to give him a form of words which will enable me to reassure those of my colleagues who are concerned about Welsh affairs that the Government do not intend to intrude on the powers of the Senedd. With those words, I look forward to the Minister’s response.
The Earl of Lytton (CB)
My Lords, I will just pick up on one or two things. Before I do so, hearing other people’s declarations of interests, particularly that of the noble Lord, Lord Blencathra, makes me realise that mine on Monday was perhaps a little light, although it is in the register. I am a co-owner of let residential and commercial property, but nothing of the nature of long-leasehold flats—they are all individual houses.
The noble Lord, Lord Blencathra, raises an absolutely crucial point: the magistrates’ court is too small a threat. It does not have the technical knowledge, and I do not believe it has the capacity either, to deal with it. This threat will simply be laughed at. It really has to have much more meat than that, whether it is through the court process—which I am always a little reluctant about—or through what is proposed in the third group of amendments later on, and in particular my amendments, which obviously take a different tack on how to establish liability. I very much support what he said there.
Lord Stunell (LD)
My Lords, it has been a very interesting debate so far. I do not intend to prolong it at all but, in relation to the technical amendments, I notice that the Bill is 244 pages long and the Government have published 37 pages of amendments. The Explanatory Notes for the Bill were 250 pages long, but there are none for those 37 pages. The explanation we had today, as I understand it, forms the explanatory notes for these provisions, so I appreciate the Minister jamming in all the information in his speech. It was short in time though obviously heavy in content. I just make the plea that we are doing some really hard stuff here, which has implications, but we have no impact assessment which covers the very substantial matters covered by the Government’s new clauses.
In later groups, I will want to raise some points about what seem consequential circumstances arising from the proposed changes to the legislation in the government amendments. I am just logging the fact that we are quite short of what the Government’s assessment is of the impact of the various changes, both technical and more substantial, which will come before us in our consideration of the remainder of the Bill.
I will comment briefly on the amendments of the noble Lord, Lord Best, which I strongly support. In fact, I would have put a longer limit than six years. I had a case in my last year as an MP of a terrace of three low-rise houses which burned down, and the fire brigade quickly determined that it was because there were no cavity barriers in those properties. That fire took place 10 years and one month after they had been handed over to the owners, so the company was actually out of its warranty period—never mind whether it could be appealed to any ombudsman or whoever. The Minister is looking at his watch; I agree that it should be longer than 10 years, but I am not proposing to speak for longer than 10 years.
Baroness Hayman of Ullock (Lab)
My Lords, this debate has been really interesting and slightly longer than I was expecting, so it is great to have had so many contributions. I agree with the noble Baroness, Lady Pinnock: we have a lot of sympathy with the amendments of the noble Lord, Lord Blencathra, and his introductory comments were excellent. As we know, non-compliance with building regulations has been a criminal offence under the Building Act for nearly 40 years now. The Bill heavily extends the scope of available power to enforce compliance and/or impose penalties for contraventions, placing much of that power in the hands of the Health and Safety Executive as it establishes the building safety regulator.
We would hope that the building safety regulator takes a more proactive stance to the broad scope of enforcement measures available to it under the Bill, as Dame Judith Hackitt’s public statements have suggested that it will. Perhaps the Minister can confirm that that will be the case. But it also has to have the resources and funding to be able to do so; otherwise, the new and extended measures may have a lot of bark but little actual bite. Again, that is why the comments of the noble Lord, Lord Blencathra, are so important. Furthermore, the key to ensuring building safety going forward will not rest just on sanctions and enforcement; as has been said in the previous debates and at Second Reading, we need a change of culture and attitude.
So, I think the noble Lord, Lord Blencathra, has brought about a really important discussion with his amendment on enforcement. I was particularly struck by his comments on the differentiation of fines for big corporations—I think he mentioned a fine of £140,000 for a breach—compared to that of millions for the National Grid on a breach that would not likely have had the impact on life that the breaches of the building corporations could have. To me, that really strikes at the heart of this. It is an extraordinary anomaly, and I hope the Minister will look at that, because we have a very different reaction to different kinds of breaches of law.
Again, the amendments in the name of the noble Lord, Lord Best, have had a lot of support in the debate today. I add our support too, because these are really important things to speak about, and he did so very eloquently at Second Reading when he talked about the need to confront housebuilders’ defective workmanship and the dreadful consumer or customer service we too often see when they are responding to entirely justified complaints by home buyers. So, along with him and others, we think it is good news that, with this Bill, the Government are bringing in an ombudsman to whom the home purchaser will be able to turn. That is long overdue.
However, the noble Lord, Lord Best, drew attention in his introduction and his amendments to the fact that there is no point having an ombudsman unless it is genuinely going to make a real difference. As he said in his introduction, customers and purchasers need an accessible means of redress. Too often it is too difficult to jump through all the different hoops you need to go through in order to get any kind of response or result from ombudsmen. We also agree with his concerns that the new ombudsman may not have enough teeth. I am particularly interested in what the Minister has to say on this area; it would be extremely helpful if he could give us reassurance on this, because we need to make sure that the ombudsman’s jurisdictions are going to make a proper difference to this.
I think it was the noble Lord, Lord Stunell, who referred to when he was a Member of Parliament. When I was a Member of Parliament, this kind of issue used to come up pretty regularly, unfortunately—and pretty regularly with certain developers, who I will not name in Committee today. For them to have had this kind of redress would have been hugely helpful.
Moving on to the government amendments, I first thank the Minister for agreeing to slow down, because an enormous number of government amendments landed in our laps after 10 February while we were in Recess. It is a lot to take in and get your head around in quite a short amount of time. I wanted to listen carefully to the Minister’s introduction on this because of that point, so I thank him for slowing down and taking that time.
I just wanted to make a few small points. We very much welcome the amendments around information sharing. It is really good news that it will be easier for people to share information about those who commit serious breaches in building safety. That is important.
Another matter relates to the different amendments on the devolved Administrations. To reiterate what the noble Baroness, Lady Pinnock, said, it is important that we respect and work closely with those Administrations when we bring forward legislation. It is therefore good to see those amendments and that the Government are doing so. It would be good for that to continue as we deal with other new amendments during the passage of the Bill. It was also interesting to get clarification on what is happening with the Crown Estate and to know that this building and all the repairs will be part of this new system.
However, as the Minister said in his introduction, these amendments are mainly technical and I appreciate his time in introducing them. I hope that he will be sympathetic to the points made regarding the amendments of the noble Lords, Lord Best and Blencathra.
Lord Thurlow (CB)
Forgive me butting in at the end but before the Minister responds, I thought that I should make a further point in connection with the amendments of the noble Lords, Lord Blencathra and Lord Best.
It is a reminder that the property development industry, when undertaking projects of blocks of flats or groups of houses—projects of medium size upwards—used to employ a clerk of the works. I am not sure whether it has been a mandatory appointment within the chain of building command, but the clerk of the works was defined as someone onsite who inspected workmanship, its quality, the safety of the work being done and, importantly, reported to senior managers and clients.
Inevitably, lack of mandatory appointment requirements and fewer and fewer clerks of works on projects led to shortcuts and poor workmanship. A clerk of the works might cost between £50,000 and £100,000 a year. For the employer, that could be significantly more, given all the on-costs. On many projects, that adds up to millions of pounds,. So of course those appointments became redundant in the eyes of the bean counters. That simply underlines the importance of the ombudsman’s role, its independence from the industry in absolute terms and the period of time limitations within which claims can be brought.
Lord Greenhalgh (Con)
My Lords, I had not thought that this debate would take quite so long, but it has been worth listening to every second of every minute. I thank the noble Lord, Lord Thurlow, for that late intervention because we have unlearned a lot of the practices that led to a higher quality of build. We would not be in the mess we were in if we had not unlearned some of the things that we did so well during the Victorian period, when there was a way of building using pattern books. Everything was essentially a process, which the Edwardians developed further. Somewhere along the line we have lost that desire to build quality. Just imagine if the Romans came back from the dead to look at what we were building over the past 30 years in the 90s, the noughties and the 10s. They would be absolutely appalled at the standard of build. They did not build their temples to last 10 or 15 years but centuries. We have got to learn that quality of our built environment matters. I thank noble Lords for raising some of their points.
One of the objectives of the Bill is not just to create a regulatory system that works but to raise the competence of an industry that has cut corners and, as the noble Earl, Lord Lytton, said, effectively gamed the system. We have to get back to the culture around quality, competence and professionalism. That will take not just legislation but an attitude of mind.
I start by responding directly to the noble Lord, Lord Stunell, around impact assessments. He is absolutely right. The government amendments came thick and fast. My entire weekends have been ruined since the beginning of the year, working at pace as we approved a plethora of amendments. It is fair to say that the sheer pace of this has meant that it has not been possible to look entirely at the impact. We just know that they are the right lines, and the impacts will be looked at in due course—my response says, “We are looking at the impact of the government amendments and will publish an assessment in due course.” We have been working very fast to get this right in the time we have, and we thought it was very important that we were ready to have these discussions in Committee of government amendments before we get to the even more serious business of Report.
I shall respond to the noble Baroness, Lady Pinnock, supported by the noble Baroness, Lady Hayman of Ullock, about Clause 126 and intruding on the powers of the Senedd. We have worked closely with the Welsh Government across all areas of the Bill to develop and agree measures that work for England and Wales. The Welsh Government have agreed the measures applying to Wales and we expect legislative consent in due course.
I have had a number of ministerial meetings with my counterparts in the devolved Administrations, and there are lessons to be learned from the Welsh approach to the building safety crisis—and, indeed, from my Scottish and Northern Ireland colleagues—on this issue. It affects all our nations in this great United Kingdom, and we have a constant dialogue as we grapple with it, but it is fair to say that the lion’s share of the problem lies in our big cities here in England. That is not to say that we are not learning from the Welsh and others, and of course we will not ride roughshod over them. I hope that gives the noble Baronesses, Lady Pinnock and Lady Hayman of Ullock, some reassurance.
I thank my noble friend Lord Blencathra for bringing forward his amendments, which are clearly aimed to impose greater punishment on those who breach building regulations. I thank the noble Baroness, Lady Hayman of Ullock, for mentioning a breach of the regulations, probably around the time when my noble friend Lord Young was the Housing Minister. I do not know whether he was responsible for the 1984 building regulations—he was. We have the living history in the Room, in the person who brought them forward. Do you know what I was doing in 1984? I was doing my A-levels, and here we have the Minister who brought forward the building regulations in 1984. That is the kind of place we have: people with decades of understanding of these issues.
It is a crime to breach building regulations. If you commit a crime in this country, there is no statute of limitations—I know that from being Deputy Mayor for Policing and Crime—so people can go after you after any period. I have huge sympathy for the intent behind there not being a short period of time, and it is important that we recognise that breaches of building regulations are criminal; that cannot be said often enough. I thank the noble Baroness for raising that again, and the Government have sympathy, but I fear we are unable to accept my noble friend’s proposals, as I intimated in my opening speech.
Looking first at Amendment 13, we consider that the changes are unnecessary for a couple of reasons. First, for some years now, the magistrates’ courts have had the power to impose unlimited fines—and fines are, of course, the principal punishment available in respect of corporate bodies, which are most likely to be in a position to commit the offence of breaching building regulations.
Secondly, it will not have escaped your Lordships’ notice that significant backlogs have developed in the Crown Court over the past two years as Covid protocols have been introduced. The costs to the courts service, the prosecution and the defence are also far higher in the Crown Court.
As was raised by the noble Baroness, Lady Hayman of Ullock, it is quite possible for the building regulations to be breached in a relatively minor way. In such cases, it would be entirely appropriate for the case to be dealt with by the magistrates. It is, of course, also possible for breaches to be extremely serious, which is why the Bill for the first time allows cases to be dealt with in the Crown Court, in the same way as crimes are dealt with: sometimes in the magistrates’ court, sometimes in the Crown Court. However, we do not consider that it would be sensible to require all breaches of the building regulations to be dealt with in the Crown Court.
Turning to Amendment 14, I say to my noble friend that I agree with increasing the daily rate of fine for ongoing offences. Indeed, the Bill already increases the daily rate from £50—where it has been since 1984, when I am sure it was set by my noble friend Lord Young, when £50 was a considerably greater sum of money than it is today—to £200, which is the current rate for a level 1 fine. However, we consider that increasing it further to £2,500, as my noble friend proposes, “would be disproportionate”—that is what it says here, anyway.
The principal aim of the prosecution must be to impose an initial fine commensurate to that particular offence; any further fine should merely encourage work to be put right, rather than imposing huge additional punishment. We consider the potential maximum of £5,600 for the month of February is likely to be significantly more proportionate on top of the fine imposed on conviction, rather than the £70,000 proposed by my noble friend.
On Amendment 15, imposing a sentence according to a mathematical formula raises a number of issues. First, the cost of the work done will not always be clear; there may be disputes about the cost in the invoice or the value of the work actually done, and resolving this would take up the court’s valuable time. Secondly, the court might consider that, in a particularly egregious case, a significantly higher fine is required than one that would be arrived at from the calculation. The amendment would preclude the court from imposing that higher fine. Finally, the provision in the amendment to enable the court to impose rapidly escalating further fines, if the breach remains unresolved, has the potential to lead to significant unfairness—as, for example, a £10,000 initial fine could total up to £70,000 if a breach remained unresolved for just two months after conviction.
As I said at the start of my remarks, while I am supportive of my noble friend’s amendments, I hope that with this explanation he will be content not to press them. I reiterate that I absolutely sympathise, and want to go with the nature of this—but that is the response to the amendments as tabled today. I thank my noble friend for laying the amendments for us to think them through and debate them extensively.
Before turning to the comments from the noble Lord, Lord Best, about strengthening the teeth of the new homes ombudsman, it is important to reflect that there has to be a little bit of work done to tidy up the whole approach to the ombudsman’s service for people in housing. I asked my colleagues behind me to list the number of people who provide a complaints service for people in different types of homes and tenures. We have the new homes ombudsman, which will be unleashed for new build, but we also, as the noble Lord, Lord Best, will know, have the Regulator of Social Housing and—my old colleague at City Hall, Rick Blakeway—the Housing Ombudsman Service, and we have the Local Government and Social Care Ombudsman. Homes are homes, and we need to think about how we get a complaints service that works for homes in the round. I know that we can categorise social housing as being over here, and people in private renting over there, but these are people’s homes. We need to recognise that, at the moment, it is a patchwork quilt of services that provide that whole ombudsman service, and that is not ideal. I wanted to put that forward—that, when discussing this subject, we are talking about new-build private homes and not housing in the round.
I turn to the amendments tabled by the noble Lord, Lord Best. I thank him for raising this important matter, but I am afraid that the Government will not be able to accept these amendments, as the intention can be achieved elsewhere. The Bill sets out requirements for the ombudsman scheme to include provision about what home buyers can complain to the ombudsman about in individual cases, and making improvement recommendations about scheme members’ quality of work and conduct in general. The developers’ code of practice allows the standards of conduct and standards of quality of work expected of members of the scheme to be set out.
The noble Lord’s amendments would provide the ombudsman with powers to make general requirements of the scheme’s members, duplicating provisions already in the Bill. It is unclear how they could be enforced or appealed against, and we must be careful that the ombudsman does not duplicate the role of regulators, the scheme provider or Parliament. The Bill includes provision for complaints to the ombudsman within two years of the first acquisition of the new-build property, which aligns with the developer liability period under most new-build warranties. I was shocked to find out that within a warranty it is for the first two years that developer liability is covered; the rest is covered through some form of warranty or insurance scheme to 10 years in private housing or 12 years in social or public housing. It is in this period that issues are much more likely to be raised in relation to snagging or the home-buying process. We believe that the proposal to extend this to six years would be unnecessary and would introduce a new unknown burden on members of the scheme. But I assure noble Lords that home buyers will retain their existing rights to seek redress in law and elsewhere in this Bill. With this reassurance, I hope that the noble Lord will be content not to press his amendments, and the Government will continue to consider how and where practices in this area could be improved.
I did say—if I may go a little bit further on that note —that we need to think about warranties, but we should also remember the Defective Premises Act, which has a statute of limitations of only six years. We are proposing to extend that prospectively to 15 years, hoping that there will be a culture change and a stronger regulatory environment, and 15 years is a reasonable timeframe to expect to seek redress—and then, retrospectively, 30 years. I am having those discussions and debates with my colleagues and the noble Lord, Lord Stunell, because I consider breaches of regulations, even going back 25 or 28 years, as a crime. It is a crime to breach building regulations, and there should be no statute of limitations for some of the crimes that we have seen, where we are putting flammable materials on the outside of the buildings, not having compartmentalisation, and having inadequate fire stopping, or fire doors that do not act as fire doors. All that I consider to be essentially breaches of building regulations, and we need to go after the perpetrators. But that is for another group of amendments—for the perpetrator pays or polluter pays—in due course.
Lord Blencathra (Con)
My Lords, as an aside, I was going to say that we are sitting in a bit of a chilly draught here, but then I reflected on what it is like for those people in blocks of flats which have had all the external cladding ripped off, leaving nothing between them and minus 5 degrees outside but a thin plasterboard wall. That is why it is important to get this Bill through and tackle that problem as soon as possible.
I am in complete agreement with my noble friend the Minister on the quality of Roman architecture. My favourite place to visit in the border country is the Housesteads military fort on Hadrian’s Wall, where the best-preserved part is the latrines in the bottom corner. To see that the Romans, 2,000 years ago, had running hot water in their toilets and latrines is an eye-opener—for many buildings in this country, we have still not caught up with hot running water in the toilet facilities.
I floated my amendments to suggest that corporate developers should in all cases be tried on indictment, with massive fines for infractions. We have all heard the expression “damned with faint praise”, but never in all my experience in Parliament have my amendments been damned with such lavish praise. My noble friend basically said, “Blencathra, you’re an absolute genius; your amendments are wise and right. We’re with you all the way; let’s hit them hard—but I still ain’t going to do it.”
I accept that there will be cases where the magistrates’ courts should have a say. I was putting in a more absolutist position. However, if the magistrates’ courts continue to have a role—as I accept—proper guidance must be issued to them through the judicial standards board, or whatever it is called. Massive fines should be imposed in those circumstances where they are deserved. As I have said, the HSE and the CMA seem to have managed to persuade courts to slap on big fines. Perhaps for local authorities it is a culture thing or, for the magistrates’ courts, breaching building regulations does not matter so much—there may be some cultural problems there, but we must cut through them and, if we keep the magistrates’ courts, make sure that guidance slaps on heavy fines.
My amendments are not as important as those from the noble Lord, Lord Best. I was impressed by his speech; I would accept my noble friend rejecting my amendments, but I think he is wrong to reject the noble Lord’s amendments, because what he asked for is eminently sensible and should not cause the Government any problems. What is the point of having a power to make recommendations if they can be ignored? Placing an obligation on builders to make improvement requirements is the only logical step. As he said, it must be beefed up—and if you beef something up, then it needs more teeth.
I also like his Amendment 97A. He made an impeccable case for it and I fail to see why the Government have rejected it—it just moves it from two to six years. Five years into my brand-new block of flats, I found a leak in the plumbing where the washbasin was. Eventually, I managed to separate the very posh fake marble frontage from it and found, in my inexpert experience, that a one-and-a-half-inch pipe had been stuck into a two-inch pipe and sealed with a bit of silica. I thought, “This ain’t right”. The developer said, “That is how we do it in the trade—nothing to worry about.” I thought, “I’m not having this”, so I hired at my own cost a plumbing expert consultant, who came in, looked at it, sucked his teeth and sent me a report saying that it should be a special reduction joint XYZ. I went back to the developer, served a notice that I would go to the county court with £200 of my own legal costs, and gave them the consultant’s report and the repair I wanted.
Because it was me, and I had the muscle and clout to do it, the developer coughed up immediately, refixed the whole thing and paid all the cost. But I have a unique position as a Member of this House, with the ability to make that threat. Most leaseholders cannot. That is why they go the ombudsman, who must have a longer period than two years to sort out these problems. I am not sure whether the noble Lord will bring it back on Report, but I say to my noble friend that there is no skin off the Government’s nose in conceding the noble Lord’s amendments.
However, returning to my Amendment 13, I will not go back to this on Report and beg leave to withdraw it.
Baroness Pinnock
“(4A) Conditions under subsection (4)(b) must specify standard qualifications and compulsory and regular training for registered building inspectors.”Member’s explanatory statement
This amendment makes provision for standard qualifications and compulsory and regular training for registered building inspectors.
Baroness Pinnock (LD)
My Lords, in his response just now the Minister talked about raising the competence of the construction industry and improving the quality of the built environment. This set of amendments, in my name and that of my noble friend Lord Stunell, does precisely that. The focus is on improving consideration of the independence, qualifications and training of those with the critical responsibility of certifying that construction is in compliance with both building regulations and the approved plans. You would think that concentrating on this element of reform of a failed system would be given importance but, unfortunately, in the clauses we have in the Bill it has not been given the prominence it deserves, which has resulted in the amendments I am speaking to now.
Amendment 16 seeks to finally end the changes made by the Building Act 1984 and the approved inspectors regulations. This Act established approved inspectors. Prior to the 1984 Act, all building inspectors were local authority employees. Of course, there were failings with that system; I am not here to say that having all building inspectors under the aegis of the local authority was perfect—it was not. What was introduced—although with good intention, I am sure—has developed into what can be an unhealthily cosy relationship between constructor and inspector. It permits development companies to appoint their own approved inspector, who has to notify the local authority initially and then submit a certification to the local authority when the building works are completed.
The removal of dangerous cladding has in some cases exposed serious defects in construction. Of course, these were because constructors failed to comply with building regulations and the approved plans. Nevertheless, building inspectors had certified these buildings as compliant when they were not. This Bill is the opportunity to make detailed changes to ensure that this situation, in which buildings are signed off as compliant when they are not, does not happen again.
The dual system of building inspectors that currently exists is a key issue. There is a lack of accountability for the decisions made by inspectors. This lack of direct accountability is the very issue that runs through the Hackitt report. At the moment, even if the local authority receives reports of problems associated with a construction site, local authority building inspectors are forbidden by law from investigating and providing an independent check. The simple fact that developers contract their own building inspectors provides a culture in which precise and exact compliance can be ignored.
Change is essential if this Bill is to achieve what it states are the aims, which we are all here to support—better building safety. The Minister has often talked about the tools in his toolbox. I want him to tell me that he will use one of the tools he constantly refers to: recovering the certification documents for the buildings where there have been breaches of building regulations at the time of construction. If he does, we will find out which building inspectors, or the companies to which they belong, have signed off as compliant buildings which painfully obviously were not. Building inspection companies have a liability in this building safety crisis, and they need to be held accountable as well as all the other elements of the construction business we are referring to.
Then there needs to be a radical change to the accountability of building inspectors, both public and private. Private inspections can no longer expect to be free of public oversight, and it will be helpful to hear from the Minister how the accountability of the building inspection regime is expected to operate and how effective it will be.
So, I have covered the duality of the building inspection control system as it currently is and how I hope it will be improved. The other amendments in my name and that of my noble friend Lord Stunell seek to have on the face of the Bill agreed and standard qualifications with consequent and regular compulsory training to ensure that all inspectors have knowledge of new building materials and how these operate in connection with other construction elements. Again, this issue of the relationship of materials in construction and retaining the integrity of the building has been cruelly exposed by the Grenfell tragedy.
Finally, building safety absolutely depends on a highly skilled workforce. Over the years, various Governments have reduced resources to organisations that are able to train and improve the skills of the construction workforce. I will give just one example: further education colleges have had funding slashed and, consequently, courses closed down. This is a short- term approach, so my Amendment 136 will require the Government of the day to publish regular assessments of the current state of the construction industry workforce in order that the aims of the Building Safety Bill can be achieved. With those comments, I beg to move Amendment 15A.
The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)
My Lords, the noble Baroness, Lady Brinton, is taking part remotely, so I invite her to speak now.
Baroness Brinton (LD) [V]
My Lords, I declare my interests as a vice-chair of the All-Party Parliamentary Fire Safety and Rescue Group and a vice-president of the Local Government Association. I support all the amendments in this group in the names of my noble friends Lady Pinnock and Lord Stunell.
In his response to the previous group and to some groups on the first day of Committee, the Minister rightly said how shocking some of the revelations have been to him, to us and to many others as more systemic failures have been uncovered, and how far too many people were able to refuse to take responsibility for their role in the problems.
Along with other parliamentarians, I heard Dame Judith Hackitt speaking on a number of occasions during and after her review, and I have also read her Independent Review of Building Regulations and Fire Safety—both the interim and the final reports. Her foreword to the final report published in 2018, which she describes as a personal view, is extremely powerful as a summary to the cultural and regulatory structures in the built environment sector and explains exactly why the amendments in this group are so necessary.
The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)
My Lords, we will also hear from the noble Baroness, Lady Harris of Richmond.
Baroness Harris of Richmond (LD) [V]
My Lords, I will be brief and I, too, wish to speak to the amendments in the names of my noble friends Lady Pinnock and Lord Stunell. I strongly support them.
At Second Reading, I commented on the large number of people who are going to be accountable for the safety of buildings when the new regime comes into force. My main concern was around the person described as the “principal accountable person” because I felt that that person had just about everything to do with the safety of buildings and that that responsibility would rest on that person’s shoulders. I was interested in the comments of the Royal Institution of Chartered Surveyors and the Chartered Institute of Building, which stated that the industry did not yet have qualified individuals who could undertake such incredibly important and probably statutory duties that the position would necessitate. Perhaps I may therefore ask the Minister what the Government are going to do to help the industry find those people and how they propose to go about training them with the necessary skills that will be required.
Lord Stunell (LD)
My Lords, I obviously support what my noble friend Lady Pinnock said in relation to the training and independence of building inspectors. That is perhaps the most obvious of the necessities which we now know exist, as far as plugging the gaps in the current regime is concerned.
I want to focus my remarks on Amendments 116 and 119A, where mine is the lead name and which deal with fire risk assessors. We have never had before, in capital letters, something called “Fire Risk Assessors”. There is no such profession and this will clearly be a significant gap, which has to be filled very quickly if we are to achieve the aims of the Bill. We know that, right across the industry, there are shortages of skills, qualifications and competence. Above all, there is a shortage of capacity. One problem that I know the Minister has had to confront is that it has been difficult to get effective surveys of high-risk buildings because the people have not been available to do them. There are no such people, or at least insufficient people, with the right competences, skills and so on to do so.
I do not know whether the Committee will have seen the reports of the fire risk assessment that was done in advance of the Grenfell fire. The housing association had a fire risk assessor and he made a fire risk assessment. It turned out that he was a firefighter but not qualified in fire risk assessment. In order to secure the job, he had manufactured a set of initials which were accepted by the housing association as proof of his skill and capacity to assess fire risks. This is reported in the public evidence sessions of the Grenfell inquiry. It was further revealed that he was commissioned not just to assess the Grenfell Tower; he was commissioned by the housing association to be its risk assessor for the whole of the housing stock of that organisation.
That is where the importance of having a register becomes immediately apparent. You need a register of qualified people for two reasons, which overlap: first, you are not allowed to practise as an assessor unless you are on that register; secondly, as a purchaser of the skills of fire assessment, for instance a housing association, you need to be sure that the person who offers you a cheap deal to do some quick fire assessment work is somebody who is qualified, prepared and competent to do so. Amendment 116 is trying to establish clearly in the Minister’s mind the need to make this process of regulation transparent, with a publicly published register. We are obviously probing at this point, but I hope the Minister can give us some satisfaction that, if not in the Bill then in parallel with it, these matters will be dealt with.
What I have said about fire assessors may be the most dramatic and acute of the problems, but the building control function was of course also exposed as woefully insufficient in the case of the Grenfell Tower. Bearing in mind that it was a local authority building control function being exercised, it is also true that the person who was the responsible officer did not once visit that tower to make an inspection. It was purely from a desk study of drawings which had been provided to him. There is clearly a tremendous gap. Even when somebody is appointed to do a job, they may not have either the skills or competences, or they may not have the attention span or the time, to give effective service to the cause of fire safety. I hope very much to hear from the Minister that he takes these matters to heart and has in mind finding a way of establishing how this can be put right.
Our Amendment 119A is about training of fire assessors on the same basis as the noble Baroness, Lady Pinnock, moved on the training of building inspectors. Every one of the professionals engaged in this fire safety regime needs to be a qualified and competent person. That is so obvious that it hardly needs to be said, but at the moment we are woefully short of the number of people we need. Indeed, it has already been referenced that the RICS and others have pointed out that, at the moment, there are not enough people with the competencies to step forward if the Bill comes into force as the Minister intends.
Baroness Fox of Buckley (Non-Afl)
My Lords, I am very sympathetic to this group of amendments, but I have a number of queries that perhaps the noble Baroness, Lady Pinnock, might address, just because I am not quite sure about them. One of the points just made is that a large number of people will be accountable —it seems to me to grow every time I look at the Bill. Although I understood what the noble Baroness, Lady Brinton, meant about the bonfire of bureaucracy, regulations and so on, there is always a danger that we are creating layer upon layer of bureaucracy and accountable people. I shall be moving some amendments later to this effect.
For now, it is obviously the case that we need qualified people involved in this, but, as has been described, there are so many new roles that the qualifications do not even exist. I am concerned about including in the Bill that you need to have the qualifications to do the role when the qualification does not exist. What does that mean? Will that hold up the process?
I am also concerned about saying that training is “compulsory”. I am concerned for the professional autonomy and integrity of those who are already involved in this area. I do not know whether legislation is the right way to go. However, it would be useful to understand from the Minister what he anticipates will happen. It cannot be, as it were, just any old Joe Bloggs given the role. Will attention be paid to talking to the professionals who already run practice qualifications in universities and further education? How will the Government manage the fact that they are creating all these new jobs with no attention, it seems, to how the qualifications will be awarded or who will give them? That is where I am very sympathetic to the noble Baroness, Lady Pinnock, in having a register, but I am not quite sure that the amendment does it.
I am nervous, perhaps because I used to be involved in education, about another government demand on education that ends up giving people a lot of work to do when there is no capacity to do it, so it will just be a shoddy box-ticking qualification that will not mean very much. That is my concern, while being sympathetic in general.
Lord Khan of Burnley (Lab)
My Lords, I speak in particular to the amendments in this group in the names of the noble Baroness, Lady Pinnock, and the noble Lord, Lord Stunell, who have made excellent contributions. I intend to be concise and brief, because the noble Baroness introduced them in an eloquent and comprehensive manner, which was followed up by subsequent speakers.
These amendments are much needed, and it is disappointing that these matters have not already been taken into account by the Government in the Bill. The new clause in Amendment 116 would require building owners and accountable persons, about whom I shall ask a question shortly, to verify the competencies of fire assessors before appointing them to conduct the fire safety assessments required by the Bill. The noble Baroness, Lady Pinnock, talked about the 1984 legislation and, prior to that, local authority employees. The cosy relationship between building constructors, developers and inspectors is really concerning. That needs to change.
These are serious concerns. Look at Grenfell, where numerous people lost their lives, and subsequent fires in high-rise and other buildings. The system is broken. Serious construction defects are there, and there have been failures in not detecting bad buildings. Building regulations have failed. That is criminal, as my noble friend Lady Hayman of Ullock pointed out on the previous group. We cannot have buildings signed off as safe when clearly they are not. Developers choosing building inspectors—a point the noble Baroness, Lady Pinnock, mentioned—cannot be a way forward. We have to all be singing from the same hymn sheet; that is what Amendment 116 talks about.
Baroness Scott of Bybrook (Con)
My Lords, I will first respond to the noble Lord, Lord Khan, and say that I agree with absolutely everything he said. This Bill is about not signing off unsafe building as has happened in the past. It is about having a toolbox filled with tools to fix the issues we have in the building sector at the moment, particularly with high-risk buildings.
I also agree with the point from the noble Baroness, Lady Brinton. I have heard my noble friend the Minister say this over and over again: it is about not just processes but cultural change within the whole system. With those opening remarks, to begin with I will just go through a few specifics before I get into my speaking notes, which I have just been given to do and which I have to do.
The noble Lord, Lord Stunell, and the noble Baronesses, Lady Harris and Lady Fox, asked, rightly, where the approved inspectors and fire risk assessors will come from. Those inspectors are an established professional group; there are many already operating in the sector—but obviously, as things change in that sector, they will have to be retrained and updated to work within the new system. With the fire risk assessors, we are working in the sector already to help to improve their capacity and competences, and contributing at this moment to two industry-led workstreams that are working on this issue.
The noble Baroness, Lady Pinnock, talked about where you can check about the completion of certificates. It is a muddled system—we know that—and that is why we aim for all documentation for buildings, including all completion certificates from construction to occupation, to be in a golden thread of information. We have legislated for this in the Bill, and further details on that will come out in secondary legislation.
The noble Baroness and the noble Lord, Lord Stunell, also brought up the issue of registers. Details of approved inspectors’ final certificates must be placed on registers held by local authorities, but we are also looking at a proposal for a national register of those inspectors, which will help the system no end. It is going to cost money; we are going to retrain people with different skills. There is money from government—nearly £700,000 in funding—to train more assessors, because we know that we will need them, but also to speed up that system for valuers and the EWS1 forms required. Training will provide competent professionals with the skills that they need for the up-and-coming changes, particularly those outlined in the Fire Safety Act 2021. So we are looking at capacity to do all these things.
I shall go through and respond to each amendment. First, on Amendments 15A and 16A, I think we are all looking for the same outcomes—it is about how we do that, and which tools we use. So there will be some decisions, but what is important in these debates is that we are all learning from each other about what might be the best solution, and we will continue as a Government to look at what has been said in these debates.
We are introducing a new framework for oversight of the performance of building control bodies, and a new professional framework for registered building control approvers and registered building inspectors, for their work on all buildings. This framework includes the registration of both building control approvers and building inspectors. We expect the building safety regulator will specify relevant skills, knowledge, experience and behaviours as part of registration, and require continual professional development to be undertaken, but we consider it important to give it the flexibility to choose how to incorporate these areas operationally, rather than be restricted by having a specific requirement for standard qualifications and compulsory training set out in primary legislation. We are also concerned that standard qualifications may be read as examinations, which may make it harder to recognise and value experimental learning. On this basis, I would ask that the noble Lord does not press his amendment.
On Amendment 16, tabled by the noble Baroness, Lady Pinnock, the Government are introducing a new framework for oversight of the performance of building control bodies and a new professional framework for all building control bodies, including registered building inspectors, for their work on all buildings. The building safety regulator will drive improvements in building safety by overseeing the performance of building inspectors and building control bodies through a robust professional and regulatory regime. This will include setting codes of conduct and competence, including for registered building inspectors, and operational standards rules defining the minimum performance standards that building control bodies, which will employ or use registered building inspectors, must meet.
To achieve this, the building safety regulator needs the flexibility to frame such codes and standards in the way it thinks best, and to adapt them over time as required. This would be hampered by specifying part of the content of the code in primary legislation, as this amendment suggests. However, we expect future codes of conduct to address conflicts of interest explicitly, just as the existing code for approved inspectors does already.
I turn to Amendment 116 in the names of the noble Baroness, Lady Pinnock, and the noble Lord, Lord Stunell. I thank them for shining a light on the important issue of the competency of fire risk assessors, as they did when the Fire Safety Bill was being debated. However, I am afraid the Government will not be able to accept the amendment.
The fire safety order 2005 requires any person who has control in premises to take reasonable steps to reduce the risk from fire and make sure people can safely escape if there is one. The order applies to virtually all premises and covers nearly every type of building, structure and open space. To give noble Lords a sense of scale, this includes approximately 1.7 million residential buildings and all offices, shops, hospitals, schools, pubs, restaurants, factories and warehouses in England and Wales.
Given the scope of the fire safety order, it is important that we retain the ability for the responsible person to carry out their own fire risk assessment, particularly in small or low-risk premises, using the guidance and support available so that they can make their premises safe from fire. In some circumstances, the responsible person will be best placed to identify the potential causes of fire, the people and the risks and to take action. They can take ownership and have the ability to take quick action.
I will give noble Lords an example: a small gift shop with a simple layout, such as one floor, and a limited risk in relation to fire. With a small number of employees and visitors to the premises, a responsible person could undertake the fire risk assessment themselves—this is because there is no sleeping accommodation, no hazardous processes taking place and no cooking processes—using the published guidance to address fire safety measures.
If we require fire risk assessments to be undertaken in every case by a registered fire risk assessor, we risk two very significant downsides. First, on capacity, we know that there is a limited number of competent fire safety professionals, as we have spoken about, and that demand for fire risk assessors outstrips supply. A register would risk creating a bottleneck, which could result in a delay in responsible persons undertaking or updating a fire risk assessment. This could mean that fire hazards would not be identified or mitigating action taken. It could also distract competent professionals away from premises of higher risk.
Secondly, on cost, in some low-risk premises it will be restrictive to require responsible persons either to appoint a fire risk assessor from the register or to ensure that they themselves are on the register. It could mean that fire safety outcomes are reduced, where they could meet the responsibility of the requirements of the fire safety order themselves without the requirement to register or appoint a registered assessor.
It is vital to ensure that those appointed to undertake fire risk assessments are competent. I assure noble Lords that the Government’s intention to enhance competence has been met in the Bill with the amendment to the fire safety order to require that the responsible person must not appoint a person to assist them with making or reviewing a fire risk assessment unless that person is competent. That amendment will also include—
Lord Stunell (LD)
I thank the Minister for giving way. I have understood her line of argument very clearly, but she seems to be saying that it would still be lawful for that housing association in Kensington to have appointed an unqualified person. Is that exactly what she is saying, or not—or will higher-risk buildings have a more stringent requirement for fire safety assessors?
Baroness Scott of Bybrook (Con)
No, what I am saying is that a higher-risk building, or any building which has certain issues, will need a qualified fire risk assessment. What I am also saying is that those people cannot subcontract or have anybody working with them who is not competent as well. In the case of Kensington and Chelsea, and Grenfell, they would no longer be able to have somebody who is not competent and does not have the relevant qualifications to do that fire risk assessment. I have seen with my own eyes where that has been done in the past. Does that make sense? I shall make sure that the noble Lord gets it in writing, so that he is clear, and I shall put it in the Library.
That amendment will also include a definition of the competence that is required—which I think also answers the noble Lord—and we will issue guidance to support responsible persons in identifying a competent fire risk assessor. Significant work has been done by the industry-led Competence Steering Group, the working group for fire risk assessors. Industry continues to lead and develop the work in relation to competence for the sector and has developed a centralised list of professionals where a responsible person can identify a competent fire risk assessor to assist them in undertaking a risk assessment. There is also further work taking place by the sector to develop a fire risk assessor industry competence standard. Again, I think that is very important.
I move on to Amendment 119A. We have had a lot of interest shown in the training and qualification of fire risk assessors. The fire safety order requires that the responsible person must make a suitable and sufficient assessment of the risks to which relevant persons are exposed for the purpose of identifying the general fire precautions they need to take. A responsible person can undertake that assessment themselves using guidance to help them do so if they have the requisite level of competence, and this is generally what happens in relation to buildings that are simple by design. When buildings are more complex—and I think that here we are probably getting to a better answer to the noble Lord’s question—responsible persons will often choose to appoint a fire risk assessor to undertake the assessment on their behalf. Fire risk assessors come from a range of professional backgrounds, and it is quite often the case that they themselves need to seek input from other professionals with specialist knowledge when undertaking a fire risk assessment on more complex buildings.
When a responsible person does appoint a fire risk assessor to complete the fire risk assessment, it is of course vital that they ensure that person has an appropriate level of competence. That is why we are introducing a requirement, through Clause 129 in the Bill, to the effect that the responsible person must not appoint a person to assist them in making or reviewing a fire risk assessment unless that person is competent. Clause 129 also includes a definition of the competence that is required, and we will issue guidance to support responsible persons in identifying competent fire risk assessors. We are also working closely with the professional bodies in the fire safety sector to consider capacity and capability issues in relation to fire risk assessors, and work is already being taken forward through the industry-led Competence Steering Group fire risk assessor sub-committee to develop a fire risk assessor competency standard.
I am clear that the initiatives I have set out represent the most effective approach to further professionalising the fire risk assessor sector at this time, and it is right that this work continues to be led by industry. I thank the noble Lord and the noble Baroness for raising these important issues, but I must ask them at this point not to press their amendments.
Finally, I thank the noble Baroness, Lady Pinnock, for her final amendment in this group, Amendment 136. I am happy to reassure her that the Government believe that this amendment duplicates many of the existing provisions in the Bill. Clause 10 requires the building safety regulator to establish the industry competence committee and provide support as necessary. The committee’s activities could include overseeing and monitoring the industry’s development of competence frameworks and training, undertaking analysis to understand areas that need improvement and working with industry to drive gap-filling. We expect the committee to provide reports of its work to the regulator periodically.
As a precursor to the statutory committee, the Health and Safety Executive has already established an interim industry competence committee, which is developing its strategy and work plan for supporting the industry’s work, including looking to understand its current competence landscape. It is for the industry to lead the work to improve competence, identify skills and capacity gaps and provide appropriate training to upskill its members for the new regime, and it has already started this work. Training and certification of competent professionals is not a function of government or the regulator under the Bill. We and the Health and Safety Executive will continue to monitor the industry’s progress and provide support where necessary.
Clause 135 legislates for the appointment of an independent person to carry out a periodic review of the system of regulation for building safety and standards and the system of regulation for construction products. The review will act to ensure the functioning of the systems and provide recommendations for improvement. The review must consider the building safety regulator and the system of regulation established by Parts 2 and 4 of the Bill and the Building Act 1984. However, the independent reviewer is not limited and may review connected matters at any time. An independent reviewer must be appointed at least once every five years, although the Secretary of State can appoint a reviewer more regularly if necessary. By ensuring that the report must be published, the Government have created a system of public accountability in building safety.
When defining “independent”, we have struck a balance that excludes those with a clear conflict of interest without overreaching and excluding everyone with relevant experience. This clause will help to protect the integrity of the system and ensure that it continues to create a safe built environment in future. Further reporting requirements risk duplication, complexity and additional bureaucracy, and I therefore ask the noble Baroness to withdraw her amendment.
Once again, in conclusion, I thank noble Lords for this interesting debate. I hope I have given the reassurances that will allow them happily not to press their amendments.
Baroness Pinnock (LD)
I thank the Minister for her very full response to the issues raised, particularly on Amendment 136 about workforce reporting. She has obviously had some support in going through all the clauses in the Bill to work out where the reviews and so on will take place. She spoke about competencies being reviewed regularly, and I will look again and read carefully what she said when it is reported in Hansard to see how that works. But on the face of it, it appears that this is covered in the Bill.
That brings me to the other issues that I raised. The first was about the building safety regulator overseeing the new roles of building control inspector and approved inspector. I understand that, but when I read the clauses, no details were given about what competencies and qualifications were required for those new roles. If we are determined to improve building safety, which we all are, some definition of what is expected of each inspector role should be in the Bill—not the detail; I totally accept that one would expect the building safety regulator to define those in detail. However, there should certainly be some indication of that, and it is not there. Hence, the amendments that I have tabled. Again, it may be that discussion with the Minister before the next stage could be of help in that regard.
I turn to the fire risk assessors. I remember the wonderful Fire Safety Bill. The issue of fire risk assessors came up at that stage and my noble friend Lord Stunell had amendments about them. He talked about a register, a lack of capacity, ill-defined qualifications and competencies, and we have not moved forward. That is the problem. We must move more quickly. The point is well made and I know that the noble Baroness has tried to explain and will put something in writing. We will look at it, but I must say that assessors and fire risk assessment is critical, particularly to some of these high-risk buildings.
Lastly, there is the issue of accountability, which was raised by the noble Baroness, Lady Fox. It is one of my themes that I come back to all the time. Quis custodiet ipsos custodes? Who guards the guardians? Who overlooks all this to make sure that people are accountable? Unless we do that, we get into the mess that we are in now, where so diverse is the golden thread of accountability that nobody understands who is going to take control. I am not sure that I totally accept the noble Baroness’s views on this part of the Bill, but I certainly do on the next part in terms of overseeing safety within already-constructed buildings. There is a good point to be made about it being so diverse and unclear who will be responsible for what that nobody will be responsible for anything and we will be in the same mess that we are now.
I thank the Minister again for a detailed response, which has been helpful. I shall read it carefully as we cannot take in all the detail—well I cannot, anyway. Perhaps in discussion with the Minister, we may make some progress before Report. With those comments, I shall withdraw or not move the amendments in my name. I beg leave to withdraw the amendment.
Lord Greenhalgh
Member’s explanatory statement
This amendment and the next amendment, which are consequential on the Minister’s amendment at page 56, line 22, provide that new section 58Z7A of the Building Act 1984 applies to a person to whom the regulator has delegated registration functions under new Part 2A of that Act as it applies to the regulator.
Member’s explanatory statement
This amendment is consequential on the previous amendment in the name of the Minister.
Member’s explanatory statement
This amendment is a drafting change, with the omitted reference (to section 91B of the Building Act 1984) being inserted by the second amendment in the name of the Minister at page 51, line 28.
( ) section 58Z7A (sharing of information between regulatory authorities);”Member’s explanatory statement
This amendment, which is consequential on the Minister’s amendment at page 56, line 22, provides that new section 58Z7A of the Building Act 1984 applies to a person to whom the Welsh Ministers have delegated registration functions under new Part 2A of that Act as it applies to the Welsh Ministers.
( ) section 91B (cooperation and sharing of information between Welsh Ministers and other authorities);( ) section 131A (application to the Crown).”Member’s explanatory statement
This amendment, which is consequential on the first new Clause in the name of the Minister after Clause 57, enables a person to whom the Welsh Ministers have delegated registration functions (under new Part 2A of the Building Act 1984) to apply to the High Court under new section 131A(5) for a declaration that an act or omission of the Crown is unlawful.
“Information sharing58Z7A Sharing of information between regulatory authorities(1) The regulator may disclose information held in connection with a function under this Part to the Welsh Ministers for the purposes of—(a) a function of the regulator under this Part, or(b) a function of the Welsh Ministers under this Part.(2) The Welsh Ministers may disclose information held in connection with a function under this Part to the regulator for the purposes of—(a) a function of the Welsh Ministers under this Part, or(b) a function of the regulator under this Part.(3) Except as provided by subsection (4), the disclosure of information under this section does not breach—(a) any obligation of confidence owed by the person making the disclosure, or(b) any other restriction on the disclosure of information (however imposed).(4) This section does not authorise a disclosure of information if the disclosure would contravene the data protection legislation (but in determining whether a disclosure would do so, take into account the powers conferred by this section).” Member’s explanatory statement
This amendment provides that regulatory authorities under new Part 2A of the Building Act 1984 (the regulator in relation to England and the Welsh Ministers in relation to Wales) can share information with each other for the purposes of their respective functions under that Part.
Lord Greenhalgh
Member’s explanatory statement
This amendment is a drafting change.
Lord Young of Cookham
“32A After section 36 insert—“36A Removal or alteration of offending work in contravention of Fire Safety Regulations(1) If any work contravenes any fire safety requirements in the building regulations, or breaches any fire safety duty in any relevant enactment, the appropriate national authority or building control authority, without prejudice to their right to take proceedings for a fine in respect of the contravention, may by notice require the person responsible for the work by a date specified in the notice to—(a) pull down and rebuild the work,(b) remove and replace the work, or(c) effect such alterations in it as may be necessary to make it comply with the applicable building regulations.(2) If a person to whom a notice has been given under subsection (1) above (called a “section 36A notice”) is unable to do the work specified in the notice because the person has no power to carry out the required work to the building and the building manager will not facilitate the required work within a reasonable period— (a) the appropriate national authority or the building control authority may order that person instead to pay to it the amount of the expenses reasonably to be incurred to perform the work specified in the notice;(b) the appropriate national authority or the building control authority shall hold the amount so received to be used by the building manager to carry out the work specified in the section 36A notice; or(c) the appropriate national authority or the building control authority shall serve a section 36A notice on the building manager and subsections (3), (5) and (6) of this section shall apply.(3) If a person to whom a section 36A notice has been given fails to comply with the notice before the expiration of the date specified in the notice the appropriate national authority or building control authority may—(a) pull down and rebuild the work,(b) remove and replace the work, or(c) effect such alterations in it as may be necessary to make it comply with the building regulations, and recover—(i) from the person responsible for the work the expenses reasonably incurred by the authority in doing so;(ii) from the Scheme in whole or in part, on an interim or final basis, the expenses reasonably incurred or to be incurred by the authority in doing so; or(iii) from the person responsible for the work any amount paid to the appropriate national authority or building control authority by the Scheme which if recovered shall be paid to the Scheme.(4) A section 36A notice shall not be given—(a) in respect of work completed before 1 June 1992 or such earlier date as the appropriate national authority may specify in regulations, or(b) in the case of work completed after the coming into force of this section, more than 10 years from the date of completion of the work in question.(5) Work specified in the section 36A notice shall be carried out so as to—(a) reduce, insofar as reasonably practicable, the risk of noise, cold, damp and other hazards to residents while the work is carried out; and(b) maintain, insofar as reasonably practicable, the design, character and amenity of the structure as it existed prior to the notice being issued.(6) Where the person responsible for the work has been taking reasonable steps to complete the work but is unable to do so before the expiry of the date specified in the section 36A notice that person may apply to the person who issued the notice to request an extension of time which is reasonable in the circumstances.(7) Where a section 36A notice has been issued the person responsible for the work shall—(a) be liable for the costs of interim mitigation or safety measures and reimbursement of or compensation for increases in insurance premiums, in either case as may be specified in regulations made by the relevant national authority; and(b) reimburse qualifying tenants for any such costs that they have been or are required to pay, the amount of such reimbursement if not agreed to be determined by the appropriate tribunal.(8) Where the person responsible for the work has not complied with the section 36A notice before the expiry of that notice, or before the expiry of the extension of that notice under subsection (6), the appropriate national authority or the building control authority may—(a) order that person to pay to it the amount of the expenses reasonably to be incurred to perform the work specified in the notice; and(b) require that person to pay a penalty in respect of that failure to comply.(9) Notice of a penalty under subsection (8) must be in writing and specify the date before which the penalty is required to be paid.(10) In fixing a penalty under subsection (8) the appropriate national authority or building control authority must have regard to the length of time that has elapsed since the person on whom the penalty is imposed has known that the work was in breach during which the person has not remediated the work, the seriousness of the infringement concerned, and the desirability of deterring both the person on whom the penalty is imposed and others from failing to comply with notices under section 36A, and—(a) no penalty fixed under this section may exceed 10% of the turnover of the person responsible for the work (determined in accordance with such provisions as may be specified in regulations made by the appropriate national authority);(b) any sums received by a national authority in relation to a penalty are to be paid into the Consolidated Fund;(c) any sums received by a building control authority are to be set off against any expenses paid by that authority under this section, with any remaining balance paid into the Consolidated Fund.(11) For the purposes of this section “the appropriate tribunal” is—(a) in respect of a long lease of premises in England, the First-tier Tribunal; and(b) in respect of a long lease of premises in Wales, a leasehold valuation tribunal.(12) Any person subject to a section 36A notice may not pass on to any qualifying tenant any expense, in whole or in part, arising from—(a) the costs of compliance with any such notice; or(b) the costs of any penalty for failing to comply with such a notice.(13) The prohibition in subsection (12) shall have effect regardless of any provision to the contrary in any agreement made before or after the coming into force of this section.(14) In this section—“building manager” means the responsible person in relation to the building in question, as defined in Regulation 3 of the Regulatory Reform (Fire Safety) Order 2005 (S.I. 2005/1541) or any such other person that has the power to carry out the required work;“fire safety requirements” means any requirement in Part B of Schedule 1 to the building regulations in force as at the date of the initial notice or full plans application;“initial notice” has the same meaning as in section 47 of this Act;“full plans application” means the date of any application under section 16 of this Act or an application for building control approval under paragraph 1B of Schedule 1 to this Act, as the case may be;“long lease” has the same meaning as in sections 76 and 77 of the Commonhold and Leasehold Reform Act 2002; “parent undertaking” has the same meaning as in section 1162 of the Companies Act 2006;“person responsible for the work” means a person responsible for or a person responsible for commissioning the construction, erection or refurbishment of the work and, where that person is a company, any parent undertaking of that person;“qualifying tenant” means any tenant under a long lease;“relevant enactment” means section 1 or section 2A of the Defective Premises Act 1972.36B Disputes over section 36A notices given by building control authorities(1) The appropriate national authority must make arrangements with a body to establish a committee called the Technical Committee which, if established in accordance with the arrangements, has the functions given by this section.(2) If a question arises between the target of a section 36A notice and a national authority or building control authority as to whether work contravenes the fire safety requirements of the building regulations in force at a particular time, the Technical Committee has jurisdiction to decide that question.(3) The Technical Committee’s decision is binding on the building control authority and any potential target of a section 36A notice who was given an opportunity to make representations, unless the matter is referred to arbitration under section 36C.(4) The Technical Committee does not have jurisdiction to decide a question that has already been decided by a court.(5) A certificate by the appropriate national authority that a specified committee has been established in accordance with arrangements under subsection (1) is conclusive evidence of that fact in relation to the period for which the certificate is in force.(6) Arrangements under subection (1) must, in particular, include—(a) a presumption that the proceedings of the Technical Committee will normally be held in public;(b) a requirement that the decisions of the Technical Committee are freely available to the public;(c) that members appointed to the Technical Committee have appropriate skills to assess issues raised by section 36A notices; and(d) that members of the Technical Committee are independent of—(i) any party involved in the reference to the Technical Committee; and(ii) any other member of the Technical Committee, or panel of the Technical Committee, hearing that particular reference.(7) Arrangements under subsection (1) may, in particular, include requirements about—(a) the composition of the Technical Committee or the appointment of its members;(b) the right of the Technical Committee to form separate panels to give decisions on its behalf;(c) the Technical Committee’s procedure or how its procedure is to be determined (including requirements for its procedures to be approved by the appropriate national authority); or(d) review by the Technical Committee of its own decisions, including by a panel constituted of different members. (8) The Technical Committee’s procedure may, in particular, include provision imposing time limits for making an application for a decision or the taking of other steps.36C Challenging decisions of the Technical Committee(1) If the Technical Committee has decided any question under section 36B(2), any person on whom the decision is binding may, if dissatisfied with the decision refer the question to arbitration.(2) But a person may not refer the question to arbitration until any review process has been exhausted.(3) Any arbitration under subsection (1)—(a) shall be commenced by the person seeking arbitration requesting the President of the Chartered Institute of Arbitrators to appoint a single arbitrator to hear the dispute;(b) shall be conducted in accordance with the rules of the Chartered Institute of Arbitrators; and(c) shall not have the power to award any costs against the Technical Committee.(4) The Technical Committee need not, but may if so advised, participate in any arbitration proceeding under this section.(5) The relevant national authority or relevant building control authority must be given notice of any arbitration proceedings under this section and must be joined as a party to the proceedings if it so requests.(6) Arbitrations under this section are statutory arbitrations in accordance with the terms of the Arbitration Act 1996.(7) The relevant national authority may amend the identity of the arbitral body named in subsection (3) by regulation.36D Notification by person with an interest in the building(1) Any person with a property interest in a building may give notice to the appropriate national authority or building control authority that that person has reason to believe that a building has been constructed in a manner that contravenes any fire safety requirements in the building regulations.(2) Where a notice under subsection (1) has been given the appropriate national authority or building control authority must, before the end of the period of 90 days beginning with the day on which it receives the notice, publish a response stating how it proposes to deal with the notice, and in particular—(a) whether it has decided to take any action, or to take no action, in response to the notice, and(b) if it has decided to take action, what action it proposes to take.(3) The appropriate national authority must make regulations regarding notices under this section, in particular regarding —(a) the manner of giving notice;(b) the calculation of time; and(c) the designation of a proper officer or proper officers to receive the notices;and any notice under subsection (1) given in accordance with regulations made under this section shall be deemed valid.(4) In this section, “property interest” means an estate in fee simple or a term of years absolute (whether legal or equitable).36E Duty to provide information(1) Where an appropriate national authority or building control authority has received a notice under section 36D, or acting on its own initiative has reason to believe that a building has been constructed in a manner that contravenes any fire safety requirements in the building regulations, the relevant authority may by notice—(a) require the person the relevant authority reasonably believes to be the person responsible for the work by a date specified in the notice to provide copies of all such plans, documents or other information as the authority may reasonably require at a time and place, and in a form and manner, and to a person specified in the notice;(b) require any person to attend at a time and place specified in the notice to give evidence to the relevant authority or a person nominated by the relevant authority for the purpose;(c) require any person to supply the relevant authority with such estimates, forecasts, returns or other information as may be specified or described in the notice and at a time and place, and in a form and manner, and to a person so specified.(2) A notice under this section shall include information about the possible consequences of not complying with the notice.(3) The person to whom any document is produced in accordance with a notice under this section may, for the purpose of this Part, copy the document so produced.(4) No person shall be required under this section—(a) to give any evidence or produce any documents which he or she could not be compelled to give or produce in civil proceedings before a court; or(b) to supply any information which he or she could not be compelled to supply in evidence in such proceedings.(5) In this section “court” means the High Court of England and Wales.36F Fees to be paid to relevant authority(1) The appropriate national authority may by regulations make provision for the payment of fees to the appropriate national authority or building control authority in respect of—(a) any notice given under section 36A; or(b) any decision by the Technical Committee under section 36B.(2) Regulations under this section may in particular—(a) make provision as to when a fee or charge payable under the regulations is to be paid;(b) make provision as to who is to pay a fee or charge payable under the regulations;(c) make provision as to how a fee or charge payable under the regulations is to be calculated (including who is to make the calculation);(d) prescribe circumstances in which a fee or charge payable under the regulations is to be remitted or refunded (wholly or in part);(e) prescribe circumstances in which no fee or charge is to be paid; or(f) make provision as to the effect of paying or failing to pay a fee or charge in accordance with the regulations.(3) Regulations under this section may—(a) contain incidental, supplementary, consequential, transitional and transitory provision and savings;(b) in the case of regulations made by virtue of subsection (2)(f) or subsection (3)(a), amend, repeal or revoke any provision made by or under this Act or by or under any other Act.(4) A relevant national authority or building control authority determining the amount of fees or charges in pursuance of provision made by regulations under subsection (1) must secure that, taking one financial year with another, the income from the fees or charges does not exceed the cost to the relevant authority of performing the function or doing the thing (as the case may be).(5) For the purposes of this section, a financial year is the period of 12 months beginning with 1 April.36G Penalties: failure to comply with information requirements(1) Where the appropriate national authority or building control authority considers that a person has, without reasonable excuse, failed to comply with a requirement imposed on the person under section 36E (Duty to provide information), it may impose a penalty of such amount as it considers appropriate.(2) The amount may be—(a) a fixed amount at level 5 on the standard scale,(b) an amount calculated by reference to a daily rate, or(c) any combination of a fixed amount and an amount calculated by reference to a daily rate.(3) In relation to a penalty imposed under subsection (1)—(a) in the case of an amount calculated by reference to a daily rate, the daily rate may not exceed level 4 on the standard scale;(b) in the case of a fixed amount and an amount calculated by reference to a daily rate, the aggregate amount may be at level 5 on the standard scale.(4) In imposing a penalty by reference to a daily rate—(a) no account is to be taken of any days before the service of the notice under section 36E, and(b) unless the authority determines an earlier date (whether before or after the penalty is imposed), the amount payable ceases to accumulate the day on which the requirement concerned is satisfied.36H Power to make fire safety remediation regulations(1) The appropriate national authority may, for any of the purposes of securing the health, safety, welfare and convenience of persons in or about buildings and of others who may be affected by buildings or matters connected with buildings, make regulations with respect to the matters mentioned in subsection (2) below.(2) Those matters are—(a) when a section 36A notice may be made only by either the appropriate national authority or a building control authority;(b) where there is more than one person responsible for the work, the designation of a lead person responsible and the contribution to be made by other responsible persons;(c) where money is paid under section 36A(2) to the relevant authority, the manner in which that authority shall hold that money and the conditions applied to it.(3) Regulations made under subsection (1) above are known as fire safety remediation regulations.(4) The power to make fire safety remediation regulations is exercisable by statutory instrument, which is subject to annulment in pursuance of a resolution of either House of Parliament.”Member’s explanatory statement
This probing amendment is consequential on the Building Indemnity Scheme, expanding and improving existing enforcement powers under the Building Act 1984.
Lord Young of Cookham (Con)
My Lords, in moving Amendment 24 in my name and that of my noble friend Lord Blencathra, I will also speak to Amendment 130 and touch on my noble friend’s amendments. I begin by welcoming the fact that he and Michael Gove have made substantial advance on the Government’s initial response to the cladding crisis. I am very grateful for that and for the role he has played.
For the leaseholders involved, this group of amendments is probably the most important in the whole Bill. The object of my amendments is to deliver the Government’s policy that, so far as historical defects are concerned, the polluter should pay and not the leaseholder. I begin by reminding the Committee of the explicit commitments given by the Secretary of State that underpin that policy. In his Statement on 10 January, he said:
“We will take action to end the scandal and protect leaseholders … We will make industry pay to fix all of the remaining problems and help to cover the range of costs facing leaseholders.”
When pressed by an opposition MP, the Secretary of State said in reply:
“She specifically requested that we provide amendments to the Building Safety Bill to ensure that there is statutory protection for leaseholders. That is our intention—we intend to bring forward those amendments—and I look forward to working with her and colleagues across the House to provide the most robust legal protection.”
Later he clarified what he meant by statutory protection:
“First, we will make sure that we provide leaseholders with statutory protection—that is what we aim to do and we will work with colleagues across the House to ensure that that statutory protection extends to all the work required to make buildings safe.”—[Official Report, Commons, 10/1/22; cols. 284-291]
Finally, in his evidence earlier this week to the Select Committee in another place, the Secretary of State said:
“The approach that we have put forward is one that provides them”—
that is, the leaseholders—
“with the maximum available level of protection.”
We need to build on the substantial advance that I mentioned earlier, because the amendments tabled by the Government so far do not deliver the policy I have just quoted: statutory protection that
“extends to all the work required to make buildings safe.”—[Official Report, Commons, 10/1/22; col. 291]
The amendments proposed are not “the most robust”, and nor do they provide
“the maximum … level of protection.”
Why is that? It is because not all relevant buildings, leaseholders and defects are covered. The object of my amendments and those of others is to deliver the policy, fill in the gaps and make the protection more robust.
I have one other objective. I believe that in cases where the Government are unable to persuade those responsible to do the work voluntarily—I suspect there will be many—remedial work should commence promptly, without waiting for the proceeds of the levy to come in or for people to be fined after protracted litigation. It is crucial to make the buildings safe sooner, to lift the blight on sales and to let people get on with their lives. Under the current government proposals, where the developer will not fund the work, nothing happens until all the money is in place, including the contributions that the Government expect leaseholders to pay, which many will not be able to afford. We cannot wait that long.
My amendments are designed to provide a speedy and efficient route to getting buildings remediated at the cost of the person responsible and, when that is not possible, by a levy on the industry. I claim no exclusivity as to how this is done. We may need to pick and mix with some of the other proposals in this group, particularly those in the name of my noble friend Lord Blencathra and the noble Earl, Lord Lytton, who brings to this issue the wealth of professional expertise. I am grateful to Sue Bright and Liam Spender, who have given me advice in a personal capacity, and to the Leasehold Knowledge Partnership, which services the all-party group on this subject.
My proposal would operate by inserting provisions into the Building Act 1984 and, as my noble friend reminded me, in an earlier incarnation I put that on the statute book. At some point, I hope that the statute of limitations will kick in and hold me not responsible for all the things I may have done in the past. That amendment, however, would enable an appropriate authority, either the Secretary of State or the building control authority, to serve a notice on those responsible for fire safety defects that are in breach of either building regulations or the “fit for human habitation” requirements in the Defective Premises Act 1972, which I did not put on the statute book. Leaseholders can also start that process and request a relevant authority to act. When the polluter no longer owns the building, the relevant authority can recover the money from the polluter and require the work to be done. If the polluter cannot or will not pay, the resources to do the work come from the building safety indemnity scheme established under Amendment 130.
The amendment also proposes an absolute prohibition on any of these costs being passed on to long leaseholders through variable service charges, filling in one of the gaps I referred to earlier. There are penalties on the polluter for noncompliance with a remediation notice; they are also liable to pay the costs of mitigating measures in the meantime. These provisions incentivise prompt action rather than protracted delay. In the event of a dispute as to whether the work contravenes building regulations, this will be decided by a technical committee, the decision of which will be binding. Any challenge to its decision can be referred to arbitration. I believe this is quicker and cheaper than the complex dispute process in government Amendment 108.
These changes to the Building Act will require money to pay for remedial works while the authorities step in, which brings me to Amendment 130. This would create a comprehensive levy scheme to be established. Contributors to the scheme would include all applicants for building control approval and suppliers of construction products. Leaseholders and a relevant authority, acting under Section 36A, would be able to apply for grants under the scheme. I cannot claim authorship of this part of the proposal; it simply mirrors the Government’s own idea of linking future building control approval to payments into the scheme. The amendment proposes that anyone who does not pay a levy when due cannot receive building control approval for any works.
Those are my proposals, and I turn now to the Government’s amendments, covering some 24 pages of legal text. The Government’s objective, although not spelt out in these terms, is to create what has been called a statutory waterfall. The waterfall is intended to work as follows: develops and cladding manufacturers are expected to pay first; for cladding remediation, government funding then kicks in through the building safety fund, then freeholders are expected to pay next. Finally come the leaseholders, who are expected to pay only a capped amount towards non-cladding costs.
Each layer of the waterfall has to be put in place before you get to the next one. Its aim is to ensure that any contributions from leaseholders become, legally, the last resort. This addresses the conflict of interest inherent in the current leasehold system. At the moment, landlords can spend leaseholders’ money without any effective control. The fact that freeholders will be on the hook to pay will concentrate their minds on the question of cost-benefit analysis. Are the works that they deemed necessary really necessary when they did not have to pay? Are they still necessary when they do?
The current Bill and the government amendments do not have adequate measures to ensure that the developer responsible for the defects must pay. With no voluntary settlement, the only route to recover would be through costly and risky litigation, with the leaseholders or freeholders responsible for pursuing a well-resourced developer through the courts, potentially delaying remediation for years and incurring higher insurance premiums and, in some cases, waking watches. Amendment 24 avoids this.
There are a number of other problems with the Government’s approach. I start with putting freeholders in the firing line. Where the developer is the freeholder, that is wholly understandable, but resident-owned buildings are excluded from the Government’s proposed protection by Amendment 63. That is because leaseholders in those buildings are also the freeholders—they have enfranchised. It is then up to the residents to sort out their claims against those responsible. When there is no one to claim against, this may mean that those residents must finance all the non-cladding remediation costs themselves. This is plainly wrong. Many leaseholders have used legislation—which, I confess, I put on the statute book—encouraging them to enfranchise and buy the freeholds. This is a welcome step away from the feudal system of leasehold, which the Government have pledged to abolish, and towards commonhold. However, those leaseholders who have enfranchised are every bit as innocent as those who have not, yet they are excluded from the support in the government amendments.
Other freeholders now find themselves in the line of fire. Freeholds are often owned by housing associations, charities, local authorities and pension funds, which have bought freeholds and their ground rents—in the case of pension funds, to match their liabilities on annuities. They have found themselves exposed to major costs, although they were not responsible for the defects. It is not clear why pension savers should pay if they did not pollute. These freeholders, like the leaseholders, bear no responsibility for causing building safety defects, and they should not bear the cost. In some cases, the costs of remediation will outweigh the balance sheet of the freeholder, threatening insolvency. Has this all been thought through? A solution would be for the Government to propose to meet any costs not met by the developer, including cladding repairs in particular.
Under the government amendments, a developer must pay only if it is still the landlord. If it has sold the building, it is off the hook, under Amendment 76. If the polluter is to pay, it is not clear why there should be these exclusions, and there must be a direct route to hold polluters responsible that does not depend on leaseholders bringing claims under the Defective Premises Act. Even if the developer is the landlord, it can recover costs from all leaseholders who are not capped by the capping provisions—another important deviation from the policy of protecting the leaseholder. This is the case even though the developer is responsible for the defect and has, for example, failed to install cavity barriers. That is likely to be a common scenario.
There are other important exclusions which breach the policy that the polluter, not the leaseholder, should pay. Where a building has non-cladding defects and is more than 11 metres tall, leaseholders have to pay up to £10,000 outside London and £15,000 in it. Under Amendment 92, these payments can be spread over five years, but that conflicts with the requirement for all funds to be in place before the work can commence. Who will fund the difference? There may be buildings where there are only non-cladding defects. If the bill for remediation is £10 million and there are 250 flats, leaseholders must pay £40,000 each. They are subject to a cap of £10,000, but where does the missing £30,000 come from—£7.5 million for the whole building? I see that I have already caused some consternation on the Front Bench.
A further important exclusion is for buildings under 11 metres. Leaseholders in those buildings, or buildings with fewer than five storeys, get no assistance for cladding or non-cladding remedial works and are exposed to unlimited costs. The Government’s view is that such buildings are not at sufficient risk to justify remediation, but this will be a bitter disappointment when leaseholders in those buildings who are not responsible for the defects face costs. It is incompatible with the principles I set out earlier.
Another exclusion is for those who have invested in buy to let who have more than one such property. The press release that the Government published on 14 February, along with the amendment, said:
“New clauses will also enshrine in law the commitment the Levelling Up Secretary made in the House of Commons last month that no leaseholder living in their own home, or sub-letting in a building over 11m, ever pays a penny for the removal of dangerous cladding.”
Amendment 64 contradicts that assurance for those buy-to-let landlords who own more than one such property, the majority of whom are individuals and not property barons. They bear no responsibility for the defects. I think that Amendment 65 addresses that issue in a later group.
The Deputy Chairman of Committees (Baroness Henig) (Lab)
My Lords, the noble Baroness, Lady Brinton, is taking part remotely, and I invite her to speak.
Baroness Brinton (LD) [V]
My Lords, I wish to speak briefly to the amendments in this group, particularly in relation to the issue of perpetrator pays for fire hazard remediation—work that must be carried out speedily to ensure the safety of the inhabitants of the building. Amendment 24 and others, introduced by the noble Lord, Lord Young of Cookham, sets out the removal or alteration of offending work that contravenes fire safety regulations. It is interesting to note that he joins a group of former Ministers who are now trying to remedy the problems that were around during their time as Ministers. I think we should thank them not just for their humility but for their acknowledgment, through their amendments, that change is needed even more urgently than ever.
The noble Lord is right that his and other non-government amendments in this group are critical to delivering what the Government want to achieve, despite their own proposals being inadequate. I echo his point that if the Government think that things can be done more effectively to achieve the objectives that he outlined, I suspect that the Grand Committee would want to hear them.
The Minister spoke earlier of his surprise about the mechanisms of current building work guarantees and the role of insurers and warranties. Insurers have, rightly, made it clear that they are not responsible for this crisis. Insurance is not eligible in the event of defective work, and insurers never sign off work; they rely on the assurances of the companies they are insuring that the work is safe. The practical problem is that too many companies have relied entirely on their insurers. In my former professional life as a Cambridge college senior bursar, I have been that client who has sat in the middle and watched arguments about who should pay for defective work on blocks of flats, including works on a fire hazard in a medium-rise building.
The problems we faced as a college, even though they were with student accommodation, were absolutely nothing compared to the problems that leaseholders and renters in blocks of flats face. Talk to any of the current leaseholders living in blocks known to be unsafe: even with waking watches overnight, families are constantly on edge, and too many face the threat of worthless homes that are unsaleable until the perpetrator pays principle is fully brought into effect. I think “perpetrator pays principle” will be one of the next speech therapist phrases that people have to articulate; it is quite difficult to get your mouth around. The current government proposals do not take into account too many leaseholders who, like those in high-rise cladding buildings, are also not responsible for the defective work done by others.
Amendment 118 makes it clear that those who should pay, in the event of a block of flats having fire hazards, are those who did the work itself. The Government’s current proposals do not go far enough and still leave too many loopholes for those living in unsafe flats. This is the moment that legislation can and should make it absolutely clear that the perpetrator is responsible and must effect the remediation work and pay for it. In the event of a gap between that work being necessary to be carried out and it being agreed that the perpetrator should pay, the Government should indeed step in to help out.
Lord Greenhalgh (Con)
My Lords, before I get my bearings, it is always good to have a few Latin phrases. “Quis custodiet ipsos custodes?”—well, I am just going to say, “Res ipsa loquitur”.
This is the “PP” group of amendments: “polluter pays” if you are my noble friend Lord Young, or “perpetrator pays” if you are the noble Earl, Lord Lytton. Although I will respond formally at the end— I am now speaking to the government amendments—I honestly agree with the sentiment of working with noble Lords and that a pick-and-mix approach is the right way forward. I am very keen to do that between now and Report. That is not in my speaking notes. The important thing is that we need a practical approach. We need one that works in law and in practice, and of course we want the polluter to pay.
I have taken noble Lords’ amendments and sought external counsel opinion, off my own bat, from a leading QC who deals with these issues in the courts to get their opinion. While I know my noble friend has tremendous ministerial experience, he perhaps has not always been in the courts when these things go into dispute. I know the noble Earl has considerable professional experience, but, again, this has to work in law as well as in practice. As the Committee will all appreciate, any scheme that requires government funding is not just a matter for this department; it is a matter for the Government and, in particular, needs Treasury approval.
I have always accepted that, in order for the polluter to pay, we have to have something that establishes liability at the building level. It is not an either/or. That is not to say that the Government’s approach is wrong; I think the Government’s approach is right. We have to have a waterfall effect that goes down the list of the polluters but recognises that not all freeholders are equal—some are “more equal than others”, to quote George Orwell—and that perhaps assignment of liability can be varied in regulation to reflect that. But all that detail is something that happens at later stages of the Bill, as my noble friend will know. Perhaps we will tease out some of those points in due course.
Clearly, if you are a developer like Ballymore that retains its freeholds, it is very easy. But if you are a developer like Berkeley, which often sells off its freeholds to a freehold investor, it becomes slightly more complex. But the intention of the Government is certainly not to let the Berkeley Group off the hook because it took another £20 million or £30 million by selling its freeholds off to another group to manage. It is still in the frame for the buildings that it built. I mention those developers just as examples, because we are obviously talking about a crisis that affects all the major housebuilders, as they freely acknowledge—not just the large ones but the medium and small ones, which have all contributed to a crisis that has brewed up over decades.
Let us move to the government amendments. Following my 11 January repeat of a Statement to this House, we have been clear on our expectations that developers should commit to self-remediate all unsafe high and medium-rise buildings for which they are responsible. They should agree contributions to fund the remediation of all cladding on buildings of 11 to 18 metres. The department has been in discussions with industry leaders on this matter and is making good progress towards a solution. I have had discussions with the medium-rise developers and have been alongside the Secretary of State in all those substantive discussions. However, should we need to take action against those unwilling to make these commitments, amendments tabled in my name will make it possible to impose a solution in law and make sure that developers and manufacturers take responsibility for rectifying building safety defects. I will now outline these important government amendments.
The first measure we are proposing as part of our package to ensure that the burden of paying for fixing historical building safety defects does not fall on leaseholders or taxpayers is a group of amendments to the building safety levy. They are an important part of the solution as they allow the building safety levy to be imposed in relation to building work going through the building control process on all residential buildings, not just buildings over 18 metres or seven storeys. This will enable the Government to raise funds to remediate cladding should the industry fail to step up and pay for the problems it has caused. It is our intention to set out in secondary legislation the levy rates and the details of who the levy applies to. By then negotiations with industry should have been concluded.
I now turn back to the package of government amendments and outline the further amendments that we are proposing to ensure that developers and manufacturers take responsibility for rectifying building safety defects. This package of amendments addresses many of the concerns highlighted today. They introduce measures to allow us to distinguish between companies that commit to shouldering their share of the blame and those companies that do not. The measures will incentivise industry actors to take responsibility in resolving issues with unsafe buildings, through firms committing to remediate buildings with which they are associated, and to contribute towards the funding of remediation of other unsafe buildings.
The first two amendments in this package would give the Secretary of State a power to establish a scheme or schemes for the building industry. This would act as a means of identifying which industry actors, including developers, and cladding and insulation manufacturers, have done the right thing and committed to act responsibly. Regulations will set out which persons in the building industry may be members of the scheme. In the first instance, the Government are minded to focus this measure on major developers of residential buildings and manufacturers of cladding and insulation. We are keeping this under review as talks with industry continue. Industry actors will be considered “responsible” if they meet published membership criteria for a scheme for which they are eligible. The membership criteria for a scheme will be set out and will include a commitment to rectifying building safety defects. The distinction between responsible actors and actors who have failed to do the right thing will be taken into account by the Government and regulators in their interactions with firms that are eligible for inclusion in a scheme.
The third amendment would give the Secretary of State a power to block developers that have failed to act responsibly from carrying out development for which planning permission has been granted, and to make sure that any breach of this block would be subject to enforcement action. The amendment would also allow the Secretary of State through regulations to require a developer to serve a notification of proposed development commencement and to prevent the grant of certification of lawful development for affected developers, should they seek it.
The fourth amendment would give the Secretary of State the power to prevent developers that have not committed to act responsibly, as set out in regulations, obtaining building control sign-off on their developments. This will make selling developments difficult for these developers, as building control approval is in most cases a prerequisite to occupancy and sale. The building control prohibitions will be imposed by regulations that will also set out details such as prescribed documents.
These new measures will help to make sure that while responsible industry actors can go about their business freely and with confidence, others will face significant legal, commercial and reputational consequences. They align with two of the principles set out by the Secretary of State: that the industry must pay for remediation and that the burden should not fall on leaseholders or the taxpayers. These measures will ensure that the burden is shared among the relevant industry actors while protecting leaseholders and the taxpayer. We cannot continue to allow those who are unwilling to commit to resolve the building safety crisis to have a role in building homes of the future. These amendments are being tabled to ensure that we have the legislative provision to help us to do this. I beg to move.
The Earl of Lytton (CB)
My Lords, as your Lordships will know, I have three amendments in my name in this group. I will speak first to Amendment 115 and then to Amendments 118 and 119, collectively now branded the “perpetrator pays” amendments. I was very pleased to hear the Minister’s prefatory comments, because he is absolutely right. The amendments in the name of the noble Lords, Lord Young of Cookham and Lord Blencathra, and mine come from fundamentally the same hymn sheet. I impress on the Minister: never mind the differences in approach, there are core, fundamental principles that lie behind them all and which, I would like to think, we hold in common. Those principles must be carried forward into the Bill. At the very least, the Minister must come back, not later than on Report, with a version that will hopefully attract some consensus.
I was very glad that we agreed on the earlier point that non-compliant construction is simply unlawful. It is just a real shame that this has been going on for 30 years. One of the problems is that building inspectors are not on site full-time but call to check at certain stages only, so nearly the entire process of receiving good, compliant construction is based on the trust placed in those who direct matters on the site, plan the work, procure materials and labour and oversee standards. I am so glad that my noble friend Lord Thurlow referred to clerks of works. I totally agree with him. The progressive decline in their use is part of a cost-cutting philosophy.
According to the fire chiefs’ council, whose representative was, I believe, giving formal evidence to a parliamentary committee in December, the failings are still ongoing, so the matter is urgent. It appears that many of the approved inspectors are in far too close association with those whose works they oversee.
The problem we have here is one of weak claimant and powerful defendant, and it is that fundamental imbalance that prevents things such as acting against defective workmanship that may amount to unlawful activity. That is why we have to do something to redress that.
My amendments were reworded with “the perpetrator pays” on the advice of the parliamentary clerks—I am very grateful to them for that, because it is a much snappier title than “polluter pays”. Amendment 115 inserts a new schedule, which outlines a remediation scheme. I use the word “outlines” advisedly, because my amendments do not seek to drill down into the administrative detail; that is a job of work for the department to take forward. The amendment tries to set certain principles.
Amendment 118 sets the principles of “the perpetrator pays”, and Amendment 119 is simply consequential. I am indebted to parliamentary counsel Daniel Greenberg for his unstinting efforts in drafting them. With respect to the Minister’s comment, I am indeed a chartered surveyor and no lawyer, but this has come not from my pen, as it were, but from that not only of Daniel Greenberg but of leading construction counsel. They have checked both the construction contractual arrangements and ECHR law and tried to proof the amendments against the risk of sequential legal action and, in particular, judicial review— all of which could effectively unseat the entire process and render anything that we might try to achieve of no effect simply because of the costs that would be faced by anybody trying to exercise it.
I also thank the huge number of leaseholders, who have been appallingly affected, for their patience and stoicism—but also those who have written to me, expressing their support for this group of amendments. I am especially glad that the noble Lord, Lord Blencathra, added his name to Amendment 118. I thank him for that, because this is not a partisan matter but a question of morality and justice, preventing contagion from irreparably damaging a market sector. That is the other piece of the equation at risk here. This is not anti-developer; my belief is that there are many conscientious developers, but a number of significant players have allowed standards to drop. It is those latter that I wish to single out and attach responsibility to, where it properly lies.
I say to all those responsible in that respect that, with all the plethora of information about cause and effect, the advice and case studies and their long experience and their own knowledge of the contracting world, what is it that they did not understand about all this? It really beggars belief that we have got to this stage. My purpose is to make the developer strictly liable for demonstrable failures to meet the regulatory standards at the time of works. I seek to deliver on the sentiments voiced across the House at Second Reading and expressed by Ministers in parliamentary proceedings and elsewhere that leaseholders should not pay the remediation costs arising from fundamental construction failings—and in connection to my amendment, that relates to fire safety. I am holding the Minister to that express promise.
Just to go into the amendments in a little more detail, noble Lords will of course note the salient characteristics set out in principle. I shall run through it as a summary. Leaseholders should not be responsible or liable for fire safety remediation costs, not even to the extent of Florrie’s law capping. It just is not appropriate. They have been led to believe that they would be relieved of paying for things for which they were wholly innocent—points consistently made by the noble Baroness, Lady Pinnock, and points still ringing in our ears from the passage of the Fire Safety Bill onwards. Secondly, the taxpayer should not foot the bill, other than as an extremely limited last resort—and I mean extremely limited—and for interim funding to get a remediation scheme in place, as bridging finance. The fallback under my amendments is not the taxpayer but the industry that allowed these practices, and what amounts to a gross breach of trust, to take root. The burden should fall on those with involvement in these practices, directly or indirectly, and not attach to wholly innocent and diligent operators. That is a matter of straightforward fairness.
The amendments are tightly focused on originating fire safety hazards in residential blocks—not any wider construction faults or building types. This is deliberate, because of the sudden, unplanned and catastrophic nature of building fires, especially when occupants are off-guard and possibly asleep, with the custody of minors and even with disabilities, and thus at their most vulnerable. It follows the thread set in place by Dame Judith Hackitt. Expanding beyond that focus would be unhelpful at this juncture.
The proposal covers residential buildings of all heights. As I observed at Second Reading, when a low-rise building in Worcester Park burned down in 2019, as was referred to last time, it could so easily have cost lives. Building height is not the sole determinant factor of high risk.
I intend to attach blame firmly to the perpetrator in a manner that is inescapable liability following the establishment of defect as fact. The perpetrators may be numerous, but the claim will be made against the developer or lead contractor on a joint and several basis, leaving them to pursue the wrongdoers in satellite litigation, if they choose, after making the payout or fixing the defect. These liabilities should not be a wider industry or societal collective responsibility; that is what bad people like to achieve—spreading their risk among the rest of us. I say no to that, and no to any amendment to this Bill that has that effect. I consider it also as a factor that leads to uncertainty and unconstrained risk response in insurance terms. In other words, it allows the contagion to spread where it should not.
The parties should be on even playing field, not one where there is trial by bank balance or a gravy train for litigators. A scheme has to be straightforward and transparent, not mired in complicated process, even less labyrinthine administrative hurdles. It should be operable by individuals or their agents on a per-building basis, and I was pleased that the Minister referred to the per-building approach. It should not discriminate between types of owners, for reasons we have already heard. It is indefensible that liability for defects should depend on the status of the injured party or the nature of their tenure, as if wrecking somebody’s pension pot or a social landlord’s finances is in some way acceptable, when for the homeowner it is not.
Landlords have moral obligations towards their tenants as well. There is that trickle-down effect of responsibility, so I say no, not even by reference to supposed wealth nor by dint of some anti-freeholder prejudice. You either subscribe to the rule of law for all or you deny credibility and confidence in government, and potentially an entire market sector, as well as evading the proper exercise of justice. I would make only one slight exception: my amendment would also protect housing associations which have purchased in good faith. The only situation where that might not pertain is where the housing association was itself the developer. However, I defer on any of that to my noble friend Lord Best, because I suspect that there are different structures within housing associations that deal with the development on the one hand and the housing association function as a quasi-charity on the other.
Just to make sure that everybody is focused on matters, the idea in these amendments is to propose a public register of determinations so that everybody knows what is going on. I hope that, going forward—this is critical—it should serve to eliminate the perverse incentives and poor culture in the race to the bottom on cost-cutting and safety, which the noble Baroness, Lady Brinton, referred to.
I think it will be found that the amendments are clear, written in plain English and perfectly understandable. As I say, they do not set in place detailed definitions or administrative schemes but seek to establish principles. I consider that they would greatly simplify what I and, I believe, other noble Lords and the Government are seeking to achieve. They would, I hope, minimise the administrative burden on government and the attendant risks of action on defects and their enforcement, but a clear statement of principles must come first.
I do not think I have ever received such a volume of correspondence on any matter in which I have been directly involved in this House as has happened here. This has come in personal emails from innumerable leaseholders and from residents’ groups, management groups, mortgage lenders, property consultants, professional bodies including the RICS and ARMA, and the British Property Federation. Even a former Australian state premier, Ted Baillieu, who now heads that state’s cladding taskforce, thinks this is a game-changer that it will look to as well. The eyes of many people in this country and elsewhere are on us.
In particular, I had an email yesterday from a Mr O’Connell, vice-chair of the Lancaster West Estate Residents’ Association—the estate that includes Grenfell Tower—in support of this. The Mayor of London has also indicated his support. I thank them all, and the social media have been absolutely buzzing. I hope the Minister will be able to repeat his previous support for the principle and that we can move on with this. I would like to make one or two comments on some of the other amendments in this group, if I may be given the time to do so.
Amendment 24, in the names of the noble Lords, Lord Young of Cookham and Lord Blencathra, is one that I would have contemplated tabling, because I felt it was so important for the debate. I am very glad that the two of them have tabled it. I understand that it was drafted by Professor Susan Bright and her husband. I have had the opportunity and the pleasure of meeting both of them virtually, at an online meeting. Professor Bright is an academic of absolutely unimpeachable principles and a stalwart campaigner for leaseholder justice, so nothing I say about this amendment or anything else should detract in any way from the high regard in which she is rightly held. I feel that both she and the noble Lords are very much on message about the necessity of freeholder redress. If there is a divergence, it is on methodology rather than on the principle, as I have said.
Lord Blencathra (Con)
My Lords, since it seems de rigueur to start with a quote, I suggest we start with Jean-Baptiste Alphonse Karr:
“Plus ça change, plus c’est la même chose”—
the more things change, the more they remain the same. However, we simply cannot have that quote for this Bill; we do not want things to remain the same. That is why I prefer the quote from Heraclitus the Obscure of Ephesus: “panta rhei, ouden menei”—all things change, nothing remains. That, I suggest to my noble friend, should be the strapline of this Bill, if he cannot put it into the Long Title.
As my noble friend Lord Young of Cookham said, this group contains probably the most important amendments in the whole Bill, along with government Amendment 114 on the cost schedule. That is why we will probably spend more time on it than any other. We have four major groups of amendments here, and we are all seeking to do the same thing. We have the Government’s amendments, my noble friend Lord Young’s amendments, those of the noble Earl, Lord Lytton, and mine. I am sorry that I have about half the amendments in this group. The sets from us Back-Benchers are all complementary. We are all in the same boat; we may have slightly different strokes, but we are all rowing in the same direction as we seek to toughen up the Government’s position, which is a very good start.
First, my noble friend the Minister said on Monday—when I was unable to be present—that he found my speeches priceless. I take exception to that. He is wrong; they are not priceless. If the Government accept my amendments, they will have a huge cost attached, starting at £15 billion. Every penny will be paid by the builders and developers, and that sum is just the excessive profits they have made in the last few years. They are not priceless—there is a good cost attached.
I am very pleased to be able to support my noble friend Lord Young of Cookham’s amendment and the excellent way he has introduced it today. I will not repeat his arguments, since I cannot improve on a single word of them. I also commend Amendment 115, in the name of the noble Earl, Lord Lytton. He is also an expert in these matters, as we heard just now. I particularly like his introduction to the amendment:
“The purpose of the FHRS must be to ensure that residential blocks of flats with fire hazards are made safe … speedily, efficiently, effectively and proportionately … without recourse to lengthy and expensive legal proceedings … without cost to leaseholders or occupiers, and … in accordance with the perpetrator pays principle.”
He replicates those principles in Amendment 118, which I am also pleased to support.
Now that your Lordships have heard from the experts, this enthusiastic amateur will attempt to explain his amendments in this group. Like my noble friend Lord Young of Cookham, I agree that my noble friend and the Minister, Michael Gove, have transformed the landscape of fire remediation works, and the government amendments to this Bill go a very long way to delivering on the pledge that no leaseholder will pay a penny and that the perpetrators will pay. But as my noble friend Lord Young of Cookham pointed out, not all relevant buildings are covered, not all leaseholders are covered and not all defects are covered. The object of my amendments—and of others—is to deliver the policy, fill in the gaps and make the protection more robust.
Two weeks ago, a noble Lord following a speech I made in the main Chamber said that I had, in my usual way, set out an absolutist position, but that I was nevertheless right to raise the issue, et cetera. So, like the noble Earl, Lord Lytton, I have attempted in my Amendment 148 to set out some key building safety objectives to which the Secretary of State and everyone else exercising functions under the Bill must have regard to when making regulations.
I do not like these EU or UN regulations which begin with dozens of meaningless “whereas this” and “whereas that”, et cetera, and our Office of the Parliamentary Counsel does not like declaratory objectives which do not actually make substantive law. Nevertheless, when I was chair of the Delegated Powers Committee, I and my committee heavily commended my noble friend’s boss, Michael Gove, on the Fisheries Act—which has now passed—because it began with a series of objectives, which we had never really had before in legislation. We said that it was a wonderful way to start the Act, and that got universal approval from all the countries of the union. My noble friend should go back to his boss and say that, if it was good enough for the committee and I to commend him then on setting objectives at the start of the Bill, he should adopt either the Lytton principles or the Blencathra objectives and put them at the start of this Bill, setting the scene for what we want to do in future. I invite colleagues to look at my Amendment 148, and I promise then that I will not read it out to them. I will read out my other amendments, however.
The concept behind my Amendment 34 is very important since it relates to Clause 57, one of the most important clauses in the Bill. But the clause has a weakness, in my view, in that it gives the Secretary of State various regulation-making powers to create a levy or levies but does not set a maximum limit on what the levy might be. From my experience in the Delegated Powers Committee and the legal advice we received, any general levy-making power in regulations is highly vulnerable to judicial review and challenge unless the Secretary of State is operating within maxima parameters. It does not matter what those maxima are so long as they are in the primary Act. That means that any levies set by the Secretary of State under that maximum cannot be challenged on the grounds that they are unreasonably high.
The big building companies have already promised— I think I read this in an article last week—to challenge Gove and throw millions at lawyers to sabotage the whole levy system and claim that regulations setting the fees are ultra vires. The levels I have set out in my amendment may seem excessive; I doubt that the Secretary of State would ever need to set a levy at that rate, but it legitimises any levy he sets under that maximum parameter.
My Amendment 39 simply states that
“‘person’ includes bodies corporate including a holding company or special purpose vehicle”.
In reading the Bill and the government amendments, I think that where the Government have used “person”, it includes bodies corporate, so I will not labour that point. I would just like an assurance that in every circumstance where the Bill talks about the obligations on a person or a levy on a person, it would include bodies corporate.
My Amendment 78 seeks to insert a new clause into the Bill setting out what I call the “Fire hazard remediation objectives”. As I said about my Amendment 148, these objectives may not be perfect, but I am adamant that the general concept of them is.
This very important Bill started as a bit of a dog’s breakfast, amending various Acts and introducing the idea of a regulator—not a coherent Bill in itself but one that amends this, that and the other. However, since the Bill left the Commons, the Government have rightly—I approve of it—hijacked their own Bill by introducing all these amendments, which give the Bill a whole new importance. But they are scattered around it, and there is no coherence. That is why I repeat my Second Reading plea that the Bill team and the Office of the Parliamentary Counsel reorder this Bill for Report and put all the new clauses relating to leaseholder protection measures and perpetrator pay measures into two new parts at the front of it. It would not just be window-dressing; it would make a statement to all the companies involved in building construction that we, the Government and this Parliament, are taking very seriously all aspects of making the perpetrators pay and protecting leaseholders. I suggest that it would also make the Bill a dashed sight easier to read.
The Lord Bishop of St Albans
My Lords, I shall speak to Amendment 35. I was expecting others to speak to it first, but I shall address it briefly. I declare my interest as a vice-president of the Local Government Association. I, too, am an enthusiastic amateur and rise with great hesitation. I also apologise for arriving fractionally late and going in and out, but I have amendments about to run on the Judicial Review and Courts Bill, so I have been trying to balance things in two places.
Whenever a new tax is applied to an industry or business, it is extremely rare that a given organisation simply chooses to absorb that additional cost. In the overwhelming majority of instances, the tax will be passed on to the consumer as a price rise. Businesses rarely undermine their own bottom line when there is little competitive advantage for doing so and where the cost can be simply passed on to the consumer without hurting the demand for their product.
The market is such that there is a massive, chronic shortage of supply of homes in the UK. This undersupply means that, in reality, developers know that demand will not greatly suffer as a result of the building safety levy. They will not absorb the tax. I fear it will simply be priced on top of the cost of new properties. After all, this is the free market, and we cannot escape the fact that that is likely to be the consequence of the levy.
I am not at all opposed to the levy in itself. The aim as outlined by the Government is to recoup money from the industry to part fund the hugely welcome grants that the Government have provided to fund cladding remediation. It is morally right that developers contribute via this charge for their past mistakes. What I am concerned about and object to, which is why I put my name to this amendment, is the idea that social housing providers will also have to shoulder the building safety levy, if I have understood it correctly.
As I said, taxes rarely get simply absorbed. The majority of social housing providers, as in housing associations, are non-profit, so the question is: where will they shift the cost to? As they do not make a profit, they are unlikely to tap into their capital reserves to subsidise the tax. Even those for-profit social housing providers are unlikely to allow it to eat up their presumably slimmer profits compared to those of private developers. So where will it go? As already alluded to by previous speakers, it could be passed on to tenants in the form of increased rents, which would somewhat undermine the purpose of social housing—to have an affordable place to live. Although that alone is a worrying prospect, what concerns me is the effect it could have on the supply of social housing. We already have a major social housing deficit. The homeless charity, Shelter, estimates that more than 1 million households are waiting for social homes. A building safety levy will leave social housing providers with the option of building fewer homes, due to the increased construction costs, or building out at the same rate with the same costs, but shifting the burden of the levy on to construction costs, the result being a lower quality of social housing.
Imposing this levy on councils means council tenants could, in effect, be subsiding the failure of private developers and paying the cost of remediating both council housing and private housing. We desperately need more social housing, and we need it now, which is why we ask the Government: what assessment have they made of the impact of this levy on social housing providers, the supply of social housing and the rental costs faced by social housing tenants?
Baroness Hayman of Ullock (Lab)
Does the noble Baroness, Lady Pinnock, want to speak next?
Baroness Pinnock (LD)
I am happy to do so. I was assuming that the noble Baroness, Lady Hayman, wanted to speak to the amendment which is in her name. I do not know what the protocol is on all that.
Baroness Hayman of Ullock (Lab)
Then I will speak to my amendment, as I stood up first. As noble Lords have said, this has been a really important group of amendments to debate. I will speak first to my Amendment 35 and I thank the noble Baroness, Lady Pinnock, and the right reverend Prelate the Bishop of St Albans for their support.
Clause 57 gives the Secretary of State powers to impose a new building safety levy in England that will contribute towards the Government’s costs for remediating historical building safety defects. This will apply to developers making an application to the building safety regulator for building control approval, which of course is the new gateway 2 process that we have debated throughout discussion on the Bill. The problem we have, which is why I tabled this amendment, is that it will also be imposed on councils—the social landlords. Councils of course already face additional financial pressures, due to the Covid-19 pandemic.
We should not forget that the key role of local government is to serve communities—the Minister will completely understand this—and provide essential services. They are not the same as developers, so the purpose of this amendment is to make social housing providers exempt from the additional financial burden of the Government's proposed levy, to prevent council and social housing tenants subsiding the failures of private developers and paying the cost of remediating both council housing and private housing. We are concerned about what may be the unintended consequences of the Bill as it stands, because if the levy is imposed on local authorities, it will increase the cost of building or refurbishing social housing, or increase rents, as the right reverend Prelate said. Yet the benefits to funds will not be available to the tenants, who would otherwise have benefited from lower rents or better housing.
The money to fund remediation must come from somewhere. Inevitably, it will be at the expense of another critical service, either in housing or through increased rents. To ask for that does not seem the right way forward. Does the Minister recognise the potential impact of the levy on social housing supply? Again, the right reverend Prelate the Bishop of St Albans talked about our desperate shortage of housing in this area. We do not want anything that will negatively impact that. It is important that we do not pit the objective of providing for those in housing need against the objective of making buildings safe, when both must be delivered.
I turn to the other amendments in this group, looking first at the amendments in the name of the noble Lord, Lord Young of Cookham, which he introduced clearly and comprehensively. To us, they seem eminently sensible and practical, and the right way forward. As he said, Amendment 130 proposes that the Government establish a comprehensive prospective levy scheme on all developers, the money from which would go towards remediating the defective buildings. As I understand it, his Amendment 24 is consequential on the establishment in Amendment 130 of the building safety indemnity scheme. That means that the removal of building work that contravenes fire safety regulations could be carried out, if his Amendment 130 were accepted.
What came through in both the noble Lord’s introduction and how other noble Lords introduced their amendments is the fundamental principle that it is right that the person who is responsible for breaches and poor building work should be made to put it right. This is a simple, basic principle that I think we all agree with. It should not be that difficult for the Government to accept it; to me, the Bill already accepts it. Why not work with noble Lords who have put forward such important amendments today, take them forward and give us much more robust statutory protection for leaseholders, extending it to all work, as the noble Lord said, that contravenes regulations? We would strongly support any amendment that makes buildings safer and protects tenants properly.
I was also struck that the noble Lord, Lord Young, referenced freeholders. They have not been talked about enough in debate on the Bill, so I thought it was very important that that reference was made and that they are not forgotten.
The noble Lord, Lord Blencathra, has a number of amendments looking to make protections more robust. We strongly support his zeal in what he is trying to achieve. His objectives are really important; as he said, they are not exactly perfect in every way, but we are not about perfection here. This is about putting forward the issues that need to be considered to improve the Bill. He has done that very clearly. His aim to pull the “perpetrator pays” and protections for leaseholders together is important, because it makes the objectives and the direction we need to go in really clear.
The noble Earl, Lord Lytton, was right when he said that his amendment and those from the noble Lords, Lord Blencathra and Lord Young, come from the same point of principle—an important principle that we support. He is right that this is quite simply a matter of justice. As the amendment says,
“responsibility for serious defects in the original construction or refurbishment”
rests squarely
“with those who designed, specified, constructed, or supervised the works or made false claims”—
and that is not the leaseholders. It is important that leaseholders feel that their position on this is fully understood and that we are moving forward in this way.
The principle that the perpetrator pays is also really important, but I should like to ask the Minister something, because I am getting a bit confused. What is the difference between a perpetrator and a polluter paying? It has got a bit confusing to have these two phrases.
The Earl of Lytton (CB)
I put this amendment forward originally to your Lordships’ wonderful team of parliamentary clerks, who did not like the term “polluter”. They felt that pollution as a term of art meant something different—if you like, involving a release or deposit of something, rather than sticking something together wrong. But they said that they would accept “perpetrator pays”, so I said, “Okay, all right, so be it.” But actually I think it is a better term, so I give them due credit for that. That is the origin of the phrase.
Baroness Hayman of Ullock (Lab)
Perhaps someone should table some amendments to change the word “polluter” in the Bill to “perpetrator”, so we can all be in the same place.
Very briefly, I turn to the government amendments in this group. At earlier stages of the Bill, it was disappointing that what it contained fell significantly short of the action that was needed to protect leaseholders, so I put on the record how warmly we have welcomed the new amendments that the Government have proposed to address a lot of the urgent issues raised through debates on the Bill so far. However, there are a number of key questions that I shall put to the Minister for clarification today on the amendments that we have debated. I shall not go into detail, because we have heard an awful lot of discussion around them today—so I shall be brief.
How strongly committed are the Government to using their proposed enforcement mechanisms to ensure that industry plays its part and pays the funds that it has been asked to? How will the Government continue to play their part and pay the funds needed to end the crisis while ensuring that funding for affordable housing supply is protected, regardless of the contribution of funds from industry? How can leaseholders who have already paid remediation costs recover those costs retrospectively? I do not think that that has been properly dealt with so far. How will the Government ensure that new funding responsibilities for social landlords will not undermine their role in providing housing supply? That references back to my amendment.
I am sure that we will revisit some of those questions later in debates on this Bill. I ask a brief question about the new clauses in Amendments 74 and 75, which give the Secretary of State power to make regulations that
“prohibit a person of a prescribed description from carrying out development of land in England”,
and/or imposing a building control prohibition in relation to persons of a prescribed description. Those powers would be for any purpose connected with building safety or building standards. I should like clarification, because it is unhelpful that a
“person of a prescribed description”
is not defined in the amendments, which simply state that it means “prescribed by the regulations” under the clause. This is what I am slightly confused about; does it apply to persons who have been found to be in breach of building safety, or is it the means by which government would prohibit those who do not contribute to the extra £4 billion fund? Some clarification on that point would be really helpful.
I hope that the Minister has listened very carefully to the important points that have been made by noble Lords in this debate, and I end by saying to him, in the spirit of what has been going on earlier, acta non verba.
Baroness Pinnock (LD)
I know we have a fuel crisis, but it is bracing in here; I should be used to it, coming from Yorkshire.
We have come a long, positive way since we debated these issues on the Fire Safety Bill. Moving from one or two voices across the House pushing the concerns of leaseholders to reaching a place where there is agreement that there must be a government-led solution to their trials is hugely welcome. I pay tribute to the cladding campaigners, who have never given up and have pushed us all into the position where we are debating this today.
I have a couple of process points first, before I comment on some of the issues raised. First, I agree with the plea from the noble Lord, Lord Blencathra, that on Report we perhaps have a new part to the Bill that puts all these amendments relating to the remediation of defects in one place. That would be hugely helpful, now but definitely in future, as the industry has to respond to whatever is decided. It would create clarity.
The second point to make is that we have again had welcome but last-minute amendments from the Government without a written Explanatory Memorandum. It would be really good to have something we can all have a look at before Report. An impact assessment would help as well. In particular, a very brave amendment is proposed by the Government about blocking developers, even when they have planning consent, if they do not pay up. That is a really radical proposal, and I should welcome an explanation of how it might work and an impact assessment.
The final process question is that we have had before us today three key proposals to try to tackle the question of who pays for the 30 years of fire safety defects and building safety defects. The series of amendments from the noble Lord, Lord Blencathra, tackle the same issue. There surely has to be a better way of trying to find a common, workable solution that we could agree to than debating it in a formal way. If we are all agreed that this is the direction of travel, let us work together to try to find it rather than have a formal debate. I leave it to others who know processes much better than I do to decide how that might be.
I want to make a few comments on what has been proposed. The noble Lord, Lord Young, reminded us that in January the Secretary of State finally made a dramatic change to the debate we have been having and said that leaseholders should not pay. I want to keep to that, as the noble Lord, Lord Young, was intent on doing. He pointed out that there are gaps in what is being proposed. As I have consistently said, the leaseholders are the wholly innocent victims of this debacle. On this side, we will back proposals that can guarantee that leaseholders do not have to contribute a penny piece to fire safety and building safety defect remediation.
I thank the noble Lord, Lord Young of Cookham, and the noble Earl, Lord Lytton, for their valiant attempts to seek a means of achieving the justice we are all looking for by providing alternative approaches. The very fact that the amendments have had to be tabled indicates that the Government’s attempt—though it is a huge step forward; I acknowledge that—does not succeed in achieving the aim that I espouse, which is that leaseholders pay nothing. That is going be my new phrase: leaseholders pay nothing. The noble Lord, Lord Young of Cookham, and the noble Earl, Lord Lytton, pointed out the gaps in the Government’s amendments, and we ought to listen very carefully to that because, as I say, we are all trying to get to the right place here.
The key question is: how do we extract the money from the people who have caused the problem? Unfortunately, we have no indication from the Government whether the levy system and the penalties for failing to pay will, first, raise sufficient funding to pay for it all. Secondly, we have no indication whether it will be watertight. We know that developers are already seeking legal advice as to how these levies and responsibilities can be circumvented, and material manufacturers are going down the same route, as will contractors and subcontractors. Litigation will ensue and the risk is that the work fails to be undertaken because no money is raised. That is unfortunately where this might lead if we are not careful.
I cannot remember if it was the noble Lord, Lord Young of Cookham, or the noble Earl, Lord Lytton, who said that time is of the essence for these folk. Some of them have already got cladding off and sheeting up in this awful weather, and the building replacement work has stopped because the funding and who will pay is not clear. Leaseholders have already suffered five years of their lives being on hold and their property having no value while those who caused the problems could well be left to fight it out in the courts. I thought the amendment in the name of noble Lord, Lord Young, dealt quite well with that. Maybe that is something the Government can pick up.
I accept that this is a very complicated issue to resolve, which is why, with my zero technical expertise, I have not tried to resolve it through detailed amendments to this Bill. I am full of admiration for those who have spent time trying to find a way to make perpetrators pay. In the end, I fear that the Government may have to step in, fund the remediation so that we get something done and then use their might to extract the funding from those who caused the problem. I look forward to what the Minister is going to say in response to these critical amendments. I want to hear from him on how the Government will ensure that remediation work will be completed within a tight timescale, whatever that is. “Shortly” is a key word that the Government use, and I always worry about it. “In due course” is another.
Baroness Pinnock (LD)
Yes. “Drectly” is what they say in Cornwall, which means “This year, next year, some time never”. I should like a bit of clarity. Timing is key. I should like to hear what the Minister is going to do about trying to get it done. How will we stop the developers and all those who we are going to try to get the money from through a levy wriggling out of their obligations? That is one of my fears in all this. Then there is the rate of the levy. Can we be given assurances that the rate will be of a sufficient level to pay for the remediation? That is key. I know that the Minister cannot give us a figure, but a broad brush assurance that the levy is going to do it would be good.
Retrospective compensation for those leaseholders who have already paid out should be considered. Some folk have gone bankrupt because of this. That is because it took time to get everyone together to deal with the problem. I know that retrospective compensation is hard to do, but we are putting back the clock 30 years in looking at these defects. If we can do that, we can look at retrospective compensation.
Leaseholders should pay nothing—that is where I am. We on this side support an amendment that gets there. As I say, I am full of admiration for people who, with their expertise, have tried to bring the Government to the place where they need to be. If the Minister is going to say yes to all these things, we will all leave happy.
Lord Greenhalgh (Con)
My Lords, this has been a very good debate. I have enjoyed listening to virtually every speech, including that of the noble Baroness, Lady Pinnock. I am not going to pick out any speech that I did not like, but the contributions were very good. I am reminded of when I met someone who worked for Senator Cory Booker when he was mayor of Newark, which is a deprived part of the United States. Apparently, at a Democratic National Convention he came out with a phrase that sticks with me. He said:
“If you want to go fast, go alone, but if you want to go far, go together.”
When it comes to making sure that we get the polluter to pay, this Government are not proud about picking the best ideas that people have put forward today and putting them into the toolbox to ensure that we do precisely that.
I think of my noble friends Lord Young and Lord Blencathra, to whom I will add the noble Earl, Lord Lytton, as the three wise men. I was Faith Minister, so that description is appropriate. I have to say that the prize for the wisest of the wise goes to my noble friend Lord Blencathra, who seems to have that intellectual agility to change his position based on circumstance. He is someone who was a distinguished chair of the Delegated Powers and Regulatory Reform Committee one week, and the next week says, “Well, that was last week and this is this week. Come on Secretary of State—think about these ‘just in case’ powers”. We will think about them, but I thank him for providing us with that breadth of thinking.
I also pay tribute to my noble friend Lord Blencathra for suggesting that we look at reordering the Bill or setting objectives, as the Fisheries Act does. He also gave some advice; I will read out a note about why there needs to be a maximum for the levy. These are all great tips. To the noble Baroness, Lady Pinnock, I say that we will look at whether we can produce a written Explanatory Memorandum and of course we need to do impact assessments. These are all jobs of work and we will see how quickly we can get those things done. This is all in the spirit of wanting to be helpful and to have a better Bill, so I take all those points on board.
Lord Young of Cookham (Con)
My Lords, I am grateful to all those who have contributed to this long and important debate. I notice that what was the awkward squad last time has now been transformed into three wise men, so we are obviously making progress. On a more serious note, this debate is of enormous interest to thousands of leaseholders, many of whom have bills they cannot afford to pay on the mantelpiece. We have thousands of leaseholders who would like to sell but cannot, because their property is blighted. We have all wanted to come up with a solution this afternoon; I think we are making progress, as I will come on to in a moment.
One issue the Government will have to face is that leaseholders do not read 24 pages of legalese amendments to a government Bill. They remember the soundbites that I mentioned right at the beginning—the polluter should pay, not the leaseholder; the leaseholders are innocent; we have statutory protection. There is a risk that the exclusions in the small print will erode the good will that the Government have generated so far in the progress they have made. We need to do a little more to address those exclusions, which stop us achieving the principle to which the Government are committed—the polluter should pay, not the leaseholder.
The other thing I take from this debate—I hope the Minister will agree with this—is a point that I, the noble Earl, Lord Lytton, and the noble Baroness, Lady Pinnock, made, which is that we have to make an early start. We simply cannot wait until the money has come in from the levy to do the work. I will come back to this in a moment, but there was a suggestion from both the noble Earl, Lord Lytton, and my noble friend Lord Blencathra that the Government should provide the bridging finance—I think that was the word the noble Earl used—in order to get the show on the road and make an early start, rather than wait for the money to come in after long and expensive litigation.
Lord Young of Cookham (Con)
I know that housing is ring-fenced; I introduced the housing revenue account.
Lord Young of Cookham (Con)
I think we had better move on from that.
My noble friend mentioned a group that we have so far not mentioned at all: shared owners. I think we need to bear that in mind.
My noble friend Lord Blencathra had a veiled threat that if there was not an agreed solution with the Government, there would be a conspiracy of either the wise men or the awkward squad. I think my noble friend the Minister needs to go back to his Secretary of State and say, “Look, everybody was really grateful for what we have done so far, but, Michael, I am afraid that it’s not going to take the trick. Either we can do a deal and take the credit for making the last step, or we don’t do a deal and we go down in flames”. I think my noble friend could put that proposition in more colourful language than I have used this evening.
Next time I speak, I hope that instead of saying we are nearly there, I can say that we are there, but it is down to my noble friend to enable me to say those words. In the meantime, and in the spirit of amity, I beg leave to withdraw my amendment.
Lord Greenhalgh
“38_ Omit sections 44 and 45 (and the heading before section 44).”Member’s explanatory statement
This amendment is consequential on the first new Clause after Clause 57 in the name of the Minister.
“47A_ In section 56(3) for the words from “, public body’s final certificates” to the end substitute “and public body’s final certificates.””Member’s explanatory statement
This amendment is consequential on the repeal of section 16 of the Building Act 1984 provided for by paragraph 20 of Schedule 5.
Member’s explanatory statement
This amendment removes the definition of “the data protection legislation” from new section 91B of the Building Act 1984 with a view to this being inserted into section 126 of that Act (see the Minister’s amendment at page 176, line 8).
“(ea) section 105C;”Member’s explanatory statement
See the statement relating to the first amendment to Clause 57 in the name of the Minister. This amendment provides that references in inserted section 105C of the Building Act 1984 to work include a material change of use and may include any other specified matter.
“““the data protection legislation” has the same meaning as in the Data Protection Act 2018 (see section 3 of that Act);”;”Member’s explanatory statement
This amendment, which is consequential on the Minister’s amendment at page 56, line 22, inserts a definition of “the data protection legislation” into section 126 of the Building Act 1984 (general interpretation).
“89_(1) The Sustainable and Secure Buildings Act 2004 is amended as follows.(2) In section 3 omit subsections (8) and (9).(3) In section 4 omit subsection (4).”Member’s explanatory statement
This amendment is consequential on the amendment of paragraphs 38 and 39 of Schedule 5.
Lord Greenhalgh
Member’s explanatory statement
This amendment and other amendments of this clause extend the power to impose a levy to work other than higher-risk building work, if it relates to residential or mixed-use buildings, and to initial notices, amendment notices and public body’s notices (as well as applications for building control approval).
Member’s explanatory statement
See the statement relating to the first amendment to this clause in the name of the Minister.
Member’s explanatory statement
See the statement relating to the first amendment to this clause in the name of the Minister.
Lord Greenhalgh
(a) may not take a specified step in relation to the application or notice (for example, may not grant an application, accept a notice or give a specified certificate in relation to works connected with the application or notice), or(b) must take a specified step in relation to the application or notice (for example, must reject a notice).(5A) A notification under this section is a notification given by the Secretary of State or designated person—(a) that the levy payable in respect of the application or notice has been paid, or(b) that no levy is payable in respect of the application or notice.”Member’s explanatory statement
See the statement relating to the first amendment to this Clause in the name of the Minister.
“(7A) In this section “relevant application or notice” means—(a) an application for building control approval,(b) an initial notice,(c) an amendment notice, or(d) a public body’s notice,relating to a relevant building or proposed relevant building (including any such application or notice relating to work that causes a building to become a relevant building or causes a relevant building to cease to be such a building).”Member’s explanatory statement
See the statement relating to the first amendment to this Clause in the name of the Minister.
““amendment notice”, “initial notice” and “public body’s notice” have the same meaning as in Part 2 (see section 58);”Member’s explanatory statement
See the statement relating to the first amendment to this Clause in the name of the Minister.
Lord Greenhalgh
““relevant building” means a building in England consisting of or containing—(a) one or more dwellings, or(b) other accommodation,(and “accommodation” here includes temporary accommodation, for example in a hotel or hospital);”Member’s explanatory statement
See the statement relating to the first amendment to this Clause in the name of the Minister.
Lord Greenhalgh
“Crown application
In Part 5 of the Building Act 1984 before section 132 insert—“131A Crown application(1) The following provisions bind the Crown—(a) Part 1 except sections 35B to 37, 39A and 40;(b) Part 2;(c) Part 2A except sections 58I to 58K, 58U, 58V and 58Z4 to 58Z6;(d) Part 4 so far as it relates to a provision within any of the preceding paragraphs.(2) No contravention by the Crown of a provision within subsection (1)(a) to (d) makes the Crown criminally liable.(3) Subsection (2) does not affect the criminal liability of persons in the service of the Crown.(4) Subsection (5) applies where—(a) a contravention of a provision within subsection (1)(a) or (b), or of Part 4 so far as it relates to such a provision, occurs in relation to a building or proposed building for which a local authority is the building control authority, or(b) a contravention of a provision within subsection (1)(c), or of Part 4 so far as it relates to such a provision, occurs in relation to Wales,and the Crown would, but for subsection (2), be criminally liable under this Act in respect of the contravention.(5) The High Court may, on the application of—(a) the local authority (in a case within subsection (4)(a)), or(b) the Welsh Ministers (in a case within subsection (4)(b)),declare unlawful the act or omission constituting the contravention.(6) In this section a reference to a provision includes any instrument made under it.(7) For the application to the Crown of Part 3, and Part 4 so far as it relates to that Part, see section 87.”Member’s explanatory statement
This new Clause makes provision about the application of Parts 1 to 2A of the Building Act 1984, and Part 4 of that Act so far as relating to those Parts, to the Crown.
“Application to Parliament
(1) The Building Act 1984 is amended as follows.(2) In section 95 (power to enter premises) after subsection (4) insert—“(5) This section does not apply in relation to the Parliamentary Estate (as defined by section 131B).”(3) After section 131A (inserted by section (Crown application)) insert—“131B Parts 1 and 2 etc: application to Parliament(1) In their application in relation to the Parliamentary Estate, Parts 1 and 2, and Part 4 so far as it relates to those Parts, have effect with the following modifications—(a) sections 35B to 37, 39A and 40 (enforcement etc) do not apply;(b) any reference to the owner or occupier of a building or of any premises is be read as a reference to—(i) the Corporate Officer of the House of Lords,(ii) the Corporate Officer of the House of Commons, or (as the case may be)(iii) the Corporate Officers acting jointly.(2) In the following provisions—“Corporate Officer” means—(a) the Corporate Officer of the House of Lords,(b) the Corporate Officer of the House of Commons, or(c) the Corporate Officers acting jointly;“relevant provision” means—(a) any provision of, or of an instrument made under, Part 1 or 2, or(b) any provision of Part 4 or of an instrument made under Part 4, so far as the provision relates to Part 1 or 2.(3) No contravention by a Corporate Officer of a relevant provision makes the Corporate Officer criminally liable.(4) Subsection (3) does not affect the criminal liability of relevant members of the House of Lords staff or of the House of Commons staff (as defined by sections 194 and 195 of the Employment Rights Act 1996).(5) Where a contravention of a relevant provision occurs which, but for subsection (3), would result in a Corporate Officer being criminally liable, the High Court may, on the application of the local authority, declare unlawful the act or omission constituting the contravention.(6) In this section “the Parliamentary Estate” means any building or other premises occupied for the purposes of either House of Parliament.””Member’s explanatory statement
This new Clause makes provision about the application of the Building Act 1984 to Parliament.
Building Safety Bill
Monday 28th February 2022
(2 years, 1 month ago)
Grand CommitteeRead Full debate Building Safety Act 2022 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 98-IV Fourth marshalled list for Grand Committee - (28 Feb 2022)
The Deputy Chairman of Committees (Lord Faulkner of Worcester) (Lab)
My Lords, welcome to the Grand Committee on the Building Safety Bill. I remind Members that they are encouraged to leave some distance between themselves and others and to wear a face covering when not speaking. If there is a Division in the Chamber while we are sitting, this Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes, or earlier if that is convenient for the Committee.
Amendment 45
“Appointment of third parties
(1) This section applies where—(a) a RTM company within the meaning of section 113, Commonhold and Leasehold Reform Act 2002,(b) a body corporate of whatever description where the majority of the shares are held by leaseholders of dwellings, or(c) a body corporate of whatever description which is limited by guarantee and the members of that company are also leaseholders of dwellings,is either the accountable person or principal accountable person.(2) Where this section applies, notwithstanding any provisions of the Memorandum or Articles of Association or any rule of law to the contrary, the company may appoint a third party to discharge all the functions of the accountable person or the principal accountable person who will assume all duties, powers, liabilities and penalties under this Act in place of the company, and this Act is to have effect as though references to the accountable person or principal accountable person were references to the third party appointed under this section.(3) If such a person is appointed then the company is empowered to re-charge and apportion the costs charged by such a person as if they were a service charge under the leases of the dwellings.(4) Such charges will, for all purposes, be deemed to be service charges within the meaning of section 18 of the Landlord and Tenant Act 1985, save that the provisions of sections 20 and 20ZA of the Landlord and Tenant Act 1985 do not apply.(5) The Secretary of State may by regulations impose conditions which must be satisfied before an appointment can be made under subsection (2).(6) Without prejudice to the generality of subsection (5), those regulations may include—(a) provision for a minimum level of professional qualification to be held by the third party,(b) provision for minimum levels of professional indemnity provision.”Member’s explanatory statement
This provision would enable leaseholder-owned or controlled companies to appoint an external professional to discharge the functions of the Accountable Person or Principal Accountable Person and for the costs of the same to be recoverable (and regulated) as if they were a service charge under the lease.
Lord Best (CB)
My Lords, this group should not detain us too long, for three reasons. First, the group has only one amendment, this one. Secondly, the issue here is not of the same complexity or magnitude as the all-important matters that the Committee discussed last Thursday. Thirdly, I think that the Minister will not take too long to accept it. Amendment 45, in my name and the name of the noble Baroness, Lady Neville-Rolfe, concerns the impact of the Bill on the management of leasehold property, in particular the management by the leaseholders who live there.
The amendment has the backing of leaseholders and of bodies representing those managing leasehold flats, the Institute of Residential Property Managers and the Association of Residential Managing Agents. I declare an interest as chair of the Government’s regulation of property agents—RoPA—working group, whose 2019 report provides insights into the arrangements for managing blocks of residential apartments. Amendment 45 seeks to prevent the Bill from creating a major problem where residents of blocks of flats have responsibility themselves for the collective management of their homes. It covers the residents management companies, where the developer has handed over ongoing management to the leaseholders, and the right to manage companies, where residents have exercised their right to take control under the Commonhold and Leasehold Reform Act 2002, on which, incidentally, I gave my maiden speech 20 years ago.
These resident-controlled companies will have a board of unpaid volunteer directors. The directors will sometimes decide to employ managing agents to carry out the usual management and maintenance tasks, but the legal responsibilities for their company’s actions will remain with the directors. The Bill as it stands places a new layer of responsibility on these resident directors: they must, together, assume the role of the accountable person or principal accountable person responsible for building safety. This makes each individual director personally liable if things go wrong. They may engage expert help, but they cannot shed their accountable person status and the full liability remains with them.
The directors will now have to identify safety hazards, decide on the remedies and procure the necessary works. There are plenty of opportunities for mistakes and the new building safety regulator could discipline them, fire them or fine them, ruining their personal reputations. Fellow residents could sue them for mismanagement or misjudgment. Indeed, under Clause 131, if residents do not feel that the residents management company has done enough to recover money from third parties, they can take them to court.
The entirely predictable but unintended consequence of placing this serious new burden on resident directors is surely that no one will volunteer for the role. Already it is often a hard job to recruit and retain willing volunteers, who must not only give up their time but risk falling out with neighbours when taking decisions that cannot please everyone. It is commonplace for directors looking for a new volunteer to be economical with the truth: “It won’t be very time-consuming or onerous”, they say. How much more difficult will the recruitment of new and the retention of existing directors become if this Bill adds considerably to the obligations placed on anyone who dares to volunteer?
Amendment 45 seeks to resolve the problem. It has two parts. First, it would allow the residents management companies and right to manage company directors, if they wish, to pass on the functions and liabilities of the accountable person or principal accountable person to an external, competent, qualified third party with proper professional indemnity insurance, which the directors could never obtain. Secondly, it would enable the directors to pass on the costs of so doing to the residents via the service charges. With this amendment in place, a significant barrier to leaseholders managing their own affairs will be avoided.
Successive Governments have consistently encouraged residents to assume mutual responsibility for managing their blocks of flats. Indeed, moves are in the pipeline to relaunch the so far unsuccessful commonhold arrangements, whereby the occupiers own the freehold as well as handling the management. So I am sure that there is no intention to impose a huge disincentive for leaseholders to participate in residents management companies and right to manage companies. By enabling the duties imposed by this Bill to be transferred from the volunteer residents to professional experts, a potential exodus of volunteers can be avoided and the encouragement for more resident control can be sustained. I hope, therefore, that the amendment is helpful in correcting an unintended oversight and that it will appeal to the Minister. I look forward to the contribution of the noble Baroness, Lady Neville-Rolfe, and I beg to move.
Baroness Neville-Rolfe (Con)
I support the noble Lord in his Amendment 45. He has described the issue very well—and given his huge contribution to the House, I shall look up his maiden speech.
I worry that unless we can find a way out for leaseholders who are also owners, no leaseholder in their right mind would contribute to the management of a building jointly owned by leaseholders. This has been a direction of travel in recent years, which I support. I believe it to be particularly valuable for smaller housing developments, of which we need more. As my noble friend Lord Young of Cookham said in Committee on 24 February, successive Governments have encouraged leaseholders to buy their freeholds. Indeed, he himself played an important part in that process. As I understand it, the leaseholders who have enfranchised and bought their freeholds are excluded from support under the Bill. That seems very unfair.
I know from direct experience in my own family that it is already very difficult to secure volunteers to run leaseholder-owned buildings, given the onerous duties involved and the time requirement. The Bill, with its additional duties and tensions, will, I fear, make it impossible. Here we have yet another perverse effect. I agree with the noble Lord, Lord Best, that a solution must be found by Report, either by accepting his amendment or, if need be, in some other way. This is an unintended consequence that nobody wants.
Baroness Pinnock (LD)
My Lords, this is such an eminently sensible amendment, in the names of the noble Lord, Lord Best, and the noble Baroness, Lady Neville-Rolfe, that I think that the Minister will struggle to counter the arguments that have been made. What we are asking in this amendment is to avoid a situation involving resident management groups, or leaseholder-controlled companies, where the stringent expectations required to fulfil the duties under the Bill are put on the volunteers.
I already have concerns about the accountable person and how that role will fit in with those of the managing agent and building safety manager. We are beginning to create a fairly bureaucratic approach to safeguarding leaseholders and tenants, which has the risk of not fulfilling the simplicity and clarity that the Hackitt report required of new building safety measures.
I just think that the arguments cannot be countered. I look forward to what the Minister has to say, but this is such an eminently sensible proposal that I hope that the Government will find ways of bringing forward their own amendment on Report to fulfil the aims of this amendment.
Lord Khan of Burnley (Lab)
My Lords, I rise briefly to speak to Amendment 45, in the name of the noble Lord, Lord Best, and well supported by the noble Baroness, Lady Neville-Rolfe. I reiterate that this amendment is about looking at leaseholder-owned or leaseholder-controlled companies appointing an external professional to discharge the functions of the accountable person or principal accountable person. The amendment also talks about costs and maybe looking at service charges.
I want to ask this of the Minister. On these Benches we have a big concern about the actual level of service charges at the moment. These charges are already quite high and they are passed on to leaseholders and tenants. Have the Government looked at the aspect of service-charge pricing and whether leaseholders will be able to bear the cost of having this expertise, as detailed in the amendment? We absolutely recognise the importance of the amendment and we are supportive of it. We are equally concerned about using service charges in order to fund these kinds of important, necessary steps. The impact on leaseholders and tenants is a big concern.
On what was discussed previously in Committee, I will add something in relation to professional expertise and skills, and having the opportunity to pass on these responsibilities to somebody who can take care of this important role, focusing on the function of the accountable person or principal accountable person. I will not talk about this at length, but it calls for a debate about the current situation and whether the Government are fulfilling the needs of leaseholders and tenants. I will finish by saying that there is a big concern about service charges overall, about pricing and about how this will have an impact subsequently on leaseholders.
Baroness Scott of Bybrook (Con)
My Lords, first, I will answer the noble Lord, Lord Khan. He brings up an important issue and I heard his concerns on the level of service charges to leaseholders. I do not think that that is particularly relevant to this amendment, but I hear his concerns and I will take them back to the department and we will get a letter to him saying what we are doing about that.
I am sorry, but I am going to disappoint the noble Lord, Lord Best, on this amendment—but perhaps not as much as I could have done. I thank him and my noble friend Lady Neville-Rolfe for raising this important matter. The Bill provides that an accountable person is the entity responsible for the repair of the exterior, structure and common parts of a building. This may well include leaseholders who have set up resident-led organisations exercising their statutory right to take control of their building away from the freeholder. These statutory rights are very important. They act as a device to ensure that the imbalance of power between freehold and leasehold tenure is redressed and that leaseholders are empowered to make decisions about the safety management of their buildings. With this empowerment come responsibilities and accountability. The amendment would allow such resident-led organisations to appoint a third party to be responsible for their building’s safety management, passing culpability to that third party if anything went wrong.
Baroness Neville-Rolfe (Con)
A meeting would certainly be helpful. We also need to see this famous guidance. We know from other experience on buildings that there is an assumption that everything will be fine and dandy, but this is a very serious problem. We will lose those volunteers who are running buildings right across the country while waiting for Godot and a bit of guidance. If we are able to see the guidance and see that it works, we will be very happy. If it does not work, there will be time to do something. I am sorry to raise this point, but it is a practical matter for lots of people across the country, some of them in very inexpensive flats that they cannot even sell.
Baroness Scott of Bybrook (Con)
We absolutely understand the issue We are working on it. As I said, if we have a meeting, maybe we would have some ideas. I do not know about guidance yet, but we will make sure that we can have that discussion. I hope that we will get something better in place before Report.
Lord Best (CB)
Those final comments were the ones that I hoped to hear: that, with a bit of discussion, we may be able to find a way around this. The test for me is a real one. My son in a block of flats says, “Dad, should I think about being one of these directors?” My answer at the moment is, “Steer well clear. It is not a good idea to volunteer for this at the moment.” I look forward to those discussions and hope that we can come to an agreement. I beg leave to withdraw the amendment.
Baroness Fox of Buckley (Non-Afl)
My Lords, this series of stand part amendments relates to Clauses 80 to 84 and would delete the building safety manager from the Bill. This is my first attempt at tabling amendments so I am nervous about the procedural aspects, but I hope to explain why I have come in on, as it were, this issue in particular. How I came about it is telling in relation to some general concerns that I have about the Bill, specifically Part 4.
Like some of us here, I came to this whole issue based on being a leaseholder and being part of a group of noble Lords who were horrified at the awful impending tragedy of leaseholders being forced to pay crippling remediation costs on the back of the response to the Grenfell tragedy. Many of those egregious injustices are now being addressed—some of them in this Committee.
However, in my speech at Second Reading, I raised a different set of concerns about adopting a zero-risk approach, including that risk aversion is in danger of creating zealotry beyond the bounds of what is reasonable, practical or desirable. If the Bill’s aim becomes to eliminate all risks, that itself has its own risks and creates a new set of victims. For example, if safety is turned into panic, it can lead to an ever-spiralling demand for safety outside the bounds of common sense. This could dangerously destroy confidence in both the construction sector and the high-rise housing market, and could create new layers of bureaucracy that hinder rather than help.
Rather to my surprise, my speech at Second Reading led to a group of leaseholders contacting me to say that they shared some of my concerns. Campaigners from the Tower Hamlets Justice for Leaseholders group and Friends in High Places explained that they understood because they felt that, as Covid has proved, it can be difficult in situations involving safety to agree that less should be done—but sometimes less should be done. This proposal for building safety managers for every block is just one of the concerns that the group has about some of the Bill’s unintended consequences. As the campaigners say, it imposes costly layers of bureaucracy on them while giving sweeping powers to managing agents and freeholders and inflicting yet more pain on leaseholders, with provisions such as building safety managers threatening to turn this into what they call “another EWS1 fiasco”.
All the provisions in Part 4 seem to assume that the problem of residential fire safety is a lack of appropriate people and processes checking for fire risks in every possible instance. However, perhaps the real problem is the competence of the people who are already in place and the enforcement of rules and regulations that already exist, rather than making up lots more or creating new roles. As the leaseholder group notes, writing into law that every building will have to appoint a building safety manager is a duplication of the role of the existing managing agents and building managers, and proceeds from the false assumption that these housing blocks are “like barrels of oil needing almost daily surveillance and supervision to ensure that they don’t burst into flames at any moment.”
The truth is that fires are relatively rare, but they cannot be prevented altogether. The priority of this Bill should be to build in adequate safety systems and then maintain those properly so that residents can evacuate as quickly and easily as possible should fire occur. Instead, these clauses create an unnecessary duplicate role that will—guess what?—yet once more, financially cripple leaseholders.
The Government themselves estimate that the cost of a building safety manager will be £60,000 a year per block. For Lucy, in a block of 33 flats, this will add £1,818 to her annual service charge. For Ruth, in a block of 19 flats, the building safety manager costs would add £3,157 a year to her service charges. It is not clear, either, whether that £60,000 estimate that was on the Government’s website has factored in employers’ national insurance and pension, plus the 20% VAT that an employing company would have to add to the charge. That would bring the cost to £85,000, in which case Lucy’s annual service charges would rise by £2,575 and Ruth’s by £4,473.
It is not clear exactly whether that £60,000 figure still stands, because the fact sheet explaining the building safety manager’s average pay of £60,000 a year was rather quietly removed from the Government’s own website after 5 pm last Wednesday. Luckily, the leaseholders have screenshots, which I have here if anybody would like to look at them. I am hoping that this is a positive sign that the Government are going to scrap the policy—delete the policy just like the web page—or at least water it down by turning it into a function that can be met by existing managing agents and property managers, and not treating it as a separate job.
With the words of the Secretary of State, Michael Gove, ringing in our ears, he has warned that
“too many buildings are declared unsafe”,
and that many of the problems associated with the cladding scandal have been caused not by unsafe buildings but over-zealous inspectors and nefarious players
“seeking to profit from the current crisis”.
We should have those words in the back of our minds when we ask key questions.
The Deputy Chairman of Committees (Lord Faulkner of Worcester) (Lab)
My Lords, I think we are all reassembled. We were listening to the noble Baroness, Lady Fox of Buckley.
Baroness Fox of Buckley (Non-Afl)
I know that noble Lords have been waiting with bated breath.
The key question is why building safety managers are needed at all, when the vast majority of leasehold developments have managing agents in place and leaseholders have to pay a management fee for their services. Surely splitting the function would risk disputes between property managers and building safety managers about what is and is not a safety issue and who is in control when remediation works have a safety element. These buildings, which people live in, already have fire risk assessments carried out by specialist firms—even if one problem is that they are not shared with leaseholders, which can mean that defects can be kept hidden and necessary repairs delayed. But still, what will the building safety manager actually do?
To find out—I do not know whether the Minister has seen this—I watched a recording of a closed-door meeting of sector professionals trying to pin down the role. It was full of flip charts, pie charts and Venn diagrams, and I was utterly confused by the end. It seemed to me to be a jack of all trades and master of none, but it needed the authority of a professional expert. It was reminiscent of a scene from David Brent’s “The Office”.
These are compulsory jobs but they are not mandated to a minimum standard. Qualifications for the role have not been established, no training programmes are in place and, as I say, even the professionals themselves do not seem to know what that training would consist of. If this post is made mandatory, as proposed by these clauses, the qualified few will surely be able to write their own salary cheques. No wonder that leaseholder campaigning groups are talking about “jobs for the boys”. Even if that is a bit cynical, we must ask who will judge their performance or hold them to account. Leaseholders—who will pay for them and who are best placed to judge those overseeing the block they live in, due to day-to-day interactions—now say that, as always, they will have no say at all.
Safer homes will come not from employing someone to march around a block of flats, trying to find issues to justify their existence and quite a hefty salary. This is a version of the waking watch debacle, replacing hi-vis jacket patrols walking around buildings looking for sparks with a suited and booted manager with an iPad finding risks, faults and unnecessary fire safety work. If they do not find any problems, what is the point of their job?
I finish with that question. What is the point of the job? I hope the Minister agrees that there is no point.
Lord Thurlow (CB)
I support the very interesting comments of the noble Baroness, Lady Fox—most interestingly, it is immensely refreshing to listen to an amendment that is driven not only by cost savings for leaseholders but by common sense. In many cases, the sub-contracting of services on multi-let buildings is appointed through external managing agents, who apply a levy; they will charge, let us say, 10% on the fee for the work being done. In the £60,000 example, another £6,000 goes on to the tenants’ bills at the end of the year.
I simply support this proposal. It will be a difficult one for the Minister, but common sense is short in the Bill because of the layers of bureaucracy. This will save money for tenants.
Baroness Pinnock (LD)
My Lords, I am very grateful to the noble Baroness, Lady Fox, for raising this issue about the necessity for a building safety manager in every block—this is of course in relation only to higher-risk buildings. However, residents in higher-risk blocks will have a managing agent, to whom they pay a fee—a service charge—who appoints an accountable person, for whom there will be an additional cost, and possibly a principal accountable person, if that is necessary. On top of that, each block will have to have a building safety manager. As the noble Baroness, Lady Fox, pointed out, adding on those roles considerably adds to the costs for each of the leaseholders; their service charge will rise considerably as a consequence.
I too have had discussions with some of the cladding campaign groups about the potential £60,000 role and the costs which will pass inevitably to them. They are very anxious that their lease will suddenly become unaffordable due to the piling on of costs from these roles.
The further issue in my mind is, as I think the noble Baroness, Lady Fox, said, that there is a duplication of roles. Equally, when there is a confusion about roles—each block might have three people who potentially have conflicting roles—building safety risks will fall between the three. I can find nothing in the Bill that says how each will be accountable. In the end, we come back to this: quis custodiet ipsos custodes—to whom are they accountable?
The Explanatory Notes gives us this as an example:
“The Building Safety Manager may be carrying out day to day functions, as set out in the agreement with the Principal Accountable Person, to assist the Accountable Persons in discharging their statutory obligations. However, the Building Safety Manager could choose to resign of its own volition, and conversely the Principal Accountable Person may find that the service provided by the Building Safety Manager is below standard and choose to dismiss that person. In both circumstances the Principal Accountable Person would need to replace the Building Safety Manager as soon as reasonably practicable.”
I hope everybody understood that. That is my argument: it becomes confused.
One of the issues with building safety and fire safety is that it needs clarity and simplicity. This is not clear and simple. I believe I raised at Second Reading the issue of too many rules causing confusion. When nobody really knows who will do what, it is always a recipe for a potential disaster.
Those are the two points: costs and duplication leading to confusion. The question is this: to whom are they finally accountable—the accountable person or the managing agent? It is not very clear.
The other point is about the competencies—a horrible word—of potential building safety managers. I could not find anywhere in any of the clauses which set out what those should be. The Bill talks about standards but it does not say what they will be. What should be expected of these folk?
Baroness Neville-Rolfe (Con)
I hope that the noble Lord, Lord Khan of Burnley, will not mind if I ask for clarification on a related point. First, I will say how much I agreed with the speech of the noble Baroness, Lady Fox, on the worry one might have about a shortage of experts for this purpose, leading to an escalation of costs that will end up with the ultimate consumer: the leaseholder. Clearly, given the history, we do not want confusion in the Bill.
My question is about how the safety manager will operate in practice. How often will he or she be expected to visit the building? Obviously, I know a lot more about shops, and in shops the safety manager is often a treasured member of staff who may not be an expert in safety but is an expert in making sure that other members of the team behave appropriately. You do not need much expertise on safety if you have a very good system—one that includes sprinklers, for example, which will work well because all you have to do is make sure that the sprinklers and the water that supplies them are checked from time to time. My question, which it would be good to have clarified, is: what is the vision of what this person is going to do, and will they be doing it once every five years, once a day, or whatever? That will affect both the cost and the risk that there will not be enough people to do the important job of ensuring that we have safe buildings. Even in high-rise buildings, there will still be quite a bit of demand.
Baroness Hayman of Ullock (Lab)
My Lords, I want to say how much we agree with what the noble Baroness, Lady Fox, said about the importance of having adequate safety measures. That has to run through everything we discuss in connection with the Bill. The noble Baroness also raised the important issue of cost. My noble friend Lord Khan talked about high service charges, and the Minister said she would write about that. This debate has put a focus on ever-increasing service costs, and the fact that in many cases they are starting to become unreasonable. It is very difficult when they go up by 190%, as they have in some areas.
The noble Baroness, Lady Neville-Rolfe, asked one of the key questions that I was going to ask, about the operation of the managers. What exactly are they going to do, and how are they going to do it? Will they be paid, and if so, how much? There is not a lot of detail in the Bill. This comes back to the point made by the noble Baroness, Lady Pinnock, about accountability, and whether there will be confusion over the role. It is important that we all understand exactly what building safety managers are expected to do, how they will do it and how they will be rewarded for their work. Without that clarification, there are bound to be concerns that the cost of their work will be passed on through increased service charges, or possibly increased rent. None of that is clear. We would like more clarification about the role and the expectations.
Baroness Scott of Bybrook (Con)
My Lords, I start by going back to where the Bill came from, the tragedy of Grenfell Tower. The point of the Bill is to ensure the safety of residents, particularly, in this case, in high-risk buildings, and the building safety manager is the day-to-day eyes and ears. I do not know whether people realise, but I did two or three years’ work after the tragedy in Kensington and Chelsea. Before I did that, I spent a lot of time in high-rise buildings, not in London but elsewhere in the country, and it was quite interesting, on a day-to-day basis, when I went round with fire brigades and dealt with issues such as safety doors. People took them off and put B&Q doors on. Those things cannot be done every five years, or every year; they need somebody going in and out of that building, checking up.
There will be stairwells with stuff stuck in them that is stopping people going up and down. There will be holes between the sealed containment of flat against flat. All those sorts of things need somebody who is not at arm’s-length but is working day to day. Yes, they will need new competences, but those competences are out there, I would argue, within the community already, and we will have to work on those competences. As for cost, obviously, that depends on the building. Some of these managers will be able to do multiple buildings if it is felt, by their accountable person, that they will be able to do a good job on that. One building is not the same size or requires the same amount of work as another building.
I shall now go through the amendments of the noble Baroness, Lady Fox, and I thank noble Lords for their contributions. The crux of Clause 80 is the duty to appoint a building safety manager. The creation of the building safety manager role was recommended made by Dame Judith Hackitt in the independent review to ensure, I say again, that the day-to-day management of buildings is undertaken by suitably competent people. That is what she said and that is what we are delivering in the Bill. Clause 80 establishes the role and creates a duty for principal accountable persons to appoint a building safety manager and provide them with support and assistance to manage building safety risks, except where they have the capability to meet the duties without needing such support. So there will be times when principal accountable persons have the time and the competences to do it without appointing somebody else. The skills, knowledge and experience offered by building safety managers will help drive up safety standards and, we believe, deliver positive outcomes for residents.
While the building safety manager will hold responsibility for certain tasks, to be agreed in their contract, accountability for meeting the duties set out by the Bill cannot be transferred by accountable persons to the building safety manager or anybody else. I think that answers the question of the noble Baroness, Lady Pinnock, about who is ultimately responsible. Whether the building safety manager is an organisation or an individual, they must possess the necessary competence to deliver the role. If an organisation is appointed, it must have a nominated individual named and in place to oversee delivery, providing reassurance to residents that their safety is being maintained. The noble Baroness, Lady Pinnock, brought up the competence issue. Work is ongoing with the British Standards Institute to establish a competency framework for the role, which will be supported by further guidance.
Moving on, Clause 81 deals with the appointment of the building safety manager where there is more than one accountable person for the building. Despite the often complex ownership structures of many high-rise residential buildings, we are committed to delivering a system that ensures a whole-building approach. This was a central tenet of the findings and recommendations of the independent review.
Where there are multiple accountable persons, the principal accountable person will be responsible for appointing the building safety manager. The building safety manager should play a key role in delivering a whole-building approach, drawing on the duty placed on all accountable persons to co-ordinate and co-operate with each other.
Before the appointment is made, the principal accountable person must consult on the proposed terms and costs with their fellow accountable persons. We expect agreements to be reached so that the scope of the building safety manager’s functions and the method of delivery of the whole-building approach are agreed by all. If an agreement cannot be reached, we are providing a process for resolution through applications to the First-tier Tribunal. This approach protects the rights of accountable persons and holds them to account for ensuring residents’ safety.
Clause 82 ensures that building safety managers hold their position through the contractual arrangements agreed with the principal accountable person. If either party wishes to end the contract, they may do so by giving notice to the other party in writing. When the contract ends, a new building safety manager must be appointed by the principal accountable person as soon as is reasonably possible. If a building is not being managed appropriately and is placed into special measures, which is the last resort for taking control of buildings with significant failings, the building safety manager’s contract will end.
I mentioned earlier that there is an exception to the principal accountable person’s duty to appoint a building safety manager. Dame Judith’s review was right to point out that many building owners already operate and successfully manage their buildings through competent in-house teams. Where the principal accountable person’s existing management arrangements deliver safe outcomes for residents and this can be demonstrated to the building safety regulator, their mode of delivery will not need to change. The competency requirements for qualifying for this exception are of course the same as those expected of any other building safety manager.
This approach is likely to be favoured by organisations such as housing associations or local authorities, which potentially have many buildings that fall under the scope of the new regime. Residents of these buildings will rightly expect to be able to identify individuals who play an important role in maintaining their safety, and the clause requires the identification of the individual responsible for overseeing delivery. This person will not be expected to carry out every task alone, but they will be required to provide oversight such that a holistic and systemic approach to managing safety is achieved.
The exception to the duty to appoint a building safety manager also applies where there are two or more accountable persons for the building. The competency requirements remain consistent. As in the case where they would appoint a building safety manager, the principal accountable person must, as I said, consult their fellow accountable persons and seek to reach agreement on the proposed arrangements. We expect the consultation process to follow the same route as already explained for appointing a building safety manager where there are two or more accountable persons.
Safety has to be our main priority and the building safety manager plays an important role in delivering this. The Government will reflect further on all the points raised today. However, at this point we maintain that Clauses 80, 81, 82, 83 and 84 should stand part of the Bill.
Baroness Pinnock (LD)
I thank the Minister for responding. I wonder whether she could explain something. I am still confused about what appear to be the conflicting roles of the accountable person and the building safety manager. I am looking at page 106 of the Explanatory Notes, where the accountable person is defined. It states:
“The Independent Review”—
the Hackitt report—
“identified that there should be a clear dutyholder during occupation who will have statutory obligations”—
this is the definition of “accountable person”—
“to maintain the fire and structural safety of the building.”
So we already have somebody who is being appointed to have those responsibilities. That is why I cannot see why there has to be a further role to undertake those duties. The duties are very important, but why should there be two people?
Baroness Fox of Buckley (Non-Afl)
Perhaps I should combine my question so that the Minister will not have to stand up twice. Saying that safety comes first and calling somebody a building safety manager does not mean that a building safety manager is going to make a building any safer. I do not think that it is entirely fair to suggest that those of us who are querying some of these things do not care about safety. We would not be sitting in this Committee, I assume, if we did not.
I want it clarified because I liked the Minister’s points about a common-sense approach to safety day by day and about eyes and ears. That all sounds sensible and in some ways I understand that point, but I am confused because it is not clear how many days someone will be there being the eyes and ears. The Minister read out that the competent person will have skills, knowledge and experience, but skills, knowledge and experience of what? It is still not clear. The idea of a volunteer, as described by the noble Baroness, Lady Neville-Rolfe, keeping an eye on things—items being broken or the fire door being replaced by B&Q—is slightly different from how it was discussed by the professionals when they were talking about what kind of person would be a building safety manager. They kept saying that they must be competent and experienced with some skills in fire engineering and personnel management because they will have to go around to tell people off. I think that in the end this is a job creation scheme that will not add to the safety of the building, as do many leaseholders, and they are on the receiving end of it.
Baroness Scott of Bybrook (Con)
I find it quite simple really, but then I am a simple person. The accountable officer is the accountable officer responsible for that building or many other buildings in the case of organisations that might have more than one building. They then ask a building safety manager to be there on a much more daily basis and to report back to them on issues within the building that might reflect on its fire or structural safety. Therefore, the skills, knowledge and experience required by such an officer are experience of fire and structural safety in high-rise buildings. We cannot expect the top level to be there day in, day out going around those buildings. How much will be required by each building will depend on that building, I suggest.
Lord Blencathra
Lord Blencathra (Con)
My Lords, I declare my interest as a leaseholder in a block of flats near here that has some remedial work not currently covered by the latest government proposals. I rise to move Amendment 46. In the customary spirit of this Committee, let us begin with my favourite building quote, which I learned in school and then used inappropriately all the time, as one does. Horace boasted that his Odes would be remembered like this; I commend the quote to my noble friend the Minister, since this is how this Bill will be remembered if he accepts the amendments of my noble friend Lord Young of Cookham, the noble Earl, Lord Lytton, and my humble self. Horace wrote:
“exegi monumentum aere perennius
regalique situ pyramidum altius,
quod non imber edax, non Aquilo inpotens
possit diruere”,
or
“I have built a monument more lasting than bronze,
higher than the Pyramids’ regal structures,
that no consuming rain, nor wild north wind
can destroy”.
That is the legacy my noble friend can have with this Bill, if he does the right thing. Let us crack on with proper work now.
Amendments 46 to 55 relate to Clauses 93 to 99. Of course, we have the excellent proposed new clause set out in Amendment 50A, which was tabled by the right reverend Prelate the Bishop of St Albans and which has also been signed by my noble friend Lord Young of Cookham and me. I look forward to hearing their speeches on it and will not trespass there except to say that the right reverend Prelate’s amendment may be a lot better than mine. I was moved to table my amendments in this group because, when I read Clauses 93 to 99, I was struck by how weighted against leaseholders they were. Since then, we have had the amendments tabled by the noble Baroness, Lady Fox of Buckley, which seem to come from the same assumption that the odds are stacked against residents. I look forward to hearing what she has to say on this as well.
In Clause 97, there seems to be an assumption that leaseholders are going to smash up and remove safety equipment from our buildings. Why in the name of God would we do that? Where has this crazy notion come from? We all paid good money for our properties. We bought them and it is in our vested interest to maintain and add value to them. Why on earth would we, in a million years, want to diminish that? It just does not make sense. Perhaps at Report noble Lords might be tempted to move that these clauses do not stand part of the Bill. Under them, we can be served contravention notices, access to our flats can be demanded and the accountable person can be given rights to take us to court, yet there is not a single balancing right for leaseholders to take action against the accountable person, who is more likely to be at fault, if our experience of managing agents is anything to go by.
Amendment 46 says that the accountable person can draw up the strategy “after consulting the residents”. Do we not believe in prior consultation before foisting a strategy on the people who have to comply with it? If a Minister did this, he would be up for judicial review for not doing proper consultation first. Amendment 46A says that, where there is a residents association, the accountable person must draw up the strategy in conjunction with its members and it must be agreed by them. Quite simply, they have the right to be involved and their buy-in is essential if the leaseholders are to happily sign up to the strategy.
Getting that buy-in is vital because we all know that the accountable person, who is likely to be the managing agent, will gold-plate every aspect of this strategy to increase the value of the landlord’s holdings. This morning, just for fun, I checked the price of a 6-kilogram standard dry powder fire extinguisher—a simple bit of safety equipment we would all expect to see. The most expensive came in at £171.75, while the cheapest was £31. They had exactly the same contents, were the same weight, had the same ingredients and would have the same firefighting ability, but we all know which one the landlord, freeholder and managing agent would buy and charge us for the privilege. It would be the gold-plated one—literally, in this case, I think. If accountable persons have a free hand to draw up these strategies, I am afraid that leaseholders will get ripped off.
Amendment 47 deletes Clause 93(5), which proposes that Clause 93(4)(a) does not apply where the accountable person is not aware of the resident or has taken reasonable steps to be aware of the residents. That is not good enough, in my opinion. This cop-out provision is not acceptable; managing agents or accountable persons could devise a strategy and claim that they could not find the residents to whom it applies and therefore could not consult them. “Accountable” means being accountable, knowing your residents and tracking them down, with no excuses—it is as simple as that.
Amendment 48 adds additional potential powers for the Secretary of State to make regulations. Again, I am not suggesting that he has to make them or building into the law that this has to happen, but this would give him a permissive power to act if he found a problem. It allows him to make further provision about the content of an engagement strategy and the way it is issued. That is small beer and pretty innocuous stuff which I am sure my noble friend can accept. I will be disappointed if he says he cannot.
Amendment 49 attempts to apply the same sanctions that are imposed on residents in Clauses 97 and 98. Clause 94 permits residents to request information from an accountable person but there is no sanction whatever if the accountable person fails or refuses to provide it. That is simply wrong; it is not a quid pro quo because, the other way round, residents are compelled to co-operate with the accountable person. I believe that the resident has as much right to demand compliance as the accountable person, who can demand compliance from residents and issue contravention notices under Clause 98.
Clause 95 states that the accountable person must set up a complaints procedure, but there is no sanction if he fails to do so. My Amendment 50 would give the Secretary of State an additional regulation-making power to create penalties for the failure of a principal accountable person to create such a complaints procedure. Again, I am not saying that the Secretary of State must do it and I am not setting out the penalties; I am just asking the Secretary of State to take the power of a regulation in case they need to use it in future because an accountable person has failed to set up a complaints procedure.
My Amendment 51 seeks to widen the potential definition of “relevant safety item”. At the moment, it is tied to “common parts” as defined in Section 69. That may or may not be good enough—I am not expert enough to know—but my amendment would change it to anything that may be defined in regulations. This would give more flexibility because, of course, regulations can be changed at any time, at the stroke of a ministerial pen, whereas an amendment to Section 69 would require primary legislation.
My Amendments 52 to 55 seek to delete “county court” and substitute it with “regulator”. I accept that the regulator may not be the right person but I think that it is heavy-handed to give the accountable person the right to go to the county court and threaten leaseholders that way. If we have a new regulator and First-tier Tribunals and an ombudsman, why drag the county court into it? Surely one of those bodies could be designated as the person to whom the accountable person goes to demand action from residents. I get the feeling that these clauses were designed to scare residents with the threat of court—for example, the accountable person saying, “Do this or we’ll take you to the county court”. That is heavy-handed; I believe that the regulator, the ombudsman or someone else should have that power instead.
My Amendment 85 would introduce a new clause to provide that, if a person with an interest in a property conducts a survey on it, they must share that information with everyone else who also has an interest in the property. Again, it is a power for the Secretary of State to introduce regulations if he is so minded; he is not forced to do so. My reasoning behind this is that we will get some landlords, freeholders and managing agents undertaking surveys of safety risks then saddling leaseholders with huge remedial costs while not sharing the safety report. Leaseholders would have to do their own at extra cost; that may not happen. There can be no justification for a safety survey undertaken by anyone in the building not being shared with everyone else in the property.
Finally, Amendment 87 would permit the Secretary of State, if he were so minded, to introduce regulations to permit the regulator, ombudsman or anyone else designated by the Secretary of State
“to act on behalf of a leaseholder or group of leaseholders in taking action against a developer, contractor, landlord or freeholder in relation to complaints about fire hazard remediation.”
We all know that a leaseholder challenging managing agents, freeholders and landlords is a real David and Goliath battle. In this case, David would not have a sling, or even a single pebble to fire at them. Leaseholders need a champion to fight their corner. My proposed new clause would permit the Government to appoint a champion and recover the costs so that the taxpayer does not have to pay a penny.
As I said, surely my noble friend the Minister cannot reject all these amendments as not technically correct or necessary because almost all of them would simply grant the Secretary of State permissive regulatory powers. He would not have to implement a single one of them but I would grant him the powers to make regulations if, at some time in the future, some of these problems arose and the Government had to act. Let us build a permissive regulation-making power into the Bill now so that the Secretary of State can use it in future if need be. I beg to move.
The Lord Bishop of St Albans
My Lords, I rise to speak to Amendment 50A in my name and those of the noble Lords, Lord Blencathra and Lord Young of Cookham. Let me say how much I support the sentiments and intentions of the noble Lord, Lord Blencathra, who has done us a real service.
I, too, do not want to die over the details of this amendment. I hope that this will stimulate a really vigorous debate so that we can all work together on how we get these sorts of commitments in the Bill. I and others on my Benches want to work with the Government and others to achieve this. If someone else can turn up with much better solutions, that is great.
Throughout the cladding and fire safety crisis, we have heard many stories of landlords imposing outrageous and sometimes astronomical building safety charges on leaseholders and tenants. Often this has been done by managing agents acting on behalf of the freeholder. Leaseholders and tenants have reported a complete lack of accountability and transparency throughout this process and have been unable to challenge or even scrutinise the charges imposed on them.
Of course, this is only one aspect of the fire safety crisis, but one that has been somewhat overlooked when the primary focus has rightly been on ensuring a fair remediation settlement. However, the fire safety crisis has exposed the utterly powerless position that many leaseholders find themselves in, sometimes subject to the whims of freeholders with very few avenues of recourse, unless they raise considerable amounts of money and try to challenge things in the courts, which is very often way beyond the financial ability of many leaseholders, even if they wish to do it.
Amendment 50A would strengthen the right of leaseholders and tenants to consult with, and scrutinise decisions made by, the landlord on matters relating to building safety and would require the landlord to set up a recognised tenants’ association for the purpose of consultation.
The leasehold system in tall buildings has been placed under serious stress in the post-Grenfell years. Future home owners may have looked at the existing crisis and been turned off the prospect of owning a leasehold property. Others, facing far fewer choices, have simply—fatefully—walked into purchasing a leaseholder property unaware of the realities of the leasehold system, only to be later consumed with regret and extortionate charges. We need to make the leasehold system fairer and more attractive, not just for those who are thinking about buying a leasehold now, but for those existing leaseholders who feel powerless in the face of their managing agent and freeholder.
Ideally, leaseholder associations would also be able to scrutinise and consult on insurance commissions, along with other service charges not related to building safety. The amendment would begin to reorientate the relationship between the freeholder and leaseholder, which, as it currently stands, is skewed too far in favour of the freeholder. This is not an anti-freeholder amendment. Many freeholders will manage their property in a responsible manner. There are, however, just too many instances—and quite high-profile ones—of freeholders acting in an appalling manner. For example, the Yianis Group, the freeholder of the West India Quay development, spent over £74,000 in a legal action to block the residents from forming a recognised residents’ association. This was after leaseholders issued proceedings against the freeholder over expensive energy bills—something not covered by this amendment, of course, but worth mentioning—in which they were vindicated after the court revealed that they had been overcharged by 26% on their utility bills.
This is the same freeholder which, when challenged by the residents at a different development at Canary Riverside, lost a ruling brought forward by the residents and was forced to replace the managing agent. The court ruled that the freeholder failed to maintain the estate and did not adequately prove expenses and service charges. As the Times reported, it even charged a 100% mark-up on repairs to leaky windows to a repair company. At the time of reporting, the freeholder then attempted to chip away at the court-imposed manager’s power, costing the leaseholders £1 million in legal fees over 22 proceedings. The freeholder’s intentions here speak for themselves.
Stronger provisions than those listed in Amendment 50A would be welcome, as these powers would relate only to building safety matters. However, the amendment would go some way to breaking the power of any unscrupulous freeholders who view their leaseholders as cash cows. The amendment is not for those honest, conscientious freeholders who retain good relations with their leaseholders and managing agents, but for those such as the Yianis Group, in respect of whom one leaseholder said they were made to feel at the mercy of their landlord.
I hope the Minister will look seriously at measures to strengthen leaseholder representation when dealing with freeholders. The scope of the Bill limits what we can do at the moment, but a verbal assurance that the Government are committed to reforming this imbalance of power would be most welcome.
In the meantime, I hope that the Government will consider these proposals carefully—limited though they may be—as a stopgap to help end some of the egregious abuses that leaseholders and tenants may face from their freeholder. I hope that this will be a contribution. I look forward to hearing what the Minister says in his summing up.
Baroness Fox of Buckley (Non-Afl)
My Lords, I shall speak to Amendments 52A to 52C, 54A, 54B, 55B and 55C, which relate to Clauses 97 to 99. I also support the amendments in the name of the noble Lord, Lord Blencathra, and his comments, as well as those of the right reverend Prelate the Bishop of St Albans. It is in that spirit that I make these observations.
One issue that the building safety and cladding crisis has shone a light on is just how iniquitous residential leasehold tenure really is. The system of leasehold may dress itself up as home ownership. When I bought my flat 25 years ago, which was the first time I had ever bought anything or got a mortgage, I thought of myself, very proudly, as a home owner—it was part of my growing up—but I now think that it was a bit of a mis-sell, as I am nothing of the sort. As Rabina Khan, a Liberal Democrat councillor in Tower Hamlets, puts it—she has been very insightful on all these issues—in effect:
“Leaseholders are tenants when it comes to rights, but owners when it comes to paying any bills. Yet they have no control over the contractor, costs or scope of any works. They must pay up pretty much whatever is demanded by the freeholder landlord and their agent.”
Under Part 4 of the Bill and the clauses that I am referring to, building owners are given sweeping new rights in relation to entry to and surveillance of leaseholders’ homes in the name of safety and fire prevention, even being able to force entry if the leaseholder does not admit entry to their own homes by a set time. Leaseholders who I have spoken to are concerned that these Part 4 provisions could be used to threaten and harass leaseholders, are overly intrusive without affecting fire safety in any real way, and, more broadly, feed into a dangerous atmosphere —which we are familiar with from the Covid period and lockdowns—of dispensing with civil liberties and privacy too easily under the auspices of safety.
My amendments to Clauses 97 to 99 come as package. They seek to tighten up the drafting to ensure proportionate actions that do not leave leaseholders open to either false accusations or blame for safety issues, so that it does not become yet another vehicle for forcing leaseholders to pay ever more money, and they would respect the rights of leaseholders as home owners.
Clause 97 places a duty on every occupant of a high-risk building not to interfere with safety features. The focus here is making it clear that residents have a duty not to affect the safety of the building. My amendment to Clause 97 makes it clear that this duty is breached only where there is material interference. This change would, for example, avoid someone being found in breach of the duty if they accidentally broke the glass in a dry-riser door or accidentally broke a hinge on a fire door because the current drafting would treat them not as accidents but as breaches of duty in the same way as someone deliberately disabling a fire alarm.
Clause 98 allows an accountable person to send a notice, possibly demanding money, if the accountable person knows or, importantly, just suspects that there has been a breach of this new residents’ duty. Again, this section has no materiality threshold, so it can be triggered by any breach that the accountable person feels like enforcing. As it stands, it is far too subjective. It is blatantly open to malicious misuse or just a promiscuous and ever-growing risk-averse blame culture targeting leaseholders as culprits. The amendment I have put forward tightens the clause up to focus on material breaches that the accountable person can evidence—a key point.
Clause 99 is on the power of entry. The current drafting allows the accountable person to demand access for any reason, including mere suspicion of a breach of duty. This demand for access can be given with as little as 48 hours’ notice. If access is not given in that timeframe, the accountable person can then obtain a court order, possibly without a notice to the person affected. This makes what should be a last resort possibly a new normal, and, I argue, a new draconian normal.
The amendment I have proposed to Clause 99 would require that the new building safety regulator issues a code of practice on how exactly this power is to be used after consulting a tenants panel. That is not a perfect solution, but at least the onus would be on the accountable person to comply with the code of practice when making requests for access to people’s homes.
As has already been mentioned by a number of speakers, I am not trying to paint a picture of dastardly freeholders, building owners or managing agents gleefully harassing leaseholders or threatening to kick their doors down, but for me one of the inevitable consequences of a disproportionate zero-risk attitude to building safety with an ever-growing proliferation of demands and duties placed on the accountable person, requiring that they check, check and check again, means that we end up where the Secretary of State, Michael Gove. warns us not to end up. In another context he has warned of the dangerous overzealousness of inspections, unnecessary surveys and precautionary, just-in-case assessments.
All this fuels the notion that not only is every flat a fire hazard but that every owner of a flat is a fire hazard too. As soon as safety measures become a disproportionate fear, they can lead to perverse outcomes. In June 2020, before the Public Bill Committee, L&Q, one of the biggest social landlords, responsible for 95,000 homes, including leaseholders and shared ownership properties, complained about the difficulties of accessing the front doors of leaseholders, implying that leaseholders who refuse to go along with its neverending fire safety upgrades might be putting lives at risk. Its spokesperson said:
“With tenants, we might be able to go to court and get injunctions and get injunctions to gain access to a home, but with leases, that challenge becomes even more difficult.”
That was said as a matter of regret.
This attitude means that these provisions presume that leaseholders cannot be trusted. I think they imply a certain contempt that treats leaseholders as ignorant or stupid or both, as though, if left alone, away from the wise and sensible landlord or his or her appointed overseer, they might set up a barbeque in the living room, rewire their own flats even though they are not electricians, be like children irresponsibly playing with matches or wilfully destroy safety equipment, as the noble Lord, Lord Blencathra, mentioned.
The Minister of State, Home Office and Department for Levelling Up, Housing & Communities (Lord Greenhalgh) (Con)
My Lords, I can see that my noble friend is about to rise, but there is a crescendo in this group of amendments and I realise that it is very important to hold in reserve the speeches from my noble friend Lord Young—as well as the crescendo of the amendments to be introduced by the noble Lord, Lord Stunell, and by my noble friend Lady Neville-Rolfe. This is a veritable feast of amendments, so I will introduce the government amendments at this point, if I may, before I summarise the group.
As this is a feast of amendments, I have looked up my old grace, which I used to say when I was 18, 19, 20 years of age. It is very long—I hope I will not get it wrong, as I know the right reverend Prelate will know if I do. It goes as follows:
“Oculi omnium in te sperant Domine:
Et tu das escam illis in tempore.
Aperis tu manum tuam,
Et imples omne animal benedictione.
Benedic, Domine, nos et dona tua …
et concede, ut illis salubriter nutriti
tibi debitum obsequium praestare valeamus,
per Christum Dominum nostrum.”
That is roughly right. It is what we used to say before we could eat. This is a feast, and I appreciate that every amendment is laid with the interests of improving this Bill. If we cannot accept them, I want to say that I appreciate the intentions behind every one of them. I will summarise our position at the end.
I have tried to summarise each group in three words. This is the “residents and redress” group, and I have always been clear that residents should be at the heart of the new regime. Today’s debate demonstrates the continued importance of that commitment. I am pleased to start by speaking to a group of amendments that is focused on ensuring that residents and others have more access to redress.
Amendments 76 and 77 create a new power for the High Court to impose building liability orders in appropriate cases. These orders will allow civil claims to be made against the associated companies of a company involved in the development or refurbishment of a building in certain circumstances, including when the original company no longer exists. In this House and in the other place, we have discussed the lack of ongoing liability that large developers have due to their use of special purpose vehicles. These amendments directly address this issue and support the changes we have proposed to the Defective Premises Act. They rebalance the level of exposure that small and medium-sized businesses in the construction industry currently have compared with the larger players—and, most importantly, they unlock potential funding for those who have remediated or who need to remediate, if they bring a successful claim. I consider that these orders will be an important tool in holding “polluters” to account and making them pay for their past misdeeds—so I hope that noble Lords will join me in supporting these amendments.
Moving on, I have also tabled a series of amendments that will help to make sure that construction product companies pay to put right building safety issues that they have contributed to causing. I do not intend to move these amendments today but have laid them to invite the scrutiny of noble Lords. I will listen carefully to the debate and bring these measures back at a future stage. Briefly, they target construction product manufacturers and ensure that they take responsibility for their part in the creation of building safety defects. The new clauses in Amendments 107 to 109 and 144 introduce two new causes of action against construction product manufacturers. There are currently almost no routes which allow leaseholders to hold construction product manufacturers accountable for their role in the creation of serious building safety defects. The Government are clear that those who have been responsible and continue to be responsible for building safety defects have a responsibility to put them right.
These causes of action will enable claims to be brought against construction product manufacturers and sellers for their role in the creation of building safety defects. They will apply if a product has been mis-sold or is found to be inherently defective, or if there has been a breach of construction product regulations. If this contributes to or causes a dwelling to become “unfit for habitation”, a civil claim will be able to be brought through the courts under these causes of action.
The cause of action relating to cladding products in Amendment 107 will be subject to a 30-year retrospective limitation period. The broader cause of action relating to all construction products in Amendment 108 will be subject to a 15-year prospective limitation period. These limitation periods reflect the changes we are making to the limitation period under Section 1 of the Defective Premises Act. These causes of action will ensure that construction product manufacturers can be held responsible for the costs of rectifying their mistakes.
Amendments 110, 113, 114, 141 and 145 will create a power to make regulations to require construction products manufacturers and their authorised representatives, importers and distributors to contribute towards the cost of remediation works where they have caused or contributed to dwellings being unfit for habitation. Amendment 110 will enable the Secretary of State to serve a costs contribution notice on companies that have been successfully prosecuted under construction products regulations, where the relevant product has contributed to identified dwellings being unfit for habitation.
Amendment 114 introduces a new schedule that will give the Secretary of State the power to appoint an independent person to inspect buildings where the relevant product has been used. This assessment will consider whether the conditions for serving a costs contribution notice are met, and the remediation works required. Amendment 114 will enable the Secretary of State to make regulations setting out a process for establishing costs that a company should be required to pay, which will take account of its ability to pay, and to whom payment should be made. This amendment will also enable the Secretary of State to require a company to contribute towards the cost of building assessments carried out as part of this process. Setting out this scheme in secondary legislation will enable the necessary interaction between costs contribution notices and construction products regulations, including those that will be made using the powers in this Bill.
I will listen carefully to the remainder of the debate today, as I have to every speech given so far introducing various amendments, and I look forward to hearing from noble Lords. As I said earlier, I will be moving only Amendments 76 and 77 today. I will carefully consider what I have heard in relation to the other amendments, and I will bring these measures back at a future stage.
Lord Young of Cookham (Con)
My Lords, the instructions on the sheet of paper in front of me are not “crescendo” but “diminuendo”—some gentle accompaniment on the bass to the forte soprano that we heard from the noble Baroness, Lady Fox. But seriously, I want to add a brief footnote to the excellent speeches made by the noble Baroness, my noble friend and the right reverend Prelate.
I make the point that they all underline the need for the next stage of leasehold reform which the Government have promised, which does away with this feudal system of leasehold which exists nowhere else in the world. Once we have done that, all these problems that we have been talking about this afternoon will disappear: there will be an identity of interest between the freeholder and the leaseholder because they will be the same person. At some point, perhaps the Minister can shed some light on the next stage, confirming that that is indeed the Government’s objective and that they want to move in that direction as fast as possible.
I add a brief footnote to the excellent speech the right reverend Prelate made on Amendment 50A. In particular, I draw attention to the radical proposal in subsection (3)(a) of the new clause proposed in his amendment, which places an obligation on the landlord for
“where there is no recognised tenants’ association in existence before the coming into force of this section, creating a recognised tenants’ association and consulting with it about building safety”.
Because of the Long Title of the Bill, the right reverend Prelate had to confine it to building safety. However, it is a radical proposal. It places the obligation for establishing a tenants’ association not on the tenants, which is the position at the moment, but on the landlord, evening up the terms of trade. As I said, it is a very radical proposal indeed. An indifferent landlord does not want a residents’ association or a tenants’ association with whom he has a statutory obligation to consult, although I happen to believe that it is in his best interests to have such a dialogue. So the terms of trade are dramatically altered by the right reverend Prelate’s amendment.
In an earlier incarnation, I recall helping establish an organisation called Tpas—the Tenant Participation Advisory Service—I see the noble Lord, Lord Best, nodding sagely; he has a similar vintage to myself when it comes to housing legislation. That was focused primarily on tenants of social landlords, but I believe it has subsequently expanded into the private sector. It would be very well placed to advise landlords and tenants on how to set about establishing such an association, were the right reverend Prelate’s amendment to be accepted.
Finally, on this group of amendments, I reread chapter 4 of the Hackitt report last night, entitled “Residents’ voice”, and it has a whole series of recommendations about enfranchising the resident and the tenant in exactly the way that we have underlined. So, as I said at the beginning, I add a small a complement on the double bass to the excellent speeches that have been made on this group of amendments—or perhaps I am a tenor.
The Earl of Lytton (CB)
My Lords, I will try to be brief here. This is an extremely valuable group of amendments, and I entirely relate to the point made by the noble Baroness, Lady Fox, and the noble Lord, Lord Blencathra.
I will comment on something that the noble Lord, Lord Young of Cookham, said. He introduced the question of, if I paraphrase him right, the undesirability of the long-term continuation of conventional long leasehold, and I understand that. For some years I chaired the Leasehold Advisory Service when it was first set up, which was in response to a ministerial commitment that it should be put in place and that there should be advice to leaseholders.
Baroness Neville-Rolfe (Con)
The noble Earl, Lord Lytton, is a great expert on landlord/tenant matters. I agree with him that changes to the leasehold system are not for this Bill; indeed, I do not think that my noble friend Lord Young was suggesting that they should be in it. We have quite enough to do in this Bill. I am grateful to my noble friend the Minister for his description of the new clauses and his willingness to listen, as I think that the new clauses may need some more work.
Like the right reverend Prelate the Bishop of St Albans, I am passionate about consultation, as my record elsewhere shows. Obviously, I am very concerned about bad practice. However, we cannot have a system where an unco-operative resident or two could prevent appropriate safety arrangements being agreed—that is a concern of mine—or encourage the use of too many expensive lawyers, with the cost ending up with the leaseholder.
We also need to think about the enforced requirements for a residents association, as suggested by my noble friend Lord Young in one of the amendments. It may be worth considering in high-risk cases, but it could complicate matters needlessly in some areas.
I shall speak to my Amendment 147 in this group. It would delay the commencement—that is, the coming into force—of the new provisions on the remediation of certain defects and building liability orders until an impact assessment has been published. Noble Lords will know of my passion for impact assessments; I thank my noble friend the Minister for the original assessment on the Bill. I emphasise, with my experience as a civil servant, a business executive and a Minister, that this is not simply a bureaucratic exercise. The discipline of drafting forces the executive authorities to reflect more deeply on the consequences, including the second, third and even fourth-order effects. It encourages good administration and identifies perverse effects and problems. All this matters more—not less—when the measures are ones of great complexity, especially if they are being rushed through.
I have reflected on this further in the light of our important debate on Amendment 24 in Committee last Thursday, 24 February. I have reread it carefully in Hansard, and I thank the noble Baroness, Lady Pinnock, for mentioning that an impact assessment, as well as an Explanatory Memorandum, before Report would be helpful to our debate. As she said,
“blocking developers, even when they have planning consent … is a really radical proposal”,—[Official Report, 24/2/22; col. GC 184.]
and we need to know how it might work and have an impact assessment. We need to understand all those who would or could be affected, including cladding suppliers and manufacturers, architects and surveyors—and, indeed, the planning and building control authorities, which may need to change their practices.
I was struck by the complexity of what is proposed, and the certainty that there will be hidden and unnoticed effects. The right reverend Prelate the Bishop of St Albans, in an excellent speech, was right to point out that any levy paid would inevitably be passed on to consumers and tenants in large part. He was also right to remind us of the chronic shortage of supply of homes in the UK. Indeed, in our report Meeting Housing Demand, the Built Environment Committee found a shortage of homes of all tenures, including social housing. We need to ensure that that does not go backwards, and that the whole building industry, already short of skills and resources, is not needlessly diverted—while, of course, doing the right thing on safety. A decent home is so important to all and we now need to cater for yet more arrivals as a result of the desperate situation in Ukraine.
I was therefore disappointed by the approach of my noble friend Lord Blencathra, who until recently chaired—very well, if I may say so—the Delegated Powers Committee. I believe it is irresponsible to give yet wider powers for bringing in and punishing, or penalising—effectively fining—new groups, when we have not thought through how they might be involved during our scrutiny of the Bill. I am afraid I have the same hesitation about engagement with residents, which is the subject of today’s group of amendments, which include a widening of powers. I regret to say that I think those amendments go too far.
More importantly, all this discussion has reinforced my view of the need for my amendment. I hope the Government will consider it carefully, as it might go some way to assuaging the fears that there may be about the proposals before us, and any decision by the House to widen their application. Wide powers are being taken in the Bill, which will set a precedent for the future. I would like to support the Government in finding a way through, but I would also like to understand the impact.
Baroness Pinnock (LD)
My Lords, this group covers three big issues—residents’ engagement strategy, access to properties, and the third part, relating to government amendments, some of which have not been moved today, on construction products and liabilities. My noble friend Lord Stunell will wind up this debate, using his expert knowledge of many of these issues, so I shall restrict my comments to the amendments about residents’ engagement, access and a little bit about construction products.
I completely agree that there has to be a residents’ engagement strategy. One of the learning points from the terrible Grenfell Tower fire was that residents wanted a voice and tried to make their voice heard, but it was not listened to. Their voice may have been heard, but it was certainly not listened to—and it was certainly not acted on.
As the noble Lord, Lord Young of Cookham, has pointed out, there is a big part of the Hackitt report which references the importance of the residents’ voice, and of listening to and acting on what they say. They are the folk who live there. They are the people who daily see what goes on. Their voice must be heard so, whatever else we do, I hope that we will strengthen those clauses about resident engagement. Picking up on the point made by the right reverend Prelate the Bishop of St Albans, we need residents’ associations to do that. We cannot force them to exist, but we can put the onus on the freeholder or the accountable person to ensure that there is some method for the residents’ voice to be heard.
Lord Stunell (LD)
My Lords, I am pleased to contribute to this debate. We certainly have many important issues bound up in one group. I will focus particularly on government Amendments 76 and 107 and my Amendment 107A. I will use this as an opportunity to open up more widely some of the issues that have already been raised in the debate so far, particularly by my noble friend Lady Pinnock and the noble Baroness, Lady Neville-Rolfe—who I suppose I can call a noble friend on the other side—who is the chair of the Built Environment Select Committee on which we both serve. I thank her in particular for her Amendment 147. There was no agreement, discussion or co-ordination between us, but I hope that she will think that my Amendment 107A and my words in support of it strengthen the case for the Minister agreeing to her amendment.
I am not going to get into the Latin stuff. My top result was 26% and I was referred back to the previous set. Incidentally, the Latin teacher at the time was a Conservative alderman—but I have not held that against him too much since.
On a serious note, this group brings into focus the really big picture on this. It is a set of proposals from the Government that, taken overall, completely tears up the normal rulebook about what Governments do to private sectors. The Bill gives a power to deliberately stop a business from functioning, and that is pretty rare. Sometimes legislation prevents businesses from functioning, but it is usually an accidental by-product of something else. This is, quite clearly, the power to stop a business from functioning if it fails to behave in a certain way.
That is robust and unprecedented and, given the scale and depth of the problem, it is certainly proportionate and necessary for building work in the future. It is also certainly right for products that go into buildings in the future to be treated in the same way. They must be safe and there must be compellingly strong reasons for those who make and install them to do so correctly, in the knowledge that they may face draconian penalties if they do not.
Even for that forward-looking case, Amendment 147 from the noble Baroness, Lady Neville-Rolfe, is certainly right: there must be an impact assessment published before any regulations are tabled for the implementation of that regime. Certainly, we on this side strongly support robust action being taken, but we also want to understand the consequences of doing it, and we want an opportunity for your Lordships to see that the consequences have been examined properly and to judge proposals in the light of that.
My Amendment 107A looks forward but looks backward to the last 30 years as well. It is a probing amendment—or, I might say, a “tip of the iceberg” amendment. It is about product liability rather than construction liability. I also think that everything I say in aid of my amendment applies just as much to construction liability as it does to product liability.
In a previous life, I spent part of my 20 years in the construction industry inspecting work prior to handover to assess whether it had been completed to specification. Most building contracts then had—and still have—a defects liability period, which means that six months after the handover somebody walks around for a second time to see whether any outstanding defects have been remedied properly so that the final moneys can be released. During my time, I did some of both those kinds of inspections, in each case on behalf of the client.
My job when I made those inspections was therefore to reveal and not to conceal. I see that the noble Earl, Lord Lytton, is nodding his head; he has the same experience. That was back in the 1970s and 1980s, and I would say that anyone who believes that standards back then were higher than they are now is mistaken. Actually, they were no higher in the 1870s or 1880s either, despite what the Minister told us in our first sitting. You only have to remember what slum clearance was all about to realise that poor building standards have always been with us.
In my professional experience, disputes were common and hugely pivoted around various benchmarks when the inspections took place. Was something done exactly as designed or not? Was it in strict compliance with the regulations or not? Was it better or worse than industry standard practice? And, as the noble Earl, Lord Lytton, said a moment ago, had they made reasonable endeavours or not?
I never let through anything that was not fit for habitation, as referenced in Amendment 107, nor a building safety risk, as set out in subsection (4) of Amendment 66 in the next group. However, there was always a lot of scope for argument over definitions, which is highly relevant to this legislation. I once attended a fire door test that was put in place because I had objected to a fire door which blew to bits in a wind. That is when I learned two important things, one of which is that to pass a one-hour fire door test a fire door has to resist fire for only 40 minutes. The one hour is when the frame drops out. The second lesson was never to go to a fire test in your best suit.
Baroness Neville-Rolfe (Con)
Does the noble Lord think this construction product schedule includes such things as wood? The thing about fire safety is that it is not just to do with whether it is a plastic tile of some sort but with where construction products are used. In a case that I am aware of, there is an argument that things made of wood—as they have been for a thousand years—are not safe and should be replaced by something else. I am not quite clear how the construction products link into that. This may be a question for the Minister, but I ask the noble Lord, Lord Stunell, because he has obviously been studying this.
Lord Stunell (LD)
The noble Baroness is certainly right that there are materials that have been used in one way, safely and successfully, for thousands of years, and others that are intrinsically safe, such as bricks—presuming they are made of clay rather than straw. I will not try to give the full range, because I think the Committee would get bored quite quickly and my pool of knowledge is quite shallow, but she has raised an important point: it is not just about having a product but about what you do with it. I am sure the High Court would want to put both components together before issuing any building liability orders, which seem to be the nuclear weapon that the Government believe they have in their hands.
Lord Khan of Burnley (Lab)
My Lords, I will speak to a number of amendments in this group. It has been a fascinating and exhaustive debate, even though there has been a mix of amendments.
I will start with Amendments 46 to 48, which are technical amendments in the name of the noble Lord, Lord Blencathra, who simplified and explained them in a very eloquent and clear manner—even using Latin at the start of his introduction. I hope the Minister got the gist of that message in Latin; I cannot repeat it, but I think it purported to say that, if he listens to the message and applies it, he will leave a wonderful legacy through this Bill.
At the heart of the argument from the noble Lord, Lord Blencathra, was consultation. Many noble Lords in this Committee have, at different stages of our lives, undertaken consultation; its value is essential to what we are doing today. I am really concerned that, if there is a lack of consultation or an element of tokenism—if we do not get residents, tenants’ groups and leaseholders on board—it could lead to what we often refer to as post hoc rationalisation of predetermined decisions. We need to take people with us on that journey, as I have said previously, and ensure that they feel as close as possible to the decision-making we are undertaking in this Committee and in subsequent debates in this Bill’s journey.
Amendment 49 in the name of the noble Lord, Lord Blencathra, makes provision regarding the contravention of requests for further information. Similarly, Amendment 50 would allow regulations to make provision for penalties where a principal accountable person fails to set up a proper complaints procedure or fails to do so in reasonable time.
The noble Lord referenced Clauses 93 to 99, which are seen as unfavourable for leaseholders and residents. The noble Baroness, Lady Fox—who has, by the way, introduced amendments for the first time; I congratulate her on completing that process successfully—raised concerns about Clauses 97 and 99. She said that last resort access should not be the new normal and that we must be careful about entrance on minor issues in particular.
Lord Khan of Burnley (Lab)
Sometimes they are wise men and women. I hope that the Minister can take forward their wise suggestions on this group of amendments in particular.
We welcome many of the government amendments, tabled in good spirit to make sure that life gets better for residents of buildings across the country and that they are free from unsafe situations. Government Amendment 141 makes provision for regulations under the new clause relating to costs contribution notices to be subject to the draft affirmative procedure. I want to ask the Minister about the power given to government to make new legislation. What scrutiny will these new powers be subject to?
The noble Lord, Lord Young of Cookham, and the noble Earl, Lord Lytton, talked about the important issue of long leases. It is a fascinating debate, but perhaps it is not for now, because this Bill is about building safety. When the noble Lord, Lord Young, was a Minister in 1984, I was five—in fact, I was a safety hazard in my parents’ building at the time. His point about the future of long leases is important, and I am sure it will be discussed and debated in a future Bill. I also appreciate the experience brought by the noble Earl in discussing his points.
The noble Lord, Lord Stunell, made an interesting and very important point about product safety. It is difficult to digest. Even the Construction Products Association is confused about this area. There is a lack of clarity which I hope the Minister and the Government will address.
Finally, I will single out Amendment 147, in the name of the noble Baroness, Lady Neville-Rolfe, which looks at publishing assessments of the impacts on businesses, in particular, of remediation changes. It is an important amendment because there is a shortage of homes and we want to make sure that we look at how this impacts on everybody in the whole chain and that we do not move to a situation where we are building fewer homes. That is an important point, but today has to be about impact assessments on citizens of this country and every person living in an unsafe building.
The Minister in debate on a previous day mentioned that this is a landmark Bill and an opportunity. Unfortunately, at this moment it is not being taken forward with the really strong, meaningful, well-intentioned and well-purposed amendments that have been presented, so I hope that the Government will reflect, listen and make that impact.
Lord Thurlow (CB)
Before the Minister stands up, perhaps I can make two points. This is a large group of quite diverse amendments. My concern is over the accountable person role. Judging by the discussion today—I will not go through the list of different contributions—I think it is going to be a very difficult job indeed. That person is going to need help in creating a co-operative working relationship with tenant groups, and the situation could be exacerbated by bad and difficult freeholders or managing agents, often in league, and if the accountable person finds himself or herself in their pocket it will not be made any easier.
I do not overlook difficult leaseholders. There are some tenants who will not let anybody into their building. That is also a problem to be dealt with, but I have two suggestions. The accountable person should be prepared to prove reasonableness in all their behaviours and should also be prepared to prove value for money. An autocratic manager refusing to engage with a leaseholder makes life even more difficult. In the second case, concerning value for money, whether it is the fire extinguisher example given by the noble Lord, Lord Blencathra, or some captive insurance company or an arrangement with a very high commission-bearing insurer offering kickbacks to freeholders, that would be avoided.
Lord Greenhalgh (Con)
My Lords, I rise to say how amazed I am by how young the noble Lord, Lord Khan, is. I thought I was a whippersnapper as someone in my mid-50s, but the noble Lord must have been born in—what, the late 1970s?
Lord Greenhalgh (Con)
My maths is not that bad, but that is impressive.
I will start with the noble Lord, Lord Stunell, who focused on the government amendments. It is fair to say—he will know this as someone who played my role in the coalition Government—that we cannot possibly move amendments without considering A1P1 rights and the impact of the amendments. We would never get them through the legal system. Obviously, we are tabling the amendments but not moving them, but we have done all the checks, as you would expect, and taken legal opinion and so forth to make sure that they are all workable, and indeed lawful. Otherwise, we would just not be allowed to do it.
I also say that there has been considerable engagement with the organisations that the noble Lord mentioned, but we need to continue that engagement and that is something we can do. I reassure him that we have had representations from Build UK, the Association for Project Safety and the Construction Products Association, but we should continue to engage. My view is that there is never too much engagement with these organisations. However, I also said to him, and I put this now into Hansard—it was raised in a previous debate by the noble Baroness, Lady Hayman—that if you breach building regulations implemented in 1984 by the then young whippersnapper, my noble friend Lord Young, it is a criminal act.
The noble Lord will also know that if you commit a crime in this country, there is no statute of limitations for most crimes. In this case, we are saying that we have seen appalling practices over the previous 30 years, and there should not be a statute of limitations period that does not allow us to rectify that. That is why we are looking backwards 30 years and forwards 15 years. Of course, we have taken considerable legal advice about taking that position, but it is to ensure that there is no legal reason why someone who has broken building regulations is not open to face redress. I accept all the points he makes around the practicalities of doing that, but there should not be a small, narrow limitations period when we tackle this historically difficult problem that has crept up on us over not one decade, but three decades.
I turn to the noble Baroness, Lady Pinnock, who wanted to understand how we are regulating construction products. It is not straightforward, but it is pretty straightforward, so I will not take too long over this. We have created a national regulator. In the same way as we have a building safety regulator in shadow form until the Bill gets Royal Assent, the Bill will put into statute a national regulator for construction products in the Office for Product Safety and Standards. The CEO is a phenomenal chap called Graham Russell. He is there and it has already started to flex its muscles with a prohibition notice to Kingspan. This Bill formalises the national regulator for construction products and there are at the same time local regulators of products, as the noble Baroness will know, with her local government background within trading standards, that provide that local role. It is the national and local regulation of construction products that provides the regulatory environment for construction products.
The noble Baroness also raised construction products testing. This is something that the inquiry showed as an area of concern. The Building Research Establishment was a nationalised entity that it was privatised in the 1980s, I think—my noble friend Lord Young will know the exact date, I do not—but we also have the British Board of Agrément, which has always been in the private sector. Neither of those have come out as great, robust testing houses, which is why my predecessor as Secretary of State asked for a construction products testing review. I believe that report is nearly finalised. I will ask for a copy. There will be recommendations on how we improve the robustness of construction products testing. I hope that addresses the questions raised by the noble Baroness, Lady Pinnock.
One of the three wise men, the noble Earl, Lord Lytton, raised a very important point, but it is fair to say that, when we are talking about construction product manufacturers, we are talking not about all construction product manufacturers but about those that contributed to this crisis. Three of them have been raised, front and centre, as being responsible for the Grenfell Tower tragedy: Celotex, Arconic and Kingspan. These were all products that should never, frankly, have been able to have been put in that position. We can argue about why, but you cannot put flammable material that spreads like petrol up the side of a building and say that that adequately resists the spread of fire, which is what the regulations stated in Approved Document B. You cannot put flammable insulation behind it, et cetera. There are a number of product companies that contributed to this. Whether they were installed incorrectly or not is irrelevant: these products should never have been put on our buildings. We can look at the responsibility for that, but the responsibility also lies with the manufacturer, in large part, and in those cases, the polluter must pay. However, it is not all construction product manufacturers by any means, and I make that point absolutely clear.
Secondly, the way in which those products are installed is a matter for the construction company. The construction company, not the manufacturer, is responsible for following the instructions and installing the product correctly. We can see examples of perfectly good cladding systems that are installed incorrectly. In such cases, that falls on the developer in the first instance, or on whoever the developer got to install the system. We must be absolutely clear about that. If we start creating confusion around it, we avoid accountability and we do not move forward. It is pretty clear in my mind where culpability falls. I hope that that addresses some of the concerns raised by the noble Earl, Lord Lytton. This has been a fantastic debate. I have enjoyed every second of every minute of every hour. We have had one hour and 40 minutes on this group, and it has been absolutely tremendous. Thank you all for your contributions.
Lord Greenhalgh (Con)
My Lords, I was caught mid-sentence so I will go back to the beginning of that particular sentence. The noble Baroness suggests that we require detailed requirements on contravention notices to ensure the proper use of these powers, but that is better suited to regulations. Indeed, the balance between what is reasonable to expect of an accountable person, the urgency of building safety risks and protecting residents from potential misuse of powers is crucial. That is why we believe that this detail should be set out in regulations, developed in consultation with residents and accountable persons and subject to public consultation.
Amendment 52B would allow residents a reasonable time to remedy any alleged contravention before an application to the court; indeed, the Bill provides that the accountable person must specify the steps that the resident should take and a reasonable time for taking them. The court is very unlikely to issue an order before that time has expired.
Amendment 55C would require the building safety regulator to consult on and issue a statutory code of practice regarding powers of entry. Subsequently, Amendments 53B, 53C, 53D, 54B, 55A and 55B would require the accountable person to comply with a statutory code of practice and ensure that the right of entry into homes applies only in urgent cases or emergencies. In respect of Amendments 52A and 54A, the Government are closely listening to these points; however, the noble Baroness’s intention is already being achieved, as the resident would be notified of the application from the accountable person as part of the court process.
I would like to reassure the noble Baroness that there are already safeguards against misuse in this Bill. Under Clause 86, we will prescribe principles under which the accountable person must operate. These have been published in draft and include the requirement to consider the impacts on residents within the building.
In addition, the clause provides that accountable persons have a right of entry to a resident’s home with an order awarded by the court. The courts will apply established principles when considering any such application for entry and will grant access only when they consider it just to do so. This provides an effective safeguard against misuse. As noted in response to the points raised by my noble friend Lord Blencathra, we would expect the accountable person to seek to resolve issues directly with residents in the first instance to gain entry where it is needed.
The building safety regulator will issue guidance to accountable persons, which will set out the expectations for their system for handling residents’ duties and enforcing them. It is important to note that these powers are necessary for the accountable person to be able to discharge the legal duties we are placing on them. Although their use covers emergency cases, access may be needed where a resident refuses to allow the accountable person to discharge their duties. Indeed, the provision is designed for the discharge of day-to-day duties and not for emergency situations, which would require calling the emergency services.
As such, we must again strike a balance between protecting residents and affording the accountable person the tools needed to keep their building and residents safe. We believe that this balance is correctly achieved in the Bill. I understand the noble Baroness’s intentions with these amendments but, for the reasons I have given, I ask her not to press them.
I now turn to Amendment 107A in the name of the noble Lord, Lord Stunell, which seeks to probe whether the retrospective liability provisions in Amendment 107 apply only to higher-risk buildings. I reiterate the points I made earlier when outlining the intent of the Government’s amendments. This course of action will apply to all dwellings and all buildings containing dwellings. The Government’s position is that the ability to recover cost contributions from product manufacturers should not be restricted to those who live in multi-occupied high-rise buildings. While it is true to say that the amount of cladding on lower-rise buildings is likely to be lower, we do not think it appropriate to exclude these just because the building is not as tall. The crucial factor must be the safety risk.
We are not restricting this course of action to buildings over 18 metres because we intend to enable all individuals who have suffered a loss as a result of a dwelling being made unfit for habitation due to the mis-selling of a product, a product being inherently defective or a breach of existing building regulations to seek cost contributions for the losses they have incurred. This course of action protects leaseholders and home owners by ensuring that all construction product manufacturers are held liable for their part in the creation of building safety defects. The broad application of this course of action to include all dwellings reinforces this principle and delivers a proportionate approach. The scope of this course of action to apply to all dwellings will mirror the Defective Premises Act.
Finally, I turn to my noble friend Lady Neville-Rolfe’s Amendment 147. I assure her that the Government have considered the impact on business of the measures I tabled on 14 February. We are clear that the principle of protecting leaseholders is paramount. It is fundamentally unfair that innocent leaseholders should be landed with bills that they cannot afford to fix problems that they did not cause. These amendments will right this wrong, and the Government consider it critical that the provisions take effect as soon as possible. I must therefore ask my noble friend to withdraw her amendment.
Baroness Neville-Rolfe (Con)
Are the Government planning to produce an impact assessment on the new measures? My amendment was drafted the way it was on the advice of the Bill clerks, but obviously my main concern is to understand the detail of this promising package.
Lord Greenhalgh (Con)
I am sorry; with the sheer length of the debate, we are now approaching the two-hour mark, so I hope that my noble friend will forgive me if I did not address that specific point. However, I did address the point that the Valentine’s Day amendments, tabled on 14 February, were made in haste. The work around impact assessment was therefore not carried out at that time, but obviously we intend to update our impact assessment to reflect all the amendments that the Government have brought forward; that is the good practice my noble friend seeks, I think.
I thank noble Lords for this debate, which has been an important and necessary part of the scrutiny of this legislation. I hope that, with the reassurances given, noble Lords will be happy to withdraw or not press their amendments. This has been a feast of a debate so let us conclude it with the two words that we used to say in our formal hall: benedicto benedicatur.
Lord Blencathra (Con)
My Lords, we have spent two hours on this group of amendments. It is probably the second-most important group in the Bill, after the one we dealt with last week. There were more than 45 amendments down, so I make no apology that we have spent considerable time discussing them.
Lord Young of Cookham
“(1A) Such a charge is for all purposes to be treated as a service charge within the meaning of section 18 of the Landlord and Tenant Act 1985.”Member’s explanatory statement
This amendment, along with others to Schedule 8, preserves the existing Building Safety Charge but treats it as a service charge due under the lease to be demanded and regulated in the same manner as existing service charges. This is to ensure that there are not two parallel sets of demands, accounts etc, one for the normal service charge and one for the building safety charge.
Lord Young of Cookham (Con)
My Lords, I recognise that the government amendments in this group may be of greater significance than mine. I think it would be in the interests of the Committee if I sat down and allowed the Minister to explain them, and perhaps responded later. I beg to move.
Lord Greenhalgh (Con)
My Lords, I rise to introduce the government amendments in this group. This is an important group—equally as important as the previous group—and is about leaseholder protections.
We have been clear that it is fundamentally unfair that innocent leaseholders, most of whom have worked hard and made sacrifices to get a foot on the property ladder, should be landed with bills they cannot afford for problems they did not cause. That is why I have laid a series of amendments to the Bill to right this wrong. I want to outline these important government amendments and highlight how they will provide much-needed protections to leaseholders from exorbitant costs for remediation of their buildings.
These leaseholder protection provisions will make landlords liable, partially or in full, for the costs of remediating historical building safety defects. Amendments 62 to 64 and Amendment 66 are definition clauses setting out the types of defects, buildings and leases that are in scope of the protections. The new clauses state that leaseholders living in their own home or subletting in a building over 11 metres will be entitled to protections from unjust and unaffordable remediation costs. It will not apply to buildings that have exercised the right to collective enfranchisement or are on commonhold land, as in those buildings the leaseholders together effectively are the freeholders.
Amendment 68 would insert a new schedule into the Bill before Schedule 9, which sets out the circumstances in which service charges relating to historical building safety issues cannot be passed on to leaseholders, and the circumstances where service charges can be passed on to leaseholders are limited. Paragraph 2 of the new schedule provides that, where the landlord is responsible or has links with the developer that is responsible for the defect, they will be required to pay in full for the historical building safety issues. This will ensure that, as far as possible, those who are responsible for creating the defects take on the burden of costs and remove all liabilities for the historical defects from innocent leaseholders.
A definition of an “associated person”, for the purpose of determining which building owners have links to the developers of the building, is set out in Amendment 67. Similarly, where building owners are not linked to the developer but can afford to pay, they will be required to put the money up to do so and pay in full. We intend to table further amendments to provide details of the affordability test on Report. I welcome any suggestions from noble Lords on how this could work.
Paragraphs 5 to 7 of the new schedule provide that, where building owners are not linked to the developer and are not able to afford the remediation, some costs can be passed on to leaseholders. This will be subject in most cases to caps of £10,000, or £15,000 for leases in Greater London. These caps will limit how much leaseholders can be asked to pay for non-cladding costs, after—I repeat, after—building owners and landlords have exhausted all other cost recovery options, such as litigation under the Defective Premises Act or the new construction products causes of action we have just debated.
The amendments also provide that any costs paid out by leaseholders over the past five years will count towards the cap, meaning some leaseholders will pay nothing more. They also provide that cladding costs cannot be passed on at all. Paragraph 6 sets out caps to be applied to very high-value properties. It provides that, for properties with a value of over £1 million but under £2 million, the maximum permitted charge is £50,000 and, for properties with a value of over £2 million, the permitted maximum is £100,000.
Building owners and landlords must comply with the law as set out by Parliament. However, there may be some who attempt to avoid their liabilities. These landlords may be associated with a company with substantial assets. Given the extent of the building safety crisis, it is morally right that these associated companies are asked to shoulder their fair share of the costs. Amendment 69 would give the First-tier Tribunal powers to make a remediation order on the application of an interested person, meaning the regulator, local authority, fire and rescue authority or another person specified in regulations by the Secretary of State. A remediation order will require a landlord to remedy defects in their building, as specified in the order.
Amendment 70 would give the First-tier Tribunal powers to make a remediation contribution order on the application of an interested person if it considers it just and equitable to do so. For the purposes of Amendment 70, interested persons include the new regulator, the local authority and the fire and rescue service, as well as leaseholders and other persons who have a legal or equitable interest in the building. A remediation contribution order will require an associated company to make specified payments, at a specified time or event, to the landlord to remedy relevant fire safety defects in the building.
Where a company needs to be wound up, our provisions enable the liquidator to apply to the court to access the assets of associated companies to contribute to the remediation of building safety defects. All too often, companies let subsidiaries go into liquidation to cut their losses. It is morally wrong that they can just fold a company up and leave leaseholders in unsafe buildings with outstanding building safety defects and the corresponding liabilities. The court’s decision will be based on whether it is just and equitable to do so—in other words, whether it is right for that associated company to help to meet the building safety remediation liability of the failing landlord.
Some unscrupulous companies may try and wind up subsidiaries before these provisions come into force, which is why we have included provisions to enable liquidators to pursue associated companies of those landlords who are currently going through insolvency proceedings. It is unfair that innocent leaseholders have had to pay for remediation of building safety defects while those who caused the fire safety issues are able to exploit company law to escape liabilities that are morally theirs. I ask your Lordships to support this significant and important set of amendments.
Lord Young of Cookham (Con)
My Lords, I am grateful to my noble friend. It was bit like listening to one of the advertisements on the radio when, right at the end, all the terms and conditions are read out very quickly and one has to listen to them very carefully. I welcome the assurances that my noble friend gave right at the beginning; I will come back in a moment to some of the things he said.
In the meantime, I will speak to Amendment 56 in my name and also to Amendment 131 in the name of two of the three wise men. This group of amendments focuses on Schedule 8 to the Bill, which defines building safety charges. It takes up no less than 12 and a half pages of rules and regulations. My Amendments 58 and 60 would eliminate eight of them, but any benefit so gained would be wiped out by the 13 government amendments tabled since the Bill left the other place.
The Deputy Chairman of Committees (Baroness Watkins of Tavistock) (CB)
There is a Division in the House. We will have up to 10 minutes to cast our votes but, if noble Lords return earlier, we will proceed because we are taking quite a long time this afternoon.
Lord Young of Cookham (Con)
I was explaining to the Committee that an existing service charge has a line headed “Health and safety”. Under Schedule 8, that line will have to be removed and relocated under the new building safety charge—or it will appear again under the building service charge with an appropriate credit because you have already paid it in your safety charge. Crucially, leaseholders will have to bear the costs of running, in effect, another set of service charges. The noble Baroness, Lady Fox, touched on some of these issues in an earlier debate.
I have read Schedule 8 and the Explanatory Memorandum. While, as far as I can see, it does not expressly forbid the incorporation of the building safety charge with the normal service charge, the whole structure of Schedule 8 certainly gives that impression, because the Secretary of State is able to apply different dates for the building safety charge and the service charge; and he can specify different deadlines for paying the two charges and for landlords to respond to requests from leaseholders. The whole impression given by these pages is of unnecessary, bureaucratic parallel invoicing processes, with all the business of reconciling accounts and all the costs to be borne by the leaseholders. I hope that the Minister will be able to assure me that this is not the intention and that it will be possible to incorporate the building safety charge into the service charge—and that the necessary amendments will be made if that is not the case.
On a related point, if you develop a building safety charge that is separate from the service charge, the entire body of case law that we have that relates to the service charge will not apply to the new building safety charge and we will have to start from scratch. So I very much hope that we can streamline the whole process and, with all the transparency that is necessary, incorporate the building safety charge into the existing service charge.
My other amendment is Amendment 131, which is very much a probing one. It is a continuing injustice that leaseholders are paying the costs of others’ mistakes. Some leaseholders have paid the full cost of remediating their buildings. For example, at Skyline in Manchester, they have had to pay the whole amount and have had to borrow substantial sums for remediation. Others continue to pay for waking watches and increased insurance costs. Ideally, there should be some means of compensating these leaseholders, who are, in the words of the Secretary of State, “innocent”. But I recognise the problems of retrospection, even though there are precedents.
This amendment requires the Secretary of State to commence a public inquiry to inquire into the costs of remediation and mitigating measures incurred by leaseholders after 10 January 2022 that are not otherwise recoverable through the Bill. The date of 10 January has been chosen because it is the date of the announcement in the other place about statutory protection for leaseholders.
The proposed inquiry’s aim would be to come up with methods of compensating affected leaseholders for the sums they paid after that date—which, as I said, are not covered by the Bill. Perhaps my noble friend can shed some light on exactly what protection is intended. There may be measures to stop freeholders pressing ahead now, before the Bill comes into effect, and passing costs on to leaseholders who would otherwise be protected. There are certainly leaseholders who think they have statutory protection now—but what about invoices received but not paid for work that is in progress? What about service charges payable when the next quarter begins on 1 April, possibly before the Bill has become an Act? There is a grey area here, on which some light should be shone, and I hope that in his reply my noble friend will be able to shed some illumination.
Lord Naseby (Con)
My Lords, I shall speak to my Amendment 65, which would modify the major statement in government Amendment 64. I was greatly encouraged when my noble friend the Minister sent the letter on 14 February. I thought, “Ah, here’s a good letter”, because it says clearly:
“The key principles that I outlined were a more proportionate approach to building safety risk”,
and
“the need to protect leaseholders”.
That is in the first paragraph. The second paragraph even starts:
“I committed to protect leaseholders”.
So I thought, “Oh, good, we’ve got there now”. But then, of course, I looked at the letter in more detail—and what is proposed in new subsection (2)(d) proposed by government Amendment 64 will have a major adverse effect on buy to let.
I remind my noble friend, who has been in housing for many years, as I have—I first got elected to the London Borough of Islington in 1968—that it was in 1993, under the Major Government, that the whole concept of buy to let was produced. That was at a time when, as all of us who were involved in housing would have known, there was a terrible situation for private tenants. They were basically exploited. We remember Rachman, De Lusignan and the others at that time. Here, it was not launched with trumpets or anything; nevertheless, it started in 1993 and it built up, because it offered good-quality housing for people to rent in the private sector. We now have a situation today, which I find really amazing, having done a bit of donkey work on this, where there are more than 2 million buy-to-let properties that are mortgaged and successful.
I will not take much of the Committee’s time, but I will just highlight that over the past 25 years, landlords have made a tangible improvement to the whole rented sector, so now we have a situation where millions of tenants today are proud of their home, although they have it on a buy-to-let basis. That is all fine and dandy, except that when you look at what is actually proposed at the moment, the net result is that, basically, buy-to-let landlords, or some of them, will not qualify for the remit of the cladding scheme that was announced in January. If they rent out no more than one flat in a block, they are okay, but if they have any more, they are in trouble. I have had strong representations, of course, from the National Residential Landlords Association, which states:
“We still fail to see why the Government is making it so difficult for buy-to-let landlords who are leaseholders to access the same level of support as all other types of leaseholders.”
The reality is, if you are a buy-to-let landlord renting out however many flats, or an owner-occupier leaseholder, you have been treated unfairly by the developers that installed dangerous cladding on blocks of flats. What Her Majesty’s Government are doing, as matters stand in Amendment 64, is introducing a very dangerous principle, basically stating that there are worthy and unworthy victims of the cladding crisis. I ask my noble friend to reflect that the Government should make it clear that any and all leaseholders should be treated the same. That is why I have tabled this amendment. I have not sought any publicity on this at all, but people have read the Bill, thankfully, and I have just brought a small sample of the huge number of emails I have received. Each is an indication of a case. The first is from a retired solicitor—so this is a perfect gentleman—who had a flat on buy to let. His wife bought one as well, and they now have two flats and are facing a problem. He says it is vital that all leaseholders are treated equally, and I do not think I can disagree with that.
Another one comes from a lady who was affected. She had a one-bedroom flat, which she bought in St Albans when her mother died, and then they bought one more, yet they are caught again. Then there is one from a lady called Katherine Wilde in Croydon. A single-parent family, two sisters, bought a flat jointly, then another flat jointly, then another flat jointly. They are caught. I could go on, although I have not brought many. It is clear. This is from a gentleman called Paul Bullock. It is clear that all these people are victims of this national scandal. As further evidence from the Grenfell inquiry comes to light, it is obvious that many parties have played a role in creating this crisis, the only innocent party being the leaseholders who purchased the flats after being guaranteed that everything was in order, only to find out that this was not true. There are moving words at the end of this email:
“Personally, I am caught up in this mess. I can’t even start to explain the toll of the past two years on my physical and mental health”.
I will not read the rest, but I will say to my noble friend that there is a problem here and I hope that he will have another look at it. I think that when he was introducing the letter of 14 February, he said that some of it had been done in a bit of a rush—so I think there ought to be an opportunity to have another look at this issue.
Lord Blencathra (Con)
My Lords, my Amendment 59 is concerned with the first two lines of paragraph 5 of Schedule 8, which begins:
“Building safety costs may be taken into account in determining the … building safety charge payable by a relevant tenant”.
You can bet your life they will be. Leaseholders know that every other week a notice comes from the managing agents to say that the freeholder or landlord has decided that the corridor lighting needs updating, new lines need to be painted in the car park, the entry phone system needs replacing and so on, ad nauseam. This schedule gives them another excuse for possibly unnecessary, gold-plated, so-called safety improvements and contracts let to their favourite contractors. That is why my amendment seeks to add these words at the end of the sentence I have just quoted:
“only if they are below a maximum as specified in regulations made by the Secretary of State”.
It is another plea for the Government to take a permissive power so that, if it proves to be the case that service or safety charges have been jacked up, they can use a regulation to put a control on it.
These regulations may not be necessary—I hope they are not—but the power should be there just in case it is needed. If your Lordships just google “leasehold scandals”, up will pop names such as McCarthy & Stone and Peverel, now calling itself FirstPort—I can assure your Lordships that Mr Tchenguiz has not made his millions by being nice to leaseholders.
My Amendment 66A adds to the definition of “relevant defect” in new subsection (2) in Amendment 66. At the moment it says:
“‘Relevant defect’ means a defect as regards a building that … arises as a result of anything done (or not done), including anything used (or not used), in connection with relevant works, and … causes a building safety risk.”
I propose to add at the end:
“which may relate to but is not limited to … external cladding … internal walls and the materials contained inside any walls … fire doors … balconies … a lack of sprinklers, fire detection and control systems … inadequate escape routes.”
Quite simply, I believe that builders should pay for all fire safety remedial work and not just external cladding. But I also hope that common sense can prevail and the Government can lay down the law that wooden decking on a steel balcony is not a fire risk, and that potentially flammable materials sandwiched inside non-combustible inner and outer walls do not need to be removed. There are a lot of excessive suggestions on fire risk materials going round at the moment, and that needs to be stamped on.
My Amendment 86 seeks to insert a new clause to prevent managing agents charging excessive amounts for undertaking fire risk assessments or preparing applications for assistance. In particular, I suggest that the regulations may include—again I stress “may”:
“setting limits on the charges managing agents may impose for fire risk assessments … setting limits on the charges managing agents may impose for making applications to the Building Safety Fund or any other source of funding for fire risk remedial works … setting limits on the charges managing agents may impose for inviting tenders for fire risk remedial works … preventing service charges being inflated by fire risk remedial works.”
I suggest that these are all reasonable. My noble friend the Minister knows what managing agents are like. If we are not careful, this Bill will be a licence for them to print money: charging for the work of the accountable person and for drawing up the strategy, coming into all our homes to look for safety dangers, and a host of other things they will be able, quite legitimately, to charge leaseholders for. While they can do so, I suspect that the charges will be excessively high. Thus, the backstop of a regulatory power is essential.
I commend Amendment 131 from my noble friend Lord Young of Cookham. He made a compelling case for a short, sharp inquiry into the charges for fire safety work which leaseholders have had to pay and which are not covered by this Bill. That is eminently sensible stuff.
Lord Leigh of Hurley (Con)
My Lords, with some trepidation after that, I rise to speak to my Amendment 94ZA, as advertised by my noble friend Lord Young of Cookham. I welcome the Government’s clear commitment that no leaseholder in a medium or high-rise building will have to pay to remove dangerous cladding, so I therefore support the significant legislative changes being introduced in this Bill. I am also pleased to see that legislation is coming forward to identify the beneficial owners of freehold and leasehold properties, because without that I am not sure how this Bill would work in its entirety. We need to know who owns property in the UK.
However, there is a small group of leaseholders who have fallen through the Government’s net of protections. They are leaseholders who have already paid for the removal of ACM Grenfell-type cladding from their buildings through an exceptional service charge imposed by their landlords, but whose landlords have unilaterally decided not to pursue available government remediation funding because they have no incentive to do so, given that the leaseholders have already borne all the costs. No encouragement by or pressure from their leaseholders or the Government has resulted in any change in their position, particularly in one specific case of which the Minister is aware.
This was not the intent of the well-meaning government cladding remediation scheme, as it assumed that landlords would behave appropriately. The scheme required applications to be made by landlords. Leaseholders had no right to do so directly, nor could they force landlords to seek funding. As a result, these leaseholders remain without reimbursement for the considerable sums that, in some instances, they have expended on removing dangerous cladding to live safely.
This behaviour has been described in the other place as outrageous; my noble friend the Minister described it as unacceptable in his Written Answer to me on 26 January. However, the Government’s proposed legislation does not expressly address this inequitable situation. My O-level Latin was even worse than that of most Members of the Committee, so to provide some balance I will quote from my coat of arms the Hebrew “Im low achshav aymarthie”, which, as the right reverend Prelate the Bishop of St Albans, who is not in his place, would explain, means “If not now, when?”
Paragraph 8 of new Schedule 9 prohibits a service charge being payable under a qualifying lease in respect of cladding remediation if the tenant was resident at the qualifying time, as we have heard. This does not help resident tenants who have already paid up by way of service charge before the Bill becomes law. My proposed amendment extends paragraph 8 of Schedule 9 to include situations where resident tenants have paid for cladding remediation at any time during the five years before the commencement of the Bill. This will leave the landlord with the choice of applying for available qualifying remediation funding or having to reimburse relevant resident tenants out of their own funds.
I appreciate that this will be relevant in only a small number of situations but that is not a reason not to have legislation. There is a glaring hole in the legislation, and we have the opportunity here to correct it. I can see that some might argue that this is retrospective, but it is not because the amendment covers only situations where the lessees have paid and the freeholders will not act as they should. It is up to the Minister, inspired by the call to arms, to widen this amendment—on Report if not here—to cover future situations where lessees pay for recladding as they are fed up with waiting for landlords, knowing that, if this amendment passes, the freeholders will be forced to apply for reimbursement.
Baroness Pinnock (LD)
My Lords, I will speak to my Amendments 93 and 94. I thank the Minister for explaining the many amendments relating to the costs of remediating cladding and other fire safety and building defects, including who will pay and how.
However, my amendments are to his Amendment 92 and are about my favourite issue, which is that leaseholders should not pay a penny. It is not their fault. The Government and everybody else accept that, and therefore, they should not pay anything. The easiest way of ensuring this is to amend the government amendment to change the maximum amount—that is, the cap—to £15,000 or £10,000, be it in London or outside London, to a peppercorn; in other words, to zero, zilch, nothing. This would achieve the aim I started with two years ago.
There are reasons for this. The Minister may not want to do it, but I certainly do. He said, “Of course”, so I assume he will now accept my amendment. However, if it helps the Minister, I am willing to exclude paragraphs 6(4) and 6(5) of the new schedule proposed by Amendment 92. They relate to properties with a value of £1,000,000 or £2,000,000 or more.
I appreciate that the Minister and others in the Government have laboured long and hard to reach a more just outcome for leaseholders. However, as we have heard from the noble Lord, Lord Naseby, the letter we received said that the Secretary of State had stated on behalf of the Government that leaseholders must not be required to pay anything. That is what my amendment would achieve. The building failures were not theirs. As we have all agreed, those who made the failures, who put up flammable cladding and failed to put in firebreaks, are the ones who have to pay.
In his introduction to his amendments, the Minister said that cap will be offset by costs already being paid for waking watch, fire alarms and other such things, which will reduce the final liability. In that case, why on earth are we pursuing it? Let us say that the amount liable is £7,000. If it is paid over a period of five years, that is less than £1,500 a year. What bureaucracy will be set up to collect that? The cost of collecting it will almost certainly outweigh the benefits. So there is a practical reason as well as a reason of justice, and I guess that the Minister will therefore accept my amendment. We will have a whole new bureaucracy for nothing very much. It is not a practical proposal at all, and it is not a just one.
The amendment is straightforward, but there are one or two things I want to ask the Minister to explain and to give some very straightforward answers to some very easy questions. Some things are not clear from all this. There are good intentions in all these clauses to try to solve who pays for remediation, but what happens if nobody pays up? Who takes on the liability? Secondly, if they all go to litigation—which is my guess about what is going to happen, and we heard earlier that there are already moves in that direction—that could take a long time. So what happens then when buildings are not safe? Who will pay for the removal of the cladding and putting right the fire safety defects? Are we expecting leaseholders, shareholders and tenants to remain in those unsafe buildings for all that period of time? So who will pay, and what about the timing? If we do not get the cash, what happens and, with that timing, what happens—peppercorn rents excepted? My noble friend Lord Stunell will wind up for us on these Benches.
The Earl of Lytton (CB)
My Lords, I will try to be brief. I will just pick up on the last point made by the noble Baroness, Lady Pinnock, who has been a doughty campaigner on all this. We have the problem that this Bill creates a bureaucratic and quite complex situation. That can only weigh in favour of those who hold the real money here, which are the developers. We must try to focus on rebalancing that so that the leaseholders are on some sort of even playing field.
I noted very carefully what the noble Lord, Lord Young of Cookham, said on the detail of the accounting process. I very much support what he said. There is an element of discrimination, which was brought out by the noble Lord, Lord Naseby. Why do we discriminate between different categories of person and what does anybody think that will result in in terms of some class action further down the road? This whole thing has to be robust against applications to some international court, to the High Court or for judicial review. There absolutely has to be proof against serial activity. I know into whose hands that will play, and it will not be to the leaseholders’ benefit. There are an awful lot of exclusions here. The noble Lord, Leigh of Hurley, made a potent point about those who have already paid up. What about them? A point has also been made about proportionality and risk.
I will cut my other comments really quite short and just pose a few questions. As I see it—I was in dialogue with the British Property Federation about this—only in the case where you have a non-cladding effect, where the developer does not exist or cannot be found, does that trigger the freeholder responsibility to make a contribution for remediation, and only after the cap liability of the leaseholder. The Minister does not need to reply to me now, but I would like to be absolutely clear that that is the scenario—one of several—that applies here.
Moving on to Amendment 67, I would like to make a comment. As drafted, does the amendment cover limited partnerships? They are not corporate entities and are different from limited liability partnerships, which are covered by the amendment. For instance, the effective owner of Waterside Park, where a lot of issues have arisen, is just such a limited partnership. Is it the Government’s intention that limited partnerships should be included in the definition of “associated persons”? If not, why not? Because that would create a gaping hole.
Baroness Neville-Rolfe (Con)
My Lords, some very good questions have been asked in this debate. I am grateful to the Minister for setting out his proposals. I rise briefly, as it is late, to say that I very much support two practical amendments; as noble Lords know, I am essentially a practical person. They are Amendment 56 in the name of my noble friend Lord Young of Cookham, on aligning building safety charges and service charges, and Amendment 94ZA in the name of my noble friend Lord Leigh, on the dilemma facing leaseholders who have already paid service charges.
Baroness Hayman of Ullock (Lab)
My Lords, I have two amendments in this group. Before I introduce them and talk about the things that we are perhaps not so content with in the group, I just want to say that we recognise that the Government have introduced some very important amendments here. We welcome the work they are trying to do to improve the Bill from its previous incarnation.
The first amendment in my name is Amendment 88. The reason we introduced it is that, looking at all aspects of the crisis that this Bill is trying to address, these Benches are concerned that the Government’s approach does not appear to have a central plan. This amendment was also tabled in the other place by my colleagues, so we are repeating their call for the Government to act across the piece to solve the crisis. We ask that the Minister considers accepting our proposals for a building works agency, which would provide a more hands-on approach.
As we have heard, home owners, many of them first-time buyers, have become trapped in a perfect storm in unsafe buildings because they cannot sell their homes, and are forced to pay thousands in remediation works through no fault of their own. We propose that a team of experts does what the Government have not done so far with this Bill: go from building to building to assess real risk, deciding what needs to be fixed and in what order, using the building safety fund to get those buildings fixed and overseeing the work. Crucially, the Government could then sign off the buildings as safe and sellable, bringing certainty back into the market.
To make it clear, we see the building safety works agency as a separate body to the building safety regulator, with no duplication or crossover; in the debate in the other place, the Minister felt that there was crossover. We see the building safety works agency overseeing the remediation works and the other body regulating. One regulates and one does the work. This would mean that the Government could really take on those who are responsible for creating the crisis and who need to pay. This approach was put in place by a cross-party group of politicians and experts in Victoria, Australia, after there was a serious fire there. That is why we think it would work here: it is not just an idea off the top of our heads but something that has been done and worked before. It would enable the Government really to lead from the front on this matter.
Briefly, my Amendment 125 was tabled before the most recent government amendments. It replicates the McPartland-Smith new Clause 5 from the Commons, amending Part XVI of the Housing Act 1985. Now that the Government have tabled their amendments, it has been superseded, but I will still speak to it to remind the Committee that there have been previous attempts to address the fire safety question during the passage of the Bill. This amendment illustrates that there are different approaches to how the issue can be solved in legislation. It was previously tabled with a range of other amendments addressed to Part 5 of the Bill with the aim of allowing the Government and local authorities to enable grants for remediation work—specifically, by allowing the Government and local authorities to designate dwellings with cladding and fire safety defects as defective.
Having now seen the government amendments, I ask the Minister why the Government could not back the original amendment, which was after all tabled by Conservative Members of Parliament. How did the Government then arrive at the decision to table what they have come up with?
I want now to look at some of the other amendments in the group, and in particular at the implications of government Amendment 92. We do not think that any of the announcements benefit leaseholders who have already paid for remediation work—this has been mentioned by other noble Lords today. The fact that there is no retrospective coverage means that even if the proposed amendments become law and are effectively implemented, many leaseholders will continue to suffer the financial impact of the building safety crisis.
I therefore indicate our strong support for Amendment 131, in the name of the noble Lord, Lord Young of Cookham, which proposes that the Secretary of State set up a statutory public inquiry. It is really important for us to understand exactly what the situation is. Otherwise, there will be no recovery of these costs to leaseholders. Any steps which will lead to full retrospective protection for leaseholders who have already paid remediation costs should be taken seriously by the Government.
If the Government choose to introduce a cap on non-cladding remediation works—the noble Baroness, Lady Pinnock, talked about this extensively in relation to her amendments, and we fully support what she is trying to achieve—it would mean that the maximum amount payable would be a peppercorn amount, which is effectively nothing and is where we need to be. Leaseholders should not be liable to pay for any costs that have resulted from a faulty regulatory system, whether these are related to cladding or non-cladding remediation, or interim safety measures. As the noble Lord, Lord Naseby, said, all leaseholders should be treated exactly the same.
Further, it is unclear who will be liable to pay for remediation costs or the provision of interim safety measures such as waking watch in cases where the £10,000 or £15,000 cap has been met. Many buildings with fire safety issues can be occupied thanks to waking watches and other interim measures. If these are removed, there is a risk that the building receives a prohibition or decant notice and/or a withdrawal of building insurance cover. I hope that the Minister has his thinking cap on, because I have quite a lot of questions and requests for clarification. There have been a great number of amendments to consider and fully understand, so I hope that he will bear with me.
The combined effect of the various amendments is pretty complex. They seem to create what I can describe only as a system of cascading statutory protection, each stage of which is triggered only if the prior one is exhausted. I shall go through my understanding of it. Can the Minister confirm that I am correct or clarify where I have got it wrong? I know that the noble Earl, Lord Lytton, also asked for clarification in a number of areas.
My understanding is that the system would work as follows. First, developers who are still the freeholders of a given building or are linked to it by a subsidiary, as well as cladding manufacturers, are expected to pay first. Secondly, freeholders of buildings who are not the original developers or linked to the original developers are expected to pay second, subject to an affordability test to be set out in the future via regulations. Thirdly, if those freeholders cannot pay, leaseholders will be expected to pay only a capped amount based on Florrie’s law towards non-cladding costs only. Anything they have paid to date counts towards the capped amount. Assuming that I have understood this correctly, I ask the Minister for more clarity on how this cascade system is expected to work in practice and what estimates, if any, the Government have made.
For example, how do the Government expect to define the affordability test at stage 2 of the cascade in regulations, given that this will make a huge difference to the number of cases that then get to stage 3? Why is there no protection for social landlords at stage 2, given the impact on affordable housing supply? What happens if freeholders of buildings who are not the original developers or linked to the original developer cannot pay and the costs exceed the leaseholder cap by a substantial amount? Who makes up the difference? Would it be from the department’s affordable housing budget, for example?
Lord Stunell (LD)
My Lords, first, I am very sorry if taking a long time last time irritated the Minister. It was an important set of amendments and I think these amendments are also important, although I will try not to irritate him. It is a pity that he did not feel able to accept the amendment in the name of the noble Baroness, Lady Neville-Rolfe, about openness and transparency and impact assessments. I remind him that he dealt with my argument by assuring me that I would know that the Government clearly would not have brought forward proposals unless they had been cleared at the highest level and that lawyers had looked at them and he wanted to assure me that they all worked. That sounded to me very much like an impact assessment or, at the very least, an explanatory note, so I am hoping that he can publish the documents that were used inside the department to decide that this is indeed a viable system to place before your Lordships.
With that preliminary, I enthusiastically support my noble friend Lady Pinnock’s Amendments 93 and 94 proposing a peppercorn figure for the cap. The Minister indicated at an earlier stage that the figures in the Bill are, to an extent, arbitrary. A number has been decided, perhaps based on some total amount of money that the Treasury thinks it is prepared to pay which has been divided by an assumed number of residents to produce a cap figure. It may be neat arithmetic for the Treasury, but it is not neat arithmetic for leaseholders facing their payment.
Some very pertinent questions have been asked by the noble Baroness, Lady Hayman, and other participants in this debate. I hope that the Minister will at least be able to commit to writing a letter, having carefully read Hansard, about this group of amendments and the previous group to make sure that he has ticked off all the queries that have been raised. They have all been advanced by noble Lords who very strongly want to see effective legislation but have various levels of severe concern about whether this legislation will be effective. I am sorry that it may be a little painful for him, but we need to understand the correct answers to this and, if not, to try again on Report.
This is a sensational policy development by the Government in interfering with the market. We believe it is justified in principle, but we want to see that it has not just been waived through without serious thought and consideration. It is easy to have popular legislation, although it would be more popular if the cap were a peppercorn, as my noble friend Lady Pinnock has proposed, but that does not mean that it will work. Plenty of popular legislation turned out not to work. The Dangerous Dogs Act occurs to me, and we must not turn this into a dangerous buildings Act full of good intentions but unable to deliver.
In relation to the other amendments, in Amendments 56 and 57, the noble Lord, Lord Young of Cookham, has produced, as he always does, extremely reasonable amendments and it is hard to see how the Minister can dismiss them. When we look at this, and bearing in mind that the Minister said in relation to the whole of this debate that the Government are still in listening and learning mode, it might be important to listen to them and to bring them forward again.
There was a theme too about excluded groups. It starts with a bold statement that no leaseholder will have to pay and then, as the noble Lords, Lord Leigh and Lord Naseby, and others have pointed out, there are little nooks and crannies in this which means that there are groups of leaseholders who will not benefit from the pledge, apart from the fact that there is a cap, which there certainly should not be.
In the debate on the last group, I commented on government amendments in some detail. I am sorry that it was a bit too hard for some people—it was a bit hard for me and I probably got some of it wrong—but I want to pick out from this current group some points that arise from government Amendment 70, which puts in place remediation contribution orders. I have a feeling that when it comes to assessing what the sum should be, the quantum that appears in a remediation order, all the issues I raised on the last group will raise themselves again. I hope the Minister is not persuaded by an argument that says, “The facts will speak for themselves. It is easy with a building, you can just go and look at it and tell whether it is compliant or not, and then you can decide how much it cost, and then they have to pay.” It is all a question of who decided that that would be used, who put it up in that particular way and what kind of regulation was carried out. We are talking about events that may have taken place 20, 25 or 30 years ago; the current opportunities to retrieve that information are very small and the chance of delivering it is very small as well.
The noble Earl, Lord Lytton, raised the point about the interaction of this process with the courts, which will be required to decide what a building safety order and a remediation contribution order should actually be. What should it be when it gets signed off by the courts? They will want to know the answers to this and I think the Minister will have heard that a number of noble Lords have a sneaking feeling that that will prove a very difficult hurdle to get over with the provisions in the form that they are.
Lord Greenhalgh (Con)
My Lords, this has been a fascinating debate, it really has. I shall start with the noble Lord, Lord Stunell, because he served as Minister from 2010 to 2012 and we are graced by his presence. I think that in the coalition he was succeeded by the noble Lord, Lord Foster, from 2012 to 2014, and then there was a chap called Stephen Williams, who never made it to this place. If the noble Lord talks to his colleague Stephen Williams of the Liberal Democrats, who was in the coalition Government, he will know about Florrie’s Law, because that came into existence in 2014. The protection we are talking about today is based on Florrie’s Law that came into effect in public housing. This is about applying that principle of a liability cap across all types of tenure. In fact, I had a meeting in this place with the noble Lord, Lord Pickles, who introduced that amendment in response to a leaseholder who received an enormous bill which was so great that, through the shame of receiving it, she subsequently died. That is why we came up with the cap, as a coalition Government, through Florrie’s Law, and it is that principle we are looking to apply.
I turn to the noble Baroness, Lady Hayman. My admiration for her has increased, with her detailed grip of policy. She read it out with such aplomb, I have to be honest. I think it is important for me to take the high level and I will respond to her in writing, but I want to give her the outline. She is absolutely right in her assessment; what she read out was absolutely correct and the phrases “cascade” and “waterfall” have been applied to the approach we are taking. The waterfall or cascade is in five parts. We start with the developers. Then we move to the freeholders, via an affordability test, and other interim landlords; that is the second wave of the cascade. The third is freehold and interim landlords seeking redress from third parties that have contributed to pollution. The fourth is leaseholders who pay a capped amount—that is for non-cladding costs, to be clear, and is where Florrie’s Law kicks in. Of course, the fifth is freeholders and interim landlords who pay the remainder. That is the cascade approach, but I will write to the noble Baroness, because it was so eloquently put that I believe her questions of me deserve full and detailed answers.
Lord Greenhalgh (Con)
Therefore, the scope of “relevant defect” is sufficiently broad and will take account of many of the defects listed by my noble friend Lord Blencathra.
In relation to cladding, the Government have already put in place separate provisions, whereby leaseholders of properties in buildings over 11 metres will be protected from all costs associated with cladding remediation. I know that my noble friend has raised very real examples of leaseholders with narrow, not broad, shoulders who may have a certain amount of property in their retirement portfolio and have chosen to invest in property as a way of guaranteeing their income in old age. I would like to sit down with my noble friend and policy officials to see that we have got the policy intention right. He raises an important point that, sometimes, there are landlords with pretty narrow shoulders, and I do not think it is the intention of the Secretary of State and the Government to be unduly unfair on those people. We will sit down to understand the concerns. At this stage, there are a number of protections in place, but we recognise where my noble friend is coming from.
I forgot in the desire to get going that I should have declared my residential and commercial property interests as set out in the register. They are all properly laid out.
I also forgot to mention something in response to the noble Baroness, Lady Hayman, who raised the important point about retrospection. I got through the waterfall and the cascade but forgot about retrospection. It has been raised by a number of noble Lords; even the noble Baroness, Lady Pinnock, probably mentioned it as well.
The important thing is that day zero for the building safety reset is 14 February 2022. Once we have got this Bill through, that is the date we will start from. However, retrospection does kick in, in the sense that leaseholders who have spent money to date will not pay more than the cap. We will take into account the money they have already spent. Admittedly, we are not going back to refund those who have already spent money, but there is a cap in terms of liability. I shall also deal with the specific issue raised by my noble friend Lord Leigh of Hurley.
I shall now address the building safety charge amendments tabled by my noble friend Lord Young of Cookham. I shall race through these, because, basically, my noble friend is right to recognise that there may be other ways of skinning a cat, and looking at service charges as opposed to the building safety charge. Let us just see how we evolve that as time goes on—so I shall leave that, if I may. I thank him for raising those points. The Government’s intention was not as it has been painted by some people, but we recognise the points that he has raised.
Turning to Amendment 131, I thank my noble friends for raising this interesting matter, but I am afraid that the Government will not be able to accept the amendment. It would require the Secretary of State to establish a statutory inquiry into costs leaseholders have paid since 10 January 2022 which are not recoverable by those leaseholders. As I have already described, the Government have tabled a series of amendments either to remove or to greatly restrict the costs that the vast majority of leaseholders living in blocks over 11 metres will have to pay. Given these significant protections, the Government do not consider that the costs and bureaucracy involved in setting up another statutory public inquiry would be appropriate or justified. On that basis, I ask my noble friends not to press their amendment.
Turning to Amendment 86, I thank the noble Lord for raising this important matter, but I am afraid that the Government will not be able to accept the amendment. Managing agents play an important role in managing and maintaining buildings on behalf of their clients, and it is fair that they should be paid for the services they provide. I agree with my noble friend that it is important that managing agents do not charge excessive fees for those services, and that such charges must be reasonable. Managing agents also need to be clear about the charges they pass on. This Government strongly believe that service charges should show this. They should be transparent and communicated effectively, and there should be a clear route to challenge or redress if things go wrong.
The law is already clear that service charges must be reasonable and, where costs relate to work or services, the work or services must be of a reasonable standard. Leaseholders may challenge the reasonableness of the service charge through the appropriate tribunal, whether that is the First-tier Tribunal in England, or the leasehold valuation tribunals in Wales.
It is also important to recognise that there may be practical challenges in setting a fee. The cost of carrying out a fire risk assessment specific to the safe occupation of an individual building will range considerably, owing to the significant variations between buildings and their individual risk profiles.
It may have unintended consequences to impose a cap on a charge for work carried out by managing agents solely on fire risk assessments. Capping one cost, without considering whether charges for other activities they carry out should also be capped, might simply allow managing agents to recoup costs from other services they provide. Any such cap would need to ensure that the intended outcomes were achieved.
The Government are already considering in what circumstances fees or charges are justified and whether they should be capped or banned. We established a working group, chaired by the noble Lord, Lord Best, who looked at this alongside the regulation of property agents and reported back to government in 2019. We are currently considering those recommendations.
I thank the noble Baroness, Lady Hayter, for her work in preparing the codes of practice. As the Minister, I can say that we take on board the need to ensure that managing agents are professionalised and properly regulated. The Government will respond on that, and we take it extremely seriously. It is all about getting the right legislative vehicle, with some forward planning. Noble Lords will hear more about that—“in due course” is, I think, the phrase we use.
With regard to legal costs, not all leases allow landlords to recover their legal costs incurred through the service charge. Even where the lease permits this, there are already statutory protections in existence. Where a landlord has incurred, or has intended to incur, legal costs in connection with proceedings before a court or an appropriate tribunal involving a leaseholder, leaseholders can apply under Section 20C of the Landlord and Tenant Act 1985 for some or all of those costs not to be regarded as “relevant costs” in determining the amount of any service charge payable by the leaseholder. I thank the noble Lord for raising this important matter and assure him that the Government are actively considering the issues raised. With that assurance, I ask him to not move his amendment.
Now we turn to the amendment from the noble Baroness, Lady Hayman of Ullock, the Workington Warrior. She highlighted an amendment raised in the other place on the proposed building works agency, which would undertake the work the department is already doing on the auditing and monitoring of buildings over 18 metres with unsafe cladding. This represents poor value for money and would have the effect of increasing costs and burdens. Furthermore, the proposed works agency would oversee an audit of cladding, insulation and other building safety issues in all buildings over two storeys. This would result in hundreds of thousands of buildings being audited and would be very expensive and take numerous years. We do not consider this proportionate and therefore we oppose it.
The Earl of Lytton (CB)
The Minister answered a query I raised in connection with Amendment 72; I apologise for jumping a group. It was to do with commercial developers. I think I used the term “commercial developers”, but I intended to say “developers of commercial property”—that is, as opposed to commercial developers of residential property.
The Earl of Lytton (CB)
I said commercial developers, but I meant to say “developers of commercial property”. However, I will leave that point for the next debate.
Lord Young of Cookham (Con)
My Lords, as the Committee enters its sixth hour of sitting, this is not the time for a comprehensive wind-up. However, I thank all those who have taken part in this debate.
My noble friend Lord Naseby made a valuable point about buy-to-let investors. Over the past 10 or 20 years, buy to let has become an alternative to a conventional pension for many people. I am grateful that my noble friend the Minister said that he is open to discussion on this; we count that as a win.
My noble friend Lord Blencathra had a series of amendments on the theme of protecting leaseholders. I am grateful for them.
My noble friend Lord Leigh of Hurley made a legitimate point about the freeholder who had not claimed the money he could have. I wrote down the solution that my noble friend the Minister arrived at. He said, “We will fix it at the political level.” The mind boggles as to what exactly that involves but I am sure that, with his robust physique and experience of government, he will come up with a satisfactory outcome on that.
The amendment in the name of the noble Baroness, Lady Pinnock, would remove the cap for leaseholders. I have a lot of sympathy with that. New paragraph 2(1), proposed by government Amendment 92, states:
“No service charge is payable under a qualifying lease in respect of a relevant measure relating to a relevant defect if a relevant landlord … is responsible for the relevant defect.”
That is fine, but then there is a whole series of exclusions, of which this is one. I find it difficult to reconcile the cap with the principle that the leaseholder is innocent and should not pay; I think we will have to come to back to that.
The noble Earl, Lord Lytton, made the same point as my noble friend Lord Leigh of Hurley: that the leaseholder should be able to apply. If the leaseholder could have applied in my noble friend’s case, there would not have been a problem and the freeholder would not have been in the loop, as it were.
I am grateful to my noble friend Lady Neville-Rolfe for supporting a number of the amendments. The noble Baroness, Lady Hayman, had her own, thoughtful approach to protecting leaseholders. She referred to the cascade. I hope that her many questions will be answered; perhaps we can all share in the letter that goes round. She also supported the request for an inquiry into compensation, for which I am grateful.
On the waterfall, the Government did not seem to appear in it. I thought that they were right at the end, but they have somehow been left out. I think that the Government are at the end of the waterfall if all else fails; my noble friend the Minister is indicating that this may not be the case, but what are the levy and fund for if not to help where the costs are not otherwise met by the freeholder, the leaseholder or the developer?
The noble Lord, Lord Stunell, asked how the cap was arrived at. It may well have been through a reverse process involving the Treasury.
Finally, my noble friend the Minister said that I thought he was a snake oil salesman. I believe that he believed what he said; my comment was about the pace at which he said it, which was like an advertisement where the terms and conditions are spelled out at an accelerated pace and one does not really have time to hear them. I think my noble friend said that enfranchised leaseholders are now within the scheme; I think he said that because I read his lips. I find that difficult to reconcile with what is in government Amendment 63:
“‘Relevant building’ does not include a self-contained building or self-contained part of a building … in relation to which the right to collective enfranchisement … has been exercised.”
If that should not be there, that is fine, but that is how I read it; I also made that point in an earlier contribution.
Lord Greenhalgh (Con)
We can sort it out. I am told by my lawyer that you are wrong.
Lord Young of Cookham (Con)
If I am wrong, the Bill may be wrong, because I have just read out what is in it, but I think this is something we can sort out at the political level.
I am grateful to all noble Lords who have taken part in this debate. I beg leave to withdraw my amendment.
Lord Greenhalgh
Member’s explanatory statement
This amendment removes the provision providing that Part 4 does not apply in relation to the Palace of Westminster.
Lord Greenhalgh
“Remediation of certain defects
(1) Sections (Meaning of “relevant building”) to (Meeting remediation costs of insolvent landlord) and Schedule (Remediation costs under qualifying leases) make provision in connection with the remediation of relevant defects in relevant buildings.(2) In those sections—(a) sections (Meaning of “relevant building”) to (Associated persons) define “relevant building”, “qualifying lease”, “the qualifying time”, “relevant defect” and “associate”;(b) section (Remediation costs under qualifying leases) and Schedule (Remediation costs under qualifying leases) contain protections for tenants under qualifying leases in respect of costs connected with relevant defects, and impose liabilities on certain landlords;(c) section (Remediation orders) makes provision about remediation orders, under which a landlord in a relevant building is required to remedy certain relevant defects;(d) section (Remediation contribution orders) makes provision about remediation contribution orders, under which an associate of a landlord in a relevant building is required to contribute towards the costs of remedying certain relevant defects;(e) section (Meeting remediation costs of insolvent landlord) makes provision about cases where a company that is a landlord in a relevant building is being wound up, and confers on the court a power to require an associate of the company to contribute to its assets.”Member’s explanatory statement
This new Clause introduces provisions about the remediation of certain defects arising out of works carried out before commencement.
“Meaning of “relevant building”
(1) This section applies for the purposes of sections (Meaning of “qualifying lease”) to (Meeting remediation costs of insolvent landlord) and Schedule (Remediation costs under qualifying leases).(2) “Relevant building” means a self-contained building, or self-contained part of a building, in England that contains at least two dwellings and—(a) is at least 11 metres in height,(b) has at least 5 storeys, or(c) is of a description prescribed by regulations made by the Secretary of State. This is subject to subsection (3).(3) “Relevant building” does not include a self-contained building or self- contained part of a building—(a) in relation to which the right to collective enfranchisement (within the meaning of Chapter 1 of Part 1 of the Leasehold Reform, Housing and Urban Development Act 1993) has been exercised, or(b) which is on commonhold land.(4) For the purposes of this section a building is “self-contained” if it is structurally detached.(5) For the purposes of this section a part of a building is “self-contained” if—(a) the part constitutes a vertical division of the building,(b) the structure of the building is such that the part could be redeveloped independently of the remainder of the building, and(c) the relevant services provided for occupiers of that part—(i) are provided independently of the relevant services provided for occupiers of the remainder of the building, or(ii) could be so provided without involving the carrying out of any works likely to result in a significant interruption in the provision of any such services for occupiers of the remainder of the building.(6) In subsection (5) “relevant services” means services provided by means of pipes, cables or other fixed installations.(7) The Secretary of State may by regulations make provision supplementing this section, including in particular—(a) provision defining “storey” for the purposes of this section;(b) provision about how the height of a building is to be determined for those purposes.”Member’s explanatory statement
This new Clause defines “relevant building” for the purposes of the provisions relating to the remediation of defects arising out of works carried out before commencement.
Lord Greenhalgh
“Meaning of “qualifying lease”
(1) This section applies for the purposes of sections (Remediation costs under qualifying leases) to (Meeting remediation costs of insolvent landlord) and Schedule (Remediation costs under qualifying leases).(2) A lease is a “qualifying lease” if—(a) it is a long lease of a single dwelling in a relevant building,(b) the tenant under the lease is liable to pay a service charge,(c) the lease was granted before 14 February 2022, and(d) at the beginning of 14 February 2022 (“the qualifying time”)—(i) the dwelling was a relevant tenant’s only or principal home,(ii) a relevant tenant did not own any other dwelling in the United Kingdom, or(iii) a relevant tenant owned only one dwelling in the United Kingdom apart from their interest under the lease.(3) Where a dwelling was at the qualifying time let under two or more leases to which subsection (2)(a) and (b) apply, any of those leases which is superior to any of the other leases is not a “qualifying lease”. (4) For the purposes of this section—(a) “long lease” means a lease granted for a term of years certain exceeding 21 years, whether or not it is (or may become) terminable before the end of that term by notice given by or to the tenant or by re-entry, forfeiture or otherwise;(b) a person “owns” a dwelling if the person has a freehold interest in it or is a tenant under a long lease of it;(c) “relevant tenant” means a person who, at the qualifying time, is the tenant, or any of the tenants, under the lease mentioned in subsection (2);(d) “service charge” has the meaning given by section 18 of the Landlord and Tenant Act 1985.”Member’s explanatory statement
This new Clause defines “qualifying lease” for the purposes of the provisions relating to the remediation of defects arising out of works carried out before commencement.
Lord Greenhalgh
“Meaning of “relevant defect”
(1) This section applies for the purposes of sections (Remediation costs under qualifying leases) to (Meeting remediation costs of insolvent landlord) and Schedule (Remediation costs under qualifying leases).(2) “Relevant defect” means a defect as regards a building that—(a) arises as a result of anything done (or not done), including anything used (or not used), in connection with relevant works, and(b) causes a building safety risk.(3) In subsection (2) “relevant works” means works relating to the building (including its initial construction) that were carried out—(a) before completion, if completion occurred in the period of 30 years ending with the coming into force of this section, or(b) by or on behalf of a relevant landlord or management company, after completion and within that period.(4) For the purposes of this section—“building safety risk”, in relation to a building, means a risk to the safety of people in or about the building arising from—(a) the spread of fire, or(b) the collapse of the building or any part of it;“completion” and “management company” are defined by regulations made by the Secretary of State;“relevant landlord” means a landlord under a lease of the building or any part of it.”Member’s explanatory statement
This new Clause defines “relevant defect” for the purposes of the provisions relating to the remediation of defects arising out of works carried out before commencement.
Lord Greenhalgh
“Associated persons
(1) For the purposes of sections (Remediation costs under qualifying leases) to (Meeting remediation costs of insolvent landlord) and Schedule (Remediation costs under qualifying leases), a person (A) is associated with another person (B) in the circumstances mentioned in subsections (2) and (3).(2) If A is an individual, A is associated with any body corporate of which A was a director at any time in the period of 5 years ending at the qualifying time.(3) If A is a body corporate, it is associated with another body corporate (B) if—(a) at any time in the period of 5 years ending at the qualifying time, a person who was a director of A was also a director of B, or(b) at the qualifying time, one of them controlled the other or a third body corporate controlled both of them.Subsections (4) to (6) set out the cases in which a body corporate is regarded as controlling another body corporate.(4) A body corporate (X) controls a company (Y) if X possesses or is entitled to acquire—(a) at least half of the issued share capital of Y,(b) such rights as would entitle X to exercise at least half of the votes exercisable in general meetings of Y,(c) such part of the issued share capital of Y as would entitle X to at least half of the amount distributed, if the whole of the income of Y were in fact distributed among the shareholders, or(d) such rights as would, in the event of the winding up of Y or in any other circumstances, entitle it to receive at least half of the assets of Y which would then be available for distribution among the shareholders.(5) A body corporate (X) controls a limited liability partnership (Y) if X—(a) holds a majority of the voting rights in Y,(b) is a member of Y and has a right to appoint or remove a majority of other members, or(c) is a member of Y and controls alone, or pursuant to an agreement with other members, a majority of the voting rights in Y.(6) A body corporate (X) controls another body corporate (Y) if X has the power, directly or indirectly, to secure that the affairs of Y are conducted in accordance with X’s wishes.(7) In subsection (5) a reference to “voting rights” is to the rights conferred on members in respect of their interest in a limited liability partnership to vote on those matters which are to be decided on by a vote of the members of the limited liability partnership.(8) In determining whether one body corporate (X) controls another, X is treated as possessing—(a) any rights and powers possessed by a person as nominee for it, and(b) any rights and powers possessed by a body corporate which it controls (including rights and powers which such a body corporate would be taken to possess by virtue of this paragraph).”Member’s explanatory statement
This new Clause defines “associated person” for the purposes of the provisions relating to the remediation of defects arising out of works carried out before commencement.
“Remediation costs under qualifying leases
Schedule (Remediation costs under qualifying leases)—(a) provides that certain service charge amounts relating to relevant defects in a relevant building are not payable, and(b) makes provision for the recovery of those amounts from persons who are landlords under leases of the building (or any part of it).”Member’s explanatory statement
This new Clause introduces a new Schedule, containing protections for certain leaseholders and others, relating to certain remediation costs, and imposing corresponding liabilities on certain landlords.
“Remediation orders
(1) The Secretary of State may by regulations make provision for and in connection with remediation orders.(2) A “remediation order” is an order, made by the First-tier Tribunal, requiring a relevant landlord to remedy specified relevant defects in a specified relevant building by a specified time.(3) In this section “relevant landlord”, in relation to a relevant defect in a relevant building, means a landlord under a lease of the building or any part of it who is required, under the lease or by virtue of an enactment, to repair or maintain anything relating to the relevant defect.(4) The following persons may apply for a remediation order—(a) the regulator (as defined by section 2);(b) a local authority (as defined by section 29) for the area in which the relevant building is situated;(c) a fire and rescue authority (as defined by section 29) for the area in which the relevant building is situated;(d) any other person prescribed by the regulations.(5) In this section “specified” means specified in the order.”Member’s explanatory statement
This new Clause confers a power to make provision about remediation orders, which are orders requiring a landlord to remedy relevant defects.
“Remediation contribution orders
(1) The First-tier Tribunal may, on the application of an interested person, make a remediation contribution order in relation to a relevant building if it considers it just and equitable to do so.(2) “Remediation contribution order”, in relation to a relevant building, means an order requiring a specified body corporate to make payments to a specified person, for the purpose of meeting costs incurred or to be incurred in remedying relevant defects (or specified relevant defects) relating to the relevant building.(3) A body corporate may be specified only if it is associated with a landlord under a lease of the relevant building or any part of it.(4) An order may—(a) require the making of payments of a specified amount, or payments of a reasonable amount in respect of the remediation of specified relevant defects (or in respect of specified things done or to be done for the purpose of remedying relevant defects);(b) require a payment to be made at a specified time, or to be made on demand following the occurrence of a specified event.(5) In this section—“associated”: see section (Associated persons);“interested person”, in relation to a relevant building, means— (a) the regulator (as defined by section 2),(b) a local authority (as defined by section 29) for the area in which the relevant building is situated,(c) a fire and rescue authority (as defined by section 29) for the area in which the relevant building is situated, or(d) a person with a legal or equitable interest in the relevant building or any part of it;“relevant building”: see section (Meaning of “relevant building”);“relevant defect”: see section (Meaning of “relevant defect”);“specified” means specified in the order.”Member’s explanatory statement
This new Clause confers power on the First-tier Tribunal to make an order requiring a person associated with certain landlords to contribute towards the costs of remedying certain defects in relevant buildings.
“Meeting remediation costs of insolvent landlord
(1) This section applies if, in the course of the winding up of a company which is a landlord under a lease of a relevant building or any part of it, it appears—(a) that there are relevant defects relating to the building, and(b) that the company is under an obligation (howsoever imposed) to remedy any of the relevant defects or is liable to make a payment relating to any costs incurred or to be incurred in remedying any of the relevant defects.(2) The court may, on the application of the liquidator, by order require a body corporate associated with the company to make such contributions to the company’s assets as the court considers to be just and equitable.(3) An order may be made where proceedings for the winding up of the company were commenced before (as well as after) the coming into force of this section.(4) In this section—“associated”: see section (Associated persons);“the court” means a court having jurisdiction to wind up the company;“relevant building”: see section (Meaning of “relevant building”);“relevant defect”: see section (Meaning of “relevant defect”).”Member’s explanatory statement
This new Clause confers power on a court winding up a company to require a body corporate associated with the company to contribute to the assets of the company.
“Building industry schemes
(1) The Secretary of State may by regulations—(a) establish a scheme, and(b) make provision about the scheme.(2) Regulations that establish a scheme must prescribe the descriptions of persons in the building industry who may be members of the scheme (“eligible persons”).(3) Where a scheme is established, the Secretary of State must set and publish the criteria that an eligible person must meet in order to become, and remain, a member of the scheme (“membership criteria”).(4) Membership criteria may be set for any purpose connected with—(a) securing the safety of people in or about buildings in relation to risks arising from buildings, or(b) improving the standard of buildings. (5) The Secretary of State must ensure that a list of members of a scheme is kept and published (and may publish a list of persons who are eligible persons but are not members of a scheme).”Member’s explanatory statement
This new Clause confers power on the Secretary of State to establish one or more building industry schemes.
“Building industry schemes: supplementary
(1) This section supplements section (Building industry schemes).(2) Regulations may provide that a scheme is to be maintained by—(a) the Secretary of State, or(b) a person designated by the Secretary of State (a “designated person”), acting on behalf of the Secretary of State.(3) Regulations may provide for the charging of fees, in connection with—(a) an application for membership;(b) renewal of membership;(c) a review;(d) any other prescribed matter.(4) The Secretary of State may publish a document setting out the procedure relating to any of the following—(a) applications for membership of a scheme;(b) the periodic renewal of membership;(c) termination of a person’s membership;(d) the review of any decision relating to a person’s membership;(e) the suspension of a person from membership.(5) Membership criteria may be framed by reference to—(a) standards, or a document, from time to time published by any person;(b) the opinion of the Secretary of State, or a designated person, in relation to any matter.(6) Different membership criteria may be set for different purposes.(7) In section (Building industry schemes) and this section—“building” means a building in England;“building industry”: a reference to persons in the building industry is to persons carrying on, for business purposes, activities connected with the design, construction, management or maintenance of buildings, including persons carrying on activities in relation to construction products (within the meaning of paragraph 24 of Schedule 11) in England;“prescribed” means prescribed by the regulations;“regulations” means regulations under section (Building industry schemes);“scheme” means a scheme established under section (Building industry schemes);“standard”(except in subsection (5) of this section) is to be read in accordance with section 29.”Member’s explanatory statement
This new Clause makes supplementary provision about building industry schemes.
“Prohibition on development for prescribed persons
(1) The Secretary of State may by regulations prohibit a person of a prescribed description from carrying out development of land in England (or a prescribed description of such development). (2) A prohibition may be imposed for any purpose connected with—(a) securing the safety of people in or about buildings in relation to risks arising from buildings, or(b) improving the standard of buildings.(3) A prohibition under the regulations applies despite planning permission (or any prescribed description of planning permission) having been granted.(4) The regulations may provide that, in prescribed cases, no prescribed certificate under the 1990 Act may be granted (and any purported grant is of no effect).(5) The regulations may require a person of a prescribed description to give a notification relating to the proposed beginning of development (and may make provision about the content and form of a notification and the way in which it is to be given).(6) The regulations may contain exceptions.(7) The regulations may make provision about enforcement, including in particular provision applying (with or without modifications), in relation to a breach of the regulations, any provision of Part 7 of the 1990 Act (enforcement).(8) For the purposes of this section—(a) “the 1990 Act” means the Town and Country Planning Act 1990;(b) a reference to the “beginning” of development is to be read in accordance with section 56(2) of the 1990 Act;(c) “building” means a building in England;(d) “development” has the meaning given by section 55 of the 1990 Act;(e) “planning permission” has the meaning given by section 336 of the 1990 Act;(f) “prescribed” means prescribed by regulations under this section;(g) “standard” is to be read in accordance with section 29.”Member’s explanatory statement
This new Clause confers power on the Secretary of State to prohibit a prescribed person from carrying out development (or certain development).
“Building control prohibitions
(1) The Secretary of State may by regulations impose a building control prohibition, as regards buildings or proposed buildings, in relation to persons of a prescribed description.(2) A prohibition may be imposed for any purpose connected with—(a) securing the safety of people in or about buildings in relation to risks arising from buildings, or(b) improving the standard of buildings.(3) A “building control prohibition”, in relation to a person, prohibits—(a) the person from applying for building control approval or from depositing plans,(b) the person from giving an initial notice (whether or not jointly with anyone else) or a public body’s notice, public body’s plans certificate or public body’s final certificate,(c) the granting of building control approval to the person,(d) the passing of plans deposited by the person,(e) the acceptance of an initial notice given by the person (whether or not jointly with anyone else) or a public body’s notice, public body’s plans certificate or public body’s final certificate given by the person, (f) the giving of a final certificate in relation to works carried out by the person,(g) the person from giving a prescribed document,(h) the giving of a prescribed document to the person or in respect of works carried out by the person, or(i) the acceptance of any prescribed document given by the person or in respect of works carried out by the person.(4) A building control prohibition applies despite any provision made by or under the Building Act 1984.(5) The regulations may contain exceptions.(6) The regulations may provide that anything done in contravention of the regulations is of no effect.(7) Any reference in this section to a building or proposed building is to a building or proposed building in England.(8) In this section—“building” and “building control approval”, and references to the deposit and passing of plans, are to be read in accordance with Part 1 of the Building Act 1984;“initial notice”, “final certificate”, “public body’s notice”, “public body’s plans certificate” and “public body’s final certificate” have the same meaning as in Part 2 of that Act;“prescribed” means prescribed by regulations under this section;“standard” is to be read in accordance with section 29.”Member’s explanatory statement
This new Clause confers power on the Secretary of State to impose building control prohibitions on prescribed persons.
“Building liability orders
(1) The High Court may make a building liability order if it considers it just and equitable to do so.(2) A “building liability order” is an order providing that any relevant liability (or any relevant liability of a specified description) of a body corporate (“the original body”) relating to a specified building is also—(a) a liability of a specified body corporate, or(b) a joint and several liability of two or more specified bodies corporate.(3) In this section “relevant liability” means a liability (whether arising before or after commencement) that relates to a building in England and is incurred—(a) under the Defective Premises Act 1972 or section 38 of the Building Act 1984, or(b) as a result of a building safety risk.(4) A body corporate may be specified only if it is, or has at any time in the relevant period been, an associate of the original body.(5) A building liability order—(a) may be made in respect of a liability of a body corporate that has been dissolved (including where dissolution occurred before commencement);(b) continues to have effect even if the body corporate is dissolved after the making of the order.(6) In this section—“associate”: see section (Building liability orders: associates);“building safety risk”, in relation to a building, means a risk to the safety of people in or about the building arising from the spread of fire or structural failure;“commencement” means the time this section comes into force;“the relevant period” means the period— (a) beginning with the beginning of the carrying out of the works in relation to which the relevant liability was incurred, and(b) ending with the making of the order;“specified” means specified in the building liability order.”Member’s explanatory statement
This new Clause confers power on the court to make an order under which certain liabilities relating to buildings in England are imposed on a person associated with the person who is primarily liable.
“Building liability orders: associates
(1) For the purposes of section (Building liability orders), a body corporate (A) is associated with another body corporate (B) if—(a) one of them controls the other, or(b) a third body corporate controls both of them.Subsections (2) to (4) set out the cases in which a body corporate is regarded as controlling another body corporate.(2) A body corporate (X) controls a company (Y) if X possesses or is entitled to acquire—(a) at least half of the issued share capital of Y,(b) such rights as would entitle X to exercise at least half of the votes exercisable in general meetings of Y,(c) such part of the issued share capital of Y as would entitle X to at least half of the amount distributed, if the whole of the income of Y were in fact distributed among the shareholders, or(d) such rights as would, in the event of the winding up of Y or in any other circumstances, entitle it to receive at least half of the assets of Y which would then be available for distribution among the shareholders.(3) A body corporate (X) controls a limited liability partnership (Y) if X—(a) holds a majority of the voting rights in Y,(b) is a member of Y and has a right to appoint or remove a majority of other members, or(c) is a member of Y and controls alone, or pursuant to an agreement with other members, a majority of the voting rights in Y.(4) A body corporate (X) controls another body corporate (Y) if X has the power, directly or indirectly, to secure that the affairs of Y are conducted in accordance with X’s wishes.(5) In subsection (3) a reference to “voting rights” is to the rights conferred on members in respect of their interest in a limited liability partnership to vote on those matters which are to be decided on by a vote of the members of the limited liability partnership.(6) In determining under any of subsections (2) to (4) whether one body corporate (X) controls another, X is treated as possessing—(a) any rights and powers possessed by a person as nominee for it, and(b) any rights and powers possessed by a body corporate which it controls (including rights and powers which such a body corporate would be taken to possess by virtue of this paragraph).”Member’s explanatory statement
This new Clause sets out who is an associated person for the purposes of the preceding new Clause.
The Deputy Chairman of Committees (Baroness Watkins of Tavistock) (CB)
The question is that Amendments 79 to 81 be agreed to.
Lord Greenhalgh (Con)
I am sorry. Those amendments are not government amendments. Will they go in Hansard?
The Deputy Chairman of Committees (Baroness Watkins of Tavistock)
Do not worry. They will not because Hansard will cover your back and my back. I have been told that this is the most complicated thing that has been done in Grand Committee for years, so I think we have to accept it if I have made a mistake. I thought they were government amendments.
Lord Greenhalgh
“(c) the relevant Northern Ireland department.”Member’s explanatory statement
This amendment places the Secretary of State under a duty to consult the relevant department in Northern Ireland before making arrangements to establish the new homes ombudsman scheme.
“(5) In this section, “the relevant Northern Ireland department” means—(a) the Northern Ireland department designated for the purposes of this section by the First Minister and deputy First Minister acting jointly, or(b) failing such a designation, the Executive Office in Northern Ireland.”Member’s explanatory statement
This amendment explains which department in Northern Ireland is the relevant Northern Ireland department.
Lord Greenhalgh
“SCHEDULE REMEDIATION COSTS UNDER QUALIFYING LEASESInterpretation
1_ In this Schedule—“associated”: see section (Associated persons);“building safety risk” has the meaning given by section (Meaning of “relevant defect”);“qualifying lease”: see section (Meaning of “qualifying lease”);“the qualifying time” has the same meaning as in section (Meaning of “qualifying lease”); “relevant building”: see section (Meaning of “relevant building”);“relevant defect”: see section (Meaning of “relevant defect”);“relevant measure”, in relation to a relevant defect, means a measure taken—(a) to remedy the relevant defect, or(b) for the purpose of—(i) preventing a relevant risk from materialising, or(ii) reducing the severity of any incident resulting from a relevant risk materialising;“relevant risk” here means a building safety risk that arises as a result of the relevant defect;“service charge” has the meaning given by section 18 of the Landlord and Tenant Act 1985.No service charge payable for defect for which landlord or associate responsible
2_(1) No service charge is payable under a qualifying lease in respect of a relevant measure relating to a relevant defect if a relevant landlord—(a) is responsible for the relevant defect, or(b) is or has at any time been associated with a person responsible for a relevant defect.(2) For the purposes of this paragraph a person is “responsible for” a relevant defect if—(a) in the case of an initial defect, the person was the developer or carried out works relating to the defect;(b) in any other case, the person carried out works relating to the defect.(3) In this paragraph—“developer” means a person who undertakes or commissions the construction or conversion of a building (or part of a building) with a view to granting or disposing of interests in the building or parts of it;“initial defect” means a relevant defect arising in connection with works carried out before completion (within the meaning of section (Meaning of “relevant defect”));“relevant landlord”, in relation to a qualifying lease, means the landlord under the lease or any superior landlord.Paragraph 2: extension of protection to superior leases
3_(1) This paragraph applies if, as a result of paragraph 2, an amount of service charge (an “unrecoverable amount”) that would otherwise be payable under a qualifying lease in respect of a relevant measure is not payable.(2) Any superior lease has effect as if any liability of the tenant under the superior lease to pay an amount in respect of the relevant measure (“the relevant amount”) were a liability to pay an amount equal to—(a) the relevant amount, minus(b) the unrecoverable amount.(3) In this paragraph “superior lease” means any lease which is superior to the qualifying lease.No service charge payable if prescribed conditions are met
4_(1) No service charge is payable under a qualifying lease in respect of a relevant measure relating to any relevant defect if any prescribed conditions, relating to a relevant landlord or the value of the qualifying lease, are met.(2) In this paragraph—“prescribed” means prescribed by regulations made by the Secretary of State;“relevant landlord” has the same meaning as in paragraph 2. Limit on service charge in other cases
5_(1) A service charge which would otherwise be payable under a qualifying lease in respect of a relevant measure relating to any relevant defect is payable only if (and so far as) the sum of—(a) the amount of the service charge, and(b) the total amount of relevant service charges which fell due before the service charge fell due,does not exceed the permitted maximum.(2) In this paragraph “relevant service charge” means a service charge under the lease in respect of a relevant measure relating to any relevant defect that—(a) fell due in the pre-commencement period, or(b) falls due after commencement.(3) In sub-paragraph (2) “the pre-commencement period” means the period—(a) beginning 5 years before commencement or, if later, on the day the relevant person became the tenant under the qualifying lease, and(b) ending with commencement.“The relevant person” means the person who was the tenant under the qualifying lease at commencement.(4) In this paragraph—“commencement” means the time this paragraph comes into force;“the permitted maximum”: see paragraph 6.Paragraph 5: the permitted maximum
6_(1) In paragraph 5 “the permitted maximum”, in relation to a qualifying lease, has the following meaning.(2) The permitted maximum is (subject to sub-paragraphs (3) to (5))—(a) if the premises demised by the qualifying lease are in Greater London, £15,000;(b) otherwise, £10,000.(3) Where the qualifying lease is a shared ownership lease and the tenant’s total share was less than 100% at the qualifying time, the permitted maximum is the tenant’s total share (as at that time) of what would otherwise be the permitted maximum.(4) Where the value of the qualifying lease at the qualifying time is at least £1,000,000 but does not exceed £2,000,000, the permitted maximum is £50,000.(5) Where the value of the qualifying lease at the qualifying time exceeds £2,000,000, the permitted maximum is £100,000.(6) The Secretary of State may by regulations make provision about the determination of the value of a qualifying lease for the purposes of paragraph 4 and this paragraph.(7) In this paragraph “shared ownership lease” and “total share” have the meaning given by section 7 of the Leasehold Reform, Housing and Urban Development Act 1993.Annual limit on service charges
7_(1) The Secretary of State may by regulations make provision limiting the total amount of service charges payable in any period of 12 months under a qualifying lease in respect of relevant measures relating to any relevant defect to one fifth of the permitted maximum.(2) In this paragraph “the permitted maximum” means the permitted maximum as defined by paragraph 6 in relation to the lease.No service charge payable for cladding remediation where tenant was resident
8_(1) No service charge is payable under a qualifying lease in respect of cladding remediation if the condition in section (Meaning of “qualifying lease”)(2)(d)(i) (resident tenant) was met at the qualifying time. (2) In this paragraph “cladding remediation” has the meaning given by regulations made by the Secretary of State.No service charge payable for legal expenses relating to relevant defects
9_(1) No service charge is payable under a qualifying lease in respect of legal expenses relating to the liability (or potential liability) of any person incurred as a result of a relevant defect.(2) In this paragraph “legal expenses” means any costs incurred, or to be incurred, in connection with—(a) obtaining legal advice,(b) any proceedings before a court or tribunal,(c) arbitration, or(d) mediation.Paragraphs 2 to 9: supplementary
10_(1) This paragraph supplements paragraphs 2 to 9 (the “relevant paragraphs”).(2) Where a relevant paragraph provides that no service charge is payable under a lease in respect of a thing—(a) no costs incurred or to be incurred in respect of that thing (or in respect of that thing and anything else)—(i) are to be regarded for the purposes of the relevant provisions as relevant costs to be taken into account in determining the amount of a service charge payable under the lease, or(ii) are to be met from a relevant reserve fund;(b) any amount payable under the lease, or met from a relevant reserve fund, is limited accordingly (and any necessary adjustment must be made by repayment, reduction of subsequent charges or otherwise).(3) In this paragraph—“the relevant provisions” means sections 18 to 30 of the Landlord and Tenant Act 1985 (service charges) and section 42 of the Landlord and Tenant Act 1987 (service charge contributions to be held on trust);“relevant reserve fund” means—(a) a trust fund within the meaning of section 42 of the Landlord and Tenant Act 1987,(b) an express trust of a kind mentioned in subsection (9) of that section, comprising payments made by the tenant under the qualifying lease and others, or(c) any other fund comprising payments made by the tenant under the qualifying lease and others, and held for the purposes of meeting costs incurred or to be incurred in respect of the relevant building in question or any part of it (or in respect of that building or part and anything else).No increase in service charge for other tenants
11_ Where—(a) an amount (“the original amount”) would, apart from this Schedule, be payable by a tenant under a lease of premises in a relevant building, and(b) a greater amount would (apart from this paragraph) be payable under the lease as a result of this Schedule,the lease has effect as if the amount payable were the original amount.Recovery of service charge amounts from landlords
12_(1) The Secretary of State may by regulations make provision for and in connection with the recovery, from a prescribed relevant landlord, of any amount that is not recoverable under a lease as a result of this Schedule.(2) In this paragraph—“prescribed” means prescribed by regulations under this paragraph;“relevant landlord”, in relation to a lease, means the landlord under the lease or any superior landlord. Information
13_(1) The Secretary of State may by regulations make provision requiring a tenant under a qualifying lease to give prescribed information or documents to the landlord under the lease or any superior landlord.(2) The regulations may provide that the information or documents are to be given in a prescribed way.(3) In this paragraph “prescribed” means prescribed by the regulations.Anti-avoidance
14_ A covenant or agreement (whenever made) is void insofar as it purports to exclude or limit any provision made under this Schedule.”Member’s explanatory statement
This new Schedule contains protections for certain leaseholders and others, relating to certain remediation costs, and imposes corresponding liabilities on certain landlords.
Lord Greenhalgh
Member’s explanatory statement
This amendment is to ensure that the new homes ombudsman scheme includes provision about provision of information to the relevant department in Northern Ireland.
“(2) In this paragraph, “the relevant Northern Ireland department” means the Northern Ireland department designated for the purposes of this paragraph by the First Minister and deputy First Minister acting jointly.”Member’s explanatory statement
This amendment explains which department in Northern Ireland is the relevant Northern Ireland department.
Lord Greenhalgh
Member’s explanatory statement
This amendment glosses the meaning of “occupation condition” for homes in Northern Ireland.
Lord Greenhalgh
“(c) in relation to land in Northern Ireland, a legal estate which is—(i) an estate in fee simple absolute in possession,(ii) an estate in fee simple in possession subject to a rent payable under a fee farm grant, or(iii) a term of years absolute granted for a term of more than 21 years from the date of the grant.”Member’s explanatory statement
This amendment provides the meaning of “relevant interest” for land in Northern Ireland.
“(d) in relation to homes in Northern Ireland, the Northern Ireland department designated for the purposes of this section by the First Minister and deputy First Minister acting jointly.”Member’s explanatory statement
This amendment confers power on a Northern Ireland department to make regulations about who is a “developer”.
“(10A) If no Northern Ireland department has been designated for the purposes of this section then, for the purposes of subsection (10), “the relevant national authority” in relation to homes in Northern Ireland is the Executive Office in Northern Ireland.”Member’s explanatory statement
This amendment is to ensure that the Secretary of State, Welsh Ministers and Scottish Ministers will still be able to make regulations for their own jurisdictions even if there is no Northern Ireland department designated for the purposes of making regulations for homes in Northern Ireland.
Lord Greenhalgh
(a) in the case of regulations made by the Secretary of State or the Welsh Ministers, by statutory instrument, and(b) in the case of regulations made by a Northern Ireland department, by statutory rule for the purposes of the Statutory Rules (Northern Ireland) Order 1979 (S.I. 1979/1573 (N.I. 12)).”Member’s explanatory statement
This amendment provides for procedural matters connected to the power conferred on a Northern Ireland department to make regulations.
“(d) if made by a Northern Ireland department, may not be made unless a draft of the regulations has been laid before, and approved by a resolution of, the Northern Ireland Assembly.”Member’s explanatory statement
This amendment provides for the parliamentary procedure for regulations made by a Northern Ireland department.
Lord Greenhalgh
“(c) the relevant Northern Ireland department.”Member’s explanatory statement
This amendment places the Secretary of State under a duty to consult the relevant department in Northern Ireland before making regulations about the new homes ombudsman scheme.
“(8) In this section, “the relevant Northern Ireland department” means—(a) the Northern Ireland department designated for the purposes of this section by the First Minister and deputy First Minister acting jointly, or(b) failing such a designation, the Executive Office in Northern Ireland.”Member’s explanatory statement
This amendment explains which department in Northern Ireland is the relevant Northern Ireland department.
Lord Greenhalgh
Member’s explanatory statement
This amendment places the Secretary of State under a duty to consult the relevant department in Northern Ireland about the code of practice.
“(5) In this section, “the relevant Northern Ireland department” means—(a) the Northern Ireland department designated for the purposes of this section by the First Minister and deputy First Minister acting jointly, or(b) failing such a designation, the Executive Office in Northern Ireland.”Member’s explanatory statement
This amendment explains which department in Northern Ireland is the relevant Northern Ireland department.
The Deputy Chairman of Committees (Baroness Watkins of Tavistock) (CB)
I cannot call Amendment 107A, as it is an amendment to Amendment 107.
Building Safety Bill
Wednesday 2nd March 2022
(2 years, 1 month ago)
Grand CommitteeRead Full debate Building Safety Act 2022 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 98-IV Fourth marshalled list for Grand Committee - (28 Feb 2022)
The Deputy Chairman of Committees (Baroness Watkins of Tavistock) (CB)
My Lords, Members are encouraged to leave some distance between themselves and others and to wear a face covering when not speaking. If there is a Division in the Chamber while we are sitting, this Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.
Amendment 111
Lord Foster of Bath
“Sale of goods online for use in buildings
(1) The Secretary of State must, within one year of the passing of this Act, make regulations placing requirements on operators of online marketplaces to take reasonable steps to identify and remove from the online marketplace items which—(a) do not comply with safety legislation, or(b) have been withdrawn or recalled by any person in accordance with safety legislation,and that are of such a kind that are, or may be reasonably assumed to be, for use in buildings.(2) Regulations made pursuant to subsection (1)—(a) must specify what in the opinion of the Secretary of State constitutes “reasonable steps”,(b) may specify which items this section applies to, and(c) may specify penalties for failure to comply with the regulations.”Member’s explanatory statement
The purpose of this Clause is to improve the safety of buildings by preventing the sale of faulty electrical goods that can cause fires. This is particularly important in high-rise buildings in which fires can, and in the past have, spread causing fatalities.
Lord Foster of Bath (LD)
My Lords, if I purchase, say, an electric fan or a tumble dryer online, it will arrive at my door within a few days and I will plug it in and use it. However, the item could be electrically unsafe or may be one that the manufacturers have withdrawn because they have some concern about it as a potential risk. I have no way of knowing whether the item I have purchased is in that condition for the very simple reason that there are no regulations that require online distributors to take any reasonable steps to ensure that items purchased online are safe. Of course, if the item is unsafe, it could threaten the safety of my home, perhaps causing a fire. If I live in a high-rise block like the ones we are talking about at the moment, that fire could spread and endanger the other flats in the block and the lives of the people who live in them. This is the danger that my amendment seeks to resolve.
Lord Foster of Bath (LD)
As I was saying before I was so rudely interrupted, Amendment 111 seeks to address the issue of potentially unsafe electrical items purchased online and the impact that could have in high-rise blocks. Some noble Lords may believe that this is not a very serious issue and that perhaps not very many such products are available.
Electrical Safety First has done a detailed analysis of the work of the Office for Product Safety and Standards and, in a test, 63% of electrical products bought in an online marketplace were found to be non- compliant and, of those, 23 were unsafe. The OPSS publishes a weekly product safety report, which details products found to pose a risk to health and safety. Analysis of these reports by Electrical Safety First shows that, during 2021, 31% of all unsafe products identified were electrical, 72 of them having been purchased online. A separate investigation that it carried out found that 93% of a sample of electrical products tested from online marketplaces were unsafe. It has also repeatedly found numerous items that have been recalled by manufacturers—often due to a concern about the risk of overheating and fire—but were still available for purchase online. We are not dealing with a small problem.
We know that there is an increasing number of fires in high-rise buildings: the number has gone up year on year. In fact, there has been a 20% increase in the last two years alone. We know that some 53%—over half of all of the fires—were caused by electricity in one form or another. In many cases, the source of ignition was a faulty electrical product. The fire in Grenfell Tower was caused by an electrical appliance—a fridge freezer—as was the fire at Shepherd’s Court in 2016, which was caused by a recalled tumble dryer, and the fire at Lakanal House in 2009, which was caused by a TV. I do not know whether, in each of those cases, those products were purchased online, but we know from all the research that an increasing number of electrical appliances are purchased online. In February last year, 75% of UK shoppers said that they bought such products online, compared to just 40% the previous year—this was obviously enhanced by lockdown.
This is an accident waiting to happen, and we need to do something about it. That view is supported by many organisations: following the OPSS consultation in 2021, they argued that change was needed to ensure that markets remain fair, and specific powers were requested by them in relation to online marketplaces and platforms. The National Audit Office—the NAO—carried out an investigation and found that there were “gaps in regulators’ powers” to regulate the online marketplace. A Public Accounts Committee report includes findings and states that the OPSS had explained to it that
“under current legislation, online marketplaces are not responsible for the safety of products sold by third parties on their platforms.”
Yet there is of course a requirement for purchases made not online but in normal shops, so it is odd that there is a discrepancy here.
It is particularly odd that the Government have done nothing about it so far, because, in answer to a House of Commons Written Question, the Minister said:
“The Government is committed to ensuring that only safe products can be sold in the UK.”
The purpose of this amendment is to achieve exactly what the Government want—to ensure that only safe electrical products can be purchased, whether they are purchased in normal shops or online. It seems a simple amendment. I have not spent a lot of time going through it, because I am absolutely certain that the Minister is just going to say, “Yes, Don, good idea, we’ll agree to it.” I look forward to hearing her say that in a few minutes.
The Deputy Chairman of Committees (Baroness Watkins of Tavistock) (CB)
My Lords, the noble Baroness, Lady Brinton, is taking part remotely. I invite the noble Baroness to speak.
Baroness Brinton (LD) [V]
My Lords, I support all three amendments in this group. Amendment 111, which was laid by my noble friend Lord Foster and to which I have added my name, aims to protect consumers from items purchased online that are non-compliant with rules for purchasing the same products in shops. I thank him for his clear and detailed explanation of why it is needed.
The excellent analysis by Electrical Safety First of the Office for Product Safety and Standards demonstrates that there is a real safety issue. Nearly two-thirds of electrical products bought in an online marketplace are non-compliant and a shocking quarter is actively unsafe. Electrical Contracting News said that in 2020 faulty appliances caused 43 fires per week in England. Everyday household appliances caused 15,000 accidental fires in homes. We know that some serious and fatal fires in high-rise and medium-rise buildings were caused by faulty appliances. Some fires were due to household items being placed too close to the source of heat or to misuse of appliances, but a number were due to appliances that were found to be faulty.
If two-thirds of electrical products bought in online marketplaces are non-compliant and, worse, a quarter is unsafe, that is a recipe for danger. Perhaps it is not surprising that legislation is taking time to catch up with new ways of purchasing goods, yet the focus of this Bill is to ensure that buildings are safe, especially high-rise buildings. This amendment proposes a solution to the problem and I support it.
Briefly, I want also to add my support to Amendment 112 laid by my noble friend Lady Pinnock and Amendment 117 laid by the noble Baroness, Lady Finlay. The amendment of my noble friend Lady Pinnock also responds to evidence given at both the Grenfell inquiry and Dame Judith Hackitt’s review of the appalling habits of too many construction product companies of managing to soften or even blatantly breach the safety regulations. It is evident that the regulations are out of date and I hope that the Minister will be able to respond favourably to this, too.
Finally, the amendment of the noble Baroness, Lady Finlay, highlights the importance of the provision of CO detectors and alarms and seeks for the responsible person to ensure that they are provided. Too many times, people end up with unsafe equipment, whether an old gas fire or, worse, a new exterior gas fire being used inside through ignorance, which has resulted in the deaths of far too many people. We are used to having smoke alarms in buildings, especially high-rise ones. We should also have CO detectors and monitors as a matter of absolute routine for safety. I look forward to hearing the Minister’s response.
Baroness Finlay of Llandaff (CB)
My Lords, I would like to speak to my Amendment 117 in this group— I am grateful to the noble Lord, Lord Hunt of Kings heath, for supporting this amendment with me. I should declare my interest, as I co-chair the All-Party Parliamentary Carbon Monoxide Group and I chair the CO Research Trust.
As the noble Baroness, Lady Brinton, said, faulty appliances are often a source of carbon monoxide, but so are wood-burning stoves and oil central heating. Anything that burns a carbon-based fuel can produce carbon monoxide, which is colourless, tasteless and odourless and results from incomplete combustion of the fuel. The problem is that high levels kill you rapidly, within a few minutes, but the symptoms are that you just feel warm and sleepy. You think that you are comfortable and sleepy; the next thing you are dead. However, low levels also produce long-term damage and are thought to damage the developing foetus in pregnant women.
Baroness Pinnock (LD)
My Lords, it was the safety failure of cladding on Grenfell Tower that resulted in 72 people tragically losing their lives. Subsequent investigations showed that construction products that failed flammability tests were used. Obviously, the safety of the construction products used is critical if we are to achieve a much improved building safety standard.
The safety of construction products in the Bill is dealt with only in Schedule 11. Ten pages of detail set out the regulatory regime around product safety. Amendment 112 in my name would add a new clause to the Bill to ensure that product safety is an integral and important part of the legislation.
The purpose of Schedule 11 is to enable the Secretary of State to make relevant regulations to control the safety of construction products. The key word used throughout is that the Government or the Secretary of State “may” by regulations do something. I suggest that the key word should be “must”. For example, Schedule 11 states that products “may” be prohibited if they are not safe. Can the Minister clarify the reasoning for not using prescriptive language?
On standards and technical assessments of products, the wording used is that construction products regulations “may” make provision for standards and technical assessments. Given the learning from the tragedy at Grenfell, I would expect product standards to meet safety standards clearly established by regulation. The schedule establishes the notion of creating a list of “safety-critical products” covered by safety-critical standards which “may”, or presumably may not, be detailed in a timely way. The regulations also make provision for enforcement—or, at least, they “may” make provision—of the safety and standards regime.
The Hackitt report, my favourite document on all this, has a whole chapter on construction product safety and some very clear recommendations, one of which states:
“A clearer, more transparent and more effective specification and testing regime of construction products must”—
I emphasise “must”—
“be developed. This should include products as they are put together as part of a system.”
That is one of the issues that I raised at Second Reading and on other amendments in Committee. It is important that a product is not only proven to be safe but proven to be safe in conjunction with other materials. That was part of the failure exposed by the Grenfell fire.
Dame Judith Hackitt states clearly in her report that that is essential. Her report recommends:
“Manufacturers must retest products that are critical to the safety of”
higher-risk buildings. The report also seeks to ban assessments in lieu of tests—that is, the desktop studies that were part of the failure at Grenfell—and allow them only in
“a very limited number of cases”.
The Government have set out to reflect in the Building Safety Bill all the recommendations in Dame Judith Hackitt’s report. Unfortunately, Schedule 11 does not do that. It certainly does not do it with the clarity of language or insistence on actions contained in that report.
Amendment 112 is an attempt to draw the attention of the Committee to the fundamental importance of ensuring the safety of, and safe use of, construction products. The amendment seeks to address the want of timeliness in the schedule by insisting on the early publication of regulations on testing and certification. Proposed new subsection (2) seeks to provide for all the recommendations in the Hackitt report to be included in the Bill. I hope that, in her response, the Minister will accept the importance of tightening the proposed regulations on construction products and, given that nearly five years have passed since the Grenfell fire, will accept that no further time should be lost in making buildings safe by ensuring that construction products are safe.
I just want to comment on the other amendments in this group. I give my full support to Amendment 111 in the name of my noble friend Lord Foster, who has made the case for the vital importance of the safety of electrical appliances and for continuing to check them. Too many fires—high-risk fires—have occurred because some electrical appliances are not safe or do not continue to be safe.
I also fully support Amendment 117 in the name of the noble Baroness, Lady Finlay. I give the example of my own council—Kirklees Council—which provided free carbon monoxide monitors for every household. This followed the tragic death of a young child whose family was living in a terraced house where carbon monoxide leaked through from the adjacent house, which was not being properly maintained, if I may put it like that. Really sadly, the child died. As a consequence, the council—with the full support of everybody—produced free carbon monoxide monitors for every household. They are life-saving, and we will obviously fully support the amendment in the name of the noble Baroness. With those comments, I look forward to the Minister’s response.
Lord Khan of Burnley (Lab)
My Lords, I will speak to all the amendments in this group in the names of the noble Lord, Lord Foster of Bath, and the noble Baronesses, Lady Pinnock and Lady Finlay of Llandaff.
I turn first to Amendment 112 in the name of the noble Baroness, Lady Pinnock. She presented the case very clearly and eloquently; the headline from her contribution was that the amendment seeks to satisfy the Grenfell review and the Hackitt review. Testing and certification are important for product safety. Ultimately, they will save lives and ensure safer homes.
Amendment 117 is in the name of the noble Baroness, Lady Finlay, who made a very clear and economical argument on safety and why this amendment should be welcomed by the Government and all of us—was it £2 for the developers and owners of buildings to ensure the safety of their residents? The noble Baroness, Lady Pinnock, mentioned the very sad example of the young child in her constituency. We can save people’s lives by welcoming and adopting this amendment.
Baroness Bloomfield of Hinton Waldrist (Con)
I thank all noble Lords for their contributions to this important debate on additional building safety measures. As noble Lords know, making sure everyone’s home is a place of safety is at the heart of the Bill. I will address each of the amendments discussed in turn.
I thank the noble Lord, Lord Foster, and the noble Baroness, Lady Brinton, for raising the important matter of ensuring that electrical goods sold online are safe. The Government remain committed to ensuring that only safe products can be legally placed on the UK market, both now and in the future. Preventing the sale of unsafe electrical goods is clearly important to achieving this aim, but this extends to ensuring that all consumer products sold in the UK are safe. Existing product safety legislation places obligations on manufacturers, importers and distributors to ensure that consumer products are safe before they can be placed on the UK market. This applies to products sold both online and offline.
In common with the noble Lord, Lord Foster, the noble Baroness, Lady Brinton, and the noble Lord, Lord Khan, the Government also recognise that the rise of e-commerce presents a particular challenge. However, it is not true that the Government are doing nothing. They are undertaking a thorough review of the UK’s product safety framework, which includes an assessment of the impact of e-commerce.
Following a call for evidence last year, the Government are developing proposals for reform of the product safety framework and intend to consult in due course. This includes options to address the sale of unsafe products online. We are also taking forward a number of immediate actions. This includes implementing a programme of work focusing on the safety and compliance of goods sold by third-party sellers on online marketplaces.
I thank noble Lords for raising this important matter. However, the Government will not be supporting the amendment at this time, given the broader work as part of the product safety review and the existing regulatory controls that I have outlined.
Lord Foster of Bath (LD)
I am very grateful for what the Minister said the Government are doing, but before she moves on to the next amendment, can she give a clear indication of the timescale? Far too often we hear the phrase “in due course”—the Minister has herself used it. We all know what it means; can she give us something a little more concrete?
Baroness Bloomfield of Hinton Waldrist (Con)
I am afraid I pushed my officials to give me a specific time. They have agreed that we may write with more details to give the noble Lord an indication of when this might be forthcoming.
On Amendment 112, I thank the noble Baroness for raising the important matter of the testing and certification of construction products. The Government are committed to reforming the regulatory framework for construction products and it is important that our approach to reform considers the system in the round and is based on engagement with stakeholders who make, distribute and use construction products.
We therefore do not believe that it is right to set a deadline of six months to introduce new measures, as this will constrain public debate. We intend to introduce a requirement for products to be corrected, withdrawn or recalled where they are not safe. This will deliver a greater practical benefit than publishing information about known safety concerns.
We recognise the importance of accurate, reliable performance information to support appropriate product choices. However, a product’s testing record is unlikely to provide useful information for this purpose. Instead, we will create a statutory list of “safety critical” products, where their failure would risk causing death or serious injury and require manufacturers to draw up a declaration of performance for these products. Dame Judith Hackitt’s review recommended that industry should develop a consistent labelling and traceability system for construction products. We agree that industry is best placed to develop an approach that will be effective in practice.
I could sense the frustration of the noble Baroness, Lady Pinnock, with the language used in the Bill, specifically in Schedule 11. I am afraid that the “may versus must” argument recurs in many bits of legislation that I have taken through, and particularly here, when Dame Judith used “must” in her report. However, the whole reason we put “may” rather than “must” in legislation is that this approach is designed to allow the Secretary of State to review existing regulations, consult as needed and bring forward new regulations where needed. We clearly intend to use these powers and published draft regulations in October 2021. I recognise that that probably will not wholly satisfy the noble Baroness but it is as far as I may go.
Baroness Bloomfield of Hinton Waldrist (Con)
Yes. We clearly intend to use these powers and we already published draft regulations in October 2021.
Baroness Pinnock (LD)
Are we allowed to see the draft regulations? It would be really useful.
Baroness Bloomfield of Hinton Waldrist (Con)
We will circulate them to the whole Committee.
Baroness Bloomfield of Hinton Waldrist (Con)
We will also be introducing requirements for labelling construction products, to support regulatory activity. Once again, I thank the noble Baroness for raising this matter but, based on the explanation I have just provided, the Government will not be supporting the amendment.
Finally, on Amendment 117, tabled by the noble Baroness, Lady Finlay of Llandaff, I thank her for raising the important matter of carbon monoxide and the risk it poses. Carbon monoxide can be released from faulty or leaky boilers and chimneys. As the noble Baroness said, it is colourless, odourless and tasteless and can lead to life-changing injuries or death. It is indeed sometimes called the “silent killer”.
The Government take the risks and consequences of carbon monoxide poisoning very seriously and share a common goal with the noble Baroness of wanting to safeguard people from this deadly gas. She was right to stress the relationship between poverty, particularly fuel poverty, and the high incidence of harmful indoor air quality. However, the new clause is unnecessary. Legislation is already in place, as I will go on to explain, and we will bring forward new legislation and updates to guidance that will safeguard people from the harmful effects of carbon monoxide poisoning. We believe that, together, these measures will achieve the improvement in safety sought by this clause. The gas safety regulations require the safe installation, maintenance and use of gas systems, and they require landlords to carry out annual gas safety checks, which reduce the risks of carbon monoxide poisoning.
While carbon monoxide alarms are not a substitute for the proper installation, use and checks of combustion appliances, they are a useful additional precaution. Currently, our building regulations require appropriate provision for carbon monoxide detection and alarms when solid fuel appliances are installed in homes, irrespective of tenure. The Smoke and Carbon Monoxide Alarm (England) Regulations 2015 require carbon monoxide alarms in privately rented homes where there is a solid fuel appliance.
Recent evidence and analysis show that, although solid fuel appliances, such as wood-burning stoves, continue to be responsible for a disproportionate number of carbon monoxide incidents, the case to require alarms for combustion appliances using other fuels has grown. Therefore in 2020 we consulted on proposals to extend provisions for carbon monoxide alarms to be fitted when oil and gas-heating boilers are installed in all homes, irrespective of tenure, and to require that alarms are installed in any room used for habitation with a fixed combustion appliance, excluding gas cookers, in privately rented homes and social housing. These proposals received broad support and, in 2021, we announced that we will amend the regulations as soon as parliamentary time allows, with the changes coming into effect as soon as practicable. We will also update the statutory guidance on carbon monoxide alarms.
These new measures extend the use of carbon monoxide alarms to the extent that we consider appropriate, based on the current evidence available. The extended alarm measures are not limited to high-rise buildings and will apply to newly installed combustion appliances in homes irrespective of tenure and to all private and social landlords. While I appreciate the intention of the amendment, I hope I have reassured noble Lords that we have committed to extending the requirements and guidance around carbon monoxide alarms where appropriate to do so. I therefore ask the noble Baroness not to press the amendment.
Once again, I thank noble Lords for this debate, which has considered wider matters connected to safety, and I hope that, with the reassurances given, noble Lords will be content not to press their amendments.
Baroness Finlay of Llandaff (CB)
May I ask why the Government have not extended the requirement to all new builds and to major refurbishments when they are bought by a company and subsequently sold, and why there is a resistance to insisting that alarms are installed in workplaces? More and more firms are now struggling with the cost of heating. They may be turning it down, and people in the workplace may, in wanting to keep warm, bring in heating devices from outside that should be used for camping and cooking outside, or whatever. With fuel poverty, the risk of carbon monoxide poisoning is going to rise.
Simply to put into regulation that alarms need to be installed seems a move that would not cost anything significant to the building trade, or anyone refurbishing buildings—but to leave it simply restricted to landlords and to rely on annual checks, when we know that they are not always done adequately, seems completely inappropriate and highly risky. The landlord has to check the appliance installed, but when people are in fuel poverty they often cannot afford to run that appliance as it should be used—and, as I said, they will do such things as use an oven with the door open to try to stay warm, and that will pour out carbon monoxide. The other problem with that is that the level of air in the room is exactly at the level of a toddler’s face, so children are more exposed than adults in such a situation. If an alarm was installed, it would go off irrespective of relying on a landlord.
The other problem is that a lot of people now in fuel poverty are not in rented accommodation. They have mortgage commitments which they are struggling to pay. They are suddenly finding that they are in a band of poverty that they never imagined they would be in when they took out a large loan to purchase their property, particularly with interest rates going up as well.
Baroness Bloomfield of Hinton Waldrist (Con)
As I said in my speech, the extended alarm measures will apply to all newly installed combustion appliances in homes, irrespective of tenure, and to all private and social landlords. I should also add that we consulted in November 2020 on proposals to extend the requirements for carbon monoxide alarms to oil and gas heating installations and to social housing. The Government are yet to respond to this consultation, but we will do so in due course.
Lord Foster of Bath (LD)
My Lords, I think we are all grateful to the Minister for her remarks. It is clear that the Government share the concerns we have expressed about construction products, CO2 monitors and, in relation to my amendment, electrical appliances. However, I have to say that I suspect there is deep concern in this Committee about the language the Minister used in relation to when any action will be taken. We have heard her say “in due course”, “as soon as parliamentary time allows”, “as soon as is practical” and so on. I am grateful that she said she will write to me on Amendment 111 to tell me when some of that action will take place, but I suspect there will be pressure for all these issues to be raised again at a later stage in the Bill’s passage.
In 20 seconds, I will beg leave to withdraw my amendment, but I first want to add a bit of light relief. The Minister’s ministerial colleague, who has told us that he is very tired today, is a great fan of Latin mottos and phrases. On Monday, the noble Lord, Lord Leigh, got Hebrew mottos in as well. I thought it might be helpful to look up an appropriate motto for an amendment to make electrical goods sold online safer, then realised that “electrical” and “online” were hardly likely to appear in Latin. However, much to my surprise, when I did a Google search, I found that I was able to get a Latin translation, which is most bizarre. I share with the Committee that, if we want to make an electrical good sold online safer, “fac tutius bona electrica online” is the motto we should be using. With that, I beg leave to withdraw the amendment.
Baroness Fox of Buckley
“(2A) In article 6 (application to premises), in paragraph (1B)(b) after “balconies” insert “, but only insofar as any such balconies pose a material risk of the spread of fire, flame or smoke”.”Member’s explanatory statement
Amends the Fire Safety Order to make clear that only balconies which pose a material risk of the spread of fire are included as part of the external wall. This would avoid balconies being remediated unnecessarily.
Baroness Fox of Buckley (Non-Afl)
My Lords, I was already feeling inadequate enough, but my inability to come up with a Latin phrase or joke on this particularly peculiar amendment of mine is nerve-racking. Clause 129 makes further amendments to the fire safety order and focuses partly on the risk of balconies. My Amendment 115A suggests tightening up the wording so that balconies should be considered a risk only if and where they can be shown to materially contribute to the spread of fire, flame or smoke.
I think this amendment is needed because I am concerned about unnecessary building safety work. I am not sure if this amendment is the right way to resolve the problem, but leaseholders who I have spoken to see emerging a widespread focus on alleged non-cladding defects, such as balconies. This can be a driver to carrying out unnecessary fire safety work, for which leaseholders must pay, with no existing government funding to help. We are all familiar with the “#claddingscandal”, but I want to avoid a scandal, or at least an injustice, emerging that is not to do with cladding. That is what this amendment probes.
Broadly, we now have a situation in which a block of flats can have a fire risk assessment that effectively determines that the building is sound but, because some notionally flammable material has been used, for example in the balconies, there are problems with valuations associated with EWS1 and a pre-emptive, rather than necessary, remediation approach. Leaseholders are then encouraged to think of their blocks with these balconies as unsafe and to believe that remediation work is necessary—and the costs will inevitably be charged to them as a fait accompli. This could be driven quite cynically by freeholders using building safety to do upgrades or carry out what otherwise would or should be regular maintenance, at leaseholders’ expense. To be less cynical and assume far more good faith, or at least to understand the pressures on freeholders and owners, I am worried that one of the unintended consequences of this Bill would be to drive up fears among owners, assessors, accountable persons and so on, under the weight of legal and insurance liability, that they would be blamed for any fires that occur, in any circumstances. As such, blame avoidance could mean stretching assessments of what is considered unsafe beyond credibility or credulity.
This seems to be partly the explanation to the rather panicky response to any building materials that can catch fire. At the moment, this is expressing itself as the almost default assumption that balconies with timber as a component are dangerous and should be replaced. This is in spite it being well documented that timber can outperform steel in a fire, depending on how it chars. An example of where this can lead is a block of flats in Castletown in Dorset. Leaseholders were shocked, at the start of the year, to receive a letter telling them that the timber-decked balconies of the 204 flats in their block had to be replaced by aluminium balconies, as some may be unsafe. Guess what? Leaseholders must meet the cost of this work estimated, on average, at £10,000 a flat.
In addition to that horrifying financial prospect, the Atlantic House Leaseholders Association raised some other issues pertinent to the Committee debates so far. For example, there was no consultation at all with the leaseholders on this decision about the balconies. Leaseholders are a tad suspicious that the contract for the work to replace the balconies was awarded to the block owner’s subsidiary company. The plan that was just announced, but not consulted on, is to carry out the installation inside people’s flats, instead of putting up scaffolding, regardless of the major inconvenience and intrusion this will cause in leaseholders’ homes. The other day I talked about whether you can call it your home if people can just come in, in the name of safety. This is really going to affect people’s home lives.
Also, if there is wear and tear on the timber decking on the balconies in question, it should actually have been the building owner’s responsibility to maintain them and keep them up to standard. Yet, despite them having failed to do so, leaseholders are now being forced to pay for the changes to the balconies, under the auspices of building safety and the threat of fire risk.
I am concerned about a climate in which there is a danger of failing to weigh up risks and assess matters objectively and proportionally. Sometimes, in the name of safety—I think that this was true in that instance in Dorset—leaseholders’ lives are being made a misery, and they are being made to pay a lot of money for remediations that do not necessarily mean that they are safer.
I do not know if noble Lords saw the story in the Manchester Evening News about social housing tenants in Salford suffering freezing conditions for months, since cladding came off their blocks. Having lobbied to get their concerns heard, they were recently sent a letter by Pendleton Together, which manages the nine council blocks, offering
“top tips for keeping warm”.
These included: “dress in layers”, wear “a hat and gloves”, keep “active” and consume “warming food and … drinks” —I thought that these might be handy in this Room, which has been rather chilly. This is another top tip:
“don’t drink alcohol to keep warm as it can give you a false feeling of warmth when you’re actually cold”.
If I were cold, I might still have a drink.
More seriously, I am glad to see that Salford council, which should, in general, be commended for its aspirational housing policies—I am not particularly having a go at it—has apologised for what has happened in its area and for the patronising and condescending message of the letter. But I was using it to illustrate that measures designed to keep people safe from fire can lead to home owners suffering freezing cold, for example, in the middle of an energy price crisis. Unfortunately, fire safety can trump common sense.
I will take noble Lords back to balconies and the Atlantic House block in Dorset that I was talking about. There is a similar perverse outcome in relation to balconies there allegedly being made safer, because, ironically, the decision to replace timber decking with aluminium might make them less safe. Luckily, the chair of the leaseholders’ association is a retired engineer from the construction industry, so he spotted that the use of aluminium might not be a safe option at all. Aluminium can be corroded by salty sea air—the block is near the sea—unless it is anodised. The truth is that those leaseholders might well be safer, and not facing a £10,000 bill each, if the balconies with timber decking remained.
My amendment is narrow and might seem a bit specific or even trivialising, but it is an attempt to probe whether the Government will consider adopting a broader cost-benefit analysis approach specifically to balconies to avoid more EWS1-type problems. It is also an attempt to encourage the Government to be wary of the zero-risk approach of a one-sided and overly precautionary culture of fear, with which the Hackitt review is imbued; there are lots of good things in it, but there are also a lot of things that I do not want to just endorse. Many of the leaseholder campaigners whom I have talked to say exactly the same: they warn that we should talk more to leaseholders, who of course want to be safe but do not want safety to lead to them having to pay for expensive and unnecessary remediation work, on balconies in this instance, when it is just not needed. I beg to move.
The Earl of Lytton (CB)
My Lords, I think the noble Baroness, Lady Fox, has done a considerable service, because she has highlighted quite a number of things. You might say balconies represent important facets in terms of building safety. The question of balconies may have been triggered by a fire—it may have been in Australia—caused by a discarded cigarette end on a timber-deck balcony. The circumstances, of course, of timber in high summer in New South Wales or wherever may be significantly difficult from in a typical English summer. I grant you that—and, of course, timber does not retain significant degrees of combustibility throughout the season, typically, in this country. I can certainly testify to disposable barbeques being a far more potent source of fire in such circumstances.
The Lord Bishop of St Albans
My Lords, I will add a few extra words to this. I apologise to the Committee; I am struggling, as I think a number of us are, as there are so many Bills going through that we are bobbing in and out of various Bills. It is frustrating for us that we cannot necessarily sit and follow everything through, but I think this probing amendment touches on some really important issues for us.
Not surprisingly, after the absolute horror of Grenfell, we are rightly trying to think about how we offer maximum safety for everybody. But safety comes at a cost, as we are all aware. As we work on a Bill that we hope will do its job for many years, we need to take an objective view on some of these areas, particularly on what the noble Earl, Lord Lytton, said about proportionality.
If a balcony is made of wood, there is the possibility that it is flammable and there is a level of risk. However, we have to look at whether it is a risk just of the balcony or whether the balcony will spread fire around the entire building. I am not sure that is clear enough in the existing fire safety order. My fear is that we may now be so risk averse that we are not keeping a balanced view on things. Once a balcony which is part of the external wall systems is identified as a fire risk, it will necessarily require remediation, which is not covered by the Government’s generous grant scheme as it is non-cladding related, meaning that it will inevitably fall on to leaseholders.
One issue picked up on by the noble Baroness, Lady Fox, is that there is a whole range of risks, of which balconies are one. Assessors should be forced to present a clear argument as to why balconies need removing as part of remedial works rather than there being a default approach which says that wooden balconies are an inherent fire risk without having necessarily to make that argument. It is worth our while pausing on this matter. As the Bill progresses, we need to look at proportionality on a number of levels, of which this is one illustration.
Lord Stunell (LD)
My Lords, the noble Baroness, Lady Fox, has raised an interesting theme which has been expanded on by the right reverend Prelate and the noble Earl, Lord Lytton, that of proportionality. I want to come at it from a slightly different angle. We have to decide whether something being a fire risk or not is an objective or a subjective decision. If we think it is an objective decision, and that it is possible by some process in a square box to say, “Yes, there is no doubt that this is a fire risk”, the view of a resident that it is not a fire risk is irrelevant, because it is a fire risk. Or we may think that there is scope for human judgment in that, and that the assessment of the resident—or, at least, of residents collectively in a block, if they decide that a particular level of risk is one they are prepared to accept—may have some bearing on the situation. Where does that objective judgment come from? I think that is at the heart of the question that the noble Baroness, Lady Fox, has brought to this discussion.
We know that there is a tremendous absence of qualified fire risk assessors. So my first question would be: was it a qualified fire risk assessor who made that judgment, or was it somebody who thought they were qualified but who actually was not? Therefore, if you are not quite sure—and we have all done it—in the current climate you obviously give a fail. What professional reputation you have depends on it. I put it to the Minister that this connects to the whole skills and training agenda, in that we do not have enough qualified people with the right skills to do the assessments on the basis of which those huge bills are then handed out.
I think that is really important. It is also important to consider what actual training we are talking about for these fire risk assessors. I presume that, apart from the necessary professional qualifications, they will also act to a code or a guidance note, or something that will be issued by the Secretary of State as part of the regulations that are otherwise in the Bill. That comes back to the question of what the basis is of the guidance that will be given to a fire risk assessor about these inevitably marginal and grey areas of what is and is not risky.
The Minister assured us some time ago that the EWS1 was no longer a factor in these things—but we know that not every insurance provider has come to the same decision. Therefore, it may still be the case that some insurance and mortgage providers will say, “I’m not going to provide you with the finance unless we see an EWS1, or something equivalent to it”. We go around in a circle here: the shortage of qualified people with proper guidance to make decisions in difficult and marginal cases means that less qualified people take the safety-first line, which is causing a lot of pain and work to be commissioned unnecessarily. In other words, we could safely afford to cut it finer if we had sufficient trained and qualified risk assessors acting with proper guidance provided by the Government.
I hope that we keep the level of risk as low as it is sensible to do. Secondly, I hope we invest a bit more time in making sure that, among the professionals making these decisions, there is a better common understanding of the phrase “what is sensible and proportionate to do”—of what that line is and where it gets drawn between a balcony that needs to be replaced and one that does not. There are some deep issues here that go far beyond whether leaseholders do not particularly like a decision about a set of balconies in one place or another.
I will just connect this to the situation in Salford, which the noble Baroness, Lady Fox, also brought to our attention. I believe my noble friend Lord Foster did so as well. A large number of residents of those blocks have had all their cladding—and therefore insulation—stripped off and are waiting for an outcome. There are some unintended outcomes lingering on from decisions taken on fire risk. I referred in our previous session to the fact that buildings have more ways of killing you than simply through fire. We need to make sure that, in eliminating one risk, we do not create others as deadly.
Lord Khan of Burnley (Lab)
My Lords, I shall briefly speak to Amendment 115A in the name of the noble Baroness, Lady Fox. It is good to see her put it in—I think she is becoming an expert on tabling amendments now. As other noble Lords have said, including the noble Earl, Lord Lytton, the right reverend Prelate the Bishop of St Albans and the noble Lord, Lord Stunell, this is an issue that needs clarifying in relation to subjectivity, objectivity and proportionality. Just to quote the words of the noble Lord, Lord Stunell, this amendment, if accepted, would alleviate the marginal and grey areas.
I thank the noble Baroness, Lady Fox, for her top tips on keeping warm—I shall print them out tonight and use them in future. I wanted to ask the Minister whether the Government have made an assessment of how many balconies pose a material risk and are in need of any remedial works. Is she aware of any new buildings with balconies that do not comply with fire safety regulations? I look forward to her response.
Lord Greenhalgh (Con)
I have tricked the noble Lord, Lord Khan—I am responding to this one. First, we have not gone around counting every balcony in the country. Given that there are 7,500 medium-rise buildings and about 12,500 high-rises, we have other things to do with our time.
I met the devolved Administrations of Wales and Scotland today; we need to know roughly how many buildings require remediation and then do it as quickly and effectively as possible. There is some way of knowing that with high-rises, and through surveys we have a pretty good grip on the number of buildings where remediation may be required—it is actually very few—as well as mitigation. Increasingly, we want to see more innovation so that we can avoid costly remediation wherever possible.
The noble Baroness, Lady Fox of Buckley, is very clever. I have been trying to distil amendments in up to three words—I have got it down to two on one occasion—and it would be easy to say that this is the “balcony” amendment, but I do not think it is. It is the “proportionality” amendment. It is fair to say that this was addressed when, on 10 January, my right honourable friend the Secretary of State set out some building safety reset principles. He said:
“We … need to ensure that we take a proportionate approach in building assessments overall … too many buildings … are declared unsafe, and … too many … have been seeking to profit from the current crisis.”—[Official Report, Commons, 10/1/21; col. 283.]
The noble Baroness was very eloquent in giving examples of precisely that—where, essentially, an industry is fuelled by trying to profit at the expense of leaseholders, very often, who do not have the shoulders to bear the costs being charged to them. That is why we are putting a number of protections for leaseholders in this Bill, for both cladding and non-cladding costs, which we have discussed in other groups, and the very strong principle that the polluter must pay wherever possible, as we discussed in an earlier group today.
The Government have taken three measures with regard to proportionality. It is important to reflect on them, because they are easily forgotten as we debate things. None is in this Bill; I will turn later to some things that are. First, we withdrew the consolidated advice note of January 2020; that was seen as a driver of decisions to remediate without thought on too many occasions, when it was not necessarily the right way to go. Secondly, after withdrawing the advice note, the publicly available specification was introduced, produced by the British Standards Institution; it will enable fire engineers and other experts to have a consistent and auditable assessment of risk—basically, grading whether something is high, medium or low—of the external wall systems, which sometimes include balconies and sometimes do not. That is an important tool to have to be able to start having sensible risk-based assessment of external wall systems.
Baroness Fox of Buckley (Non-Afl)
I have one query on that. I thank the noble Lord for his response, but on the recommendation of high, medium and low risk, everything I have read on this suggests that with high or low risk we know where we are, but medium risk says, “There is some risk, but don’t worry, you don’t need remediation”. The point made in everything I have read is: who will go along with that? If you say that there is medium risk—this is where risk aversion comes in—there is concern that the assessors do not have the expertise, as has been referred to, and may say, “There is medium risk, but can I go home and sleep at night, because I am not quite sure what that means? There might be a risk.” That is where blame avoidance comes in. This comes back to the assessors; I do not think that will solve it.
Lord Greenhalgh (Con)
I did not say that it would. The noble Baroness intervened too early; that is the problem with interventions. No one was saying that any single thing—
Baroness Fox of Buckley (Non-Afl)
I was just trying to clarify something—that is good.
Lord Greenhalgh (Con)
The noble Baroness raises the issue of balconies. I am talking about a system that looks at the external wall system. We then have the Fire Safety Act, which we took through this House. I have all the scars to prove that it was not an easy matter to get that three-clause Bill past a number of the people here today. We got it on the statute book, however, and it will commence shortly with a building prioritisation tool.
The noble Lord, Lord Stunell, spoke very eloquently on fire risk assessments. They will look at the risk in the round, going beyond external wall systems and including balconies, the external walls, the flat entrance doors and whether they are fire doors, et cetera. Fire risk assessors will have to look in the round, consider whether there are enough ways to exit the building and come up with a series of action steps, which will often be very small, that can make a building safer. It is right that we make sure that those risk assessments are done by competent professionals. They need to be kept up to date. They will come up with a series of actions that can be taken. Not all of those will require huge expense, but they will make the building that little bit safer.
I think noble Lords need to see this as a package. In answer to questions raised, the proportionality agenda does not have a silver bullet as an answer, but there are a number of things that the Government are encouraging that will lead to a more proportionate approach. PAS 9980 refers to materials on a balcony that may be combustible, such as timber decking, which may be relevant even if the construction of the balcony itself includes materials that present minimal or no risk. The current position, with the inclusion of balconies in the fire safety order and the professional guidance in PAS 9980, is all about encouraging that proportionate approach.
The competence of fire risk professionals is a relevant factor and ensuring that is a major objective of the Bill. We are bringing about greater professionalism in the sector through Clause 129, with a requirement that anyone appointed to undertake a fire risk assessment must be competent. That stipulation is in the Bill, in answer to the noble Lord, Lord Stunell. A lot of this is not happening in the Bill, but there are clauses which aim to drive competence, which directly answers questions raised in this debate. That is what we have to look to, rather than necessarily seeing this specific Bill as the answer in isolation. We must look at the measures the Government are taking in the round.
Baroness Fox of Buckley (Non-Afl)
My Lords, I thank all noble Lords who have spoken. My heart was in my mouth when the noble Earl, Lord Lytton, spoke, because I thought, “He knows what he’s talking about and I’m not sure I do”, so I was glad that he recognised something in what I said on the professional point about materials and so on. I am not an expert but I know lots of people who work in this area.
My concern is that there are blocks of flats all around London whose residents are being told that the balconies have to be remediated, but they have passed their fire risk assessments. This is basically coming from freeholders acting in a precautionary fashion, as in the Dorset example I used. They have said, “We think some of these balconies are unsafe. We’re going to take them down and you have to pay.” They are using safety as the basis but they should have maintained the balconies. There is great concern about the balcony question but I have been caught out by the Minister, because this was really an attempt to talk about proportionality. That is what I really wanted to do. Although I keep hearing about balcony scandals, that was my main focus.
We want to keep people safe all the time, but the right reverend Prelate the Bishop of St Albans made the important point that safety has a cost. Carrying on from our Committee meeting the other day, I was talking about a cost-benefit analysis and always thinking about balancing. If you want 100% safety, you would never leave the house. We also need a sense of proportionality towards fire, which is still very rare. People are not dying of fires in their thousands, in this country. I want to get the right balance.
The noble Lord, Lord Stunell, made a very important point, on which I have been trying to get balance. As a leaseholder, I have tried to speak on behalf of leaseholders a little, because I thought I could make a valid contribution. I am not suggesting that every time a leaseholder says something, we all have to believe it. Leaseholders are not experts, and their fears and concerns should not make the decision, but sometimes it is worth asking them what they know or think and part of the Bill suggests that. The objective point about competence is key. I am suggesting that, because of blame avoidance, fear of litigation and measures being brought in by the Bill, people will always take the most risk-averse decision. That could be at the expense of leaseholders and will not necessarily improve safety.
I shall withdraw my amendment, but I hope it has contributed to a broad discussion to which we can return on Report to make sure that the Bill does not create more problems than intended.
Baroness Jolly
“Consultation on staircase regulations
The Secretary of State must, within 6 months of the day on which this Act is passed, consult on regulations requiring staircases in all new build properties to comply with British Standard 5395-1.”
Baroness Jolly (LD)
My Lords, I declare my interest as president of the Royal Society for the Prevention of Accidents. I shall try to be brief.
The Bill was introduced to avoid life-changing horrors, such as we witnessed with the Grenfell fire. “Safety first” has now become our general watchword. Falls on stairs are hidden killers, every year affecting the lives of over 700 families in England. A further 43,000 people are admitted to hospital, often with life-changing injuries. Anyone who has cared for someone who is perhaps advancing in age, with poor balance, eyesight or both, knows just how much of a worry a trip down the stairs can be. Many older people acknowledge the problem and choose to make their retirement home a bungalow—boring maybe, but safe.
I tabled my Amendment 120, with cross-party support, to ensure that staircases in our homes are built to the correct industry standard. It calls for the Secretary of State to consult on regulations requiring all new-build properties with staircases to comply with British Standard 5395-1 within six months of the Bill becoming an Act. However, when it was introduced, it was never enshrined in law; it exists only as a standard and, as such, only a recommendation. This amendment has the backing of the housing industry, because building firms recognise that the existing BS 5395-1 would make stairs safer at little excess cost. The fact that such an industry standard exists but is not universally used is really quite beyond belief. Countless lives will be saved if we simply enshrine this standard in law. Very few amendments to Bills are as uncomplicated, straightforward and beneficial as this.
The Deputy Chairman of Committees (Baroness Watkins of Tavistock) (CB)
My Lords, the noble Baronesses, Lady Harris of Richmond and Lady Brinton, are taking part remotely. I invite the noble Baroness to speak.
Baroness Harris of Richmond (LD) [V]
My Lords, I support Amendment 120 in the name of my noble friend Lady Jolly and other noble Lords and would just like to make a few comments.
At Second Reading, we heard how important it was to ensure that BS 5395-1 was accepted. I am disappointed that the Government have not yet made a concession on this. In fact, there is no mention at all of stair safety in the Bill. In the 2010 legislation, the standard was put in place only as a recommendation, as we have heard. It is now time to put it in this Bill as a requirement and ensure that all new buildings comply from 2024, as my noble friend Lady Jolly has indicated. We know that hundreds of lives may be saved every year—estimated at about 700 in England alone. If this standard were adopted for all buildings, we could prevent the hospitalisation of around 43,000 more people. Think what amount of money that would save in costs just to the NHS, never mind the trauma suffered by the families of those injured.
I ought to declare a small interest here, as I have increasing difficulty using the stairs in my own home, as they are both steep and deep. In fact, I am having to have another handrail put in so that I can use them safely.
It is vitally important that stairs in high-rise buildings, indeed any communal building, are of sufficient depth and width to allow numbers of people to use them simultaneously in an emergency. We know that the horrors of the Grenfell Tower disaster were exacerbated by totally impractical stairs in the building. I cannot believe that any building company or architect designing a new high-rise building would rely on just one staircase for multiple flats. That would be a complete dereliction of duty, in my opinion. In the event of an outbreak of fire in a high-rise building, there will inevitably be a rush to get out down the stairs, as lifts will be out of use. It is therefore inevitable that people will fall. BS 5395-1 should be put into law during the passage of this Bill and I urge the Minister to accept this immediately.
Baroness Brinton (LD) [V]
My Lords, I have signed Amendments 122, 123 and 124 in the name of the noble Lord, Lord Foster, and will come to them in a minute, but I wanted to start by supporting Amendment 120, laid by my noble friend Lady Jolly.
As the noble Baroness, Lady Harris, has said, BS 5395-1 ensures that staircases in new-build homes have the best possible ratios between treads and risers. This is especially important as many new-build homes are built to fewer square metres than recommended, resulting in staircases being squeezed into narrower spaces. There is only one consequence of that: stairs become steeper, and too often even fail to have a handrail all the way up because of the narrowness of the stairs. That is a recipe for falls, whether for children, the elderly, or the disabled.
Let me tell noble Lords, it is extremely scary to have to come slowly and painfully down steep emergency exit stairs, holding a handrail, with a stick in your other hand, while others race past you. On one occasion, someone tripped on my stick as they tried to race past me, resulting in both of us falling—luckily, only a couple of steps. Had it been at the top of a run of 10 steps, not only would we both have hurt ourselves badly but others following would probably have fallen over us too. Building standards are there for a reason and should be a minimum for new builds. Building in safety is part of Hackitt’s golden thread.
Elderly and disabled people using a stick, or sticks, on a narrow and steep staircase, possibly with no handrail, will be at serious risk of falls. Special fracture clinics report that falls in the vulnerable often lead to life-changing injuries, serious muscle loss while they are in hospital, loss of confidence and, sadly, earlier deaths. So it does not just cost lives; it costs quality of life, and it also costs the NHS and social care millions every year in extra treatment and care support.
I now turn to the other three amendments in this group in the name of the noble Lord, Lord Foster, to which I have added my name. One of the worrying aspects of fires in high and medium-rise residential blocks is the number caused by faulty or defective installation. Home Office data shows that this number is growing, whether from the cables themselves or from the shoddy work on party walls that breaches compartmentation, both of which are completely unacceptable. These amendments address that.
Amendment 122 requires leaseholders to ensure the safety of electrical installations in high-rise buildings. Amendment 123 specifies that leaseholders in mixed tenure high rises have to ensure the safety of their electrical installations. Amendment 124 places a specific responsibility on social landlords to do the same. The noble Baroness, Lady Pinnock, spoke eloquently in the first group this afternoon about the problems of breached compartmentation and quoted from Dame Judith Hackitt’s report. The same applies here, but currently the same responsibility does not apply to different types of landlords and leaseholders, and this is an unacceptable loophole. The amendments from the noble Lord, Lord Foster, remedy that.
The requirements in these amendments make it clear that leaseholders and landlords have a duty to ensure that installation works must be safe. Surely, that is not too much to ask. Surely, all these various types of flat should have a current electrical installation condition report, which not only demonstrates that they, the landlords and leaseholders, have taken care to ensure the safety of residents and the buildings they live in but gives them the same protection as those of flats with private tenants. Dame Judith Hackitt’s golden thread does not just apply to the construction industry; it also applies to those with responsibilities for the buildings once they are lived in. Most tenants are not aware of the distinction between different types of landlord and leaseholder in building safety law. Surely, our law should be consistent.
Baroness Finlay of Llandaff (CB)
My Lords, I was delighted to see this amendment from the noble Baroness, Lady Jolly. As she pointed out, more than 700 people die each year from falls on the stairs. But in addition to this, 43,000 people are admitted to hospital. Falls are tragic and common, but they do not often make the news. Someone is estimated to fall on stairs every 90 seconds, and falls on stairs account for a quarter of all falls in the home. Obviously, when stairs have an inadequate guardrail, the trauma sustained is even worse, as it is when they are a long flight of stairs.
The most common injury is a fractured hip, but the most costly to the country is a spinal cord injury, which is absolutely devastating. The lifetime average cost of a spinal cord injury is £1.12 million, which works out at a total of £1.43 billion for all the accumulated spinal cord injuries. These are staggering figures, yet the British Standard, which has been referred to, is associated with a 60% reduction in falls. It has existed since 2010 and has been thoroughly tested, evidenced and assessed by industry and government. If we are to have homes that are built as homes for life, we need stairs in them that are safe. If workplaces are to be safe, they must have safe evacuation stairs as well.
As they grow older, many people need to install a stairlift in their home to enable them to go up and down stairs safely, particularly when they have items to carry. Many homes are still being built with stairs too narrow to safely install a stairlift on. In the long term, the British Standard is a very good investment for the nation.
I know that the Minister is aware of all of this and has been working with RoSPA to come to a solution. I look forward to hearing an update from him on this matter, because RoSPA and those of us who signed this amendment honestly believe that this one action could save more lives than anything else in the Bill.
Lord Foster of Bath (LD)
My Lords, before I remark on Amendments 122, 123 and 124, I express my surprise that we still have arrangements in our House whereby those who wish to contribute virtually do not appear to have the same flexibility as the rest of us to choose when they speak. I feel very sad for my noble friend Lady Brinton, whose support for these amendments I am enormously grateful for. She has to speak before those amendments have even been moved. I hope that the authorities will have a look at this.
I will make two apologies to the Committee. First, I have no Latin motto to offer the Minister on this occasion, unlike the previous one. Secondly, I fear that I cannot be quite as brief in speaking to these three amendments as I was when I spoke to the earlier one. As I said on the amendments that I previously raised, however, the number of fires in high-rise blocks with 10 or more flats has risen considerably year on year—this has been repeated subsequently by a number of noble Lords—with a rise of nearly 20% in the last two years. We also heard that, as I said, 53% of those fires are related to electrical faults.
In the debate on the previous amendment, I referred to electrical faults caused by faulty electrical appliances purchased online. These three amendments in my name raise the issue of faulty electrical installations. We can find ways of dealing with electrical appliances—I suggested a way of doing this in the previous amendment —but in building new blocks, electrical installations are installed and checks carried out on them, quite properly, to ensure that they meet all the necessary safety requirements.
I was pleased that, when I had the opportunity as a Minister for a brief period in the department, I was able to introduce some changes to those regulations to improve still further the safety of installations in new buildings. As we all know, however, over time those installations can be degraded; indeed, some can be damaged by work carried out by overenthusiastic DIYers and for a whole series of other purposes. It makes a great deal of sense to ensure that, from time to time, there are periodic checks of the electrical installations in flats in high-rise blocks—indeed, I would argue, in all properties.
Lord Jordan (Lab)
My Lords, I, too, declare an interest as vice-president of RoSPA. I shall not take too long, however, because those who have already spoken have made a watertight case for Amendment 120 to be included in the Bill.
The truth is we do not have to convince the Minister, certainly not of the value of this amendment. He said enough at Second Reading for us to know that he would like the life-saving potential of this amendment to be built into every new house. But we have to convince him that its capabilities to prevent injury and death should be in the Bill now. He must know that every alternative to these words going into the Bill now means delaying the introduction of measures that would help prevent injury and death. It would be a fatal delay because, when we are certain that today, tomorrow and the day after, people will fall downstairs and be seriously injured or killed, we see the tragic implications of delaying this measure.
Baroness Young of Old Scone (Lab)
My Lords, I will briefly speak in support of Amendment 120— I will call it the safer-stairs amendment, as I know the Minister likes short names for amendments—to which I have added my name. I will not repeat the excellent evidence and support that has been given by several speakers already.
It is simply to say that this will potentially become more of a problem, because we are all getting older—and we in this House should know that more than anybody else. Also, because of the wonderful feeding and other benefits we have given our children, their feet are bigger. With bigger feet and advanced old age, they will become a complete and utter liability, if we continue to build the poxy little stairs, with inadequate surfaces and terrible handrails, that we see all too often in both public and private buildings. This is something that not only would the Minister welcome, but housebuilders are saying they are keen to get ahead with, but they are not willing to do it unilaterally. Housing providers, both public and social, are keen on it, as are fire chiefs and local authorities. It would not cost any more, is absolutely needed and will be needed even more.
One of the endearing things about Governments—although as a staunch Labour supporter, I find it difficult to think of a Conservative Government as endearing—is when they say, “Yes, that is a very good idea. Let’s just do it”. This is an opportunity for the Government to say that of this Bill now, to avoid deaths, injuries and life-changing circumstances, particularly for older people, which are happening as we speak. There is probably somebody falling down stairs in the House of Lords right now. Minister, if you want us to be fulsome in our praise, put this in the Bill.
Baroness Neville-Rolfe (Con)
My Lords, safety has a cost, as the right reverend Prelate the Bishop of St Albans reminded us. We have to decide where we should require money to be spent. I will talk a bit about the electrical safety and standards provisions and then come back to staircases.
I know there is a shortage of electrical experts able to carry out these assessments. Our own electrician, who is very expert, cannot do the assessments we are being asked to provide for social housing and other blocks of flats—for example, my son has a let flat, because he is an academic. The electrician says that he needs to go on a week’s course and, as a busy self-employed person, he does not have time. The lobbying organisation Electrical Safety First, which tried to get me to support Amendments 122 to 124, because I am keen on safety and looking after the consumer, seemed relatively unconcerned about this. Moreover, the amendments are wide-ranging and uncosted. As noble Lords will know, I worry a lot about the shortage of skills in the industry.
These amendments would further jeopardise housing supply, this time including social housing, and leave flats empty. Social housing landlords will be doing this sort of thing anyway post Grenfell, I think. For similar reasons, I am against the wide-ranging Amendment 121.
I am much more relaxed about Amendment 120, especially as it includes a consultation provision. The noble Baroness, Lady Jolly, and I did the Consumer Rights Act together; she is right to think forward to the needs of an increasingly ageing population, which is exactly what this amendment does. We also heard from the noble Lord, Lord Jordan, and the noble Baroness, Lady Young. The huge potential cost to the NHS of accidents in an ageing population is also a very strong argument for action, as we heard from the noble Baroness, Lady Finlay of Llandaff.
This is Committee, so I am sure the Minister will reflect further, but if one can find a way—without imposing significant costs—of making staircases safer, that could be extremely useful.
Lord Whitty (Lab)
My Lords, I added my name to the amendment from the noble Lord, Lord Foster, which the noble Baroness, Lady Neville-Rolfe, has just disagreed with. Those three amendments seem to me an essential guarantee of safety for the tenants, leaseholders and others who occupy buildings that are owned by what are broadly social landlords.
The noble Baroness is correct that the normal training of electricians does not include an ability to do this, but that needs to be addressed. I contrast it with the gas situation. Social landlords are obliged to have a gas inspection regularly and, by and large, they do it. Gas suppliers both train their people in that respect—it is an essential element of a gas fitter’s training—and, certainly in my experience of London boroughs, they carry it out pretty regularly and effectively. I do not see why electrical suppliers should not be in the same situation.
As has been said, over half of fires are ultimately caused by electrical faults; most of those are in appliances, but if those appliances are fitted to an installation and a system whereby the defusing mechanism does not work and the fire goes back into the wall and beyond, you have a terrible and inaccessible situation. That is exactly what the more serious fires caused by electrical faults are. There is clearly a responsibility on the manufacturers and retailers in terms of the quality of the appliances, but there is also a responsibility on those responsible for the buildings to ensure that there is a proper inspection of the whole electrical system. That needs to be addressed; it is an anomaly that gas is different from electric. There was a time when the biggest accidents were gas—now they are predominantly electrical. I hope that these three amendments are carried.
On staircases, I agree with the amendment spoken to by the noble Lord, Lord Jordan. I would also say—somebody referred to it earlier—that there are new high-rise and medium-rise buildings that have received planning permission with one staircase and one means of escape only. That is perfectly legal at the moment. It should not be, but I know of at least three examples in London boroughs which have been passed because they say that there are alternative means of escape—in other words, a lift. Most of us are advised not to use a lift in a fire, and it is pretty much built into our psyche, so that is not a sufficient reason. If we are addressing the staircase regulations, for medium-rise and high-rise buildings, two means of escape without involving an electrical lift need to be written in. I support all the amendments in this group.
Baroness Hayman of Ullock (Lab)
My Lords, it has been an interesting debate about two very different but important aspects of safety. I want first to talk about the Safer Stairs campaign introduced by the noble Baroness, Lady Jolly. She and others made it clear that falls on stairs are a huge issue, but unfortunately it seems continually to go under the radar when it comes to what to do to stop so many people suffering often catastrophic falls.
As we have heard, the British Standard has existed since 2010. It has been rigorously tested by industry but has never been made a legal requirement. That is strange: we have a standard, but we do not have to bother with it—that seems a very odd way to go about things. There does not seem to be anything to stop the Government putting this standard into primary legislation. There is a precedent for doing so: the ban on combustible materials went into the Building Regulations 2010. My noble friend Lord Jordan put it in a nutshell when he said that, if the Minister were to accept the amendment, we would have the opportunity to end day-to-day tragedies—the smaller stuff. Kicking the can down the road will cost lives. If we do not address it now, it could be many years before any new ombudsman tackles the problem. If it is 10 years before we get a grip on this, that is 7,000 more unnecessary deaths.
The noble Baroness, Lady Jolly, and the other signatories to the amendment therefore have our strong support—as well, it seems, as that of many noble Lords, not just in Committee today but at Second Reading. This is the Minister’s opportunity to do something that would genuinely make a huge difference. He should accept the amendment and, as my noble friend Lady Young of Old Scone said, just do it.
We also fully support the amendments tabled by the noble Lord, Lord Foster, which aim to improve the safety of electrical installations. We have heard that the number of fires in high-rise residential blocks has risen consistently year on year, which indicates that we need to do something practical to try to stop that number continuing to increase. Safety parity for all renters was mentioned. As we have heard, it cannot be right that in a mixed-tenure block a private renter will have electrical checks carried out by law while the social tenant living next door will not. As the noble Lord said, a fire in a tower block does not check the tenancy status of those that it threatens.
I will briefly reference my noble friend Lord Whitty’s point about how wrong it is that there is only one escape staircase in blocks now. A planning application was recently overturned because it was challenged on that. As part of the response to Grenfell, the Government really need to get to get to grips with this. I know that this is a planning issue, but I hope that the Minister will take this away.
Baroness Neville-Rolfe (Con)
We had the tragedy of Grenfell, and I am worried that we are doing a lot of different things in the Bill—some of them are very major—and are now adding on extra things. Individually, things such as the proposals on staircases and electrical safety might have helped to prevent that tragic fire, but each of them has a cost. So it is obviously up to the Minister to look at them in the round and work out what is needed to try to ensure that we have a safe environment. I now support what was said on staircases, because a very good case was made and I am always open-minded, but I am a bit worried about these all piling up and separately chasing the same thing. I have found that, whenever there is a disaster, people come up with several things, and if we had only done some of them 10 years ago we would not have had Grenfell at all.
Baroness Hayman of Ullock (Lab)
I appreciate where the noble Baroness is coming from, but I still think there should be parity across the board going forward. Thinking about the Government’s levelling-up White Paper, if we are going to level up, surely parity should be part of that, so that all renters have the same protections.
I will sum up because we still have a lot to get through today. Given the nature of the discussion and the concerns that social housing landlords rarely carry out the certification—the problem is it is not mandatory, so it does not happen very often—I hope the Minister has listened to all of this debate. There is a lot for him to take back to his department.
Lord Greenhalgh (Con)
My Lords, it has been an absolutely fascinating debate. This is very much the additional safety measures group—that is three words; you cannot do better than that. I thank the noble Baroness, Lady Jolly, in particular for raising this important issue, as well as noble Lords who have spoken about the Safer Stairs campaign. I am sorry that I did not hear from my noble friend Lady Eaton, but she could easily have joined forces with everyone here.
I have been invited to say, “Just go for it” or “Just do it”—it is almost like a Nike ad in this House—but I think that it is a question of how you go for it. I met with the chief executive of RoSPA, Errol Taylor, in this House, and we have a plan that is important to share with noble Lords. As my officials have said, it would be highly unusual, even though people are grappling for precedents, to include in an Act of Parliament something that is as detailed as this, referring to a specific technical standard.
We are not graced by the presence of my noble friend Lord Young, who was Minister when the building regulations were passed. It is possible that this existing standard, BS 5395-1, could be included in an approved document. Indeed, it is in Approved Document K. I have received a letter from RoSPA making that proposal, which we will take to the next meeting of the Building Regulations Advisory Committee—BRAC—which advises on these things. We have effectively brought forward the next meeting, which was scheduled for September, as I know that noble Lords are very impatient.
We brought forward that meeting, which essentially is an emergency BRAC, to 16 March. That is how fast we move in my department. You meet someone on 23 February, you set up an emergency meeting on 16 March and you get an answer. Let us see whether the route of updating the approved document is an elegant way of fulfilling the desires that have been laid out by so many noble Lords. We all have elderly parents, or some of your Lordships may well; I do not. No, I take that back—perhaps we do not all have elderly parents. I suddenly realised that that was probably not the thing to say. [Laughter.]
Lord Greenhalgh (Con)
I have not been drinking. I have had some Polos. In fact, I am not drinking anything at all.
I move on to the next campaign, which is electrical safety first. In fact, I am being bombarded with emails and letters. I promise noble Lords that I have had the briefing document from NAPIT—it followed up even today to check that I had it. That is also an incredible campaign.
I have to say that I particularly enjoyed the way the noble Lord, Lord Foster, introduced these amendments. His Amendments 122 and 123 have both been brought forward to ensure electrical safety in homes. I thank the noble Lord for raising this important matter and for his comments on the matter at Second Reading, but I am afraid that the Government cannot support these amendments.
We recognise the intention of these amendments, but we believe that they place a disproportionate burden on leaseholders in high-rise buildings. Under Amendment 122, high-rise leaseholders would be required to obtain and keep up to date an electrical installation condition report—an obligation we place on no other homeowner. Under Amendment 123, that obligation would also be placed on leaseholders who live in mixed-tenure high-rise buildings. “Mixed tenure” is defined as buildings where in addition to leaseholders there are also social housing or private rented tenancies. We believe that leaseholders living in their homes have a fundamental motivation to ensure that their home is safe and will take steps to ensure the safety of electrical installations. Therefore, we do not currently believe there is sufficient evidence to place further burdens on leaseholders in high-rise buildings.
I also assure the noble Lord that the intention of ensuring that residents take an active role in ensuring the safety of their building has already been met in the Bill. The Bill imposes a new active duty on residents not to create a significant risk of spread of fire or structural failure and empowers the accountable person to enforce these duties through the courts. These are systemic changes that are broader in scope than specific requirements for an electrical installation condition report; they will promote genuine collaboration between all parties in keeping their building safe.
The Government thank the noble Lord for raising this important point and will highlight in our guidance to accountable persons and residents the importance of considering electrical installations as part of their building safety decisions. With that assurance, I must ask him not to move his amendment.
On Amendment 124, I thank noble Lords for raising this important matter, but I am afraid that the Government will not be able to accept this amendment. However, I can assure them that their intention is being met by the Government. In the Social Housing White Paper we committed to consult on electrical safety requirements in the social sector, and expert stakeholders participated in a Government-led working group last year to inform the content of that consultation. The working group considered the mandating of electrical safety inspections in all 4 million social homes, not just those in high-rise residential buildings, as moved by this amendment. The group also considered how to keep social housing residents safe from harm caused by faulty appliances. We will consider whether the best way forward to protect social residents from harm is to mandate checks and bring parity with standards in the private rented sector, and it is important that we work through all the issues to reach the right decision. The consultation will be published shortly.
Lord Greenhalgh (Con)
Social homes are already safer than homes of other tenures in respect of electrical safety. In 2019, 71% of social homes had all five electrical safety features compared to 60% of owner occupied and 65% of private rented homes. Under obligations in the Landlord and Tenant Act 1985, social landlords are required to keep electrical installations in repair, and the Homes (Fitness for Human Habitation) Act 2018 requires social landlords to keep homes free of electrical hazards.
With that explanation, I ask the noble Baroness to withdraw her amendment.
Baroness Young of Old Scone (Lab)
Perhaps I am the only person in the room who does not know what updating the approved document actually delivers, so perhaps the Minister could give us some information.
Lord Greenhalgh (Con)
Effectively, the Building Act 1984 has various approved documents, and Approved Document K would be the relevant document to update, which would then set that standard in building regulations. As the noble Baroness, Lady Hayman, has pointed out, when you build new-build homes, you have to build to those regulations. Does that help the noble Baroness understand what I said? I am sorry I am so unclear; I will do better next time.
Baroness Jolly (LD)
My Lords, this has been a really fascinating debate. We have a listening Minister, and it looks as if we have a good outcome. I am sure he will carry on listening and, if he does not listen, I am sure we will carry on trying to talk to him to make sure we get what we would like. He said he has met the RoSPA CEO, and he is very insistent and will not take no for an answer. I look forward to pressing this further with the Minister in due course.
Baroness Young of Old Scone (Lab)
I live in Cornwall, and we do things dreckly. For the moment, I am happy to withdraw the amendment.
Baroness Bloomfield of Hinton Waldrist (Con)
Before we move on, could I just say we have quite a lot more to get through this evening, and we have a hard stop at 9.15 pm? I do not want to stifle debate, but perhaps we could avoid repeating arguments made by previous speakers in the same group.
Amendment 121
Lord Foster of Bath (LD)
“Existing homes: standards
(1) This section applies to domestic properties that have been used as such since before this Act is passed.(2) The Secretary of State must ensure that—(a) all domestic properties achieve a minimum standard by 2035, and(b) those domestic premises that, because of their standard, present a serious risk to the health, wellbeing or safety of people living in them, that the occupant is unable to rectify for financial or other reasons, achieve a minimum standard by 2030,where practical, cost-effective and affordable.(3) In this section a “minimum standard” is the achievement by the property of—(a) Level C on an Energy Performance Certificate issued under section 43 of the Energy Act 2011 (domestic energy efficiency regulations) or any amendment to that section made by the Secretary of State by regulations; or(b) an equivalent level on any new method of measuring the energy efficiency of properties that may be adopted by the Secretary of State by regulations.(4) The duty in subsection (2) does not apply to a domestic property where the following exemptions apply—(a) an occupant or anyone else whose permission is needed for works to be carried out has explicitly refused such permission; or(b) it is not technically feasible to fulfil the duty; or(c) the cost of carrying out works to fulfil the duty would exceed £20,000. (5) The Secretary of State may by regulations add to or change the exemptions referred to in subsection (4).(6) The Secretary of State may by regulations define the terms “practical”, “cost-effective” and “affordable”.(7) In this section “wellbeing” includes the ability of an occupant to keep warm at reasonable cost.”Member’s explanatory statement
This Clause requires that existing homes achieve a minimum standard in order to protect the safety, health and wellbeing of occupants.
Lord Foster of Bath (LD)
My Lords, I will try my very best to be as quick as I can, as I have tried to in all my contributions. I began my last contribution with concern about the speaking order of Members. Can I just say that it was particularly disappointing to have to start speaking for this amendment knowing that, already, the noble Baroness, Lady Neville-Rolfe, had indicated she will not be supporting it? I hope that by the end of my remarks, she might change her mind. I give way.
Baroness Neville-Rolfe (Con)
I owe the noble Lord an apology. It was my fault for getting it in the wrong order. I have been trying to be on the other Bill as well.
Lord Foster of Bath (LD)
The noble Baroness is forgiven entirely, and let us hope she will come to support the amendment at the end.
The Bill is clear what it is about. It is to make provision about the safety of people in and around buildings and about the standards of buildings. As I said on Second Reading, it is surely relevant to consider the impact of poor-quality homes on the safety of people who live in them, not least given the claim by the Building Research Establishment that millions of individuals and families are living in unhealthy housing, a reality that is having a huge impact on the NHS. Even more worrying is the number of deaths caused by poor-quality homes. We know from the ONS figures that some 8,500 people died in the winter two years ago because of cold housing. They simply did not have sufficient money to keep their homes warm, and often that was because of poor insulation.
We still have in this country over 13.5 million homes that are deemed below what the Government have set as the acceptable energy performance level, that is band C on the energy performance rating. Of those, over 3 million homes are occupied by families deemed to be fuel poor, that is people who even without the rocketing bills that we are now experiencing simply cannot afford to stay warm. Far too many people in this country are having to choose between heating and eating. On Second Reading, I also pointed out, as others have done subsequently, that the removal of unsafe cladding is making the situation worse.
Like the noble Baroness, Lady Fox, I was horrified by the remarks of the group that runs the Pendleton tower block in the note that she mentioned, which gave tips about dressing in layers, wearing a hat and gloves, not drinking alcohol and so on. What the noble Baroness did not point out was that that note came to light in a meeting to discuss increasing the rent for residents in that block. It was absolutely condescending. We need to do more to help the fuel poor, as well as those having to deal with the removal of unsafe cladding. That means improving the energy efficiency of existing homes.
Baroness Hayman of Ullock (Lab)
My Lords, I also have an amendment in this group. In thinking about what the noble Lord, Lord Foster, just said, there has been a running theme through our debates on the Bill in Committee about the importance of housing standards and how good-quality housing standards can have a positive impact on health and well-being, as well as on fire safety.
Amendments from the noble Lord, Lord Foster, have also drawn attention to the importance of energy efficiency, which is the focus of Amendment 128 in my name. Energy efficiency is important, not just for safety but from a climate change perspective and for the cost of living, because we know that energy costs will rise dramatically. Energy efficiency is something to which we need to give more attention, in supporting people on how they also can save energy in their homes. The Government should use every opportunity at their disposal to look at how they can improve energy efficiency to reduce costs for consumers.
The noble Lord, Lord Foster, mentioned the Government’s Heat and Buildings Strategy, which says that, to meet net zero, virtually all heat in buildings will need to be decarbonised. This will bring about reduced energy bills and healthier and more comfortable environments. Again, I am sure that is something we all support. We know energy efficiency will bring comprehensive benefits, not just for climate change but in increased property values. These are all positive aspects of what it can do.
The noble Lord, Lord Foster, also referred to the figures for excess winter deaths caused by cold homes. In a modern, 21st-century society, with everything to support warmth and heating at our fingertips, this should not be happening. In the last normal winter, 8,500 lives were lost because of cold homes. In a society such as ours that is disgraceful and should not be allowed.
We know that low incomes, high energy costs, and poor heating and insulation combine to do this. We need to do more to support insulation. I know the Government do a lot, but we need to focus more on this area. We should not have homes that are unfit for people to survive the cold or incomes that are not sufficient for people to put on the heating.
At this point, I hope the Ministers will both indulge me, if I raise a particular concern—the issue of communal and district heating networks. In the UK, 500,000 homes, 120,000 of which are in London, are heated by communal and district heating networks. They are therefore considered commercial customers, even though the people paying the bills are residents—me for one, in the flat I rent while I am here in London. Those households are therefore not protected by the Ofgem energy price cap that will be introduced on 1 April. Estimates of cost increases for those living in buildings served by communal and district heating networks range from 400% all the way up to 700%.
Some 90% of heating networks run on gas. At the start of 2022, the price of gas spiked at around five times its cost at the start of 2021. Prices remain far higher now than this time last year. This means that energy costs for these households are expected to see a large increase. The increase in energy prices will contribute to the cost-of-living crisis, which means that household finances will be under even further pressure.
We know that much social housing is supplied by communal and district heating networks, meaning that price rises are more likely to affect social housing tenants, who also tend to be in the lower-income groups, as we know. That means that some of those least able to pay for their energy are likely to be asked to pay the most. I saw the Minister nodding, so he clearly understands what I am talking about. I ask him and the noble Baroness to take these concerns back to their colleagues in government, because this is a serious issue for many thousands of people.
Baroness Bloomfield of Hinton Waldrist (Con)
I am delighted to take that point on district heating back to the department. It will become an increasingly interesting area as we move to nuclear power and other ways of producing energy for district heating networks. I know that my noble friend has already made a note of that.
I shall speak first to Amendment 121 in the name of the noble Lord, Lord Foster. I thank him for raising this important matter, but I am afraid that the Government will not be able to accept the amendment. That is not because we disagree with its aims, but because we are already doing an awful lot of work in this area, and it pre-empts a number of workstreams already under way across government.
On the assistance that we are giving those who face the tragic choice between heating and eating, I remind noble Lords that we have already introduced winter fuel payments and the warm home discount. The Chancellor, Rishi Sunak, introduced a £9.1 billion package of support in the spending review, encompassing a number of initiatives. A £3 billion package of energy efficiency measures will be introduced over this Parliament. All are targeted at low-income households. There is also the ECO scheme, funded from bills, which will rise from £750 million to £1 billion over this Parliament. There are also boiler upgrades. We are doing a huge amount in this space. We are not unsympathetic to the reasons for the noble Lord’s amendment, but I defend our record.
In 2017, the Government committed in the clean growth strategy to upgrade as many homes as possible to EPC band C by 2035 and as many private rental homes as possible to EPC band C by 2030 where practical, affordable and cost effective. The Government have now consulted on raising the energy performance standard in the domestic private rented sector to EPC band C and will publish a response to that consultation in due course.
We further committed in the Energy White Paper to seek primary powers to create a long-term regulatory framework to improve the energy performance of homes, alongside a package of incentives. We have consulted a wide range of stakeholders and will undertake further consultation on specific policy design before making secondary legislation. In the Social Housing White Paper, we committed to reviewing the statutory decent homes standard by 2024 to consider how it can better support decarbonisation and improve the energy efficiency of social homes. In the Net Zero Strategy, we reiterated our commitment to consulting on phasing in higher minimum performance standards to ensure that all homes meet EPC band C by 2035 where practical, cost effective and affordable. In light of these comments, I ask the noble Lord to withdraw his amendment.
I turn to Amendment 128 in the name of the noble Baroness, Lady Hayman. Her proposed new clause would set a requirement for the Secretary of State to consider the energy efficiency impact when making changes to the building regulations for the purpose of building safety. It is a fundamental principle of the building regulations that, when building work is carried out, all applicable technical requirements must be met. In many cases, this will include energy efficiency, referred to in the regulations as the
“conservation of fuel and power”.
If a particular technical requirement is not applicable to a specific building project, the building regulations none the less require that the building is not made less compliant with that requirement than it was before the building project. This means, for example, that where work is undertaken to improve a building’s fire safety performance, the building’s energy efficiency must not be worsened as a consequence. The opposite case is also true, in that energy efficiency improvements must not worsen the fire safety performance of a building.
As this principle is laid out in the existing regulations, energy efficiency is already a consideration in carrying out building work. We do not believe that it is necessary to introduce a specific duty for the Secretary of State to consider energy efficiency matters when making building regulations for the purpose of safety. I assure the noble Baroness therefore that her intention to ensure that energy efficiency is considered in relation to building safety has already been met under existing legislation.
I wish to reassure the Committee that the Government take the matter of energy efficiency seriously and are taking action in this space. I therefore ask the noble Lord to withdraw his amendment.
Lord Foster of Bath (LD)
My Lords, in my remarks, I went out of my way to praise the current Government for the promises and commitments they have made in this area. I will go further and say that I will praise the current Government for at least some of the commitments they have made to provide the funding for the work to be carried out. But I just say to the Minister that it is the industry that will actually deliver, not the Government. We therefore need to consider what the industry needs to ensure that it can deliver.
The industry has said that it wants these targets, promises and commitments put into primary legislation to give it the confidence to carry out the investment, buy the equipment and do the training to enable the work to be carried out. It has been let down time and again by Governments of all political persuasions, with a string of projects that sound almost the same—the green deal, the green this, the green whatever—which have always failed and have not been followed through. The industry has had enough; it has made that very clear. It wants the firm commitments put into legislation. The Business Minister, Mr Kwarteng, believes in targets; he has said so on many occasions. I fail to understand why the Government will not put this one specific issue into legislation.
We will have an opportunity to raise these issues again at a later stage. Be assured that I intend to take every opportunity to press this matter but, in the mean- time, I beg leave to withdraw.
Baroness Neville-Rolfe
“Review of external wall fire assessments
Within 12 months of the passing of this Act, the Secretary of State must review the process used by chartered surveyors for assessing external walls of tall buildings for fire risks, in particular the EWS1 form produced by the Royal Institute of Chartered Surveyors, and must lay a report before Parliament.”
Baroness Neville-Rolfe (Con)
My Lords, I move Amendment 132 in my name on the subject of external wall fire assessments. I did not speak on energy efficiency as time is short, although I was Energy Minister five years ago; I look forward to discussing the opportunities and frustrations informally.
Noble Lords will know that external wall assessments have been a serious problem aggravating the difficulties that leaseholders have experienced in the post-Grenfell world.
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, I am sorry to interrupt. The Minister has had to leave to deal with a pressing personal matter. Can I ask for a five-minute adjournment?
The Deputy Chairman of Committees (Baroness Finlay of Llandaff) (CB)
My Lords, the Committee will adjourn for five minutes.
Baroness Neville-Rolfe (Con)
My Lords, as I was saying, the Committee will know that there has been a serious problem aggravating the difficulties that leaseholders have experienced in the post-Grenfell world. This is because insurance companies and mortgage lenders have required these external wall assessments to be made and the dreaded EWS1 forms to be filled in before transactions can proceed. However, not only are the assessments expensive—or they were—but the requirement to provide them implies, or implied, a very cautious view of the needs of fire safety in particular. Worst of all, there has been a crippling shortage of RICS professionals to carry them out.
I argued during the passage of the Fire Safety Bill that this process was over the top, as sometimes happens with professional-based regulation, and increased the numbers of unsaleable properties post Grenfell by hundreds of thousands. I was therefore delighted to hear the Valentine’s Day announcement of the Secretary of State, Michael Gove—in addition to the January comments quoted earlier by my noble friend the Minister —stating that:
“The provisions will protect leaseholders and encourage a more proportionate approach to fixing buildings. Currently, building owners can simply pass all costs on to leaseholders, with no incentive to hold back on unnecessary remediation work that has brought misery to leaseholders. Today’s package, alongside the duties in the wider Bill, will create an environment for tough, proportionate action on critical safety issues while preventing cost inflation and excessive work.”
“Today’s package” sounds good to me. However, I remain a little sceptical, knowing just how bad the gold-plating has been. For example, we were right to agree earlier on the need to be proportionate about balconies, as the noble Baroness, Lady Fox of Buckley, argued.
The purpose of this probing amendment is to invite my noble friend, who is of course the Minister at the Department for Levelling Up, to update us and agree to undertake a review of the situation in 12 months’ time. The review proposed would focus on the tall buildings that are in scope, but the whole sector would benefit from a review that assesses the position of smaller buildings as well as the interests of the consumer rather than just the surveyor—in this case, the leaseholders and property owners affected. I add that the right reverend Prelate the Bishop of St Albans asked me to say that he supports this amendment but had to be elsewhere. I very much hope that my noble friend will look sympathetically on this request, particularly given the helpful change of approach by the Secretary of State.
The Earl of Lytton (CB)
My Lords, I will probably disappoint the noble Baroness a little, but I hope that I can also give a bit of explanation. I say that with particular feeling because she chairs the Built Environment Committee, on which I have the privilege to serve.
I understand the irritation that has been generated in some quarters by the EWS1 scheme. I ask the Committee to bear in mind that this was prepared as something of an emergency measure to deal with the logjam of unmortgageable, and therefore unsellable, properties. It was set up at the instigation of government and occurred following discussion with insurers, lenders and valuation professionals. It is a creature of common creation and not the RICS alone, although the RICS put it out. That is quite important.
The unfortunate thing is that, as it was the only form of certification around, it has been latched on to in certain quarters as providing some reassurance for things that it was never intended to achieve. In other words, it was seen as something with a wider fitness for purpose than was ever intended, and that is part of the problem.
When one produces something of this sort, it is produced in collaboration with others, but there will always be people across the spectrum; the insurance world is such that certain sectors of it will top-slice the risk. There will always be some that—a bit like some of what I might call the more adventurous motor insurers—will insure only certain clearly de-risked parts of the market in risk generally. I do not know whether that is a problem here.
This EWS1 was just reviewed in December. The RICS—again in consultation, and again, I believe, with support and collaboration from government but certainly with all the relevant bodies—decided that even though its application in terms of the problems that it created was reduced to a very small proportion, it should be kept because that was the view of valuers, mortgage lenders and insurers. The RICS as a professional body cannot ignore what these people are saying or the commercial pressures that are set before it in dealing with that. The RICS also published its justification in December, which is available on the web. I am all for de-risking things so that assessments of all sorts do not grow horns and a tail. However, I am not sure that having the Government take control and ownership of this particular matter would necessarily reassure lenders or professionals or, for that matter, benefit the market sentiment.
In its evidence to the Levelling Up, Housing and Communities Committee, the RICS acting chief executive made it clear that there is already a process in hand to train up a cohort of fire risk assessors pursuant to the Bill’s objectives. EWS1 itself is probably destined to wither on the vine in a relatively short period of time. I therefore hope that I have given some sort of helpful explanation of why I am not sure that it is a good thing for the Government to take on this thing, even if they felt that they were willing to get their fingers involved in that particular pie, and why it is probably best that the matter continues on the critical path it is now and we see the outcome of this cohort of newly trained people. I am sure that other professional bodies will need to do training as well; we must try to make sure that it is rolled out as speedily as possible so that, hopefully, the problems will be put behind us.
Baroness Pinnock (LD)
My Lords, I thank the noble Baroness, Lady Neville-Rolfe, for raising an important issue. There is confusion and concern around these EWS1 forms and assessments. There is confusion—which I will come on to, following on from what the noble Earl, Lord Lytton, just said—and there is certainly concern from leaseholders. Either they wait for ever for these external wall structural assessments, or those who do them err on the side of caution because of the way that they were brought in as an emergency measure following the awful Grenfell fire.
The Earl of Lytton (CB)
My Lords, I should perhaps explain that, while I am a RICS member and fellow and a registered valuer, I do not actually deal with this particular thing. But, as a valuer, I understand constructs of risk and the attitude of lenders, because they so often dictate the process that is put in place by the valuers: they often set the fee for valuation and their form is used for this particular process. I say again that it is very difficult for a professional institution that tries to weigh up all these different bodies to get away from the big beasts of the mortgage lenders and the insurance world when it is dealing with this sort of thing. But I make no apology for that—there have been problems, and the noble Baroness is absolutely right that they have been visited, as she would say, on wholly innocent leaseholders. It is right that the whole thing should be kept under constant review.
Lord Khan of Burnley (Lab)
My Lords, I rise briefly to speak to Amendment 132 in the name of the noble Baroness, Lady Neville-Rolfe. It is a little but very important amendment and, as the noble Baroness will appreciate, “Every little helps” in making sure we get this right. I admire what the noble Earl, Lord Lytton, who spoke with great expertise, said about ending the confusion and providing clarity. That was a very important point. As a Lancastrian, I have never agreed with somebody from Yorkshire as much as I have agreed with the noble Baroness, Lady Pinnock, during the course of this Bill. She is quite right: leaseholders should not bear the costs for issues they have no control over. It is not their fault. We need to end the logjam.
This is my final contribution in Committee. It has been a fascinating debate. I have a special message for the Minister in Latin, to continue the theme: “Da operam, si potes”, or “You can do it, if you try hard”. We have debated a lot of fantastic amendments during this Committee. I am sure the Minister can do it and make this landmark Bill even better, to help people, residents and leaseholders across the whole country.
Lord Greenhalgh (Con)
My Lords, I thank my noble friend Lady Neville-Rolfe for her amendment. It has been a fascinating debate, with lovely Latin phrases which I am sure have been worked on all afternoon using Google Translate.
As the Government have made clear, it is important that we restore a sense of balance and proportionality to fire safety. We must ensure that fire risk assessments of external walls do not require unnecessary work and reduce the risk aversion we have seen in the sector. The department has already taken steps to ensure that industry takes a proportionate approach to the assessment of the external walls of buildings and I can reassure my noble friend that we will continue to work with industry, including lenders and surveyors, to keep under review the process used to assess external wall systems.
The noble Earl, Lord Lytton, mentioned that we have been tracking the data from mortgage lenders and it is available on the GOV.UK website. I have been looking at my Apple iPhone—I have given the brand away, but I do not know how I could have coded that without using the brand name—and the vast majority of mortgage valuations for flatted developments do not require an EWS1 form. The trend is also going down. I think the most recent data in January was that around 8% of mortgage valuations require an EWS1, so 92% do not. That is down from 9%. My department estimates that 492,000 leaseholders in residential buildings of 11 metres and above do not need to undergo an EWS1 assessment for their building for them to sell their property or remortgage. It is important that we continue to work with mortgage lenders to track how that is evolving over time. These things take time, but the trend is in the right direction.
The Government are also making preparations to launch a professional indemnity—or PII—scheme, targeted at qualified professionals to enable them to undertake EWS1 assessments where otherwise they would not be getting PII cover. A condition of PII coverage under the scheme will be that EWS1 assessments are carried out in line with PAS 9980. An audit process will be in place to monitor compliance to the standard.
I thank my noble friend for raising this important matter. She has absolutely championed that the Government get to grips with some of these points. I think we are making progress on a number of fronts now. I assure her that this work is of critical importance for the Government. We will continue to work closely with industry in the coming months to ensure that. I therefore ask that she withdraws her amendment.
Baroness Neville-Rolfe (Con)
My Lords, I thank my noble friend, particularly for giving the figures. Before Report, it would be good to have the figures for the non-high-risk buildings as well, because one of the concerns I had was that the industry was requiring people who were not caught by measures following Grenfell to have these EWS1 assessments. It was a probing amendment and I will reflect further in light of what has been said. It was a very good debate.
There is confusion and concern about the logjam, and we need to make sure that we have the support of the industry professionals who are needed to do this. Things can take a long time in the building industry, as I think we will hear when we debate retentions. I certainly did not want to lock horns with the noble Earl, Lord Lytton, who is such an excellent member of the Built Environment Committee, but to make sure that we had this debate and that we really do sort this issue, as I know the Government have said that they wish to. I beg leave to withdraw my amendment.
“Local authorities: impact of land contamination on building safety
Local authorities must assess, within their local areas, the risk posed by land contamination to building safety.”
Baroness Jones of Moulsecoomb (GP)
Noble Lords may have noticed that I am not my noble friend Lady Bennett of Manor Castle, but I am here to move Amendment 132A and speak to Amendment 132B, both in her name. I am sure that the Minister is listening, because it is quite important that he agrees with me on this.
Baroness Jones of Moulsecoomb (GP)
I am so sorry—I thank the noble Baroness.
These amendments create an obligation for local authorities to locate contaminated land in their areas and for the Government to review the management of contaminated land. This is the first parliamentary outing of what has been called Zane’s law. It is named for Zane Gbangbola, for whom the Truth About Zane campaign was also founded, which is still working. There is wide support for the campaign—from Sir Keir Starmer and Andy Burnham to the FBU, the CWU and the Conservative-controlled Spelthorne Borough Council—to get on the record the truth about the seven year-old’s death in Chertsey in 2014, when floods swept hideously toxic hydrogen cyanide into the family home from a nearby historical landfill site. That is not what the inquest verdict concluded in 2016, but the campaign continues to fight that inequality of arms and the illogic of that verdict.
Last year, Zane’s parents, Kye and Nicole, and their supporters took up an even broader issue: the question of why it was that they and the rest of the community had no knowledge of the danger of the historic landfill site near their home. I am old enough to remember Aberfan in 1966; it was a well-known site, but it was unstable. As most noble Lords probably know, 116 children and 28 adults were killed when the landslip came on to a school. What happened to Zane—and his father Kye, who was left paralysed by the hydrogen cyanide—could awfully easily happen to another family or a whole community.
The issue goes back to 1974, when the Control of Pollution Act first took control over waste disposal. However, before that came into effect, many dumps were quietly closed and, since then, have been pretty well forgotten, as campaigner Paul Mobbs explains in a disturbing video, which I do not have here with me. EU regulations on waste and pollution required the tightening of those controls under the Environmental Protection Act 1990. Section 143 brought in an obligation on local authorities to investigate their areas and draw up
“public registers of land which may be contaminated”.
Section 61 gave local waste authorities powers to inspect closed landfills and clean them up if necessary. However, lots of new housing developments, in particular, are on old landfill sites. Under pressure, the Government held three consultations on contaminated landfill registers from 1991 to 1993, eventually deciding that the aforementioned Section 143 would not be enacted and all plans for public registers of contaminated sites would be dropped. The explanation given was cost and the desire not to place new regulatory burdens on the private sector.
Limited powers were brought in in 1995, although they did not come into force until 2000, which meant that when developers found contamination problems, public authorities often had to pay. But it got worse. In 2012, as part of the Cameron Government’s “bonfire of red tape”, to reduce the statutory burdens, the right of enforcement authorities to use the law was further reduced—the emphasis being on “voluntary” clean-up, with no real power to check it had been done. This is clearly a problem for existing buildings, but also for buildings being constructed right now. It is evident that there is a great risk at potential locations of new homes right around the country, from Carlisle to Cambridge, and Dudley to Newbury.
There is also the issue of the climate emergency and the new extremes of weather, particularly floods, but also heatwaves, that cause events such as that which tragically claimed young Zane’s life. To identify the size and scale of the problem, in every local authority in the land, there has to be a starting point to fixing it and preventing future risk to life. I beg to move.
Baroness Pinnock (LD)
My Lords, I thank the noble Baroness, Lady Jones, for introducing these two amendments. When I read them, I thought, “You know, this isn’t possible. You cannot build on contaminated land.” Certainly, from all the planning committees on which I have sat over the years, I know that it is not possible. I live in an area where there is quite a lot of land contaminated by dyes from the woollen industry, which have cyanide in them. My experience of development on contaminated land, which is a bit different from the issues that the noble Baroness, Lady Jones, has raised, is that such sites are raised by planning authorities as part of the National Planning Policy Framework, they have to be identified as part of strategic local plans, and the Environment Agency and the Environment Act all contribute towards ensuring that contaminated land is cleared—decontaminated, if you like—before it is developed.
That is a bit different from some of the issues raised by the noble Baroness, which were about building adjacent to such land. Again, I am surprised that the environment legislation which controls old landfill sites has enabled that to happen. It may be a failure of legislation, but I will wait to hear what the Minister has to say.
The only thing I would say is that the Government are very keen for development of brownfield sites, and there is a desperate need for those sites to be cleared and decontaminated before they can be redeveloped. Everybody wants the Government to continue providing grants to developers to do so. I have experience from my town, where a site has been left empty for at least 15 years. It has been allocated for housing, but no grants have been provided to decontaminate it from an old chemical works that was on the site. So former green-belt land has been developed first, because we are waiting for grants for decontamination of derelict sites.
My one plea to the Minister is to take that back to the department and to say that, if it is to be brownfield sites first, such sites nearly always have significant contamination. Sometimes it is asbestos in older buildings. Certainly, in the Midlands and the north where there have been industrial complexes, there can be quite serious chemical contamination, and decontamination is necessary before anybody can get near them. I look forward to what the Minister has to say.
Baroness Hayman of Ullock (Lab)
My Lords, I shall be brief, because there will probably be another vote soon in the House. We are very happy to support the two amendments tabled in the name of the noble Baroness, Lady Bennett. I thank the noble Baroness, Lady Jones of Moulsecoomb, for her comprehensive introduction.
We know that local authorities, as we heard, are responsible for determining whether their land is contaminated. The noble Baroness, Lady Pinnock, talked about the grants that her authority has been waiting for to clean up land. It is really important that these grants are dealt with quickly, because it can be incredibly expensive to clean up contamination. If we are to use brownfield sites, local authorities need to be able to do so in a way that is cost effective for them. That was an important point.
We are also aware that availability of land is one of the biggest barriers to building at the moment. The government targets for housebuilding mean that, in particularly populated areas such as the south-east, any additional homes are more likely to be built on previously developed brownfield land. No one would want to build on contaminated land by choice, but “brownfield” does not necessarily mean that land is contaminated. We need to be clear about this.
However, there is a need to ensure that houses constructed on sites affected by contamination are built to the appropriate standards, including those next to an area of contamination. We need to know where the contaminated land is so that we can do these checks properly. As the noble Baroness, Lady Jones, said, things such as flooding can bring contamination across a very wide area, with, as we have heard, sadly catastrophic consequences. As she said, on the surface of it, Zane’s law seems pretty simple and straightforward to implement. If we can identify the size and scale in every part of the country where contamination is, that would be a very logical starting point to prevent future risk to life and support local authorities in tackling the whole issue of contamination so that we understand it better as we move forward with more development and housing. I hope the Minister will listen to this, because it seems to me that Zane’s law ought to be supported.
Baroness Bloomfield of Hinton Waldrist (Con)
I thank the noble Baroness, Lady Bennett, for tabling her amendments, so ably introduced by the noble Baroness, Lady Jones of Moulsecoomb. I welcome her raising the important issue of contaminated land in this Committee. As always, the noble Baroness, Lady Jones, made some very powerful points—as did the noble Baronesses, Lady Hayman and Lady Pinnock—on the need for speeding up the process of decontamination. I believe the ambition to bring a version of Zane’s law on to the statute book is well intentioned but I consider that the policy intent behind these proposals is already met by existing legislation and statutory guidance.
The noble Baroness, Lady Jones, is right that Section 143 was repealed, but it was replaced by Part IIA of the Environmental Protection Act 1990, which provides a framework for identifying contaminated land in England and allocating responsibility for its remediation. It provides a legal definition of contaminated land and lays out the responsibilities of local authorities and the Environment Agency for dealing with it. These responsibilities include a requirement for local authorities to inspect their area to identify actively land that may be contaminated, to investigate and remedy contaminated land and to maintain a public register of information relating to contaminated land. This includes contamination from non-operational historic landfill sites and is regulated by local authorities. Further, Part C of the building regulations requires reasonable precautions to be taken by developers to avoid any risk to health and safety caused by contaminants in the ground where they are carrying out building work.
Lastly, assessment of contaminated land risk currently focuses on the impact of contaminated land on human health and the environment. Shifting focus on to buildings and building safety may dilute the aims of the existing framework. Given that this existing framework is already embedded into legislation and guidance, the proposed amendments regarding contaminated land would create unnecessary duplication and could cause confusion for local authorities. Therefore, while I appreciate the concerns of the noble Baroness, I ask her to withdraw her amendment.
Baroness Jones of Moulsecoomb (GP)
I thank the noble Baroness for her response, and I will of course check the Environmental Protection Act, exactly what it does and what protection it gives. I also thank the noble Baronesses, Lady Hayman of Ullock and Lady Pinnock, for their support.
I care very much about this, even though this amendment is in the name of the noble Baroness, Lady Bennett of Manor Castle, because it seems that the poor always suffer. This is one of those things where, if you live on an old industrial site or whatever, you are likely to have a much lower form of housing and much less protection in any case. If we are talking about levelling up, this would be a very good thing to do.
By the way, I want all your Lordships in this debate to know that this is a much friendlier debate than the one next door. It was a real relief to come in here out of there; there will of course be another vote soon.
I understand that this is not the moment to push this amendment, but it will probably come back on Report. In the meantime, I beg leave to withdraw it.
Lord Greenhalgh
““building function” has the meaning given by section 3;” Member’s explanatory statement
This amendment defines “building function” for the purposes of Clause 135.
Lord Aberdare
“Review of safety impact of retention
(1) Within 12 months of the passing of this Act the Secretary of State must publish a review of the impact on building standards and safety of retention of payments due to sub-contractors by building contractors.(2) Matters which the review may consider include, but are not limited to—(a) cash flow difficulties sustained by sub-contractors as a result of retention,(b) ability of sub-contractors, as a result of retention, to afford materials of a suitable quality for future contracts,(c) ability of sub-contractors, as a result of retention, to recruit sufficiently qualified staff, and(d) other factors which may cause sub-contractors to make savings on building standards and safety because of retention.”
Lord Aberdare (CB)
My Lords, it has been interesting and instructive for a non-expert to listen to the debate in this rather impressive Grand Committee while waiting for my sole amendment to be reached as the very last group.
Amendment 136A is a probing amendment that seeks to encourage the Government to take some long-overdue action to tackle the pernicious practice of retentions in the construction sector. I start by thanking, in his absence, the noble Lord, Lord Blencathra. He crafted this amendment in a form deemed to be in scope and then allowed my name to appear above his. I am sorry to hear that, as I gather, he has fallen prey to Covid, but I wish him a speedy recovery and I shall certainly miss his powerful support today. I am also grateful to the Minister for sparing time last week to meet me and David Frise, representing the engineering services alliance, Actuate UK, whose members are among the firms most impacted by retentions.
I shall make just three points relating to the amendment. First, retentions are a cancer affecting the construction industry, which, as noted in the Hackitt report,
“can drive poor behaviours, by putting financial strain into the supply chain”.
These can damage both quality and safety; for example, by causing subcontractors to use cheaper, substandard or unsuitable materials or to cut corners on quality in other ways. In some cases they may withdraw from contracts or even be forced out of business altogether, causing the “golden thread” which is such an important part of the thinking behind the Bill to fray, if not snap.
Retentions poison relationships between subcontractors and contractors, creating a fundamentally adversarial relationship rather than a far more productive collaborative partnership. They deprive smaller firms of funds for investment in skills, technology, growth and productivity, while causing them to waste substantial time and effort chasing payments which are due to them, but which in some cases are never paid at all—notably when the business owing them goes bust, as in the case of Carillion. Retentions are not even a particularly effective way of preventing or remedying defects; the sector has been developing much better approaches, such as modern methods of construction and the Get It Right Initiative. I salute the Minister’s evident commitment to improving the quality and culture of the construction sector, but that aim will never be achieved while unregulated retentions persist.
My second point relates to the need for legislation. There is a high degree of consensus across the sector that something needs to be done about retentions, and there is even a target date, endorsed by the Construction Leadership Council, for there to be zero retentions by 2025. That is a laudable goal, but, as Ministers regularly point out, there is no industry consensus about how to reach it. Of course there is no consensus between firms that benefit from withholding retentions, often using them to artificially boost their own working capital, and those who are deprived of funds due to them. So we have a stalemate that can only be resolved by government through legislation, whether primary or secondary.
Baroness Neville-Rolfe (Con)
My Lords, I added my name to this amendment, although I am not sure whether it made its way on to the list. I support the great work of the noble Lord, Lord Aberdare, in his quest for a resolution on the subject of retentions—that is, the retention of part of a contract cost.
The noble Lord may recall that, when I was a Minister during the passage of a motley business Bill about six years ago, I promised that a review would be undertaken by the then DHCLG. At first blush, the arrangements seemed wrong and unfair to me, from my experience of the building industry. Somehow, delivery has been extraordinarily slow. It would be nice to have my ministerial promise delivered, albeit somewhat late, by St George here. I very much hope that the Minister will do the right thing and accept this modest proposal for a long-overdue review or whatever else might be agreed between now and Report, with the ever-energetic and nil desperandum noble Lord, Lord Aberdare.
Lord Stunell (LD)
My Lords, the noble Lord, Lord Aberdare, has certainly been energetic, forthright and determined on this issue, and rightly so. He has reminded the Committee that the Hackitt report made it clear that the withholding of money from second-tier, third-tier and fourth-tier contractors and suppliers put pressure on them, which made it much more difficult for them to deliver a proper and effective product or job on site. The downward pressure that they faced as a result of the withholding of that money was a major problem for them as functioning entities. That was the view expressed in Hackitt, based on the evidence that had already emerged from the Grenfell inquiry.
Of course, there is much wider evidence around the country. The collapse of Carillion is an example. I think that £140 million of retentions were held by Carillion and thereby lost from those on lower tiers in the pyramid. Whatever else might be said about it, that put a number of companies at risk of going out of business, and indeed a number of companies did so just because that money was lost to them. The evil impact of this is very clear.
Some of the impact is less clear but just as difficult. Such companies find that they do not have the resources to invest in skills, training and continuing professional development, simply because they do not have that cash in hand. So it has an impact. Under
“Matters which the review may consider”,
the noble Lord, Lord Aberdare, has sensibly listed in his amendment three important ones and then put “(d) other factors”. I would add investment and training as one of the other factors that suffer as a result of this.
I want to remind the Minister that it is government policy that all government contracts should be written in such a way that retentions are not in place. Unfortunately, not every government department has read the memo. I asked the Business Minister, the noble Lord, Lord Callanan, a Written Question and subsequently an Oral Question about how that was progressing. He was quite frank in admitting, and it is on the record, that the Department for Education had so far refused to implement the Government’s overall guidance that all public procurement should be without retentions built into the contract documents. I have no doubt that the noble Lord, Lord Callanan, is having a good go at the education department; I hope that I can add to that today and another Minister will have a good go at it, at the very least to make sure that the Government get their own departments to follow their own policy, which would be very much in the direction that the noble Lord, Lord Aberdare, is advocating. I have probably said enough, but I certainly hope to hear good words from the Minister in a moment or two.
The Earl of Lytton (CB)
My Lords, I support my noble friend Lord Aberdare. The matter of retentions comes right at the end of this series of Grand Committee sessions, but it is part of a culture. It is the race to the bottom, value engineering or cost-cutting. Construction contract architecture and the practices that have grown up with it are all part of the perverse incentives that have somehow been built up.
At one stage in my professional life, retentions of, say, 5% or 2.5% for limited periods, as the case may be, started as security for the proper completion of works as set out and to a required standard. However, I take the point made by the noble Lord, Lord Aberdare, that this has now gained the appearance of an informal and unconsented bankrolling of construction costs at the expense mainly of subcontractors and their suppliers. This has to stop. It is like all such situations: retentions have a legitimate use but have been subject to serial abuse. If we could keep our eye on one and render the other improbable, that would be all very well, but if the bad practitioners do not get the message, some brutal measures may indeed be necessary and better regulation and protection of sums due may follow from that. I cannot help thinking that the small and medium-sized enterprises that have dwindled and atrophied as a component part of the construction industry are the chief sufferers. They are unable to take on the big beasts of construction.
There is a real point behind this. If the memorandum that the noble Lord, Lord Stunell, referred to became a universal code of practice in the sense that you really had to justify yourself before stepping out of line, that would at least be a start. There is a lot we can do with what we know and the existing situation in terms of decent treatment, honest measures and taking care of the whole supply line we are dealing with. What the noble Lord, Lord Stunell, said about investment, training and that sort of thing is absolutely on point, and I certainly support the thrust of this amendment.
Baroness Hayman of Ullock (Lab)
My Lords, the noble Lord, Lord Aberdare, has raised a very important issue and certainly has our support. Something has to be done to resolve this, and others who have spoken have swung in strongly behind the noble Lord. I am sure the Minister has listened and is taking note.
We have heard that retention is the customary practice of withholding monies to cover defects and incomplete work, but it is also being used for so much more than that, as the noble Earl, Lord Lytton, and the noble Lord, Lord Aberdare, explained. Depending on the size of the project, it can be insignificant or very significant. Large construction projects can be worth £1 billion; huge sums of money can be affected. As the noble Lord, Lord Aberdare, said, reform of the problems this can cause is long overdue.
Retention is often a cause for complaint and quarrel. Subcontractors often find it difficult and can see it as a tool to be bashed with by the paying party, who can hold back payment whether there is good reason to do so or not. I guess that I ought to declare a past interest in that I used to work for a small business that was contracted into large infrastructure projects, so I am very aware of the kind of impact that retention of monies can have. We worked with a lot of other small businesses within large projects. If payment is held back through retention, often for many months, small businesses have a serious cashflow problem, often meaning they cannot pay their staff. This is about not just training but the basic running of the business. They can then become dependent on constant, rolling bank loans, which is not the way a small business wants to run.
All that could be solved if this was sorted out. We see signs everywhere about considerate contractors, but contractors are not always considerate to their subcontractors. We need to sort this out. As we have heard, it can be such a source of pain and concern when the party holding the monies goes bankrupt. Other noble Lords have mentioned Carillion, which is probably the largest example of that happening.
I will not say any more, because we are nearly there, and we are nearly at another vote, I think. The noble Lord, Lord Aberdare, very ably introduced his amendment, so I think the Minister will have heard his message loud and clear. The last thing for me to say during this Committee is that today in particular, and throughout, the Minister has been given an opportunity to slay a number of dragons, not just this one, so I look forward to his response.
Lord Greenhalgh (Con)
“St George,” “St Stephen,” “It is so easy, just do it”: I have had all the usual exhortations. I did really enjoy meeting the noble Lord, Lord Aberdare, and David Frise. I think it was towards the end of last month, so relatively recently. David Frise, part of the Building Engineering Services Association but representing Actuate UK, had gone through the quite traumatic experience of building up a business then effectively seeing it dismantled because of the pressures of being a subcontractor. I have declared my business interests—as someone who has started a small business, I know exactly what it is like when you are working for bigger businesses, particularly in the early days. It is tough, particularly when people withhold payments that you are contractually due just because they know they can.
Another practice we see in payments is: “Why do we not pay you in 180 days’ time?” You have delivered the services and paid all the costs, but: “We are a big company, and our payment run is every 180 days.” It is that kind of line; it does not happen all the time, and I know that is not something Every Little Helps would do; it will have a code of practice. But that is the kind of thing we have seen, and it is important, if we want to encourage smaller organisations, that we see the end of those kinds of practices. I think we are, generally speaking; certainly, blue chip companies would not do that.
One of the things I would also say about the whole construction issue is that one of the things I want to know as a businessman is who makes the money. It is clear that developers have made good money since Grenfell. Before Grenfell they made good money, but since Grenfell even more. Some of the manufacturers of the construction materials have done really rather well as well. But actually, construction is a cash-flow business on wafer-thin margins, and the further you go down from the prime contractor, the more they squeeze the margins, and that is the kind of the thing the noble Earl, Lord Lytton, has been talking about—the value engineering. That is why you start to see the corners being cut.
We have to understand that we are dealing with a real cultural issue. That is what we said to the noble Lord, Lord Aberdare, in the meeting. Yes, I would like to wave my magic wand and say there is a legislative solution—but we recognise that he is going to set out in writing to me a number of thoughts about this. I think that is what we agreed. Then, we are going to take some of those thoughts to Dame Judith Hackitt and also talk to Amanda Long, who ran the Considerate Constructors Scheme and is also building a building safety charter, to try and get players on board. Perhaps they can consider cash retentions within that. There is also the New Homes Quality Board and the new homes ombudsman, which operates underneath that. Perhaps they can think about some of these issues.
There are a number of things I can talk about that could potentially also help. The Construction Leadership Council has a business models workstream focused on collaborative contractual practices, which I think has been raised by the noble Lord, Lord Aberdare. We are also looking at the culture of late payments that I already referred to. Our efforts include introducing payment practices, reporting through legislation and guidance. Prompt payment is also important.
What I resolve is not to accept the amendment but to work with the noble Lord, Lord Aberdare, because I really feel passionate about this. It is an abhorrent practice, and we should do what we can to ensure the culture of good practice prevails and that we address those that are not following the right way. But let us get the culture right.
Lord Stunell (LD)
Before the Minister sits down, I wonder if he could comment on the Department for Education’s performance.
Lord Greenhalgh (Con)
That is a really good way to end the debate. I will have to write to the noble Lord, because I do not know a lot about the Department for Education other that it is on the street near Marsham Street. I have been there maybe two or three times when I was a council leader. I will write to the noble Lord, but I think it is probably something, as he would well know, that I am not in a position to answer at the Dispatch Box right at this minute.
At this point, I am allowed to sit down. I have avoided a Latin phrase for the whole four hours of this debate, but the noble Lord, Lord Kennedy of Southwark, has provoked me: he responded to me saying that I would not resort to Latin by saying, “Id gratum esset”. I knew enough Latin to know that that means, “It would be appreciated”. Well, I have appreciated this debate, and I look forward to moving on to Report and taking this landlord Bill through this House.
Lord Aberdare (CB)
My Lords, I thank the Minister for that response, which at least confirmed my prophetic abilities and had quite a bit of encouragement. I confirm that we are working on a letter to him along the lines that he described, and we will get that to him in due course—that is a bit pessimistic; we should say “shortly”. I thank him for the other comments that he has made, which I will study and act upon.
I was absolutely delighted that the noble Baroness, Lady Neville-Rolfe, was able to contribute to the debate. As she said, she was the Minister responsible when I first accidently got involved with retentions in 2015. For a glorious moment, I thought that she might prove to be the dragon-slayer, but I am delighted that she continues to support the cause. The noble Lord, Lord Stunell, made a very important point about investment in training as well as the fact that government itself is not doing all that it could to bring this practice to an end.
As always, I depend heavily on the vast expertise of my noble friend Lord Lytton, whom I thank particularly for focusing on the impact on SMEs. The noble Baroness, Lady Hayman of Ullock, also did so, again pointing out the issue of cash flow and its importance. Fortunately, my SME was never in the construction sector, so that is one problem that we did not have, although we certainly had plenty of cash-flow problems. Of course, I also thank the Minister.
Fixing this issue will be a key part of achieving the goal that the Minister is setting out to achieve: a productive, high-quality, collaborative, innovative, forward-looking and, above all, safe construction sector, providing the sorts of homes and other buildings that we can be truly proud of. I am not convinced that we should not come back to this issue on Report, but, for now, I beg leave to withdraw the amendment.
Lord Greenhalgh
“(ba) sections (Remediation of certain defects) to (Meeting remediation costs of insolvent landlord) and Schedule (Remediation costs under qualifying leases) (remediation of certain defects);”Member’s explanatory statement
This amendment provides for the new clauses and Schedule relating to the remediation of certain defects to bind the Crown.
Lord Greenhalgh
“Application to Parliament
(1) The following provisions do not apply in relation to the Parliamentary Estate—(a) sections 101, 102 and 105 (compliance notices under Part 4);(b) paragraphs 1 to 3 of Schedule 2 (powers of entry of authorised officers).(2) If the Palace of Westminster (or any part of it) is a higher-risk building within the meaning of Part 4, for the purposes of that Part the accountable persons for the building are the Corporate Officer of the House of Lords and the Corporate Officer of the House of Commons, acting jointly.(3) No contravention by a Corporate Officer of a provision made by or under Part 2 or 4 makes the Corporate Officer criminally liable.(4) Subsection (3) does not affect the criminal liability of relevant members of the House of Lords staff or of the House of Commons staff (as defined by sections 194 and 195 of the Employment Rights Act 1996).(5) In subsection (3) “Corporate Officer” means—(a) the Corporate Officer of the House of Lords,(b) the Corporate Officer of the House of Commons, or(c) the Corporate Officers acting jointly.(6) In this section “Parliamentary Estate” means any building or other premises occupied for the purposes of either House of Parliament.”Member’s explanatory statement
This new Clause makes provision about the application of Parts 2 and 4 to Parliament.
Lord Greenhalgh
Member’s explanatory statement
This amendment provides for the draft affirmative procedure to apply to certain regulations.
Member’s explanatory statement
This amendment provides for the draft affirmative procedure to apply to certain regulations.
Lord Greenhalgh
“(ba) sections 120 to 127 and Schedule 9 (new homes ombudsman scheme);”Member’s explanatory statement
This amendment provides for certain provisions about the new homes ombudsman scheme to form part of the law of England and Wales, Scotland and Northern Ireland.
“(3) Section 2(2) and Schedule 1 (amendments of the Health and Safety at Work etc Act 1974) extend to England and Wales and Scotland.”Member’s explanatory statement
This amendment is consequential on the amendment to page 144, line 41 that appears in the Minister’s name, providing for the new homes provisions to form part of the law of England and Wales, Scotland and Northern Ireland.
Lord Greenhalgh
Member’s explanatory statement
This amendment is consequential on the first amendment of Schedule 5 in the name of the Minister (and also corrects the numbering of the paragraphs referred to).
Building Safety Bill
Tuesday 29th March 2022
(2 years ago)
Lords ChamberRead Full debate Building Safety Act 2022 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 125-I(a) Amendments for Report (Supplementary to the Marshalled List) - (28 Mar 2022)
13:23 - Division on Amendment 8 - Ayes: 176 / Noes: 151 - Amendment 8 agreed.
Lord Foster of Bath
“(aa) furthering the protection of property, and”Member’s explanatory statement
This amendment would require the building safety regulator to exercise its functions with a view to furthering the protection of property, which is intended to promote longer term protections for occupant safety and reducing fire damage and cost.
Lord Foster of Bath (LD)
My Lords, even if no lives are lost, fires in any type of building—home, school, office, factory or other—can often have serious social, economic and environmental consequences. Property and equipment are lost, rebuilding costs are enormous, jobs can be lost and so on. Of course saving lives is the most important consideration, but my Amendments 1 and 16 suggest that we should be going beyond the current arrangements whereby we consider that building legislation and regulations are deemed a success if all occupants are evacuated safely. The amendments propose means by which consideration of property protection can be proportionately applied to the fire safety building regulations, measures that I believe will allow for buildings to be safer, more resilient and more sustainable than now.
At earlier stages of the Bill, I illustrated the need for such measures with reference to a large number of fires that had completely destroyed buildings. Sadly, to that list we can now add the fire just a couple of weeks ago that destroyed a self-storage warehouse in Cheadle along with the possessions of more than 650 people. Conversely, we know the benefits of applying property protection approaches. That was evidenced last week, for example, when a sprinkler system saved a large distribution warehouse in Leicestershire from being destroyed by fire. Over the past two months alone, sprinklers have prevented large, costly and potentially dangerous fires in schools in Ayrshire, in a retirement home in Bedfordshire, in high-rise blocks in Chester, Newport and Irvine and in a furniture warehouse in Sheffield.
In Committee, the Minister avoided addressing the crux of the proposition that I am making. I find that odd, particularly given that the Government have already commissioned research into property protection measures. It is disappointing that we have reached this stage of the passage of the Bill without seeing the results of that research, which would have been enormously helpful to him. It may be that the Government want to use it to determine future considerations for fire safety building regulations, but surely the most appropriate time to be doing that is now, while we have this Bill before us. We know how difficult it is to find legislative time to bring in further measures. It is particularly strange when the Minister has said categorically that the Bill before us is intended to deliver the biggest improvement in building safety in nearly 40 years.
The Government may well also say that they have the opportunity at a later stage to amend guidance in these matters. We must of course accept that there have already been changes to guidance on fire safety over recent years; indeed, there have been changes in relation to high-rise buildings as a result of the Grenfell fire. However, the sad truth is that placing something in guidance does not necessarily ensure that the actions that we want will happen. That was the case back in 2007, some years ago now, when Building Bulletin 100: Design for Fire Safety in Schools was introduced, with the suggestion that sprinklers should be installed. In the first few years that is exactly what happened, but over subsequent years the incidence of the introduction of sprinklers in new school buildings reduced dramatically as developers found ways around the guidance.
I mention that because we should be looking at changes not to guidance but to the actual regulations. After all, that was what was thought important when we made changes to the regulations in respect of cladding. That was not a change to guidance; it was a change to regulation. That is why my Amendments 1 and 16 would introduce into regulation measures to provide improvements to property protection. I say to the Minister, who I know is interested in this issue, that that would not be a particularly strange thing to do. After all, many other countries have thought it important to do this; for instance, Germany, Sweden, the United States, Canada, Japan and a number of others have already introduced such measures. I hope that the Minister will give serious consideration to my proposals or, if he is not prepared to accept the amendments, give us an update on the research that is currently being done and what the Government’s plans are to make changes—in due course, sadly—to the regulations in this matter.
I have another amendment in this group, Amendment 8, which relates to the need for the regulator to
“within two years … carry out and publish an assessment of the benefits and costs of measures on improving the safety of people in or about buildings relating to … certification of electrical equipment and systems”—
that is the installations, not the equipment running off them. In Committee, I pointed out the inequality that exists whereby private landlords in high-rise buildings are required by law to have a valid electrical safety certificate, whereas social landlords are not. This is strange, as the Government want equality between the two. The social housing charter states unequivocally:
“Safety measures in the social sector should be in line with the legal protections afforded to private sector tenants. Responses to the social housing Green Paper showed overwhelming support for consistency in safety measures across social and private rented housing.”
The Minister said:
“The Bill is unapologetically ambitious, creating a world-class building safety regulatory regime that holds all”—
I emphasise “all”—
“to the same high standard.”—[Official Report, 2/2/22; col. 916.]
Yet elsewhere, the Minister appeared less committed, saying only that
“In the Social Housing White Paper we committed to consult on electrical safety requirements in the social sector”.
Commitment to consult is a far cry from a commitment to achieve the same regulatory standard. The Minister continued:
“We will consider whether the best way forward to protect social residents from harm is to mandate checks and bring parity with standards in the private rented sector.”—[Official Report, 2/3/22; col. GC 319.]
A commitment to consider mandatory checks is a far cry from the words in the social housing charter and the Minister’s own words at Second Reading.
Lord Crisp (CB)
My Lords, in speaking to Amendment 2, I thank those noble Lords who have added their names to it. The noble Lord, Lord Blunkett, has asked me to inform your Lordships that he cannot be in his place today as he has Covid. I am sure that we send him our best wishes. However, I am delighted that the noble Lords, Lord Bethell and Lord Stunell, are here and I thank them and others who will speak to this amendment. In passing, I also thank the TCPA and other organisations outside your Lordships’ House which very much support this amendment and have provided support and notes to a number of Members.
I emphasise that this is very much a cross-party amendment. I know that there is a lot of support for the principles involved. It is very simple and quite profound. It offers a simple definition of safety: the risk of harm to the health and well-being of an individual. It is a very simple, common-sense notion that applies to safe stairways, electrical wiring, dampness and cold as much as it does to fire.
In Committee, the Minister in effect argued in response that there did not need to be a definition and that definitions were satisfactorily covered in the current arrangements. There is no legal duty in the planning system that deals with human health. For that reason alone, it is important that we have a definition. More widely than that, I think that we need one for both negative and positive reasons. The negative reason is that, unless there is a definition, I believe that a Government of any party will always be in reactive mode. Amendment 8, which I am happy to support, is a perfect example; it lists four specifics related to human health and well-being and to safety and draws them to the House’s attention as of particular concern.
There will be others. One could produce a much longer list and there are things that we have not thought of yet. We could think about subsistence, air pollution and all kinds of areas that might be caught. The Government will need to continue to address all these issues as they come up—tactically, if you like, and on an ad hoc basis. I am quite sure that, as the Bill was being prepared, the Minister and his colleagues will have wanted to ensure that not too many things were added to it. The danger is that they may not be added to the Bill but will be added to parliamentary and government time afterwards.
There is an enormous advantage to being strategic—to setting out a definition that asks the regulator, and therefore everyone else in the system, to pay attention to health and safety, which embraces all these issues. That will help to bring about the cultural change in line with what I believe the Government want from the Bill. It will allow them to get ahead of the game and be ambitious, as the Long Title suggests that the Bill should be about
“safety … in or about buildings”.
There are positive reasons too; I have already talked about being ambitious. With their proposals around levelling up and elsewhere, the Government are undoubtedly seeking to improve the lives of citizens in the country. Housing and the built environment are absolutely at the heart of those ambitions. Covid has reminded us that our homes, if not being our castles, are certainly the foundations of much else in life: they are our sanctuary, a place for education and a place for stability and safety. I know that the noble Lord, Lord Bethell, will say more about the impact of Covid and the relationship between health and housing and buildings more generally. We have always known about that link and so have Governments in the past. For something like 50 years, the Secretary of State for Health was also the Secretary of State for Housing; the two were intimately linked. Partly as a result of that, no doubt, we saw the excellent standard of council housing built between the two wars, for example.
These are long and profound links. The way we design and build our homes and the whole built environment matters not only to people but to the Government’s policies around levelling up, around achieving net zero and around health inequality, to mention just three of the things that have been debated in this House in recent times. I would add the importance of preparation for the next pandemic and more generally for securing increased resilience in the country as a whole.
I have not decided whether to press for a vote and I will obviously listen carefully to what is said by the Minister. I will ask him what steps he will take to meet the concerns that the amendment raises and the need for a profound link between health and housing and whether he will meet me and colleagues to discuss these issues further. I believe that he is also the Minister for Levelling Up, so these issues will undoubtedly return in another guise and at another time. The quality of homes, communities and the built environment is fundamental to levelling up our society. I will also listen with great interest to noble Lords who represent the other political parties in the Chamber. I hope that they will support these principles and will similarly consider how, in the longer term, the links between health, housing and the built environment can be developed and taken forward.
My point here is a simple but big one. In wider society, people have made the connection between health and well-being and the built environment, just as they have made it between health and well-being and the natural environment. The issue will keep coming back to your Lordships’ House. It is far better to get ahead and be strategic and ambitious. This is an idea whose time is coming. The built environment, like the natural environment, is crucial to the health and well-being of the population and therefore to the future prosperity of the country.
Lord Bethell (Con)
My Lords, I support Amendment 2. It is a great privilege to follow the noble Lord, Lord Crisp; he put the arguments for the amendment incredibly well so I will keep my comments as brief as I can.
As Health Minister during the pandemic, I realised how unhealthy our country is. Time and again, one saw from the front line of Covid—through the ICUs and test and trace teams—reports of how connected the spread of the disease was to the housing conditions of the country and how the comorbidities of those arriving in our ICUs were often connected to the environment in which they lived. Housing and illness are inextricably linked; I came face to face with that during the pandemic.
The pandemic led to a huge amount of misery through loss of life and severe disease. It also hit the country’s economy extremely hard; there is no doubt that we had longer and harder lockdowns as a result of the fact that our country is so poorly. However, we cannot ask the NHS and our healthcare system on their own to be responsible for the improvement of our national health. There is a role to be played by education, sports, scientists, civic society—all the parts of our country, including and especially housing. That is why I support the healthy homes principle from the TCPA.
This issue is recognised in the levelling-up White Paper, to which the noble Lord, Lord Crisp, referred. However, it is not clearly recognised in the Bill. The priority that housing should support health and well-being should be fundamental to the underpinnings of this Bill. That is the purpose of this amendment, which is why I put my name to it. I ask the Minister to put on record a commitment that the department will look at ways to augment the Bill’s focus to bear on the health and well-being aspects of housing regulation, and to meet the noble Lord, Lord Crisp, myself and others to discuss how this might be done.
Lord Aberdare (CB)
My Lords, having had the very last amendment debated in Committee, I now mount my retentions hobby-horse once again, but riding on a slightly different course and in the first group on Report. My Amendment 7 would give the building safety regulator a duty to keep possible safety risks arising from contractual arrangements, including payment conditions such as retentions, under review in fulfilling his or her role of improving building safety and standards.
Procurement and contractual arrangements are crucial in setting the tone for relationships between different-level contractors in a building or building maintenance project. They can determine whether those relationships are adversarial—seeking advantage for one side against the other and looking to minimise cost—or collaborative, mutually beneficial and focused on adding value and maximising safety.
Yesterday, I attended a webinar hosted by King’s College London to launch the Guidance on Collaborative Procurement for Design and Construction to Support Building Safety, produced by the Department for Levelling Up, Housing and Communities with the support of its procurement advisory group. To quote the invitation,
“preventing another Grenfell Tower disaster depends on a major overhaul of construction procurement practices, breaking away from the adversarial ‘race to the bottom’ through which low prices undermine safety and quality.”
The first speaker was none other than Dame Judith Hackitt, who gave her strong support to the guidance. She emphasised that culture change in construction has to start at the very beginning of projects, and that contractual arrangements are crucial in setting the tone for relationships between different-level contractors. She also restated her view that retention policies are totally inconsistent with collaborative procurement and do not encourage a focus on building safety. Contractors assume that they will not receive the funds withheld and look for other ways to reduce costs, through cutting investment in training and quality or using substandard materials. I only wish that Dame Judith could be speaking on my amendment.
Baroness Finlay of Llandaff (CB)
My Lords, I rise briefly to support the amendment in the name of the noble Lord, Lord Crisp, and others. I had the privilege to be on the Select Committee on National Policy for the Built Environment, which reported six years ago with Building Better Places. We had extensive evidence from Public Health England on the impacts of the built environment on health. That built on the work done by Michael Marmot on the social determinants of health and the evidence of the cost to the nation of poor housing. In our report, we recommended that those working in housing should take account of the health impacts of their decisions. The relevant paragraph of the government response to our report said:
“The Government recognises the importance of considering health as part of the planning process and believes health impacts should be considered as part of the wider policy environment.”
The plea that we heard from the noble Lords, Lord Crisp and Lord Bethell, to integrate these factors and consider them at every stage has been supported by the evidence for many years. I hope that the Government will listen to the evidence that they themselves took on board in responding to our report.
Lord Young of Cookham (Con)
My Lords, I added my name to the amendment tabled by the noble Lord, Lord Crisp, in Committee but was unable to speak to it, so I welcome the opportunity to add a brief footnote to the excellent speech that he made a few moments ago. I do so having been responsible for building control under the Thatcher and Major Administrations.
No one could object to the aspirations behind the amendment and the Healthy Homes Act campaign and I hope that the Minister will be able to respond sympathetically. I understand that so far the Government have objected to the proposal on the grounds that this is a matter for planning rather than for building regulations. The boundary between the two is inevitably not clearly marked and many people think that, if they have planning consent, that is the end of their interface with the local authority.
I have just one suggestion to make. The Minister may take the view that some of the objectives in the TCPA brief fall on the planning side rather than the building regulations side. I quote from its manifesto, which says that homes should
“be built to design out crime and be secure … all new homes should … provide access to sustainable transport and walkable services, including green infrastructure and play space”
and should have a minimum liveable space. Those all seem to be entirely reasonable requests. If my noble friend takes that view and believes that they are not appropriate to this Bill, can he give an assurance that they will be incorporated into the next planning Bill so that we can get to the same destination, albeit via a different route?
Baroness Prashar (CB)
My Lords, I, too, support the amendment in the name of the noble Lord, Lord Crisp. In so doing, I declare that I am a trustee of the Nationwide Foundation, which supports the TCPA’s Healthy Homes Act campaign. I shall not detain the House for too long other than to reiterate the points made by the noble Lord, Lord Crisp, who introduced the amendment admirably. This is a simple but profound amendment that should be taken note of. As we have heard, we already have a great deal of evidence about the impact of housing on both health and education—Covid highlighted all of that—and how that contributes to inequalities in health. For all those reasons, it is important that we take note of the amendment and make sure that it is incorporated, whether into this Bill or a planning Bill, as the noble Lord, Lord Young, said. One cannot fault the logic of what has been recommended, so I strongly support the amendment and look forward to the Minister’s response. I also urge him to agree to meet some of us to see how this issue can be taken forward.
Baroness Bennett of Manor Castle (GP)
My Lords, I offer Green support for all these amendments, which have been so powerfully and comprehensively introduced. I am not going to go over any of the same ground but shall focus particularly on Amendment 2 in the name of the noble Lord, Lord Crisp, with full cross-party backing, particularly the wording,
“‘safety’ means the risk of harm arising from the location … of buildings”.
In some ways that might be seen to deliver the aims of two amendments that I tabled in Committee but have not brought back on Report, Amendments 132A and 132B, which would have delivered what has been called Zane’s law, targeting the issue of contaminated land and the risks that such land may represent to residents and others in nearby buildings. For those who do not know, Zane’s law refers to the tragic child Zane Gbangbola, who died and whose father was disabled when flooding carried contaminants from nearby land into their home.
If we had a safe location for every building, that would seem to deal with the issue. However, looking at our debate in Committee, I note that the noble Baroness, Lady Hayman of Ullock, kindly offered support for amendments in this direction. What she said then clearly sets out the problem:
“If we can identify the size and scale in every part of the country where contamination is, that would be a very logical starting point to prevent future risk to life and support local authorities in tackling the whole issue of contamination”.
In responding, the Minister suggested that the Building Safety Bill was not the right place to bring in Zane’s law because it would take the focus away from the environment and put it only on buildings. I think that she was right in that supposition, which is why I have not brought the amendments back now; the planning Bill, if indeed we see one, may well be the place to do that. However, where I disagree with the Minister—she was responding to my noble friend Lady Jones of Moulsecoomb, who kindly introduced these amendments as I could not be present—is where she noted that Section 143 of the Environmental Protection Act 1990
“was repealed, but it was replaced by Part IIA of the Environmental Protection Act 1990”.—[Official Report, 2/3/22; cols. GC 333-34.]
However, that was a significant downgrading of the protection and the powers offered by local authorities. It is worth looking at what was known as, perhaps rather unfortunately, the Red Tape Challenge: Environment Theme Proposals from March 2012, which effectively downgraded three-quarters of environmental regulation. Those changes to the guidelines said that they were
“anticipated to save business £140 million a year by reducing uncertainty about when land needs to be remediated”.
“Reducing uncertainty” is a phrase that needs to be re-examined and reconsidered.
I commend all the amendments, particularly Amendment 2, which focuses on the issue of the safe location of buildings. A great deal of regulatory work would have to be done to deliver that, which would include Zane’s law. If this becomes part of the Bill, the Government would have to look at that, but it would be a big step forward if we focused adequately on ensuring that—in this age of the Anthropocene and the climate emergency, in which new risks are emerging that were not present before—no one has a home or building in a place that is dangerous.
Lord Best (CB)
My Lords, I will briefly speak to support the amendment tabled by the noble Lord, Lord Crisp, and declare an interest as chair of Oxford University’s Commission on Creating Healthy Cities. I also declare my interest as a vice-president of the Town and Country Planning Association.
An obvious case of building safety impacting on health and well-being is surely the permitted development rights regime. Submissions to the Oxford Commission on Creating Healthy Cities have revealed widespread condemnation of the appalling building standards allowed via permitted development rights, which permit conversions of commercial and industrial buildings into accommodation without the need for normal planning consents. This has led to the creation of some ghastly, substandard new slums often on non-residential business parks full of safety hazards, with no facilities, no play areas for children and danger from traffic. Research at University College London reveals that a very large proportion of the well over 100,000 homes delivered through these permitted development rights have been substandard.
I am pleased that there has now been some regulatory change and requirements for at least some natural light and minimum space standards. However, this controversy has highlighted the importance of adequate space, sufficient daylight, protection from noise and a surrounding environment that is not hostile and unhealthy. That underlines the need for bringing together housing and health issues under the banner of minimum standards that recognise the broader definition of safety in the amendment in the name of the noble Lord, Lord Crisp. This would engage the new regulator in the process and require attention to be paid to health and well-being as essential aspects of the homes that we build and the places that we make. I support Amendment 2.
Lord Stunell (LD)
My Lords, it has been an interesting debate so far and I hope that I will not let the standard drop. Three excellent amendments have been proposed. I have added my name to Amendment 2 tabled by the noble Lord, Lord Crisp, but I could equally well have done so to the others as well. I look forward to hearing what the Minister has to say.
In different ways, the amendments all look at the strategic vision for what building safety should be and how it should perform. The noble Lord, Lord Foster, made a strong argument for widening the purposes of building regulations from the simple protection of life to the protection of property.
The noble Lord, Lord Aberdare, has renewed his persistent and well-justified point that there is a terrible shortage of performance from the construction industry, driven by its dysfunctional character—in particular, as he highlighted, the use of retentions in building contracts, which makes a collaborative process difficult to achieve in the industry. He referenced the Construction Playbook and what BEIS is doing. If the Minister is just going to say kind words to the noble Lord, will he also undertake to get the Department for Education to follow the Construction Playbook and get rid of retentions in the contracts that it signs? All the questions that I have asked of the Department for Education have been answered in a rather injured tone. It says that it is doing its best for the public purse—not while it continues to insist on retentions, which undermine the collaborative way the construction industry has to go.
Lord Blencathra (Con)
My Lords, briefly, I wish to support the noble Lord, Lord Aberdare, in his amendment on retention. I am not sure whether this is the right Bill for it but there is a problem that needs to be addressed sooner rather than later. My only experience of it—I think it was a form of retention—was many years ago, in the early 1990s, when I had a derelict farmhouse and barns done up in Cumbria. About half way through the job, I said to the electrician, “You must be making a pretty penny out of this.” “Some hope”, he said, “it’ll be next year before I get paid and I’m fourth down the line.” I asked what he meant by that. He said, “The contractor said I’ll get paid for your job only when I have bid for three others and done them. Once I finish the third one, then they’ll pay me for yours.” I was appalled but he said, “Oh, that’s standard practice in the trade, guv, nothing we can do about it.”
I do not know whether that is standard practice in the trade, or whether it actually is retention, but it is a racket that ought not to continue. I hope that, at some time in the future—in some other legislation if not in this Bill—my noble friend the Minister will be able to crack down on that sort of racket. I know that there are views on both sides of this issue but it is not right at all because there are safety implications. The electrician was to get paid for the job he did for me only if he went in at a rock-bottom price to win three other jobs. That is a safety issue.
Baroness Hayman of Ullock (Lab)
My Lords, turning first to Amendment 1 in the name of the noble Lord, Lord Foster of Bath, we agree that longer-term protections for residents’ safety are absolutely critical. His amendment also raises the importance of how we manage longer-term protections relating to fire safety.
Look at the government cuts to the fire service. Between 2010 and 2016, the Government cut central funding to fire and rescue services by 28% in real terms. In 2020, that was followed by a further cut of 15%. If the Government are really serious about tackling fire safety—there is a lot of good stuff in this Bill—they need to look at reversing those cuts to our fire safety organisations to make sure that they have the proper support they need to do the job that needs to be done.
Turning to Amendment 2 in the name of the noble Lord, Lord Crisp, I assure him that, in principle, we support what he is trying to achieve. The issues that he raises are important. Health and well-being need to be considered in a lot of our legislation and we too often overlook it. The noble Lord, Lord Aberdare, introduced his Amendment 7 very ably, as he always does, and we certainly support in principle what he is trying to achieve with it. We have every sympathy with many of his practical suggestions for what could be done to improve things in this area.
Amendment 8, in the name of the noble Lord, Lord Stunell, which he just clearly introduced, is particularly important given the areas that it includes and to which he referred. We had a long debate in Committee on the importance of the safety of staircases and making sure that the minimum standards are properly applied. We heard from many noble Lords about the RoSPA campaign and the number of people who die falling down staircases. This is an opportunity to do something about that.
We also had much debate in Committee on electrical certification and the importance of the safety of electricity systems. It is important that this also includes provision for disabilities. I am aware that the Government have introduced amendments on disabilities, but this is another opportunity to support that.
It is important that we have an amendment that looks at timely intervention—timely action—on safety issues. Grenfell was not the first time in recent years that a fire in a high-rise block of flats resulted in loss of life. In 2013, coroners wrote to Ministers about two separate fires: first, Lakanal House in Camberwell in 2009, in which six people died, and then Shirley Towers in Southampton in 2010, in which two firefighters died. The coroner’s letters included clear points of criticism and recommendations, which were not acted on. These also included retrofitting sprinklers into high-rise social housing blocks. The amendment of the noble Lord, Lord Stunell, includes the importance of sprinklers. The Lakanal House fire involved high-pressure laminate cladding, but that was not ordered to be removed from buildings until 2019—between 2009 and 2019 is 10 years.
It is important that when coroners, for example, or anyone who understands the safety of buildings writes to Ministers about genuine and serious concerns with actions that need to be taken, these are acted on in a timely way. That is why we strongly support Amendment 8, in the name of the noble Lord, Lord Stunell and, if he decides to divide the House on it, we will support him.
The Minister of State, Home Office and Department for Levelling Up, Housing & Communities (Lord Greenhalgh) (Con)
My Lords, I thought that it would be helpful to reflect on why the Bill is before us today. It is entirely driven by the Grenfell fire tragedy, which took place on 14 June 2017 and resulted in the largest loss of life in a residential fire since the Second World War. It was also the deadliest structural fire in the United Kingdom since Piper Alpha in 1988. As the Minister who has taken on responsibility for both building safety and fire, as Building Safety Minister in the Department for Levelling Up, Housing and Communities and Fire Minister in the Home Office, I have reflected on the factors that drove that outcome of such a loss of life. One of those was the corrosive construction industry culture that uses the sort of Spanish practices mentioned by my noble friend Lord Blencathra. I have had similar experiences in construction—we all have, to a greater or lesser extent. Anyone who has undertaken any kind of construction project knows that the margins are squeezed and the people you value, the tradesmen who are on the job, are often simply not paid. It is shocking.
But there are also two other reasons why that tragedy happened. The first was a regulatory system that is essentially broken, which is why we have the Bill to establish the new building safety regulator, which will then take on responsibility for building regulations. Secondly, there was an inadequate response on the night by fire and rescue services. The Home Secretary will shortly launch, and I will support her, a White Paper on fundamental reform of fire and rescue services.
A considerable amount of money has been invested in fire and rescue services in the past three years while I have been Fire Minister, particularly on fire protection. There had been a loss of skills in those people who were very capable of assessing the built environment in fire and rescue services, so we introduced a £30 million uplift to try to repair that. It is not just about numbers and investment; it is about ensuring that we have the right skilled people in our fire and rescue services. We will continue with further investments on fire protection because we recognise that we have to prevent fires from happening in the first place, but we also have to ensure that we build in a way that is safe both from a fire perspective and in every other sense of the word.
Lord Foster of Bath (LD)
My Lords, there is a wide range of amendments in this first group relating to the role and scope of the new building safety regulator, which will oversee the new safety regime not least for—but not exclusively for, as the amendments suggest—high-risk buildings. For instance, there is my amendment to further the protection of property through the introduction of measures such as sprinklers and compartmentation. There is also the important amendment in the name of the noble Lord, Lord Crisp, to widen the definition of “safety” to include health and well-being because, as we have heard, a building can have a profound effect on a person’s physical and mental health. There is the important measure in the name of the noble Lord, Lord Aberdare, related to addressing the safety risks that can—and do—arise from contractual arrangements. Then there is my noble friend Lord Stunell’s amendment, which aims to get the new regulator to look at and report on a range of issues of concern, from fire suppression systems to stairways, ramps, electrical equipment and measures to support people with disabilities.
The Minister’s response was to say that he welcomes these proposals and that they will be looked at over time but, of course, he does not want to burden the new regulator with additional responsibilities at this stage—notwithstanding the fact that he said that noble Lords were merely asking the regulator to do “a little bit more”. None the less, I am sure that those who have spoken to their own amendments will make a decision on what they wish to do at later stages of this Bill.
I was disturbed by the Minister suggesting that acceptance of my Amendments 1 and 16 would put the safety of the building on a par with the safety of its occupants. I must tell him that this absolutely misunderstands the importance of property protection measures. Often, the introduction of sprinklers and compartmentation, for example, gives the occupants of a building a longer period of time in which to escape and improves safety. Clearly the Minister has accepted that in terms of, for instance, reducing the height of tall buildings when it is expected, at least under guidance, that sprinklers will be introduced.
I acknowledge that the Minister has offered to have a further meeting with my noble friend and provide his not inconsiderable weight, as he described it, to move some measures forward. I hope that he will use his considerable weight to move the measures I have proposed forward in, as he suggested, the first statutory review of the work of the new regulator. Given that rather modest assurance, I beg leave to withdraw the amendment.
Lord Greenhalgh
“(1A) The assistance and encouragement that must be provided under subsection (1) includes, in particular, assistance and encouragement with a view to facilitating securing the safety of disabled people in or about higher-risk buildings in relation to building safety risks as regards those buildings.”Member’s explanatory statement
This amendment provides that the regulator must in particular provide assistance and encouragement to relevant persons with a view to facilitating their securing the safety of disabled people in or about higher-risk buildings.
Lord Greenhalgh (Con)
My Lords, I open this group by introducing a set of amendments that respond to many of the issues raised during previous debates on this Bill. I hope that these changes will be welcomed.
I start with a change that I trust will be welcomed across the House: the removal of the building safety manager. Following feedback from leaseholders and persuasive interventions from noble Lords during Committee, we are scrapping the legal requirement to appoint a building safety manager. I thank noble Lords, including the noble Baronesses, Lady Fox of Buckley, Lady Pinnock and Lady Hayman of Ullock, the noble Lord, Lord Thurlow, and my noble friend Lady Neville-Rolfe for their thoughtful contributions on this important matter.
The Government are clear that accountable persons are responsible for ensuring that their buildings are safe and must not pass on unnecessary costs to leaseholders. We must restore common sense on building safety. There are more effective ways of discharging the responsibilities set out in the Bill than recruiting managers on high salaries for individual buildings.
Accountable persons should reflect on their current management arrangements. If they are confident that they deliver safe outcomes, there is no reason for change. We are committed to driving up standards of safety management and maintenance in high-rise buildings and the competence of those who deliver it. In the first instance, this should be done by supporting the development and upskilling of those already managing buildings. The Government will continue to work towards raising professionalism and standards among property agents and are considering the recommendations of the working group of the noble Lord, Lord Best, on regulating the market. We will continue to work with industry on improving best practice.
I turn now to our amendments to the building safety charge. I have listened to the feedback that we have received from stakeholders and in the other place and I thank my noble friend Lord Young of Cookham for raising this matter during Committee on the Bill. I recognise the concerns raised—that the building safety charge as previously envisaged could have created additional bureaucracy for landlords and leaseholders alike—and I have listened to those concerns.
The amendment simplifies how the costs are managed by removing the building safety charge as a separate charging mechanism. We will do this by changing the modifications that we are making to the Landlord and Tenant Act 1985. Building safety costs will now be accounted for as part of the service charge, as my noble friend recommended. The costs will be clearly identifiable and part of a system that is familiar to both landlords and leaseholders, thereby ensuring transparency of the costs. As the building safety charge will be incorporated into the service charge, the legislative protections against forfeiture will already be in place, so I am removing the amendments related to forfeiture that were laid in the other place.
I move on to how we can strengthen the voice of disabled residents. I am particularly grateful to the noble Baroness, Lady Grey-Thompson, for tabling amendments in Committee to highlight this important matter. The Government and the Health and Safety Executive are committed to providing residents with diverse backgrounds and lived experiences—including, in particular, disabled residents—with a strong voice in the new regulatory system. We have therefore brought forward amendments to ensure that the building safety regulator will have to pay particular attention to the safety of disabled people in high-rise residential buildings and engage with them.
Amendment 3 ensures that the building safety regulator must particularly focus on the safety of disabled persons when undertaking its broad Clause 4 functions around safety in higher-risk buildings. Amendments 5 and 6 are consequential amendments. Amendment 9 provides that the building safety regulator must take all reasonable steps to ensure that its residents panel contains representation from individual disabled residents of high-rise residential buildings or groups that represent or support disabled residents. Groups may be represented corporately or by an individual member expected to be sponsored by the organisation. Amendment 12 requires the building safety regulator to report publicly about its engagement with disabled residents of high-rise residential buildings in its wider annual statement on resident engagement. Amendment 14 defines “disabled”, using the widely used definition from the Equality Act 2010.
I thank those noble Lords who made important points about resident engagement in Committee, particularly the right reverend Prelate the Bishop of St Albans. We have listened carefully to them and are making appropriate amendments to the Bill. The Bill puts residents at the heart of the building safety regime and gives them a clear voice in building safety matters. These amendments take this even further and oblige the principal accountable person to consult residents at prescribed times on the residents’ engagement strategy. This means that residents have the opportunity to comment on the form of the strategy and that those responsible for the safety of the building must listen to such comments.
To avoid any doubt, we have also made it clear that the principal accountable person will be obliged to act in accordance with the strategy. This means that residents and the building safety regulator will be able to hold principal accountable persons to account for their commitments made in the residents’ engagement strategy.
I thank the noble Lord, Lord Best, and my noble friend Lady Neville-Rolfe for raising the important matter of resident management companies assuming accountable person duties under the new regime. I have sought to address this issue through collaboration with the noble Lord and will accept his technical, non-government Amendment 86 to my Amendment 85. This will ensure that all resident management companies that are an accountable person have the option to appoint a professional director to support them with their Part 4 building safety duties.
These amendments give a power to the Secretary of State to set out in regulations the detail of provision that will be implied into articles of association of resident management companies to enable this. They imply terms into leases so that costs of the appointment can be recoverable as a service charge under the lease. The amendments apply retrospectively. Through secondary legislation, we will apply leaseholder consultation requirements to protect leaseholders from paying unnecessarily large sums as a result of appointing a professional director and ensure that, where professional directors are appointed, they can also be easily removed when required.
Amendment 263 provides that, where a paid professional director is appointed to support building safety, all unpaid directors of the resident management company will be relieved of their personal criminal liability under Part 4. Resident management companies will continue to be liable for any contraventions that may occur, maintaining the principles embodied throughout the Bill of clear responsibilities and accountability. All the elements of this amendment enable resident management companies to remain in control and responsible for their buildings, while enabling them to obtain the professional support that they may need to meet the duties of our new building safety regime.
I am grateful to noble Lords and the Delegated Powers and Regulatory Reform Committee for their careful scrutiny of the delegated power in Clause 12. Noble Lords will be aware that we have responded to the committee’s report in detail. The provision in Clause 12 to repeal statutory committees was included in the Bill on the expert advice of the Health and Safety Executive that this power is needed to enable the committee structure to adapt and improve over time. I understand that the House has concerns that this power might be used by Ministers for other reasons.
I am grateful to the chair of the Levelling Up, Housing and Communities Committee in another place for suggesting a potential safeguard, which the Government propose to accept, through Amendments 10 and 11. These amendments ensure that the power to repeal provision for a statutory committee may be used only following a proposal by the building safety regulator. A statutory committee could not be repealed merely on the initiative of Ministers. Proposals for regulations would come to Ministers only after the regulator had consulted on them and regulations under this clause would continue to be subject to the affirmative procedure.
I hope that the House will welcome these changes and additional safeguards and that it will support these amendments.
The Deputy Speaker (Baroness Pitkeathley) (Lab)
My Lords, the noble Baroness, Lady Brinton, is taking part remotely. I invite her to speak.
Baroness Brinton (LD) [V]
My Lords, I declare my interests as a vice-president of the Local Government Association, as vice-chair of the All-Party Parliamentary Group on Fire Safety and Rescue and as a disabled person. The noble Baroness, Lady Grey-Thompson, is unable to be in her place this morning as she is attending the memorial service for the Duke of Edinburgh in her role as chair of the Duke of Edinburgh’s Award scheme.
In Committee, the noble Baroness, Lady Grey-Thompson, and I both spoke of our experience of the use of personal emergency evacuation plans, or PEEPs—good practice, and less good practice. I will not repeat that today but one thing is clear: the responsibility for getting safely out of a building should not be on the shoulders of a disabled resident alone. That is why I have laid Amendments 13, 20 and 35, and I thank the noble Baronesses, Lady Grey-Thompson and Lady Hayman of Ullock, for signing them. The amendments set out a clear link between the duties under the Equality Act 2010 for those providing services for disabled people—in this case, housing and safety in buildings.
Amendment 13 would put into law that a statement must have been laid by the regulator that they have engaged with their residents in relation to the accountable person’s duty to avoid disability discrimination. Amendment 20 would amend Section 31 of the Equality Act by adding a specific reference to a person exercising functions in relation to public housing. Amendment 35 would create a duty on the accountable person to include developing PEEPs for people with a disability in order to avoid disability discrimination.
I believe that the amendments are necessary because I want to see clarification that Part 3 of the Equality Act 2010 applies to social landlords and that, as a result of Part 3, there is an anticipatory duty on social landlords to prepare PEEPs for disabled residents. There is a limited time for the relevant government body to prepare statutory guidance and a code of practice in relation to this.
I thank the Minister for his amendments, starting with Amendment 3, which talks about the “assistance and encouragement” that must be provided. Unfortunately, that is a long way from the current requirement for the responsible people in offices and other public buildings, including hotels, to make formal arrangements that ensure that a disabled person can leave a building that is dangerous whether due to suspected fire, chemical escape—such as at the Olympic Park swimming pool last week—or anything else that puts people at risk. The other amendments tabled by the Minister, and indeed his letter to signatories of my amendments that arrived at 10 am this morning, for which I thank him, talk about the government consultation, but the Government have been consulting on this specific matter since the early days of the Grenfell inquiry.
Why do we believe that there needs to be stronger reference to the Equality Act and to PEEPs? Week 68 of the Grenfell Tower inquiry took substantial evidence from witnesses in relation to the provision of communication and engagement with disabled residents and how they were—or were not—able to leave Grenfell Tower safely. They were not. Over 40% of disabled residents died in the fire, a far higher percentage than any other category of resident. There were no PEEPs. Not only was there no guidance but, as I will refer to, any arrangements for disabled people were actively discouraged by the government adviser and government officials.
Inside Housing has reported on week 68 of the Grenfell Tower inquiry last week, saying:
“Government-endorsed guidance in use at the time said the provision of such plans was ‘usually unrealistic’, and staff at the Kensington and Chelsea Tenant Management Organisation … which managed the tower, previously cited this guidance in explaining why they did not provide any.”
As I said in Committee, Colin Todd of CS Todd & Associates, the consultants who wrote the guidance document for the Government, said:
“The consensus opinion of the project group was that it should be acknowledged in the guide that PEEPs were impracticable.”
However, the inquiry heard that Louise Upton, the former head of the fire safety policy team at DCLG, thought it was not a
“deliberate decision to exclude representatives”
of the disabled community.
The inquiry notes that the failure to provide escape plans resulted from that guidance being used by the KCTMO, but the Chief Fire Officers Association had raised concerns and warned that to
“ignore and eliminate advice on disabled access and evacuation is a fundamental error of the document”
and it
“is recommended that it must be included”.
Elspeth Grant, a fire safety consultant with TripleAconsult, wrote to Sir Merrick Cockell, then chair of the LGA and leader of the Royal Borough of Kensington and Chelsea Council, when the guidance was published to say that it was unlawful and discriminated against disabled people, calling for it to be withdrawn
“before this guidance leads to an unnecessary tragedy because plans were not in force”.
Just yesterday at the inquiry, Brian Martin, another official, said that the Government ignored the warnings about PEEPs for disabled people as they were “too expensive” to put into practice. The first phase of the inquiry recommended the provision of PEEPs for residents of high-rise blocks, but that is not what we are seeing now. Instead, the Government are still consulting.
Lord Blencathra (Con)
I rise to comment on the disabled amendments that the Government have laid, including the one that was just moved. I will also comment briefly on Amendments 46 and 47, which have not yet been spoken to by the noble Baroness, Lady Fox of Buckley, and speak to Amendments 39 and 40 on behalf of the right reverend Prelate the Bishop of St Albans, since he is unable to be with us at this time of the morning.
I commend the Government for listening to my noble friend Lady Grey-Thompson in Committee and on all the amendments that they have brought forward today. Having been bored on the train when I was heading up north last week, I counted on the Order Paper more than 220 government amendments and 50 proposed new clauses. That is an extraordinary achievement and shows the extent to which my noble friend the Minister has been listening, as well as what he has been able to drive forward—principally because the Secretary of State, my right honourable friend Michael Gove, gets it and understands what needs to be done. So, although my noble friends and I may move a few amendments today, and perhaps force them to a vote, I do not want the Minister to think that we are being churlish. We appreciate the huge distance that the Government have travelled; we just think that there may be one or two more gaps that we need to fill.
I would be grateful if the Minister could reassure me as to why the disabled amendments that we have just heard noble Lords speak to may not be necessary or why there may still be an essential gap there. I thought that the government amendments were adequate but I am keen to hear his explanation.
I will speak briefly to Amendments 46 and 47 in the name of the noble Baroness, Lady Fox. In Committee, I tried to make the point that the burdens on leaseholders are much heavier than those on building safety managers and others, who seem to have unlimited rights to impose fines and penalties and invade homes to check on things without good reason. I am keen to hear what the noble Baroness has to say about her amendments, which state that such persons should be able to access leasehold flats only when it is essential to do so.
My main purpose this morning is to speak to Amendments 39 and 40 in the name of the right reverend Prelate the Bishop of St Albans, which I was pleased to sign up to as second fiddle. The good news is that I shall not need to make my own speech and bore the House. The bad news is that my speaking on behalf of a right reverend Prelate may do irreparable damage to the Church of England, so I hope that does not occur. He says:
“First off, I would like to express gratitude to the Minister for tabling his Amendment 38 and the overall listening approach he has taken to the concerns of the House throughout the passage of this Bill. I hope that this is at least some indication on the Government’s part that they are still working through the imperfections of this Bill, and that they might respond with amendments at Third Reading in response to problems noble Lords and Baronesses”
have raised and will raise today. He continues:
“I will be frank and say that although I am pleased the Government did respond to the concerns I raised at Committee stage by tabling Amendment 38, the content of it is admittedly limited. The reality is that the principal accountable person could take representations from or hold consultations with the relevant tenants or leaseholders on matters”
relating to building safety
“without necessarily integrating their concerns into the Residents Engagement Strategy. It appears entirely discretionary on the accountable person as to what enters into this strategy. In fact, because Amendment 38 also requires the accountable person to act in accordance with the strategy”
that, from conversations he has had with others,
“would seem to imply that a failure to act in accordance with the strategy could be flagged up to the Building Safety Regulator. The question then is simple: why would an accountable person commit to include something in an engagement strategy that could later be used against them?”
However, the right reverend Prelate says:
“I do not want to hastily dismiss what the Government are trying to do here as the foundations contained”
within the amendment require only
“an ever so slight tweaking to better ensure that the accountable person acts in accordance with a strategy that actually reflects the views of residents, rather than the current vague requirement to just ‘take any representations … on the consultation into account when next reviewing the strategy’”.
Personally, I think that he has made a very good point there. He continues:
“Amendment 39 would mildly alter Amendment 38 to ensure that the accountable person takes any representations made on the consultation into account”
and then changes
“‘the strategy to reflect the balance of representations made’. This remains imperfect but it does at least in part remove the discretionary basis for deciding the content of the strategy by adding a protection to ensure that the strategy reflects”
that balance. He then says:
“Even with this change, the accountable person will hold immense discretionary power since it is … incumbent on them to interpret the balance of representations made”
so that the accountable person still has the whip hand.
“However, it would alter the relationship when formulating the strategy from the accountable person as its absolute sovereign to the accountable person as the interpreter of the general will. The accountable person will ultimately be the individual who determines the content that enters into the residents engagement strategy. Amendment 39 provides just an inch of breathing room to better guarantee that it does reflect the views of tenants and residents”.
Amendment 40, says the right reverend Prelate,
“admittedly is far more wide ranging and acts as a direct extension”
of his previous amendment in Committee,
“which would have mandated recognised residents associations for the purpose of consultations on building safety issues. I did recognise the Government’s discomfort at the prospect of mandating anything, particularly where there exists an amicable relationship between the freeholder and the leaseholders or tenants. For this reason, I have tried to create a conditional avenue by which a freeholder must set up a residents association. The condition being that as part of consultations on the residents engagement strategy, the accountable person must consult with residents on whether to create a recognised tenants association, and create one, for the purpose of consultations on building safety decisions, where it turns out there is a simple majority demand from residents”
to so have one. He continues:
“I believe a conditional requirement for recognised residents’ associations would help mitigate some of the abuses that do exist within the system. In Committee, I referenced the case of a freeholder who charged residents a 100% markup on window repairs and also spent £74,000 in a court battle to prevent residents from forming a recognised tenants’ association. I cannot speculate on how many other leaseholders have suffered similar abuses at the hands of their freeholder. However, I know the Minister is as appalled by these abuses as I am.”
I share that point of view. He continues:
“The Government do recognise the need to reform the leasehold system”—
something we all look forward to in, we hope, the next Queen’s Speech on 10 May.
“For this reason, I do not want to press the Government on Amendment 40 other than to ask the Minister to look seriously at how recognised tenants’ associations can be more widely promoted and more easily set up, as well as perhaps to expand their remit to encompass matters relating to building safety issues so that there is actual accountability and scrutiny when it comes to the charges they incur.
However, I would still impress to the Government the need to strengthen Amendment 38 so that there are greater safeguards to guarantee that residents’ engagement strategies better reflect the views of residents. I believe Amendment 39 presents a sensible compromise to solve this problem. The authority to decide on what is contained within the residents’ engagement strategy remains with the accountable person but in a manner that is more conducive to capturing the balance of residents’ views.
Finally, I would just like to note a few other amendments in this group. I welcome the sentiment of Amendment 36 within this group and the duty it places on the accountable person to achieve best value. I welcome the Government’s decision to remove the building safety manager”—
I think we all welcome that—
“and I would congratulate the noble Baroness, Lady Fox, on making the strong case for its removal in Committee. Of course, some of the costs previously contained within the building safety manager will naturally be rebadged and passed on, it is inevitable. Nevertheless, since it is now discretionary on the accountable person to decide how to meet their obligations under this Act, and since any costs incurred for meeting this obligation will be met by the tenants or leaseholders, there is no incentive for the accountable person not to reimpose the costly building safety manager. Therefore, I do believe that some duty to achieve best value would represent a sort of financial safeguard for leaseholders and possibly encourage freeholders to take a more considered approach to meeting their obligations rather than taking the path of least resistance in hiring a building safety manager.
I would also quickly offer my support to Amendments 13, 20, and 35, and the protections they afford to those living with disabilities, which I welcome.”
It has been a privilege to deliver this speech on behalf of the right reverend Prelate. I say to my noble friend that this was not Blencathra talking; I was speaking from a much higher authority today and expect him to pay particular attention to Amendment 39.
Lord Young of Cookham (Con)
My Lords, I will intervene very briefly to welcome the Government’s amendments, particularly Amendment 100, which removes Schedule 8 and abolishes the building safety charges as separate charges. As my noble friend the Minister mentioned in his opening remarks, I spoke to an amendment in Committee which did exactly that, pointing out the extra costs and potential confusion that two separate charges could result in. I recommended that the building safety charge be incorporated into the service charge but shown separately. I welcome this simplification, as will leaseholders. I am grateful to my noble friend for listening and responding.
I will very briefly support Amendments 39 and 40 in the name of the right reverend Prelate the Bishop of St Albans, and so ably spoken to by my noble friend Lord Blencathra, who may find himself invited to deputise at pulpits in and around St Albans as a result of his performance. If there is no provision in the Bill to ensure that residents have a collective voice, the accountable person—normally the landlord—will have a huge interest in ensuring that residents are not organised and enabled to resist any costs that the landlord wishes to impose on them. The current government proposal just says that the accountable person should design an engagement strategy, whereas the amendments rightly go further, requiring a tenants’ association to be set up where that is what the majority want.
The amendment goes entirely with the grain of successive Governments’ policy to even up the terms of trade between leaseholders and tenants on the one hand and landlords on the other. I hope that the Minister can look benevolently on these proposals and perhaps at a later stage consider strengthening them further in the direction proposed by my noble friend.
Baroness Fox of Buckley (Non-Afl)
My Lords, I will speak to Amendments 36 and 46. I was pleased to hear the noble Lord, Lord Blencathra, be so kind about my previous comments, but then I remembered that it was not him speaking. I thank whoever said something nice about the points that I was making.
I feel slightly awkward because, in some ways, I should be saying that I had a win in Committee, but here I am again. Amendment 36 seeks to insert a clause that would mean that
“an accountable person must take … steps to achieve best financial value”
for leaseholders. It would require the Secretary of State to issue guidance to ensure that this duty is taken seriously. This is to focus the mind on the danger that we have seen throughout this Bill where, in the name of safety in a Bill taking on the grave injustice suffered by leaseholders of having to pay for building safety remediations, sometimes the solution inadvertently creates even more layers of disproportionate, overly cautious and risk-averse regulation and bureaucracy, which result in spiralling and never-ending sets of additional costs for leaseholders.
After Committee, when announcing the changes that the Government were making to the Bill, the Secretary of State, Michael Gove, said that they had listened to leaseholders’ concerns and were
“removing the requirement for a separate building safety charge and scrapping compulsory building safety managers, to help avoid unnecessary costs.”
Brilliant, I thought. When the Minister then told me that there would now be no building safety managers, I must confess that I was delighted. My amendment to abolish the building safety manager role was the first amendment that I had ever tabled and I had had a win. However, before I got the bunting out and allowed myself to indulge in any backslapping, I was brought to a pause by leaseholders, who noted:
“Small gains towards fairness, decency & common sense do not equal an overall ‘win’, the battle is v much ongoing!”
It is important that the Government have listened. A little like the noble Lord, Lord Blencathra, I should say that any caveats that I raise now are not intended to be churlish. However, it is precisely because I accept the assurances of the Minister and Michael Gove that they want to ensure that there are no unintended outcomes from the Bill in terms of avoidable unnecessary costs that I have tabled this amendment, which gives guidance a chance to push home the point that value for money for leaseholders is a very important thing.
This is not just about my fears around what might happen or leaseholders being paranoid. At a sector conference—Leasehold London 2022—Shaun Lundy, a chartered health and safety practitioner and a supporter of building safety managers, reflected on what removing that role would mean. He said that what worries him a bit is that some of the onerous duties are still there so, even if you get rid of the role, it still leaves a void over who will do the work. He worried out loud about the danger of creating “a disproportionate industry” and “another layer of bureaucracy”, especially in relation to the new duty to create safety case reports. He noted that, although some reports he had seen were sensible, others were completely over the top; he gave the example of a 50-page report costing £50,000 but with no tangible benefit. The building safety manager may therefore be dead but, for some, it is “Long live the building safety manager and their duties”. Dame Judith Hackitt’s call soon after Grenfell that it was not good enough to wait for a change in the law and that freeholders had to act has led to something of a panic reaction and has often been taken literally.
Just to give you an example, I will tell you the story of Aviva leaseholder Sarah from the Quadrant in Salford. With no law passed, her managing agent, Contour Property Services, has charged her and her fellow leaseholders for a building safety manager. What is more, it has appointed an additional building safety co-ordinator. In correspondence with the lease-holders, Contour writes of balancing “value for money” against taking
“appropriate measures to meet new safety requirements”.
Then the killer line tells them, almost casually as an afterthought:
“As a result of these appointments, there will be an increase in your service charges.”
There they are, in the small print, for the forthcoming year from April 2022 to March 2023. If you look at the small print in the bill, as I have, the building safety manager is there at £21,249.50. The cost of the part-time safety co-ordinator is £11,702.56 and this is charged to the leaseholders.
This might be blatant but, even if there is no direct mention of the building safety manager, it seems that they are lurking in the shadows, rebadged or slightly in disguise, but ever present none the less. The heavily administrative substance of the duties that they were meant to take part in remains in the Bill. Many of these duties are based on the precautionary principle, sadly interpreted through the prism of zero risk and often disproportionately focused on myriad possible risks rather than clearly defined dangers. In Sarah’s case, one of the listed duties is writing and maintaining the building safety case for the building, which shows that all the potential risks have been considered and mitigated. Never mind the cost of the building safety case itself, who will pay to resolve all the potential risks?
The question is whether the removal of the legal requirement to appoint building safety managers is strong enough to, in effect, stop them being imposed. This amendment asks the Government to note that the genie is out of the bottle, but the Secretary of State has the opportunity to ensure, in guidance, that the sector should not just rush to risk-averse costly solutions because they have once been suggested, but should instead focus on whether costs are proportionate to real risks and ensure that value for money is a barrier to costs just being dumped on leaseholders via service charges or other nefarious routes.
Of course, it is not all about money. We have to consider human costs, too. There is no point in knowing the cost of everything but ignoring the non-monetary value of homes for people, discussed so eloquently in the group beginning with Amendment 1.
Amendment 46 focuses on tightening the ability of freeholders, landlords and managing agents to force entry into leaseholders’ homes. When I raised this in Committee, there was understandable concern. People wanted to say, “What if there is an emergency? You need to be able to enter.” We can all think of such instances. I know that that happened with a burst pipe in a flat above mine, with water pouring into the flat below. You need to be able to get in to turn the water off, but this should be a last resort. This modest amendment simply aims to reinforce that point and to give leaseholders some power in that decision.
At present, despite limited rights for leaseholders, which have become increasingly clear since building safety issues came into the public realm, landlords have been under an implied obligation—as the ideal—to give the tenant or leaseholder “quiet enjoyment” of the property and they should not interfere with that. If you read the literature around building safety, you will discover an increasing clamour to challenge the idea that leaseholders have any rights to stop entry into their homes, presenting leaseholders as obstacles to safety.
For example, in the Safer People, Safer Homes: Building Safety Management report of a couple of years ago, there are complaints of
“Leasehold … units … purchased by their owners, who are not culturally accustomed to the notion that the owner … has any jurisdiction over their home.”
The landlords complain that access for owners and their agents is just too difficult. Extraordinarily and insultingly, the assumption is that, behind leaseholders’ front doors, they all behaving as fire hazards, irresponsibly ignorant of risks. Leaseholders are painted as ill-informed problems:
“Most will have no comprehension as to fire (or other safety) principles and their place in the matter.”
The report demands:
“Timely intervention on a statutory basis is needed to enable prompt access”
in order to
“monitor or assess risk and condition.”
My concern is that all these checks, monitoring and assessment will mean demands for entry beyond any reasonable bounds of common sense. Leaseholders themselves are anxious that the Government press home that this is not encouraged, and that the Government ask key questions of landlords.
Amendments 46 and 47 would restrict the power to enter people’s homes unless it was essential and would make it clear that the court must be satisfied that it was necessary to grant entry only in extreme circumstances, not just because an accountable person had sent a notice demanding entry for building safety purposes so vaguely defined that they could include anything from the overuse of scented candles to fridge inspections. I am just waiting for smoking in one’s home to become a listed fire risk, although I do not want to give that idea to the Government.
I make a final plea that leaseholders’ property rights are not just to be shooed away and a final reminder—one that I will return to later—that we should avoid pushing a narrative that assumes that all blocks of flats are inherently dangerous and at high risk of fires, creating a climate of fear that then justifies the surveillance and monitoring of leaseholders in their homes and the reorganisation of everyone’s lives around hypersafety and zero risk at great cost, both financially and in the human sense of civil liberties and privacy rights, to those homeowners who are unfortunate enough to be leaseholders as well.
Lord Best (CB)
My Lords, I shall say a few words on behalf of my noble friend Lady Grey-Thompson in respect of Amendments 13, 20 and 35, to which her name is attached. As the noble Baroness, Lady Brinton, explained, my noble friend sends her apologies; she is attending the thanksgiving service for His Royal Highness the Duke of Edinburgh in her capacity as chair of the wonderful Duke of Edinburgh’s Award scheme. I think we all agree that that event should take priority.
She wanted her thanks to the Minister and his officials to be recorded for the new amendment, which will require the regulator to report regularly on engagement with residents who are disabled. She has greatly welcomed constructive talks outside the Chamber and is keen to keep working with the Minister on personal emergency evacuation plans to meet the needs of people with disabilities so that they have correct and useful information and can feel safe where they live.
Amendment 86 in this group is in my name and that of the noble Baroness, Lady Neville-Rolfe. I will also comment on government Amendments 73, 85 and 263. In Committee, I raised the issue of leaseholders managing their own blocks of flats who would be given onerous new responsibilities for safety issues by this Bill. These new duties and liabilities could deter many from acting as the voluntary unpaid directors of their resident management companies and right-to-manage companies. These self-managed blocks depend on their volunteer directors to give up their time—and, indeed, risk falling out with their neighbours since not all their decisions will be popular with everyone—but who wants to risk a criminal prosecution and a criminal record for failing to carry out all the correct safety actions required of an accountable person by the Bill? Recruiting and retaining volunteers to be directors of resident-run companies is already difficult yet there is widespread agreement that more, not less, leaseholder control should be strongly encouraged.
The Minister has recognised the issue and brought forward government Amendment 73 to enable lease-holder-controlled companies to take on board a paid expert building safety director to provide this service to the company if, and only if, the leaseholders wish to delegate the job. Amendment 85 means that the cost of engaging that professional as the person responsible for building safety can be included in the service charges for all residents. These government amendments are very welcome; I thank the Minister very much for listening to the arguments and acting accordingly.
However, the Institute of Residential Property Management and the Association of Residential Managing Agents—they are now becoming a single entity, to be known as the Property Institute—noticed one obstacle to the Government’s otherwise excellent solution: quite a few resident-controlled companies prohibit the appointment of any director who is not themselves a leaseholder in the block. My amendment would address that point and enable an external expert safety director to be appointed in such circumstances, with necessary protections on costs and the ability to get rid of the building safety director if the arrangement does not work out.
Lord Stunell (LD)
My Lords, first, we very much welcome the way the Government have moved on this. We appreciate that the Minister has aimed to build consensus for the changes and amendments that he has now brought forward. Several points have been made by noble Lords, in particular my noble friend Lady Brinton, about gaps that remain and uncertainties about implementation. We look forward to hearing how the Government feel they can respond to those, if not by accepting specific amendments then at least by setting out a clear way of engaging with those who have legitimate concerns to find out how they can be best resolved.
On my own behalf, I thank the Government for government Amendments 10 and 11, which safeguard the building safety regulator’s committees from interference by the Secretary of State unless a request is made by the regulator to change the internal structures of the body. That is a necessary and very welcome change. Our overall view is that these government amendments earn our support—we certainly support their rapid implementation—but the loose ends that have been discussed by noble Lords and drawn to the Minister’s attention need attention. We very much look forward to hearing the Minister’s response to them.
Baroness Hayman of Ullock (Lab)
My Lords, I start by thanking the Minister for his introduction to a large number of government amendments. Like other noble Lords, I think it is really important that the Government listened to a lot of our debate in Committee and have brought forward these amendments, as well as others that we will discuss later, in response. It is good that we are making such excellent progress in some areas. I also thank the officials in the department, who have been incredibly supportive and helpful in spending time with me to help me understand the huge number of amendments we had to consider at quite short notice; I very much appreciate that work.
However, as the noble Lord, Lord Stunell, said, there are still a few areas where people feel there is a bit more to be done; they are addressed by the amendments we have been looking at. I start with the three amendments in the name of the noble Baroness, Lady Brinton. I was pleased to add my name to them, as did the noble Baroness, Lady Grey-Thompson. There was a lot of discussion in Committee about the need for disabled people to be more supported. I am pleased that the Government brought in amendments to strengthen the voice of disabled residents; that is extremely important.
Starting with Amendment 13, the noble Baroness, Lady Brinton, mentioned that 41% of the disabled people at Grenfell Tower were killed in the disaster, which is an appalling figure. Anything that can be done to ensure that something like that does not happen again in a fire is terribly important.
The noble Baroness also talked about the Equality Act on her Amendment 20. It is really important that we consider how building safety can affect different groups listed with protected characteristics under that Act. This could also include pregnant people, who may need more support in getting out of a building. As a protected characteristic, it is important that that is taken into account, as someone who is very elderly and vulnerable should be.
I am pleased that the Minister has offered the noble Baroness a meeting on her Amendment 35, on personal emergency evacuation plans, because this is really important. I was quite concerned that none of the Grenfell Tower residents had been offered a personal emergency evacuation plan. Again, we need to ensure that in future these things are better managed, so I thank the noble Lord for his time on that.
I turn to the amendments in the name of the right reverend Prelate the Bishop of St Albans. I thank the noble Lord, Lord Blencathra, for introducing these amendments and look forward to his first sermon in the not-too-distant future, we hope. Again, these two important amendments draw attention to areas that need to be looked at further. Government Amendments 37, 38 and 41 to 45 look specifically at tenants’ associations and principal accountable persons. This was also much discussed in Committee, where it needed further work. I would like to talk a bit about the resident tenants’ associations because, as I think the noble Lord, Lord Blencathra, said, they need to be more widely promoted. This is a really important part of managing safety going forward.
Recognised tenants’ associations give owners of leasehold flats important rights. To become recognised, an association must have agreement from more than 50% of qualifying leaseholders. They then have the right to request information from the freeholder of their block, such as about the service charge account, which again was discussed a great deal in Committee. It is really important that resident tenants’ associations are properly recognised and more widely promoted. Again, when looking at consultation, they are a vital part of understanding better what residents’ needs and concerns are.
I turn briefly to the amendments in the name of the noble Baroness, Lady Fox. Her Amendment 36 raises the important issue that leaseholders need value for money. On her other amendments regarding entering buildings, it is important that tenants are properly protected in this way. Only when something essential is happening safety-wise can flats be entered, and it is really important to say that. I also welcome the fact that the government amendments remove the building safety manager. As the noble Baroness said, it was important that the Government listened to her clearly laid out concerns in Committee.
Along with the noble Lord, Lord Young of Cookham, we very much welcome the amendments to the building safety charge, and the fact that the Government have accepted the amendment of the noble Lord, Lord Best, which will make a very sensible and practical change going forward, as he said. I look forward to the Minister’s response.
Lord Greenhalgh (Con)
My Lords, I start with Amendments 13, 20 and 35, which relate to disability discrimination. I thank the noble Baroness, Lady Brinton, for tabling these amendments, but I am afraid the Government will not be able to accept them. However, we were all struck by the statistic that more than 40% of the disabled residents of Grenfell Tower died in that tragedy, and the Government are committed to supporting the fire safety of the vulnerable. We are particularly aware of the need to improve the safety of those with mobility concerns. As the noble Baroness mentioned, I have committed to meet with her and I have met with the noble Baroness, Lady Grey-Thompson, on a number of occasions.
As noble Lords are aware, we ran a consultation on personal emergency evacuation plans last year. This highlighted the substantial difficulties in mandating PEEPs in high-rise residential buildings, especially around practicality, proportionality and safety. I shared some of our thinking, admittedly quite late before this debate, with the noble Baroness, Lady Brinton, because it is important to recognise that this thorny policy issue requires a considerable amount of work and collaboration with the fire and rescue service.
We will publish the Government’s response as soon as possible and explain these concerns in more detail. Our response will include a commitment to undertake a new consultation on this proposal for emergency evacuation and information-sharing—an EEIS. One of the things we learned about from the Grenfell Tower tragedy is the ability to locate people who are vulnerable and have mobility concerns, so that we can provide them with the support they need to safely evacuate those buildings where the “stay put” policy has been suspended. It is clear that information is critical. As are visits from the fire and rescue service to help advise them on how to make their properties that much safer. This is fundamental to ensure that we can provide the support that disabled residents require, so this EEIS proposal will give the fire and rescue service the information it needs on where people are located within higher-risk buildings that have a simultaneous evacuation strategy in place.
I completely agree—there is absolute unanimity on this—that accountable people must take all the appropriate steps to ensure that they comply with the law, not least in respect to protected characteristics. However, it is not clear what this amendment will achieve beyond the requirements that already appear in the Equality Act, which I will describe shortly.
Furthermore, an accountable person’s duty to manage building safety risks under the Bill extends to limiting their impact, should an incident involving the relevant building safety risks occur. This means accountable persons are already required by the Bill to consider how people might evacuate safely, if relevant to the building safety risk in question.
Amendment 13 would require the building safety regulator, in its statements of its engagement with residents, to outline the extent to which accountable persons have engaged with residents in relation to a duty to avoid disability discrimination by virtue of Amendment 35.
I agree with the noble Baroness, Lady Brinton, that disabled residents must be listened to and have their needs met. That is why we have tabled Amendments 3, 9 and 12, which require the building safety regulator to pay particular attention to the safety of disabled people in high-rise residential buildings. This includes seeking out disabled representation on its residents’ panel and publicly reporting on its engagement with the disabled residents of high-rise residential buildings. In relation to principal accountable persons’ proper engagement with disabled residents, it is clear that their responsibility to measure and review the effectiveness of their residents’ engagement strategy will apply to all residents, including those with disabilities.
On Amendment 20, activities relating to the exercise of a public function in the provision or management of public housing in relation to building safety will, depending on their nature and context, already be covered by specific parts of the Equality Act 2010. They may be within Part 3, “Services and public functions”, or Part 4, “Premises”. In other words, protection from discrimination, harassment and victimisation already exists for the users and residents of premises, irrespective of whether they are in public or private sectors, and subject to certain exceptions. A reasonable adjustments duty also arises in this field of activity.
Which part of the 2010 Act provides this protection will be case specific. The preliminary text of Part 3 provides that, if an act of discrimination, harassment or victimisation is made unlawful by other parts of the Act, including Part 4, which relates to premises, those provisions rather than those covering services and public functions apply. The depth or reach of protection between these two parts is broadly equivalent. Therefore, our conclusion is that Amendment 20 is unnecessary.
Baroness Fox of Buckley (Non-Afl)
That amendment has been degrouped; we are coming to it later, where I have a similar amendment. The Minister might want to wait until then.
Lord Greenhalgh (Con)
I am addressing my noble friend Lady Neville-Rolfe’s amendment; we will come specifically to group 6 from the noble Baroness, Lady Fox, in due course.
Baroness Fox of Buckley (Non-Afl)
It is just that it has been degrouped to be with my amendment on the review. I was just explaining.
Lord Greenhalgh (Con)
I am referring to Amendment 264A tabled by my noble friend Lady Neville-Rolfe, not the amendment of the noble Baroness. If it has been degrouped, I apologise; my speaking notes have not kept pace with the regroupings of particular amendments, which have been prolific and frequent until the very last minute. In any case, we are not accepting my noble friend’s amendment; we may turn to it once again, in which case I will not repeat myself.
I turn to Amendment 36 tabled by the noble Baroness, Lady Fox of Buckley, which would require the accountable person to take all reasonable steps to achieve best financial value. We believe these protections are already in place. The Bill requires all accountable persons to take reasonable steps to manage building safety risks.
As part of this duty, accountable persons will be required to act in accordance with principles that will be prescribed in regulations. We have published these in draft to provide an indication of our intent. They include a requirement that, where reasonable to do so, accountable persons consider the impacts on residents within the higher-risk building and carry out engagement with them. There will be a full consultation on these regulations in due course.
Accountable persons need to be clear about the charges they pass on. This Government believe very strongly that service charges should show this. The law is already clear that service charges must be reasonable. Under the residents’ engagement strategy, residents will be able to participate in building safety decisions and can raise cost as an issue.
I turn to Amendments 46 and 47 on powers of entry, also tabled by the noble Baroness, Lady Fox of Buckley. The Government recognise the importance of safeguarding against the misuse of requests for access to residents’ premises by accountable persons. I reassure her that those intentions have already been met in the Bill.
Amendment 46 aims explicitly to require that a request for access must be essential to achieve a building safety purpose. I assure the noble Baroness that Clause 101 already does this. To be an enforceable access request under the existing drafting, it must be made for the purpose of fulfilling the accountable person’s building safety duties or establishing whether a resident has breached their building safety duties. Therefore, by its nature, the request will be essential to achieving a building safety purpose.
It is not clear how Amendment 46 would change the current requirement that an access request must be necessary for one of the purposes I just mentioned. It is important that we do not set the bar so high as to make access requests difficult to implement where necessary; accountable persons have important building safety responsibilities and must have the appropriate tools available to ensure the safety of all residents.
Amendment 47 would require that, when making an order to allow access to a resident’s premises, the county court must be satisfied that access is essential to achieve the requested purpose. I reassure the noble Baroness that the county court is already required to be satisfied that the granting of an order must be necessary, under Clause 101(4), and will consider what is appropriate when considering a request. Therefore, the intended effect of the amendment has already been met.
I turn to Amendments 39 and 40 tabled by the right reverend Prelate the Bishop of St Albans, but so ably delivered by my noble friend Lord Blencathra, on residents’ engagement. I thank my noble friend for addressing these amendments, but unfortunately the Government cannot accept them. Amendment 39 would oblige principal accountable persons to change the residents’ engagement strategy to reflect representations made by residents. The amendment is too restrictive, as there will be a number of factors that principal accountable persons must consider when updating the strategy.
The views of residents must also be weighed against other factors, such as the principal accountable person’s ability to deliver what residents want and the cost of doing so, which would of course be passed on to residents. It is right that we allow principal accountable persons the flexibility to determine how best to ensure the views of residents are represented and balanced alongside other building safety considerations.
In any case, government Amendment 38 already requires meaningful consultation with residents. If the principal accountable person fails to take residents’ representations into account when updating the strategy, residents will be able to raise a complaint, and escalate if needed to the building safety regulator.
Amendment 40 would oblige principal accountable persons to establish a tenants’ association where a majority of residents participating in the strategy consultation are in favour of one being established. The Government agree that tenants’ associations can be and are powerful tools for resident representation. However, they work best when established by residents rather than when mandated by landlords or managing agents. Residents already have the right to establish a tenants’ association under existing legislation and any proposed change to the arrangements for establishment of tenants’ associations is not a building safety matter.
I will touch finally on the amendment tabled by the noble Lord, Lord Best. I thank him for his constructive engagement with me over the last week, and confirm, as I said in my opening speech to this group, that I am happy to accept his amendment.
I think that we have covered most matters raised during the debate. I am really sorry to the noble Baroness, Lady Fox, that my speaking notes did not keep up with the groupings. She is the Oliver Twist of the House—I have noticed that she wins, and then asks for more. I thank all noble Lords who participated in the debate. I hope that, with the explanations and reassurances that I have given, they will be content not to press their amendments and to support the government amendments.
Lord Greenhalgh
Member’s explanatory statement
This amendment is consequential on the amendments in the name of the Minister leaving out Clauses 82 to 86 (which remove provision about building safety managers).
Member’s explanatory statement
This amendment is consequential on the first amendment to this Clause in the name of the Minister.
““disabled”: see section 29;”Member’s explanatory statement
This amendment is consequential on the first amendment to this Clause in the name of the Minister.
Lord Stunell
“(2) The regulator must within two years of this section coming into force carry out and publish an assessment of the benefits and costs of measures on improving the safety of people in or about buildings relating to—(a) fire suppression systems;(b) safety of stairways and ramps;(c) certification of electrical equipment and systems;(d) provision for people with disabilities.(3) The regulator’s assessment may—(a) make proposals in accordance with section 7(2) for regulations in respect of any of these matters, and(b) identify and give notice of such other matters relating to safety of people in or about buildings that they determine require further examination.”Member’s explanatory statement
This amendment seeks to ensure that major issues of public concern about safety in buildings are addressed in a timely way.
Lord Stunell (LD)
I heard what the Minister had to say; it does not answer the concerns raised, so we wish to test the opinion of the House.
Lord Greenhalgh
“(2A) The regulator must take all reasonable steps to ensure that the committee includes—(a) one or more residents of a higher-risk building who are disabled,(b) a body that represents, supports or promotes the interests of any description of disabled people that includes residents of higher-risk buildings, or(c) a member of a body within paragraph (b).”Member’s explanatory statement
This amendment provides that the regulator must take all reasonable steps to ensure that a residents’ panel includes one or more disabled residents or a body that represents, supports or promotes the interests of disabled residents of higher-risk buildings.
Lord Greenhalgh
“(1A) But regulations repealing section 9, 10 or 11 may be made only if the regulator has made a proposal to the Secretary of State for the making of such regulations (as to which see section 7(2)).”Member’s explanatory statement
This amendment provides that the power to repeal a Clause about committees may be exercised only pursuant to a proposal by the regulator.
Member’s explanatory statement
This amendment is consequential on the other amendment of this Clause in the name of the Minister.
Lord Greenhalgh
“(1A) A statement under subsection (1) must, in particular, include information about the regulator’s engagement with residents of higher-risk buildings who are disabled.” Member’s explanatory statement
This amendment provides that a statement of the regulator’s engagement with residents etc must include information about the regulator’s engagement with disabled residents.
Lord Greenhalgh
““disabled”: a person is disabled if the person has a physical or mental impairment which has a substantial and long-term adverse effect on the person’s ability to carry out normal day-to-day activities;”Member’s explanatory statement
This amendment defines “disabled” for the purposes of Part 2.
Baroness Hayman of Ullock
“Building safety and local authorities
The Secretary of State may amend the Building Act 1984 so that the duties imposed on the regulator by virtue of section 31 in respect of higher-risk buildings are imposed on local authorities that exercise building control functions in the area in which the building is located, in respect of buildings which are—(a) under 18 metres in height, and(b) comprise more than one dwelling.”
Baroness Hayman of Ullock (Lab)
My Lords, Amendment 15 is about building regulations and safety measures. It would insert a new clause that states:
“The Secretary of State may amend the Building Act 1984 so that the duties imposed on the regulator by virtue of section 31 in respect of higher-risk buildings are imposed on local authorities that exercise building control functions in the area in which the building is located, in respect of buildings which are …under 18 metres in height, and … comprise more than one dwelling.”
I will give an overview of the amendment; we discussed this issue in detail in Committee so I will be fairly brief.
These two points will ensure that the more stringent building safety framework applies not just to buildings over 18 metres but to buildings under 18 metres where they are multi-occupancy dwellings. We believe that the Bill, in its original draft and as amended in Committee, fails to confirm robustly whether the gateway system will apply to buildings under 18 metres where they are multi-occupancy dwellings. The purpose of this amendment is to get that covered. If it is already covered, I would appreciate clarification from the Minister because we do not want to see a two-tier system where buildings under 18 metres have less rigorous safety regulations than those over 18 metres.
If the Government accepted this amendment then, to avoid issues with capacity that could arise for the building safety regulator—the Minister has discussed his concerns about this in previous debates—it would make the local authority the building control authority, not the building safety regulator. Local authority building control would then cover the operation of the gateway system at all heights below 18 metres.
The amendment also, importantly, removes developers’ ability to pick their own regulator for multi-occupancy buildings under 18 metres, because the local authority building control will then be the sole regulator, again preventing a two-tier system developing. It would also remove concerns raised by local authorities and others that the Government may fail, or take a long time, to expand the high-risk regime to include more buildings.
To sum up, the Hackitt report identified the ability of duty-holders to choose their building control body as a major weakness of the current regulatory regime. The Bill restricts the building control duties to the regulator for buildings within scope. The Local Government Association supports this amendment, which would address these issues. Prohibiting duty-holders of any residential building choosing their building control body would help to ensure a consistent standard, right across the board, and prevent conflicts of interest and a two-tier system. I urge the Minister seriously to consider the proposals in this amendment. I beg to move.
The Deputy Speaker (Lord Haskel) (Lab)
My Lords, as the noble Baroness, Lady Brinton, is taking part remotely, I invite her to speak.
Baroness Brinton (LD) [V]
My Lords, I speak in support of Amendment 254, laid by my noble friend Lord Foster, but shall do so very briefly to say that there needs to be consistency in preventing the sale of faulty electrical goods online, or those that do not meet the appropriate safety standards and may therefore be defective. My noble friend’s amendment would by regulation ensure that operators of online marketplaces take the appropriate steps to remove items that do not comply with safety legislation.
I remember some years ago discussing with an independent retailer of baby goods, including electrical goods, how vigilant he had to be when goods arrived that they met the safety standards needed. He and his staff knew what to look for: sometimes a fake EU safety logo had printing faults, but there were other warning signs too. He felt he had a particular responsibility to ensure that his customers always bought safe and regulated items.
The difficulty is that online marketplace operators do not feel that responsibility to check that items meet safety regulations. Many of the fires in high-rise blocks that have been referred to during the passage of the Bill and other debates in Parliament over the years were started by faulty or defective electrical goods. There is a particular worry with an ever-increasing percentage of electrical goods now being bought online. My noble friend’s amendment attempts to level the playing field to make sure that customers and consumers can rely on the safety of their products when they buy them.
Lord Foster of Bath (LD)
I am grateful to my noble friend Lady Brinton for summarising Amendment 254, which is in my name and supported by her. I shall speak to that and to Amendment 261. As my noble friend just said, there is a real concern about fires, particularly in high-rise buildings. Sadly, the statistics show that the number of fires in such buildings is rising year on year, with more than 350 having taken place in the last year for which figures are available.
We also know more generally that more than 50% of fires in such buildings and others are caused by electricity. In some cases, it is as a result of faulty electrical installations—which is why, earlier this morning, I moved an amendment to ensure that all such installations should have a safety check every five years—but sometimes they are caused by faulty electrical appliances. The Grenfell Tower fire, the great tragedy which led so much to the Bill before us, was caused by a faulty fridge-freezer; the Shepherds Court fire was caused by a faulty tumble-dryer and the Lakanal House fire by a faulty TV. It is vital that when customers purchase an electrical appliance, they know that it is safe.
Baroness Jolly (LD)
My Lords, I begin by declaring my interest as the president of RoSPA. I will speak to Amendment 262.
In Committee, I felt that the Minister understood the issue; I thank him for his co-operation and his time yesterday afternoon. He had received correspondence from the Building Regulations Advisory Committee, which confirmed that the appropriate route to achieve safe staircases in all new-build homes was through building regulations and associated statutory guidance rather than primary regulation.
Part K of the building regulations covers protection from falling, collision and impact. Requirement K1 specifically addresses the usability of stairs, ladders and ramps, including handrails. That last part is important because there is a need to have properly built stairs, but a considerable number of accidents are prevented by having handrails. British Standard 5395-1 was fully updated in 2010, is reviewed every five years and remains current.
Staircase injuries are an underestimated threat to the health and safety of people in this country, with 43,000 people admitted to hospital every year following an accident on the stairs. Many of these people will lose their mobility and, with that, their independence; tragically, about 700 people lose their lives every single year. The risk is so common that it gets taken for granted but it does not need to be this way.
The most up-to-date British Standard for stair design, BS 5395-1, is associated with a 60% reduction in falls on stairs. I am grateful that the noble Lord, Lord Greenhalgh, agreed to bring forward a meeting of the Building Regulations Advisory Committee to discuss enshrining this standard in building regulations. I understand that it was a positive meeting, on which I feel sure he can give an update—I hope that he comes back soon.
Throughout the Safer Stairs campaign, we have prioritised the importance of making this proposal a reality as soon as possible. I want to ask the Minister for his assurances that any consultation on enshrining BS 5395-1 is completed promptly, at least within a year. The longer we delay, and the more time we spend getting this change through building regulations, the more homes will be built across the country with stairs that are simply not safe enough. The quicker we get this done, the larger the cumulative benefit to future generations will be.
In Committee, several others joined me in telling the House the facts. Enshrining stair safety into law is genuinely low-hanging fruit. It is cost effective and proven to save lives. I call on the Minister to give us his assurance that the process to make BS 5395-1 legally mandatory via building regulations will progress as quickly as possible and that, within 12 months at the very latest, it will be enshrined into law.
Given that the Government’s preferred route of directly updating the building regulations’ Approved Document K to enshrine British Standard 5395-1 achieves the same aim as our amendment to the Building Safety Bill, we should be in a position to withdraw our amendment. However, we can do so only if the Minister confirms on the Floor of the House that the consultation to enshrine BS 5395-1 in Approved Document K is under way and will be completed within a year.
The Government’s commitment to a 12-month period would provide reassurance that our issue will not be left at the bottom of the new building regulator’s priority list. I trust that the Minister will be able to reassure us. We will be watching and waiting.
Lord Jordan (Lab)
My Lords, in supporting the noble Baroness, Lady Jolly, on Amendment 262, I have to tell the House that when RoSPA campaigned for the introduction of car seat belts, it said that would save lives—and it did, spectacularly. Now we are campaigning for safer stairs in new-build houses and saying again that it will save lives, which it will. More than that, it will significantly reduce the appalling number of serious, life-damaging injuries that result in needless pain and suffering. It will in turn lift some of the colossal burden on the NHS, a burden that absorbs so much of its money and resources in doctors’, technicians’ and nurses’ time.
The Minister has shown in his dialogue with RoSPA’s chief executive, and in the things he said in this Chamber, that he truly understands the enormous benefit that enshrining BS 5395-1 in building regulations will bring. I hope he is equally convinced of the urgency of this vital reform and that, today, as the noble Baroness, Lady Jolly, said, he assures your Lordships that he will not let it be bogged down in the labyrinthine legislative process and that he gives us a timescale and a plan by which this reform will become a reality.
Baroness Young of Old Scone (Lab)
My Lords, briefly, I too support Amendment 262 in the name of the noble Baroness, Lady Jolly, to which I have put my name. I will not go through all the reasons why it makes common sense but we have had the British Standard for well over 10 years and it is more observed in the omission than the commission. We really must make progress at this stage.
The Minister gave valuable assurances in Committee; the reason that we need to press him today is to get some clarity about the timetable for this. I feel that, if we cannot get a guarantee that it will be not only consulted upon but implemented within a 12-month period, we will have to regard that as unsatisfactory and press this amendment. Can he tell us whether he can meet that 12-month deadline for consultation and implementation and, if not, what the problem is and what the timetable will be? The standard has been around for a decade and it seems that this is a “just get the finger out” moment. I am sure that he is a “just get the finger out” sort of Minister.
Baroness Finlay of Llandaff (CB)
My Lords, I am most grateful to the Minister for meeting me and the noble Baroness, Lady Jolly, yesterday, and for sharing the correspondence that he had had over the Building Regulations Advisory Committee. He explained why it would be easier to update a statutory approved document than primary legislation, and the need for such statutory regulation to be reviewed rapidly and changed as things go on.
I endorse what has been said by others who have spoken, in that there is an urgency to this. Around many parts of the UK at the moment, we see what is almost an explosion of housebuilding and of other building sites. It would be really tragic if the Bill went through but those buildings do not have staircases in them which are fit for the population who are going to use them, and if we do not see a real drop in accidents in these new buildings. The old housing stock is obviously really difficult and much of it has inappropriate staircases, but we are talking here about new build. Because of that, there is an urgency and I hope that, when the Minister responds, he gives us a really good and tight timetable.
Baroness Neville-Rolfe (Con)
My Lords, as a former retailer, I have a good deal of sympathy with Amendment 254 in the name of the noble Lord, Lord Foster. I agree with him that there is a gap here with online material posing a risk to safety, which is not the case with normal retail sales. In summing up, can my noble friend the Minister give us a bit more confidence as to when that gap will be filled? The Government are often too slow.
In that vein, I very much welcome the progress made by my noble friend the Minister on staircases, which are the subject of Amendment 262. I agree that the approach outlined by the noble Baroness, Lady Finlay of Llandaff, seems to make sense and allow us the opportunity to get on with this consumer issue as well.
I share the concerns underlying Amendment 264 from the noble Baroness, Lady Pinnock. There is a real problem of shortages in the built environment workforce, as highlighted in the Built Environment Committee’s report on demand for housing—a committee on which several Members of this House sit and which I have the honour to chair. However, to be honest, the amendment is overcomplicated. The direction of travel is right but I am doubtful that we should accept an amendment in this form.
On Amendment 261, of course we need improved homes; cold homes are very bad for health, as has been shown by many studies. However, this is an uncosted proposal. It will have huge compliance costs for homeowners—admittedly, over a reasonably long period—and I really do not think that we are in a position to add it to this Bill today.
Lord Stunell (LD)
My Lords, I will speak to Amendment 264 in my name and that of my noble friend Lady Pinnock, which would require a report on the built environment industry workforce that takes into account various factors. I assure the noble Baroness, Lady Neville-Rolfe, that this is very much a probing amendment; we certainly do not intend to press it today.
However, we need to give this issue an airing. The whole pyramid on which this Bill is constructed depends on that bottom level: the workforce who will deliver it. We know that there is a grievous shortage of fire risk assessors, not least because the fire risk assessor who assessed Grenfell Tower was an unqualified, off-duty firefighter who made up the qualification letters that he put after his name when he applied for the job with the tenant management organisation. That evidence was given in phase 1 of the Grenfell inquiry.
We know that the Government have made strenuous efforts to get fire assessment training going but there is every indication that there is not enough and that, when this regime comes into force—we all want to see this as soon as possible—there will be a shortage of fire risk assessors. Earlier today, wearing his fire responsibilities hat via the Home Office, the Minister made the point that one of the jobs in the fire and rescue service is to upskill staff to gain the competences they need to fulfil their functions of realistically assessing risks and remedies in the duties they undertake. We think that there needs to be a clear plan for developing training for and upskilling the people taking on the new roles in this Bill. There is a whole series of new posts, including accountable persons and responsible persons—not to mention the safety regulator staffing itself—and we need some assurance that the Government are clear on all of them and have a laser-like focus on producing the answers that are needed. This is against the background of an industry that employs 2 million people, has 90,000 sole traders operating on the ground and in many ways, as we have discussed, has a dysfunctional contracting model. It certainly has low productivity and very poor standards of delivery of outcome.
The amendment may or may not be over-elaborate. I hope that it would be a work plan that someone is working on, even if it should not be in the Bill. I really want to hear the Minister give an account of how a work plan such as this is in fact going forward. If not, we will certainly be snapping at his heels over the coming months. Much more seriously than that, he will find that there will be the gravest difficulty in implementing the Bill, which is what we all want to see, on the shortest possible timescale.
I am the resident pointing at the hole in the road and saying to the contractor, “Please come and fill in this hole”. That is what this amendment is about.
Baroness Bennett of Manor Castle (GP)
My Lords, I want briefly, having just had a signal on those lines, to offer Green support for all the amendments. I will speak only to Amendment 261 in the name of the noble Lord, Lord Foster of Bath. I commend him on his long work in this area.
I am perhaps a little less charitable to the Government than him about where things are now. Just this afternoon, while we were debating the second group of amendments, the Green Alliance put out a new report, Cutting the Cost of Living with a Green Economy. It has some figures that are interesting and helpful for this debate. It points out that the cuts to energy efficiency subsidies and the scrapping of the zero-carbon homes policy over the past decade saw the installation rate of home insulation and energy measures go from 2.3 million in 2012 to 230,000 in 2013—a rate that has continued since.
This addresses the question that the noble Baroness, Lady Neville-Rolfe, just asked about what we can do and whether it is possible to step up again. We have done this in the past; we can do this in future. The noble Baroness expressed concern about a lack of costing for that. The Green Alliance report points out that, if we followed Amendment 261, through insulating 15.3 million homes, it would save them all £511 a year after the April price cap rise. For the country, that is £7.8 billion a year, mostly in fossil fuel.
Looking again at the costing, the Great Homes Upgrade plan, put together by the New Economics Foundation along with 28 organisations, shows that spending £11.7 billion over this Parliament could raise 7 million homes up to this standard by 2025. As the noble Lord, Lord Foster, said, this is very much a health and safety issue. We have set the standard of zero carbon by 2050. That is a target for the environment; this is a target for people’s health. Surely we can have both health and environment targets that so crucially fit together.
The Earl of Courtown (Con)
My Lords, taking the time into consideration, I beg to move that we adjourn the debate on this amendment and that consideration on Report be adjourned until after the Urgent Question.
Building Safety Bill
Tuesday 29th March 2022
(2 years ago)
Lords ChamberRead Full debate Building Safety Act 2022 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 125-I(a) Amendments for Report (Supplementary to the Marshalled List) - (28 Mar 2022)
19:27 - Division on Amendment 115 - Ayes: 156 / Noes: 123 - Amendment 115 agreed.
19:41 - Division on Amendment 117 - Ayes: 146 / Noes: 114 - Amendment 117 agreed.
19:57 - Division on Amendment 155 - Ayes: 137 / Noes: 123 - Amendment 155 agreed.
20:23 - Division on Amendment 221 - Ayes: 59 / Noes: 124 - Amendment 221 disagreed.
20:37 - Division on Amendment 234 - Ayes: 94 / Noes: 117 - Amendment 234 disagreed.
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, again, I thank those who have participated in this interesting debate.
Baroness Bloomfield of Hinton Waldrist (Con)
Oh, I thought we had finished.
Baroness Pinnock (LD)
No, we stopped before the noble Baroness, Lady Hayman, and I had had a chance to speak. That is what comes of stopping mid-flight, but here we go—if anybody can remember what we were doing an hour ago. Before I go on, I remind the House of my relevant interests, as a member of Kirklees Council and as a vice-president of the Local Government Association.
First, I speak to Amendment 15, which is in the name of the noble Baroness, Lady Hayman of Ullock, and to which I put my name. I raised a number of concerns at Second Reading and in Committee about the consequences of the part-privatisation of building control inspectors some 20-odd years ago, whereby developers can and do appoint their own building control inspectors. As noble Lords will know who have been here throughout all these stages, I have referred before to my favourite: “Quis custodiet ipsos custodes?” Who will call these folk to account? At the moment, nobody does, and the result is what we are trying to deal with today.
If we had a band of building control inspectors who were like terriers in pursuit of bad practice and cutting corners, we would not be here today trying to put things right. So this is absolutely key to what we are doing—and, of course, I support the creation of the building safety regulator, and all the other parts of the Bill that the Government have introduced, but I recognise that it affects only buildings of 18 metres and above. Dame Judith Hackitt brought to our attention in her report her grave concern about developers who can choose their own inspector. Two things need to be dealt with: they should no longer be able to do so, and we should not create a two-tier inspection system. This amendment tries to put those two things right, and I am sure that the Government will accept it. It is, dare I say it, common sense. Why would you have such a stringent regulatory system for 18 metres and above, which I totally support, and then say, “Oh well, for the others it’ll be okay.” It will not be okay, and it has not been, so let us put it right.
The amendment proposes that local authority building inspectors take on that role. I support that idea not because they are local authority, but because they are based in an area and are therefore attached to the council and know who the builders are in that area. They know the particular problems of building in the Pennines, for example, where there is not much ground before you hit solid stone, or of building in London clay, where the problems are different. If we have building control inspectors who recognise the different problems across the country, we are more likely to get regulations that are adhered to. This is an important amendment, and I hope that the Government will treat it in that light.
My noble friend has already introduced Amendment 264, which is also in my name. It is also fundamental to building safety, because unless you have a workforce imbued with the knowledge and experience of building in a safe way, we will have the current corrosive construction industry culture that we and the Minister have spoken about. This is one way, one route, one of the tools in the toolbox—another phrase he loves—to try and put that right. Both those amendments are key. I think the Minister will say: “Yeah, that was really good. Why did we not think of it?” But I am an optimist.
Baroness Bloomfield of Hinton Waldrist (Con)
I must again thank those noble Lords who have participated in this interesting debate. It is a shame it has become a group of two halves, but I will address the points raised in turn.
Turning first to Amendment 15, I thank the noble Baronesses, Lady Hayman of Ullock and Lady Pinnock, for raising this important matter, but as they have surmised, I am afraid the Government will not be able to accept this amendment. The noble Baroness, Lady Pinnock, will know that local authorities are already the statutory provider of building control services to the public under the Building Act 1984. This includes the duty to enforce the Act in their jurisdiction and they retain ultimate responsibility with regard to enforcement action, except where the building safety regulator is the building control authority.
In response to the concerns of the noble Baroness, Lady Pinnock, I can say we are introducing a system of oversight, registration and regulation, driving up standards across both public and private sector building control. The Bill introduces a new professional framework for which individual registration will be based on competence, subject to a code of conduct and sanctions where standards fall short. Registered building control approvers and building control authorities will need to obtain and consider the advice of a registered building inspector before carrying out certain building control functions and use a registered building inspector to undertake certain activities. This greater scrutiny and accountability will provide greater incentive to ensure all buildings, including non-higher-risk buildings, are safe. Our approach is proportionate to risk.
The new regulatory regime set out in the Bill and draft secondary legislation is proportionate to the level of risk potentially found in high-rise residential and other in-scope buildings. The Government have chosen to set the scope of the new more stringent regime at 18 metres or seven storeys, as we are committed to following this risk-based approach. Evidence from Dame Judith Hackitt has shown that, in general, the risk from fire increases with height. Through the Bill, the Fire Safety Act and further fire reform, we are working to protect all residents in buildings, regardless of height. Given these points, I hope your Lordships will agree that this amendment is not required.
Turning to Amendment 254, on sale of goods online, I reassure noble Lords that the Government fully recognise the importance of ensuring product safety, not only in relation to fire risk but also for the wider prevention of harm. As I set out in Grand Committee, existing product safety legislation applies to all products, whether sold online or offline. However, the Government also recognise that the rapid growth of e-commerce, particularly of third-party sales via online marketplaces, presents a significant challenge.
While I sympathise with the intention of the amendment, it represents only a partial response to the wider issue of unsafe products sold online. This illustrates that the Bill is not the best means of addressing the issue. The ongoing product safety review, which is examining the full range of consumer products and the role of online sales, is the more appropriate vehicle for meeting the concerns of the noble Lord, Lord Foster. He mentioned the letter I wrote after Committee to electrical safety firms. As I said, we are planning a consultation on proposals for reform, which will be published not later this year, as previously stated, but later this spring. Once it is published, I will be happy to update the noble Lord and this House to ensure that concerns raised in this debate are fully reflected. I hope I have reassured the noble Lord.
Turning to Amendment 261, again I thank the noble Lord for raising this important matter and recognise his concerns about poor-quality homes. However, I am afraid that the Government will not be able to accept this amendment, as it pre-empts and duplicates work already being undertaken across government. As the noble Lord reminded the House, in 2017, the Government committed in The Clean Growth Strategy to improve as many homes as possible to EPC band C by 2035. Where practical, affordable and cost-effective, we are seeking to bring as many private rental homes as possible in line with EPC band C by 2030. The Government have now consulted on raising the energy performance standard in the domestic private rented sector to EPC band C and will be publishing our response in due course. I hope the noble Lord will take some comfort from this.
In the energy White Paper, we announced our intention to seek primary powers to create a long-term regulatory framework to improve the energy performance of homes, alongside a package of incentives. We have consulted with a wide range of stakeholders and will undertake further consultation on specific policy design before making secondary legislation. In the social housing White Paper, we pledged to review the statutory decent homes standard by 2024, to consider how it can better support decarbonisation and improve the energy efficiency of social homes.
We shall publish a White Paper in the spring to reform the private rented sector. Some £800 million was committed through the 2021 spending review for a social housing decarbonisation fund and, as further evidence of our intent, we also committed in the levelling up White Paper to explore proposals for new minimum standards in the social and private rented sectors. In the Net Zero Strategy, we reiterated our commitment to consulting on phasing in higher minimum performance standards to ensure all homes meet EPC band C by 2035 where practical, cost-effective and affordable. I can assure the noble Lord that the Government will deliver on all our commitments in this space, but I ask that he does not press this amendment.
Turning to Amendment 262, on staircase regulations, I thank the noble Baronesses for raising this important matter and other noble Lords for contributing to this debate, but I am afraid that the Government will not be able to accept this amendment.
As the noble Baroness, Lady Jolly, mentioned, my noble friend the Minister convened a meeting of the Building Regulations Advisory Committee on 16 March to seek its advice on this matter. I have the response from its chairman here. The Building Regulations Advisory Committee has advised that the Government should carry out a review of the statutory guidance, approved document K, focusing on section K1, which covers staircases. It also advised that it was more appropriate to deal with this issue through the building regulations and associated statutory guidance than in primary legislation. In his letter, Hywel Davies says that BRAC agrees that it is more appropriate to seek to address this problem through building regulations and associated statutory guidance than in primary legislation and recommends a focused review of ADK section 1. Further detail on the potential scope of the review of ADK is set out in annexe 1 of the letter.
The Government have accepted the advice of the Building Regulations Advisory Committee and will now put in motion a review of approved document K, focusing primarily on section K1. This review will run in parallel with the review already under way of approved document M, which looks at accessibility. This review will consult on raising the safety of staircases to that achieved by meeting the British Standard on staircases, BS 5395-1. I reassure noble Lords that this will be done as expeditiously as possible and certainly within the year. I assure the noble Baroness that this review will fully address her intention to consult on improving standards of staircase safety in England. I thank her for raising this important matter and assure her that it is being addressed by government.
Turning to Amendment 264, laid by the noble Baroness, Lady Pinnock, and the noble Lord, Lord Stunell, I thank noble Lords for raising this important matter. As I assured them in Grand Committee, their intentions have been met in the Bill. Clause 10 requires the building safety regulator to establish the industry competence committee, which will oversee and monitor industry’s development of competence frameworks and training, undertake analysis to understand areas for improvement, and work with industry to drive gap-filling. The committee will provide reports of its work to the regulator periodically. The Health and Safety Executive has established an interim industry competence committee, which is developing its plan for supporting industry’s work, including understanding the current competence landscape. Training and certification of competent individuals is not a function of government or the regulator under this Bill. The industry needs to lead the work to improve competence, identify skills and capacity gaps, and provide appropriate training for its members, and has already started this work. The Government continue to monitor industry’s progress and will provide support where necessary.
Clause 152 legislates for the appointment, at least once every five years, of an independent person to carry out a review of the system of regulation for building safety and standards and the system of regulation for construction products. Importantly, the reviewer is not limited and may choose to review connected matters, which could include the built environment industry workforce. When defining “independent”, we have excluded those with a clear conflict of interest, without overreaching and excluding everyone with relevant experience. Given this explanation, I trust that noble Lords will agree that Amendment 264 duplicates many of the existing provisions in the Bill. With those reassurances, I respectfully ask the noble Baroness to withdraw her amendment.
Baroness Hayman of Ullock (Lab)
My Lords, I thank the Minister for her detailed response. I was very pleased to hear her response to the amendment on staircase safety from the noble Baroness, Lady Jolly. It is good that the Government are going to review this. I am sure noble Lords will keep the pressure on to make sure that that is done expeditiously.
Coming to my Amendment 15, again, I thank the Minister for her response. I am still concerned about the potential for a two-tier system and potential conflicts of interest, so I ask the Minister whether she could encourage the Government to monitor these issues once this becomes law to ensure that we do not end up with a system that does not work for all people. In the meantime, I beg leave to withdraw my amendment.
Baroness Scott of Bybrook
“Inspection of local authorities and registered building control approvers 58Z7A Inspections(1) The regulatory authority may carry out an inspection of a local authority, or a registered building control approver, in relation to their exercise of building control functions.(2) The purposes for which an inspection may be carried out include—(a) ascertaining the efficiency and effectiveness of the local authority or registered building control approver in exercising their building control functions;(b) verifying any information provided by the local authority or registered building control approver to the regulatory authority, in connection with their building control functions.”Member’s explanatory statement
This amendment confers a power on the regulatory authority to inspect local authorities and registered building control approvers, in relation to their building control functions.
Baroness Scott of Bybrook (Con)
My Lords, I open this group by introducing a number of technical amendments tabled to strengthen the Bill. Included within this group are amendments that simply update the drafting of the Bill. These include Amendments 72, 75, 79 and 274.
I will speak to government Amendments 17 to 19, which make changes to Clauses 41 and 47 and introduce a new clause relating to approved inspectors. Amendments 18 and 19 relate specifically to approved inspectors’ insurance, while Amendment 17 introduces a power for the regulatory authority to inspect local authorities and registered building control approvers. The Building Act 1984 currently requires approved inspectors to hold insurance through a government-approved scheme. These amendments remove this requirement. Instead, approved inspectors will need to identify adequate cover themselves, encouraging competition between insurance providers.
Lord Stunell (LD)
My Lords, I have a couple of points that would perhaps have been better taken in Committee, but we did not have the amendments then, so I apologise for these rather Committee-related points. I refer to the government Amendments 18 and 19 about insurance requirements, which I am afraid are not very self-explanatory and, in the absence of explanatory text, rather impenetrable.
Amendment 18 rather boldly says, “Leave out Clause 47”. Clause 47 is one that requires there to be an insurance scheme for certain officials, as the Minister has just set out. That is in a context where, in Amendment 243, the Government have found the need to step in to provide a warranty scheme and make sure it really happens. In the building industry, many of those looking for professional indemnity insurance have found that in the first year after Grenfell their premiums went up by a factor of two, and in the most recent year their premiums have gone up by a factor of four.
Insurers are fleeing the market of providing professional indemnity insurance for anybody who has anything to do with the construction industry. So I wondered whether there was any evidence available, to the Minister or the department, that there was a functioning market in insurance products for those for whom this requirement is being changed. It was, as the Minister has just said, up to professionals in this new profession to seek out insurance, just as it was for professionals such as architects, surveyors or whoever it might be. In a situation where that insurance market is shrinking, and where the Government have found it necessary to talk about imposing a requirement in relation to housing warranties, how happy are they that such a market really exists, and that the abolition of Clause 47’s requirements actually make sense?
I am not proposing an amendment. I am simply seeking to establish that the Government do know exactly what they are doing, and also asking them to explain to this House and noble Lords what exactly they are intending to do.
Lord Khan of Burnley (Lab)
My Lords, I welcome these technical amendments, tabled by the Minister. While I will not unnecessarily detain the House by discussing each amendment, I would appreciate clarification on a small number of issues.
First, Amendment 17 provides the building safety regulator with a power to conduct inspections of building control bodies, thereby giving further oversight of building control bodies provision. Can the Minister explain what guidance will be given on the conduct of such inspections?
Secondly, Amendments 243, 244 and 265 will together mandate a warranty of 15 years minimum as a standard, while enabling the making of regulations for warranties to set a minimum period of liability for developers, minimum standards for the warranty, and a penalty regime for any developers failing to comply. On the warranty, can the Minister explain the rationale for 15 years? Can she elaborate on the Government’s plans for the penalty regime?
As I stated earlier, I welcome these technical amendments and look forward to clarification from the Minister.
Baroness Scott of Bybrook (Con)
My Lords, I thank noble Lords for this short debate on these amendments. I am very pleased that most of them, if not all of them, have been welcomed, because I think they will make a difference to the housing market.
The noble Lord, Lord Stunell, brought up the issue of why the amendments have come so late. It is because we listened; the Minister listened, in Committee, to this issue, and therefore the Government have brought forward these amendments. I think the important thing about insurance requirements, as I said, is that the Government are expecting this to reinvigorate the insurance market. At the moment, that is not the case because it is all done through specific Government-procured insurance. This should reinvigorate the market that, as he quite rightly says, is not as vigorous as it should be at the moment. So that is one thing.
The insurance of approved inspectors was mentioned. It will be for the building safety regulator to decide how to set up insurance requirements for approved inspectors. This can be done by the regulator through its professional conduct rules.
The noble Lord, Lord Khan, asked who has oversight of this. It will be the building safety regulator. That is their job, and it is through their rules and regulations that they will make sure that these things are delivered.
Lastly, I am afraid I do not know how the 15 years came about, but I will find an answer for the noble Lord. It is in line with the prospective limitation period for action under the Defective Premises Act 1972—but I will find out how that came about in 1972 for the noble Lord.
Baroness Scott of Bybrook
Member’s explanatory statement
This amendment removes provision about insurance cover relating to work to which an initial notice relates.
Baroness Scott of Bybrook
“Insurance: removal of requirements
(1) The Building Act 1984 is amended as follows.(2) In section 47 (giving and acceptance of initial notice)—(a) in subsection (1) omit paragraph (c) (but not the “and” at the end of it);(b) omit subsections (6) and (7).(3) In section 51A(2) (variation of work to which initial notice relates) omit paragraph (c) (but not the “and” at the end of it).(4) In section 56 (recording and furnishing of information) omit subsection (2).”Member’s explanatory statement
This new Clause removes requirements in Part 2 of the Building Act 1984 relating to insurance.
Lord Greenhalgh
“(3A) The different provision that may be made by the regulations by virtue of section 120A(2)(b) includes in particular different provision in relation to—(a) persons who are eligible to be members of a building industry scheme and are not members of that scheme, and(b) other persons.”Member’s explanatory statement
This amendment clarifies that regulations under this Clause may make different provision in relation to persons who are eligible, but not members, of a scheme established under Clause 128 and other persons.
The Minister of State, Home Office and Department for Levelling Up, Housing & Communities (Lord Greenhalgh) (Con)
My Lords, I am very pleased to speak to a group of amendments that will strengthen our solution in law to ensure that the industry pays to remediate all unsafe high-rise and medium-rise buildings for which it is responsible, and contributes to fund the remediation of all cladding on 11-metre to 18-metre buildings. As discussed during our debate in Committee, we need to take action against those unwilling to make these commitments and impose a solution in law to make sure that developers and manufacturers take responsibility for rectifying building safety defects—the polluter must pay.
Amendments 133 to 136 set out a number of changes to the definition of associated persons within the leaseholder protections provisions. Amendment 137 sets out that partnerships are captured within the definition of an associated company and Amendment 139 defines joint ventures. This will ensure that well-resourced companies cannot make use of complex corporate structures to evade their responsibilities. These amendments pierce the corporate veil.
Amendment 179 confers a power to make regulations to require landlords to provide information to a relevant tenant or other prescribed person
I will now speak to amendments we are making to Clauses 128 and 129, which I moved in Committee. As noble Lords may remember, these clauses give the Government the power to establish building industry schemes. We want to use this power to enable us to establish a scheme to distinguish between building industry actors who have committed to act responsibly and make buildings safe, and irresponsible actors who have failed to do so. The amendments tabled on 22 March add detail to those powers, to reflect more clearly the Government’s intentions and to provide Parliament and the public with more information on the purpose of any building industry scheme or schemes we set up, together with indicative examples of the kinds of membership conditions that eligible industry actors may need to meet to be part of a scheme.
We have made it clear that we expect the industry to act now to take responsibility for fixing building safety defects, and our principal objective in establishing a scheme under this power would be to make sure that we can hold industry to account against this and other obligations. Examples of the kinds of membership conditions that may apply to members of a scheme in connection with these purposes include: the remedying of defects in buildings to which an industry actor has a connection; and making financial contributions towards remediation of defects in buildings, including by way of contribution to a general industry fund to pay for remediation.
We may also require scheme members not to use certain construction products made by prescribed manufacturers—for example, cladding and insulation products made by manufacturers who have failed to step up and commit to an industry solution by making a financial contribution to remediating unsafe buildings.
Lord Young of Cookham (Con)
My Lords, I welcome the amendments tabled by the Government. As my noble friend has explained, they extend the scope of liability, making it more likely that builders will be remediated. The amendments also block some loopholes, and I welcome that.
I begin with a general point about amending this part of the Bill. I understand the caution that many in your Lordships’ House have about amending a Bill at this stage of a Parliament if it has been fully scrutinised by the Commons. However, there should be no such inhibitions about amending this part of the Bill, because although the Bill started in another place, the remediation clauses were added in your Lordships’ House, and the other place has never considered them. So, as part of our role we should feel free to amend the Bill if we feel that that is the right thing to do, not least because the Government have themselves tabled several hundred amendments.
I make it clear that I welcome the amendments on remediation, and I commend my noble friend and Michael Gove on the substantial progress that they have made in beginning to address the crisis facing thousands of leaseholders trapped in unsaleable flats, facing unaffordable remediation bills and repossession as well as, in many cases, high insurance premiums and the costs of waking watches, while continuing to live in a building which is a fire risk.
My noble friend has moved the dial, and is to be commended for that, but, as today’s debate will show, the Bill as it stands falls well short of assurances that Ministers have given to leaseholders, who are the only innocent party in a scandal that has involved developers, contractors, local authorities and, indeed, as is emerging from the Grenfell inquiry, the Government, who knew about the cladding problems 15 years before Grenfell—and did nothing.
In this section of the Bill we are building on the Government’s proposals and we do so after extensive discussions with Ministers and officials, for which we are really grateful. We hope that it may still be possible, even at this late stage, to find common ground.
In particular, we seek to amend the Bill to be consistent with commitments that Ministers have made on the record. I remind my noble friend the Minister of what he told noble Lords in his letter dated 20 January, entitled “Introduction of the Building Safety Bill”. He said:
“The Secretary of State recently announced that leaseholders living in their homes should be protected from the costs of remediating historic building safety defects.”
That letter built on the Statement made by the Secretary of State, Michael Gove, on 10 January in another place. He said:
“First, we will make sure that we provide leaseholders with statutory protection … and we will work with colleagues across the House to ensure that that statutory protection extends to all the work”—
all the work—
“required to make buildings safe.”
The Statement said:
“We will take action to end the scandal and protect leaseholders.”
It continued:
“We will make industry pay to fix all of the remaining problems and help to cover the range of costs facing leaseholders.”—[Official Report, Commons, 10/1/22; cols. 285-291.]
I think we would all agree with that.
However, since then these commitments have been watered down. Not all leaseholders are covered by the Bill, not all buildings are covered by the Bill, and defects have been sub-divided into those that are fully protected by qualifying leaseholders, and other defects that are not. I see no guiding principle behind these distinctions, but the consequence is protecting the contractor/taxpayer and putting more costs on to the only innocent party: the leaseholder.
Turning to Amendment 233, in my name and that of my noble friend Lord Blencathra, I appreciate that there are other proposals that have the same objective as ours, namely Amendments 221 and 234. I am in no way prescriptive about how the problem is tackled. The best way forward may be for my noble friend the Minister to say that he recognises the problem and will come up with the same solution at a later stage, so let me describe the problem.
The Government’s so-called waterfall proposal creates a pyramid of contributions, with developers at the top and leaseholders at the bottom. This is a welcome inversion of the situation under the current law, where the leaseholders are in the firing line, and the Government should be commended for it, but the waterfall does not live up to Michael Gove’s Statement, in which he said that
“leaseholders are shouldering a desperately unfair burden. They are blameless, and it is morally wrong that they should be the ones asked to pay the price. I am clear about who should pay the price for remedying failures. It should be the industries that profited, as they caused the problem, and those who have continued to profit, as they make it worse.”—[Official Report, Commons, 10/1/22; cols. 283-84.]
We have been told at meetings with officials and Ministers that good progress has been made in persuading the industry to accept its responsibility and remediate the buildings for which it is responsible, doubtless incentivised by some of the provisions in the Bill. I commend Ministers for the progress they have made. However, we are left with the issue of what happens to buildings where remediation does not happen—the so-called orphaned buildings. The freeholder has no resources, there is no developer or contractor to sue, and so we reach the end of the waterfall: the leaseholders. What are they supposed to do? Are they supposed to pay for all the non-cladding costs, which they cannot afford? In many cases these are higher than the cladding costs. Should they continue to live in a dangerous building, with properties that they cannot sell and with high insurance premiums?
Let me illustrate this with an example, Northpoint in Bromley. The developer, Taylor Wimpey, a company listed on the FTSE 100, refuses to pay, I am told. The building is already in the building safety fund for cladding, so taxpayers are picking up the bill. Under the waterfall, we come to the resident management company, which is run by the leaseholders. It collects the service charge and therefore has a liability in step 2 of the Government’s waterfall, but it has no assets and does not have an interest worth £2 million, so we reach the end of the waterfall: the leaseholders. Most flats in Northpoint are worth less than £325,000, so there will be zero commitment to be collected from most leaseholders for non-cladding costs, thanks to the Government’s low-value exemption. A handful of the flats in that building are worth more than £325,000, so those few leaseholders are in the invidious position of having to pay £15,000—but they do not have to pay, because waking watches have eaten up their £15,000 caps already, so they pay nothing.
At Northpoint, the non-cladding works are not covered by the building safety fund, so who will pay? The only option for the moment is to ask the leaseholders to pay, wearing their hats as shareholders in the resident management company, but that defeats the point of the caps the Government have proposed for leaseholders. There are many other examples of no liability on someone with assets to pay—the so-called orphaned buildings. It is unacceptable that dangerous buildings, part of this country’s housing stock, should remain in this condition either indefinitely or until prolonged litigation has been completed.
The Earl of Lytton (CB)
My Lords, as it is my first contribution in this part of the Bill, I must necessarily declare my interests as a practising chartered surveyor, a member of the RICS and a patron of the Charted Association of Building Engineers. I am also a member of the Built Environment Select Committee, chaired by the doughty noble Baroness, Lady Neville-Rolfe, who keeps us all in order. I think she is splendid and I do not say that for want of any favours. I also own residential rented property: no flats, no high-rise, thank goodness.
I pay tribute to the Minister for the meetings he has arranged, the dialogue in which he has been willing to engage and his untiring efforts and those of his Bill team. It is fair to say that we have come an enormous way in this Bill and that is in large part, if not solely, because of the drive the Minister has put into this. I am pleased that he has clarified the limited partnerships and provided the other clarifications in the amendments he has introduced. I also pay tribute to all noble Lords around the House who have stuck with the principle that the innocent should not be made to pay for the mistakes of the developers and constructors.
I will just deal, if I may, with Amendments 201 and 202, which are in my name and on which I will not be seeking the opinion of the House. They relate to a matter I referred to in Committee, which is insolvent landlords and their interests being escheated to the Crown. That means that potentially, there is no landlord as such to organise remediation work, leaving remediation in limbo and responsibility for costs uncertain. That follows on from what the noble Lord, Lord Young of Cookham, set out with, I may say, a degree of piercing clarity which I found unchallengeable. I will outline the differences between my further amendments and his, but not on these ones.
The sole purpose of my Amendment 201 is to clarify the Crown responsibility. Amendment 202 covers where a superior leaseholder defaults and as a result the liability potentially passes to others. This amendment would serve to prevent a lease being disclaimed, thereby creating another loophole and another piece of loose liability floating around the system.
Amendment 229 in my name is another probing amendment; I hope it is self-explanatory. It attempts to deal with a perceived problem of delay by landlords and agents in accepting first funding agreements for remediation. The matter was highlighted in a recent edition of Inside Housing. Reference was made to the logjam created because managing agents were reluctant to sign off on remediation contracts without knowing who would be paying for the work or, indeed, when. That effectively stalled the first funding offer acceptance.
It was thought that the matter had been resolved; according to the Inside Housing article, the Minister confirmed in December that the logjam had been cleared. Notwithstanding this, the article said, the problems persist. It reported cases in St Albans, London and Manchester; in other words, all over the country. It is known that there are few enough contractors ready and willing to take on the—quite demanding in some cases—work of remediation, which this Bill addresses. Delay will simply cause contractors to go elsewhere and opportunities to be lost. This prejudices both leaseholder and, ultimately, I suspect, freeholder. It makes no sense. There may be many reasons for this—usually, I suspect, surrounding the landlord’s own tactical and financial advantage—but none can justify the excessive delay that this amendment seeks to avoid.
There seems to be a bit of a blame game going on between the department on the one hand and block management interests on the other. I am reluctant to take sides on that. This amendment intends to treat the symptoms by setting a time limit on acceptance of the offer so that things cannot be spun out. I hope that it will have the effect of concentrating minds and will be conducive to good order for that reason.
I now turn to Amendments 234 to 237 in my name. I make it clear that, subject to what I may hear from the Minister, I may need to test the opinion of the House on these amendments. They would have a similar effect to Amendment 233 in the name of the noble Lord, Lord Young; namely, to relieve leaseholders and freeholders of what many of us feel is an unjust imposition. Much of what we have been discussing arises because the Government believe, as I do, that, given the 30 years during which certain bad practices have taken root in construction quality, not every defect will have an identifiable perpetrator or associate currently in existence, solvent and with sufficient assets to make a claim a practical possibility. The Government seek to ensure that, if a construction defect exists which does not fall within their scheme of financial support for remediation and there is no perpetrator to be found, the public interest that buildings are made safe will persist. In their view, the only other possible sources of remediation funding are the freeholders and leaseholders.
I think it is fair to say that the noble Lords, Lord Young and Lord Blencathra, and I have been in a sort of huddle since Grand Committee. We all believe that the fallback should be the perpetrator of the situation. The amendment in the name of the noble Lord, Lord Young, proposes falling back on the local authority or the Secretary of State—AKA the taxpayer. I am aware that the Treasury has said, in fairly blunt terms, “We have made an allocation of £5.1 billion and that is it.” That means no more money unless it comes out of the departmental budget, impinging on other important work that the department might wish to take place. I take it that this is one reason, among many, why the Secretary of State has taken the initiative to protect the departmental budget by seeking voluntary contributions from the construction industry for a further £4 billion for other defects—good on the Secretary of State for doing that.
The first question I have for the Minister is: can he update us on how things are progressing on that voluntary scheme? Certainly, the industry’s initial response was not very fulsome, and the Secretary of State made what one might describe as a somewhat sterner demand— and very rightly too. The Minister’s answer is pivotal to how likely it is that property owners will have to fork out for these defects and thus require the protections he seeks to build into this Bill.
If the perpetrator, as defined, cannot be found, then it becomes a test of what is “just and equitable”—to use the words in the Bill—in apportioning the orphaned responsibility and cost between two groups of property owners, who, in the main, are likely to be completely innocent of the construction-related defects and for whom arguably it is neither just nor equitable that they should bear that responsibility and cost at all. Of course, that circumvents what I understand to be meant by the perpetrator pays principle, and results in the passing back of both responsibility and cost—the two are not exactly the same—to the innocent.
Given the Government’s insistence on this approach, I conclude that the deficit between what can be claimed from extant, solvent and legally liable developers on the one hand, and the true remediation cost on the other, is likely to be significant; otherwise, why would we be here? Meanwhile, I sense the industry is telling us, in the blunt cant of the trade, that we can whistle for it.
The Government’s remediation model of liabilities, exemptions, cost controls, means testing, tiered contributions by property value, appeals to courts and much chasing of tails withal is certainly not straight-forward. Any one of the procedural steps is contestable to some degree and contested they will undoubtedly be. So, while the many leaseholder protections are welcome, such as cladding on buildings over 11 metres, building safety levy backstops on cladding costs, exemptions for sub-£175,000—or £325,000 in London—properties, and non-cladding remediation where the landlord is or was connected to developer.
These are very welcome, but the model is incomplete and there remain significant exclusions. Properties under 11 metres are certainly one of them, but we will have to wait until we get to Amendment 115 in a later group to discuss that. There is also the question of buy-to-let landlords with more than three properties, but we will have to wait until we get to Amendment 123 to consider that. There is no backstop for non-cladding remediation costs. Leaseholders in enfranchised or commonhold blocks, as discussed in Amendment 117, may get some support for cladding remediation from the building safety fund, but I question whether they will get everything they are due under a true perpetrator pays principle.
Some issues have not necessarily been eliminated, despite what the Government claim. The noble Lord, Lord Young, referred to the waterfall, so I can skip my explanation as he has explained it much better than I would. Establishing cost liability does not of itself generate funds for remediation if those liable to pay are broke. It is a very important principle, because if the guys made responsible have no assets or cannot get at their assets because they are mortgaged up to the hilt and there is no equity, then what is the purpose of placing this onus on them in the first place?
The Government are taking a substantial risk in leaving it to the courts to decide whether it would be “just and equitable” as regards their various proposed orders. That seems to be tantamount to an invitation for further litigation, delay, uncertainty, risks, and so on. There will be applications for remediation orders, remediation cost orders, building liability orders, and litigation under the Defective Premises Act—my mind freezes over when I see that list.
There is no bridging funding facility in any of this, so unless the Secretary of State steps in or some other funding is levered in, remediation cannot take place. People cannot simply buy in on spec some large amount of a contractor’s time and substance; it is just not going to happen. Some of those who might, I suppose, be in line to be contributors to this just and equitable approach to splitting it between innocent parties—and I am sorry to go on about that—are not going to be there. Some buy-to-let investors will be denied any protections, and some landlords will fail the cost contribution test; I tried to make that clear when we were dealing with this in Committee. If you multiply the number of properties that they hold by £2 million per property, you will very often find that the total figure is greater than their capitalised worth—ergo, they drop out of responsibility.
Baroness Pinnock (LD)
My Lords, there are 70 amendments in this group, but, on a positive note, they are all seeking to protect leaseholders. We have been very fortunate in having such a clear exposition of the issues which remain from the noble Lord, Lord Young of Cookham, who has demonstrated that there is still a gap in what the Government have set out. Who pays when there is literally no one left to pay? This relates to the orphan buildings, as the noble Lord has described them. That must be resolved. The noble Earl, Lord Lytton, has just shared his expertise on the matter. I admit that I have not quite understood every part of what he said, except that I know that it is based on knowledge and experience. I am very grateful to him for sharing it with the rest of the House and trying to find solutions to the problems which remain.
I have my name on four amendments. I will speak particularly to two of these which are, in a rather more straightforward way, seeking to achieve the same ends. Amendment 200, in my name and that of my noble friend Lord Stunell, presents another way by which leaseholders will be protected from any payment which results from the approach which the Government are taking—and which we will discuss in group 7—regarding who pays and how much leaseholders should be expected to pay. It also helps to solve the problem outlined particularly by the noble Lord, Lord Young of Cookham, about what happens to these orphan buildings when the waterfall runs out of people to fall on. I have suggested in Amendment 200 that we establish a leaseholder protection fund. I do so because, as noble Lords across the House know, there is an absolute determination on the part of all noble Lords who have spoken so far that, whatever else happens, the leaseholders will not, and should not, be the ones who pick up the bill for the errors of others—errors which are sometimes deliberate.
Amendment 200 takes a slice of the building safety fund which the developers are providing, and it establishes a fund for leaseholders who are left carrying the can, either through the orphan building situation—as described by the two previous speakers—or if the cap which we will discuss in group 7 remains. In both cases, it achieves the same end: there is a fund to which leaseholders can apply for funding to offset the bills they are presented with for work for which they have no responsibility and should never be asked to pay. This is the aim of Amendment 200, and I hope that one of the other amendments deals with this because, as far as I am concerned, this is a backstop. I assume that one of the other amendments will get the majority support of your Lordships’ House, and I will therefore not press this particular amendment.
Lord Blencathra (Con)
My Lords, it is a pleasure to follow the noble Baroness. I particularly like her slogan, “Get the work done.” Somehow it reminds me of a similar slogan we heard rather successfully a couple of years ago: Get Brexit done. I am glad that the Liberal Democrats are picking up some Conservative slogans.
Lord Blencathra (Con)
I support Amendment 233, so ably moved by my noble friend Lord Young of Cookham in his usual erudite way; he had the detail but was still succinct. Because he set it out so well, I can be commendably brief, for a change.
I start from the position of my right honourable friend Michael Gove, and I totally support what he has said and done. I usually support what he says and does, except when he was Conservative Chief Whip and was a bit cuddly, caring and too kind. But apart from that, I liked it when he said that
“leaseholders are shouldering a desperately unfair burden. They are blameless, and it is morally wrong that they should be the ones asked to pay the price. I am clear about who should pay the price for remedying failures. It should be the industries that profited, as they caused the "problem, and those who have continued to profit, as they make it worse.”—[Official Report, Commons, 10/1/22; col. 284.]
You cannot say better than that. So I am rather sympathetic to any amendments, including the one moved by the noble Earl, Lord Lytton, trying to make sure that developers or perpetrators pay every penny. It should not be leaseholders and, ideally, it should not be the taxpayer.
However, this amendment creates a remediator of last resort and allows the Secretary of State to step in and undertake the works. In either case, it would allow the Secretary of State or the local authority to pursue the responsible developer with debt claims to recover the money laid out on remedial works. As my noble friend so ably said, that ensures that there is a failsafe mechanism in the law. The Government’s legislative proposals do not tell us what will happen if remedial works are simply not started or cannot be completed as a result of the effect of the caps imposed in the Bill and the restrictions on buy-to-let landlords.
The duty in this amendment would fill the gap. The Government’s proposals would require some sort of remediator of last resort. Because they are imposing caps on what can be collected toward non-cladding costs, the Government are creating a gap in funding, which will have to be plugged somehow. Ultimately, someone is going to have to pay; otherwise, as my noble friend said, buildings will never be fixed. This amendment allows building work to be started and buildings to be fixed, with the taxpayer providing a form of bridging finance—but they must get that money back from the building safety fund; this is not carte blanche to make the taxpayer pay for these things.
As I said, I am sympathetic to the amendment from the noble Earl, Lord Lytton. I just worry that if we adopted these four or five new clauses, we might be tearing the guts out of the Bill and would have to rewrite a lot of it. But I think his heart is in the right place in where he is aiming to go. I understand that my noble friend might be worried about the legal position under the ECHR. This is another area where the noble Earl’s amendments might technically fall foul of the ECHR. Some of us have seen legal advice circulated from Daniel Greenberg, who is well known to everyone in this House. He says:
“On the basis of this analysis, l am satisfied that the draft clauses are compatible with the Convention rights and that Ministers will be able to comply with Section 6 of the Human Rights Act 1998 (Acts of public authorities: duty not to act incompatibly with ECHR) when they come to perform the functions conferred by the draft clauses”—
referring to draft Clauses 234 to 237.
I am not capable of suggesting whether Daniel Greenberg QC is correct or not, but I would love to hear what the Minister has to say about that. If the amendments from the noble Earl, Lord Lytton, are not right, it would be helpful to hear from my noble friend how far they can go towards what the noble Earl is trying to achieve. If he is going to reject them, I would love to hear how far he can push to get as close as possible to the noble Earl’s position. With those words, I am content to support my noble friend’s Amendment 233, and I would love to hear explanations on the noble Earl’s amendments.
Baroness Neville-Rolfe (Con)
My Lords, I apologise for a brief Committee-style intervention, given the novel nature of the group of amendments we are looking at. I have two points.
First, I am very grateful for the agreement earlier to the amendment from the noble Lord, Lord Best. I thank my noble friend for that but, as he knows, I am concerned about the position of leaseholders who are also involved in the hard task of managing even a small development as an enfranchised leaseholder. I have a family member with an interest in that area. What happens if a cladding or other building safety issue arises? I know that such leaseholders may face big bills and responsibilities. Amendments 186 to 193 appear to make enfranchised leaseholders of this kind liable even if they have ceased to act or sold out and become previous landlords. Have I understood this correctly? If I have, then it undermines the case for enfranchisement that has been encouraged by successive Governments to get rid of excess service charges.
Secondly, a strong case has been made for the non-government amendments in this group. I too have received many worrying letters from leaseholders. Do we have a feel for the cost, especially the net cost, of these Back-Bench amendments we are debating? I feel this is a matter that will be of concern in the other place, given current fiscal pressures, and might therefore determine what is eventually agreed in this important and urgent Bill.
Baroness Hayman of Ullock (Lab)
My Lords, this has been a very interesting debate so far. In the interests of time, I will just speak to the two amendments I have in this group, and then I will be very interested to hear the Minister’s response to the broader debate and issues that have been raised, that were clearly also debated in Committee.
Amendment 231 is about a registered social landlord not being able to
“use the income from rents or service charges to rectify defects relating to external wall systems or compartmentations where those defects result from the construction of the property or the installation of the external wall systems.”
The amendment would prevent local authorities using rental income or service charges to pay to remediate dangerous cladding or other fire safety defects. The aim is to give social housing tenants the same protection as leaseholders. While we support the Government’s efforts to protect leaseholders from the cost of remediation, the arrangements currently being considered by Ministers will mean that the cost of remediating social housing blocks falls on housing associations and council housing revenue accounts.
In the case of council housing, the main sources of income within the HRA are from tenants, in the form of rent and service charges. If the cost of fixing council housing falls on the HRA, then either rents, service charges, or potentially both, will need to increase, or maintenance improvement of social housing as well as new social housing delivery will need to be cut back. That is our concern. We clearly support the protection of leaseholders, but the protection of home owners who will eventually make a profit from the sale of their property, cannot and must not come at the expense of social housing tenants. Our proposal would prevent that outcome and instead require the Government to protect tenants such as leaseholders by requiring the industry to pay, with the taxpayer as a fallback provider of funds in recognition of any failings that created this crisis in the first place.
We discussed my Amendment 22 in Committee. It states:
“The regulations must exempt any relevant application made by or on behalf of a registered social landlord for the provision of social housing as defined under section 68 of the Housing and Regeneration Act 2008.”
The purpose behind this is to make social housing providers exempt from the additional financial burden of the Government’s proposed levy in order to prevent council tenants effectively subsidising the failures of private developers. Clause 57 of the Building Safety Bill gives the Secretary of State powers to impose a new building safety levy in England. This will contribute to government costs for remediating historical building safety defects and will apply to developers making application to the building safety regulator for building control approval. This is the new gateway 2 system, which will be introduced in building regulations.
Lord Greenhalgh (Con)
I thank noble Lords who have spoken in this long—a little over an hour on one group—but important debate on ensuring that the polluter pays. I thank the noble Baronesses, Lady Hayman and Lady Pinnock, for Amendment 22, on the levy on social housing. The noble Baroness, Lady Hayman, raised the issues of exemptions from the building safety levy for social housing providers and who the details of the buildings levy will apply to in secondary legislation.
I am pleased to inform the noble Baroness that we are considering an exemption from the levy for affordable housing as a whole, including social housing, housing for rent or sale at least 20% below market rent or sales rates, and shared ownership. The Government recognise that applying a levy to affordable housing would increase the cost of developing affordable housing and would therefore be likely to disincentivise supply, as the noble Baroness said. We consulted on this exemption for affordable housing in our consultation on the levy, which ran from July to October last year.
I hope the noble Baroness understands that her suggestion is under careful consideration and will be addressed in secondary legislation. I will probably have to roughly translate: she should be reassured that the building safety levy will not apply to public housing. That probably makes it a little easier for her to decide what she wants to do.
I turn now to Amendment 200, on the leaseholder protection fund, tabled by the noble Baroness, Lady Pinnock, and the noble Lord, Lord Stunell, which would require the Government to use funds raised by the levy to refund leaseholders who have already paid for safety works. While a noble thing to do, the Government’s primary aim is and should be to protect leaseholders from building safety risks and enable work to be undertaken to ensure this. For this reason, we will not be able to accept the amendment.
On Amendment 221, I thank the noble Baroness, Lady Pinnock, for this amendment. We share her determination to make sure that the industry acts now to take responsibility for fixing building safety defects and that the burden should not fall on leaseholders or taxpayers. The whole tone of the amendment is to get on with remediation and I have great sympathy for that. The principal objective of Clauses 128 and 129 is to make sure that responsible parties pay and to enable us to hold the industry to account. The further amendment I spoke to earlier will make it clear that we can link the scheme to the planning system.
Together, these powers will allow us to monitor compliance of members of the responsible actors scheme and make sure that members take responsibility and act promptly to make buildings safe. We do not believe a 5-year deadline needs to be inserted into the Bill. Our intention is for the measure to achieve its objectives much more quickly. Those that do not meet the scheme conditions may lose scheme membership and may immediately be subject to the planning prohibition, as our amendments make clear. A focus on pace is already built into the Government’s approach. I hope this reassures the noble Baroness that her intention has been more than met by the Government through this Bill, just in another way.
I turn now to Amendment 231 on social landlords and defects, tabled by the noble Baronesses, Lady Hayman and Lady Pinnock. The Bill already makes provision to protect leaseholders from unreasonable costs and allow guilty parties to be pursued. It contains a requirement on landlords to take reasonable steps to pursue other cost recovery avenues before seeking to recover the costs of remediation works from leaseholders. They need to provide evidence to the leaseholders of the steps taken. Social landlords will have to undertake these measures, including pursuing construction companies or installers where applicable.
To help all landlords, including social landlords, the Government are bringing forward an ambitious toolkit of other measures to allow those responsible to be pursued. This includes extending the limitation period under Section 1 of the Defective Premises Act 1972 to apply retrospectively for 30 years. We are also allowing the High Courts to extend the reach of civil liability to associated companies and creating a new cause of action. This will allow manufacturers, distributors and sellers of construction products to be pursued where defective or mis-sold products have been used in the construction of a dwelling, or where further works are carried out to that dwelling, rendering it unfit for habitation. These amendments make it easier for those affected to force those responsible for defective buildings—developers and construction products manufacturers—to pay.
While we are making it easier to pursue third parties, in parallel, we continue to protect leaseholders, so they are not paying for unreasonable remediation costs. The Bill introduces new statutory provisions which provide that cladding remediation costs cannot be passed on to qualifying leaseholders in buildings over 11 metres. The law is already clear that service charges and any increase in cost must be reasonable. Finally, the Government set a rent policy for social housing which determines the maximum amount of rent that social tenants may be charged and the maximum amount by which rents may increase each year. The rent standard prevents unforeseen hikes to tenants’ rents and is enforced by the Regulator of Social Housing.
Turning now to Amendment 232 in the name of the noble Baroness, Lady Pinnock, and the noble Lord, Lord Stunell, the service charge is the means by which fire safety costs would be recovered and the leaseholder protections measures already prevent costs being passed to leaseholders above the permitted maximum.
I now turn to Amendment 233, tabled by my noble friends Lord Young of Cookham and Lord Blencathra, which seeks to impose a duty on local authorities to pursue responsible developers. It imposes requirements on local authorities to remediate buildings with defects and to recover funds from responsible parties. If no funds can be recovered, the Secretary of State would be required to reimburse the local authority.
We have been clear that industry is responsible for remediating defective buildings. We expect developers to remediate buildings they had a role in developing or refurbishing. Where this does not happen, building owners and landlords will have new powers to pursue those responsible. Local authorities will also have powers under our new remediation orders and remediation contribution orders, as will other regulatory bodies. However, to impose a duty on local authorities to fix buildings or pursue responsible parties is not the right approach. This would absolve industry of its duty to resolve the crisis and building owners and landlords of their responsibilities to make buildings safe. It would also place an unacceptable burden on the taxpayer.
The amendment seeks to create a taxpayer backstop by requiring the Secretary of State to reimburse local authorities for costs they cannot recover. We have been very clear that it is wrong to look to the taxpayer for further funding to fix defective buildings. For these reasons, we will not be able to accept the amendment. I want to deal with the specific issue of the remediator of last resort. I understand where my noble friend Lord Young is coming from. We have asked the industry to provide a fully funded solution for both the cladding and non-cladding costs, including fixing their own buildings and contributing to a fund for the very orphan buildings he has highlighted of between 11 and 18 metres that need cladding remediation. The focus of the industry is on fixing its own buildings, and therefore we can begin to be more focused on where we apply taxpayer funds.
Finally, I address Amendments 201, 202, 229, 234, 235, 236 and 237 in the name of the noble Earl, Lord Lytton. Amendments 201 and 202 would hold the Crown liable where properties escheat—that is probably not the right pronunciation—and would prevent liquidators and trustees in bankruptcy renouncing the leases of buildings with fire safety defects. The Bill already prevents freeholders evading liability by simply escheating their properties where they do not want to pay. It also makes provisions in relation to insolvency and bankruptcy. Freeholders will still be liable where they were, or were connected to, the developer, or had a net worth over £2 million per in-scope building on 14 February. As I have said before, taxpayers should not be held liable. For this reason, I will not be able to accept these amendments. Amendment 229 is unnecessary as landlords are already prevented from passing on costs unless they have explored all other routes of funding.
I turn to the important Amendments 234 to 237. These cover building safety cost orders, providing powers to make regulations, stipulating liability and establishing a building safety cost fund. Liability for remediation costs is already set out in the Bill, as are provisions for building owners and landlords to go after associated developers, companies and manufacturers of defective products. For this reason, I will not be able to accept these amendments.
My noble friends Lady Neville-Rolfe and Lord Young of Cookham raised the position of enfranchised leaseholders and asked whether we have made life harder for them via Amendments 186 to 193. I want to be absolutely clear that nothing in the amendments increases liabilities for enfranchised leaseholders. No leaseholder will be worse off; all are measures to make the polluter pays principle apply to enfranchised leaseholders.
I hope that I have gone some way to provide assurances on the Government’s approach.
Lord Young of Cookham (Con)
Before my noble friend sits down, I am really grateful to him for the explanation he has set out but can he tell the House what happens where there is a building and no one has any money— the leaseholders cannot afford it, there is no freeholder and there is no developer or contractor to pursue? Who then puts that building right?
Lord Greenhalgh (Con)
My Lords, in practical terms, we have a £5.1 billion fund, of which we have committed the first stage of £1 billion. We have an additional £4.1 billion for buildings over 18 metres and an additional £4 billion for cladding remediation, yet we are asking industry to fix its own buildings. That gives us the ability to focus on the few buildings my noble friend is talking about, because we have got the developers that built these buildings to go on and fix them in a proportionate way and we do not have to use the core of money that we already have. Noble Lords can test the opinion of the House, but that is a practical way of dealing with the problems—focusing the current funds on those few buildings where that scenario applies.
Baroness Hayman of Ullock (Lab)
Before the Minister sits down, I thank him very much for his response to my Amendment 22. Could he just clarify something, so that I am completely clear on it? Was he saying that the Government will exempt social housing from the levy and that an SI will be brought in? If I am correct in my understanding, I would be grateful for a meeting to discuss the detail of what he proposes will happen.
Lord Greenhalgh (Con)
My Lords, I thank the noble Baroness, Lady Hayman of Ullock, for the opportunity to clarify what I meant. In simple terms, the exemption applies to social housing. With regard to how that is implemented and the means by which we do that, I will be happy to meet the noble Baroness to set out formally how we intend to bring that forward. I have already made that comment in meetings before Report, so it has been made in public. I am happy to make that commitment on the Floor of the House and to work on how we implement that and set it out, either in writing or in a further meeting.
Baroness Hayman of Ullock
“(4A) The regulations must exempt any relevant application made by or on behalf of a registered social landlord for the provision of social housing as defined under section 68 of the Housing and Regeneration Act 2008.”
Baroness Hayman of Ullock (Lab)
I am very happy to accept the Minister’s assurance on this if we can have a meeting to follow up.
Lord Greenhalgh
““building industry scheme” means a scheme established under section 128 of the Building Safety Act 2022;”Member’s explanatory statement
This amendment is consequential on the previous amendment to this Clause in the name of the Minister.
Lord Greenhalgh
Member’s explanatory statement
This amendment is consequential on the amendments in the name of the Minister leaving out Clauses 82 to 86 (which remove provision about building safety managers).
Member’s explanatory statement
This amendment is consequential on the amendment to leave out Schedule 8.
Baroness Fox of Buckley
“Review of provisions relating to accountable persons
(1) By the end of the period of two years beginning with the day on which section 71 comes into force, the Secretary of State must undertake a review of the financial impact of accountable persons on leaseholders in higher-risk buildings.(2) The review under subsection (1) may consider any matter appearing to the Secretary of State to be relevant, but must identify and quantify—(a) all costs passed on to leaseholders in relation to any function of any accountable person under Part 4 of this Act; and(b) any other costs passed on to leaseholders by any accountable persons.(3) A Minister of the Crown must, as soon as practicable on completion of the review, lay a statement on its findings before Parliament.(4) This section comes into force on the day this Act is passed.”Member’s explanatory statement
This amendment requires the government to identify and quantify all costs passed on to leaseholders under the accountable person regime, for example to check if Building Safety Manager costs have been rebadged and passed on.
Baroness Fox of Buckley (Non-Afl)
Your Lordships need to calm yourselves.
On Saturday, I went to visit my home in Wood Green. It looks like a bomb site: there is no roof and there are huge amounts of scaffolding and barbed-wire fences surrounding the block of 25 two-floor maisonettes. When you arrive, you see a huge multicoloured fluorescent sign with the words “Zero tolerance” and then a list of prohibited activities, all relating to safety: “Safety helmets must be worn”; “Safety footwear must be worn”; “No smoking”; “Danger: tripping hazards”; “Danger: men working ahead”; “Danger: no children on the site”. We are told that “Safety signs and procedures must be observed.” I therefore know, having visited my home in Wood Green, that Haringey Council is definitely keen on promoting safety.
Let us consider this. My home is in this state because, two years ago, there was a fridge fire in one maisonette. The roof of the block caught fire and the other flats, including mine, were drenched by the fire brigade in putting out the fire. It was not too bad and, to be honest, we were so glad that no one was hurt and we were relieved to get out safely. But that was two years ago this month—two years in which 25 families have been effectively homeless. As a leaseholder, the council, which is my freeholder, took my front door key off me—it is not a glamorous house, by the way, but it is mine, or so I thought—and basically said that I would get it back when the block had been made safe. It is now two years later and I am still not back, and I have no idea when I can go home.
I have mentioned this story before. My retelling it is not therapy but to show how what starts as an unremarkable but unpleasant event—a fire, albeit in lockdown—can escalate and turn into a nightmarish, never-ending misery for so many people. At every turn, as leaseholders and tenants, we have been faced with layers of bureaucracy getting in our way, more and more people to deal with, more and more issues being raised to explain why we are not returning home, and dwindling effectiveness in getting our homes back to us. We leaseholders and council tenants have been shown a certain indifference to our plight. If I am honest, all that has been much worse than the original fire, but it is okay because Haringey Council has put up lots of safety signs. Safety trumps all, and is used to say to us, “Shut up and put up.”
I arrived at this place during the time of my eviction from the house and was inspired by the right reverend Prelate the Bishop of St Albans and the noble Baroness, Lady Pinnock, whom I heard speak on what was happening to leaseholders. I thought, “I’m going to join that debate.” I was inspired by their dedication and what they said, and that is how I ended up here.
The moral of this tale is that I want to make sure that the Bill, which is well-intentioned on safety, does not in the name of safety end up with the unintended escalation of a whole new set of problems for leaseholders, which was the point of the analogy with my flat fire. The amendment—I actually prefer a similar but better amendment from the noble Baroness, Lady Neville-Rolfe, who is trying to do the same thing—would require the Government to commit to review the impact of the legislation in a couple of years. It says to the Government, “Can you just check in all instances that the legislation doesn’t cause more problems and is actually doing what you want it to do, or what we in the House have been told you want it to do?”
We are rather rushing through the Bill. Whole swathes of new amendments have emerged. These have been put in not necessarily by noble Lords but by the Government. I was happy to hear the Minister explain that there are so many amendments because he, the Secretary of State and the department are listening. But whatever way you look at it, we, as people scrutinising the Bill, are being presented with hundreds of amendments that have been quite hard to get one’s head round in the time. In many ways, the Bill is not being fully scrutinised line by line. As the noble Lord, Lord Jordan, put it, it really is a legislative quagmire to wade through and it is very difficult.
It has been almost impossible to read the amendments, assess what their nuances mean and look for what the consequences might be. I appreciate that that is for me and that I am a lay person on technicalities, but luckily, as has been mentioned, leaseholders have a few important voluntary heroes who have helped the rest of us through. I know that the lawyer and leaseholder Liam Spender has already been name checked for his multicoloured sheet, which has already been shown, but if noble Lord have not seen it is well worth studying because it really does explain things. There are also all sorts of reporters for the Leasehold Knowledge Partnership and intrepid leaseholders doing their own work, trying to get to grips with what all these new amendments and the Bill mean.
I mention that because it would be irresponsible if we passed this Bill and then let it sail off into the distance without any idea that it will be looked at again. I worry that the Government think that all will be solved once the Bill has passed. I do not want hostages to fortune. We have had lots of reassurances today, we have been told not to worry and have had great rhetoric from the Government on proportionality and common sense, but we therefore need to be able to check that that rhetoric will be fulfilled.
Finally, this is not all about leaseholders. My hunch is that the Bill has a range of problems because it has gone along uncritically with the picture painted by Dame Judith Hackitt that somehow every aspect of living in a flat should be seen as a potential hazard and a dangerous fire risk. For the last few years—understandably because of Grenfell—there has been a sort of hyperactive “something must be done” mentality that has led to the EWS1 crisis and caused many of the issues that informed the discussion on the previous group of amendments on innocent victims paying for excessive remediation.
All I ask is that this review checks that an overzealousness does not emerge from the legislation that skews priorities and means the Government’s valiant efforts at common sense and proportionality somehow end up in a proliferation of chunky formalised procedures.
I will also reflect on the other people we should bear in mind. I have emphasised leaseholders throughout this contribution, but in my Second Reading speech I also talked about the construction industry. I want to make sure we do not end up stymying the house-building programme through overregulation. There is a danger that, as we have heard in some of the contributions, we describe the construction business as though they are all cowboy builders, which is a rather insulting caricature. With another hat on, at another time, I would be saying the big crisis in this country is a lack of housing and we need to “Build, build, build”, so I get worried when the Home Builders Federation says that it is concerned that there will be difficulties with housing delivery if too much of a burden is put on housebuilders. You might say, “I am not going to feel sorry for them,” but we do not want to get ourselves into a situation where the extraction of funds from the construction industry means that the UK home building industry—which is important to many parts of levelling up, social equality and so on—is stymied.
One way or another, I can think of nothing more sensible for a common-sense Minister than to say, “In a couple of years, we’ll review all this and check that your hunches are wrong, Lady Fox.” That will be fine. The Minister referred to me earlier as Oliver Twist—always wanting more. This is only a little bit more, but you cannot change the world unless you want more, and I intend to demand a lot more, but only a little more in this Bill. I beg to move.
Baroness Neville-Rolfe (Con)
My Lords, I rise to speak to my Amendment 264A in this group. I thank my noble friend the Minister, as others have done, for all he has done to make this Bill a reality.
The object of the Bill, as I see it, is to get defects remediated to a proportionate extent as quickly as possibly—mainly cladding, sometimes installed, ironically, to improve insulation in the interests of carbon reduction, but also other unsafe matters. There have turned out to be more defects than anticipated and we have witnessed an unfortunate record by builders and others of not doing enough to put matters right. The Bill seeks to get things remedied quickly. However, it is costing an eye-watering amount to home owners, leaseholders and the Exchequer, and the Bill therefore also seeks to establish an equitable share-out of the costs including appropriate contributions by the supply chain.
It is a long saga and some of us in this House have been seeking solutions for a very long time and welcome the principle of legislation. However, unusually, the Bill has been changed completely by government amendments tabled since it left the House of Commons, yet we have not had an updated impact assessment to help us assess the costs and benefits of the revised proposals. This is poor, given the financial and other burdens on different stakeholders, as the noble Baroness, Lady Fox of Buckley, has just explained. However, as the chair of the Built Environment Committee I welcome today’s concession from the Minister on social housing, which I hope will be less costly, as it will give welcome clarity.
I have a great deal of respect for the Health and Safety Executive, as I have said before, and for the Minister who has fought so hard to present credible, effective and sensible proposals. However, it has been a rush, and I believe we must have a review clause in the Bill beyond the five-year independent review in Clause 152, and with more teeth. The noble Baroness, Lady Fox of Buckley, has constructively proposed one option; I hope my version may recommend itself to colleagues across the House and to my noble friend. I believe that agreeing to this could help to narrow current, very real, differences on the Bill particularly in the next group of amendments.
I will explain why. I am proposing a review within two years. It would look at the impact of the provisions of the Act. If the review found that there were serious problems for leaseholders, for home owners who could not buy or sell property, or for any other group, it would make recommendations.
Baroness Bennett of Manor Castle (GP)
My Lords, I rise with pleasure to follow the noble Baroness, Lady Neville-Rolfe. I agree with almost everything she said and very strongly back her amendment. The political spread we have just achieved across the House in that regard is interesting.
I sat through the previous group, and I am indebted to the noble Baroness, Lady Pinnock, for counting the 70 amendments in it. I listened to the detailed and informative contributions, particularly from the noble Lord, Lord Young of Cookham, and the noble Earl, Lord Lytton. I learned a great deal about waterfalls. I am still not entirely convinced that there is a solution to the “if no one’s left to pay who’s going to pay?” problem. None the less, it is very clear that this is an unusual Bill and that we have very broad agreement on what we are trying to achieve; that is, that the perpetrator pays to ensure that innocent leaseholders and home owners who through no fault of their own have found themselves trapped in awful, incredibly stressful, dangerous circumstances are not the ones who ultimately suffer and that the people who create the problem pay for it.
However, given the complexity of everything we have just done, we cannot be sure that the Bill will deliver and that there will not be unexpected hitches and problems along the way. I agree with the noble Baroness, Lady Neville-Rolfe, that five years is just too long. The noble Baroness, Lady Fox, spoke about the personal experience of being stuck out of a home, and some people are stuck in homes in awful situations. Two years is the right time to look at this in the round.
This may be where I slightly part company with two earlier speakers. I think there is broad agreement that we have a huge cultural problem in the building industry. I should perhaps declare a historic interest as the daughter of a builder. I knew quite a bit about the Australian building industry and lots of the problems that I saw in that situation have been magnified and intensified by economic developments over the past few decades. We have mass housebuilders that are far better at being cash cows than at producing homes. We are trying to change this situation and the whole culture of the industry. We are trying to get homes that are produced so that people have a secure, stable, affordable place to live. It is such an enormous change that we cannot wait five years to review this, so I commend the amendment tabled by the noble Baroness, Lady Neville-Rolfe.
The Earl of Lytton (CB)
I, too, commend the noble Baroness, Lady Neville-Rolfe, on this amendment. Given the circumstances of the Bill, the number of variations in it and the sheer number of moving parts involved, a review is essential for precisely the reasons she said, and I support the amendment.
Lord Greenhalgh (Con)
My Lords, I am grateful to the noble Baroness, Lady Fox of Buckley, and my noble friend Lady Neville-Rolfe for this insightful debate.
Amendment 26 from the noble Baroness, Lady Fox, would require a review of the financial impact of the new regime. I reassure the noble Baroness that a review is already required by Clause 152, which provides that:
“The Secretary of State must appoint an independent person to carry out a review of”
the system of regulation of building safety and standards and the system of regulation for construction products. Importantly, the reviewer is not limited and may choose to review connected matters, including the matters mentioned in the noble Baronesses’ amendments.
Similarly, Amendment 246A in the name my noble friend Lady Neville-Rolfe would require a review of the impact of the Act. I apologise for the mix-up that resulted in my addressing this amendment in an earlier group. I will repeat for the record that we believe that this further replicates Clause 152 in the Bill and therefore we believe this is unnecessary.
What I do say to my noble friend is that the Secretary of State has to appoint someone to carry out the review within five years, so that is a long-stop date. I am very happy to meet my noble friend to ensure that we get going with this review at the very earliest opportunity to make sure that that long-stop date is comfortably met. We also need to make sure that this review is substantive and learns the lessons of a new regime in the broadest possible sense and addresses the points raised by the noble Baroness, Lady Fox of Buckley, as well those raised by my noble friend Lady Neville-Rolfe, who has had tremendous Front-Bench experience as well as experience as a distinguished civil servant.
With those explanations, I kindly ask the noble Baroness, Lady Fox, to withdraw her amendment and my noble friend Lady Neville-Rolfe not to press her amendment.
Baroness Fox of Buckley (Non-Afl)
I will withdraw but I will come back to the Minister. I think it is important to come back to the Minister and say if it is within five years, I would like it to be brought forward sooner. I do not know why he does not just accept the two years but let us have the meeting to discuss it. At this point, I will not press the amendment and beg leave to withdraw.
Lord Greenhalgh
Member’s explanatory statement
This amendment is consequential on the amendments in the name of the Minister leaving out Clauses 82 and 85.
Lord Greenhalgh
Member’s explanatory statement
This amendment is consequential on the amendments in the name of the Minister leaving out Clauses 82 and 85.
Lord Greenhalgh
Member’s explanatory statement
This amendment is consequential on the amendments in the name of the Minister leaving out Clauses 82 to 86 (which remove provision about building safety managers).
Lord Greenhalgh
Member’s explanatory statement
This amendment and the amendments leaving out Clauses 83 to 86 in the name of the Minister remove provision about building safety managers.
Lord Greenhalgh
Member’s explanatory statement
This amendment and the amendments leaving out Clauses 82 and 84 to 86 in the name of the Minister remove provision about building safety managers.
Lord Greenhalgh
Member’s explanatory statement
This amendment and the amendments leaving out Clauses 82 and 83 and 85 and 86 in the name of the Minister remove provision about building safety managers.
Lord Greenhalgh
Member’s explanatory statement
This amendment and the amendments leaving out Clauses 82 to 84 and 86 in the name of the Minister remove provision about building safety managers.
Lord Greenhalgh
Member’s explanatory statement
This amendment and the amendments leaving out Clauses 82 to 85 in the name of the Minister remove provision about building safety managers.
Baroness Brinton
“Duty to avoid disability discrimination
(1) The steps taken by the accountable person pursuant to section 88 must include specific steps to ensure that no prohibited conduct relating to the protected characteristic of disability occurs that is unlawful contrary to Part 3 of the Equality Act 2010.(2) Those steps must include the development of personal emergency evacuation plans for persons with disabilities.(3) The Secretary of State must publish guidance in relation to the content of a personal emergency evacuation plan within 6 months of the commencement of this section.(4) In any proceedings concerning the steps taken by the accountable person pursuant to this Part of this Act, or Part 3 of the Equality Act 2010, this guidance is admissible as evidence and must be taken into account.”Member’s explanatory statement
This new Clause puts a duty on the accountable person to avoid disability discrimination, which includes the development of personal emergency evacuation plans for persons with disabilities.
Baroness Brinton (LD) [V]
My Lords, this amendment was debated earlier. I just want to repeat the point I made then that I thank the Minister for the offer of the meeting tomorrow. If we have not made some progress on the issue of PEEPs and safety for disabled people, I will bring back an amendment at Third Reading but, in the meantime, I beg leave to withdraw.
Lord Greenhalgh
Member’s explanatory statement
This amendment requires the strategy to be reviewed at times prescribed by regulations.
Lord Greenhalgh (Con)
I am very pleased to move a group of amendments that are focused on ensuring that leaseholders are protected from costs related to historical building safety defects. The package of leaseholder protections eradicates the idea that leaseholders should be the first port of call to pay to fix historical building safety defects. In fact, in drafting these clauses we started with the presumption that leaseholders should not have to pay anything, a sentiment that I know is shared with noble Lords from all sides of this House.
It is only right that building owners and landlords share in the costs of fixing dangerous buildings and we have carefully engineered—
Lord Cormack (Con)
I was under the impression that this was grouped with a whole group of amendments that had been debated and therefore there was no need for a further debate. If I am wrong, of course I apologise.
The Deputy Speaker (Lord Duncan of Springbank) (Con)
I will take the blame for that. I should have said moved formally and that would have encouraged the noble Lord, Lord Greenhalgh, to say “moved formally”. I will accept the admonition on that point. The noble Lord has saved the House some considerable time because I can see the page of that speech now fluttering in the wind.
Lord Greenhalgh
“(c) in prescribed circumstances, consult relevant persons and prescribed persons on the strategy and take any representations made on the consultation into account when next reviewing the strategy;(d) act in accordance with the strategy.”Member’s explanatory statement
This amendment requires the principal accountable person to consult on the residents’ engagement strategy, and to act in accordance with the strategy.
Lord Greenhalgh
Member’s explanatory statement
This amendment is a drafting change.
Member’s explanatory statement
This amendment is a drafting change.
“(c) any prescribed person.”Member’s explanatory statement
This amendment requires an accountable person to give a copy of the strategy to a person prescribed by regulations.
“(aa) make provision about the preparation, review or revision of a residents’ engagement strategy, in cases where there is more than one accountable person for the building;”Member’s explanatory statement
This amendment enables regulations to make provision about the making, review or revision of a strategy, in cases where there is more than one accountable person.
“(c) make provision about consultations under this section.”Member’s explanatory statement
This amendment enables regulations to make provision about consultations on a strategy.
Lord Greenhalgh
Member’s explanatory statement
This amendment is consequential on the amendments in the name of the Minister leaving out Clauses 82 to 86 (which remove provision about building safety managers).
Member’s explanatory statement
This amendment is consequential on the removal of the building safety charge as a separate charge.
Member’s explanatory statement
This amendment is consequential on the removal of the building safety charge as a separate charge.
Member’s explanatory statement
This amendment is consequential on the amendment in the name of the Minister leaving out Clause 82.
Member’s explanatory statement
This amendment is consequential on the removal of the building safety charge as a separate charge.
Member’s explanatory statement
This amendment is consequential on the amendment in the name of the Minister leaving out Clause 82.
Member’s explanatory statement
This amendment provides that only “relevant” rights and liabilities of an accountable person for the building become the rights and liabilities of the special measures manager under paragraph 7 of the Schedule.
Member’s explanatory statement
This amendment is consequential on the Minister’s amendment at page 204, line 35.
Member’s explanatory statement
This amendment is consequential on the Minister’s first amendment at page 204, line 6.
Member’s explanatory statement
This amendment is consequential on the Minister’s amendment at page 204, line 35.
“(c) one or more rights or liabilities of that person under the contract are relevant rights or liabilities,”Member’s explanatory statement
This amendment is consequential on the Minister’s first amendment at page 204, line 6.
“(3A) A right or liability of an accountable person for the building under a relevant contract is a “relevant right or liability” if it relates to a function of that person under, or under regulations made under, this Part in relation to the building.”Member’s explanatory statement
This amendment defines relevant right or liability for the purposes of paragraph 7 of the Schedule.
“(3B) The notice under sub-paragraph (3)(e) must state which rights or liabilities under the contract are relevant rights or liabilities.”Member’s explanatory statement
This amendment is consequential on the Minister’s first amendment at page 204, line 6.
Member’s explanatory statement
This amendment is consequential on the Minister’s amendment at page 204, line 35.
Member’s explanatory statement
This amendment is consequential on the Minister’s amendment at page 204, line 35.
Member’s explanatory statement
This amendment is consequential on the Minister’s amendment at page 204, line 35.
Member’s explanatory statement
This amendment is consequential on the amendments in the name of the Minister leaving out Clauses 82 to 86 (which remove provision about building safety managers).
Member’s explanatory statement
This amendment is consequential on the removal of the building safety charge as a separate charge.
Member’s explanatory statement
This amendment is consequential on the removal of the building safety charge as a separate charge.
Member’s explanatory statement
This amendment is consequential on the Minister’s amendment at page 211, line 11.
Member’s explanatory statement
This amendment is consequential on the Minister’s amendment at page 211, line 11.
Member’s explanatory statement
This amendment is consequential on the amendments in the name of the Minister leaving out Clauses 82 to 86 (which remove provision about building safety managers).
Member’s explanatory statement
This amendment is consequential on the removal of the building safety charge as a separate charge.
Lord Greenhalgh
Member’s explanatory statement
This amendment is consequential on the amendments in the name of the Minister leaving out Clauses 82 and 85.
Lord Greenhalgh
Member’s explanatory statement
This amendment is a drafting change.
Lord Greenhalgh
“Building safety directors of resident management companies
(1) This section applies in relation to a resident management company that is an accountable person for a higher-risk building.(2) The articles of association of the resident management company have effect as if they included such provision as may be prescribed relating to—(a) eligibility for appointment as a director of the company, for a building safety purpose;(b) the appointment of a director for such a purpose;(c) the entitlement to remuneration of a director appointed for such a purpose;(d) the removal of a director so appointed.(3) Subsection (2) has effect—(a) whether or not the provision is adopted by the company;(b) whether the company was formed before or after the coming into force of this section;(c) notwithstanding anything in the company’s articles of association.(4) In this section—“building safety purpose” means the purpose of supporting the resident management company in complying with its duties under this Part or under regulations made under this Part;“resident management company” has the meaning given by regulations made by the Secretary of State.”Member’s explanatory statement
This new Clause makes provision about directors of a resident management company that is an accountable person.
Lord Greenhalgh
Member’s explanatory statement
This amendment is consequential on other amendments to this Clause in the name of the Minister.
Member’s explanatory statement
This amendment is a drafting change.
Member’s explanatory statement
This amendment is consequential on the amendments in the name of the Minister leaving out Clauses 82 to 86 (which remove provision about building safety managers).
Member’s explanatory statement
This amendment is consequential on the amendments in the name of the Minister leaving out Clauses 82 to 86 (which remove provision about building safety managers).
Member’s explanatory statement
This amendment is consequential on a subsequent amendment to this clause in the Minister's name which removes the building safety charge as a separate charge.
Member’s explanatory statement
This amendment is a drafting change.
Member’s explanatory statement
This amendment removes the building safety charge as a separate charge.
“(5A) The relevant lease has effect—(a) as if the matters for which the service charge is payable under the lease included the taking of building safety measures by or on behalf of a relevant person (insofar as this would not otherwise be the case), and(b) where the lease contains different methods for apportioning different relevant costs (within the meaning of section 18), as if it provided for any costs for which the tenant is liable by virtue only of paragraph (a) to be apportioned in the same way as costs incurred in connection with insuring the building.(5B) “Building safety measure” means any of the following—(a) applying for registration of a higher-risk building in accordance with section 77 of the Building Safety Act 2022;(b) applying for a building assessment certificate in accordance with section 78 of that Act;(c) displaying a building assessment certificate in accordance with section 81 of that Act;(d) assessing building safety risks in accordance with section 87 of that Act;(e) taking reasonable steps in accordance with section 88 of that Act (management of building safety risks), other than steps involving the carrying out of works as referred to in section 88(2);(f) preparing and revising a safety case report in accordance with section 89 of that Act;(g) notifying the regulator of a safety case report, and giving a copy of a safety case report to the regulator, in accordance with section 90 of that Act;(h) establishing and operating a mandatory occurrence reporting system, and giving information to the regulator, in accordance with section 91 of that Act;(i) keeping information and documents in accordance with section 92 of that Act;(j) giving information and documents to any person in accordance with section 93, 94 or 96 of that Act;(k) complying with any duty under section 95 of that Act (residents’ engagement strategy);(l) establishing and operating a system for the investigation of complaints in accordance with section 97 of that Act;(m) giving a contravention notice to a resident, and making an application to the county court, in accordance with section 100 of that Act;(n) making a request to enter premises, or making an application to the county court, in accordance with section 101 of that Act (access to premises).(5C) For the purposes of this section any of the following incurred in connection with the taking of a building safety measure are to be regarded as incurred in taking the measure—(a) legal and other professional fees;(b) fees payable to the regulator;(c) management costs.” Member’s explanatory statement
This amendment provides that the service charge provisions under the lease have effect as if they covered costs incurred or to be incurred in connection with the taking of building safety measures.
Member’s explanatory statement
This amendment is consequential on the removal of the building safety charge as a separate charge.
““relevant person” means—(a) if the landlord is an accountable person for the building, the landlord or a special measures manager for the building;(b) otherwise, any superior landlord who is an accountable person for the building or a special measures manager for the building;”Member’s explanatory statement
This amendment, which creates a definition of “relevant person”, is consequential on other amendments to this Clause in the name of the Minister.
“(7) The Secretary of State may by regulations made by statutory instrument amend subsection (5B) so as to add, remove or modify a building safety measure.(8) The regulations may make incidental, transitional or saving provision.(9) A statutory instrument containing regulations under subsection (7) may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”Member’s explanatory statement
This amendment confers a power to amend the definition of “building safety measure”.
Lord Greenhalgh
“30DA Liability for remuneration of building safety director of resident management company etc(1) This section applies to a lease of premises which consist of or include a dwelling in a higher-risk building if—(a) the landlord is an accountable person for the building,(b) the landlord is—(i) a resident management company within the meaning of section (Building safety directors of resident management companies) of the Building Safety Act 2022, or(ii) an RTM company within the meaning of Chapter 1 of Part 2 of the Commonhold and Leasehold Reform Act 2002 (right to manage), and(c) the tenant is liable to pay a service charge.(2) The lease has effect—(a) as if the matters for which the service charge is payable under the lease included remunerating any director of the landlord appointed for a building safety purpose (insofar as this would not otherwise be the case), and (b) where the lease contains different methods for apportioning different relevant costs (within the meaning of section 18), as if it provided that any costs for which the tenant is liable by virtue only of paragraph (a) to be apportioned in the same way as costs incurred in connection with insuring the building.(3) In this section—“building safety purpose” means the purpose of supporting the landlord in complying with its duties under Part 4 of the Building Safety Act 2022 or under regulations made under that Part;“landlord” includes any person who has a right under the lease to enforce payment of a service charge;“service charge” has the meaning given by section 18;“tenant” includes any person who has an obligation under the lease to pay a service charge.”Member’s explanatory statement
This amendment makes provision for the recovery from tenants of costs incurred by a residents’ company in remunerating a director of the company, appointed in connection with its building safety duties.
“(za) as if it contained provision authorising the appointment of a person (whether or not a leaseholder or a resident of the building) as a director of the landlord for a building safety purpose,”Member’s explanatory statement
The new clause “Building safety directors of resident management companies” which stands in the name of the Minister ensures that any restrictions in the Articles of Association of a residents management company are disapplied insofar as they conflict with the new power to appoint a professional director to discharge building safety duties. This amendment supplements that amendment by ensuring that any similar restriction imposed by a lease is also disapplied.
Lord Greenhalgh
Member’s explanatory statement
This amendment is consequential on the second amendment in the name of the Minister at page 119, line 36.
Member’s explanatory statement
This amendment is consequential on other amendments to this Clause in the name of the Minister.
Member’s explanatory statement
This amendment is consequential on other amendments to this Clause in the name of the Minister.
“(2) A covenant or agreement, whether contained in a lease to which section 30D or 30DA applies or in an agreement collateral to such a lease, is void insofar as it purports to modify the effect of section 30D(5A) or 30DA(2).”Member’s explanatory statement
This amendment is consequential on other amendments to this Clause in the name of the Minister.
Member’s explanatory statement
This amendment is consequential on other amendments to this Clause in the name of the Minister.
Member’s explanatory statement
This amendment is consequential on other amendments to this Clause in the name of the Minister.
Member’s explanatory statement
This amendment is consequential on other amendments to this Clause in the name of the Minister.
Member’s explanatory statement
This amendment is consequential on other amendments to this Clause in the name of the Minister.
Member’s explanatory statement
This amendment is consequential on the amendments in the name of the Minister leaving out Clauses 82 to 86 (which remove provision about building safety managers).
“(3) After section 20E (inserted by section 134) insert—“20F Limitation of service charges: excluded costs for higher-risk buildings(1) This section applies in relation to a lease to which section 30D (higher-risk buildings: building safety costs) applies.(2) Excluded costs are not to be regarded as relevant costs to be taken into account in determining the amount of service charge payable by a tenant under the lease.(3) In this section “excluded costs” means any of the following incurred in connection with Part 4 of the Building Safety Act 2022 or regulations made under that Part—(a) costs incurred or to be incurred by or on behalf of a relevant person solely as a result of any penalty imposed or enforcement action taken by the regulator;(b) legal costs incurred or to be incurred by or on behalf of a relevant person in connection with special measures order proceedings;(c) costs incurred or to be incurred by or on behalf of a relevant person by reason of any negligence, breach of contract or unlawful act on the part of that relevant person or a person acting on their behalf;(d) costs of a description prescribed by regulations made by the Secretary of State that are incurred or to be incurred by or on behalf of an accountable person or special measures manager for the building in connection with the taking of building safety measures.(4) In this section—“building safety measures” has the meaning given by section 30D;“enforcement action” means action taken with a view to, or in connection with—(a) securing compliance with Part 4 of the Building Safety Act 2022 or regulations made under that Part, or(b) the imposition of a sanction in respect of a contravention of that Part or those regulations; “the regulator” has the meaning given by section 118 of the Building Safety Act 2022;“relevant person” means—(a) where the landlord under the lease is an accountable person for the higher-risk building, the landlord or a special measures manager for the higher-risk building;(b) where the landlord is not such an accountable person, any superior landlord who is an accountable person for the higher-risk building or a special measures manager for the higher-risk building;“special measures order proceedings” means any proceedings relating to the making, variation or discharge of, or the giving of directions in relation to, a special measures order under Schedule 7 to the Building Safety Act 2022 (including any appeals in relation to such proceedings).(5) Regulations under this section are to be made by statutory instrument.(6) A power to make regulations includes power to make—(a) incidental, transitional or saving provision;(b) different provision for different purposes.(7) A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament.”(4) In section 21 (service charge information) after subsection (6) insert—“(6A) In particular, regulations which make provision about higher-risk buildings (within the meaning of Part 4 of the Building Safety Act 2022) need not contain provision of a kind mentioned in subsection (2) or (3).”(4A) In section 30 (meaning of “landlord” and “tenant”)—(a) after the definition of “landlord” insert—““services” includes, in relation to a dwelling in a higher-risk building (as defined by section 30H), building safety measures within the meaning of section 30D;”;(b) in the heading for ““flat”, “landlord” and “tenant”” substitute ““landlord”, “tenant” etc”.”Member’s explanatory statement
This amendment applies the existing provisions on service charges to costs incurred in respect of building safety measures, provides that certain costs may not be taken into account in calculating service charges, makes provision about service charge information, and makes provision consequential on other amendments to this Clause in the name of the Minister.
section 30DA (liability for remuneration of building safety director of resident management company etc).””Member’s explanatory statement
This amendment is consequential on other amendments to this Clause in the name of the Minister.
Member’s explanatory statement
This amendment is consequential on other amendments to this Clause in the name of the Minister.
(a) for “30B” substitute “30H”;” Member’s explanatory statement
This amendment is consequential on other amendments to this Clause in the name of the Minister.
Lord Greenhalgh
Member’s explanatory statement
This amendment is consequential on the removal of the building safety charge as a separate charge.
Lord Greenhalgh
Member’s explanatory statement
This amendment is consequential on amendments to Clause 115 removing the building safety charge as a separate charge.
Member’s explanatory statement
This amendment is consequential on amendments to Clause 115 removing the building safety charge as a separate charge.
(b) a special measures order (within the meaning of Schedule 7 to the Building Safety Act 2022) is in force.”Member’s explanatory statement
This amendment provides that subsection (2) of inserted section 47A does not apply if a special measures order is in force.
Member’s explanatory statement
This amendment is consequential on amendments to Clause 115 removing the building safety charge as a separate charge.
Member’s explanatory statement
This amendment is consequential on amendments to Clause 115 removing the building safety charge as a separate charge.
Member’s explanatory statement
This amendment is consequential on amendments to Clause 115 removing the building safety charge as a separate charge.
Member’s explanatory statement
This amendment is consequential on amendments to Clause 115 removing the building safety charge as a separate charge.
(b) a special measures order (within the meaning of Schedule 7 to the Building Safety Act 2022) is in force.” Member’s explanatory statement
This amendment provides that subsection (2) of inserted section 49A does not apply if a special measures order is in force.
Member’s explanatory statement
This amendment is consequential on the amendments in the name of the Minister leaving out Clauses 82 to 86 (which remove provision about building safety managers).
Member’s explanatory statement
This amendment is consequential on amendments to Clause 115 removing the building safety charge as a separate charge.
Member’s explanatory statement
This amendment is consequential on the amendments in the name of the Minister leaving out Clauses 82 to 86 (which remove provision about building safety managers).
Member’s explanatory statement
This amendment is consequential on amendments to Clause 115 removing the building safety charge as a separate charge.
Member’s explanatory statement
This amendment is consequential on the amendments in the name of the Minister leaving out Clauses 82 to 86 (which remove provision about building safety managers).
Lord Greenhalgh
Member’s explanatory statement
This amendment is consequential on the amendment in the name of the Minister leaving out Clause 82.
The Earl of Lytton
Member’s explanatory statement
This amendment extends the cost protections in the Bill to leaseholders in buildings of all heights containing two more residential dwellings.
The Earl of Lytton (CB)
My Lords, this amendment is leading the charge here. I refer noble Lords to Grand Committee, when the noble Lord, Lord Blencathra, in particular, questioned why only buildings of a certain height benefited from the cost protections in this Bill. This is a matter on which I feel very strongly—and, indeed, both my cosignatories feel strongly—and I give notice that I may well press the amendment to a Division.
I reminded the Grand Committee at the time that building safety is not governed by building height alone or, possibly, at all. I refer to the fire at Worcester Park in September 2019. The Minister went on to give us a graphic description of the circumstances. However, despite that the Minister stuck to his text in suggesting that lower rise buildings do not have the same risk profile. I have probably paraphrased him, and that may not be the precise form of words that he used, but that is the drift of what he was saying. If, as he recounted in the circumstances of the Worcester Park fire, it was so well alight after nine minutes that the fire and rescue services concluded that the building could not be saved, that represents to me an existential risk to occupiers who may be asleep, confused of mind, infirm, pregnant, disabled or otherwise particularly vulnerable, especially as regards the speed with which an inferno can evidently develop.
A block of flats without adequate separating walls to me is just as dangerous above ground-floor level as a high-rise block without decent fire doors. I do not make a distinction in terms of risk; they are both equally perilous, as far as I can see. Be that as it may, I have received emails from occupiers of identical buildings in the same development in the Worcester Park building, telling me that the developer was remarkably reluctant to address basic issues and shortcomings, many of which may have accelerated the fire in the building that was actually destroyed. Furthermore, they said that they could not sell their flats and that insurance had gone through the roof, and interim measures were costing a fortune—exactly the same problems and privations as with taller buildings.
I will just say—other noble Lords will be able to elaborate—that the Government have not made the case for excluding these, other than giving the impression that this is driven, dare I say it, by a degree of Treasury parsimony and a departmental inclination to go no further than it absolutely has to. There seems no good reason for height exclusion on any moral, economic, safety or practical ground. I beg to move.
Lord Young of Cookham (Con)
My Lords, as noble Lords may know, I am not in the habit of making long speeches, but this group of amendments covers a huge range of issues and is arguably the most important group today. I am proposing seven amendments and I have added my name to four others. I will be as brief as I can, and the good news is that I do not propose to intervene in this debate again.
I will go through the amendments in the order in which they appear, starting with Amendment 115, moved by the noble Earl, Lord Lytton, to which I have added my name. It seeks to expand the service charge protection of Schedule 9 to buildings of all heights. At the moment, as we heard, buildings under 11 metres get no help at all from the proposed waterfall. Unless developers agree to fix those buildings voluntarily, or leaseholders are willing to engage in litigation, there is no meaningful help on offer.
As mentioned in earlier debates, buildings under 11 metres can be just as dangerous as buildings over 11 metres. The fire at Richmond House, the 9-metre building that burned to the ground in less than 11 minutes in September 2019, shows the dangers. Buildings under 11 metres are excluded, even though they have exactly the same defects, for which leaseholders bear no responsibility at all. They suffer exactly the same consequences as those in taller buildings: unaffordable service charges, repossession and bankruptcy. I see no equity or principle behind this decision, which is there solely to save money.
When we asked about this in meetings on the Bill, we were told there was no systemic problem with cladding in these buildings—a statement that brings no consolation to leaseholders, such as this one, one of many who have written to me. The letter says:
“I am a leaseholder in a building well under 11 metres. We are three storeys high with 10 flats. We are therefore excluded from any support from the Government, yet our freeholder/managing agent is taking us to court on Friday to ask them to agree to us having to pay for the cost of remediation—a £26,000 service charge in 2022 per leaseholder. We are told the freeholder does not have the means or obligation to pay for these works that we need to reduce the annual insurance premium. We are told that the only way to pay for these works is via the leaseholder and that we will be legally responsible to fund the money and pay it upfront so that the management agent has the means to pay for works.”
The letter continues:
“I hope the Minister will see fit to bring our needs in line with leaseholders in larger properties and protect us from at least some of the costs that we currently face.”
Last week’s Sunday Times had an article showing that, despite what the Government say, buildings under 11 metres remain unsaleable and unmortgageable, as quotes from the major lenders in the article underlined.
We were also told that there were not many such buildings. That is good news, but it follows from that that the extra cost of putting this inequity right is so small that I hope the Minister can accept it.
I should have said at the beginning that I am grateful to Martin Boyd, Liam Spender and Sue Bright, who in their personal capacity have helped me with some briefing.
I turn now to Amendment 117 in my name and those of my noble friend Lord Blencathra and the noble Earl, Lord Lytton. It seeks to expand the service charge protections to enfranchised buildings and buildings where the right to manage has been exercised. This would ensure that all leaseholders are treated equally.
It has been the policy of successive Administrations to encourage leaseholders to enfranchise and buy their freeholds, and to move away from a feudal system of tenure. That process began in the 1960s, when leaseholders could buy their houses, and was extended to flats in the 1990s. Since then, there have been other measures to encourage leaseholders to buy their freeholds, with the security of the independence that goes with it, and measures to promote and enhance right to manage. We are promised legislation in the next Session to take this policy forward.
Against that background, it would be perverse if the legislation before us today put enfranchised leaseholders in a worse position than leaseholders who are not enfranchised, but that is what Clause 120 does. The Government cannot hope to succeed in encouraging more resident-owned and resident-run buildings unless they treat all buildings affected by fire safety issues equally. As I understand the legislation, once your building is “not relevant”, it in effect becomes a second-class building in perpetuity.
I have looked at the government amendments tabled since Committee stage but they seem to make the position worse by confirming that these buildings are excluded. That means that people living in these buildings are being left to fend for themselves, either by undertaking litigation or by recovering what they can from the building safety fund. An excellent article in the recent edition of Inside Housing shows the problem with the fund:
“If the rate of remediation through the fund continues at this pace, it will be decades before all blocks receive funds—never mind see work completed.”
I hope that my noble friend will be able to confirm what he said in Committee, which appears to contradict what is in the Bill. He said:
“My noble friend Lord Young asked the very important question of whether enfranchised properties will have to pay all the costs for remediation. I want to be absolutely clear—read my lips—no, they are not. This will not apply to buildings which have exercised a right to collective enfranchisement, or to commonhold land, which in this case, admittedly, is very few buildings. New subsection (3) in government Amendment 63 is very clear on that point. I am happy to speak to my noble friend afterwards, but I am very clear that they are not expected to shoulder the burden. They are effectively leaseholders that have enfranchised as opposed to freeholders. I hope that helps.”—[Official Report, 28/2/22; col. GC 262.]
However, under Clause 20, these buildings are left to fend for themselves if the developer does not pay or if they do not have the wherewithal to engage in litigation against a well-resourced developer. They miss out on the guarantee in paragraph 8 of Schedule 9 that no leaseholder will have to pay for cladding costs, because they do not live in a relevant building. They are not treated as leaseholders but as freeholders.
My amendment does no more than achieve the ambition set out by the Secretary of State in another place on 10 January, when he said that
“we will protect leaseholders today and fix the system for the future.”—[Official Report, Commons, 10/1/22; col. 286.]
Perhaps my noble friend the Minister can confirm that, if you have not enfranchised, you are protected by the caps on what you can pay but, if you have enfranchised, there is no such protection. I hope that my noble friend will look at that again.
I turn to Amendment 123 in my name and those of my noble friends Lord Blencathra and Lady Neville-Rolfe. This would change the definition of qualifying leases so that buy-to-let landlords with interests in up to five properties, including their main home, benefit from the leaseholder cost protections in Schedule 9. While we welcome the Government’s movement on this, we would like to go a little bit further.
As I mentioned in Committee on 24 February, there are many buildings where flats are owned by buy-to-let landlords. If those landlords cannot pay their share of the bill, it will mean that not all of the money is available to do the works to the whole building and so remediation will not commence, to the disadvantage of all the residents in the block, who will continue to live in unsafe premises. Many landlords hold their buy-to-let properties as part, or in some cases all, of their pension provision. According to data that the Government provided in July 2021 in response to the noble Lord, Lord Carrington, of the 2.2 million buy-to-let landlords paying income tax, 1.5 million—68%—fell within the basic income tax band.
This point is reinforced by the recent report on the remediation and financing of building safety work by the Levelling Up, Housing and Communities Select Committee in another place. It said:
“Buy-to-let landlords are no more to blame than other leaseholders for historic building safety defects, and landing them with potentially unaffordable bills will only slow down or prevent works to make buildings safe.”
It wanted total exemption, but we do not go quite so far. The committee rightly pointed to the kinds of landlord who will be affected:
“We heard from landlords who find themselves outside of the scope of the protections, who invested in properties to support their children, to provide income after being made redundant, to help pay for the costs of caring for relatives, or to provide for their retirement, now facing bills they cannot afford. One contributor told us they had invested in flats using compensation from the Criminal Injuries Compensation Authority ‘after the murder of my husband in the 7/7 atrocity’ and now faces ‘vast bills’”.
Our amendment would align the provisions of the Bill more closely with the Bank of England’s definition of a portfolio landlord as being one with four or more mortgaged buy-to-let properties across all lenders in aggregate. It would also ensure that most private landlords who are leaseholders would be covered by the Bill. The Government’s most recent English private landlords survey shows that 83% of private landlords rent out between one and four properties.
I understand that the Minister has indicated to the National Residential Landlords Association that he might be open to considering a formula which would enable landlords to access support under the government scheme where their portfolio of properties is valued at a certain amount, instead of simply counting how many there are. There are huge variations in the value of property for a multitude of reasons. For example, someone who has 10 other properties may have significantly less means than someone who only owns one property. Yet the government approach will penalise the individual with less means purely because of the number of properties their own. Some buy-to-let owners may have significant equity in their properties while others may be mortgaged to the hilt or in negative equity. The current approach is very crude and does not differentiate between the wealth of those affected, so I wonder whether the Government are considering that option.
I move to Amendment 126, which is a technical amendment. At the moment it is not quite clear whether the protections being given to leaseholders can be sold on to future buyers. It is important that that should be possible, in order to get the market moving again. Clause 121 defines a “qualifying lease” as one held by “a relevant tenant”. A relevant tenant must on 14 February this year meet the occupation and property ownership provisions set out in Clause 121. The Government say that this clause allows protection to be passed from someone who qualifies on 14 February to a future buyer, but I am not sure that that is the case because the restrictions the Government are imposing on who can benefit from help, such as those owning more than four buy-to-let properties, depend on the same definition of relevant tenant.
If the Government’s view of Clause 121 is correct and the existing wording allows leases with protection to be sold on, the Government may have made a drafting error. If the lease can be sold and the protections passed to a buyer, the characteristics of the buyer are irrelevant. If so, it means someone with 10 flats—six more than the four allowed—could come in, buy up a lease and still get protection. I do not think that is what the Government intend. It is important that we get the market moving, but also that we do not give opportunistic cash buyers the chance to buy up these leases and benefit from protections that other buy-to-let landlords will not get.
Amendment 153, which amends government Amendment 152, is technical. Given the passage of time and the fact my notes are in very small print, I think I will pass over that.
I turn now to Amendments 157 to 160 and 163, which are really important. They deal with the amount leaseholders have to pay for non-cladding costs. On this, my preference is for Amendments 155 and 156, which mean zero liability; the leaseholder pays nothing. The Government say these caps are necessary because of legal advice. The claim is that to impose measures on developers and landlords, it is necessary for leaseholders to contribute in some cases.
As with all legal matters, there appears to be a diversity of opinion among professional lawyers on the Government's judgment that Article 1, Protocol 1 requires leaseholders to contribute anything. But if my noble friend the Minister advises your Lordships that those two amendments—the ones with zero cost—mean that he can no longer assert that the legislation is compatible with the ECHR, then Amendments 157 to 160 come into play and limit the liability. My noble friend Lord Blencathra will speak to Amendment 158.
The Lord Bishop of St Albans
My Lords, I will speak to Amendments 260 and 126. I apologise for not being here this morning. I am grateful to the noble Lord, Lord Blencathra, for speaking to our amendments.
Amendment 260 enfranchises leaseholders and brings them closer to the decision-making processes of their building. It ensures that residents of the building are made aware, within the earliest reasonable timeframe, by the responsible person, when they are served any notice given by the fire and rescue service. It also ensures that, when in complying with the notice the responsible person passes costs on to residents, the residents will have 21 days after being informed to appeal this notice to the court.
The essence of this amendment touches upon the freeholder’s incentives, as there is no incentive for the freeholder to challenge a notice from the fire service requiring remedial work, since ultimately it is the tenants or the leaseholders who will shoulder these costs. The reality is that freeholders often do not have skin in the game and are more than happy to comply with a served notice, with the full knowledge that they will not be the ones incurring costs for complying with the notice. This amendment is not handing leaseholders the power to indefinitely hold up works necessary for the safety of the building. It is simply providing them, as the ones with real skin in the game, with the right of appeal.
I recognise that allowing any individual tenant the right of appeal is messy and may lead to a flurry of unnecessary appeals, which in turn could create unnecessary work when it is least needed. Nevertheless, in principle, leaseholders deserve enfranchisement and mechanisms to challenge decisions that are simply imposed on them. Appeals being done through a representative body—a recognised tenants association, for example—would represent a more sensible position, as that would prevent rogue leaseholders going against the majority to appeal decisions, while at the same time allowing appeals to occur through a body that is both representative and accountable to the leaseholder, and which retains regular communication with the responsible person.
I now turn to Amendment 124, in my name and that of the noble Lord, Lord Blencathra. The definition of a qualifying lease and its implications are concerning, as the noble Lord, Lord Young, has pointed out. I am pleased that the Government have extended this definition to three dwellings in total, but it is still problematic. The protections under the waterfall system in Schedule 9 are only available for qualifying leases. Technically, an individual who owns three flats valued at £900,000 per dwelling would meet the cap of £15,000 for remedial costs, whereas an individual with five investment properties in the north of England valued at £200,000 per dwelling would be offered no protection and be liable for the entire remedial costs for each dwelling.
Is this not the sort of regionalism that the Government want to avoid in their levelling-up policy? Under the Government’s scheme, the individual, up in the north, for example, whose total property holdings are valued at £1 million, is required to pay for all their remedial costs, whereas their equivalent in London, with total property holdings of £2.7 million, would have their costs capped at £15,000. This example is to make the point that simplistically saying a number, whether it be one, two, four, whatever, for the number of leases allowed under the definition of a qualifying lease, says very little about the value of those apartments. It is evidently unfair that an individual with a much lower portfolio in value might incur much higher costs.
I accept the reality that, under any scheme, there will be winners and losers. However, I wonder whether the Government need to go back to the drawing board on how they determine whether a private landlord qualifies under the definition of a qualifying lease, as it is almost entirely void of context. It would be much wiser to determine the definition of a qualifying lease for private landlords based on the value of their entire property portfolio, rather than simply on the number of leases that they own.
This point about context brings us to the crux of what Amendment 124 would do, which is to provide some level of security to those receiving a state pension. Young landlords who may fail to qualify under the definition at least have the ability and the time to incorporate this setback into their retirement plans. It does not make it any less painful, but it would at least be a more manageable state of affairs for which they might be able to plan accordingly over many years if they have that time ahead in which to work. Furthermore, it would be assumed that many private landlords would be in receipt of an active income, probably a reasonable income, if they were able to afford multiple leases and not be classed as a qualifying lease. Regardless of whether this means that their exclusion is fair, at the very minimum they have the possibility of greater future earnings. The hope is that those individuals may at least be able to weather these costs in the long run and secure for themselves the financial future they want in retirement.
However, pensioners do not have this luxury. Beyond their state and work pensions, savings and any income they get from renting out properties or other dividends, there is almost a negligible prospect of them finding additional ways to raise money. The whole point of planning for your pension is the knowledge that whatever you have in your possession at the point of retirement is what you will be required to live on for the rest of your life. What concerns me is the notion that, as a result of this definition of a qualifying lease, some pensioners who have worked their entire lives and saved and invested diligently so they can enjoy their retirement without financial worry will be suddenly forced to raise enormous amounts of capital to fund remedial works. How does one expect a pensioner to raise such funds? I hope that my concerns are not well founded, but I fear that unless the definition of a qualifying lease makes reference to those on pensions, retirees may find their entire financial life’s work in tatters.
I am not a fan of the simplistic way in which the Government are deciding which private landlords do or do not qualify under the definition. However, if I am forced to work within this framework, I think that the provisions contained within Amendment 124, in ensuring that pensioners who own up to six leases in total also fall under the definition of a qualifying lease, are fair ones that protect those who will find it exceedingly difficult to adjust financially to the bills that may come their way.
In this vein, I also support the provisions contained in Amendment 123, extending that number of leases up to five. However, I believe even this is a sticking plaster, for the reasons that I have just outlined, as it says nothing about the value of an individual’s property portfolio.
I really hope that the Government will be able to do something more on this and, at a minimum, offer some assurances to those pensioners affected that they will not see their life’s financial planning reduced to ruin. More comprehensively, I hope that between now and Third Reading the Government will look at this definition of a qualifying lease for private landlords and how in reality it is to the benefit of private landlords with a few but highly expensive leasehold properties.
I am pleased to see Amendments 165 and 165A and their attempt to address the question of how a flat will be valued under the definition of a qualifying lease. However, I express a degree of concern about Amendment 165, as there are leaseholders I have met, not necessarily very wealthy, who purchased a leasehold flat for marginally over £1 million in London only to find that, as a result of requirements to undertake remedial works, the value has dramatically dropped and is now far less than the purchase price. Valuing their flats at the purchase price would likely mean that many leasehold flats which have lost significant value were brought into a cap which no longer reflected their current value. For this reason, I welcome Amendment 165A, as it would force the Government to consider issues surrounding negative equity when drawing up their mechanism to value these leases. I know that the Minister gave some reassuring comments during a meeting we had and hope that he might expand on them today so that leaseholders can be reassured that their leases will be fairly valued.
Finally, I support all those amendments in this group seeking to reduce the costs that can be passed on to leaseholders, along with Amendment 115, which would extend the cost protection to leaseholders in buildings of all heights. Taken together, these amendments could provide a package of measures that would deliver justice to those unfairly caught up in this scandal.
Lord Greenhalgh (Con)
My Lords, I was a little slow in rising to introduce the government amendments. I was, perhaps, a little punch drunk after the length of the debate today.
It is only right, and I am sure we all agree, that building owners and landlords should share in the cost of fixing dangerous buildings. We have carefully engineered this Bill to ensure that those responsible, and otherwise those with the broadest shoulders, will be the first who are required to pay. Where there is no party that clearly should pay in full, and only in this scenario, our approach spreads the costs fairly and equitably and, above all, ensures that the most vulnerable leaseholders are protected. These measures are a robust and unprecedented legislative intervention, reversing the existing legal presumption that leaseholders must bear the costs of historical building safety defects.
The Government have listened to the comments raised by noble Lords, and we have tabled amendments which go even further in protecting leaseholders. Before I set out the detail of these further protections, I would like to be clear that the protections we are putting in place are extensive and, as noble Lords will be well aware, that these must remain in balance with the demands placed on landlords and building owners in ensuring that building safety defects are fixed and paid for where no wrongdoing on their part has taken place. There is an element of fairness here that we need to deliver. The Bill changes the private contract between the landlord and the leaseholder by stating that leaseholders will not pay any costs except in certain circumstances. Government can do this if it is in the general interest to do so, provided there is a fair balance between all the parties. Therefore, we need to make sure that the Bill is both proportionate and fair to all parties.
As I have said, leaseholders need to be protected, and we have brought in the most wide-ranging and expansive set of protections ever seen, allowing the courts to look through to associated companies to find both who is responsible and who has funds to remediate properties as there is no point in having money while properties remain unsafe. However, we are also aware that not all landlords were involved with the developer or have deep pockets, and we need to make sure that we consider the issue of building safety from all sides. We have therefore legislated on the side of the landlords by providing numerous robust routes for recovery of funds from those truly responsible: developers and the manufacturers of defective construction products.
To be clear, and bearing in mind my noble friends’ proposed amendments, let me put their minds at rest. The Bill makes it very clear that leaseholders will not pay anything in the majority of cases. These are where the landlord is the developer or is linked to the developer, where the landlord is wealthy and, finally, where the leaseholder’s property is valued at less than £325,000 inside London and £175,000 outside.
Where these absolute protections do not apply, the leaseholder’s contributions will be heavily capped. On leaseholder contribution caps, it is important to bear in mind that these caps are a maximum that leaseholders can be charged, not a target, and that, as above, they apply only where the landlord is not linked to the developer and cannot afford to pay in full. In addition, costs paid out in the past five years, including for interim costs such as waking watches, will count against the caps. Overall, we consider that in most cases leaseholders will not have to pay the full capped amount and many will pay nothing at all. Nevertheless, the Government agree it is critical that those leaseholders who are least likely to be able to afford to contribute towards historical remediation costs receive the greatest protection. That is why we have tabled amendments to provide that any qualifying lease with a value below £175,000, or £325,000 in Greater London, will be protected from all costs relating to non-cladding defects and interim measures. This is in addition to the protections for cladding remediation costs, which apply to all qualifying leases, and to all leases in buildings owned by or connected to developers.
Amendment 164 sets out that the value of a qualifying lease at the qualifying time is to be determined by the most recent sale price on the open market, prior to 14 February this year, uprated in accordance with the UK House Price Index published by the Office for National Statistics. Uprating values for this purpose will be set out in legislation.
Amendments 118 and 119 expand the definition of “enfranchised buildings” to ensure that all types of enfranchised buildings are covered.
We have listened very carefully to concerns about leaseholder affordability in the small number of cases where leaseholders are paying up to the caps. That is why we have tabled Amendment 166, to double the repayment period from five to 10 years. For leaseholders whose property is not below the threshold and whose building owner or landlord is not liable for the full remediation costs, Amendment 166 will mean that with regard to the capped costs the monthly repayments will be halved.
We have also listened carefully to those who were worried about buy-to-let investors who may be holding leasehold properties instead of a pension. As a result, we have amended Clause 121 to provide that people owning up to three UK properties qualify for the protections. As before, the principal home will always qualify, irrespective of how many additional properties are owned.
As well as going further to protect leaseholders, we have tabled a number of amendments which add key detail to the measures. We are clear that developers must fix the buildings they developed. That is why we have tabled Amendments 141 to 143 to Schedule 9, which clearly state that, where the landlord is or is linked to the developer, they will not be able to pass costs on to any leaseholder. This includes non-qualifying leaseholders such as commercial leaseholders and those with more than three UK properties. We have also tabled Amendment 145, which extends the definition of a developer to include persons who were in a joint venture with the developer. If you commissioned the work, you will also count as the developer.
We have also tabled Amendment 152, which will amend Schedule 9 to provide that where the landlord meets the contribution condition—defined as having a total net worth of more than £2 million per in-scope building as of 14 February 2022—they will not be able to pass any costs on to qualifying leaseholders. The calculation for net worth will be set out in regulations and will take into account parent and associated companies. This will ensure that those who have used complex corporate structures, such as special purpose vehicles, cannot evade liability where they can afford to meet the costs of remediation.
We are also amending Clauses 120 and 122 on the definitions for relevant buildings, landlords and works. These amendments will extend provisions to include work undertaken to remedy a defect and will clarify that buildings that are leaseholder-owned are out of scope because, in such buildings, the leaseholders are effectively the freeholders as well. With Amendment 121, we set out how the height of an in-scope building and its number of storeys will be calculated.
Amendments to Clauses 122 and 136 cover further definitions, including clarifying that associated partnerships are included, as the noble Earl, Lord Lytton, raised in Committee. Amendment 169 to Schedule 9 inserts a new definition of cladding remediation, which now means the removal or replacement of any part of a cladding system that forms the outer wall of an external wall system and is unsafe.
Amendments 170 and 171 provide that the landlord cannot pass on costs to a qualifying leaseholder relating to professional services, in addition to legal costs. Amendment 177 provides that certain leases are taken to be qualifying leases without the tenant providing a certificate, unless steps are taken. It also provides that landlords are taken to have met the contribution condition unless they provide a certificate proving otherwise. This means that the legal burden will be on the landlord to prove that they are entitled to pass on capped remediation costs.
The amendments also make minor technical and consequential amendments to clauses to ensure the provisions work as intended, remove extraneous powers and commence the provisions two months after Royal Assent.
It is right that leaseholders be protected from extortionate costs of remediating historical building safety defects, in a manner that balances the demands placed on landlords and building owners, where no wrongdoing on their part has taken place. I ask your Lordships to welcome and support this significant and important set of amendments, which go further to protect leaseholders and provide that fair balance.
Baroness Pinnock (LD)
My Lords, this is probably the most important group of amendments we are considering today, because it is absolutely at the heart of the building safety scandal that started nearly five years ago with the loss of 72 people in the Grenfell fire. I always think it is worth remembering that: 72 people died and the lives of many families were changed for ever, and that happened because of systemic and long-term failures in the construction industry.
It is also worth remembering that leaseholders since that time have found themselves under the enormous pressure of anxiety when they receive invoices, maybe for £100,000 or more. Some of them have not been able to cope with that level of anxiety, thinking that nothing would change, and have chosen bankruptcy as a consequence and therefore lost everything they had saved and worked for. For some whom I have heard about, sadly, this pressure may have contributed to something even worse: in the face of the bills and a long dark tunnel with no solution, they ended their lives. That is the backdrop. That is the tragic impact this has had on individuals across the country, and which has brought us to this place. This set of amendments is at the heart of those concerns.
I first raised my worries about leaseholders being liable for all the costs of cladding, removal and remediation of all the fire safety defects when the Fire Safety Bill was first debated in 2020. Unfortunately, I did not succeed in amending it at that stage, but what has happened since has been remarkable—the number of people on all sides of the House who have taken up the cudgels to argue the case, rightly, for justice for leaseholders. I give enormous credit to the cladding campaigners from all groups and different cities around the country who have got together and done the investigation, found the facts and put the case to the Government, who, to their credit, have listened and made the changes we have seen today. I think there are over 200 government amendments to the Bill today.
The question of justice for leaseholders is still at the heart of the Bill, and I contend that the Government still have not gone far enough in fulfilling what the Secretary of State and the Minister have said: that they should not pay a penny. They have done everything right and nothing wrong. They should not pay anything towards this remediation, because the flammable cladding, sometimes knowingly, was put on buildings, as was exposed in the Grenfell inquiry. Shoddy construction, sometimes deliberate, to cut corners and save costs, has also been exposed during the Grenfell inquiry.
I want to speak to Amendment 156 in my name and that of my noble friend Lord Stunell, but also to Amendment 155 in the name of the noble Baroness, Lady Hayman, and to Amendments 158 and 159 in the names of the noble Lords, Lord Young of Cookham and Lord Blencathra, and the noble Baroness, Lady Hayman, to which I have added my name. They focus on trying to solve the problem of justice for leaseholders, who should not pay a penny.
Unfortunately, the Minister has said today that “the majority” will not pay. Well, if the majority will not pay, the minority will—and the minority should not, because none of this is of their making. My Amendment 156 seeks to establish that what the leaseholder should pay is a peppercorn—a grand, historical way of saying zero, zilch. I thank the noble Lord, Lord Young of Cookham, for his support for Amendment 155 in the name of the noble Baroness, Lady Hayman, which uses the word “zero”. I use “peppercorn”, but they get to the same place, and he has acknowledged the justice of this case.
Lord Marks of Henley-on-Thames (LD)
My Lords, it is a great pleasure, especially after that introduction, to follow my noble friend Lady Pinnock. I should say that I have not spoken before on this Bill, and I apologise for coming in only at this stage. I want to contribute on just one aspect of the amendments in this group: the legal advice that the Government have apparently found persuasive, referred to by the noble Lord, Lord Young of Cookham, and by my noble friend Lady Pinnock.
Noble Lords have heard that Amendments 155 and 156—and, to a lesser extent, 158 and 159—would significantly limit the permitted maximum payable by leaseholders under paragraphs 5 and 6 of Schedule 9 below the caps contended for by the Government, so that leaseholders would pay nothing, or only a small amount, towards remediation costs. The Government have asserted that, if those amendments were passed, the legislation would probably breach a freeholder’s right to the peaceful enjoyment of their property under Article 1 of Protocol 1 of the ECHR. I also understand that the Government are therefore concerned that that would mean the Minister could not make a statement of compatibility in conformity with Section 19 of the Human Rights Act.
I do not accept that analysis, and I will say briefly why—and I hope I will be forgiven for quoting the relevant part. It is right that the article provides, in paragraph 1:
“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.”
But paragraph 2 goes on to say:
“The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”
I am relatively confident that this is not a straightforward deprivation case in the first paragraph, because there is no expropriation of the freeholder’s property, in fact or in law. My understanding is that the Government agree with this, although they say that the Strasbourg case law is not clear on the point. On that, I disagree. My reading of the cases on this issue is that they are indeed relatively clear, and that any argument that this is a full deprivation case is unsustainable. But much more difficult is the question of whether this is a case of the Government controlling the freeholder’s use of their property, in such a way as to amount to a breach of the article by imposing effectively the entire remediation costs on those freeholders.
On the initial point as to whether or not this would be a control of use, I think the Government’s advice would be right, but that is not the end of the story. Once control of use is established, then the test is whether the conditions for its lawfulness in paragraph 2 of the article are met by the state. The test for a court, domestically or in Strasbourg, would be threefold. First, does the control of use serve the public interest? Secondly, does it comply with the conditions prescribed by law? Thirdly, does it pass what is sometimes called the fair balance test—that is, does is strike a fair balance between competing interests, and/or is it a proportionate response?
Generally, the European Court of Human Rights will interfere only if the state’s control of use has been arbitrary or manifestly unreasonable. In my view, freeholders would face a difficult uphill battle to persuade a court that a requirement that they meet full remediation costs, pursuant to primary legislation for a clearly public-interest aim—that the fire safety of buildings should be paid for by the freeholder, not my blameless leaseholders—conflicted with the principle of lawfulness or failed to meet the legitimate aim requirement.
Significantly in this context, the protection of the environment—which is, I suggest, analogous to the safety of residential property—has been clearly marked out in cases as a legitimate public interest, as have housing regulations involving rent control and protected tenancies.
The freeholders would have to rely on what is essentially a backstop argument: that these provisions, as amended—if they are—fail to strike a fair balance between their interests in their enjoyment of their property and the interests of the state in achieving a legitimate public policy aim. To rebut such an argument the state would have to show only that the law, as enacted, avoids arbitrariness, that it is foreseeable in its application, and that it strikes a balance between the public interest in protecting blameless leaseholders from heavy charges and the private right of commercial freeholders to enjoy their property. It would be difficult to argue that this legislation, even with any of the proposed amendments, failed to meet the fair balance test.
Nor is it, in my view, central to this argument that there should be a contribution of a particular amount or of a capped amount. For my part, I doubt that the European Court of Human Rights would find that the argument turned on the amount of any contribution by leaseholders. In this I disagree with the Government’s assessment. Indeed, it could be argued that the Government would be more, rather than less, vulnerable to an accusation of arbitrariness if they picked on a particular figure as a defensible cap, rather than legislated for nil contributions from leaseholders.
I am greatly fortified in my overall view by the fact that the margin of appreciation, as it is known, for states in the application of the fair balance test is very wide. I will omit the references that it makes to a number of decided cases, but the European Court of Human Right’s guide on this article, at paragraph 134, I think, says that
“the margin of appreciation available to the legislature in implementing social and economic policies will be a wide one and the Court will respect the legislature’s judgment as to what is ‘in the public interest’ unless that judgment be manifestly without reasonable foundation … Furthermore, the notion of ‘public interest’ is necessarily extensive … The Court normally shows deference to the Contracting States’ arguments that interference under its examination was in the public interest and the intensity of its review”
—the court’s review—
“in this regard is low.”
It follows that I do not believe that a Minister could not properly and conscientiously make a statement under Section 19 of the Human Rights Act that, to use the words of Section 19,
“in his view the provisions of the Bill are compatible with the Convention rights”.
The Minister does not have to be certain; a 51% chance of success in resisting a challenge is sufficient. In my view, that standard is met.
Lord Hope of Craighead (CB)
My Lords, I have not spoken in these debates either. I hope, like the noble Lord, Lord Marks, I might be forgiven for intervening very briefly.
I took the opportunity of looking at Article 1 of Protocol 1 shortly before coming into the Chamber today, and at some of the background authorities to which the noble Lord has referred. I agree entirely with his carefully worded speech in every respect. There is, of course, a question of balance and a question of the margin of appreciation and the other technical phrases that he has used, with which I am very familiar, but I think his assessment of all these points is absolutely right. The prospects of a successful challenge really are very remote, and the Government would succeed. I agree with his assessment, and I hope this might be of some comfort to the noble Baroness, Lady Pinnock, in her amendment, and to the noble Lord, Lord Blencathra.
Lord Blencathra (Con)
My Lords, it is a privilege to speak after hearing from two such knowledgeable noble Lords. I am tempted to say: let us cut to the chase and go straight to the vote on Amendment 115 and get it over with.
In the meantime, I would like to speak on Amendment 115, which I strongly support, and Amendment 123. I would like to comment on Amendments 155, 156 and 157, and to my Amendments 158, 159 and 163. Before doing that, although I will not speak to them, I was privileged to support Amendment 117 on enfranchising leaseholders, Amendment 124, moved by the right reverend Prelate the Bishop of St Albans, on pensioners, and Amendment 153, moved by my noble friend Lord Young of Cookham.
On Amendment 115, concerned with buildings under 11 metres, I strongly support what is proposed by the noble Earl, Lord Lytton. I hope he presses it to a vote unless my noble friend is willing to accept it. I have heard my noble friend the Minister say repeatedly—and he is largely right—that a building of under 11 metres may be less dangerous than a building of 20 or 30 storeys. I accept that even I could get out of a building of three storeys a bit faster than I could get out of one of 13 or 30 storeys. The risk is lower, but there is still a risk—that is one of the main points: there is still a risk. When we saw Richmond House burn down in nine or 10 minutes, it was horrifying. I hope that, if I was in there and woke up in time, I would have got out, but there might be some disabled people who could not have done so.
There is also an issue of principle. If someone has built a building, whether it is 1 metre high or 11 metres high, and used flammable materials or the wrong materials, they should be made to fix it, no matter how wealthy they are—if it is Abramovich or anyone else. If the building has flawed materials, it should be repaired, irrespective of the height. I appreciate that my noble friend has gone a long way on this and that he has been very kind in telling us at countless meetings that there is a lower risk in those buildings, but there is still a risk. Of course, he also said that the numbers were very small: in that case, if the numbers are very small, it is a small problem to fix.
Lord Blencathra (Con)
Let us do it—that is a slogan for the next election for the noble Baroness. If the numbers are small, it is a small thing to fix.
Moving on to Amendment 123, again I support my noble friend Lord Young of Cookham in changing the definition of “qualifying lease” so that buy-to-let landlords with an interest in up to five properties, including their main home, benefit from the leaseholder cost protections in Schedule 9. As my noble friend said, this is important because there are many buildings where there are a lot of little flats owned by buy-to-let landlords. If those landlords cannot pay their share of the bill, it will mean that not all the money is available to do the work for the whole building. Similar issues may arise when landlords own flats in multiple different affected buildings that have received help from the building safety fund.
I appreciate that many of those landlords hold their buy-to-let properties as part of or, in some cases, all their pension provision. We have all had many emails from people in the past few days setting out some rather sad examples. I know my noble friend has increased the protection from two by-to-lets to four, but I do not think that goes far enough and we suggest that the overall figure should be five, but even then it omits many small landlords. I know it is not good law to quote hard cases, but I have an example of just one of dozens one has received in the past few weeks.
This person says, “I am 57 and have worked as an electrical contractor most of my life. I now have nine small rental apartments in Salford, valued at £80,000 to £100,000 each, a total of approximately £800,000 before they were valued at £0 since the cladding crisis. These properties were purchased in 2007-08 with years of savings and dropped 40% in value due to the financial crash of 2009 caused by the banks, which were bailed out, so my properties are still in negative equity. My nine apartments in the same building are all subject to safety issues, and my total service charges for 2022 are approximately £250,000 for the external wall system only, and this quote is from last year. The managing agents are in the process of getting updated quotes, which will be much higher. This does not include firebreaks, compartmentalisation, fire doors, et cetera, so my total costs are likely to be over £300,000 on property valued at £800,000. Having nine rental apartments seems to deem me to be a large-scale landlord not worthy of protecting from these costs, whereas someone with one or two rental properties in London worth a similar value to my nine little flats will be protected under the latest proposals.” He concludes, “The developer of the building has not replied to any letters from our managing agent or us leaseholders and has been trying to close the company for months, which we have objected to. The company has not traded for six years and there are zero funds in the accounts.”
That is a good example of why these amendments are necessary. It is not just the numbers, as the right reverend Prelate said, it has to be the overall value, and that is why I support my noble friend Lord Young’s amendment on having a percentage figure. If we cannot have zero or peppercorn, then 1% seems a fairer way of going about it.
On my Amendments 158, 159 and 163, the Government’s proposals require leaseholders in properties worth more than £175,000 and up to £1 million outside London to pay £10,000 towards non-cladding remedial works if money cannot be found from developers or landlords. In London leaseholders in properties worth more than £325,000 and up to £1 million may have to pay up to £15,000. Again, that is if money cannot be found from developers or landlords. Higher caps of £50,000 and £100,000 apply inside and outside London for properties worth more than £1 million or £2 million. The Government say that these caps are necessary, again because of legal advice which we have just heard rebutted and on which I shall comment in a moment. The claim is that in order to impose measures on developers and landlords it is necessary for leaseholders to contribute in some cases or we fall foul of the ECHR.
Amendment 158 in my name, also supported by my noble friend Lord Young of Cookham and the noble Baronesses, Lady Hayman of Ullock and Lady Pinnock, simply says
“leave out ‘£15,000’ and insert ‘£7,500’”,
halving the figure. For buildings in London, the amendment halves the contribution of leaseholders to non-cladding costs. Similarly, Amendment 159, for buildings outside London, reduces it from £10,000 to £5,000, halving the contribution of leaseholders on non-cladding costs; again, supported by my noble friend Lord Young of Cookham and the noble Baronesses, Lady Hayman of Ullock and Lady Pinnock. Finally, Amendment 163, again supported by my noble friend Lord Young of Cookham, says,
“leave out ‘£50,000’ and insert ‘£15,000’”.
That applies to the properties inside and outside London worth between £1 million and £2 million. The amendment would reduce the leaseholder contribution to non-cladding costs from £50,000 to £15,000.
All told, as we come to the end of this debate, the Government have been given four options by the various amendments. There is the zero option, proposed by the noble Baroness, Lady Hayman of Ullock; the peppercorn option, proposed by the noble Baroness, Lady Pinnock; the 1% option proposed by my noble friend Lord Young of Cookham; or they can lower the cap, as in the amendments that I have just described. We have done all those amendments on lowering the cap in the hope that we could get around the Government’s view that the ECHR would put a block on this and that they would have to say that the Bill, or Act, was not compliant with the ECHR. But we have just heard from two eminent and learned noble Lords and an ex-Supreme Court judge that none of these amendments would be in breach of the ECHR. As the noble Lord, Lord Marks of Henley-on-Thames, pointed out, even if we do not accept of these amendments and stick with the government ones, there will be some freeholders, landlords and developers who will still go to the ECHR and complain about anything to slow it down. So sticking with the Government’s level does not get us out of litigation in the European court.
I look forward to what my noble friend has to say on this. The legal arguments produced by the noble and learned Lords are very telling. I commend my amendments to the House, and also commend those from the noble Earl, Lord Lytton.
Baroness Fox of Buckley (Non-Afl)
It is a great pleasure to follow the noble Lord, Lord Blencathra. In relation to Amendment 115, the noble Lord discussed the 11-metre question. The emphasis is often on whether there is less risk in safety terms under or over 11 metres. For me, that slightly misses the point—which is that, regardless of whether you have resolved that, the problem is that freeholders are still charging and doing remediation work on buildings under 11 metres. Therefore, there are costs that those people who live in buildings under 11 metres have to pick up. The lecture that it is less risky over 11 metres really needs to be given to the freeholders not, necessarily, to the leaseholders—but that does not really help us, I think.
More generally, this is such an important group of amendments. The noble Baroness, Lady Pinnock, passionately reminded us of the context. It is true that being a leaseholder today is no longer just a description—it has almost become a full-time job in terms of fending off more and more financial demands and getting on top of the law. If you go and meet a group of leaseholders, they are having the kind of discussion about the ECHR that we have just heard from noble Lords, because they are trying to get on top of all these details and technicalities. It has become an overriding source of worry and anxiety, and genuinely—rather than just being about the status of home ownership—it has become a hellish state of affairs. So they need anything that can resolve that, and that is why this Bill is so important and this group of amendments matters.
My amendment in this group is a tiny, modest amendment that relates to evaluations. Amendment 165A in my name asks that any evaluations used to decide on caps for those still being charged for remediation should be looked at in a slightly different way. I do not want anything to be paid—I would go with peppercorn or nil—but if there are caps deployed and evaluations used, I remind noble Lords that we need to rectify a different kind of injustice.
The amendment asks that those valuations take into account that the leaseholder’s ability to pay will have been affected by the fact that their main wealth may be in the form of their asset—their home—and that their asset’s value may well be devalued hugely due to fire safety and building safety policies. The amendment notes that the properties may well be in negative equity as a consequence of government measures.
Baroness Neville-Rolfe (Con)
My Lords, there are many amendments in this group, and I have concerns about the open-ended financial implications while it remains unclear who is responsible for a perpetrator who cannot be found, or who is beyond the reach of the law—thus the importance of the review that the Minister has, I believe, agreed to bring forward much sooner than five years’ hence, although, without my amendment, he would need another Bill if we have to make changes, which seems inevitable.
There have been many powerful speeches, not least from the right reverend Prelate the Bishop of St Albans. I will not repeat what has been said. I have, however, given my support to Amendment 123, and I would like to take the opportunity to commend my noble friend Lord Naseby who in Committee highlighted the unfairness of excluding buy-to-let premises from the safeguards in the Bill for reasons we have heard. The Government have acknowledged that he was right.
However, I agree with my noble friend Lord Young of Cookham that it is difficult to limit this arbitrarily to the ownership of two extra UK properties. I would prefer his formula of four properties, or some other, fairer system. He and others have worked so hard to get the various provisions of the Bill right. For example, he said that we may not have capped the liability of enfranchised leaseholders—which he and I have worked on together—as we had been led to believe in Committee.
I look forward to my noble friend the Minister’s reply on the rationale and an answer to all the good points that have been raised, particularly on enfranchised leaseholders and how we do buy-to-let fairly.
Baroness Hayman of Ullock (Lab)
My Lords, this has been an extremely important debate in which we have covered some of the critical issues still outstanding in the Bill. I thank the Minister for the introduction to the amendments. Many of them are good, but we believe there are still problems that need to be sorted out.
I will be brief. I thank the noble Earl, Lord Lytton, for his introduction to Amendment 115. If he decides to divide the House, he will have our support on that amendment.
I turn to my Amendment 155. It is really important that we take account of the principle that has been referred to by other noble Lords: there should be no cost to people who have done nothing wrong. It is not the fault of leaseholders that they have been left with these huge costs. We believe it is desperately unfair to force them to pay a penny, which is why my amendment has the word “zero” in it. As mentioned by the noble Baroness, Lady Pinnock, we must not forget the strain on the mental health of leaseholders. They need clear and proper support, and they are relying on your Lordships to do the right thing by them. To me, this is a moral question. Should leaseholders pay costs that, for many, will still be huge despite the caps proposed by the Government? They are blameless; they should pay nothing.
I thank the noble Lord, Lord Marks, and the noble and learned Lord, Lord Hope of Craighead, for clearly laying out the legal position. It has been important for me to hear that from them, and the detail that they have provided, having had discussions with the Government on their concerns about the ECHR. I also thank the noble Lords, Lord Young of Cookham and Lord Blencathra, and the noble Baroness, Lady Pinnock, for their support.
I confirm that I intend to divide the House on Amendment 155. If it fails to pass, I will be happy to support the noble Lords, Lord Blencathra and Lord Young, on Amendment 158.
Lord Greenhalgh (Con)
My Lords, I spoke to the government amendments as I hoped it would assist the House to have the Government’s views. With the permission of the House, I will now speak again in reply to the points raised by noble Lords on the non-government amendments that they have tabled.
Amendments 155 to 160 and Amendments 162 to 163 deal with leaseholder contribution caps. I thank noble Lords for their contributions and constructive approach, but I am afraid that the Government will not be able to accept these amendments. It is important to bear in mind that leaseholder contributions apply only in certain circumstances, and even then, only when a series of other steps have been exhausted. The caps do not apply at all in relation to cladding defects, nor do they apply where the value of the flat is less than £175,000 outside Greater London and £325,000 inside.
The caps only apply where the building owner or landlord is not linked to the developer and cannot afford to pay in full, where the developer cannot be made to fix their own building, and where the building owners have exhausted all reasonable steps to recover costs from third parties. Leaseholder contributions will only apply where there is no clear developer or wealthy landlord to meet the costs in full, and the party responsible for defective work cannot be identified. The Government consider that this will occur only in a minority of circumstances.
Where there is no party that clearly should pay in full—and only then—our approach spreads the costs fairly and equitably across those with an interest in the building and ensures above all that the most vulnerable leaseholders are protected. The Government’s latest amendments go even further in protecting leaseholders. Where the freeholder or landlord is not at fault and cannot pay to meet the costs, we need to ensure a proportionate approach that takes into account the interests of all parties. That is why our approach spreads the costs equitably among all relevant parties with an interest in the building.
The amendments tabled by the noble Baronesses, Lady Hayman and Lady Pinnock, and—
Lord Cormack (Con)
Can my noble friend quantify how many people he expects will be paying? What is the maximum amount they will pay?
Lord Greenhalgh (Con)
I cannot quantify the exact amount people will pay, but it is fair to say that we have set out a fundamental system of protection that admittedly does not go as far as the zero or peppercorn proposed in opposition amendments, but it does go a considerable way to ensuring that leaseholders are the last in line to pay, as opposed to the first.
As I said, the amendments tabled by the noble Baronesses, Lady Hayman and Lady Pinnock, and the noble Lord, Lord Stunell, seek to reduce leaseholder contributions to zero or a peppercorn. Where there is no clear party that must pay, it would not achieve a fair balance between relevant parties to transfer the costs in full to the freeholder or landlord. I appreciate that that opinion seems to vary from that of noble Lord, Lord Marks of Henley-on-Thames, but that is the government position.
Amendments tabled by my noble friends Lord Young and Lord Blencathra propose to reduce the leaseholder contribution caps, and another amendment proposes alternatively that the contribution is 1% of the lease value. The Government have already taken significant and far-reaching steps to protect leaseholders, protecting those in lower value properties and doubling the repayment period to 10 years. On that basis, I ask the noble Lords not to move their amendments.
Government Amendment 164 provides for the value of a lease to be determined without the need for a valuation. It allows for the value of the lease to be determined by uprating the most recent sale price prior to 14 February 2022. The uprating, which will be set out in regulations, will ensure all properties are compared on a level playing field. The uprating will be based on a metric called the house price index which tracks house prices. This will allow properties to be assigned a nominal present-day value.
Amendment 165, tabled by my noble friends Lord Young and Lord Blencathra, proposes that the value of the lease would be based solely on its most recent sale price. I am afraid the Government will not be able to accept this amendment as it would put leaseholders who have purchased their properties more recently at a significant disadvantage. The Government consider it important that properties are compared like for like, irrespective of when they were last sold. On that basis, I ask my noble friends not to move to their amendments.
I will turn now to Amendments 123 and 124, which deal with the definition of a qualifying lease. The Government have already tabled amendments which will see people with a total of up to three UK properties eligible for the protections. Amendment 123, tabled by my noble friends Lord Young and Lord Blencathra, proposes to increase this to a total of up to five UK properties. Amendment 124, tabled by the right reverend Prelate the Bishop of St Albans, proposes to increase the total to six for individuals in receipt of a state pension. I am afraid that the Government will not be able to accept these amendments.
As I have previously discussed, it is important that the Government take a proportionate approach and ensure that our measures are fair to all parties. This includes considering where certain groups of leaseholders are likely, on average, to be able to afford to contribute to the costs of remediation. The Government need to focus their protections on those who need it most, primarily leaseholders living in their own homes and those who have moved out and are subletting. We also recognise concerns about people with small numbers of additional properties, and that is why we are ensuring those with up to three UK properties will be protected.
The Earl of Lytton (CB)
My Lords, I will test the opinion of the House on Amendment 115 in a minute. However, before I do so, I will say how much I appreciate the contributions from all noble Lords. It has been an absolutely fascinating debate. As others have said, we are really getting into the core philosophy of what sits behind this Bill. I feel slightly like the skinny fly-half who, having got hold of the rugby ball and made a dash for the opposing side’s try line, finds himself up against a veritable wall of the opposition. It is only seconds later that he finds that a substantial number of heavyweights from his own side have propelled him over the line and applied him and the rugby ball into the mud to score a try. We have not scored a try yet. That, of course, depends on noble Lords—the referees.
I thank the noble Lord, Lord Young, for his summary of this and the other amendments—I found him to be wholly convincing. I will not go into a great deal of detail, given the well-rounded debate we have had, but Amendment 117 seems to address an issue which actually borders on discrimination on the grounds of tenure, and it is a really perverse outcome for commonholders as a tenure. It is a tenure to which the Government should be giving support—we all know that. Excluding them cannot be right.
Various noble Lords have spoken about extending the number of buy-to-let properties. That would rely on their accepting the basic premise of a charge to the leasehold and freehold properties as a default mode—I shall come back to that in a minute.
Amendment 126 is necessary because, unless the benefits under the Bill inure to the benefit of the buyer as a signee, the Bill would simply act to the prejudice of the seller, which would remain and lead to unfair loss, cost, worry, delay and disadvantage—and we cannot have that. A reduction to zero charge would be beneficial and I would support it, but, again, I go back to the question whether I would start from this point.
I welcome a lot of these amendments and would welcome some of those from the Government if I was not troubled by their basic premise of deciding that orphan cost liabilities must be spread between two categories of the innocent. It is a matter of policy; it is not a matter of human rights. I listened carefully to what the noble Lord, Lord Marks, and the noble and learned Lord, Lord Hope of Craighead, said on that, and I found it absolutely fascinating. The fact remains that freeholders as we know them very often have a minority interest by value, so the questions remain: where do you find that real, available hard cash to fund the remediation, and after what degree of litigation, delay and cost?
Despite what the Minister said, and I admire his tenacity, I remain unconvinced by the arguments. On sub-11 metres, I do not see that the argument has been made for the quantifiable difference under the Bill that the Government are trying to achieve, bearing in mind that the Worcester Park building was a four-storey building. I wish to test the opinion of the House on Amendment 115.
The Deputy Speaker (Baroness Pitkeathley) (Lab)
My Lords, I cannot call Amendment 116, as it was pre-empted by Amendment 115, which has already been agreed by your Lordships.
Amendment 117
Lord Young of Cookham
Member’s explanatory statement
This amendment ensures leaseholders in enfranchised buildings are not excluded from the protection in the Bill.
The Deputy Speaker (Baroness Pitkeathley) (Lab)
My Lords, as Amendment 117 has now been agreed, I cannot call Amendments 118 and 119.
Amendment 120
Lord Greenhalgh
Member’s explanatory statement
This amendment removes the power to make supplementary provision, in consequence of the proposed new Clause after Clause 120 in the name of the Minister.
Lord Greenhalgh
“Section 120: height of buildings and number of storeys
(1) This section applies for the purpose of section 120.(2) The height of a building is to be measured from ground level to the finished surface of the floor of the top storey of the building (ignoring any storey which is a roof-top machinery or plant area or consists exclusively of machinery or plant rooms).(3) When determining the number of storeys in a building—(a) any storey below ground level is to be disregarded;(b) any mezzanine floor is to be regarded as a storey if its internal floor area is at least half of the internal floor area of the largest storey in the building which is not below ground level.(4) In subsection (2) “ground level”, in relation to a building, means—(a) the level of the surface of the ground immediately adjacent to the building, or(b) where the level of the surface of the ground on which the building is situated is not uniform, the level of the lowest part of the surface of the ground immediately adjacent to it.(5) For the purposes of subsection (3) a storey is “below ground level” if any part of the finished surface of the ceiling of the storey is below the level of the surface of the ground immediately adjacent to that part of the building.”Member’s explanatory statement
This new Clause sets out how the height of a building, and the number of storeys, is to be calculated.
Lord Greenhalgh
Member’s explanatory statement
This amendment provides that a lease may be a qualifying lease if a relevant tenant owns no more than two dwellings (excluding their interest under the lease).
Lord Greenhalgh
Member’s explanatory statement
This amendment ensures that subsection (4)(b) does not apply to Scotland (as the word “ownership” suffices for property in Scotland).
Lord Greenhalgh
Member’s explanatory statement
This amendment is a drafting change.
Member’s explanatory statement
This amendment is a drafting change.
(a) works relating to the construction or conversion of the building, if the construction or conversion was completed in the relevant period;(b) works undertaken or commissioned by or on behalf of a relevant landlord or management company, if the works were completed in the relevant period;(c) works undertaken after the end of the relevant period to remedy a relevant defect (including a defect that is a relevant defect by virtue of this paragraph).“The relevant period” here means the period of 30 years ending with the time this section comes into force.(3A) In subsection (2) the reference to anything done (or not done) in connection with relevant works includes anything done (or not done) in the provision of professional services in connection with such works.”Member’s explanatory statement
This amendment makes drafting changes, provides that “relevant works” includes works undertaken to remedy a relevant defect (which means that a defect resulting from those works is capable of being a “relevant defect”), and ensures that professional services are covered (so a defect resulting from such services is capable of being a “relevant defect”).
““conversion” means the conversion of the building for use (wholly or partly) for residential purposes;”Member’s explanatory statement
This amendment defines “conversion” for the purposes of this Clause.
Member’s explanatory statement
This amendment and the next amendment in the name of the Minister change the defined term to “relevant landlord or management company”, bringing in persons who are responsible under a lease for carrying out works.
Member’s explanatory statement
See the explanatory statement relating to the previous amendment in the name of the Minister.
Lord Greenhalgh
Member’s explanatory statement
This amendment is a drafting change.
“(2) A partnership is associated with any person who was a partner in the partnership, other than a limited partner, at any time in the period of 5 years ending at the qualifying time (“the relevant period”).(2A) A body corporate is associated with any person who was a director of the body corporate at any time in the relevant period.”Member’s explanatory statement
This amendment defines who a partnership is associated with, and that a body corporate is associated with a person who was a director in the relevant period.
Member’s explanatory statement
This amendment is a drafting change.
Member’s explanatory statement
This amendment is a drafting change.
“(9) In this section “partnership” means—(a) a partnership within the meaning of the Partnership Act 1890, or(b) a limited partnership registered under the Limited Partnerships Act 1907,or a firm or entity of a similar character formed under the law of a country or territory outside the United Kingdom (and the reference to “limited partner” is to be read accordingly).”Member’s explanatory statement
This amendment defines “partnership” for the purposes of this Clause.
“(10) The Secretary of State may by regulations provide that, in relation to a prescribed reference in a provision mentioned in subsection (1) to anyone associated with another person, subsections (2) to (3) have effect with prescribed modifications.”Member’s explanatory statement
This amendment provides that subsections (2) to (3) may be modified in their application to a reference, in a provision mentioned in subsection (1), to an associate.
Lord Greenhalgh
““joint venture” includes a partnership (as defined by section 123);”Member’s explanatory statement
This amendment defines “joint venture” for the purposes of the Schedule.
““prescribed” means prescribed by regulations made by the Secretary of State;”Member’s explanatory statement
This amendment defines “prescribed” for the purposes of the Schedule.
“(2) The definition of “service charge” applies in relation to a lease of premises that do not include a dwelling as it applies in relation to a lease of a dwelling.”Member’s explanatory statement
This amendment ensures that the definition of “service charge” works for leases of premises that do not include a dwelling (as to which, see the next amendment in the name of the Minister).
“(A1) This paragraph applies in relation to a lease of any premises in a relevant building.”Member’s explanatory statement
This amendment extends the leases to which this paragraph applies.
Member’s explanatory statement
This amendment is consequential on the preceding amendment in the name of the Minister.
Member’s explanatory statement
This amendment is a drafting change.
Member’s explanatory statement
This amendment extends the persons responsible for a defect to persons who were in a joint venture with the developer.
Member’s explanatory statement
This amendment provides that the persons responsible for a defect include a person who undertook or commissioned the works in question.
Member’s explanatory statement
This amendment provides that the persons responsible for a defect include a person who undertook or commissioned the works in question.
Member’s explanatory statement
This amendment is consequential on the amendment in the name of the Minister at page 225, line 26.
Member’s explanatory statement
This amendment is consequential on amendments to Clause 122 in the name of the Minister.
Member’s explanatory statement
This amendment is consequential on the amendment in the name of the Minister at page 225, line 26.
Member’s explanatory statement
This amendment is consequential on the amendment in the name of the Minister at page 225, line 26.
Lord Greenhalgh
“No service charge payable if landlord meets contribution condition
3A_(1) No service charge is payable under a qualifying lease in respect of a relevant measure relating to any relevant defect if the landlord under the lease at the qualifying time (“the relevant landlord”) met the contribution condition.(2) The contribution condition is that the landlord group’s net worth at the qualifying time was more than N x £2,000,000,where N is the number of relevant buildings within sub-paragraph (3).(3) A relevant building is within this sub-paragraph if a member of the landlord group was, at the qualifying time, a landlord under a lease of the relevant building or any part of it.(4) For the purposes of this paragraph—(a) “the landlord group” means the relevant landlord and any person associated with the relevant landlord;(b) the net worth of the landlord group at the qualifying time is to be determined in accordance with regulations made by the Secretary of State.(5) The Secretary of State may by regulations amend the amount for the time being specified in sub-paragraph (2).(6) This paragraph does not apply if, at the qualifying time, the relevant landlord was—(a) a private registered provider of social housing (as to which see section 80 of the Housing and Regeneration Act 2008),(b) a local authority (as defined by section 29), or(c) a prescribed person.” Member’s explanatory statement
This amendment provides that no service charge is payable under a qualifying lease in respect of a relevant measure relating to any relevant defect if the landlord met the condition mentioned in the paragraph (relating to net worth).
Lord Greenhalgh
(a) £325,000, if the premises demised by the qualifying lease are in Greater London;(b) £175,000, in any other case.(2) For the purposes of this paragraph the value of a qualifying lease at the qualifying time is its value determined in accordance with paragraph 6 and regulations made under it.”Member’s explanatory statement
This amendment provides that no service charge is payable under a qualifying lease in respect of a relevant measure relating to any relevant defect if the value of the lease at the qualifying time is less than the amount mentioned in the amendment.
Baroness Hayman of Ullock
Member’s explanatory statement
This amendment would reduce the maximum amount leaseholders could be liable to pay for fire remediation work to zero.
The Deputy Speaker (Baroness Pitkeathley) (Lab)
I cannot call Amendments 158 and 159 for reasons of pre-emption.
Lord Greenhalgh
(a) the value of the qualifying lease at that time is to be determined as if the tenant’s total share at that time was 100%;(b) ”Member’s explanatory statement
This amendment provides that where the qualifying lease is a shared ownership lease the value of it at the qualifying time is to be determined as if the tenant's share at that time was 100%.
Lord Greenhalgh
“(6A) The regulations may in particular provide that, except in prescribed cases, the value of a qualifying lease at the qualifying time is to be determined by—(a) ascertaining the consideration given on the latest disposal of the qualifying lease on the open market to have been made before that time, and(b) if that disposal occurred before 2022, uprating the consideration in accordance with the regulations.”Member’s explanatory statement
This amendment mentions the kind of provision that may be made by regulations under paragraph 6(6).
Lord Greenhalgh
“(1) A relevant service charge which would otherwise be payable under a qualifying lease is payable only if (and so far as) the sum of—(a) the amount of the service charge, and(b) the total amount of relevant service charges which fell due in the period of 12 months ending with the day on which the service charge fell due,does not exceed one tenth of the permitted maximum.”Member’s explanatory statement
This amendment removes the existing power to make regulations, and provides that a service charge in respect of a relevant measure is payable only so far as the total of such service charges in any 12 month period does not exceed one tenth of the permitted maximum.
““relevant service charge” means a service charge under a qualifying lease in respect of a relevant measure relating to any relevant defect.”Member’s explanatory statement
This amendment is consequential on the preceding amendment in the name of the Minister.
Member’s explanatory statement
This amendment removes the condition that a tenant under the qualifying lease was resident at the qualifying time.
(a) forms the outer wall of an external wall system, and(b) is unsafe.”Member’s explanatory statement
This amendment inserts a definition of “cladding remediation” (and removes the power to define that expression).
Member’s explanatory statement
This amendment provides that this paragraph applies to legal or other professional services relating to liability or potential liability of a person in respect of a relevant defect.
Member’s explanatory statement
This amendment is consequential on the previous amendment in the name of the Minister.
Member’s explanatory statement
This amendment clarifies the paragraphs of this Schedule to which the provisions in this paragraph apply.
Member’s explanatory statement
This amendment is consequential on the amendment in the name of the Minister at page 225, line 26.
Member’s explanatory statement
This amendment is consequential on the amendment in the name of the Minister at page 225, line 26.
“(4) The Secretary of State may by regulations modify the application of this paragraph as it applies in relation to a lease of premises that do not include a dwelling.”Member’s explanatory statement
This amendment is consequential on the amendment in the name of the Minister at page 225, line 26.
Member’s explanatory statement
This amendment is consequential on the amendment in the name of the Minister at page 225, line 10 inserting a definition of “prescribed”.
“Presumption: qualifying lease
12A (1) This paragraph applies in relation to a lease that meets the conditions in paragraphs (a) to (c) of section 121(2).(2) The lease is to be treated for the purposes of this Schedule as a qualifying lease unless—(a) the landlord under the lease has taken all reasonable steps (and any prescribed steps) to obtain a qualifying lease certificate from a tenant under the lease, and(b) no such certificate has been provided to the landlord.(3) In this paragraph “qualifying lease certificate” means a certificate, complying with any prescribed requirements, that the condition in section 121(2)(d) was met in relation to the lease at the qualifying time.(4) The requirements that may be prescribed include requirements as to—(a) the information to be provided in the certificate,(b) the form of the certificate, and(c) the execution of the certificate.Presumptions relating to landlord under qualifying lease
12B_(1) The person who was the landlord under a qualifying lease at the qualifying time (“the relevant landlord”) is to be treated for the purposes of this Schedule as having met the contribution condition (as defined by paragraph 3A) unless the landlord under the lease provides to the tenant under the lease a certificate, complying with any prescribed requirements, that the relevant landlord did not meet that condition. (2) The Secretary of State may by regulations provide that (in some or all cases) the condition in paragraph 2(1) is to be treated for the purposes of this Schedule as met in relation to a lease to which paragraph 2 applies unless the landlord under the lease provides to the tenant under the lease a certificate that complies with any prescribed requirements.(3) The requirements that may be prescribed include requirements as to—(a) the information to be provided in the certificate,(b) the form of the certificate, and(c) the execution of the certificate.”Member’s explanatory statement
This amendment provides that certain leases are taken to be qualifying leases unless steps are taken without the tenant providing a certificate, and landlords are taken to have met the contribution condition, or the condition in paragraph 2, unless they provide a certificate.
Member’s explanatory statement
This amendment is consequential on the amendment in the name of the Minister at page 225, line 10 inserting a definition of “prescribed”.
“Information from landlords
13A_(1) The Secretary of State may by regulations make provision requiring a relevant landlord to give prescribed information or documents to a relevant tenant or other prescribed person.(2) Information or documents may be prescribed if they relate to any matter with which this Schedule is concerned.(3) The regulations may require the information or documents to be given in a prescribed way.(4) The regulations may provide that where a relevant landlord fails to comply with the regulations, prescribed costs—(a) are not to be regarded as relevant costs to be taken into account in determining the amount of a service charge payable under a relevant lease, and(b) must not be met from a relevant reserve fund.(5) The regulations may make provision for and in connection with an application to the First-tier Tribunal for an order—(a) determining whether a relevant landlord has failed to comply with the regulations, and(b) if so, requiring the relevant landlord to provide specified information or documents to a specified person by a specified time.“Specified” here means specified in the order.(6) Nothing in sub-paragraph (5) limits the effect of regulations made by virtue of sub-paragraph (4).(7) Information or documents may be specified in an order under sub- paragraph (5) only if the regulations require them to be provided to the specified person.(8) In this paragraph—“relevant costs” has the meaning given by section 18 of the Landlord and Tenant Act 1985 (and this applies in relation to a lease of premises that does not include a dwelling as it applies in relation to a lease of a dwelling);“relevant landlord” means a landlord under a relevant lease;“relevant lease” means a lease of premises in a relevant building;“relevant reserve fund” has the meaning given by paragraph 10; “relevant tenant” means a tenant under a relevant lease.”Member’s explanatory statement
This amendment confers a power to make regulations, requiring landlords to provide certain information and documents, and also enabling an application to be made to the First-tier Tribunal about the provision of information and documents.
“13B_ In section 21 of the Landlord and Tenant Act 1985 (service charge information), in subsection (6A) (inserted by section 115), after “2022)” insert “or relevant buildings (as defined by section 120 of that Act)”.”Member’s explanatory statement
This amendment provides that regulations under section 21 of the Landlord and Tenant Act 1985 (service charge information) need not make the provision mentioned in subsection (2) or (3) of that section in relation to relevant buildings.
Lord Greenhalgh
Member’s explanatory statement
This amendment is a drafting change.
“(3A) In subsection (3) the reference to a landlord under a lease includes any person who is party to the lease otherwise than as landlord or tenant.”Member’s explanatory statement
This amendment provides that where repairing obligations under a lease are placed on a person other than the landlord (or tenant), the person falls within the definition of “relevant landlord”, and accordingly a remediation order may be made against them.
Member’s explanatory statement
This amendment is a drafting change.
“(ca) a person with a legal or equitable interest in the relevant building or any part of it;”Member’s explanatory statement
This amendment provides that a person with a legal or equitable interest in the building may apply for a remediation order.
“(6) A decision of the First-tier Tribunal or Upper Tribunal made under or in connection with this section (other than one ordering the payment of a sum) is enforceable with the permission of the county court in the same way as an order of that court.”Member’s explanatory statement
This amendment provides for the enforcement of orders made under this Clause.
Lord Greenhalgh
Member’s explanatory statement
This amendment provides that an order may be made in respect of a partnership.
Member’s explanatory statement
This amendment is consequential on the first amendment of this clause in the name of the Minister.
(a) a landlord under a lease of the relevant building or any part of it,(b) a person who was such a landlord at the qualifying time,(c) a developer in relation to the relevant building, or(d) a person associated with a person within any of paragraphs (a) to (c).”Member’s explanatory statement
This amendment expands the persons in respect of whom an order may be made.
““developer”, in relation to a relevant building, means a person who undertook or commissioned the construction or conversion of the building (or part of the building) with a view to granting or disposing of interests in the building or parts of it;”Member’s explanatory statement
This amendment defines “developer” for the purposes of the Clause.
“(za) the Secretary of State,”Member’s explanatory statement
This amendment provides that “interested person” (who may apply for a remediation contribution order) includes the Secretary of State.
“(e) any other person prescribed by regulations made by the Secretary of State;”Member’s explanatory statement
This amendment provides that “interested person” includes a person prescribed by regulations.
““partnership” has the meaning given by section 123;”Member’s explanatory statement
This amendment defines “partnership” for the purposes of the Clause.
“(6) The Secretary of State may by regulations provide that this section applies, with or without modifications, in relation to a building that would, but for section 120(3), be a relevant building.”Member’s explanatory statement
This amendment provides that regulations may apply the Clause (with or without modifications) in relation to buildings that are not relevant buildings because of Clause 120(3) (enfranchised buildings etc).
Lord Greenhalgh
Member’s explanatory statement
This amendment provides that a person acting as an insolvency practitioner in relation to the company may apply for an order under this Clause.
Member’s explanatory statement
This amendment provides that an order under this Clause may be made against a partnership associated with the company that is being wound up.
(b) to make such payments to a specified person as the court considers to be just and equitable for the purpose of meeting costs incurred or to be incurred in remedying relevant defects mentioned in subsection (1)(b).Section 126(4) applies for the purposes of this section.”Member’s explanatory statement
This amendment enables an order under this Clause to require the making of payments to a person specified in the order.
““act as an insolvency practitioner” has the meaning given by section 388 of the Insolvency Act 1986;”Member’s explanatory statement
This amendment is consequential on the first amendment to this Clause in the name of the Minister.
““partnership” has the meaning given by section 123;”Member’s explanatory statement
This amendment is consequential on the amendment to this Clause at page 132, line 19 in the name of the Minister.
““specified” means specified in the order.”Member’s explanatory statement
This amendment is consequential on the amendment to this Clause at page 132, line 20 in the name of the Minister.
Lord Greenhalgh
Member’s explanatory statement
This amendment is a drafting change.
“(1A) A scheme may be established for any purpose connected with—(a) securing the safety of people in or about buildings in relation to risks arising from buildings, or(b) improving the standard of buildings,including securing that safety, or improving that standard, by securing that persons in the building industry remedy defects in buildings or contribute to costs associated with remedying defects in buildings.” Member’s explanatory statement
This amendment sets out the purposes for which a scheme may be established.
(b) the conditions that an eligible person must meet in order to become, and remain, a member of the scheme (“membership conditions”),and may provide for different categories of membership.”Member’s explanatory statement
This amendment provides that scheme membership conditions are to be contained in regulations.
“(3) The membership conditions that may be prescribed include in particular conditions relating to—(a) the remedying of defects in buildings with which an eligible person has a connection of a prescribed kind;(b) the making of financial contributions towards meeting costs associated with remedying defects in buildings (including buildings with which an eligible person has no connection);(c) the use (or use in prescribed cases) of construction products (or construction products of a prescribed description) of prescribed persons carrying out activities in relation to construction products;(d) the provision of information to the Secretary of State or any other person;(e) the competence or conduct of any individual connected with an eligible person (for example, any director or senior manager of an eligible person) or any person with whom an eligible person contracts;(f) whether persons with whom an eligible person contracts are members of a scheme.In paragraph (e) “conduct” includes conduct occurring before the coming into force of this section.(4)The descriptions of persons prescribed by virtue of subsection (3)(c) may in particular be prescribed by reference to—(a) being eligible to be members of a scheme and not being members of that scheme;(b) their conduct in relation to remedying defects in buildings or contributing to costs associated with remedying defects in buildings.(4A) The membership conditions that may be prescribed by virtue of subsection (3)(c) include in particular a condition requiring an eligible person to ensure that no prescribed product of prescribed persons carrying out activities in relation to construction products is used in prescribed cases.”Member’s explanatory statement
This amendment sets out various matters that may, in particular, be the subject of membership conditions for a scheme established under this Clause.
“(6) Regulations may make provision about the keeping and publication of other lists.”Member’s explanatory statement
This amendment provides that regulations may make provision about the keeping and publication of other lists.
Lord Greenhalgh
Member’s explanatory statement
This amendment is a drafting change.
“(2A) Regulations may make provision about—(a) applications for membership of a scheme;(b) renewal of membership at prescribed intervals;(c) termination of a person’s membership;(d) the suspension of a person from membership.”Member’s explanatory statement
This amendment and the next amendment to this Clause in the name of the Minister provide that provision about procedure relating to a scheme is to be set out in regulations rather than in a document published by the Secretary of State.
Member’s explanatory statement
See the explanatory statement relating to the previous amendment to this Clause in the name of the Minister.
Member’s explanatory statement
This amendment is consequential on the Minister’s amendment to Clause 128 at page 132, line 35.
“(5A) Regulations may make provision about the determination of disputes.”Member’s explanatory statement
This amendment provides that regulations under Clause 128 may make provision about the determination of disputes.
Member’s explanatory statement
This amendment is consequential on the Minister’s amendment to Clause 128 at page 132, line 35.
“(6A) Regulations may make provision about the termination of a scheme.”Member’s explanatory statement
This amendment provides that regulations under Clause 128 may make provision about the termination of a scheme established under that Clause.
Member’s explanatory statement
This amendment is a drafting change.
Baroness Scott of Bybrook
Member’s explanatory statement
This amendment removes the reference to Schedule 12 in the definition of “persons carrying out activities in relation to construction products” with a view to a definition being inserted into the Clause.
Baroness Scott of Bybrook (Con)
My Lords, we now come to the final debate on Report of this Bill, and I will speak to a number of government amendments on construction products. Noble Lords will be familiar with a number of these amendments already as they were debated and withdrawn during Committee.
I will begin by speaking to Amendments 245 to 249. This set of new clauses will introduce a new cause of action against construction product manufacturers and sellers of construction products. There are currently limited routes which might allow leaseholders, building owners and homeowners to hold to account construction product manufacturers or sellers for their role in the creation of building safety defects.
The cause of action will enable claims to be brought against construction product manufacturers and sellers for their role in causing problems associated with building safety. It will apply where a construction product has been mis-sold or is found to be inherently defective, or if there has been a breach of the construction products regulations applicable at the time and it has been used in the construction of a dwelling or works on that dwelling. If this contributes to a dwelling being unfit for habitation or causes it to be so, a civil claim will be able to be brought through the courts under this cause of action. This cause of action will be subject to a 30-year limitation period retrospectively in relation to cladding products only. The new cause of action will also apply retrospectively to all construction products and be subject to a 15-year limitation period. These limitation periods mirror the changes we are making to the Defective Premises Act. This cause of action will help to ensure that construction products manufacturers, distributors and others are held responsible for the cost of rectifying their mistakes, where a dwelling is unfit for habitation as a result of those mistakes. Amendments 255 and 271 are consequential to these amendments.
I now move on to Amendments 250, 251, 252 and 253, which will create a power to make regulations to require construction products manufacturers, their authorised representatives, importers and distributors to contribute towards the cost of remediation works where they have caused dwellings to be unfit for habitation or contributed to dwellings being unfit for habitation. This will enable the Secretary of State to serve a costs contribution order on a company that has been successfully prosecuted under the construction products regulations. Amendment 253 will allow the Secretary of State to appoint an independent person to inspect buildings where the relevant product has been used. They will assess whether the conditions for serving an order are met, the remediation works required and the cost of those works. Amendment 251 will also create a power to make regulations to take an alternative route through the courts. This will enable the Secretary of State to apply to a court for a costs contribution order to be made against a company. The grounds for making an application would be the same. Amendment 253 will enable the Secretary of State to require a company to contribute towards the cost of building assessments carried out as part of this process.
Amendment 256 makes a technical correction to secure that the maximum fine that can be imposed under the construction products regulations for an offence in Scotland is the statutory maximum in Scotland.
Setting out this scheme in secondary legislation will enable the detailed design of these powers to interact with the construction products regulations, including those that will be made using the Bill’s powers. Amendments 269, 270 and 273 are consequential to these amendments.
Amendment 257 will require that the affirmative procedure is used to make any regulations that would remove construction products from the list of safety-critical products set out in the construction products regulations.
I have considered carefully the important points raised by the Delegated Powers and Regulatory Reform Committee in its report on the Bill regarding the parliamentary procedure that should be used to make regulations under this power. I thank the noble Lords, Lord Stunell and Lord Khan, for their contributions on this matter in Grand Committee. It is of course right that regulations receive the proper level of parliamentary scrutiny. That is why Amendment 257 will supplement the existing safeguards in Schedule 12, which prevents products being added to the list unnecessarily or removed without good reason. I hope the noble Lords are reassured that this strikes the right balance between the need for parliamentary debate to scrutinise regulations and the proper use of the limited and valuable time of parliamentarians.
Finally, Amendments 216 and 217 make a minor drafting change in relation to the definition of
“persons carrying out activities in relation to construction products”
in Clause 129. I beg to move.
Lord Stunell (LD)
My Lords, briefly, we welcome the changes that the Minister has reported, particularly Amendments 257, 258 and 259, which will bring back to the affirmative procedure some of those matters which we raised in Committee. We appreciate that and we are very happy to support the Government’s amendments in that respect.
Lord Khan of Burnley (Lab)
My Lords, I welcome this final group of amendments relating to construction products. The Government are absolutely right to take steps to increase the recourse available to residents and responsible persons where construction or cladding products have led to residences becoming uninhabitable. Government
Amendment 246 is particularly welcome, as it provides for a new right of action where breach of regulations relating to construction projects leads to a building or dwelling becoming unfit for habitation. Every person and family deserves the right to live in a safe and habitable home. On this issue, I would be grateful if the Minister could clarify whether the Homes (Fitness for Human Habitation) Act already provides for similar guarantees.
I also particularly welcome Amendments 247 and 248, which intend to provide a right of action for a 30-year limitation period where historic defaults relating to cladding either cause or are a factor in a building or dwelling becoming unfit for habitation. I am sure that the whole House will agree that the passage of the Bill should represent a turning point for building safety in the UK, and I hope that these amendments will contribute to that.
Baroness Scott of Bybrook (Con)
I thank noble Lords for their support for these important amendments —I will write to the noble Lord on his question; I do not have it in my pack. This shows that, throughout the Bill, we have listened to noble Lords across the House and have done what we can. I thank noble Lords for their engagement and for their continued support for most of the Bill. It is important because it will ensure that in this country everyone’s home is a place of safety.
Baroness Scott of Bybrook
““construction product” has the meaning given by regulations;“persons carrying out activities in relation to construction products” include (without limitation)—(a) a manufacturer of construction products,(b) a person who markets or supplies construction products to others, and(c) a person who imports construction products into the United Kingdom for use, marketing or supply;”Member’s explanatory statement
This amendment defines “construction product” and “persons carrying out activities in relation to construction products” for the purposes of Clause 128.
Baroness Scott of Bybrook
“(1A) The descriptions of persons which may be prescribed include in particular persons who—(a) are eligible to be members of a scheme established under section 128, and(b) are not members of that scheme.”Member’s explanatory statement
This amendment provides that the descriptions of persons whom regulations may prohibit from carrying out development under this Clause include, in particular, persons who are eligible to be members of a scheme established under Clause 128 but are not members of that scheme.
Member’s explanatory statement
This amendment is consequential on the previous amendment to this Clause in the name of the Minister.
“including securing that safety, or improving that standard, by securing that persons in the building industry remedy defects in buildings or contribute to costs associated with remedying defects in buildings.”Member’s explanatory statement
This amendment clarifies the purposes for which a prohibition may be imposed.
Baroness Pinnock
“(3A) Within the period of five years beginning with the day on which this section comes into force, the Secretary of State must by regulations prohibit any developer who has not completed all previously identified works in relation the remediation of fire safety risks from carrying out development of land in England.”Member’s explanatory statement
This amendment would require the Secretary of State to prevent developers who have not completed previously identified fire safety work within 5 years from carrying out any further development.
Baroness Pinnock (LD)
My Lords, I wish to move Amendment 221 formally and divide the House on it. We have already decided that leaseholders will not pay towards the cost of remediation, and now we have the chance to decide that it is done in a timely way. That is just as important, so I beg leave to seek the opinion of the House.
Lord Greenhalgh
Member’s explanatory statement
This amendment has the effect of allowing regulations to require notifications to be given about development other than notifications relating only to the proposed beginning of development.
Member’s explanatory statement
This amendment is consequential on the previous amendment to this Clause in the name of the Minister.
Lord Greenhalgh
“(1A) The descriptions of persons which may be prescribed include in particular persons who—(a) are eligible to be members of a scheme established under section 128, and(b) are not members of that scheme.”Member’s explanatory statement
This amendment provides that the descriptions of persons in relation to whom regulations may impose a building control prohibition under this Clause include, in particular, persons who are eligible to be members of a scheme established under Clause 128 but are not members of that scheme.
Member’s explanatory statement
This amendment is consequential on the previous amendment to this clause in the name of the Minister.
“including securing that safety, or improving that standard, by securing that persons in the building industry remedy defects in buildings or contribute to costs associated with remedying defects in buildings.”Member’s explanatory statement
This amendment clarifies the purposes for which a prohibition may be imposed.
Lord Greenhalgh
Member’s explanatory statement
This amendment has the effect of applying this clause to Wales.
Lord Greenhalgh
“Order for information in connection with building liability order
(1) A person of a prescribed description may apply to the High Court for an information order.(2) An “information order” is an order requiring a specified body corporate to give, by a specified time, specified information or documents relating to persons who are or have at any time in a specified period been, associates of the body corporate.(3) An information order may be made only if it appears to the court—(a) that the body corporate is subject to a relevant liability (within the meaning of section 132), and(b) that it is appropriate to require the information or documents to be provided for the purpose of enabling the applicant (or the applicant and others) to make, or consider whether to make, an application for a building liability order.(4) In this section—“associate” has the meaning given by section 133; “building liability order”: see section 132;“prescribed” means prescribed by regulations made by the Secretary of State;“specified” means specified in the information order.”Member’s explanatory statement
This new Clause provides that a person prescribed by regulations may make an application to the High Court for an order requiring a body corporate to give information relating to persons who are associates of the body corporate and sets out when the High Court may make the order.
Lord Greenhalgh
Member’s explanatory statement
This amendment is a drafting change.
The Earl of Lytton
“Building safety cost orders
(1) The Secretary of State must by regulations make provision for the Building Safety Cost Panel to make building safety cost orders on the application of an interested person.(2) A “building safety cost order” under this section is an order requiring a specified body corporate to make payments to a specified person, for the purpose of meeting costs incurred or to be incurred in remedying relevant defects (or specified relevant defects) relating to a relevant building.(3) An order may—(a) require the making of payments of a specified amount, or payments of a reasonable amount in respect of the remediation of specified relevant defects (or in respect of specified things done or to be done for the purpose of remedying relevant defects);(b) require a payment to be made at a specified time, or to be made on demand following the occurrence of a specified event;(c) provide for payment in services or money’s worth.(4) The regulations must make provision for the Building Safety Cost Panel to issue a warning notice to a person before determining whether to make a building safety cost order under this section against that person.(5) The regulations must make provision requiring that a building safety cost order under this section—(a) be made in a prescribed form; (b) contain prescribed information.(6) The regulations may make provision about service of a building safety cost order under this section including—(a) how an order is to be served;(b) when an order is to be taken as having been served;(c) the persons on whom an order must be served.(7) The regulations must make provision in relation to—(a) enforcement of a building safety cost order made under this section (including enforcement by the Secretary of State or the tribunal);(b) powers of the Secretary of State to order a person served with a building safety cost order to pay any costs incurred by the Secretary of State under section (Building safety cost order: determinations) in respect of a building safety cost order under this section.(8) The regulations may make provision for persons to apply to the Secretary of State for a review of a building safety cost order under this section.(9) The regulations must make provision for appeals to the tribunal in relation to—(a) a decision of the Building Safety Cost Panel to make or not make a building safety cost order under this section;(b) a refusal by the Building Safety Cost Panel to review a building safety cost order under this section;(c) the outcome of a review by the Building Safety Cost Panel of a building safety cost order under this section.(10) The regulations may in particular include provision suspending a requirement to pay an amount due under a building safety cost order under this section pending the determination of a review.(11) The Secretary of State must make regulations under this section within a period of three months beginning with the day this section comes into force.(12) In this section—“associated”: see section 123;“interested person”, in relation to a relevant building, means—(a) the regulator (as defined by section 2),(b) a local authority (as defined by section 29) for the area in which the relevant building is situated,(c) a fire and rescue authority (as defined by section 29) for the area in which the relevant building is situated, or(d) a person with a legal or equitable interest in the relevant building or any part of it;“prescribed” means prescribed by regulations under this section;“relevant building” means a building consisting of or containing one or more dwellings;“relevant defect”: see section 122;“specified” means specified in the order.(13) This section comes into force on the day this Act is passed.”Member’s explanatory statement
This new Clause confers a regulation-making power for the Secretary of State to provide for making of building safety cost orders by the Building Safety Cost Panel.
Lord Greenhalgh
Member’s explanatory statement
This amendment clarifies that a home created by, for example, extending an existing building will be a “new build home” for the purposes of the new homes ombudsman scheme.
Member’s explanatory statement
This amendment is consequential on the amendment to page 144, line 5 that appears in the Minister’s name.
Member’s explanatory statement
This amendment clarifies that “developer” for the purposes of the new homes ombudsman scheme will include a person who, for example, creates a home by extending an existing building.
Member’s explanatory statement
This amendment clarifies that “developer” for the purposes of the new homes ombudsman scheme will include a person who, for example, extends an existing building so as to change the number of homes in it.
Member’s explanatory statement
This amendment is consequential on the amendment to page 144, line 31 that appears in the Minister’s name.
Lord Greenhalgh
“New build home warranties
(1) This section applies where a person (“the developer”) carries out a development in England that results in the creation of one or more dwellings (“new build homes”).(2) The developer must, at the time of or before granting or disposing of a relevant interest in a new build home—(a) provide to the purchaser a new build home warranty for the new build home, and(b) provide to a prescribed person a new build home warranty for any common parts.(3) A “new build home warranty” for a thing is an arrangement, satisfying any requirements under subsection (4), under which—(a) the developer agrees, in specified circumstances, to remedy any specified defect (or any defect) in the thing occurring in a specified period, and(b) a prescribed person obtains the benefit of a policy of insurance relating to specified defects (or any defects) in the thing.“Specified” here means specified in the arrangement.(4) The Secretary of State may by regulations impose requirements about new build home warranties, including in particular requirements as to—(a) the kinds of defect which the developer must agree to remedy;(b) the circumstances in which the developer must agree to remedy a defect (including the minimum duration of the period mentioned in subsection (3)(a));(c) the developer agreeing to meet prescribed costs incurred by a person occupying a new build home, where works to remedy a defect are carried out;(d) the policy of insurance (including risks that must be covered, the minimum amount of cover, the minimum duration of the period of cover, and the maximum amount of any excess);(e) the solvency of the insurer or underwriter;(f) the standard of service provided by or on behalf of the insurer in relation to the policy;(g) the ability of a person who has the benefit of the warranty to transfer that benefit to another person. (5) The regulations must provide that the period of cover under the policy of insurance must be at least 15 years beginning with the day on which the relevant interest is granted or disposed of.(6) In this section—“carries out a development”: the reference to a person carrying out a development is to undertaking or commissioning—(a) the construction of a building, or(b) the conversion of, or carrying out of any other works to, a building,with a view to granting, or disposing of, relevant interests in one or more dwellings created as a result of the construction, conversion or carrying out of works;“common parts”, in relation to a new build home, means any part of a building, where—(a) that part is provided for the use, benefit and enjoyment of the residents of the new build home and the residents of other dwellings (whether alone or with other persons), and(b) the right to use that part is conferred in connection with the grant or disposal of the relevant interest in the new build home;“defect”: any reference to a defect includes, in relation to land, contamination;“prescribed” means prescribed by regulations made by the Secretary of State;“purchaser” means the person to whom the relevant interest is granted or disposed of;“relevant interest” means a legal estate which is—(a) an estate in fee simple absolute in possession, or(b) a term of years absolute granted for a term of more than 21 years from the date of the grant.”Member’s explanatory statement
This new Clause imposes, on a developer of new build homes, a requirement to provide a “new build home warranty” complying with the requirements imposed under the clause.
“New build home warranties: financial penalties
(1) The Secretary of State may by regulations make provision for and in connection with the imposition of a financial penalty in cases where the Secretary of State, or a person designated by the Secretary of State, is satisfied beyond reasonable doubt that a person has, without reasonable excuse, failed to comply with section (New build home warranties)(2).(2) The regulations may include provision—(a) about the procedure to be followed in imposing penalties;(b) about the amount of penalties;(c) for the imposition of interest or additional penalties for late payment;(d) conferring rights of appeal against penalties.(3) The regulations must provide that the amount of a financial penalty (excluding interest or any additional penalty) may not exceed the greater of—(a) 10% of the value of the relevant interest at the time the person granted or disposed of the relevant interest, and(b) £10,000.”Member’s explanatory statement
This new Clause confers power to impose a financial penalty for breach of the duty to provide a “new build home warranty”.
Lord Greenhalgh
“Liability relating to construction productsLiability relating to construction products: general definitions
In this section, section (Liability relating to construction products) and (Liability for past defaults relating to cladding products)—“the 1991 Regulations” means the Construction Products Regulations 1991 (S.I. 1991/1620);“the 2011 Regulation” means Regulation (EU) No. 305/2011 (regulation laying down harmonised conditions for the marketing of construction products);“the 2019 Regulations” means the Construction Products (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/465);“construction products regulations” means regulations under paragraph 1 of Schedule 12;“construction product requirement” means a requirement under—(a) construction products regulations,(b) the 2011 Regulation, or(c) the 2019 Regulations;“relevant building” means—(a) a building which consists of a dwelling, or(b) a building which contains two or more dwellings;“relevant interest”, in relation to a building in England and Wales, means—(a) in a case where the building consists of a dwelling, a legal or equitable interest in the building, and(b) in a case where the building contains one or more dwellings, a legal or equitable interest in—(i) the building, or(ii) any dwelling contained in the building;“relevant interest”, in relation to a building in Scotland, means—(a) in a case where the building consists of a dwelling, any right or interest (including a servitude or heritable security) in or over the building, and(b) in a case where the building contains one or more dwellings, any right or interest (including a servitude or heritable security) in or over—(i) the building, or(ii) any dwelling contained in the building;“requirement” includes a prohibition or restriction.”Member’s explanatory statement
This new Clause contains definitions relevant to the next two new Clauses tabled by the Minister.
“Liability relating to construction products
(1) This section applies where Conditions A to D are met.(2) Condition A is that, at any time after the coming into force of this section—(a) a person fails to comply with a construction product requirement in relation to a construction product,(b) a person who markets or supplies a construction product makes a misleading statement in relation to it, or(c) a person manufactures a construction product that is inherently defective. (3) Condition B is that, after Condition A is met, the construction product referred to in subsection (2)(a), (b) or (c) is installed in, or applied or attached to, a relevant building in the course of works carried out in the construction of, or otherwise in relation to, the building.(4) Condition C is that, when those works are completed—(a) in a case where the relevant building consists of a dwelling, the building is unfit for habitation, or(b) in a case where the relevant building contains one or more dwellings, a dwelling contained in the building is unfit for habitation.(5) Condition D is that the facts referred to in subsection (2)(a), (b) or (c) were the cause, or one of the causes, of the building or dwelling being unfit for habitation.(6) The person referred to in subsection (2)(a), (b) or (c) is liable to pay damages to a person with a relevant interest in relation to the relevant building for personal injury, damage to property or economic loss suffered by that person as a result of the facts referred to in subsection (4)(a) or (b).(7) A term of an agreement which purports to exclude or restrict, or has the effect of excluding or restricting, any liability arising under this section is void.(8) For the purposes of section 10B(1) of the Limitation Act 1980 and section 18ZD(1) of the Prescription and Limitation (Scotland) Act 1973, the right of action that a person has by virtue of this section is to be regarded as having accrued—(a) in a case where the works referred to in subsection (3) are carried out in the construction of the relevant building, when the construction is completed, and(b) in any other case, when the works are completed.(9) In subsection (2)(a), “construction product”—(a) in relation to a construction product requirement under construction products regulations, has the meaning specified in those regulations;(b) in relation to a construction product requirement under the 2011 Regulation, has the meaning specified in the 2011 Regulation;(c) in relation to a construction product requirement under the 2019 Regulations, has the meaning specified in the 2011 Regulation as it had effect immediately before IP completion day.(10) In subsection (2)(b) and (c) “construction product” has the meaning specified in the 2011 Regulation.”Member’s explanatory statement
This new Clause makes provision for a new right of action where breach of regulations relating to construction products causes, or is a factor in, a building or dwelling becoming unfit for habitation.
“Liability for past defaults relating to cladding products
(1) This section applies where Conditions A to D are met.(2) Condition A is that, at any time before the coming into force of this section—(a) a person fails to comply with a cladding product requirement in relation to a cladding product,(b) a person who markets or supplies a cladding product makes a misleading statement in relation to it, or(c) a person manufactures a cladding product that is inherently defective.(3) Condition B is that, after Condition A has been met, the cladding product is attached to, or included in, the external wall of a relevant building in the course of works carried out in the construction of, or otherwise in relation to, the building. (4) Condition C is that, when those works are completed—(a) in a case where the relevant building consists of a dwelling, the building is unfit for habitation, or(b) in a case where the relevant building contains one or more dwellings, a dwelling contained in the building is unfit for habitation.(5) Condition D is that the facts referred to in subsection (2)(a), (b) or (c) were the cause, or one of the causes, of the building or dwelling being unfit for habitation.(6) The person referred to in subsection (2)(a), (b) or (c) is liable to pay damages to a person with a relevant interest in relation to the relevant building for personal injury, damage to property or economic loss suffered by that person as a result of the facts referred to in subsection (4)(a) or (b).(7) A term of an agreement which purports to exclude or restrict, or has the effect of excluding or restricting, any liability arising under this section is void.(8) For the purposes of section 10B(2) of the Limitation Act 1980 and section 18ZD(2) of the Prescription and Limitation (Scotland) Act 1973, the right of action that a person has by virtue of this section is to be regarded as having accrued—(a) in a case where the works referred to in subsection (3) are carried out in the construction of the relevant building, when the construction is completed, and(b) in any other case, when the works are completed.(9) Where an action is brought under this section in England and Wales that, but for section 10B(2) of the Limitation Act 1980, would have been barred by that Act, a court hearing the action must dismiss it in relation to any defendant if satisfied that it is necessary to do so to avoid a breach of that defendant’s Convention rights.(10) Where an action is brought under this section in Scotland that, but for section 18ZD(2) of the Prescription and Limitation (Scotland) Act 1973, would have been barred by that Act, a court hearing the action must dismiss it in relation to any defender if satisfied that it is necessary to do so to avoid a breach of that defender’s Convention rights.(11) In this section “cladding product requirement” means—(a) in relation to a time before IP completion day, a requirement relating to a cladding product under—(i) the 1991 Regulations, or(ii) the 2011 Regulation as it had effect in EU law at that time, and(b) in relation to a time after IP completion day, a requirement relating to a cladding product under—(i) the 2011 Regulation, or(ii) the 2019 Regulations.(12) In this section—“cladding product” means a cladding system or any component of a cladding system;“Convention rights” has the same meaning as in the Human Rights Act 1998;“external wall”, in relation to a building, includes any part of a roof pitched at an angle of more than 70 degrees to the horizontal if that part of the roof adjoins a space within the building to which persons have access otherwise than for the purpose of carrying out repairs or maintenance.”Member’s explanatory statement
This new Clause provides for a right of action where historic defaults relating to cladding cause, or are a factor in, a building or dwelling becoming unfit for habitation.
“Liability relating to construction products: limitation in England and Wales
In the Limitation Act 1980, after section 10A insert—“10B Special time limit for actions relating to construction products(1) An action under section (Liability relating to construction products)of the Building Safety Act 2022 shall not be brought after the expiration of 15 years from the date on which the right of action accrued.(2) An action under section (Liability for past defaults relating to cladding products) of the Building Safety Act 2022 shall not be brought after—(a) if the right of action accrued before the commencement date, the expiration of the period of 30 years from the date on which it accrued, and(b) if the right of action accrued on or after the commencement date, the expiration of the period of 15 years beginning with the date on which it accrued.(3) In a case where—(a) a right of action under section (Liability for past defaults relating to cladding products) of the Building Safety Act 2022 accrued before the commencement date, and(b) the expiration of the period of 30 years beginning with the date on which the right of action accrued falls in the year beginning with the commencement date,subsection (2)(a) has effect as if it referred to the expiration of that year.(4) In subsections (2) and (3) “the commencement date” is the day on which section (Liability for past defaults relating to cladding products) of the Building Safety Act 2022 came into force.(5) No other period of limitation prescribed by Part 1 of this Act applies in relation to an action referred to in subsections (1) and (2).(6) Sections 28, 32 and 35 of this Act apply in relation to an action referred to subsections (1) and (2), but otherwise Parts 2 and 3 of this Act (except sections 37 and 38) do not apply for the purposes of this section.””Member’s explanatory statement
This amendment provides for the limitation periods in England and Wales for the rights of action created by the previous two new clauses tabled by the Minister.
“Liability relating to construction products: limitation in Scotland
(1) The Prescription and Limitation (Scotland) Act 1973 is amended as follows.(2) After section 18ZC insert—“18ZD Actions relating to construction products(1) An action under section (Liability relating to construction products) of the Building Safety Act 2022 may not be brought after the expiration of 15 years from the date on which the right of action accrued (see subsection (8) of that section).(2) An action under section (Liability for past defaults relating to cladding products) of the Building Safety Act 2022 may not be brought after—(a) if the right of action accrued before the commencement date, the expiration of the period of 30 years from the date on which it accrued (see subsection (8) of that section), and (b) if the right of action accrued on or after the commencement date, the expiration of the period of 15 years beginning with the date on which it accrued.(3) In a case where—(a) a right of action under section (Liability for past defaults relating to cladding products) of the Building Safety Act 2022 accrued before the commencement date, and(b) the expiration of the period of 30 years beginning with the date on which the right of action accrued falls in the year beginning with the commencement date,subsection (2)(a) has effect as if it referred to the expiration of that year.(4) In subsections (2) and (3) “the commencement date” is the day on which section (Liability for past defaults relating to cladding products) of the Building Safety Act 2022 came into force.(5) No other period of limitation specified by this Part of this Act applies in relation to an action referred to in subsection (1) or (2).(6) In the computation of a period of time specified in subsection (1) or (2), there is to be disregarded any time during which the person seeking to bring the action (P)—(a) was under a legal disability by reason of nonage or unsoundness of mind, or(b) failed to bring the action by reason of—(i) fraud on the part of the person against whom the action is to be brought (D) or the part of any person acting on D’s behalf, or(ii) error induced by words or conduct of D or any person acting on D’s behalf,(but not including, for the purposes of paragraph (b), any time occurring after P could with reasonable diligence have discovered the fraud or error mentioned in that paragraph).(7) For the purposes of subsection (6)(b), it does not matter whether D, or the person acting on D’s behalf, intended the fraud or the words or conduct to cause P to fail to bring the action.”(3) In section 7(2) (extinction of obligations by prescriptive periods of twenty years), at the end insert “or any obligation to pay damages arising from liability under section (Liability relating to construction products) or (Liability for past defaults relating to cladding products) of the Building Safety Act 2022 (see section 18ZD of this Act).”(4) In section 19CA(1) (interruption of limitation period: arbitration), after “18ZC(2)” insert “, 18ZD(1) or (2)”.(5) In Schedule 1, in paragraph 2 (exceptions from the 5 year prescriptive period under section 6), after paragraph (ga) insert—“(gb) to any obligation to pay damages arising from liability under section (Liability relating to construction products) or (Liability for past defaults relating to cladding products) of the Building Safety Act 2022;”.”Member’s explanatory statement
This amendment provides for the limitation periods in Scotland for the proposed new rights of action relating to construction products.
“Construction products: costs contribution ordersCosts contribution orders: general definitions
In this section and sections (Costs contribution orders made by courts) to (Costs contribution orders: assessments)—
“the 2011 Regulation” means Regulation (EU) No. 305/2011 (regulation laying down harmonised conditions for the marketing of construction products);“the 2019 Regulations” means the Construction Products (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/465);“the 2020 Regulations” means the Construction Products (Amendment etc.) (EU Exit) Regulations 2020 (S.I. 2020/1359);“construction product”—(a) in relation to a construction product requirement under construction products regulations, has the meaning specified in those regulations;(b) in relation to a construction product requirement under the 2011 Regulation, has the meaning specified in the 2011 Regulation (or, in Northern Ireland, in the 2011 Regulation as having effect in EU law from time to time);(c) in relation to a construction product requirement under the 2019 Regulations, has the meaning specified in the 2011 Regulation as it had effect immediately before IP completion day;(d) in relation to a construction product requirement under the 2020 Regulations, has the meaning given by regulation 2 of those Regulations;“construction products regulations” means regulations under paragraph 1 of Schedule 12;“construction product requirement”, in England and Wales or Scotland, means a requirement under—(a) construction products regulations,(b) the 2011 Regulation, or(c) the 2019 Regulations;“construction product requirement”, in Northern Ireland, means a requirement under—(a) construction product regulations,(b) the 2011 Regulation as having effect from time to time in EU law,(c) the 2019 Regulations, or(d) the 2020 Regulations;references to an “interest” in a building or dwelling include—(a) in England and Wales, any legal or equitable interest in the building or dwelling;(b) in Scotland, any right or interest (including a servitude or heritable security) in or over the building or dwelling;(c) in Northern Ireland, any estate within the meaning given by section 45(2) of the Interpretation Act (Northern Ireland) 1954 in the building or dwelling;“relevant building” means—(a) a building which consists of a dwelling, or(b) a building which contains two or more dwellings;“requirement” includes a prohibition or restriction.”Member’s explanatory statement
This new Clause contains definitions relevant to the new Clauses tabled by the Minister in relation to costs contribution orders in respect of construction products.
“Costs contribution orders made by courts
(1) The Secretary of State may by regulations make provision for courts to make costs contribution orders on the application of the Secretary of State.(2) The regulations may only make provision for the making of costs contribution orders under this section in cases where— (a) Conditions A to D are met, and(b) any prescribed conditions are met.(3) Condition A is that a person (“the defaulter”) is convicted of an offence consisting of a failure to comply with a construction product requirement in relation to a construction product.(4) Condition B is that, after the failure to comply referred to in subsection (3), the construction product is installed in, or applied or attached to, a relevant building in the course of works carried out in the construction of, or otherwise in relation to, the building.(5) Condition C is that, when those works are completed—(a) in a case where the relevant building consists of a dwelling, the building is unfit for habitation, or(b) in a case where the relevant building contains one or more dwellings, a dwelling contained in the building is unfit for habitation.(6) Condition D is that the failure to comply referred to in subsection (3) was the cause, or one of the causes, of the building or dwelling being unfit for habitation.(7) A “costs contribution order” under this section is an order requiring the defaulter to pay an amount to a person with a prescribed interest in the building or any dwelling contained in the building.(8) Regulations under this section must provide for the amount to be paid to a person under a costs contribution order under this section to be such amount as the court making the order considers just and equitable in respect of the costs that the person has reasonably incurred, or in the view of the court is likely to reasonably incur, in respect of works to make the building or dwelling fit for habitation.(9) The regulations may make provision as to the matters which may or must be taken into account by a court in determining—(a) whether, against whom and in favour of whom to make a costs contribution order under this section;(b) the amount required to be paid by a person under a costs contribution order under this section.(10) The regulations may make provision in relation to—(a) enforcement of a costs contribution order under this section;(b) court powers to order the defaulter to pay—(i) any costs incurred by the Secretary of State under regulations under section (Costs contribution orders: assessments)(assessments) in respect of the application, and(ii) any costs incurred by the Secretary of State in making the application.(11) The regulations may make provision about how a costs contribution order under this section relates to other remedies, including in particular—(a) provision to secure that, taking a costs contribution order under this section together with other remedies—(i) a person does not incur liability more than once in respect of the same costs;(ii) a person is not entitled to be reimbursed more than once for the same costs;(b) provision preventing a person to whom any amount is payable under a costs contribution order under this section from pursuing any other legal remedy for the recovery of such an amount.(12) In this section “prescribed” means prescribed by regulations under this section.”Member’s explanatory statement
This new Clause confers a regulation-making power for the courts to make costs contribution orders.
“Costs contribution orders made by the Secretary of State
(1) The Secretary of State may by regulations make provision for the Secretary of State to make costs contribution orders.(2) The regulations may only make provision for the making of costs contribution orders in cases where—(a) Conditions A to D are met, and(b) any prescribed conditions are met.(3) Condition A is that a person (“the defaulter”) is convicted of an offence consisting of a failure to comply with a construction product requirement in relation to a construction product.(4) Condition B is that, after the failure to comply referred to in subsection (3), the construction product is installed in, or applied or attached to, a relevant building in the course of works carried out in the construction of, or otherwise in relation to, the building.(5) Condition C is that, when those works are completed—(a) in a case where the relevant building consists of a dwelling, the building is unfit for habitation, or(b) in a case where the relevant building contains one or more dwellings, a dwelling contained in the building is unfit for habitation.(6) Condition D is that the failure to comply referred to in subsection (3) was the cause, or one of the causes, of the building or dwelling being unfit for habitation.(7) A “costs contribution order” under this section is an order requiring the defaulter to make a payment to a person with a prescribed interest in the building or any dwelling contained in the building.(8) Regulations under this section must provide for the amount to be paid to a person under a costs contribution order under this section to be such amount as the Secretary of State considers just and equitable in respect of the costs that the person has reasonably incurred, or in the view of the Secretary of State is likely to reasonably incur, in respect of works to make the building or dwelling fit for habitation.(9) The regulations may make provision as to the matters which may or must be taken into account by the Secretary of State in determining—(a) whether, against whom, and in favour of whom, to make a costs contribution order under this section;(b) the amount required to be paid by a person under a costs contribution order under this section.(10) The regulations may make provision for the Secretary of State to issue a warning notice to a person before determining whether to make a costs contribution order under this section against that person.(11) The regulations may make provision requiring that a costs contribution order under this section—(a) be made in a prescribed form;(b) contain prescribed information.(12) The regulations may make provision about service of a costs contribution order under this section including—(a) how an order is to be served;(b) when an order is to be taken as having been served;(c) the persons on whom an order must be served.(13) The regulations may make provision in relation to—(a) enforcement of a costs contribution order made under this section (including enforcement by the Secretary of State); (b) powers of the Secretary of State to order the defaulter to pay any costs incurred by the Secretary of State under section (Costs contribution orders: assessments) in respect of a costs contribution order under this section.(14) The regulations may make provision about how a costs contribution order under this section relates to other remedies, including in particular—(a) provision to secure that, taking a costs contribution order under this section together with other remedies—(i) a person does not incur liability more than once in respect of the same costs;(ii) a person is not entitled to be reimbursed more than once for the same costs;(b) provision preventing a person to whom any amount is payable under a costs contribution order under this section from pursuing any other legal remedy for the recovery of such an amount.(15) The regulations may make provision for persons to apply to the Secretary of State for a review of a costs contribution order under this section.(16) The regulations may make provision for appeals to a court or tribunal in relation to—(a) a decision of the Secretary of State to make or not make a costs contribution order under this section;(b) a refusal by the Secretary of State to review a costs contribution order under this section;(c) the outcome of a review by the Secretary of State of a costs contribution order under this section.(17) The regulations may in particular include provision suspending a requirement to pay an amount due under a costs contribution order under this section pending the determination or withdrawal of an appeal or the determination of a review.(18) In this section “prescribed” means prescribed by regulations under this section.”Member’s explanatory statement
This new Clause confers a regulation-making power for the Secretary of State to make costs contribution orders.
“Costs contribution orders: assessments
(1) For the purposes of sections (Costs contribution orders made by courts) and (Costs contribution orders made by Secretary of State), the Secretary of State may by regulations make provision for the Secretary of State to appoint persons to assess—(a) whether the conditions for the imposition of a costs contribution order under either of those sections are met;(b) the works required to make a building or dwelling fit for habitation;(c) what interest a person has in a building or dwelling;(d) the costs that a person has reasonably incurred or is likely to reasonably incur in respect of works referred to in paragraph (b);(e) the amount that a person should be required to pay under a costs contribution order.(2) The regulations may include provision about the criteria to be met by a person before they may be appointed as an assessor.(3) The regulations may make provision about assessments, including provision—(a) conferring power on an assessor to require that persons provide such information as the assessor may reasonably require for the purposes of an assessment; (b) for the provision of information by an assessor to the Secretary of State (including any information provided under paragraph (a)).(4) Regulations under subsection (3)(a) may include provision for criminal offences relating to a failure to provide information, or to the provision of false or misleading information.(5) Regulations under subsection (3)(a) creating a criminal offence must have the effect that—(a) the offence is—(i) triable summarily only, or(ii) triable summarily or on indictment,(b) the offence is punishable only—(i) with a fine, or(ii) with a term of imprisonment or a fine (or both),(c) where the offence is triable summarily only, any fine with which the offence is punishable in Scotland or Northern Ireland does not exceed level 5 on the standard scale,(d) where the offence is triable summarily or on indictment, any fine with which the offence is punishable on summary conviction in Scotland or Northern Ireland does not exceed the statutory maximum, and(e) any term of imprisonment with which the offence is punishable on summary conviction does not exceed—(i) in England and Wales, the relevant period,(ii) in Scotland, 12 months, and(iii) in Northern Ireland, 6 months.(6) In subsection (5)(e)(i), “the relevant period” means—(a) in relation to an offence that is triable summarily only—(i) where the offence is committed before the coming into force of section 281 of the Criminal Justice Act 2003, 6 months, and(ii) where the offence is committed after that time, 51 weeks;(b) in relation to an offence that is triable summarily or on indictment—(i) where the offence is committed before the coming into force of paragraph 24(2) of Schedule 22 to the Sentencing Act 2020, 6 months, and(ii) where the offence is committed after that time, 12 months.(7) Regulations under subsection (3)(b) may make provision for the purpose of securing that there is (taking into account any power or duty to provide information under the regulations) no contravention of the data protection legislation.(8) In subsection (7), “data protection legislation” has the same meaning as in the Data Protection Act 2018 (see section 3 of that Act).”Member’s explanatory statement
This new Clause confers a regulation-making power relating to assessments for the purposes of costs contribution orders.
Lord Greenhalgh
“(2) Construction products regulations may under paragraph 20(1)(c) make consequential provision amending section (Liability relating to construction products), which may in particular include the omission or amendment of subsection (2)(b) and (c) of that section.”Member’s explanatory statement
This amendment is to enable construction product regulations to make consequential amendments to the Clause relating to liability in respect of construction products.
“(c) where the offence is triable summarily only, any fine with which the offence is punishable in Scotland or Northern Ireland does not exceed level 5 on the standard scale,(ca) where the offence is triable summarily or on indictment, any fine with which the offence is punishable on summary conviction in Scotland or Northern Ireland does not exceed the statutory maximum, and”Member’s explanatory statement
This amendment makes a technical correction to secure that the maximum fine that can be imposed under the regulations for an offence in Scotland or Northern Ireland is the statutory maximum.
“(aa) provision omitting a construction product from the list of safety-critical products under paragraph 10(1);”Member’s explanatory statement
This amendment makes regulations omitting a product from the list of safety-critical products subject to draft affirmative procedure.
“(d) provision under paragraph 21(2) (consequential provision relating to liability for construction products).”Member’s explanatory statement
This amendment makes regulations that are made under the proposed power to make consequential provision subject to the draft affirmative procedure.
Member’s explanatory statement
This amendment secures that a statutory instrument may contain both construction products regulations and regulations relating to cost contribution orders provided that the instrument is made subject to the draft affirmative procedure.
Lord Greenhalgh
“(4) Where—(a) a relevant company is an accountable person for a higher-risk building (within the meaning of Part 4), and (b) one or more (but not all) directors of the relevant company have been appointed for a building safety purpose and are entitled to remuneration from the company,this section, so far as relating to Part 4, does not apply in relation to a director who is not entitled to remuneration from the relevant company.(5) In subsection (4)—“building safety purpose” means the purpose of supporting the relevant company in complying with its duties under Part 4 or under regulations made under that Part;“relevant company” means—(a) a resident management company within the meaning of section (Building safety directors of resident management companies),(b) an RTM company within the meaning of Chapter 1 of Part 2 of the Commonhold and Leasehold Reform Act 2002 (right to manage), or(c) a company that is a commonhold association within the meaning of Part 1 of that Act (see section 34).”Member’s explanatory statement
This amendment provides that, in relation to certain residents’ companies, this Clause - so far as relating to Part 4 - does not apply to unpaid directors if there are paid directors, appointed for a building safety purpose.
Lord Greenhalgh
“(da) sections (New build home warranties) and (New build home warranties: financial penalties) (new build home warranties);”Member’s explanatory statement
This amendment provides for the new Clauses on new build home warranties to bind the Crown.
Lord Greenhalgh
Member’s explanatory statement
This amendment is consequential on the removal of the power to make regulations under Clause 120(2)(c).
Member’s explanatory statement
This amendment provides for regulations made under Clauses 128, 130 and 131 to be subject to the draft affirmative procedure.
Member’s explanatory statement
This amendment provides that regulations under the power conferred by new paragraph 3A(5) of Schedule 9 are subject to the draft affirmative procedure.
“(ea) regulations under sections (Costs contribution orders made by courts) to (Costs contribution orders: assessments),”Member’s explanatory statement
This amendment makes provision for regulations under the new Clauses relating to costs contribution orders to be subject to the draft affirmative procedure.
Lord Greenhalgh
“(da) sections (Costs contribution orders: general definitions) to (Costs contribution orders: assessments) (costs contribution orders);”Member’s explanatory statement
This amendment secures that the new Clauses relating to costs contribution orders extend to the whole of the United Kingdom.
“(5) Sections (Liability relating to construction products: general definitions) to (Liability for past defaults relating to cladding products)(liability relating to construction products) extend to England and Wales and Scotland.(6) Section (Liability relating to construction products: limitation in Scotland) (liability relating to construction products: limitation in Scotland) extends to Scotland only.(7) The Secretary of State may by regulations—(a) provide for the provisions mentioned in subsection (5) to extend also to Northern Ireland, and(b) make provision (including provision amending this Act or any other enactment) in relation to the application of the provisions mentioned in subsection (5) in Northern Ireland.”Member’s explanatory statement
This amendment secures that the new clauses relating to civil liability in respect of construction products extend in the first place to England and Wales and Scotland, with power to extend them to Northern Ireland and to make provision as to their application in Northern Ireland.
Lord Greenhalgh
“(za) sections 119 to 127 and Schedule 9;”Member’s explanatory statement
This amendment provides for the provisions on the remediation of certain defects to come into force two months after Royal Assent.
“(ca) sections (Liability relating to construction products: general definitions) to (Costs contribution notices: assessments);”Member’s explanatory statement
This amendment provides for the new clauses relating to construction products to come into force two months after Royal Assent.
Lord Greenhalgh
Member’s explanatory statement
This amendment is a drafting change.
Building Safety Bill
Monday 4th April 2022
(2 years ago)
Lords ChamberRead Full debate Building Safety Act 2022 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 144-I Amendment for Third Reading - (1 Apr 2022)
Lord Ashton of Hyde (Con)
My Lords, I have it in command from Her Majesty the Queen and His Royal Highness the Prince of Wales to acquaint the House that they, having been informed of the purport of the Building Safety Bill, have consented to place their interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
The Minister of State, Home Office and Department for Levelling Up, Housing & Communities (Lord Greenhalgh) (Con)
My Lords, a significant number of the provisions in the Building Safety Bill apply to England and Wales and a number also apply to Scotland and/or Northern Ireland. Throughout the preparation and passage of the Bill we have been working closely with each of the devolved Administrations, and I pay tribute to officials and Ministers in Scotland, Wales and Northern Ireland for their constructive engagement and support.
There are provisions in the Bill which engage the legislative consent process in the Scottish Parliament, Senedd Cymru and the Northern Ireland Assembly. I am pleased to report that the Senedd and the Scottish Parliament have granted legislative consent. However, the Northern Ireland Executive have not brought forward a legislative consent memorandum and the Assembly has therefore not voted on legislative consent. I reassure noble Lords that the Government will continue to engage with the Northern Ireland Executive.
Schedule 8: Remediation costs under qualifying leases etc
Amendment 1
Baroness Hayman of Ullock
“(4) The Secretary of State may by regulations make provision about the determination of the value of a qualifying lease for the purposes of paragraph 4.”Member’s explanatory statement
This tidying-up amendment is consequential on Amendment 155 at Report Stage which set the “permitted maximum” to zero.
Baroness Hayman of Ullock (Lab)
My Lords, through every stage of the proceedings I have supported the aims of the Bill, and I am sure the whole House will welcome any steps taken to make homes safer and more secure. While we may have differences of opinion on the most effective and fair way of achieving this, I do recognise the genuine desire of the Minister to address historic cladding and non-cladding defects. This Bill should represent a turning point for innocent home owners, and I hope that in the final stages of the Bill we can resolve the remaining issues of contention to ensure that the Bill properly gives leaseholders the protections in law that have long been promised by the Government.
I briefly draw to noble Lords’ attention the fact that I have tabled a short amendment. It has been tabled as a consequential to Amendment 155 on Report, following advice from the Public Bill Office. I hope that the Minister will accept that the amendment is purely technical.
Finally, on behalf of my noble friend Lord Khan of Burnley and me, I take this opportunity briefly to thank the Minister and the departmental team for their approach to the Bill. I look forward to working with them in future on any further legislation brought forward to address building safety. I beg to move.
Lord Greenhalgh (Con)
My Lords, the Grenfell Tower tragedy resulted in the largest loss of life in a residential fire since the Second World War. On 14 June 2017, 72 people died and 70 more were injured. This was the deadliest structural fire in the United Kingdom since Piper Alpha in 1988. The Government are determined to ensure that a tragedy such as this never happens again. The Building Safety Bill is the landmark Bill that delivers on that mission.
These are the biggest changes to building safety legislation in our history. The Bill not only addresses the total building safety regulatory system failure head-on but protects leaseholders who are the victims in a building safety crisis. This Bill helps to ensure that there is a more proportionate approach to building safety risk, introduces a cap on the historic building safety costs that leaseholders will have to pay and, finally, provides an extensive set of tools in law that will ensure that the polluter pays.
Fifteen of the 37 disabled residents living in Grenfell Tower died in the fire. That is more than 40% of the disabled residents. The Government are committed to supporting the fire safety of disabled and vulnerable residents. We are acutely aware of the need to ensure the safety of residents with mobility concerns. The Government ran a consultation on the issue of personal emergency evacuation plans—PEEPs—in July 2021. The consultation has made clear the substantial difficulties of mandating PEEPs in high-rise residential buildings around practicality, proportionality and safety. On practicality, how can you evacuate a mobility-impaired person from a tall building before the professionals from the fire and rescue service arrive? On proportionality, how much is it reasonable to spend to do this at the same time as we seek to protect residents and taxpayers from excessive costs? On safety, how can you ensure that an evacuation of mobility-impaired people is carried out in a way that does not hinder others in evacuating or the fire and service in fighting the fire?
Given these difficulties, the Government are committing to undertake a new consultation. While our response is still being finalised, this will include a proposal called “emergency evacuation information-sharing” or EEIS. The Government will publish our response to the PEEPs consultation and our new consultation on EEIS and commence the Fire Safety Act 2021 on the same day next month, which is as soon as practical after the pre-election period. I have discussed this at some length with the noble Baronesses, Lady Grey-Thompson and Lady Brinton. I confirm to the noble Baroness, Lady Brinton, that the consultation will look to ensure as best we can that the golden thread exists between planning for the safe evacuation of a mobility-impaired person when needed and the response of fire and rescue services in the event that a building needs to be evacuated.
The Building Safety Bill leaves your Lordships’ House in a far better state than it arrived in. I welcome the clear cross-party support for the Bill. Both Opposition Benches have played hard but fair. I thank the noble Earl, Lord Lytton, for using his considerable professional expertise and the noble Baronesses, Lady Jolly and Lady Finlay of Llandaff, for their redoubtable efforts with the Safer Stairs campaign. I also thank the noble Baroness, Lady Fox of Buckley, for ensuring that the new regime is as proportionate as possible. Finally, I thank the right reverend Prelate the Bishop of St Albans for helping improve the Bill in the interests of leaseholders.
On the Government Benches, I thank my noble friend Lord Naseby for representing the interests of pensioners with pensions tied up in buy-to-let leasehold properties, my noble friend Lady Sanderson for ensuring that the voice of the Grenfell community is heard loud and clear, and last but by no means least, the dynamic duo of my noble friends Lord Young and Lord Blencathra, who have brought decades of parliamentary experience to ensure that leaseholders are protected. I also thank my long-suffering Whip, my noble friend Lady Scott, and her understudy briefly on Report, my noble friend Lady Bloomfield. My heartfelt thanks also go to Hannah Ellis in the Whips’ Office.
Finally, I thank the army of officials in the Department for Levelling Up, Housing and Communities, the Home Office and across government for their support and hard work over the last few months. I will name four who deserve special mention: the former Bill manager, Amy Payne, the current Bill manager, Catherine Canning, and the superb DHLUC government lawyers, Joanna Stewart and Katherine Bridges.
The Deputy Speaker (Lord Haskel) (Lab)
My Lords, the noble Baroness, Lady Brinton, is taking part remotely. I invite the noble Baroness to speak.
Baroness Brinton (LD) [V]
My Lords, I declare my interest as a vice-president of the Local Government Association and vice-chair of the All-Party Group on Fire Safety and Rescue, as well as a user of personal emergency evacuation plans, or PEEPs, as I am a wheelchair user.
I am very grateful to the Minister and his officials for the two meetings and our email exchange since Report. I particularly thank him for what he has just said this afternoon. Both the noble Baroness, Lady Grey-Thompson, and I have repeatedly debated the problem that residents in high-rise blocks face in the event of an emergency, because disabled people are not currently covered by the PEEP rules.
Disabled people were encouraged by the Grenfell Tower Inquiry and the Judith Hackitt report, both of which highlighted the necessity of the golden thread of planning, notification and practical support needed for vulnerable residents, whether disabled or with a mobility impairment. Last week’s evidence from civil servants and Ministers at the Grenfell Tower Inquiry exposed a real concern that, in the past, there was no real heart to make PEEPs work, as they were deemed too expensive and complicated. The department’s announcement of a third consultation on how to get disabled residents out of a high-rise building in an emergency is welcome, but we need a final answer.
The Minister rightly focused on emergency evacuation information-sharing, because it sits within the scope of this Building Safety Bill. He has argued publicly and privately that PEEPs are for the Fire Safety Bill, but it is vital that they are developed, planned and reviewed together. Otherwise, there will be disabled residents who believe that they will be looked after and removed from their flat in the event of a fire or another emergency only to discover—as the Grenfell disabled residents did—that sitting tight and waiting can result in injury or death.
I am really grateful for what the Minister has said. We in the disabled community will watch with great interest and hope to see that golden thread come into practice in just over a month’s time.
Lord Young of Cookham (Con)
I thank my noble friend for his very kind words, and, in return, I commend him for the progress which he has made with the Bill, with his statement on 10 January, the amendments he tabled on 14 February and the further amendments he tabled last week on Report. I also commend him for his engagement with those who have sought to improve the Bill; he engaged with patience and humour despite, from time to time, considerable provocation from two former Chief Whips.
I will make two very brief points. First, I hope the amendments that were carried last week will not be overturned in the other place: amendments protecting those in buildings under 11 metres; amendments protecting leaseholders from making any contribution; and amendments that seek to protect the position of enfranchised leaseholders and put them on a par with unenfranchised leaseholders.
Secondly, there is still some unfinished business. We need to make progress on so-called orphaned buildings. I know my noble friend recognises the problem, which he believes, I think, can be dealt with administratively, and in an exchange on Report he pointed to the funds available, but it remains to be seen whether those funds will be sufficient and who will take on the responsibility of remediating these buildings given that the leaseholders —at the bottom of the waterfall—will not have the resources to do this, particularly if they are expected to litigate first.
I hope that, in the other place, some thought might be given to this and, in what is entirely a matter for the other place, I hope they recognise that they have never seen these clauses at all and therefore allow adequate time for consideration of Lords amendments.
The Earl of Lytton (CB)
My Lords, your Lordships will of course know that I have one principal abiding fear about this Bill, which is exactly the point that has been made by the noble Lord, Lord Young—who I regard, along with the noble Lord, Lord Blencathra, as my co-conspirator on this Bill.
To put a little more flesh on that bone, in a case where the original developer or builder cannot be identified or is identified but has gone bust, the question is about getting the remediation cost from these defunct individuals. Given that we have effectively removed the liability of leaseholders for remediation costs—and rightly so, in my view—what then happens when those freeholders and leaseholders are faced with no other option going forward? That is my abiding fear about the overwhelming financial odds that might face these occupiers.
Whether is it possible for the Minister to clarify that, I do not know. However, I add my voice to those of others who have expressed their appreciation for what the Minister has done: he has tackled this with a real sense of purpose, with an open-door policy to talking with those who have concerns, and I appreciate that very much. Behind him is the Bill team, to which I pay tribute as well.
I pay tribute to my co-conspirators, and also all those across the House, on all sides, who have supported me in Divisions—I appreciate that very much indeed. I particularly pay tribute to fellow Cross-Bench Peers, the noble Baronesses, Lady Finlay and Lady Grey-Thompson, and the noble Lord, Lord Best, who, on individual aspects, have campaigned tremendously effectively to have this Bill altered, very much for the better.
Beyond this House, I pay tribute to the efforts of organisations such as the Leasehold Knowledge Partnership, which has been very helpful in many respects. Most of all, I thank the perpetrator pays team, Steve Day and Daniel Greenberg; as far as I am concerned, their input has been absolutely fantastic and totally indispensable.
My last point has to be for all those who wrote to me: the couples who had put off having a family, or even getting married; the distraught pensioners; the families with their hopes and finances on hold, whose children have had their education disrupted and who have been unable to move because their properties were unsaleable for work or for any other purpose; and those facing bankruptcy and repossession. They have been my driving force. In all my years of experience as a chartered surveyor, I do not think I have had so many people write to me, and I hope that I have been able to give a voice to the voiceless in that respect and some glimmer of hope that, at the end of a really long dark period for them, there might be a little bit of light. I remain committed to the principles that I have held to throughout the course of the Bill.
The Lord Bishop of St Albans
My Lords, I do not want to delay the House for too long, but I also add my word of thanks to the Minister. I share the concerns of other noble Lords: I hope that this is going to be given enough time for proper scrutiny and debate in the other place and that the really key amendments will not be overturned.
Many positive changes have been made, particularly reducing the cost for non-cladding remedial work to zero and the extension of this support to all buildings, not just those over 11 metres. But I remain concerned by the definition of a qualifying lease and its failure to protect those receiving a state pension who rely on rental income from a lease to sustain themselves. I am not entirely certain how these pensioners who do not qualify will pay for non-cladding remedial costs, but that is a hurdle that the Government may face in the near future.
Furthermore, I continue to think that the Government have taken a rather London-centric view when defining a qualifying lease. I personally find it odd that someone with three leases worth, say, a total of £2.7 million, or £900,000 per dwelling, would qualify to pay nothing as per the latest amendments, but an individual with, say, five leases totalling £500,000, or £100,000 per lease, would be liable for the entirety of their non-cladding remedial costs on four of those leases. Again, I can only speculate as to how this might play out once the Bill passes.
I hope that the Minister shares these concerns and might perhaps look at a fairer way to define qualifying leases in respect of buy-to-let landlords, but I do not want this sticking point to hold up what has been a very positive debate around this Bill. I reiterate my thanks to the Minister for his co-operation and willingness to listen to and work with us.
Baroness Fox of Buckley (Non-Afl)
My Lords, I thank the Minister for his comments. I am glad to be associated with proportionality, especially in relation to safety and the unintended consequences of a zero-risk approach to any policy, actually. I thank everyone who has been involved—the Minister, the government team and all the people across the House far more experienced than I am—for making the discussions around this have a certain sense of a collegiate endeavour, trying to solve a problem that we all knew was there. I thank your Lordships for your encouragement and, often, your patience with my own inability to quite understand the process.
I particularly thank leaseholders. I got involved with this issue because I was lobbied, not by big business but by ordinary, grass-roots leaseholders. As a leaseholder myself, I found that there was a whole community out there. While we have done a huge amount to benefit their situation, going from where they were to where they are, we are not quite there yet. As much as I would like it to be the case that they are grateful for our endeavours, many of them still feel frustrated, fearful and nervous—and you cannot blame them, because they are just not sure what is going to happen; there are too many question marks. I do not think we should be disparaging of them or think that they are lacking in gratitude for what has happened.
I encourage the Government not only to give time in the other place to consider the amendments but not to wash their hands of the Bill, as it were, once it eventually fully goes through. I think we have all noted that there will be unintended consequences: hidden costs and service charges. While there might be a formal review, this will be an ongoing issue for many years to come. Therefore, I hope the Government will be open to those lobbying for leaseholders, even when we are not discussing a Bill in Parliament. I would like the department to still keep listening to them, as I certainly will. I will raise issues whenever I get the chance. Generally, this is far better than when we started, but I always want more.
Lord Blencathra (Con)
My Lords, simply look at the Bill that came from the other place, then take a look at what we are sending back. It has changed beyond all recognition. I pay tribute to my noble friend the Minister and his boss, my right honourable friend Michael Gove, for that extraordinary transformation. I also thank my noble friend Lord Young of Cookham and noble Lords and noble Baronesses on all sides of the House, and the right reverend Prelate, for the many amendments they have made, many of which have been accepted by the Government. We are sending back some important amendments that the Government might not quite like as much as we would like them to. However, I appeal to the other place to accept them and not to remove them, especially the zero amendment proposed by the noble Baroness, Lady Hayman of Ullock.
The Government, apparently, have had legal advice on the dangers of breaking the ECHR if we changed the cap figures, but we heard, I submit, even better legal advice that that is not so. In any case, as the noble Lord, Lord Marks of Henley-on-Thames, said, some developers will challenge the figure in court no matter what level the Government set.
We also need to do more on enfranchised leaseholders. They were encouraged to purchase their freeholds, and they must not be treated like rapacious landlords. Nevertheless, this Bill now gives leaseholders infinitely better protection. With a few further tweaks it could give them full protection. When I see the contribution my noble friends have made to the Bill, I am reminded of the words of Shakespeare’s Julius Caesar, or almost his words:
“Antonius! … Yond”
noble Lord, Lord Young of Cookham,
“has a lean and hungry look … Let me have men about me that are fat”.
I commend this Bill and hope the other place will improve it further.
Lord Naseby (Con)
My Lords, as one who has been involved in housing policy for over 50 years, I pay tribute to my noble friend for his time, care and effort, and his listening qualities, which have not always been a feature of those on either Front Bench. I offer sincere thanks to my noble friend.
Baroness Pinnock (LD)
My Lords, I start by thanking the cladding and building safety campaigners who have been resolute and unremitting, since the Grenfell fire tragedy, in pursuing justice for leaseholders and tenants. Without them, this Bill would not be in the shape it is today. It has been transformed but not transformed enough, as we have heard from others. Across the House, people have worked together to make it a better Bill. I thank them for the way we have worked together to make improvements, but it is not yet enough.
I, too, urge the Government to accept the amendments that we accepted on Report. I, for one, am not giving way. I hope that the Government, at the other end, will say that the argument has been made for a nil cost to all leaseholders. That is where I shall firmly stand to the bitter end. Leaseholders are the innocent victims; they must not pay a penny.
I pass on my thanks to the Minister for being so free with his time, discussing the various amendments, and to the officials from various parts of the Government for explaining the detailed changes that had been proposed. Particularly, I thank Sarah Pughe in the Liberal Democrat Whips’ Office, and my noble friend Lord Stunell. Without their expertise, knowledge and experience, we would not have been able to do the job that, between us, we have done. I look forward to the Bill coming back, having been accepted by the Commons.
Lord Greenhalgh (Con)
My Lords, I beg the indulgence of noble Lords: as my noble friend Lord Young and the noble Earl, Lord Lytton, asked pretty much the same question, I thought I would respond to that very briefly. They wanted to know what happens to orphan buildings, where there is no polluter to pay. I do not feel that this works in this setting, but I have this wonderful diagram that makes it pretty clear to me what happens. This is the so-called “non-cladding costs waterfall”, which I am going to try to have put on the Government’s website. Let us be very clear: we need to look at this in terms of cladding and non-cladding.
There is, of course, the £5.1 billion building safety fund for the remediation of cladding in high-rise residential buildings, which is open to orphan buildings. My department is seeking a further £4 billion voluntary contribution. In the first instance, it is a voluntary contribution from the developers for the remediation of unsafe cladding in medium-rise buildings, which is also open to orphan buildings. Then, we have this wonderful government waterfall for non-cladding costs: the developers must pay. In instances where the developer is not available to pay, the landlord must pay. The landlord or freeholders who pass the government test, which is a net worth of £2 million per building, become legally liable for all the costs. The landlords must comply with the law, as set out by Parliament. Freeholders or landlords must pursue those responsible, as well as any applicable grant schemes, before they can pass costs on.
Finally, as it says on this wonderful chart, which even I can read with my poor eyesight, costs are shared equitably between freeholders, lessees and leaseholders, subject to robust leaseholder protections detailed in the Bill—and sent back to the other place with some other parameters that perhaps the Government might not have wanted at this stage.
I want to make a final point about landlords. Sadly, some landlords are polluters. A number of large freeholders have appeared on the Government’s “name and shame” list for not remediating their buildings. Some freeholders or landlords have gone so far as to force leaseholders to take loans to remediate their buildings. As I said, we all agree that, in those instances, the polluter must pay.
Building Safety Bill
Wednesday 20th April 2022
(1 year, 12 months ago)
Commons ChamberRead Full debate Building Safety Act 2022 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Commons Consideration of Lords Amendments as at 20 April 2022 - (20 Apr 2022)
15:45 - The House divided: - Ayes: 316 / Noes: 188 - Question accordingly agreed to.
16:01 - The House divided: - Ayes: 318 / Noes: 189 - Question accordingly agreed to.
16:18 - The House divided: - Ayes: 317 / Noes: 190 - Question accordingly agreed to.
16:35 - The House divided: - Ayes: 318 / Noes: 188 - Question accordingly agreed to.
Madam Deputy Speaker (Dame Rosie Winterton)
I must draw the House’s attention to the fact that financial privilege is engaged by Lords amendments 6, 17, 22 to 30, 103, 104, 111 to 113, 116, 120 to 127, 137 and 138. If they are agreed to, I will cause the customary entry waiving Commons financial privilege to be entered in the Journal.
Before Clause 117
Remediation of certain defects
The Minister for Housing (Stuart Andrew)
I beg to move amendment (a) to Lords amendment 93.
Madam Deputy Speaker
With this it will be convenient to discuss the following:
Government amendment (b) to Lords amendment 93.
Lords amendment 94, and Government amendment (a) thereto.
Lords amendment 98, and Government amendments (a) to (c) thereto.
Lords amendment 107, and Government amendment (a) thereto.
Lords amendment 108, and Government amendment (a) thereto.
Lords amendment 109, and Government amendments (a) and (b) thereto.
Lords amendment 145, and Government amendment (a) thereto.
Lords amendment 184, Government amendments (a) and (b), amendment (e), Government amendments (c) and (d), and amendment (f) thereto.
Lords amendment 6, Government motion to disagree, and Government amendment (a) in lieu.
Lords amendments 1 to 5 and 7 to 25.
Lords amendment 26, and amendment (a) thereto.
Lords amendments 27 to 77.
Lords amendment 27, and Government consequential amendment (a).
Lords amendments 79 to 92, 95 to 97, 99 to 106 and 110.
Lords amendment 111, and amendment (a) thereto.
Lords amendments 112 to 144, 146 to 183 and 185 to 191.
Stuart Andrew
I must start with a reminder of where this journey started: 72 people lost their lives in the Grenfell Tower tragedy, which was the largest loss of life in a residential fire since the second world war. All our thoughts are with those families who have lost loved ones. The Government are determined to ensure that such a tragedy never happens again.
I thank the Members of this House, noble Lords, cladding groups and industry stakeholders who have worked tirelessly on this landmark legislation. I remind Members that the Bill not only creates an improved building safety regulatory system but protects leaseholders, who have become victims in the building safety crisis. We have stuck to my right hon. Friend the Secretary of State’s principles on building safety, which are that we must make industry pay to fix the problems for which it is responsible; protect leaseholders; and restore common sense to the assessment of building safety risks, thereby speeding up the fixing of the highest-risk buildings and stopping buildings being declared unsafe unnecessarily .
Mr Clive Betts (Sheffield South East) (Lab)
I accept that a lot of what the Minister is saying is correct—that those who are responsible should pay and leaseholders should not—but he missed out one group that has been particularly affected by Grenfell: social housing tenants. Why is the Minister not prepared to offer them the same financial support as he is giving to leaseholders?
Stuart Andrew
We continue to review all these matters. We are looking at and consulting on the whole of the affordable housing and social housing policy area, and we will come back to ensure that we get it right.
Bob Blackman (Harrow East) (Con)
The Chairman of the Levelling Up, Housing and Communities Committee—the hon. Member for Sheffield South East (Mr Betts)—and I have been involved in the prelegislative scrutiny of the Bill and the whole process behind it. Is my right hon. Friend the Minister saying that not only can we pass the Bill today with the Government amendments but he will continue to look to revise the law and to embrace more people in the law through secondary legislation?
Stuart Andrew
The Building Safety Regulator will continue to make sure that all building safety regulations are adhered to. Mention has been made of social housing tenants, social housing and affordable housing; we will consult on that further down the line so that we can be absolutely sure we have got this right. I hope that reassures my hon. Friend.
On 13 April, my right hon. Friend the Secretary of State wrote to Members to update them on the progress in the negotiations with industry. We will now see the vast majority of developers fix all the buildings that they had a role in developing or refurbishing in the past 30 years. My right hon. Friend announced last week that, in addition to the existing building safety fund, the Government will establish a new cladding remediation scheme, funded by industry contributions, to cover all other unsafe residential buildings of 11 to 18 metres that contain private leasehold properties but a developer has not accepted responsibility for fixing them or cannot be identified.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
I thank the Minister for what he is saying. He will be aware that I have had significant issues in my constituency, with many affected developments. In respect of the Celestia development in particular, there have been long-standing challenges in getting answers to the questions that residents are asking. Redrow wrote to the Secretary of State to say that it will now take responsibility for paying, but it has not made clear whether that applies to Wales—the letter refers only to England. Will the Minister clarify whether he understands that such commitments are going to be UK-wide, given that it is a UK-wide issue? If they are not, what pressure will he put on Redrow to make sure that that commitment applies to Wales as well?
Stuart Andrew
I do not know the specifics, to be really honest with the hon. Gentleman. He will know that I have picked this issue up lately, and if he does not mind, I will come back to him with a definitive answer.
The leaseholder protections that were introduced in the other place put our commitments into law. Qualifying leaseholders—defined as those living in their own homes or with up to three UK properties in total in buildings that are above 11 metres or five storeys—will be legally protected from all costs associated with the remediation of unsafe cladding, as will all leaseholders in buildings owned by or associated with the developer. Leaseholders in buildings above 18 metres are already protected by the Government’s £5.1 billion building safety fund for the removal of unsafe cladding. It is the Government’s expectation that developers will pay to fix buildings that they had a role in developing or refurbishing.
John Redwood (Wokingham) (Con)
Has it been possible to trace any foreign companies or foreign interests that are involved in these matters? Will they be making their contribution?
Stuart Andrew
My right hon. Friend raises an important point. I shall address that specific point later in my speech.
Stephen McPartland (Stevenage) (Con)
The Minister has been a breath of fresh air since he has come to the Department, and the discussions have been very productive. Will he clarify from the Dispatch Box that for leaseholders in buildings under 11 metres, who currently have no protections, the Department would be willing to look at those buildings on a case-by-case basis if support was needed?
Stuart Andrew
My hon. Friend has invested a considerable amount of time in his campaign and I have enjoyed the opportunity to have those discussions with him. I will come to that point shortly, but yes, as a Department we will deal with those buildings on a case-by-case basis. I shall give more details as to why we have come to that conclusion.
We are protecting qualifying leaseholders from costs associated with non-cladding defects, including interim measures such as waking watches. Building owners and landlords will be prevented from passing on the costs to fix non-cladding defects if they are linked to, or are, the developer.
While the Bill was in the other place, the Government made a number of amendments to it that will restore fairness to the system and help those who have been unfairly impacted by building safety issues. I know that many Members wish to speak, so I do not propose to go through each of the amendments made in the other place. The Bill now not only provides for a new regulatory regime but provides an extensive set of tools, in law, to ensure that those who bear the responsibility for defects are made to pay and to protect leaseholders from crippling bills for historic defects. In response to concerns expressed by Members in both Houses and by stakeholders, we have changed how the building safety charge works and removed the legal duty to appoint a building safety manager.
Royston Smith (Southampton, Itchen) (Con)
The EWS1 form, which was brought about by the Royal Institution of Chartered Surveyors, has caused many problems for people trying to sell their properties. We now have PAS 9980, which will not replace EWS1, but could the Minister say that from his perspective he would rather people look at PAS 9980, as opposed to EWS1?
Stuart Andrew
I pay tribute to my hon. Friend, who has also been heavily involved in all this work. Yes, I can confirm that. I will elaborate later in my speech.
Let me turn now to the Government amendments to the Lords amendments. Lords amendment 94 inserts a clause that sets out the meaning of “relevant building”. The clause defines the categories of buildings to which the leaseholder protection measures apply. The Government originally proposed to apply the leaseholder protection measures to buildings containing at least two dwellings above 11 metres in height, or with at least five storeys. Amendments made in the other place extended the definition of “relevant building” to buildings of all heights containing two or more dwellings. We will take a very dim view of freeholders who seek to exploit leaseholders to pay for unnecessary works. The Department is aware of a handful of low-rise buildings where freeholders have been commissioning such works and we are addressing such buildings, as I said a moment ago, on a case-by-case basis, but we must restore proportionality to the system. That is why the Government do not agree with the extension of the scope of leaseholder protections to include buildings under 11 metres. There is no systematic risk of fire with buildings below 11 metres. Low-rise buildings are therefore unlikely to need costly remediation to make them safe. Lower-cost mitigations such as fire alarms are likely to be far more appropriate and proportionate. Assessments carried out in accordance with the new PAS 9980 principles should produce more proportionate responses than costly and, ultimately, unnecessary remediation. The Government have been clear in their view that an EWS1 form should not be required for buildings below 18 metres in height.
Stephen Doughty
I thank the Minister for his generosity in giving way again. What is his advice to leaseholders who believe that they have been wrongly charged for unnecessary works, or works that are not actually required in the way that he is describing? Many residents have raised concerns with me about what has been put forward and whether it was actually required. What should they do? What is the Minister’s practical advice?
Stuart Andrew
My door is always open, so if the hon. Gentleman wants to raise specific cases with me I would be more than happy to take them up and make sure that we get relevant answers for him.
Freeholders and landlords should not be commissioning costly remediation in buildings below 11 metres except in exceptional circumstances, which is where there is no more proportionate option available. They certainly should not be pointing to old EWS assessments to justify those costs. Given the small number of buildings involved, a blanket legislative intervention bringing hundreds of thousands more buildings into scope to deal with an issue affecting just a handful of buildings would be entirely disproportionate. The Government amendments therefore reinstate the definition of “relevant building” as one that is at least 11 metres, or five storeys in height, and contains at least two dwellings.
Hilary Benn (Leeds Central) (Lab)
I am extremely grateful to the Minister for giving way. In respect of the point that he has just made, have the Government made an estimate of the number of residential buildings below 11 metres where there may be a case for extensive remediation works? I am just trying to follow the logic of the Government’s position. They say that there is not really a problem with buildings below 11 metres, which is why they do want to include them, but if there is not a problem, surely the Government would not be having to do much in respect of those buildings, because there are very few of them—so the Minister says.
Stuart Andrew
The issue is the proportionate measures that can be made in those buildings to ensure that they are safe. We want to make sure that we get this right, and we will be continuing to look at all of these. If the building safety regulator assesses that further work needs to be done, or that the Government need to look at what needs to be done, we will absolutely make sure that we do that, and I make that commitment to the House.
Daisy Cooper (St Albans) (LD)
On that specific point, I am grateful that the Minister has said that he will look at this issue of buildings below 11 metres. As part of that, will he commit to focus especially on those buildings where there are many vulnerable residents—whether that is care homes, shelter buildings or perhaps even schools where there are children with special educational needs or disabilities who might find it harder to escape buildings? Will he commit to look specifically through that lens of risk to the vulnerable adults in those buildings?
Stuart Andrew
I am grateful to the hon. Lady for her engagement, too. She raised this important point with me yesterday. Yes, absolutely, we have officials looking at that, but also, as I have said, the Building Safety Regulator will be assessing buildings such as those. If this becomes an area that needs further consideration, we will look at what measures need to be introduced.
Mr Betts
I thank the Minister for giving way. He is being very generous, but these are important and quite complicated issues. There is a general welcome for the Government’s attempts to take a more proportionate approach and for moving away, albeit over a period of time, from EWS1 forms to PAS 9980, which can cover whole blocks rather than individual properties. The two questions that the Select Committee has not had answers to are, first, whether the Government will look at making the building regulator responsible for deciding which blocks need this new assessment rather than the building owners, who might have a particular interest in saying no; and, secondly, whether he will ensure that the professional indemnity insurance scheme also applies to assessors on the PAS 9980 assessments as well as to those on the EWS1 forms?
Stuart Andrew
I know that the Department has been considering much of the Select Committee’s excellent work. We have moved a long way from the initial reports, and the responses will be going back to the Committee. Yes, I will take that away with me if the hon. Gentleman will allow, and I will write to him to give him further details.
Let me move on now to collectively enfranchised and commonhold buildings. The Government’s original proposal included an exemption from the leaseholder protection provisions to leaseholder-owned buildings—those in which the leaseholders have collectively enfranchised and those which are on commonhold land.
In a collectively enfranchised building, the freehold is owned by some or all of the leaseholders, so there is no separate entity with which the costs can be shared. The leaseholders are the freeholders. The amendments made in the other place seek to apply the protections to these buildings. The Government recognise that the amendments are well intentioned and driven by a desire to protect these leaseholders, and they share these aims. However, I must emphasise to the House that these amendments will not have the intended effect of protecting leaseholders living in those buildings. Those leaseholders who have enfranchised would still have to pay—but in their capacity as owners of the freehold rather than as a leaseholder. Indeed, it could make things worse. Where some leaseholders have chosen to enfranchise and others have not, the enfranchised leaseholders would have to pay for remediation of the whole building in their capacity as owners of the freehold—including the share of remediation costs that would otherwise have been recoverable from those leaseholders who have not enfranchised, once they have paid up to any cap. That is why the Government amendments reinstate the exemption for leaseholder-owned buildings. Enfranchised buildings are eligible for the £5.1 billion building safety fund in the same way as other buildings.
The other protections that we have introduced will also apply. The recent commitment from many developers to fix their own buildings will apply equally to enfranchised buildings, and the measures and powers that we have added to the Bill to pursue and compel developers and cladding manufacturers to pay will be available. I know that Members will still be concerned about how we can protect leaseholders in leaseholder-owned buildings, which is why I am announcing today that the Government will consult on how best leaseholders in collectively enfranchised and commonhold buildings and other special cases can be protected from the costs associated with historical building safety defects. The consultation will allow the Government to understand fully the position regarding leaseholder-owned buildings with historical defects and identify whether further measures are appropriate to address specific circumstances in which leaseholders may unintentionally be exposed to disproportionate costs.
Paul Blomfield (Sheffield Central) (Lab)
I am grateful to the Minister for giving way. He has, to some degree, covered the concerns that I was going to raise about those people who have exercised the right to manage. Yesterday, in a letter to us, he and the Secretary of State acknowledged that Lords amendment 117 identified a real problem. Frankly, at this stage, a consultation will give very little comfort, but could he try to assure leaseholders in that position by saying how long that consultation will be undertaken and when they might expect some conclusion?
Stuart Andrew
I appreciate the hon. Gentleman’s point. I want to ensure that we get the consultation under way as quickly as possible. I accept that people have deeply held concerns, so we will do our best to get that done speedily, but we do need to consult. We need to get the evidence and know exactly what the picture is, in order to know how best to deal with that situation.
Lords amendment 184 inserts a new schedule 8, titled “Remediation costs under qualifying leases”. It sets out the circumstances in which costs cannot be passed on to leaseholders. The Government’s original proposals set out that where the building owner is, or is linked to, the developer or can afford to meet the costs in full, they would be prevented from passing costs on to leaseholders.
It is worth stressing just how wide these proposed protections are. If a building is still linked to the developer, that building owner and the landlord will be liable for the costs associated with non-cladding defects and their leaseholders will pay nothing. If the building owner or landlord is not linked to the developer, but has the wealth to meet the costs in full, their leaseholders will pay nothing. If a leaseholder property is valued at less than £175,000, or £325,000 in London, the leaseholder will pay nothing and, if the leaseholder has already met interim costs that exceed the contributions cap, they will pay nothing.
Based on that “waterfall”, the Government’s assessment is that the vast majority of leaseholders would pay less than the caps and many would pay nothing at all. However, it is important to remember that not all landlords are evil. Where the building owner or landlord is not at fault, where they have no link to the developer who created those defects and they do not have the wealth to meet the remediation costs in full, and only in that situation, we propose that leaseholder contributions towards non-cladding defects can be recovered, subject to the fixed caps.
Rushanara Ali (Bethnal Green and Bow) (Lab)
I apologise for not being able to be here since the beginning of the debate as I was at the rally with leaseholders.
Does the Minister agree that there is a conflict of interest issue? As I have seen in my constituency, which has many cladded buildings, it is often freeholders who do the assessments, which therefore do not have the necessary independence or checks and balances. Does he agree that it is worth having a building works agency, as Labour proposes, with independent assessors to do the work, so that residents can have confidence that there will be no more attempts to find ways to pass on the costs to leaseholders? We have had three fires in my borough since Grenfell, and it is vital that freeholders take the responsibility rather than passing on the bill.
Stuart Andrew
The hon. Lady is absolutely right. Freeholders must ensure that their buildings are safe. We will have responsible people associated with each of those buildings to ensure that all the regulations are adhered to. The Building Safety Regulator will also ensure that buildings are safe. As ever, we want to learn as this process goes on, and I would be keen to continue to have dialogue with her as we progress with this.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
My hon. Friend is being very kind with his time. On the point about the building cost thresholds, he will know that the London median house price is £515,000, but in Runnymede and Weybridge it is £475,000. In fact, house prices in my constituency are higher than or equal to those in 25 London constituencies. Many of my constituents will be adversely affected but will not get the same benefit as those in London, despite having equivalent or higher house prices. As he reviews the policy going forward, will he consider looking at house prices on a regional basis, as opposed to inside London versus outside London, which negatively affects constituents such as mine?
Stuart Andrew
I thank my hon. Friend for raising that important point. He will be aware that we are trying to avoid any leaseholders having any contributions to make at all. The first port of call will always be the people who developed the building in the first place. I hope to come on a bit later to the valuation of properties, which might address some of his points.
Importantly, we proposed that those leaseholder contributions be subject to a firm cap and that costs paid out in the past five years count against the caps. The Government originally proposed that leaseholders’ contributions be capped at £10,000, or £15,000 in Greater London, and we believe that creates a fair balance. It is the Government’s assessment that the vast majority of leaseholders would pay less than the caps, and many would pay nothing at all. None the less, the other place voted to reduce leaseholders’ capped contributions to zero. I am afraid the Government cannot accept the amendments.
We believe that in those circumstances, setting the cap on leaseholder contributions to zero is not a proportionate approach. Placing the entire burden on freeholders and landlords in circumstances where they are not at fault and are not wealthy will only increase the risk that remediation that is needed to ensure that residents are safe will not happen at all. We are therefore restoring the caps at £10,000 outside London and £15,000 in London, as originally proposed, and have made a small number of other technical improvements to those measures.
Sir Mike Penning (Hemel Hempstead) (Con)
I welcome the Minister to his position on this very interesting Bill that is going back and forth. The one group of people who took the money right at the start for the developers and builders was the insurance companies. The developers could not have built those properties without having the legal protection of insurance. Sadly, the Minister has not mentioned the insurance companies once in this situation, but that is where the burden should fall, instead of on the leaseholders. Does he agree?
Stuart Andrew
Actually, the responsibility lies with those who built the building defectively in the first place. They are the ones we are chasing. I pay tribute— I should have said this right at the beginning—to officials in the Department, who have worked incredibly hard to get this new package of measures from the developers in place. It has not been an easy task, but they have done it with great passion and have been incredibly successful. As I say, it is the developers who should be paying, and we expect a minimal number of leaseholders to pay.
Royston Smith
I am grateful to the Minister for giving way. I know he wants to get on. On insurance, which has been my bugbear as well, it is not just that many of the insurance companies insured the development beforehand, and therefore provided a warranty of sorts, but that since then they have increased premiums on leaseholders, sometimes by more than 1,000%. Does he have something to say about that particular activity from insurance companies?
Stuart Andrew
Yes. My right hon. Friend the Secretary of State has asked the Financial Conduct Authority to look at that, because it is an area of great concern. I hope to update the House on further progress in the near future.
Turning to Government amendment (a) in lieu of Lords amendment 6, the Government have accepted the principle of the Lords amendment, requiring the Building Safety Regulator to conduct a series of safety reviews. We believe the new version provides clearer drafting and a more practical and pragmatic approach. The amendment inserts a new clause that increases the time available to the regulator from two years to three, reflecting the time needed for the regulator to develop the capacity to carry out those reviews alongside all its other functions.
The new clause aligns the reviews with building regulations to address safety issues, focusing on the costs and benefits of measures to improve safety. It sets specific priorities for the regulator to review while fulfilling its duty under clause 5 to keep,
“the safety of people in or about buildings”,
under review. The scope remains true to the intent of the original amendment, and it is important to assure hon. Members that the reviews will be conducted within the principle of proportionality placed on the operation of the regulator’s building functions by this Bill.
I now turn to a number of technical improvements that the Government are proposing to Lords amendments. Lords amendment 93 inserted a new clause called “Remediation of certain defects”, which provides an overview of the leaseholder protection measures contained within the Bill. Government amendments (a) and (b) to Lords amendment 93 make two minor and technical amendments to that new clause.
The first amendment, to leave out “under qualifying leases” at line 12, is a minor and technical amendment to reflect that some of the protections in schedule 8 apply to leases that are not qualifying leases. When the landlord is, or is linked to, the developer they will not be able to pass costs on to any leaseholders in the building, including non-qualifying leaseholders. The second amendment, at line 23, is a minor and technical drafting change.
I now turn briefly to Government amendments (a), (b) and (c) to Lords amendment 93 regarding trusts. I must take this opportunity to pass on my appreciation to the noble Lord Young of Cookham and Lord Blencathra, who raised this matter through their work in the other place. I acknowledge the concerns raised about the use of trusts and how their misuse could undermine vital leaseholder protection provisions. The Building Safety Minister, my noble Friend Lord Greenhalgh, committed on Report in the other place to consider this further. Government amendments (a), (b) and (c) amend clause 120 to ensure that a body corporate or a partnership can be regarded as associated with another if they are the beneficiary of a trust that has an interest in a relevant building. In other words, the existence of a trust will not enable a group of companies to evade their responsibilities under the leaseholder protections. We have also inserted wording into clause 130 so that beneficiaries of trusts can be considered for building liability orders—that is, can be required by the High Court to contribute to remediation. The remaining amendments to Lords amendments 107, 108 and 190 are consequential to the amendments I have described.
Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)
We are discussing measures that the Government are introducing for England only. I know the Minister cannot answer for the Welsh Government, but what discussions has his Department had with them about policy in Wales? Does he expect the Welsh Government to follow the measures that he is introducing today for England, and does he have a timeframe for when such policy might be announced?
Stuart Andrew
The hon. Gentleman is right that it would not be appropriate for me to speak on behalf of the Welsh Government, and I do not think they would like that either. What is important is that all buildings across the United Kingdom are safe. I hope that we will all learn from each other to ensure that we achieve that objective, because the safety of the residents is paramount in this instance.
I hope that hon. Members will welcome all the changes that the Government have made, which I firmly believe address the key concerns that have been raised in Parliament. It is in all our interests to see this crucial Bill become law as quickly as possible. I hope that all hon. Members across the House will support the Government amendments, and look forward to seeing the Bill implemented so that we can get these buildings into a safe position and give the residents the reassurance that they need.
Madam Deputy Speaker (Dame Rosie Winterton)
I call shadow Minister Matthew Pennycook.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
This Bill has been a long time in gestation. First published in July 2020, it was subject to extensive pre-legislative scrutiny and was examined in exhaustive detail over five long weeks in Committee in the autumn of last year. Then, in January this year, the Government accepted that the approach they had taken to the building safety crisis over a period of more than four years following the Grenfell fire had not worked, and they announced that it would change. We raised a series of questions and concerns about what that change of approach would mean in practice, but we welcomed the fact that it had finally happened. It is of course right that we seek to ensure that those who profited from the sale of unsafe buildings and construction products pay their fair share when it comes to putting things right, that every developer and freeholder who can shoulders the financial burden of fixing their own buildings, that we restore common sense and proportionality to the assessment of building safety in general, and that leaseholders are properly protected from the costs of remediating all historical cladding and non-cladding defects. Labour has urged the Government to act on all these fronts, and more, for years, and we are pleased that we are now finally making progress toward some semblance of a comprehensive solution to the building safety crisis.
However, the manner and the pace at which this already complex and technical Bill has been overhauled to reflect the Government’s belated change of heart has been deeply problematic. Large sections of the Bill have been completely rewritten on the basis of hundreds of Government amendments tabled in the other place that the noble Lords had relatively little time to consider carefully or properly scrutinise. We welcome many of those amendments, particularly the removal of the building safety charge and the abolition of building safety managers, and we also welcome the important concessions the Government made in the other place in response to Labour amendments—for example, to exempt social housing providers from the levy. But that does not detract from the fact that this is no way to make good law, and I want to put on record the Opposition’s serious misgivings about the way the Government have gone about revising the Bill. As a result of the way it has been modified, it is now, by all accounts, something of a mess, and the five pages of complex Government amendments tabled yesterday afternoon, which again provided hon. and right hon. Members in all parts of the House with little time to properly consider them, do little to remedy that fact.
Nevertheless, the Opposition have always maintained that we want to see a version of the Bill on the statute book as soon as possible. As such, our focus is now on ensuring that its most glaring remaining defects are addressed so that it can be passed in what remains of this Session. To that end, there are five specific issues to be considered today: the duties placed on the Building Safety Regulator with regard to reviewing safety and standards, protection for leaseholders in buildings below 11 metres in height, protection for leaseholders in enfranchised buildings, the issue of buildings held in trust, and the proposed leaseholder cap.
The first can be dealt with very quickly. As well as having the resource and capacity to perform all the complex tasks assigned to it, it is critically important that the new Building Safety Regulator within the Health and Safety Executive be clearly tasked in the early years of its operation with assessing the benefits and costs of a range of measures in relation to safety and standards. Lords amendment 6 specified four—fire suppression systems, the safety of stairways and ramps, the certification of electrical equipment, and provision for people with disabilities—and we supported it. Having maintained in the other place that the amendment was entirely unnecessary, the Government yesterday tabled an amendment in lieu of Lords amendment 6 that almost entirely mirrors its provisions. On that basis, we will support that Government amendment.
The second issue is protection for leaseholders in buildings below 11 metres in height. As I argued on Report on 19 January, 18 metres was always a crude and arbitrary threshold that not only failed to adequately reflect the complexity of fire risk but was an entirely unsound basis for determining which blameless leaseholders were and were not protected by the state from the costs of remediation. The same argument applies to the 11-metre threshold. The blameless leaseholders who are trapped living in unsafe smaller buildings deserve the same protection as those in mid and high-rise unsafe buildings. As the Earl of Lytton argued in the other place:
“There seems no good reason for height exclusion on any moral, economic, safety or practical ground.”—[Official Report, House of Lords, 29 March 2022; Vol. 820, c. 1508.]
The Government maintain—the Minister said as much again in his remarks—that there are no systemic building safety issues with buildings under 11 metres, yet we know from the devastating incident at Richmond House in Worcester Park in 2019 just how dangerous to life defective buildings under this height threshold can be. The Government further maintain that buildings under 11 metres in height that are dangerous are few in number. I suspect that is almost certainly the case, but all the more reason, then, to provide financial support to those blameless leaseholders who find themselves living in them rather than leaving them without protection. I noted what the Minister said when he gave a commitment that the Government would review such buildings on a case-by-case basis, but it begs the question: why will the Government not act by amending the Bill to cater for the exceptional circumstances that he spoke about?
Rushanara Ali
On that point, does my hon. Friend agree that if the Government do not act to safeguard such blocks, the people who live in those kinds of accommodation will find it very difficult to be insured and to get mortgages? This is a short-sighted response, when the Government could address these issues in the round.
Matthew Pennycook
My hon. Friend is absolutely right, and it has been a consistent position of ours that we ensure that all leaseholders affected by the building safety crisis are protected irrespective of circumstance, including what height their building happens to be. For that reason, we will oppose Government amendment (a), tabled yesterday to Lords amendment 94, and seek to ensure that the Lords amendment remains unmodified.
I turn to the third issue we are considering this afternoon: enfranchised buildings. Under the Bill, enfranchised leaseholders will, in effect, be treated as freeholders when it comes to the costs of remediation. That cannot be right. Buildings that have exercised a right to collective enfranchisement, or those on commonhold land, may be few in number, but it has been the policy of successive Governments to encourage leaseholders to enfranchise and to promote the right to manage. Indeed, the Government have promised legislation in the next Session to make it easier and cheaper for leaseholders to buy the freehold of their building, yet the Government have put forward no solution whatever to the issue of enfranchised buildings in the Bill as it stands, and they are seemingly content, at least until this afternoon, to see such leaseholders completely excluded from the protections enjoyed by those in buildings that remain unenfranchised. We vehemently disagree with that position. It is imperative that such leaseholders are afforded the same protection as those who do not collectively own or manage their buildings. As Lord Young put it in the other place,
“it would be perverse if the legislation before us today put enfranchised leaseholders in a worse position than leaseholders who are not enfranchised”.—[Official Report, House of Lords, 29 March 2022; Vol. 820. c. 1509.]
It is essential that the service charge protections set out in schedule 8 to the Bill apply clearly to enfranchised buildings and buildings where the right to manage has been exercised, which is another reason why we cannot support Government amendment (a), tabled yesterday to Lords amendment 94, and why we will seek to divide the House on it. The Minister is right to say that pressing the amendment to a vote is not enough, and that at some point the Government will have to go further than simply accepting Lords amendment 94 or a version of it, because the Bill in its current form would not prevent resident-owned companies from making unlimited demands on leaseholders in their capacity as shareholders, to cover the costs that they would be unable to pass on via service charges if the Lords amendment, or a version of it, were to remain part of the Bill. So the Government will have to act.
I noted what the Minister said about a consultation, but I have to say that I agree entirely with my hon. Friend the Member for Sheffield Central (Paul Blomfield). It is too late in the day to consult on this matter. Four and a half years after Grenfell, the Bill needs to be amended to reflect and deal with this issue.
I turn to the fourth issue we are considering this afternoon, which is buildings held in trust. As it stands, buildings held in trust on behalf of a third-party investor, where the landlord is a professional depository or custodian regulated by the Financial Conduct Authority, or buildings owned on trust by what I can only describe as ground rent grazers—almost invariably based offshore—do not meet any of the association tests or the net wealth test in the Bill. Unless the Bill is revised to capture such trustee arrangements, they will escape the so-called waterfall system as set out in schedule 8, and the leaseholders will find themselves picking up a proportion of the costs of non-cladding remediation. The Minister is right to say that, in the other place, the Government accepted that the Bill needed to be so modified, and yesterday they tabled an amendment to Lords amendment 98 as a result.
Let me be clear that the inclusion of Lords amendment 98, as amended in the way the Government propose, would make for a better Bill than one that has no provision addressing the trustee loophole whatever. However, the Government amendment tabled yesterday afternoon has serious deficiencies, which are almost certainly the result—I make no charge against the officials involved—of the hurried timescale in which it has been drafted and tabled. Let me take the two most obvious problems with it. First, the Government amendment covers only partnerships or bodies corporate that are a beneficiary of a trust; private individuals are entirely excluded. That cannot be right, and they must be brought within the scope of these arrangements.
Secondly, the Government amendment makes no distinction whatever between types of trusts. A local authority pension fund, for example, will be liable under the waterfall system in precisely the same way as an offshore ground rent grazer. We believe that that is wrong and that the Government should think further about how they might better protect trusts where there is a clear public interest in doing so. We will not oppose Government amendments (a), (b) and (c) to Lords amendment 98, but I urge the Minister and his officials to go away and consider whether the flaws in the Government amendment as currently drafted can be rectified as the Bill progresses.
Sir Peter Bottomley (Worthing West) (Con)
I thank my hon. Friend the Minister for the way he introduced the amendments, and I thank the Labour spokesman, the hon. Member for Greenwich and Woolwich (Matthew Pennycook), who spoke in a non-party way about the matter. I pay tribute to those on both sides of the House who have been working on the Bill, often without proper recognition. Among them I include the hon. Member for Sheffield South East (Mr Betts), the Chair of the Levelling Up, Housing and Communities Committee. Its first report on the leasehold disaster was critical to getting Government and some people outside to pay attention.
If anyone from a major media organisation is listening, I urge them to make sure that they have a housing editor who can pay attention to this issue and provide continuity. During the four or five years since Grenfell, several people have taken up the issue of the fire itself, but no one has provided the necessary continuity when it comes to television and radio programmes. Institutional memory is required if we are to understand how we got to where we are, and where we need to get to. For residential leaseholders, fair, detailed, expert housing coverage matters as much as coverage of health, economics, defence and other things. I commend to media organisations the idea of having a housing editor and a team who can help us to do our work better, because without media reflection of our efforts, we will not go as far or as fast as we ought to.
Bluntly, the thinking in the Treasury has been the cause of much of the delay. The tragic deaths at Grenfell, where over 70 people died unnecessarily, were a spur to action. For too long, however, people said, “Look at the Royal Borough of Kensington and Chelsea; this is all its fault.” Most of the blocks affected are not in Chelsea or in Conservative-controlled areas, so we all have a responsibility to accept that we got things wrong.
What was needed to get this right? It was best put by Ted Baillieu in Victoria, Australia, who said that it was necessary to find the problems, fix the problems and fund the problems, and then get after the people who are responsible. If we had done that, for the last four years many more innocent residential leaseholders would have been able to live in homes that they knew to be safe and saleable, and we would be many steps further forward.
I hope that my hon. and right hon. Friends in the Department for Levelling Up, Housing and Communities want to make sure that no block is left unremediated—in plain English, to make sure that every block is made safe—and then go after the money, but the Treasury is blocking that.
I put this question to my hon. Friend the Minister. Who will take claims against those other than the developers—the architects, the surveyors, the component manufacturers, the people who set the building standards and the people who did building control, whether in the public or private sector—who were involved? I am not saying that they are all responsible, but some are. In any other field, lawyers would be coming forward with a class action to put them all in the dock and claim from them the costs that would otherwise fall on innocent residential leaseholders.
For those who are new to this, I repeat that the only people who are totally innocent—the only people who do not own a single brick in the building—are the residential leaseholders, and yet they are being left with some of the costs. If it comes to Divisions, I will vote in a non-party way to try to keep the intentions of the House of Lords going on most of the issues.
I do welcome and accept what the Minister said about extending to three years the responsibilities of the Building Safety Regulator. That makes sense, given the timescale, but what is controversial is leaving residential leaseholders with some of the costs. I draw the House’s attention to the fire at Gibson Court in Woking in 2011. Six years later, those responsible were fined more than £300,000 because their fire protection work had been clearly inadequate. In that case, part of reason for the spread of the fire was the fact that lofts went right across the buildings.
I also draw the House’s attention to the point that the hon. Member for Greenwich and Woolwich made about the fire in 2019 at Worcester Park, where 23 other blocks had to be made safe because one block went up in smoke in 11 minutes. If a fire can spread so far in that many minutes, the idea that it could be contained within one flat is not realistic; those who are vulnerable would have no chance of getting out safely.
I hope that this Bill has the power, under secondary legislation, to extend provisions on remediation costs to buildings below 11 metres, especially for the vulnerable, although I would prefer it to go as far as the House of Lords wanted, so that leaseholders do not have to pay.
Remember that a few years back, Government appeared to be thinking that costs of £15 billion could fall on these residential leaseholders, who did not have the money. I am not talking about people who live in big, expensive, multi-million-pound apartments looking out over the Thames. I ought, by the way, to declare an interest, as I have a small flat in Worthing, which does not even look out over the sea. Six of us bought the freehold and we have had no problems with this, or even with managing agents or insurance companies. I will be buying a leasehold on another property in London in time, and I hope it will not be affected either. I put that on the record, just in case someone says that I am talking from self-interest.
I am speaking in the interest of people who are poorer than I am, who live in homes that are less valuable than mine, and who have been lumbered with all the disadvantages of being a residential leaseholder—and now with this fire safety defect issue as well.
I reinforce what other hon. Members have said about insurance. Premiums are unreasonably high; I hope that the Competition and Markets Authority and the Financial Conduct Authority will quickly produce a report, and that publicity will make insurance companies bring rates down to market rates—that is to say, rates that are justified by the risk, not by what the market can be made to pay in a crisis. I also hope that all commissions, rebates and douceurs—sweeteners—paid by brokers or insurance companies and received by managing agents or landlords are disclosed. That ought to be out in the open.
For too long, too many people have got rich on the back of residential leaseholders. There are many more things that I would like to say, but I suspect that, given the amount of interest in the subject, I ought to stop now. As well as thanking those from both sides of the House who have worked on this, I thank the National Leasehold Campaign. Without it, we would not have had Victoria Derbyshire’s interest, which has been important. I thank the cladding groups, in all their manifestations. At great expense to themselves, and having given up some of their other responsibilities, they have brought these issues to the attention of Parliament.
I also thank officials in the Department, because after a very slow start, a group of people has been brought together to support Ministers in their legitimate aim of making sure that those who are responsible pay, and those who are not responsible do not have to.
Mr Clive Betts (Sheffield South East) (Lab)
It is a pleasure to be able to speak in this debate. I thank the Father of the House, the hon. Member for Worthing West (Sir Peter Bottomley), for his kind words about the Select Committee. He certainly encouraged and prodded us to do the first report on leasehold reform. It was, as he said, a first step towards what we hope will eventually be much more significant reform, which I think the Government are committed to.
Since the tragedy of Grenfell, the Select Committee has produced five reports. I am pleased that the hon. Member for Harrow East (Bob Blackman) is in his place, because he has been with us right the way through those reports, all of which were agreed unanimously by the Select Committee. We have repeated over and over again that leaseholders who are not responsible should not have to pay, and neither should social housing tenants; they are no more responsible, and the two should be seen together and treated equally.
I am pleased with what the Minister said today. I hope it was not just a way to get the debate over with, without pushing away too many difficult questions, and that he is still prepared to look at broadening the scope of the Government’s offer to leaseholders and to social housing landlords and tenants. If that was a genuine offer and he is keen to work on it, that is welcome.
We clearly have come quite a long way since the first offer of a £400 million package to deal with ACM cladding. That was going to solve everything, but obviously it was not, even when the Chancellor stood up and offered in his Budget the £1 billion building safety fund and said that was going to give everything the Select Committee had asked for, which it was not and did not. We have moved on since then, so it is welcome that we have now got to a better place, although it is still not quite good enough.
Rushanara Ali
Does my hon. Friend agree that, if the Government do not invest in improving social housing, there is a real risk that some of that housing could become unsafe and could create fire risks, so it is incredibly short-sighted to divert funds from investing in improving social housing? I have seen that at first hand in my own constituency and how that can create risk.
Mr Betts
Absolutely. It is important that the money is available to make sure that all buildings are safe, that everyone is safe in their home, whether they be a leaseholder or a social housing tenant, and that the money provided to make those buildings safe comes from the various funds the Government have identified, and is paid fairly and equally to blocks, whether they are in the private sector or the social housing sector. I hope the Government will listen to that view, which has been expressed by the NatFed and the Local Government Association, to which I am grateful for helping with my amendments today. Just to declare that I am a vice-president of the Local Government Association and very proud to be so, and I think its campaign, along with the NatFed’s on this issue, is fundamentally right.
Sir Mike Penning
What an awful long way we have come with this Bill. On the previous Bill, the Fire Safety Bill, we were told categorically that that was not the right vehicle for the sorts of remedial help people needed in all our constituencies and that this was the Bill. To be fair to the Minister and his civil servants, there has been huge movement—huge movement—compared with where we were when there was considerable unrest on the Conservative side of the House as well as around the House. One of the reasons this Bill has been changed so much is that there was general unrest across the Floor of the House as to what the Bill was actually saying and doing. Can I pay tribute to my colleagues on this side of the House? With a majority of this size, the Government could have ignored us, but they could not because there was too much unrest on this side of the House and the campaigning went on. I want to pay tribute to my colleagues on that point.
Is the Bill perfect? No, it is not going to be perfect. But do we need this Bill on the statute book in this Session? Yes, we do. That is why I will personally be supporting all the measures, and not voting for any of the amendments to send it back to the other place. I think a lot of the work can be done through secondary legislation. The Minister has indicated that. More work could be done, particularly in my opinion—I have said this on Report and Third Reading, and the Father of the House, my hon. Friend the Member for Worthing West (Sir Peter Bottomley), has touched on it, as have all of my colleagues here—with the insurance companies. The Father of the House cited how all the professional bodies that were responsible for building these properties—all of them—were insured, yet the insurance companies have got off scot-free.
I know that those in the Department will say—I have said this before, but let me just repeat it—that it would be very difficult to get the insurance companies to retrospectively pay for this work. That is what they said about mesothelioma, where companies had gone bust and people were dying and suffering from that horrible asbestos disease, but the Government actually brought the legislation forward so that we took a levy from the insurance companies to cover those missing employers, and we could do it with the missing companies. We could do it if we wanted to really do it, and I hope—I am going to go on and on to everyone in this House—that this can be done. Look at the way the Department for Work and Pensions did that Bill. I know a lot about it because I took it through the House, so I am slightly biased. It can be done.
I want to pause for a second, and I declare an interest as a former firefighter. I have nothing but admiration for our firefighters and emergency services who went into Grenfell, when others were quite understandably coming in the other direction. They saw things they never dreamed they would see in their careers. We do not want to see that again, but fires do recur, and our emergency services do a fantastic job. I hope that they are getting the psychiatric support for what some of those sights will have created in their lives. That will affect their lives going forward, and I have asked this question before of several Ministers.
However, the key to this Bill today is that we get it on the statute book. We can do more work through secondary legislation. I think it is absolutely imperative for our constituents that we get it on the book today, so that the other House listens to us and we get this on the statute book before the Queen’s Speech.
Hilary Benn
Like many Members have already done, I begin by acknowledging the progress that the Government have made. I think the House would like to thank the Secretary of State and the Minister for Housing for effecting the transformation from the laissez-fair approach that the Government took previously to a really hands-on approach now—I also pay tribute to the civil servants for the work they have obviously done advising Ministers—and for asking themselves, “What are all the levers we can pull and the legislation we can enact to force people to live up to their responsibility?” I also thank Members on both sides of the House—it has been a team effort—but echo the point made by the right hon. Member for Hemel Hempstead (Sir Mike Penning) that, given the Government majority, dissent on the Conservative Back Benches has been really important in getting us to this point. I pay particular tribute to the hon. Members for Stevenage (Stephen McPartland) and for Southampton, Itchen (Royston Smith).
The reason above all others that we have got to this point, however, is the leaseholders’ refusal to give up. They looked at the situation they found themselves in through no fault of their own and basically said, “We’re not having it, because it’s not fair.” The House now acknowledges that and recognises it, so we should, above all, applaud their determination and persistence and that of all the cladding groups, including the Leeds Cladding Scandal group in my constituency, where, like many speakers today, I have constituents who are affected. It shows what can be done if people do not give up, which is a really important life lesson.
Having said that, our constituents have lived with years of uncertainty and it is not quite over yet—a point to which I shall return. Reference was made to a video of one of the fires. We all saw what happened at Grenfell, but there was also the fire at The Cube student accommodation in Bolton, and we saw how quickly it went up. I think the official report said, in effect, “The building did not perform according to expectations”. If that is not understatement, I do not know what is. The truth is that we are dealing with a load of buildings that were badly built and unsafe, and people got away with it for far too long. Let us try to put ourselves in the position of those who live in those buildings. Never mind the fear of a bill arriving which they have no hope of paying; there are the waking watch costs, the insurance, the uncertainty, the inability to get on with their life or to sell, and going to bed every night thinking, “Well, if there were a fire, would I get out if the building went up in 11 minutes?” It is a scandalous position that people have been put in through no fault of their own.
I have a few brief points to make. The first is that I stick to the principle that I and many other Members have advocated from the start, which is that leaseholders, because they are not responsible, should not have to pay anything. My hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook), who spoke so clearly a little earlier, was absolutely right when he said that they should not have to pay. A cap is better than an uncapped bill, but why should they have to pay anything at all?
Secondly, we have discussed the position of buildings under 11 metres this afternoon, and I think the local case for including them is extremely strong. Replying to interventions, the Minister for Housing said that he is prepared to look at them on a case-by-case basis, but it seems to me that he could do that even if the Government chose to include them in the scheme.
Thirdly, I seek clarification on a point my hon. Friend raised about what happens if leaseholders have already paid up to the £10,000 cap but there are further costs. What if there is a continuing need for a waking watch? If the bill is not paid, the fire service may say to leaseholders, “You’re going to have to leave the building. We’re shutting it down because you don’t have a waking watch still in place.” What happens in those circumstances? It would be scandalous if leaseholders who have already paid the £10,000, or £15,000 in London, were to suffer that for want of someone to pay the bill.
Fourth is a point that has not been raised in the debate so far, but some constituents have contacted me about it. The Government have decided to limit the number of leaseholders who are not resident—buy-to-let landlords—who can benefit from the scheme. Morally, I do not see how anyone can argue that they are more responsible for the failings of others than residential leaseholders. Also, if a building has a lot of buy-to-let properties and the buy-to-let landlord leaseholders cannot come up with their share of the money to fix the building, that has an impact on the residential leaseholders living in the building, and the net result could be that the building does not get fixed and they continue to bear costs that they cannot bear. I say “cannot bear” because ultimately that is the reason the Government have had to move. It was a fantasy to think that leaseholders would come up with sums of money they simply do not have—ridiculous. It was never ever going to happen.
Sir Peter Bottomley
The right hon. Gentleman mentioned the Leasehold Knowledge Partnership, which I should have included in the list of those to be thanked. I think that representatives of the partnership and the National Leaseholders Campaign have had time to get from the rally to the Gallery, so I repeat the thanks to them. I include with them Lord Greenhalgh, who has engaged with all the voluntary groups. I can think of no better aim for a campaigning charity than saving residential leaseholders from a situation from which they could not otherwise escape.
Hilary Benn
I am delighted to echo the Father of the House. The partnership has been brilliant in its analysis of what has and has not been done, what the problems are and what the solution ought to be, and it has also been persistent.
I know the Minister will appreciate my final point, because he has worked very hard on this. Our constituents have waited long enough, with their lives on hold, and the sooner we can made all these bits work, the better. We have to enable them to wake up in the morning and think, “D’you know what? I don’t have to worry about the nightmare I’ve been living in for the last five years and I can get on with the rest of my life.” We owe it to them to bring the day they dream of around as soon as possible.
Bob Blackman
It is a pleasure to follow the right hon. Member for Leeds Central (Hilary Benn). I refer the House to my entry in the Register of Members’ Financial Interests, in particular as chairman of the all-party group for fire safety and rescue. As I mentioned in an intervention, I have been involved in prelegislative scrutiny of the Bill from its beginning and in the various reports the Select Committee produced in the wake of the Grenfell fire. The eye-watering aspects of building safety across this country really only came to light with that terrible tragedy at Grenfell, nearly five years ago. We have all learned a lot.
I congratulate my right hon. Friend the Minister for Housing, who is new to the job and to the Bill, on the rapid progress that has been made since he was appointed. I also congratulate my right hon. Friend the Secretary of State, who has dramatically changed the whole approach taken in this Bill. The Opposition spokesman, the hon. Member for Greenwich and Woolwich (Matthew Pennycook), is no longer in his place, but I think he recognises the dramatic changes that have taken place during the passage of the Bill through the other place.
When preparing for today’s debate, I thought of one or two ironies. The first was that the Second Reading debate was so shortened that we all got three minutes to speak, but today, although we have a reasonable amount of time to debate the issues, the business managers are encouraging us not to go on too long. That seems suitably ironic.
There are several issues to address. I thank the Minister for making it clear that this will not be the end of the process. Secondary legislation will come along on the back of the Bill, and that will be the detail that really matters to the people we represent—the leaseholders, who are the one party in all of this who are completely innocent and should not be penalised in any way, shape or form. It is a contradiction that we are asking leaseholders to make a contribution to fire safety costs and cladding remediation for which they have no responsibility.
I welcome the cap, but I do not see why that cap has been set at a particular figure. Many of the people we are talking about are not wealthy. They may have bought their leases a long time ago, and they are often living on fixed incomes and have no disposable income to put towards the costs, because they are paying the other bills for their properties. They are not able to stump up huge amounts of cash. As has been said, many of those people have been presented with eye-watering bills, such as £250,000 or more, to fix fire safety issues that are definitely not their fault, are clearly the responsibility of the developer in the first place and should have been put right since.
Also in preparation for this debate, I had a look at the Select Committee’s first report on prelegislative scrutiny of the Bill—the Chairman of the Committee may recall it. If the Government had accepted our proposed changes, we probably would not be here today discussing Lords amendments. Almost all the proposals in our report are now in the revised Bill. That is a significant change and demonstrates that when we are dealing with issues of such a technical nature, prelegislative scrutiny is the right way forward. I commend its use to Ministers in the future.
I have a couple of points to make about where we are now, to put them on the record so that we can get through this phase in the secondary legislation. I would like clarity from the Minister on the position of housing associations when pursuing developers who have developed social housing that is clearly not fit for purpose.
Bob Blackman
I agree with my right hon. Friend, but let us make it clear that it should not be housing associations paying for the costs of remediation—it should be the developers who did the work in the first place, under instruction. If the developers are no longer in business or have retired, will housing associations have access to the building safety fund? That will be important, because—as Opposition Members have said—the cost will fall on those paying rent in housing association properties, and that is unfair.
Will the Minister make sure that proper protection is given to the affordable homes programme? Otherwise we will not get the new properties developed that we all want to see to enable more social rented accommodation in this country.
One change in the Bill is that from 18 metres in height to 11 metres. In reality, the lower height properties do not have the compartmentalisation that high-rise flats have. As a result, there is a greater inherent fire risk in lower level designs. If a fire breaks out in one of those units, it is likely to spread rapidly across a broader range of properties. That is a serious fire risk and it needs to be remediated. I welcome the move from 18 metres to 11 metres, but it does not design out the original problem. We need to make it clear in the future that designing out such risks has to be paramount.
Another issue is disabled access. One concern is that when disabled people have to leave a property to flee a fire, disabled access is not always available. That has to be taken into consideration. From my reading of the Bill, that does not appear to have been given proper consideration and we need to look at it in the secondary legislation.
Since Grenfell and the publication of the original draft Bill, a raft of new high-density, multi-storey blocks of flats have been erected. Most of them now need fire remediation. I find it bizarre that developers would ignore all the suggestions of what needed to be done, but they have. We had an example earlier this year of a developer putting in a planning application for a 44-storey tower block in east London with only one stairway. It was outrageous, but it was only the intervention of the fire brigade and local residents that prevented that planning application from being approved.
Another issue is the commonhold versus leasehold model. I believe that more people should exercise common- hold, because I want to see more people enfranchised. The Bill appears to suggest that they would be penalised for doing so, but that cannot be right and the Minister needs to correct that.
I shall mention two other issues briefly. What happens to overseas ownership of buildings? Will we pursue those people to the nth degree or will they get away scot-free? My right hon. Friend the Member for Hemel Hempstead (Sir Mike Penning) referred to the insurance companies. To me, they have not so far put their minds to the problem.
The Bill is vastly improved compared with when it left this place. I will support it wholeheartedly today on the basis that we will not draw a line under it and that will be the end of it; secondary legislation will be required to amend it further. The evidence that was presented to the Select Committee suggested that we still do not know exactly how many buildings need fire remediation, how many need cladding remediation, and what the cost of that work will be. Until we have that data, we will not be in a position to say what the total cost will be to the Treasury and the Department, and how it will be funded.
Daisy Cooper
I declare an interest as I am a vice-chair of the Local Government Association. I add my voice to those who have paid tribute to the extraordinary building safety campaigners who have shared their stories, put this issue on the national agenda and shamed the Government into several significant concessions. We are in a better place than we have been over the past couple of years, but the situation is still not good enough. There have been, from the beginning of the debate, a very few principles that the Government should have followed—that homes should be fixed as quickly as possible, that the innocent should not have to pay for the mistakes of the guilty, and that the Government should use their weight to go after those responsible. It is a sorry state of affairs that those principles have not been upheld two pieces of legislation later.
On Lords amendment 184, many of us are in agreement that innocent leaseholders should not have to pay a penny, end of. But the costs cap undermines that principle. Two years ago, when I tried to introduce that principle for the first time in the Fire Safety Bill I was told time and again by Ministers in Committee that it was not the right place, or that it would not work as intended. If we ever needed confirmation that that is code for “we don’t want to do it”, we get that from this Bill.
By arguing for the costs cap, the Government are opening themselves up to legal challenge. It cannot be fair, or in keeping with natural justice, that in some cases the single determinant of whether someone has to pay £10,000 or £15,000—and someone else does not—is the arbitrary fact of whether the Government can find another party to carry the can.
The Government have said that by their calculations the vast majority of leaseholders would not have to pay, so I would like the Minister to respond to these questions in his remarks. He says the vast majority. How many? Where is the Government assessment? Will he publish it and put it in the Library? Where is the web page for every leaseholder to find out whether they will be in the camp that might have to pay?
Stephen McPartland
It is a great pleasure to be able to speak in this debate. I am very grateful to the Minister and the Secretary of State for the great work they have done since they have taken up their roles in working with us to get to a position where the Government accept that leaseholders are the innocent victims who are not responsible and should not have to pay.
I will come on to the waterfall in a few moments, but I want to pay tribute to a number of cladding groups: UK Cladding Action Group; End our Cladding Scandal, Leasehold Knowledge Partnership; Cladiator groups up and down the country; the millions of leaseholders who have put their lives on hold; and a lot of my colleagues on both sides of the House, in particular my hon. Friend the Member for Southampton, Itchen (Royston Smith) who helped me coin the McPartland-Smith amendment all that time ago, which we both found very humbling. We were very pleased that we were able to help to move this process forward and give leaseholders hope.
We have gone from being offered £400 million to £9.2 billion. The Government are still negotiating, and were talking to me and other Conservative colleagues this morning. The Minister himself said from the Dispatch Box during the debate that for leaseholders in properties under 11 metres, issues in those buildings will be looked at on a case-by-case basis. It is clear that the Government have listened. It is clear that the Government are trying to work with us and are trying to find solutions. I accept —we all accept—that we did not want to be in this place. The Government themselves want to fix the problems.
We need to reintroduce some proportionality into the debate. We need to ensure that leaseholders feel that the buildings they are in are safe and are not fire risks. One thing that has disappointed me throughout is that although it has been very cross-party, we have to ensure we keep it cross-party and that we reassure people. A lot of leaseholders out there feel that they and their children lay their heads down to sleep in unsafe buildings. They have just come out of the covid pandemic where they were told to stay at home because going out was unsafe, but staying at home was unsafe. These people have severe mental health issues and financial insecurity. It is our job and our responsibility to reassure those leaseholders that we are trying to resolve this problem, that we are going to try to find a way through and that we will ensure their buildings are made safe.
That is what I want to do as the Member of Parliament for Stevenage. I want to represent the leaseholders in Monument Court in my constituency who at the moment—I will speak to the Minister about this—are being sent bills by Higgins Homes for 50% of costs. How is that even possible when we have been clear that leaseholders are not going to pay? We have Vista Tower—the iconic Sophie Bichener, my constituent, got me involved in the campaign originally, all that time ago—and even with all the measures going through, because the tower is effectively owned by trustees they may be exempt and the waterfall may pass directly on to the leaseholders. They are already getting £10 million from the building safety fund, and they need to find £5 million from leaseholders. It is going to be very, very difficult.
We have to finish the primary legislation and get the Bill through to Royal Assent so that leaseholders have some reassurance. Once the Bill has achieved Royal Assent, we need to work together to get the secondary legislation, vast quantities of which are needed to make the Bill work, right. We then need to start, over five years on from the terrible and tragic events at Grenfell, to make these buildings safe. How will we make people feel the buildings are safe? Finishing this debate in the Chamber today does not make any building safer than it was yesterday or five years ago. We need to focus on identifying those buildings and making sure they are safe. That is my priority. I will be supporting the Government today, because they have shown a massive willingness over the past few months to sit down and negotiate with us, and to do everything they can to try to ensure that leaseholders are not held responsible.
On the waterfall and the cap, we need to ensure that the waterfall works in practice so that developers are held on the hook, then freeholders and then other organisations, with leaseholders being the last resort. In my constituency, leaseholders who are affected would not pay a single penny, because the Secretary of State gave a commitment from the Dispatch Box in a previous debate that waking watch costs that had already been paid over the past five years—extended to 10 years, which we are very pleased about and did not even ask for—would contribute towards the £10,000. The reality is that the leaseholders in my constituency would not be paying a single penny towards the cost of remediating the building. We need to find a way of ensuring that the building still gets remediated. We have gone from the issue being just cladding to the Government’s accepting both external building safety defects and internal building safety defects. We have won the campaign. Leaseholders have won. Up and down the country millions of leaseholders have won, but we must turn that victory into reality. We must ensure that those leaseholders live in protected buildings.
Obviously we would all like the cap to be at zero. However, one of the issues, which I asked the Secretary of State about only yesterday, is that there are leaseholders who cannot move, take a new job or move on with their life because they cannot sell their flat; the flats have no market value and are worthless. In response to a letter that we sent, the Secretary of State has asked the lenders whether they will provide consent to let for affected leaseholders so that they can rent out their property and move on with their life somewhere else. As we know, at the moment millions of them are trapped.
The Government are working with us all the time. Because we know that the most that any leaseholder will ever pay—technically, in theory—is £10,000, we have created value again in every single one of those properties. We have got the market moving again, because everybody knows that they will not have to face what in the case of Vista Tower is a remediation bill of £180,000 or £200,000 on a £180,000 flat. That is how far we have moved—that is the size of the victory that we have won. Leaseholders up and down the country have won, and we need to ensure that we take that victory to the next level and help them to get their buildings made safe. I am grateful to the Minister and will support him in the Lobby today.
Janet Daby (Lewisham East) (Lab)
In June, it will have been five years since the devastating Grenfell fire. I did voluntary work in the community when I was in my late 20s, so I know the area well. The fire destroyed lives and tore families and communities apart; again, I offer the survivors my condolences in memory of those they lost. Since then, thousands of leaseholders have been forced to live with the anxiety of being in unsafe buildings through no fault of their own. It has to be said that although we are where we are today, the Government have acted far too slowly to put right the most serious situation. Residential leaseholders are panicking about costs that they never envisaged and are worried about who will pay for the work to remedy the situation.
The Bill has the opportunity to right those wrongs. I put on record my appreciation for all the building safety campaigners and for their work and their efforts. At the beginning of this year, the Secretary of State announced that
“leaseholders…are blameless, and it is morally wrong that they should be the ones asked to pay the price.”—[Official Report, 10 January 2022; Vol. 706, c. 283.]
I absolutely agree. Nevertheless, I am in contact with my constituents and they are concerned that the Government’s proposals will still leave most leaseholders facing unaffordable costs. I therefore support Lords amendment 155, which reduces to zero the maximum amount that leaseholders could be liable to pay for fire remediation works, as we have heard from my hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook). That is important, because people who have done nothing wrong should not have to pay a penny for remediation work, for other fire safety work or for additional work that may arise.
The residents of Parkside in my constituency have endured years of uncertainty about who will pay for the work to put right the unsafe cladding on their building. My constituents, residential leaseholders, have been given a tentative commitment by Peabody, the housing provider, that the full cost for their remediation works will be met by Peabody, Ardmore and Rydon, the developers. However, the developers have not given my constituents the outright reassurance that they need; instead, they are keeping them dangling on the end of a string. My constituents desperately need to know that no additional cost will be passed on to them. It is deeply disappointing that they have not been given that reassurance.
Leaseholders who have shared ownership and socially rented residents have been left in limbo in unsafe buildings for far too long. Promises are being broken, works have yet to begin—they have been delayed and delayed—and commitments are not being met. If the families or friends of Peabody, Rydon and Ardmore were in that situation, they would want it put right. It is not fair that leaseholders and socially rented residents continue in these situations. Leaseholders cannot sell, cannot re-mortgage and cannot increase their share of ownership. They cannot decide to extend their family, because they will end up in an overcrowded situation. For Parkside, there is still no policy for sub-renting. Furthermore, the building is vulnerable to the risk of fire.
My constituents need to know the timeframe for when remediation work will begin and end. They need reassurances that they will not be paying for anything. They need to be treated with the utmost respect and consideration. I ask the Government what they will do to follow through, ensure that there is a time cap on when remediation work begins and ends, and ensure that leaseholders and socially rented residents are treated with the utmost respect when remediation work takes place. Every decision needs them at the forefront. After all, as we have already heard, it is they who are vulnerable. They are the victims and they need to be protected.
I urge the Government to accept the Opposition amendments and always to put the residential leaseholders and socially rented residents in this situation first.
Royston Smith
I refer hon. Members to my entry in the Register of Members’ Financial Interests.
I thank the Secretary of State, the Minister and the Department for what they have done to get us to this stage. I also pay tribute to the cladding groups, which have acted with great integrity and determination. If they are not completely content today, at least they are in a much better place than they were during the passage of the Fire Safety Bill.
That Bill now seems quite a long time ago, but that is nothing compared with how long it has felt for the leaseholders who are still caught up in this awful scandal. We were promised at the time that the Building Safety Bill would deal with the issues of leaseholders having to pay. It seems that the Government have been as good as their word and have made sure that at least leaseholders will not be held responsible—we all know that they are the only people in the entire situation who are not responsible. I was cynical when the Government said that they would deal with the issue in the Building Safety Bill, so I am particularly happy. Of course, I was not nearly as cynical as the leaseholders who were facing bills for tens of thousands of pounds and were wondering whether the issue would just be kicked down the road and into the long grass. I am pleased that at least we are now somewhere that we can all be a lot happier.
The Bill is infinitely better than what we have seen before and is definitely a move in the right direction. I have mentioned to the Minister, who has made himself available numerous times now, my concerns about buildings under 11 metres. I think it was the Chairman of the Select Committee on Levelling Up, Housing and Communities, the hon. Member for Sheffield South East (Mr Betts), who said that if a building were 1 cm lower than it needed to be, that could be the most expensive centimetre in history. That is exactly the point: some of these numbers are a bit arbitrary.
What the Minister has said at the Dispatch Box has given me some comfort—enough comfort, as it happens, to support the Government today. Going forward, however, we need to make sure that we are all as good as our word. If we say that things will be assessed on a case-by-case basis, they must be. When I remove myself from the national picture, which I never intended to be involved in, and go back to representing my constituents first and foremost, although perhaps not exclusively, I hope that each time an issue comes up and I take it to the Government, they will be as accommodating as they suggest they will.
I know that everyone is talking about the insurers, which I spoke about in one of my first speeches on the Fire Safety Bill. In a way, I am really pleased that we are all fed up with talking about the insurers, because if we are all talking about them, hopefully the Government will hear us. We think—and it is not an unreasonable position—that insurers should be part of this. As the Chairman of the Select Committee said, when the ABI was in front of the Committee it said that some of these premiums were helping them to put money aside in the event that they would need to pay in future. The way I look at it, they think they will have to do something anyway, so let us make sure that they are involved.
Sir Peter Bottomley
May I suggest that it would be a good idea if the Government had a roundtable with the insurers about what informal provision they are making in case there are successful actions, and about whether they would like voluntarily to contribute, say, £4 billion to £5 billion? No residential leaseholder would then carry the cost, and the insurance company would know that it would not be chased with legal claims that were likely to succeed.
Royston Smith
That is an excellent suggestion. The Government have been very successful in talking to developers and persuading them to sign up voluntarily, and there is no reason why they could not have similar conversations with insurers.
I do not want to make a case in defence of developers. I have made the case throughout that they should pay, but we need to be a bit careful about the possible unintended consequences of only going after them. I am pleased to note that they are taking responsibility for their own buildings, although they should have done that in the first place and they are a bit late to the party. Asking them then to remediate buildings that are not their responsibility will have all sorts of effects, not least in making them think about whether they will want to be in that particular market any more. I doubt that they will ever withdraw from the house building market, because it is their business, but if we want to ensure that we can build 300,000 homes a year—a proportion of which would, I am sure, be high-rise—we should bear in mind that some developers will now be saying, “This may not be for us in the future.”
I promised that I would not speak for too long, because we want to get through this business as quickly as possible, so I will end my comments by thanking the Minister again for what he has done and welcoming the changes that have been made. Given the Minister’s assurances today, I will be supporting the Government.
Paul Blomfield
It is a pleasure to follow the hon. Member for Southampton, Itchen (Royston Smith). I pay tribute to him and to the hon. Member for Stevenage (Stephen McPartland) for the work that they have done in this regard.
As others have said, we have made considerable progress, but it is a disgrace that, so long after the Grenfell tragedy exposed the scandal of cladding and fire safety issues, the Government have yet to provide the comprehensive response that would address all the issues faced by the thousands of leaseholders caught up in that scandal across the country. This evolving Bill—it was clearly still evolving yesterday, with a body of new amendments tabled by the Government—and, indeed, the Secretary of State’s announcement in January were significant steps, but they still fall short of the Prime Minister’s promise—and I think we all know how much that is worth—that no leaseholders should have to pay for the remediation of problems that are not their responsibility. Moreover, there is still too much uncertainty surrounding the Government’s proposals, which in itself is frustrating progress on making buildings safe.
Let me give just one example. Mandale House, in my constituency, faces a range of problems, and has secured £3.4 million from the building safety fund towards the necessary remediation. However, that falls short of what is needed, and Mandale House is left with £7.4 million to find in order to complete the work. The building’s original developer is one of many to have gone into liquidation, so the building management are on their own. The builders who had been scheduled to carry out the remediation works have now pulled out because of the uncertainty over whether they would be paid. That leaves no foreseeable prospect of the building’s being made safe. The building management are now worried that if the money they have been granted from the building safety fund is not used promptly, it may be withdrawn. I understand that that has happened in respect of other buildings, and I would welcome the Minister’s confirmation that it will not happen in this case—as well as his advice on how Mandale House leaseholders should now proceed to make their building safe.
The second point that I want to make concerns enfranchised buildings. I urge the Government to think again about Lords amendment 117, and I hope to persuade them to do so by citing the case of Wicker Riverside, another building in my constituency, whose residents were evacuated just before Christmas 2020 because of safety concerns.
It is not good enough for the Secretary of State to write to us, as he did yesterday, saying that the amendment highlights a real problem which must be addressed, but then to reject it without putting anything else in its place. I welcome his late announcement today of a consultation, but it should have been possible four years on, and after all the months of knowing that this remained a problem following the Government’s January announcement, to include an amendment that addressed the concerns and provided a solution that the Government felt was robust, along with the bundle of amendments that were added yesterday.
Let me illustrate the problem. In 2019, Wicker Riverside leaseholders took their freeholder to court after years in which building maintenance had been neglected, with the freeholder also failing to provide proof of whether the money collected through service charges had actually been spent on the building. The freeholder did not even turn up for the court case. The leaseholders then exercised their right to manage, and took over responsibility for the building. Now they are being penalised for doing so. By treating right to manage companies in the same way as institutional freeholders, the Government are excluding them from the protections that exist for other leaseholders, such as the remediation bill cap. I would like us to go further and provide zero liability for leaseholders, but the fact remains that the cap is there for some and is not there for those in Wicker Riverside. They should qualify for the same protection as others, because without it they will face unmanageable costs, and as a result the building will not be made safe.
The Government must set out their plans. If they will not accept Lords amendment 117, I respect their concerns, but the Minister needs to explain—and I hope that he will, in his closing remarks—exactly what they intend to consult on to ensure that right to manage leaseholders are protected. I hope the Minister will also give a clear guarantee that the outcome of the consultation will be that those leaseholders will have the protection that is being provided for all others.
Rebecca Long Bailey (Salford and Eccles) (Lab)
Like many Members on both sides of the House, I welcomed the Secretary of State’s assurances to Parliament earlier this year that leaseholders
“are blameless, and it is morally wrong that they should be the ones asked to pay the price.”—[Official Report, 10 January 2022; Vol. 706, c. 283.]
However, despite the progress that the Secretary of State and Members across the House have undoubtedly made on this issue, there are still inadequate legal protections in the Bill to ensure that residents and leaseholders do not bear the costs of a crisis that they did not cause. I therefore support Lords amendments that seek to widen the scope of the Bill, including the amendment to reduce leaseholder contributions to zero, tabled by Baroness Hayman, and the proposal for an extension of leaseholder protections to buildings of all heights, tabled by the Earl of Lytton and supported by Lord Blencathra and Lord Young. I thank Members of this House for their hard work, and I thank all the cladding campaign groups, many of whose members are present today. I want to mention in particular Manchester Cladiators, which has supported residents throughout Greater Manchester through rain and shine in their hour of need.
Those campaigners have to keep going, because the sad reality is that many residents in my constituency still fall through the gaps in the proposals that the Secretary of State has outlined so far. Indeed, a recent survey by End our Cladding Scandal of more than 2,200 properties and buildings over 11 metres tall shows that more than 64% of leaseholders outside London and more than 83% of leaseholders in London will not be protected from the costs of non-cladding fire safety defects. The recent pledges from developers to remediate the buildings that they have built over the last 30 years sadly do not go far enough, and there is continued ambiguity about the treatment of non-cladding fire safety defects. Leaseholders in buildings that are under 11 metres remain unprotected, and there is still no funding commitment from house builders for the £4 billion required for the remediation of buildings where the developer no longer exists. As we have heard today, there also remains a huge question mark over social housing.
Further to that, we still do not know what residents who have already received devastating demands for payment should do. There is no detail at all on how to recoup any sums of money already spent by residents, as sinking funds are depleted to catastrophic levels. For example, one development in my constituency has been unable to receive support from the waking watch relief fund simply because the residents acted proactively to try to reduce the cost of their waking watch by agreeing to fund the installation of a fire alarm system. Because they did this prior to the waking watch relief fund’s cut-off date of 17 December 2020, their application to the fund was rejected. Sadly, had they waited and incurred even more waking watch costs, their application probably would have been successful. The Minister must agree that that makes no sense at all, and this is just one case.
The Secretary of State informed Parliament in January that he would pursue statutory protection for leaseholders, and that nothing would be off the table. The Bill does not give that protection, and all I ask today is that the Government support the amendments that would protect leaseholders and go some way towards providing that statutory protection that they all deserve.
Florence Eshalomi (Vauxhall) (Lab/Co-op)
I pay tribute to Members from right across the House for their support as this Bill has passed its various stages. I have spoken on this Bill a number of times, and it is fair to say that it is a very different piece of legislation from what was initially proposed. My constituents in Vauxhall, like others in constituencies around the country, have a basic right to live in a building that is safe, and it is a shame that it has taken nearly five years after the Grenfell tragedy for Ministers to implement this new regime. I welcome the establishment of the building regulator and the other measures in the Bill to protect lives, particularly the overdue safeguards for disabled occupants of high-rise flats; that is an issue that is not referenced enough.
Sadly, this is not just about safety; it is about who should pay for the mistakes that led to these buildings being unsafe in the first place. For too long, that has been left to innocent victims, with leaseholders and social housing providers having to pay while the developers and builders who are responsible have had their profits protected. I pay tribute to the many leaseholder campaigns and groups caught up in this, including many of my constituents in Vauxhall who have worked tirelessly on this issue for many years. Without them, we would not have reached this point.
The simple fact is that this crisis will not end until leaseholders in buildings of all heights are exempt from all fire safety costs, but that is still not the situation. Leaseholders can still have to pay up to £15,000 if funds cannot be recovered from the developer or freeholder, and leaseholders in buildings under 11 metres are entirely excluded. I place on record my support for retaining the two amendments, referenced by many Members, that were passed in the other place and that would solve these problems. Sadly, they have not been accepted by the Government. It is neither right nor fair that some leaseholders should pay while others are protected, and I hope the Minister will address that when he responds.
Lords amendment 155, tabled by my noble Friend Baroness Hayman, would abolish the unfair cap and legally protect leaseholders from all remediation costs. The Government claim that it is unnecessary to protect buildings under 11 metres, but fire does not discriminate. It does not care if a building is 11, 15 or 18 metres. I have heard from constituents in low-rise buildings in Vauxhall whose mortgage lenders still require a fire safety inspection. If that inspection finds problems, guess what? Those leaseholders in low-rise buildings will have to pay.
We must not allow the technical details of this debate to obscure the fundamental moral principle at the heart of it. Either the leaseholders are responsible for this crisis or they are not. The Government have said for many years that they are not, and I agree with that. I hope that Members will vote today for the amendments that will deliver our responsibility to fully protect leaseholders from all of the costs of the problems they did not cause. In the name of fairness and transparency, I urge all Members in this House to do that.
Madam Deputy Speaker (Dame Rosie Winterton)
I call the Minister, Stuart Andrew.
Stuart Andrew
Once again, I thank all hon. Members for their contributions. They have raised lots of very serious points and questions and have clearly demonstrated a long-standing commitment not only to their constituents, but to this wider issue. I am grateful to right hon. and hon. Members for acknowledging that this piece of legislation is vastly different from what it was, and I apologise to the shadow Minister, the hon. Member for Greenwich and Woolwich (Matthew Pennycook), for the necessity, I suppose, of the late amendments that we tabled. I hope that he agrees, however, that it is important for us to get the Bill on the statute book, and to start the process of making sure that people feel safe in their home. I was particularly struck by some of the contributions from my hon. Friends who mentioned that. I also thank all those who have been involved in campaigns; they have shown how hard-working campaigners can make a considerable contribution on a very serious issue such as this.
I will start by responding to some of the amendments that the hon. Member for Sheffield South East (Mr Betts) tabled. I thank him and the Levelling Up, Housing and Communities Committee for their prelegislative scrutiny of the Bill and their tireless scrutiny of the Government’s response since the fire at Grenfell Tower.
Amendment (e) to Lords amendment 184 states that no
“service charge is payable under a qualifying lease”
where the landlord is either a private registered provider of social housing or a local authority. It provides that funding to meet the costs concerned would come from the levy set out in clause 57. I reiterate the Government’s commitment to protecting leaseholders, but we will not be able to support the amendment. We are clear that those responsible for creating historical building safety defects need to pay to put them right. That principle should apply equally where the party responsible is a social housing provider or local authority. Social housing providers will not be subject to provisions that stipulate that building owners and landlords with a net worth of more than £2 million per in-scope building must pay all in-scope remediation costs. They will be required to pay in full only where they were involved in developing the building.
We are also introducing an ambitious toolkit of measures to allow those directly responsible for defective work to be pursued. Those measures include an extension to the limitation period under the Defective Premises Act 1972 to 30 years; a new course of action relating to product manufacturers; and provisions removing the protections afforded by special purpose vehicles and shell companies. We have been working closely with social housing providers to help them to understand the impact of these changes.
Amendment (f) to Lords amendment 184 provides that where
“the freeholder of a building is a local authority”,
remediation costs will be paid “in the first instance” by the developer of the building and otherwise through the levy set out in clause 57. Again, the Government will not be able to accept the amendment because developers are already expected to remediate their buildings, and as we have announced, developers have signed our pledge to commit to do that. We are also introducing the ambitious toolkit that I mentioned.
Stuart Andrew
I committed earlier to continuing to work on the whole area of social housing, and I assure the hon. Gentleman that I am keen to deliver the ambitious affordable housing programme that we have announced. I do not want to see that affected in any way, so it is in my interest to ensure that we do everything we can in this area. I commit to our doing that.
Bob Blackman
I apologise for taking part in a bit of a pincer movement on the Minister. He mentioned the 30-year rule; there will be developers who say, “We built under the regulations that existed over those 30 years.” Are we going to say to those developers, “No. As a result of fire safety issues, you must remediate those buildings in line with the regulations that are now in place, not those that existed 30 years ago”?
Stuart Andrew
Yes. I think I am correct in saying that. Yes, I am; I have just double-checked.
Colleagues have mentioned the 11-metre rule, and I reiterate that they should please write to my Department if they are aware of buildings under 11 metres that are facing costly remediation. We are clear that costly remediation should not be undertaken on buildings under 11 metres, and we would be glad to look into specific cases and to question freeholders on why they are insisting on commissioning costly and unnecessary remediation works.
In answer to my hon. Friend the Member for Worthing West (Sir Peter Bottomley), let me say that we are retrospectively extending the limitation period under section 1 of the Defective Premises Act. The duty under the Act applies to those taking on work in connection with the provision of a dwelling, which includes architects and contractors whose actions have contributed towards defects, as well as developers.
Sir Peter Bottomley
As I understand it, the difficulty is that a claim would need to be made on behalf of leaseholders by their landlord, who would insist on indemnity funding. The Minister and his advisers should get together with the Law Officers to find a practical way to ensure that claims to have a prospect of getting people to pay up, rather than people trying to resist. After Tony Pidgley sadly died, the new bosses resisted paying up to put right the defects in the Worcester Park block. That situation needs to be challenged.
Stuart Andrew
It is always wise for a Minister answering the Father of the House to take his sage advice, and of course I will speak to my officials.
The hon. Member for St Albans (Daisy Cooper) asked about valuations. I am aware there has been a discussion about how the Bill proposes to assess the value and banding of individual flats. The process set out in the Bill—further detail will be set out in regulations—takes the last price at which a flat changed hands, which will be recorded at the Land Registry, and uprates it in line with the national house price data produced by the Office for National Statistics. We recognise that this may produce a value that differs from the flat’s current market value, but we are using this approach for two specific reasons. First, it uses publicly available data and so avoids any potential for gaming the system. Secondly, it avoids the need to value a large number of flats individually, which would likely be both expensive and time-consuming and could delay the needed changes and improvements to those properties.
Daisy Cooper
Notwithstanding the Minister’s explanation that the valuation might not meet today’s market value, which he also gave to me yesterday, does he accept that, precisely because the starting point is the most recent sale price, the owner of a flat might have to pay up to the cap to get remediation done, whereas the owner of the identical flat next door in the same block might not because the two flats sold at different times for different sums of money? That is simply not fair.
Stuart Andrew
I recognise the hon. Lady’s point, and I have committed to coming back to her after we have done further work in this area.
I am conscious that there will be a large number of Divisions in a moment, so I reiterate my thanks to hon. Members on both sides of the House. This is an incredibly important issue, and I am aware that my Department has a great responsibility to get it right. I hope that the direction set by the Secretary of State shows that we are determined to get it right for people who have been living in these worrying circumstances for too long.
Amendment (a) made to Lords amendment 93.
Amendment (b) made to Lords amendment 93.
Lords amendment 93, as amended, agreed to.
Before Clause 117
Meaning of “relevant building”
Amendment (a) proposed to Lords amendment 94.—(Stuart Andrew.)
Question put, That the amendment be made.
Building Safety Bill
Tuesday 26th April 2022
(1 year, 11 months ago)
Lords ChamberRead Full debate Building Safety Act 2022 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 147-I Marshalled list for Consideration of Commons Amendments - (25 Apr 2022)
20:34 - Division on Motion H1 - Ayes: 187 / Noes: 209 - Motion H1 disagreed.
Lord Greenhalgh
That this House do not insist on its Amendment 6 and do agree with the Commons in their Amendment 6A in lieu.
“Report on certain safety-related matters
(1) Before the end of the period of three years beginning when this section comes into force, the regulator must—
(a) carry out a cost-benefit analysis of making regular inspections of, and testing and reporting on, the condition of electrical installations in relevant buildings;
(b) consider what further provision under the Building Act 1984, or in guidance under that Act, may be made about—
(i) stairs and ramps in relevant buildings,
(ii) emergency egress of disabled persons from relevant buildings, and
(iii) automatic water fire suppression systems in relevant buildings, with a view to improving the safety of persons in or about relevant buildings, and carry out a cost-benefit analysis of the making of that provision.
(2) Before the end of that period, the regulator must—
(a) prepare one or more reports about the analysis mentioned in subsection (1) (which may also contain recommendations), and
(b) give them to the Secretary of State.
(3) The Secretary of State must publish any report received under subsection (2).
(4) In this section “cost-benefit analysis” means—
(a) an analysis of the costs together with an analysis of the benefits that will arise if the things mentioned in subsection (1)(a) are done or the provision mentioned in subsection (1)(b) is made, and
(b) an estimate of those costs and of those benefits (subject to subsection (5)).
(5) If, in the opinion of the regulator—
(a) the costs or benefits cannot reasonably be estimated, or
(b) it is not reasonably practicable to produce an estimate, the cost-benefit analysis need not estimate them, but must include a statement of the regulator’s opinion and an explanation of it.
(6) In this section—
“electrical installation” means fixed electrical cables or fixed electrical equipment located on the consumer’s side of the electricity supply meter;
“relevant building” means a residential building or any other kind of building that the regulator considers appropriate.”
The Minister of State, Home Office and Department for Levelling Up, Housing & Communities (Lord Greenhalgh) (Con)
My Lords, with the leave of the House, I will also speak to Motions B to H.
Here we are again: debating this landmark Bill which will bring forward the biggest changes to building safety legislation in our history. I will turn quickly to the outstanding non-government amendments. Noble Lords, led by the dynamic duo, my noble friends Lord Young of Cookham and Lord Blencathra, extended the definition of “relevant building” to buildings of all heights containing two or more dwellings. As the Government have said on many occasions, we must restore proportionality to the system. That is why we cannot agree to extend leaseholder protections to include buildings under 11 metres. As I have said repeatedly, there is no systemic risk of fire for buildings below 11 metres. Such buildings are extremely unlikely to need costly remediation to make them safe. Despite research and lobbying from a number of areas, the department has been made aware of only a handful of low-rise buildings where freeholders have been commissioning such work, and even fewer where that work was actually based on a proper assessment in line with the PAS 9980 principles.
My right honourable friend the Minister for Housing was clear that leaseholders in buildings below 11 metres should write to my department should they find that their freeholder or landlord is commissioning costly remediation works. I have already intervened directly with building owners and landlords to challenge freeholders, such as in Mill Court, and will continue to do so. Your Lordships can be assured that I will bring my full weight to bear where landlords are looking to carry out works that are not needed or justified. However, given the very small number of buildings involved, it is not appropriate to take forward a blanket legislative intervention and bring hundreds of thousands more buildings into scope. I must point out to noble Lords that doing this could backfire, sending mixed signals and encouraging the market to take an overly risk-averse approach to this class of buildings.
Turning to leaseholder-owned—or collectively enfranchised and commonhold—buildings, the Government’s original proposals included an exemption from the leaseholder protection provisions for leaseholder-owned buildings: those in which the leaseholders have collectively enfranchised, and those which are on commonhold land. Noble Lords agreed an amendment in the names of my noble friends Lord Young and Lord Blencathra—the dynamic duo again—and the noble Earl, Lord Lytton, to remove that exemption.
Those noble Lords will know that I have a great deal of sympathy with their position. I know that the amendment is well-intentioned and driven by a desire to protect these leaseholders, and the Government share those aims. However, as I said on Report, these amendments will not have the intended effect of protecting leaseholders living in those buildings. Those leaseholders who have enfranchised would still have to pay, but in their capacity as owners of the freehold rather than as leaseholders. Worse, where some leaseholders have enfranchised and others have not, the enfranchised leaseholders would have to pay for remediation of the whole building in their capacity as owners of the freehold, including the share of remediation costs that would otherwise have been recoverable from those leaseholders who have not enfranchised, once they have paid up to the cap. This would create the perverse situation where the leaseholder protections result in an increase in liability for those leaseholders who have chosen to collectively enfranchise. That is why the other place agreed to reinstate the exemption for leaseholder-owned buildings. My right honourable friend the Minister for Housing announced last Wednesday that the Government would consult on how best leaseholders in collectively enfranchised and commonhold buildings can be protected from the costs associated with historical building safety defects to the extent as all leaseholders.
Turning finally to the qualifying leaseholder contribution caps, the Government proposed that lease- holders’ contributions should be capped at £10,000, or £15,000 in Greater London. We believe that this approach protects leaseholders, while ensuring that work to remediate buildings can get under way. Noble Lords agreed with the amendment of the noble Baroness, Lady Hayman, to reduce that cap on contributions to zero.
I will not repeat all of the Government’s arguments here, but I want to remind Peers of just how far the Government have come. Leaseholders are fully protected from costs associated with the removal of unsafe cladding. On non-cladding defects, where a developer has signed up to our developer pledge—that is more than 35 developers—they will fix non-cladding defects, as well as cladding defects, in their own buildings, and these leaseholders will pay nothing. If a building owner is, or is linked to, the developer, that building owner will be liable for the costs associated with non-cladding defects, and their leaseholders will pay nothing. If the building owner or landlord is not linked to the developer but has the wealth to meet the non-cladding costs in full, their leaseholders will pay nothing. If a leasehold property is valued at less than £175,000, or £325,000 in London, the leaseholder will pay nothing, and, if the leaseholder has already contributed up to the cap, they will pay nothing. Based on this approach, the Government’s assessment is that the vast majority of leaseholders will pay less than the caps, and many will pay nothing at all.
In relation to safety checks, noble Lords agreed to an amendment that requires the new building safety regulator to look at a number of important safety matters. We have consulted with the HSE and are happy to confirm that we fully accept the principle of this amendment, and the building safety regulator will be happy to take forward these safety reviews. I thank the noble Lord, Lord Stunell, for his passionate advocacy in this area. The Government therefore proposed an alternate version of this proposal, which was agreed in the other place. I hope noble Lords will agree that this provides clearer drafting and a more practical and pragmatic approach. Importantly, we have increased the time available to the regulator from two years to three years. This reflects the time needed for the regulator to develop the capacity to carry out these reviews alongside all its other functions. We have also made a number of technical improvements to the Bill, and I am happy to answer questions while summing up.
Lord Stunell (LD)
My Lords, as the person who has just had his name mentioned, I will start my very brief contribution by saying that there will be noble Lords who have a lot of criticism of what has come back from the Commons, but I am not one of them in respect of Amendment 6A. I am very pleased to see that the Government have responded well to the views that were very strongly expressed by Members of your Lordships’ House on all sides on the importance of tackling these issues. The Minister has come back with an amendment that is longer than the one that we tabled, and he has come back with a period of time that is longer than the one that we suggested. I am delighted with the first, which shows that he has better drafters than I had at my disposal, but I am not so happy about the three years.
However, it is going to be a major step forward if we get these issues of fire suppression, stairways and ramps, electrical equipment and safety, and provision for people with disabilities properly examined and costed, with the regulations coming in front of the House and in front of the Secretary of State. Even if it takes three years, it will be a significant step forward, and I am very pleased indeed to see that it is included in this Bill.
Lord Young of Cookham (Con)
My Lords, I commend my noble friend again for the way he has managed this Bill through your Lordships’ House; like him, I very much hope the end is in sight. It has been particularly challenging, as he has had to retrofit into the Bill the remediation clauses, while negotiating at the same time with the industry and the Treasury.
On those negotiations, since we last debated the Bill, Ministers have persuaded the last remaining housebuilder—Galliard—to join the pledge to remediate defects in their own buildings, and I very much welcome that. I have one issue to raise on the builders’ pledge, which is restricted to “life-critical fire-safety” work. Can my noble friend confirm that this definition, which appears to be narrower than the one in the Bill, will cover all the necessary work to make a building safe? It would clearly be unsatisfactory if a builder were to argue that some particular aspect of remediation was not life critical, and he therefore did not do it, with the result that the building did not qualify for the relevant certificate and the leaseholder could not sell the building.
On Motion D, I understand why the Government resisted the Lords’ amendment which sought to give enfranchised leaseholders the same rights as unenfranchised leaseholders. My noble friend has just explained the perverse incentive that that would have resulted in. However, inserting that section back into the Bill leaves the enfranchised leaseholders in the firing line for the time being. I will not repeat all of my noble friend’s “read my lips” speech, which we have heard on several occasions, but the last sentence was:
“They are effectively leaseholders that have enfranchised as opposed to freeholders. I hope that helps.”—[Official Report, 28/2/22; col. GC 262.]
The Minister has responded to the amendment that I tabled with my noble friend by announcing a consultation, and I very much welcome that. Perhaps he could say something about the timetable for that consultation—when it will begin, when it will end, and when the conclusions will be announced—because time is fairly critical for some of these leaseholders. I hope he can repeat the commitment that the objective is to put enfranchised leaseholders in the same position as unenfranchised leaseholders—namely, with caps on their contributions, which they do not have in the Bill at the moment. Unless that firm protection is offered, it will undermine all the efforts made by successive Governments and by my noble friend to encourage leaseholders to enfranchise.
I would like to say a word about orphaned buildings. Will the Minister say how he envisages these buildings being remediated if there is no guilty party or freeholder to pursue? We cannot leave those tenants and leaseholders in unsafe buildings that they are unable to sell, and it would be reassuring for them if they knew the Government had a plan to deal with that.
Finally, on Motion H, there are two issues. I am sure that the Minister is right when he says that there are few buildings under 11 metres with serious problems, but the fire at Richmond House burned the building to the ground in less than 11 minutes in September 2019, and it was under 11 metres. Therefore, I very much hope that the case-by-case analysis that the Minister referred to will quickly reveal which buildings are at risk. Following that, can he confirm that they will be remediated without the leaseholders bearing all the costs, which is currently the position under the Bill?
When we debated this on Report, my noble friend Lord Blencathra and I tabled an amendment which effectively halved the cap on leaseholder contributions. However, we were persuaded by the eloquent arguments adduced by the noble and learned Lord, Lord Hope, and the noble Lord, Lord Marks, that zero was possible under ECHR and we then supported that amendment, which was carried by the House. The Government have made it quite clear that zero is unacceptable, so I see no point in pursuing that at this stage of the Parliament. However, I remain of the view that our original amendment is actually the right way forward, so, while not supporting the amendment of the noble Baroness, Lady Hayman, which is quite close to zero, I will not vote against it. I hope that if it is carried, the Government will retable my and my noble friend Lord Blencathra’s amendment in the other place, and bring this matter to a satisfactory conclusion.
Baroness Hayman of Ullock (Lab)
My Lords, I thank the Minister for the constructive amendments that the Government have tabled at this stage and for listening to the noble Lords, Lord Young and Lord Blencathra, who have been very helpful during the passage of the Bill. However, there are still concerns outstanding, as has just been said, so I will speak now to my Motion H1 as an amendment to Motion H.
We on these Benches have consistently argued that all leaseholders should be protected from the cost of remediating historical cladding and non-cladding defects and the associated secondary costs, irrespective of circumstance. Although we fully acknowledge that the waterfall system set out in Schedule 8 provides leaseholders with a far greater deal of protection than was proposed when the Bill first came to us, when it was originally drafted, it does not protect all of them fully. Just as importantly, the Bill does not provide redress for the countless blameless leaseholders across the country who have already been hit with huge bills and have paid out significant sums as a result.
That is why I have tabled Motion H1 to reduce leaseholder contributions to a maximum of £250. I am aware that the Government have said that leaseholder contributions are fair in principle because they will apply in only a very limited number of cases. The Minister has said that leaseholders will pay up to the cap or a proportion of the cap in only a minority of circumstances. However, if it is only a very small number of cases that we are talking about, why are the Government so reluctant to provide proper and full support? For many people, £15,000, or £10,000 as the cap currently stands, is simply an impossible sum to find.
Leaseholders have refused to give up. They recognise more than anyone that the situation they face is simply not fair, and your Lordships’ House recognised that by supporting the amendment that I tabled on Report. I ask for noble Lords’ continued support in agreeing Motion H1 and, in so doing, to acknowledge the determination and persistence of the leaseholders and cladding groups that have been pressing for redress in this matter.
In sticking rigidly to the position that a minority of leaseholders will have to pay sums that, although capped, are still significant, in order to resolve a scandal that they played no part in causing, we believe that the Government are not acting equitably and will not ensure that the most vulnerable leaseholders will be protected. Our Motion H1 would provide such protection. If the Minister is unable to accept it, we will seek to divide the House, with a view to ensuring that all leaseholders are fully protected.
Lord Blencathra (Con)
My Lords, I apologise to the House for missing the first two minutes of my noble friend’s magnum opus; the last business went slightly faster than I had anticipated. I declare a personal interest as a leaseholder in a block of flats that may contain some non-cladding works that may require remedial treatment.
I have to praise my noble friend the Minister yet again for the tremendous changes that have been made to the Bill since it came from the other place. I also congratulate my right honourable friend Michael Gove on forcing all the big building companies to sign up, including bringing the Galliard Homes horse kicking and neighing to the water, although he will need to ensure that it and the other companies actually drink the water—they will throw millions at lawyers to weasel out of what they have signed up to.
I am told that the owner of Galliard Homes, Stephen Conway, has accused Michael Gove of acting like Al Capone and the mafia. My respect for young Gove increases by the minute. Conway had an estimated worth of £270 million in 2015; imagine what he is worth now. It seems to me that the owners of the big building companies have made their billions by being a bit more ruthless mafiosi than Michael Gove ever was. However, that is for another day.
Despite the excellent progress on the Bill, there are still some gaps. I regret that we do not have anything specific in the Bill protecting enfranchised leaseholders. All Governments have encouraged leaseholders to buy out the freehold. Those who have done so are still exactly the same as other leaseholders who have not, and they should get the same protection. I welcome the consultation but I hope it is speedy, and I hope that, if legislation is necessary or this can be done by regulation, that is brought in as quickly as possible.
I acknowledge that the Government have increased the number of properties qualified under buy to let, but in my opinion they have not gone far enough. As a small buy-to-let owner said to me, why does the Bill support with cost-capping a billionaire oligarch non-dom with two buy-to-let leasehold flats in Mayfair, valued at millions, yet leave completely exposed a pensioner buy-to-let leaseholder with a small portfolio of just four flats? These people are not big landlords. Although nothing can be done in this Bill now, I hope something can be done in future.
Nor am I happy that we are planning to reject buildings under 11 metres. They may not be as big a risk but they are unsellable. When an estate agent or lawyer tells prospective buyers that the flat they have looked at has some dangerous cladding—but not to worry because you will probably get out in time if it burns down—I do not think that they will find many buyers. These flats are simply unsellable.
Finally, I disagree with the removal of “zero”, and like the Opposition’s amendment of £250. I do not accept that the government caps set a proportionate balance, as was said in the other place by my right honourable friend Stuart Andrew MP, who was also an excellent Deputy Chief Whip in his time. As Michael Gove said, no leaseholders should pay a penny for any remediation works. We heard impeccable legal advice in this House from the noble Lord, Lord Marks, and a former Supreme Court Justice, the noble and learned Lord, Lord Hope of Craighead, saying that making leaseholders pay in order to avoid an ECHR challenge was misguided and wrong. As the noble and learned Lord, Lord Hope, said, the challenge will happen in any case, no matter what level the Government set the cap at, and those building companies will try it on.
If Motion H1 succeeds today, I do not want the Government in the other place to take on the role of the wonderful Ukrainian Snake Island defender, Roman Grybov, who offered sexual advice to the Russian warship. We are not the “Moscow”, and I hope that the Government will bring forward a compromise amendment, perhaps higher than £250 but much lower than the government caps.
With those quibbles, I wish to congratulate my noble friend yet again on the massive progress he has made with this measure. “One more heave”, as Jeremy Thorpe said in 1974—but hopefully with a bit more success.
Baroness Neville-Rolfe (Con)
My Lords, I have been living with this matter since we first debated the Fire Safety Bill in 2020. I declare an interest as chair of the Built Environment Committee. I believe that the building industry has an important part to play and has tried to rise to the table in the current circumstances. The Government, and my noble friend the Minister in particular, are to be congratulated on all they have done to find a way through on cladding, but the measures legislated for are inevitably costly and should not, in my view, be legislated for in respect of buildings under 11 metres, as proposed in Amendment D1.
I have some news for my noble friends. Since Michael Gove’s Statement on 10 January about proportionality and common sense, the logjam in buildings under 11 metres has eased. I have experience of this, relating to a family leaseholder in a nearby village, where there is now a less absolutist and more flexible approach to fire safety in a block of homes; this has become apparent in recent weeks since the changes were made. I believe, therefore, that there is a limit as to what we should provide on a contingency basis. I do not believe that taking the proposed powers, as now suggested, is justified. I think that the situation is improving in relation to buildings under 11 metres, and we should welcome that and see how that approach can be progressed.
I end by thanking my noble friend the Minister for the progress that has been made. Obviously, there are horrific problems, right across the board, in relation to taller buildings and cladding. Howeever, I urge people to be a little careful in bringing into the legislative framework, without looking at all the details, a very much larger number of homes.
Baroness Fox of Buckley (Non-Afl)
My Lords, like everybody else, I think it has been refreshing to be in a situation whereby the debates in this place have been listened to and changes made. On a number of other Bills, one has not had that feeling—but in relation to this we definitely have.
I want to emphasise the key issue of buy-to-let leaseholders. They can be presented as big landlords, but I remind the Minister that many people were advised that investing in property would be an important way of being sensible and would provide them with an income or a pension and so on and so forth. So people did this in good faith. They are not landlords. They are leaseholders; they just have more leasehold flats. They are not big business. They are being treated differently if they have a small portfolio of four properties. This needs to be looked at, because it feels wrong that such people should be punished.
Secondly, I am very mixed about the 11-metre question. I agree that the danger of an unintended consequence here would be to say that, if you paid the remediation for under 11 metres, everybody would rush out and start remediating under 11 metres when it is not necessary. I am delighted to hear the Minister’s pledge, which I hope we will keep him to, that anyone having a problem with a building under 11 metres can get in touch if they are being charged. However, there is the problem of sales, and people feeling that they have unsellable flats; the noble Lord, Lord Blencathra, mentioned this. That is the approach I want to feel that we leave this Bill with: that leaseholders can come to the Minister with these kinds of problems that are unintended consequences.
I was one of the people who was very enthusiastic about having some kind of ongoing review—although we did not go down that route. The unintended consequence of what has in the end been a bit of a risk-averse panic over the past few years—which I understand—is that everything is seen as a fire risk. This has led not to keeping people safe but to making people very poor and not solving the safety problem. Let us hope, therefore, that things such as consultations and these kinds of questions will be taken seriously, because one thing I have heard consistently from leaseholders is that, although there is a lot of talk about listening to leaseholders and tenants—we heard that post Grenfell; we all know that Grenfell residents had tried to raise issues but were ignored—they still do not quite feel that they have a way of having a voice. That is an important thing for the Minister to carry on with.
I support Motion H1, because I want to push the Government one last time on this question. Ultimately—this is a very important point—the number is small but, on principle, we just want to be in a situation where the leaseholders are not paying. That is really what is being argued here: leaseholders, who were always the innocent people in this, should not pay.
Finally, because I think this can get lost, I have tried to represent the voices of at least some leaseholders—particularly those from Tower Hamlets, where I know the Lib Dems in particular have been brilliant at raising all these issues. It is an area where there are more problems around the leaseholder question than anywhere else, but greater remediation; I have been really inspired by that.
I also remind noble Lords that I want more houses to be built. This is a huge, important part of levelling up or whatever it is. We just need more houses built. I have always been concerned that we do not do anything that ends up destroying the construction industry or having the outcome that no houses are built—risk aversion in housebuilding. Part of what has happened is that people now understand the downside of being a leaseholder. Even if you are building those houses, you now think, “Why would I buy a leasehold flat?” I can assure you that, if I ever buy a flat again, after I have sold my leasehold flat—I am going to get rid of it as quickly as possible—I will not then want to buy a leasehold flat. I just think it is too scary.
The Earl of Lytton (CB)
My Lords, it is always a pleasure to follow the noble Baronesses, Lady Neville-Rolfe and Lady Fox. I pay tribute to the efforts of the Secretary of State and the Minister to achieve significant changes in the face of a very difficult situation. That should never be understated. If it has been too slow for some seriously challenged individual households, the Bill is undoubtedly immeasurably better than when we started. Obviously it was a disappointment to me that several key elements were rejected in the House of Commons, and I remain concerned by the sub- 11 metre exclusion, buy to lets, enfranchised blocks and orphan buildings, about which so much has been spoken. Although the point that the perpetrator should pay was not before the House of Commons, the problem remains a real one: the problem of funding does not go away.
On the 11-metre cut-off, it has been consistently said that with the measured and proportionate response that the Government say they have adopted, there is no systemic risk for low-rise properties. I do not know whether this means that other mitigations, such as alarms, smoke detectors or sprinklers, may be appropriate, but the claim seems to lack a basis in data. The point was well made in the seventh report of the Levelling Up, Housing and Communities Committee of the other place and followed by an Answer to a Question for Written Answer of mine: without data, assertions regarding risk, mitigation options and cost-benefit lack foundation and create doubt.
If the Government are saying that adding sprinklers, smoke detectors and alarms to such buildings is an acceptable means of overcoming an initial failure in construction, I ask the Minister to be aware that there is a reputational and moral hazard here. If those are seen as workarounds to deal with essential, original compartmentation in buildings, I would really worry about how that will be taken forward and potentially abused in the future. I just do not want to go there; this one has been bad enough. So we rely heavily on government assertions that they will have the powers to deal with these issues.
I acknowledge that the Secretary of State has made considerable progress on the developer pledge but, as the British Property Federation observes, it does not cover sub-11 metre buildings and, in several aspects, as the noble Lord, Lord Young of Cookham, said, it may be inconsistent with the Bill. But if, as I am led to understand, this will be enforced by denying developers planning consent, apart from the questionable basic legality of such an intervention in planning and development laws, it should be noted, as I have said to the Minister before, that planning consent runs with the land, not with the applicant, and even less with whoever happens to be the current owner. That is a matter of law, not of debate.
I was also led to believe that one of the reasons why the perpetrator-pays approach would not stand the test is that it means backdating to a previous era, beyond what would normally be covered by the provisions of the Limitation Act. If I am right and a fundamental failure to meet the mandatory provisions of building regulations from 1965 and at all times since is, in fact, an offence, time cannot run against the commission of an offence in favour of the perpetrator. I am a bit fearful that aspects of the Bill could be regarded as arbitrary and discriminatory as between classes of owner and the nature of liabilities, touched on by other noble Lords. In a sense, that might lead to its own legal trajectory in another area.
I hope the Government have a constant process of rolling review of what is going on here, because if we do not deal with ongoing market turbulence, lack of confidence, economic attrition and the victims in all this simply concluding that they have been hung out to dry in some way, that will really be a system failure and we will not have delivered on the promise given by Ministers in the other place and here that leaseholders should be kept free of these costs, for which they were entirely blameless. I am absolutely sure that the noble Baroness, Lady Pinnock, will say just that in a minute.
I finish by paying tribute to noble colleagues with whom I have worked and particularly to the many leaseholders and their groups. They have campaigned for justice and proper defect remediation. My arguments here have been fuelled by their plight, and I intend to keep reminding the Government that this matter, until it is all put to bed, will have to remain in their line of sight.
Baroness Bennett of Manor Castle (GP)
My Lords, it is a great pleasure to follow the noble Earl, Lord Lytton, and to hear that he intends to keep a close eye on this, because that will clearly be needed well into the future.
I rise to offer Green support for Motions D1 and H1 and to make a single point about how I see these fitting together. The noble Baroness, Lady Hayman, and others said that the leaseholders are the absolutely innocent parties here—but, more than that, it is important to say that they are the injured parties. They have been injured over years and years of stress and worry, both financial and about their physical safety, given where they are forced to live. Think about going to bed every night fearful about what is going to happen. They are the victims of the policies of successive Governments who have allowed the building industry to act as a cash cow rather than a provider of secure, affordable, decent homes.
There are still a lot of steps down the road, but if we pass Motions D1 and H1 we give those leaseholders and owners the clarity and certainty that they will be looked after, whether or not their building is under 11 metres, and that they will not be hit with a bill that they still cannot afford to pay, as the noble Baroness, Lady Hayman, said.
I was tempted to say that your Lordships’ House should put one last heave behind the Building Safety Bill, but then I thought that was a slightly unfortunate metaphor in the context we are talking about. I will pick up what the noble Baroness, Lady Hayman, said: the campaigners have done so much work and have fought so long and hard on this. Let us buttress that and put in the final supports they need to get the Bill we should have.
Baroness Pinnock (LD)
My Lords, it is good to recognise that the Bill has indeed been transformed during its passage through Parliament, but the major transformation point was initiated by the Secretary of State, Michael Gove, when he said that
“leaseholders are shouldering a desperately unfair burden. They are blameless, and it is morally wrong that they should be the ones asked to pay the price.”—[Official Report, Commons, 10/1/22; col. 283.]
I agree, as many others across the House will. Unfortunately, however, the Bill currently does expect some leaseholders to pay. My colleagues and I are asking the Government today to think again.
The Government argue that Article 1 of Protocol 1 of the European Convention on Human Rights ensures a balance of rights between property owners and leaseholders, which in their view means that leaseholders have to pay towards the costs. That is the basis of the Government’s argument for the cap of £10,000 and £15,000. However, that view was comprehensively challenged by my noble friend Lord Marks, whose argument was endorsed fully by the noble and learned Lord, Lord Hope of Craighead, on Report. Senior legal minds in this House agree that it is possible within the ECHR for innocent leaseholders to pay nothing.
This legitimately opens up the opportunity, which must be grasped, for the Government to accept that leaseholders must not pay a penny whatever the height of the building, hence Motion D1 in my name to include buildings under 11 metres so that leaseholders in those buildings do not pay. As the noble Lord, Lord Young of Cookham, rightly reminded us, a building under 11 metres has been destroyed by fire in under 11 minutes. We really need to think again about those buildings under 11 metres. However, I thank the Minister for the assurances he has given to those leaseholders in buildings under 11 metres at the Dispatch Box today and for urging them to get directly in contact with him if they get any invoices for remediation works. I am sure I will be holding him to account on that one, as will the leaseholders, and I am sure they will get in touch with us across the House to make sure that they do not pay. They must not.
What I do know is that the Government need to think again about the leaseholder cap. My Motion H2 reduces the cap back to zero, where it should be. I remind the House of the commitment by Secretary of State Michael Gove that leaseholders should not be paying the cost incurred as the result of the sometimes deliberate actions of others. The Minister himself has acknowledged tonight that some leaseholders will still pay, when we agreed in January at the very start of this great transformation that they are blameless and it is morally wrong that they should have to be the ones to pay the price. We have looked after many leaseholders but not all.
Obduracy in the face of moral right is a failure of political leadership. We on the Liberal Democrat Benches will support the noble Baroness, Lady Hayman of Ullock, in her Motion H1 to achieve a degree of improvement to the lot of leaseholders, who have shouldered the burden of anxiety and fear for too long and whose campaigning efforts have achieved so much.
Lord Greenhalgh (Con)
My Lords, I must thank noble Lords for their contributions to this debate. I am not sure; maybe we are close to that point where we can say, “One more heave”. I want quickly to turn to Amendment 94 and Motion D1, the amendment of the noble Baroness, Lady Pinnock, to the Government’s Motion D, where she disagrees with the Government. I explained in my opening speech the reasoning behind our Amendment 94A and I do not propose to repeat my arguments. I simply remind noble Lords that the approach the Government have proposed is sensible. Setting the threshold at 11 metres will help restore proportionality to the system, as also argued by my noble friend Lady Neville-Rolfe, and the Government have committed to consult on how best leaseholders in collectively enfranchised and commonhold buildings can be protected. On timescales, in response to my noble friend, I think we said “soon”. I shall strengthen that and say “as soon as possible”. That is a big concession.
I turn to Motion H1 in the name of the noble Baroness, Lady Hayman, as an amendment to the Government’s Motion H. It would replace a zero cap in a previous amendment with £250 for leaseholder contributions, while Motion H2 in the name of the noble Baroness, Lady Pinnock, disagrees with the Government’s caps.
Motion H1 would make changes to the leaseholder contribution caps in Schedule 8 and reduce them to £250, up from the zero cap in her previous amendment. Motion H2 disagrees with the Government’s Motion and would return the caps to zero. As I said in my opening speech, the Government have been clear that setting the leaseholder contribution caps to zero or to a nominal level, such as £250 or £25 a year for 10 years, would not be a proportionate approach. I reiterate the Government’s commitment to protecting leaseholders. Indeed, it is hard to overstate how far-reaching our proposed protections are. They represent a hugely significant and robust improvement on the existing position for leaseholders.
Lord Greenhalgh
That this House do agree with the Commons in their Amendment 78A.
Lord Greenhalgh
That this House do agree with the Commons in their Amendments 93A and 93B.
Lord Greenhalgh
That this House do agree with the Commons in their Amendment 94A.
(a) is at least 11 metres high, or
(b) has at least 5 storeys.
This is subject to subsection (2A).
“Relevant building” does not include a self-contained building or self- contained part of a building—
(a) in relation to which a right under Part 1 of the Landlord and Tenant Act 1987 (tenants’ right of first refusal) or Part 3 of that Act (compulsory acquisition by tenants of landlord’s interest) has been exercised,
(b) in relation to which the right to collective enfranchisement (within the meaning of Chapter 1 of Part 1 of the Leasehold Reform, Housing and Urban Development Act 1993) has been exercised,
(c) if the freehold estate in the building or part of the building is leaseholder owned (within the meaning of regulations made by the Secretary of State), or
(d) which is on commonhold land.”
Lord Greenhalgh
That this House do agree with the Commons in their Amendments 98A, 98B and 98C.
“(1A) Where a person’s interest in a relevant building was held on trust at the qualifying time, any partnership or body corporate which was a beneficiary of the trust at that time is to be regarded, for the purposes of the provisions mentioned in subsection (1) as they apply in relation to the relevant building, as associated with the person.”
Lord Greenhalgh
That this House do agree with the Commons in their Amendments 107A, 108A, 109A and 109B.
“(7) For the purposes of section (Building liability orders) as it applies in relation to a building, where a person’s interest in the building is held on trust, a body corporate which is a beneficiary of the trust is to be regarded as associated with the person.”
Lord Greenhalgh
That this House do agree with the Commons in their Amendment 145A.
Lord Greenhalgh
That this House do agree with the Commons in their Amendments 184A, 184B, 184D and 184D.
(a) if the premises demised by the qualifying lease are in Greater London, £15,000;
(b) otherwise, £10,000.
(2A) Where the value of the qualifying lease at the qualifying time exceeded £1,000,000 but did not exceed £2,000,000, the permitted maximum is £50,000.
(2B) Where the value of the qualifying lease at the qualifying time exceeded £2,000,000, the permitted maximum is £100,000.”
Baroness Hayman of Ullock
Leave out from “House” to end and insert “do agree with the Commons in their Amendments 184A and 184B, do disagree with the Commons in their Amendments 184C and 184D and do propose Amendment 184E as an amendment to Amendment 184 in lieu—
Baroness Pinnock
Leave out from “House” to end and insert “do agree with the Commons in their Amendments 184A and 184B and do disagree with the Commons in their Amendments 184C and 184D”
Baroness Pinnock (LD)
My Lords, this is a shattering defeat for those doughty and determined campaigners who have made the case for justice for all leaseholders. I say to them that we on these Benches are on their side. They have right on their side. Unfortunately, the headline from the Government that it was morally wrong for any leaseholder to pay for the wrongs of others in the building safety scandal was a headline only, and a cynical attempt to win over more than half of the campaigners so that the rest get left to pay the bills that will come their way. I am sure that many of them will feel betrayed by the Government acting in that way.
As was pointed out earlier, it was easy to say that no one should pay. If not many are going to pay, why not encompass them all? No one should pay. We on these and the Labour Benches, with the support of Cross-Benchers and others, have tried to force a change—a rethink. Unfortunately, that has been lost tonight, but it will not be the last we hear of this. I will continue to fight, but for now I shall not move the Motion.
Royal Assent
Thursday 28th April 2022
(1 year, 11 months ago)
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