16:06 - Division conducted remotely on Motion A1 - Ayes: 322 / Noes: 236 - Motion A1 agreed.
Lord Greenhalgh
That this House do not insist on its Amendments 4B and 4C, to which the Commons have disagreed for their Reason 4F.
The Minister of State, Home Office and Ministry of Housing, Communities and Local Government (Lord Greenhalgh) (Con)
My Lords, I thank noble Lords for engaging in this important debate throughout the passage of the Bill. We all share the same concerns about the impact that the cost of remediation is having on many leaseholders and tenants. We all agree that we have to protect leaseholders as far as practicable. All in this House agree that residents deserve to be and feel safe in their homes.
I will go on to explain why we consider the proposed amendments in lieu to be both inappropriate and unworkable but first, I want to outline in the strongest way possible the importance of the Bill and the risk that these remediation amendments are creating. Let us be in no doubt about what is at stake here.
Throughout the passage of the Bill, we have all agreed with the fundamental purpose of what we seek to achieve. We all want to ensure that there is no legal doubt that, under the fire safety order, the responsible person must assess and, as appropriate, identify any fire safety risks relating to the external walls and entrance doors in multi-occupied residential buildings.
We also agree that the current legal ambiguity under the fire safety order is unhelpful. If we do not rectify this now with this Bill, there will be significant ramifications. If we do not clarify this legal ambiguity, responsible persons can continue to argue that they can lawfully and deliberately ignore the external walls and flat entrance doors in their fire risk assessments. This inaction will mean that important defects will not be identified and be left unremedied, potentially increasing fire safety risks for anyone living in such buildings.
Given the repeated agreement, across both Houses, that we need to act, I think we would all also agree that this Bill should go on to the statue book in the next few days. The Commons has already voted against two different remediation amendments put forward by your Lordships’ House, and by substantial majorities of 115 and 69. Prior to that, the issue of remediation costs was discussed at both Commons Committee and Report stages, so the Commons has considered the issue of who pays at four different stages and voted on it twice—each time supporting the Government’s view that provision of this kind is unnecessary. This House has done what is right and proper as a revising Chamber, namely, to ask the Commons to think again—not once, but twice. It is time for your Lordships’ House to respect the will of the elected Chamber. To continue to deny the wishes of the democratically elected Chamber, particularly where the result is an increase in fire safety risks, could ultimately cost lives.
I underline that this Government are committed to protecting leaseholders and tenants from the costs of remediation. Hundreds of thousands of leaseholders will be protected from the costs of replacing unsafe cladding on their homes, as part of the Government’s five-point plan to provide reassurance to home owners and build confidence in the housing market. The £5.1 billion grant funding made available to leaseholders is unprecedented. We take these issues seriously and we are acting. To say otherwise is misrepresentative and simply not correct.
The Government are also taking forward a comprehensive programme of reform to end unfair practices in the leasehold market, from the abolition of ground rents to revising the use of forfeiture. Our plan to alleviate the burden of paying for remediation costs is, and should be, considered as part of this comprehensive programme.
We recognise that the implementation of the Fire Safety Bill will lead to more remediation issues being identified, but there will be occasions when other measures to mitigate the risk are required, rather than extensive remedial works. To suggest that this Bill will unleash hundreds of thousands of costs is incorrect; we have always argued that building owners must take a proportionate, risk based-approach that takes into account the possibility of risk to life in properties, which for most leaseholders is mercifully low. This Bill applies to all buildings with two or more dwellings; the number of buildings that require substantive remedial works is relatively small, as the vast majority of lower-rise buildings will not require the type of remedial work discussed in the House today.
If noble Lords cast their minds back to the previous stages of the Bill, they will find widespread support for clarifying the fire safety order and legislating to implement the Grenfell inquiry recommendations. In fact, the criticism was that we should have introduced sooner and gone faster. It is therefore getting increasingly difficult to square the sentiment of noble Lords at the beginning of the passage of the Bill with the actions of some Peers now.
Let me point to two examples. I am grateful to the noble Lord, Lord Kennedy of Southwark, for his candid engagement with me during the passage of the Bill. He tabled amendments in Committee and on Report to, in his words,
“make progress in respect of the recommendations of the first phase of the Grenfell Tower Inquiry.”—[Official Report, 17/11/20; col. 1367.]
The noble Baroness, Lady Pinnock, urged the Government at Second Reading to get on with the process of legislating. She said that she supported the direction of travel the Government are taking on the Bill but, in her words,
“the route being taken is too slow.”—[Official Report, 1/10/20; col. 350.]
Tabling and voting for these amendments is inconsistent with pressing the Government to act quicker. Pushing the Fire Safety Bill back to the other place jeopardises it completing its passage before the end of this Session. When I last spoke on the Bill in this House, I said that this Government intend to bring forward regulations to deliver the Grenfell Tower inquiry phase one recommendations before the second anniversary of the inquiry publishing its report, but this is subject to the Bill first gaining Royal Assent. If the Bill is not finalised in this Session, there will be a delay of potentially a year or more in delivering the inquiry’s recommendations.
I will comment in detail on the amendments in lieu in my closing address but, for now, I leave everyone across this House with two key points. First, the Government are unreservedly committed to protecting leaseholders from the costs of remediation. We have announced an unprecedented level of funding in this regard and will publish more details on how it can be accessed.
Secondly, do not let this issue prevent the Fire Safety Bill getting on to the statute book. Pushing the Bill back to the other place this close to the end of the Session risks that, and risks not implementing an important legal clarification that will improve fire safety and help to protect lives. I beg to move.
Lord Greenhalgh (Con)
My Lords, it has been an interesting debate, to put it mildly. I did not think we would be invoking the spirit of the European Super League quite so much, but I have to say I stand with noble Lords in being utterly opposed to the proposals, including from the club that I support.
The idea that we are unleashing a torrent of issues for leaseholders as a result of the Fire Safety Bill—one of the points the noble Baroness, Lady Fox of Buckley, made—is overstated. That is not going to happen. We recognise that building owners will have to take a proportionate, risk-based approach that takes into account the true possibility of risk to life in properties. Life risk is mercifully low, as I said in my opening remarks.
I say to the noble Lord, Lord Newby, that the solution has been outlined by the Government. Noble Lords can query the scope, but the solution will always involve three basic elements: a level of grant funding—we have had the ACM fund of some £600 million and the building safety fund of £1 billion; some kind of financing scheme that provides a loan facility to pay for these works; and taxation or levies. The Government are introducing all three elements, and that is ultimately the only solution that can be offered. I point out to the noble Lord, Lord Adonis, that the solution in all those areas does not need to be statutory—in fact, in order to be timely, it cannot be statutory. The grant funding exists, and we will be publishing further details of the financing scheme very shortly. The Treasury’s lead is needed on taxation and levies, as the noble Lord will know.
In response to the noble Baroness, Lady Warwick of Undercliffe, it would be nice to put more money on the table, but over £5 billion, as I am sure she recognises, is a considerable sum. Leasehold properties in those buildings are protected. We know that a number of housing associations are applying to the building safety fund. I recognise that we could go further and protect the full remediation costs of those buildings, but it is nevertheless the case that many housing associations are applying for funds for the removal of unsafe cladding. In addition, a very generous affordable housing programme of some £12.5 billion has been announced, which housing associations can access.
By way of clarification to the right reverend Prelate the Bishop of St Albans, the building safety fund does exist and the money is being accessed. It is clear that the additional money the Government have announced will be added to that fund. We are in danger of running out of money, frankly, in a matter of months, without the additional amounts committed by the Government. The other things I mentioned will happen, but none of them requires statute to implement, so it is simply not the case that a statutory solution is the only way forward.
I want to reiterate why these amendments, which I believe are unworkable and impractical, should be rejected.. I do not have the benefit of political advisers as a Lords Minister. I am always happy with extra help in drafting my speeches, but I do not have a special adviser helping me in this regard. I do not think the amendments deliver the solution; all they do is put the legislation at risk. We have had the Easter Recess, which is one of the reasons we are now short of time.
As noble Lords have heard before now, it is impractical and confusing to amend the fire safety order to include this issue. The main aim of the fire safety order is to ensure public safety by reducing the risk to life from fire. This is done through responsible persons complying with their duties and regularly reviewing their fire risk assessment to identify and put in place appropriate fire precautions. These amendments do not include measures that provide public safety or set out how the responsible person should reduce the risk to harm from fire. Instead, they cover the relationship, including financial obligations and liabilities, between freeholder and leaseholder. These matters do not sit naturally with the fire safety order, as some noble Lords have admitted.
In his amendment, the noble Earl, Lord Lytton, wants to add further protections to leaseholders by insisting that building owners seek government support through our grant or financing schemes before passing costs on to leaseholders. Noble Lords will note that a similar provision already exists in our draft Building Safety Bill in Clause 89(17P), which places obligations on the landlord to deduct from leaseholder charges any funding received. We are adding to this clause with the purpose of ensuring that building owners must explore other cost-recovery mechanisms before passing costs on to leaseholders.
In addition to this proposed legislative protection, the existing building safety fund application process already requires building owners to demonstrate that they have already explored other cost-recovery avenues as a condition of government funding. Including this sort of provision in the Building Safety Bill removes a clear practical difficulty in this clause. By extending the requirement to explore alternative funding sources before approaching leaseholders to all building safety risks, leaseholders will now have to work out which costs are directly attributable to the provisions of the fire safety order and which are not. In the interim, building owners should already be accessing all the government support available to remediate unsafe cladding, and we are supporting them through this process.
I thank the right reverend Prelate the Bishop of St Albans for his engagement over the last few weeks, but I am afraid that his amendment will not work either. It would orphan liability. We have looking to assign liability to freeholders or orphan liability of works until such times as a statutory scheme is in place that pays for the work directly attributable to this Bill. I have already talked about the difficulties of defining which works might be directly attributable to the Fire Safety Bill provisions and which might not.
Some of the works that may be required will be low cost, where anyone would reasonably expect leaseholders to pay. Does the right reverend Prelate really want to stop the passing on of relatively minor costs, such as for a new smoke alarm? The amendment does not differentiate between the costs of the work which could lead to delays in important minor works. He is talking about stopping something even as minor as putting in a smoke alarm as a consequence of the amendment. No taxpayer scheme for such minor works would be forthcoming, and we would reach an entirely avoidable impasse.
The amendment does not take into account safety defects that are identified outside the fire safety risk process—for example, necessary works brought into scope as a result of another incident. In such cases, this will not prevent costs being passed on, and the amendment will not, therefore, achieve what the right reverend Prelate intends. Since this amendment is not sufficiently detailed and will require extensive drafting of primary legislation, it would continue to delay the implementation of the Fire Safety Bill and the important reforms that it intends to carry out.
We also recognise that there could be protracted legal action from building owners to claim for costs they feel they are entitled to pursue from leaseholders. Stating in legislation what the landlord can and cannot recover from the leaseholders, and when, could contradict the provisions set out in the contractual terms of a lease. This would affect the Government and, to that extent, taxpayers. The amendment should ultimately be self-defeating as the pace and progress of all fire safety works would be stalled, leaving leaseholders still in an invidious position.
I must admit that I had a strong sense of déjà vu when reading the amendment of the noble Baroness, Lady Pinnock. The House will remember that an almost identical amendment was laid during the previous stage of this Bill and rejected by the Commons. As with the previous amendment, it would orphan liability and leave leaseholders no better off, with no clear route for buildings to be remediated, without a clear cost recovery mechanism. Noble Lords will also remember that the scope of this amendment is extremely broad; it is applicable to not just external walls but all and every defect regardless of whether it has been caused by wear and tear. This is neither proportionate nor appropriate. It is certainly not the best use of taxpayers’ money.
Lord Adonis (Lab)
My Lords, we are talking about three different amendments; I am focusing on that from the right reverend Prelate the Bishop of St Albans. In so far as I could tell, the detail of the Minister’s objection to the right reverend Prelate’s amendment was that further delay could be caused by uncertainty over the attribution of costs and that he objected to the amendment’s requirement that the scheme be statutory. Further delay depends on how long it takes the Government to come forward with their scheme; they are in complete control of the timescale. On the statutory scheme, to foster peace and good will between the right reverend Prelate and the Government, I suggest that “statutory” be replaced by “government” scheme—which need not necessarily be statutory, for the reasons the Minister gave. Would he be prepared to entertain this?
Lord Greenhalgh (Con)
I am very new to this place but, as I have tried to highlight, I do not believe that the solution in large part involves statute. The noble Lord is asking for a further commitment that is really about putting more government money up front to pay for the significant costs faced by leaseholders. It would not be helpful to amend the amendment by removing that word, because I do not think we could accept the amendment in any way whatever. We have set out that we want to focus on the remediation of unsafe cladding because cladding on the outside of buildings is the major fire accelerant. That is what we will focus on and we are putting forward over £5 billion to do precisely that—a significant, globally unprecedented amount. I do not think amending that one word moves us any further forward.
The Lord Bishop of St Albans
My Lords, I am hugely grateful for the extraordinary range of speeches made today. I acknowledge what Her Majesty’s Government have done; I take the point that this is unprecedented and a major contribution towards trying to sort out this very difficult problem. The Minister knows that I have said on many occasions that I am terribly naive about all this. I was hoping Her Majesty’s Government would help solve it because I am just an amateur paddling around in the shallows. I am hugely grateful to people such as the noble Earl, Lord Lytton, who is a real expert in this area.
I still believe that my amendment is a practical, helpful and just way forward which is in the spirit of what Her Majesty’s Government want and have committed to. I was hugely grateful to the noble Lord, Lord Adonis, for quoting the Minister in the other place. I am still sufficiently positive—noble Lords will probably say naive—about our political system to believe that this amendment could well commend itself to people in the other place when they see that it is within the spirit of what the Government want to do. I hope that it will be taken back to the other place and considered there, or that the Government will wish to introduce something like it, to help us move this forward. I would like us to get this on to the statute book as quickly as possible but, in the light of what I have heard, with reluctance I feel I have no other choice but to divide the House on this Motion.
Lord Greenhalgh
That this House do not insist on its Amendment 4D, to which the Commons have disagreed for their Reason 4G.
Lord Greenhalgh
That this House do not insist on its Amendment 4E, to which the Commons have disagreed for their Reason 4H.