Building Safety

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Tuesday 11th January 2022

(2 years, 2 months ago)

Lords Chamber
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Baroness Pinnock Portrait Baroness Pinnock (LD)
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My Lords, I start by paying tribute to the cladding campaigners, whose extraordinary persistence in conducting a fact-based, solutions-offered campaign is largely responsible for the content of the Statement today. Their efforts on behalf of blameless leaseholders and tenants are a worthy memorial to the tragic victims of the Grenfell Tower fire.

The words of the Secretary of State are welcome. He says that the Government have to take a “share of responsibility”, that manufacturers have “shown insufficient contrition”, that those who profited will “pay the price” and that leaseholders are “blameless”. These are all quotations from the Statement and I welcome them.

On the face of it, the Government are responding to the fire safety and cladding crisis with bold proposals. However, the most important of these are more aspirational than concrete. The aim—to extract £4 billion from the companies that developed the buildings to pay for the removal of dangerous cladding from blocks of between 11 and 18.5 metres—is based on the polluter pays principle. Can the Minister explain how this will be achieved?

Special purpose vehicles and shell companies are devices that have been used to ring-fence the parent company from liability. Will the Government nevertheless expect the parent company to pay up? Then there are the distant freeholders, not based in this country. How do the Government anticipate extracting funding from them? Will action be taken to prevent construction and development companies ring-fencing their liabilities to prevent losses from parent companies?

Then there are the backstop arrangements to raise £4 billion, which seem rather confused to me. Will the Minister clarify whether further taxation of construction funds will follow if the requisite funding is not raised? The letter from the Treasury seems to suggest that, if all else fails, departmental funding will have to be used. Is that right? Will it be taken from the £12 billion set aside in the department’s funding to support affordable and social housing? If so, I am not sure I would be able to support it.

My next question is this: the £4 billion is to remove flammable cladding only. We know that a major element of the remediation costs is in the lack of firebreaks and compartmentation. Who do the Government expect will put these right? I appreciate that the Statement includes a commitment to create a 30-year period of limited liability, during which leaseholders could sue, although this would be a David and Goliath contest.

Then there is the question of timing, which is crucial. Leaseholders already have bills for remediation, many of which are in the tens of thousands of pounds. The date by which they must be paid is April this year. Time is running out. I understand that the Government rightly wish to protect leaseholders from forfeiture and eviction, but what about bankruptcy? Will that protection be in place by April? If not, I fear leaseholders may still find themselves at the mercy of the unscrupulous.

The whole area of social housing barely gets a mention. Those social housing providers that are raising capital to remedy defects are doing so at the expense of new homes being built or existing homes being improved. Can the Minister describe the plan for the social housing sector?

Finally, can the Minister assure us that sufficient funding will be made available if the costs rise above £4 billion? I appreciate that I have posed many questions. If the Minister is not able to provide full answers, will he please provide a written response?

Despite all the questions, I am pleased that the Secretary of State has been so forthright in this Statement and has taken a very large step forward in addressing the plight of the thousands of leaseholders and tenants who have lived for four years in fear and anxiety, and who must not pay a penny piece to put right the wrongs of others.

Lord Greenhalgh Portrait The Minister of State, Home Office and Department for Levelling Up, Housing & Communities (Lord Greenhalgh) (Con)
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My Lords, I join the noble Baroness, Lady Hayman, in paying tribute to Jack Dromey. I never met him, but it is fair to say that he touched my political career. All political careers end in failure—I do not know said that; it might have been Enoch Powell—but at the height of my political powers, Jack Dromey, then deputy general secretary of Unite, said at the TUC conference on 15 September 2009 these words, as recorded in the verbatim report

“there are two visions in our country. There is our vision, on the one hand, of every one with a decent home at a price they can afford, a new generation of council homes, green homes, in mixed communities with decent facilities, council homes so good you could walk down any street in Britain and not be able to tell the difference between private and council. On the other hand, there is the Tory vision. Do you remember Dame Shirley Porter? Wait for it! The flagship Tory council on housing, Hammersmith & Fulham, has drawn up plans that involve the demolition of thousands of council homes ending security of tenure and hiking up rents to market levels”.

I did not agree with his assessment of my time as leader of Hammersmith & Fulham council, and for ever more, I was described as Dame Shirley Porter in drag by some of my political opponents, but Jack was a phenomenal political figure. He was not just a trade unionist and distinguished parliamentarian who campaigned for good-quality housing, he was an extremely effective politician. It was because he noticed me and because of his comments that I suddenly became the 71st most influential right-winger according to a league table in the Daily Telegraph, and it has been downhill ever since. I want to thank Jack Dromey for noticing me. I wish there were more Jack Dromeys out there who listened to what I had to say on things.

I join the noble Baroness, Lady Pinnock, in paying tribute to the cladding groups. I suppose that I am the longest-serving Minister in government focused on the building safety crisis. I was appointed in March 2020. I had Covid and, as many of you know, I lost my mother the following April, so I was not really effective until then, but I had been working on this issue and thinking about it and getting to know many of the cladding groups and some of the leasehold groups personally through Zoom and Teams. I want to pay tribute to them as well. I have had meetings with Sarah Rennie of Claddag and am very impressed with what it is doing on behalf of disabled leaseholders. Ritu Saha of the UK Cladding Action Group is literally indefatigable. It is clear that she does not necessarily appreciate what I do, but I appreciate her tireless efforts, together with those of Liam Spender, who is obviously a very good lawyer. Julie Fraser from the Liverpool Cladiators is campaigning for leaseholders up in Liverpool. Giles Grover of the Manchester Cladiators is very effective. As many Bishops know, there is also Steve Day. Not a day goes by without Steve Day contacting me by some means or other—at any time of the day, I hasten to add. He has campaigned tirelessly on behalf of RAQ residents and come up with constructive ways in which we can strengthen the Building Safety Bill.

It is not just the cladding groups. There are also the leasehold groups such as the Leasehold Knowledge Partnership: Sebastian O’Kelly is a very distinguished former property journalist and Martin Boyd has an encyclopaedic knowledge of matters to do with leasehold.

Lastly, as a junior Minister, I should pay tribute to the new Secretary of State, Michael Gove. I really mean it when I say that he is a phenomenon. He has worked incredible magic to come up with a profound and brave reset around building safety. My right honourable friend is very clear about the principles that underpin this reset. We should just reflect on what he said in the Statement—first, on proportion:

“We … need to ensure that we take a proportionate approach in building assessments overall. There are too many buildings today that are declared unsafe, and there are too many who have been seeking to profit from the current crisis.”


That is absolutely spot on; we need a greater sense of proportion.

On protection, leaseholders are the victims. He said that leaseholders living in their own flats should not bear the burden of fixing historical fire safety defects that are no fault of their own. That too is absolutely spot on; we need to protect leaseholders.

The third principle, on pollution, is that the polluter must pay. My right honourable friend said:

“We should not ask hard-working taxpayers to pay … taxes to get developers and cladding companies making vast profits off the hook. We will make industry pay to fix … the remaining problems and help to cover the range of costs facing leaseholders.”—[Official Report, Commons, 10/1/22; cols 283-285.]


These are very clear principles set out by my right honourable friend. In yesterday’s Statement, he came out with some significant steps, as mentioned by the noble Baroness, Lady Hayman, such as the withdrawal of the consolidated advice note. That died yesterday. It could not have come a day too soon. It should have come earlier, but it now rests in peace—I hasten to add that it was published in January 2020 and I only became a Minister in March, so I had nothing to do with it.

It is important that we do not have government by diktat and that we get a sense of proportion. That will be possible with the publication on Wednesday of PAS 9980, which allows a risk-based assessment of external walls. We will also commence the Fire Safety Act. The noble Baroness, Lady Pinnock, was a fearsome adversary during its passage. We have a good Bill. We will commence that with the building prioritisation tool. The phrase is “shortly”, but it will be a matter of a few weeks; we need to get the IT right for that.

Underpinning proportion, we need a call for innovation. If we are to have more buildings made safe not by costly remediation where people profit—let us be clear, they profit from remediation—let us make mitigation a possibility in more homes. That is why I am delighted that we are beginning to fund some innovative ideas, some of which will work and some of which will not. I mention the Intelliclad system that has been funded by the Waking Watch Relief scheme. I shall not go into exactly how that works, but it is a form of innovation that may make mitigation an option more often than remediation. We have funded that system in two buildings, the Interchange building in Croydon and the Guildhall Apartments in Southampton. If noble Lords would like to join me to visit those, it may be useful and interesting. We need more innovation such as that, so here is a call for innovation.

Protection is the second principle, as was raised by the noble Baronesses, Lady Pinnock and Lady Hayman. We announced that, essentially, we are seeking a moratorium on forfeiture, so that those who live in buildings with historic safety defects do not lose their home as a result of their landlord forfeiting the lease. We are working with government to make that happen.

Importantly, not mentioned was the Defective Premises Act 1972, on which I became an expert and talked to some of my colleagues who are construction QCs. The limitation period in that at the moment is only six years. We have extended it prospectively to 15 years but retrospectively to 30 years, which covers the vast majority of buildings affected by the crisis. It means that people who built rubbish are liable through law to fix that. It is very important that there is statutory underpinning, and it is an important development in terms of protecting leaseholders.

Lastly, there is more money now. During my time as Minister, £600 million was made available in the first instance, then we announced a further £1 billion for the building safety fund. Under my right honourable friend Robert Jenrick, a further £3.5 billion was announced, followed by this £4 billion under my right honourable friend the Secretary of State. We now have £9.1 billion committed towards the remediation of unsafe cladding.

Of course, questions have been raised about how we make the polluter pay. Those are legitimate, but let us just take stock of the fact that this Government have effectively declared war on the polluters. Those polluters are not just developers; they are the manufacturers of cladding systems that do not work and are flammable; they are the manufacturers of the insulation that is flammable and all those defective construction products. It is pollution in the round; it is not just developers. Even construction companies that put up very poor-quality buildings are included. Everybody who has profited from this crisis is a polluter and they must pay.

In declaring war, we have a series of measures. To use a Second World War analogy, we have bomber command with levies and taxes which mean, at a very high level, you tax. We have had announcements from the Treasury about the developers tax on companies with profits above a certain amount, which will contribute £2 billion. There is also the building safety levy. I also count within the bomber command scenario the voluntary scheme where we come to you. Over two months, we are asking people who have polluted to stump up the £4 billion to pay for the historical problems they caused.

As a backstop, we have what I would call fighter command. That means looking at all kinds of measures —this was obviously heavily leaked and I know that the Secretary of State has launched an inquiry into the leaks. We are looking at taxes or legal means to extract the money if it is not given voluntarily. That is essentially the plan. As it says in the widely trailed letter, the department is the backstop—the Department for Levelling Up, Housing and Communities, not the Treasury. The money is there, effectively, and it is now about getting it from the polluters—that is the plan.

Non-cladding costs were also raised. I would say that cladding is a large proportion of the bill. I have seen quite a few of these. When we met the cladding groups yesterday, we spoke to Sophie Bichener, a leaseholder who has a £200,000 bill. About £60,000 of that is non-cladding costs, so 60% or 70% of the bill is cladding costs. In some cases, the amounts might be equivalent, but to say cladding is an insignificant amount would be a misrepresentation. We have taken a major chunk of this by focusing on cladding, which is, after all, the major accelerant of fires.

The noble Baroness, Lady Hayman, also mentioned pace and seemed to have some interesting statistics; I hope she will share the figures which have led her to assume that this will take until 2024 for private housing and 2026 for social housing. We have to get this done and it does take time, but I would point out that, certainly during my time, we have made progress—despite a pandemic—so that virtually every single building with the worst form of cladding has had it removed or fully remediated. There are some places, such as the 20 buildings in Southwark that we suddenly identified—the noble Lord, Lord Kennedy of Southwark, has come in right on cue—that we now have to remediate, but we have not known about those for long. It is important that we deal with the riskiest forms of cladding first, namely aluminium composite material, then deal with non-cladding costs. We committed £863 million of the initial £1 billion and, as we work through the process, there will be the further £3.5 billion for high-rises and we now have plans for medium-rises. It is a significant job of work and it would take any Government time to get it right.

Let us not rush it, however. If you rush it, you may do the remediation so poorly that you have to do it again in two years’ time. Of course, we need pace, but we also need quality remediation so that, for the lease- holders and people who rent these homes, the remediation lasts a generation and not a couple of years. That is important to think about as well.

The noble Baroness, Lady Hayman, mentioned buildings of under 11 metres. I really do not see a case for costly wholesale remediation of buildings of that height—you stick in a fire alarm. A simultaneous evacuation alarm system or other mitigation measures should work. I have not seen a fire engineer make the case that you need to undertake costly remediation of low-rise buildings, but am happy to be given examples of where we think low-rise buildings need to have millions spent on them to fix the problem.

I have been told to finish in a very delicate way, but it is important that I do my best to answer the questions and set out the Government’s position. I want to finish by saying that, following all my 20 years in local government—with 16 years as a councillor and council leader, four years in City Hall and now my role in this place—I of course want to work collaboratively with the Opposition, the Liberal Democrats, the Cross-Benchers, including the noble Earl, Lord Lytton, and the noble Lord, Lord Bilimoria, who is here specially and who I have known since university, and the Bishops. We will, I hope, work collaboratively to make the Building Safety Bill a better Bill and provide the protection that leaseholders in this country deserve.

Lord Young of Cookham Portrait Lord Young of Cookham (Con)
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My Lords, I commend the Minister for his tireless work over the past few months, which has led to this very welcome initiative. Will he clarify two points that arose from the exchange in another place yesterday? First, when asked about costs relating to fire doors and external wall insulation, the Secretary of State said that

“the freeholders, as the ultimate owners of these buildings, will be held responsible for all the work that is required, and we will make sure that leaseholders are not on the hook.”

He then confirmed this in a subsequent reply to Matthew Offord, saying:

“It is our intention that the ultimate owner of a building is responsible for all of the safety steps that are required, and we will use statutory means in order to ensure that that happens.”—[Official Report, Commons, 10/1/22; col. 301.]


I read that as saying that leaseholders are protected for all safety steps, not just dealing with cladding. Secondly, while the Secretary of State repeatedly promised statutory protection for leaseholders, it is not clear what they should do about bills sitting on their mantelpiece for work completed or under way but not paid for. Do those leaseholders have statutory protection?

Lord Greenhalgh Portrait Lord Greenhalgh (Con)
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My noble friend always asks very pertinent questions and he knows this issue inside out. Rather than obfuscating this, I will give the straight answer. Of course, in protecting the leaseholders, someone else has to pay—that is the thrust of the question from my noble friend. When it comes to cladding, there is now funding in place and a plan to deliver that without touching anyone beyond the polluter, if we can get back the money put up by the taxpayer. Some leaseholders have obviously borne the brunt of the costs as well and that is regrettable. We cannot apply these protections retrospectively but, by having the reset statement issued by my right honourable friend, we can ensure that we protect many thousands—potentially hundreds of thousands—more leaseholders from being affected in the future by having those statutory protections in place.

Lord Kerslake Portrait Lord Kerslake (CB)
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My Lords, I declare my interest as chair of Peabody housing association. I welcome the Statement; it is a really important step forward in terms of dealing with this long-running and difficult issue. I particularly welcome the proportionate approach to building safety, the polluter pays principle and the move to end the uncertain and unfair position for leaseholders. These are all welcome, but we need to move on from the principles to delivery. This is the critical issue. Of course, the work to address the issues of building safety is already under way, particularly by housing associations. The question now is: how do we bring certainty to leaseholders? What will the approach to collaboration be here? We will make more rapid and better progress if we can have a very close, collaborative relationship with the department and the new dedicated team. I would be interested to hear how the Minister sees the process of resolving the outstanding issues that are still in front of us all working.

Lord Greenhalgh Portrait Lord Greenhalgh (Con)
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My eyesight is not the best, but I now know that those were the lovely dulcet tones of the noble Lord, Lord Kerslake. I remember that, when I was leader of Hammersmith and Fulham Council, the noble Lord visited me to discuss housing policy. He has had a long-standing interest in this area and has been a distinguished chief executive and an extremely senior civil servant in Whitehall, so he has worked at all levels of government and I know he comes from a good place. Peabody is a provider of extremely good social housing and there are great examples of that where I live. I commend the work it does. It provides housing for some of the most vulnerable people, but also people of all income streams who cannot afford market housing.

We have to work with Kate Henderson at the National Housing Federation and with the G15 associations, all of which have development arms and have built housing. We have to accept that some of the G15 associations may have built houses with unsafe material. I take the view that, if you are social developer, particularly as you have had a subsidy to do the development, and have made the same mistakes as a private developer, then the consequences should be the same. We should do that in a way that is fair and proportionate to ensure that the polluter, whoever it is, contributes to fixing the mess that they have played some part in creating. It should be collaborative; I have spent a lot of time reaching out to the National Housing Federation and different chief executives, and will continue to do so.

Baroness Neville-Rolfe Portrait Baroness Neville-Rolfe (Con)
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My Lords, I have an interest as chair of the Built Environment Committee. I very much welcome the package of measures, although I regret the time that it has taken to get to this stage. My experience on the ground is that we need flexibility at the edges to apply common sense, so I welcome the notion of proportionality. Risk assessments by external advisers can jeopardise good businesses, as we know from the overzealous enforcement of a number of EU regulations and the disastrous EWS1s, which, if I understand it correctly, my noble friend is rightly withdrawing. Will the Government ensure that the new British Standards Institution guidance prevents the needless recrafting and remediation of buildings—especially old buildings with an old balcony or a wooden beam, which pose a low risk of fire?

Lord Greenhalgh Portrait Lord Greenhalgh (Con)
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I first praise the efforts of my noble friend in raising issues throughout my time as Building Safety Minister, and particularly for her passion about how we improve the built environment. The honest answer is that the introduction of the British Standards Institution’s Publicly Available Specification 9980 will go some way, and it will take time to ensure that we have a more proportionate approach. As I have already said in responding to questions, there is no silver bullet, but it is good to have the right direction of travel. That requires the lenders, insurers and valuers who follow valuation guidance from RICS to all take a sensible approach, and that takes time. The more we focus on proportionality and risk, as opposed to having a binary view that everything needs to be fixed in the most expensive manner possible, the closer we get to a far better place.

Lord Stunell Portrait Lord Stunell (LD)
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I thank the Minister for his Statement; it is very welcome. Following on from that last point, there is a clear problem created by the insurance industry, which has made matters significantly worse. Will he have meetings with the insurance industry to guide them through the new British standard that will be published so that we do not go through another two years of overengineered responses based on an extravagant risk-based system?

Lord Greenhalgh Portrait Lord Greenhalgh (Con)
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I thank the noble Lord, who was a distinguished Minister in the very same department in which I find myself. He has been at the Dispatch Box in the other place and has great experience. He is absolutely right that we need to see movement from the insurance industry. I have had many meetings with the ABI. In fact, most recently, I have had a series of individual meetings with primary insurers—you get more out of a meeting when you have one of them in front of you; they speak more candidly to a Minister than if you have a group of them together. The new chair of the ABI is my noble friend Lady Morgan of Cotes, and I have engaged with her about how we can get a more sensible approach. Some of these hikes in insurance are not just 100%; they are 1,000%. The Father of the House in the other place, Sir Peter Bottomley—a distinguished parliamentarian—has raised the prospect that, if insurers are not going to be sensible about this, let us get the Competition and Markets Authority looking into some of these practices. There is carrot and stick to this, but of course I will continue, as I have been asked—in the Statement yesterday I was namechecked once—to follow up and make sure that we get a sensible and proportionate response from insurers; that is my job.

Lord Bishop of London Portrait The Lord Bishop of London
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My Lords, like many others, I welcome this Statement, because clearly, it is a move in the right direction. I too pay tribute to those who have campaigned with tenacity to try to resolve what is an awful situation for people’s lives. I may just be slow, but I would really appreciate the Minister clarifying whether the Government will bring forward legislation in the Building Safety Bill to ensure that the polluter pays, and not the taxpayer or the leaseholder.

Lord Greenhalgh Portrait Lord Greenhalgh (Con)
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The right reverend Prelate is not being slow; if you are the Bishop of London, you have to be pretty quick. As a backstop, we have committed to look at solutions that involve tax, which is a Treasury matter—it has been very clear about that—or legal means to do these things. I am well aware of the work that has been done by Steve Day, supported by many experts, in bringing forward the polluter pays proposal. My personal view, as a humble Minister, is that we need a building-by-building assessment of liability if we are to ensure that the polluter pays. But that is down the road, and the sequence is: voluntary contributions first, and some of these other things are being positioned as backstops.

Lord Blencathra Portrait Lord Blencathra (Con)
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My Lords, I declare a potential interest as someone who has some wooden decking on a balcony. I congratulate my noble friend on the wonderful Statement he has made, his own personal views today, and the work he has done over the last 12 months. More particularly, will he convey to my right honourable friend the Secretary of State the thanks of millions of leaseholders for the astonishing announcement he made yesterday? I always believed that, when he was appointed, there was no one better than Michael Gove to cut through and deliver success.

I do not want the taxpayer to spend a penny on this, but I want the developers and the freeholders to do so. With regard to the backstop, I suggest that we need to hold a sword of Damocles over the developers’ heads. The voluntary approach, I am afraid, will not work. Can my noble friend therefore bring forward urgent legislation—which we pass but hold in abeyance as that sword of Damocles—to let them see that Parliament means business and that we want legislation on the statute book that we can implement at a moment’s notice if they fail to deliver, rather than spend a year putting it through afterwards? I suggest that as a good tactical approach.

Lord Greenhalgh Portrait Lord Greenhalgh (Con)
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My noble friend is a very wise man. With regard to my right honourable friend the Secretary of State—having worked with the Prime Minister for four years when he was mayor, I know that he likes the odd Latin phrase—quod erat demonstrandum: he has done an amazing job coming in to reset this. Of course, there is more work to be done, but I pay tribute to him myself, and I thank my noble friend Lord Blencathra for those kind remarks. I agree with him; they are very wise words.

When we look for the polluter to pay, as in all negotiations, you need both the carrot and the stick. I will use the metaphor of the very distinguished late Archbishop Desmond Tutu: you need your moment of truth and reconciliation, where people come forward and make a voluntary contribution. That could work to a degree, and time will tell how well it works. But equally, as a backstop, you need to prepare for the moment where you go to the Nuremberg trials and look, building by building, at who caused the mess, and make sure that they pay for it. We have started that process with Operation Apex, which looked at who caused the problems in particular buildings. We are getting some specific figures. My right honourable friend got a series of forensic accountants to look at some of this stuff, and more work will be done in that regard. That is very helpful advice.

Viscount Stansgate Portrait Viscount Stansgate (Lab)
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I thank the Minister for his comments. Yesterday’s Statement by the Secretary of State was a welcome and much overdue step forward. Can the Minister tell the House a little more about a point raised by the noble Baroness, Lady Pinnock, about the way in which the Government intend to pursue freeholders and landlords who are not based in the UK but overseas?

Lord Greenhalgh Portrait Lord Greenhalgh (Con)
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Not today. But we are well aware of the practice, which goes beyond just whether they are domiciled, of using special purpose vehicles. We are looking at how we deal that issue, where the developer is known, creates an entity over there, away from the rest of the business, does the development in isolation using the funding, and then wraps it up at the end of the development. We are looking at all these issues, through law and tax. Whatever levers the Secretary of State has, he is looking to deploy them to make sure that the polluter, in the broadest sense, will pay.

Earl of Lytton Portrait The Earl of Lytton (CB)
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My Lords, I add my congratulations to the Minister on his untiring work here. The Statement made in another place yesterday is certainly extremely welcome. As a practising chartered surveyor and valuer, I am particularly determined to ensure that the regime where the purveyors of shoddy buildings have not been properly held to account must stop, but I understand the immense complexity, raised by other noble Lords, to do with insurance and other matters downstream from the immediate problem.

My first and last concern is the point made, in particular, by the noble Baroness, Lady Pinnock: namely, that innocent people have devoted their life savings and invested their homemaking, their very being and their work/life balances in properties which have been found to be not constructed to safe standards. This is an appalling social and mercantile evil—let us make no bones about it.

I request that the Minister confirm that this cannot and must not be turned into a tax solution. The reasons for that will be self-evident. It would be both unfair and an unbelievably blunt instrument. It will almost certainly require hypothecation, and would merely serve to collectivise what should be an individually assessed liability; the Minister mentioned that it will be property by property.

Like the noble Lord, Lord Blencathra, I fear that there will not be a great queue at the Minister’s door with open cheque books, and I suspect it will be necessary to move to plan B, because it is not just the cladding but an awful lot of other defects—

Earl of Lytton Portrait The Earl of Lytton (CB)
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Does the Minister agree that the only remaining viable route that is coherent across the piece is, in effect, the polluter pays amendment, the draft of which had the scrutiny of top legal minds, such as Daniel Greenberg QC? Furthermore, does he agree that this is the only means whereby the perverse habits of what is known in the trade as value engineering will become something of the past, and in future that the inculcation of consistently good construction methods will be the lasting legacy of Grenfell?

Lord Greenhalgh Portrait Lord Greenhalgh (Con)
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The noble Earl is right that this is a crisis of epic proportions that has affected hundreds of thousands of leaseholders and has been caused over many decades. I have probably visibly aged while holding this brief, because some of the stories from leaseholders are simply harrowing. That is one reason why I am delighted that the House collectively feels that we are making a big step in the right direction.

I also agree that we should challenge some of the practices that have led to this, such as value engineering, which is essentially a way of cutting corners and trying to inflate profits, often by compromising the integrity of the building. These practices simply must stop. Making the polluter pay and doing so at the individual building level is the way to ensure that the quality of the buildings in future will be far better than what we have seen in the past 30 years in this country.

Lord Shipley Portrait Lord Shipley (LD)
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My Lords, the Minister said that this may take time, but what assessment has been undertaken to unlock mortgages, which at the moment are a huge barrier to the sale of properties?

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Lord Greenhalgh Portrait Lord Greenhalgh (Con)
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I am very pleased that the issue of lenders has been raised: it is one area where we need to see a greater sense of proportion. When I have spoken directly to primary insurers, they have given the undertaking that their practices are that, at the moment at which it is clear that cladding remediation costs have been found and that remediation will be undertaken, they can begin to reduce building insurance premiums. That is not the case with the banks. I have had many leaseholders come to me to say that they cannot move on with their lives because the banks are not changing their practices and are not offering mortgages, even when the remediation is locked in or even begun—it often takes about a year to do some of these projects. We will engage with lenders to say, “Can you take a more proportionate approach to risk, to ensure that people can move on with their lives?” I thank the noble Lord for raising that point.

Lord Bishop of St Albans Portrait The Lord Bishop of St Albans
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My Lords, the Secretary of State announced an additional £27 million for fire alarms. Are similar grants being considered for installing sprinklers in buildings over 11 metres?

Lord Greenhalgh Portrait Lord Greenhalgh (Con)
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My Lords, I am delighted that we have heard from not just one but two Bishops, because the right reverend Prelate has been a tireless campaigner on behalf of people in St Albans and beyond. The additional £27 million comes on top of the first tranche of money, which was £30 million, so we are talking about nearly £60 million towards providing alarm systems in buildings, rather than the ridiculous practice of having “waking watch” costs month by month, which run to hundreds of thousands of pounds for leaseholders to bear. We must look at how we encourage mitigation as the solution. I am not sure—I am not a fire engineer—but sprinklers are a potential way to achieve that, particularly in low-rise buildings. We have not necessarily looked at taxpayer funding, but we will take that away and see how we can best encourage more mitigation where that is a safe and sensible end-point and ensure that we can avoid costly remediation being the preferred option, if we can make a building safe enough.