Building Safety Bill
Tuesday 29th March 2022
(2 years ago)
Lords ChamberRead Full debate Building Safety Act 2022 View all Building Safety Act 2022 Debates 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.
NHS: Pre-pandemic Facility Levels
(2 years ago)
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Lord Balfe
To ask Her Majesty’s Government when they expect the full range of NHS facilities, such as hospital visiting and booking GP appointments, to return to pre-pandemic levels.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Lord Kamall) (Con)
My Lords, NHS services are open to patients and numbers of general practice appointments have returned, or are returning, to pre-pandemic levels. As before the pandemic, hospital visiting is currently at the discretion of NHS trusts. Hospitals are expected to accommodate at least one hour of visiting per day, and preferably more. The department is working closely with the NHS to tackle the Covid-19 backlog and restore pre-pandemic activity and performance as soon as possible.
Lord Balfe (Con)
I thank the Minister for that Answer, but in our local hospital there are very big signs saying that visiting is still not permitted, while it seems to be quite in order for staff who are unvaccinated to go in and out of the hospital at will. What steps are being taken to test unvaccinated staff to ensure that they are not carrying Covid, and can the Minister remind me whether we have repealed the bit of legislation that restricted the number of people who can be in a GP’s surgery?
Lord Kamall (Con)
I thank my noble friend for those questions and will try to answer as many of them as I can. We are aware that this idea of returning to normal is patchy in different parts of the country. Some people have told me that visiting their GP or a hospital is fine, while others have had real trouble. Therefore, when these issues come up, I hope that noble Lords and others make us aware, so that we can ask the NHS what is happening. It is clearly an issue of capacity, but also, some people are trying to get face-to-face appointments with their GPs, while some practices are trying to move towards a technology-based service offering. I am aware of that. GP appointments are up to 60% of what they were pre-pandemic, but we understand that there is progress to be made in other areas.
Lord Laming (CB)
My Lords, I wonder whether the Minister realises that he could make himself hugely popular in the country if he could persuade GP practice reception facilities to be more user-friendly and welcoming to the clients.
Lord Kamall (Con)
The noble Lord makes an important point, and I can see a lot of agreement, judging by noble Lords’ body language. However, we must always be careful about this issue because patients have had different experiences. I have been speaking to noble Lords about this. Some have told me that it is really good and has gone back to normal; others are having real trouble getting access to a GP or even getting someone to answer a phone in the first place. We must be careful, because if I say, “GPs should be doing more,” I will be criticised for being tough on GPs, but if I say that we must understand that GP practices are under a lot of pressure, I will then be criticised for not pushing hard enough to solve the problem. The pandemic accelerated pre-existing trends. We were already moving more towards the use of technology. Some people were quite happy to contact their GP by phone or online, and we will see some of that. We will never go back to 100% face-to-face, but certainly, patients should be able to have face-to-face appointments unless there are good clinical reasons why they cannot.
Lord Watts (Lab)
My Lords, is it not about time that the Government reformed GP services? Should we not have GP and diagnostic centres replacing traditional GP services? At the moment, many GPs are making thousands of pounds out of buildings that have been paid for by the NHS. When will the Government be getting value for money for taxpayers?
Lord Kamall (Con)
One of the advances we have seen with technology is the community diagnostic centre; these will no longer necessarily be at health centres or GP surgeries. We are looking at rolling them out in the community, in shopping centres and sports stadiums. About 80% of the people on the waiting lists are waiting for diagnostics, so we hope that will be a great way of tackling the waiting list.
The Lord Speaker (Lord McFall of Alcluith)
My Lords, we have a virtual contribution from the noble Baroness, Lady Brinton.
Baroness Brinton (LD) [V]
My Lords, surveys of parent carers during the pandemic by the Disabled Children’s Partnership reveal that more than 70% of disabled children were unable to access their pre-pandemic levels of therapies and health services, and many of their conditions regressed during the pandemic. How do the Government plan to use wider NHS recovery funding to meet the acute health needs of disabled children and young people?
Lord Kamall (Con)
I thank the noble Baroness for making me aware of this issue. We are aware of a number of front-line services where there is a backlog as a result of the pandemic and not being able to have face-to-face appointments. However, I will have to write to her on the specific case that she raised.
Lord Geddes (Con)
My Lords, on the other side of the question from the noble Lord, Lord Laming, I have it on very good second-hand authority that receptionists are getting an extraordinary amount of abuse from the public. That is one of the problems.
Lord Kamall (Con)
My noble friend raises an important point. No matter how frustrating we might find trying to get an appointment with a GP, there is no room for abuse of our NHS staff—whether GPs, doctors, nurses or other health and care workers. I completely support the point he made.
Lord Austin of Dudley (Non-Afl)
My Lords, for many patients, the service before the pandemic was not nearly good enough, so our ambition ought to be much higher in the future. Why can we not reform the system by empowering patients with choice and competition? With modern IT services, why can GPs not be paid by appointment and why can patients who choose to not be able to ring round to find a GP who can treat them when and where they want, instead of being restricted to one practice?
Lord Kamall (Con)
The noble Lord makes some really good suggestions. On technology, one of the things we are looking at is why, in this day and age, when you can book appointments online for most other meetings, you cannot for GP practices. We want to make sure that people can book online, by telephone, and in advance—rather than having to phone at 8 am —and also let them choose between different places. We have to look at all these options, but, at the same time, technology is not enough: we also have to change the work processes to match the changes in technology.
Viscount Hailsham (Con)
My Lords, a problem that I have encountered in Lincolnshire is that when one tries to get a telephone appointment with the GP, one is offered a point in a spectrum of a number of hours. One simply cannot sit at one’s desk waiting for a call back within a spectrum of a number of hours.
Lord Kamall (Con)
That is exactly why, as technology has improved, you should be able to book a specific time. In fact, in some practices, it has gone backwards since the 1970s. When I was a child, my mother was able to phone up and ask, “Can my son have an appointment on Tuesday next week?” These days, you have to phone at 8 am hoping to get in the queue to book an appointment. Technology should improve that, and we hope that once we are able to recover, we will be able to use technology to book in advance.
Baroness Wheeler (Lab)
My Lords, the BMA’s Rebuild General Practice campaign has warned that GPs’ lack of time with patients, workforce shortages, heavy workloads and administrative burdens mean that patients’ safety is being put at risk when they attend a surgery. Data shows that GPs are conducting nearly 50% more appointments, but staff vacancies continue to soar and GP numbers to decline. In the light of this, can the Minister explain to the House how the Government expect to achieve their target of an extra 6,000 GPs by 2024—just two years away?
Lord Kamall (Con)
I thank the noble Baroness for reminding us of the target. We have been quite clear that it is important that we have as many healthcare professionals as possible and fill the vacancies as soon as possible. We made £520 million available to improve access to GPs and expand general capacity during the pandemic. That is in addition to the £1.5 billion announced in 2020 to create an extra 50 million general practice appointments by 2024, by increasing and diversifying the workforce.
Lord Bethell (Con)
My noble friend is entirely right that the technology offers benefits, but the health infrastructure plan, promised some time ago, has not yet been published. That will outline the framework for investment in the technology he mentions. When will the update be published?
Lord Kamall (Con)
My noble friend will be aware from when he was a Minister that there were other priorities in tackling Covid, trying to get a vaccine and procuring much-needed equipment. This was therefore all delayed, but we are now working with stakeholders to ensure that the updated capital strategy sets a clear direction for the system, taking into account significant events since the first publication. The multiyear settlement confirmed for 2021 allows us to take the next step forward. We expect the paper to be published at some time in 2022.
Lord Reid of Cardowan (Lab)
My Lords, did not the noble Lord, Lord Austin, hit the nail on the head when he said, regarding GPs, to give the patients choice? Back in the days when we reduced the waiting list from 1.1 million to just under 400,000, we reduced waiting times in hospitals from over three years down to 18 weeks. We did that primarily by giving the patients the choice to go to another hospital if they were not getting the service they needed and making the money follow the patient’s choice. Is that not the way to solve the GP problem?
Foreign Languages: Economic Value
(2 years ago)
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Baroness Coussins
To ask Her Majesty’s Government what assessment they have made of the research by Professor Wendy Ayres-Bennett and others The economic value to the UK of speaking other languages, published on 22 February; and in particular, the finding that the removal of language barriers with Arabic-, Chinese-, French- and Spanish-speaking countries could increase annual exports from the United Kingdom by around £19 billion.
Baroness Coussins (CB)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper and declare my interests as co-chair of the All-Party Group on Modern Languages and as vice-president of the Chartered Institute of Linguists.
The Parliamentary Under-Secretary of State, Department for Education (Baroness Barran) (Con)
My Lords, the Government believe in the importance of languages and welcome the report’s findings on removing language barriers to benefit the economy. We support language teaching through the recent modern foreign languages GCSE review, the MFL hub programme and the Mandarin Excellence Programme, among other initiatives. We are considering the report alongside other available research and exploring other ways in which we can expand the pipeline of fluent speakers to meet the country’s future needs.
Baroness Coussins (CB)
My Lords, the Mandarin Excellence Programme has shown that high standards can be achieved in state schools without impinging on other priority subjects, so will the Government launch an equivalent programme in one or more of the other three languages which could result in economic benefits? Secondly, given the finding that in specific sectors such as energy, services and mining other languages matter at least as much as English in reducing trade barriers, will the Minister undertake to speak with colleagues in the Department for International Trade and the Treasury to identify how language skills can be improved and funded in these sectors?
Baroness Barran (Con)
The Government welcome the results of the report, which do indeed highlight the notable achievements of the programme to date. We continue to explore how we can provide greater support for the study of other languages. Regarding the Department for International Trade, the noble Baroness will be aware that we recently announced a refreshed export strategy, Made in the UK, Sold to the World, giving UK exporters support services to seize the opportunities secured through our trade agreements. This is focused on market barriers such as language. I am happy to talk to colleagues there and at the Treasury, as the noble Baroness suggests.
Lord Sherbourne of Didsbury (Con)
Has my noble friend seen the evidence given just a few days ago by a former British ambassador to Moscow to a Lords committee, in which he lamented the decline of foreign language skills in the Foreign Office, especially Russian? Does she agree that it is quite important that diplomats who represent the United Kingdom in and promote exports to foreign countries should be able to understand and speak a foreign language? Can she therefore tell the House what progress has been made to improve foreign language skills in the Foreign Office?
Baroness Barran (Con)
I absolutely agree with my noble friend. The FCDO has some 800 specially trained linguists qualified in 46 languages, operating in 111 posts around the world. This figure includes almost 80 heads of mission.
Baroness Garden of Frognal (LD)
My Lords, speaking other languages is very good for warding off Alzheimer’s, as well as playing a significant part in international trade, which is the point of this Question, so it is a win-win. Are the Government still serious about ensuring that the UK can compete on a global stage post Brexit? If so, how will they measure the success of the measures they are taking to ensure that the woeful decline in modern language learning stops and is turned around?
Baroness Barran (Con)
I do not have time to answer the noble Baroness’s question in full, but I remind her that the uptake of French GSCE is slightly up between 2017 and 2021, Spanish is up very substantially from 85,000 students to 109,000, and 41,000 participants in the Turing scheme, 48% from disadvantaged backgrounds, have been allocated funding this year.
Lord Anderson of Swansea (Lab)
My Lords, does the Minister agree that a diplomat or business person trying to negotiate in a foreign language which they have not mastered can be dangerous, but nevertheless a basic knowledge of the language can ease the path to good negotiation?
Baroness Barran (Con)
I absolutely agree with the noble Lord. Indeed, returning to diplomats, more than 70% of FCDO staff in speaker slots, which require language skills, now have a valid exam pass in their target language compared to 39% in 2015.
Lord McDonald of Salford (CB)
My Lords, Willy Brandt put it best when he said “If I am selling to you, I will speak your language, but if you are selling to me dann müssen Sie Deutsch sprechen.” Clearly, German manufacturers got the point because this century Germany has been one of the two most successful manufacturing exporting countries in the world. Why is this fundamental truth so elusive to British exporters?
Baroness Barran (Con)
I think it is not elusive to British exporters. There are a number of mechanisms for improving our competitiveness on the world stage; language is one of them. However, English is a global language in the way that Deutsch ist nicht.
Lord Watson of Invergowrie (Lab)
My Lords, developing the point just raised by the noble Lord, Lord Sherbourne, in the European Union two-thirds of adults of working age can speak more than one language, yet two-thirds of Britons cannot hold a conversation in a language other than their mother tongue, so I am sure the Minister will be as concerned as I was to see the latest figures on A-levels in modern languages decline by a further 5% between 2017 and 2021. Yesterday, the schools White Paper pledged a network, I think it was called, of modern language hubs with CPD for teachers of those languages, yet the numbers of those teachers are falling. Will the cuts made last year by the Government in bursaries for language students, from £26,000 to £10,000, be reversed to support the development of those modern language hubs?
Baroness Barran (Con)
We were very pleased to announce in the schools White Paper the network of modern foreign language hubs. We are also increasing the languages bursary to £15,000 for 2023 to incentivise candidates. In 2020-21, the number of postgraduate modern foreign language trainees increased by 300 to 16,087.
Lord Morgan (Lab)
My noble friend’s reference to native languages stirs me to point out that, while I of course totally agree with the Question and with the Minister’s replies, there is far more to modern languages than simply improving the terms of trade. There is the question of deep cultural enrichment and, in these islands, understanding the culture of these islands more deeply. As someone who was brought up bilingually in Britain, I think that is important.
Baroness Barran (Con)
I absolute agree with the noble Lord and that is why I referred to the Turing scheme, which we hope will be part of creating that richer picture of the world we live in.
Baroness Wheatcroft (CB)
My Lords, the Minister cited a statistic for the success with French and Spanish, but they are languages of the EU, with whom our trade has fallen, according to the Dutch Government, by 14% in the three months to January compared with two years previously. I wonder whether the Minister can say something about our success in teaching the languages of those new markets in which we are going to succeed.
Baroness Barran (Con)
The noble Baroness, Lady Coussins, referred to the Mandarin Excellence Programme, but I point out that, as the noble Baroness understands, French and Spanish are very widely spoken outside the EU.
Baroness McIntosh of Pickering (Con)
My Lords, the Erasmus programme was reciprocal, so tuition fees were not paid. In my noble friend’s experience, how many European universities have waived tuition fees under the Turing programme to enable UK students to apply without paying tuition fees?
Baroness Barran (Con)
I do not have that data to hand and I am not sure whether it is yet available, given the newness of the Turing scheme, but I will write to my noble friend to clarify that.
Schools: Creative Subjects and the English Baccalaureate
(2 years ago)
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Lord Storey
To ask Her Majesty’s Government what assessment they have made of the teaching of creative subjects in schools since the introduction of the English Baccalaureate.
The Parliamentary Under-Secretary of State, Department for Education (Baroness Barran) (Con)
My Lords, the Government remain committed to ensuring that all pupils receive a high-quality cultural education as part of a broad curriculum. This starts during the early years and continues in school, with art and design, design and technology and music all forming part of the national curriculum from age five to 14. The percentage of young people entering at least one arts GCSE between 2010 and 2021 has remained broadly stable.
Lord Storey (LD)
The Minister will be aware that since the introduction of the EBacc in schools, there has been and is a creativity crisis—for example, in music there has been a 16.83% fall in A-levels—and there has been a 31.47% fall in students taking those subjects. Obviously, that has a pipeline into universities and only one university now has an English professor. I want to ask the Minister a direct question—no ands, ifs or buts. If it is not the English baccalaureate that is causing the crisis in creative subjects, what is the reason?
Baroness Barran (Con)
We simply do not accept that there is a crisis in creative subjects. The noble Lord rightly quoted some data, but I point out that the percentage of students taking art and design at GCSE is up from 26.5% to 30.4%. He is right that there have been declines in some other subjects, but he will also be aware that the numbers taking vocational and technical qualifications have gone up very substantially, particularly in media: since 2018 the figures for media have risen from 4,500 to 55,000 students.
The Earl of Clancarty (CB)
My Lords, despite what the Minister says, the message clearly being sent out via EBacc to teachers, parents and children is that creative subjects are of lesser worth, a message independent schools are ignoring. Is the Minister aware that there is five times greater spend on music in independent schools than in state schools, including academies? Does the Minister agree that this is bad for levelling up, bad for education and bad for our future economy, a key aspect of which will be the creative industries, as independent schools know full well?
Baroness Barran (Con)
The department does not track the expenditure on these subjects in independent schools. What the department is committed to, and restated in the schools White Paper yesterday, is that every child should have a rich cultural education, and we will be publishing a new cultural education plan jointly with DCMS next year.
Baroness McIntosh of Hudnall (Lab)
My Lords, the noble Baroness’s credentials regarding personal commitment to these issues are impeccable, both in this role and the role she held previously at the DCMS; however, the evidence is against her. As the noble Earl, Lord Clancarty, has just said, there is an impact not only on students in schools but on the workforce both within education and in the creative industries more widely, as there is a decline in the numbers of people prepared to take forward qualifications in music, drama and other creative subjects, Does she worry at all that the much-vaunted creative industries, of which she and her colleagues frequently speak with pride, will be suffering over the coming years as a result of these policies?
Baroness Barran (Con)
I thank the noble Baroness for her question and her kind remarks but I just cannot accept what she suggests. As she points out, we have thriving cultural and creative industries in this country. We have enough teachers entering initial teacher training for art and design and drama, well above our recruitment targets. We are committing more funding in T-levels, in media, broadcast and production, and in craft and design, so I think we are building the platform for our creative industries and our children to thrive.
Lord Lexden (Con)
My Lords, are the Government not deeply concerned that their own official data shows that the number of hours of music taught in years 7 to 13 has fallen sharply in the last 12 years? In view of this and of comments of the noble Earl, Lord Clancarty, and others, is it not all the more important that independent schools work closely with their maintained sector colleagues to increase still further the 655 music partnership schemes from which students in both sectors benefit so greatly?
Baroness Barran (Con)
We very much welcome the partnerships from the independent sector in music and many other areas, and my noble friend is right to highlight them. However, we also have a responsibility and an ambition to make sure that our children have a strong music education, which is why we will be publishing our updated national plan shortly.
Lord Bird (CB)
Does the Minister agree that, if we are to create a world of resilient workers in the next generation, we need to look at how we create these people through a resilient education system? We are in a bigger crisis than we believe. We need to reinvent a holistic form of education, because that is how the world’s businesses are going.
Baroness Barran (Con)
The noble Lord raises a large, broad and important issue. Of course we need a resilient education system and resilient children, and in the announcements in our schools White Paper and the special educational needs and disability Green Paper published this morning, we have set out exactly how we plan to do that.
Baroness Wilcox of Newport (Lab)
My Lords, I taught creative subjects for over 30 years and, as principal examiner for A-level theatre studies for much of that time, I saw a wealth of talent studying this subject across the UK. It is essential that we promote the creative arts in our schools. They nurture well-rounded students and bring a breadth and depth to their learning. In hard cash terms, according to DCMS analysis, the creative industries contribute almost £116 billion a year to the UK. If, for example, the current decline in A-level music that many noble Lords have mentioned continues, this subject could have zero entrants in 10 years’ time. What, if anything, are the Government doing to reverse this appalling decline?
Baroness Barran (Con)
At the risk of repeating myself, we have announced that we will publish a cultural education plan together with DCMS, working jointly across government, which is the right way to approach it. We will shortly announce our national plan for music education. We are doing a lot of work and continue to invest around £115 million per year in cultural education.
Lord Addington (LD)
My Lords, the Minister has told us on numerous occasions that the Government like to listen to employers. When Netflix representatives came to speak to my group, I asked them what they wanted in trainees and whether they wanted people with more English and maths. They looked blankly at me and said, “No, that’s not what we are looking for. We want more rounded people.” Will the Government follow their own mantra and make sure they talk to the big employers, who do not seem to want what the Government are offering?
Baroness Barran (Con)
The Government work extremely closely with employers. Our T-level programme was developed with over 250 employers. I would ask the noble Lord why we are seeing such huge international investment in our film and creative industries if we are not providing the talented people they need.
Lord Hodgson of Astley Abbotts (Con)
My Lords, would my noble friend care to reflect on the importance of citizenship education in levelling up and creating a country at ease with itself? Will she join me in regretting that yesterday’s White Paper said nothing about citizenship education at all?
Baroness Barran (Con)
Citizenship education is absolutely a core part of what we deliver. In defence of the White Paper, we were setting out the major new elements of our plan for the next several years, but citizenship remains a core part of it.
Lord Cashman (Lab)
My Lords, first-hand experience of the arts can be life enhancing and life changing. Therefore, will the Minister encourage her department to do all it can to ensure that background and income levels are not a barrier to physically accessing the arts?
Baroness Barran (Con)
To the extent that it is within my gift, I will do my best.
Lord Aberdare (CB)
My Lords, last week, the Incorporated Society of Musicians published a report entitled Music: A Subject in Peril?, based on a survey of more than 500 music teachers. Some 93% of respondents said that the EBacc and/or Progress 8 had caused huge damage to music in schools, resulting in courses not running and music departments shrinking. What reassurance can the Minister give that the refreshed national plan for music education will address these issues and that teachers will be consulted on it before it is published?
Baroness Barran (Con)
The national plan has been developed with an expert panel, of which the noble Lord is aware, and that panel consulted extensively during its work—through forums, surveys and other mechanisms—with teachers, students, parents and other experts. We very much look forward to its publication.
Offshore Companies: Property
(2 years ago)
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Lord Wallace of Saltaire
To ask Her Majesty’s Government what progress they made towards ensuring the transparency of beneficial ownership of offshore companies holding properties in the United Kingdom in the recent discussions between the Minister for Asia and the Middle East at the Foreign, Commonwealth and Development Office and the government of the British Virgin Islands.
The Minister of State, Foreign, Commonwealth and Development Office (Lord Ahmad of Wimbledon) (Con)
My Lords, the 2022 economic crime Act creates a register of overseas entities that own properties in the UK. This will apply to legal entities from any overseas jurisdiction that own UK property, including those registered in the British Virgin Islands. The overseas territories already share confidential information on company beneficial ownership with UK law enforcement bodies, an arrangement that has enabled the UK’s first unexplained wealth order.
Lord Wallace of Saltaire (LD)
My Lords, it is four years since the passage of the Sanctions and Anti-Money Laundering Act required the overseas territories to open up their company registers. My understanding is that the British Virgin Islands, which has one of the largest sets of companies owning property in the UK—more than 20,000 properties—has been reluctant to open up its registers fully. One has to ask individually and know what one is looking for. Can the Minister explain what the relationship between the sovereign United Kingdom and these overseas territories is in this respect? Do we require them to accept our instructions, or do we ask them if they would mind?
Lord Ahmad of Wimbledon (Con)
My Lords, we have a very constructive relationship with our British Overseas Territories. We regard them very much as part of the British family, and we have a co-operative partnership with the British OTs. That is the way it should be. In terms of recent engagement, my right honourable friend the Minister for the Overseas Territories, Amanda Milling MP, discussed the BVI’s newly announced consultation on a publicly accessible register, to which it is, along with all the other overseas territories, totally committed, ensuring that there will be working registers by the end of 2023.
Lord Collins of Highbury (Lab)
Can we really wait that long? It was 2018 when we legislated on this, and we are now facing a crisis in which this country is seeking out illicit funds. Surely it is time to go back to places like the British Virgin Islands and say, “Open your register to us, the Government, so that we can have a clear view of what is going on.” The Government should not wait until 2023, when things are going on in Ukraine.
Lord Ahmad of Wimbledon (Con)
My Lords, on the issue of Ukraine, as the noble Lord is aware, all the overseas territories are absolutely committed. With each sanction that is passed, it becomes incorporated into their jurisdictions. There are two where Orders in Council are required, and they have also initiated those processes. These sanctions apply immediately. In terms of the overseas territories themselves, we have discussed this before. The noble Lord will be aware that, with the OTs that have these registrations, the register is open to both tax authorities and law agencies. As I explained in my response to the noble Lord, Lord Wallace, the first unexplained wealth order was in conjunction and in partnership with the BVI.
Lord Bellingham (Con)
My Lords, the noble Lord, Lord Wallace, will recall the briefings that he and I received when we both worked in the Foreign Office about the excellent information and intelligence gathering between ourselves, the NCA, other authorities and the different authorities in the overseas territories. Does the Minister share my concern that, while it is incredibly important to keep this information flowing on an ad-hoc, confidential basis, if these registers become completely open, the companies will simply move to places such as Panama and Delaware?
Lord Ahmad of Wimbledon (Con)
My Lords, I believe the overseas territories have been very constructive on their engagement when it comes to registers, but I also recognise the point the noble Lord, Lord Collins, made, about the need for accessibility of registers. We believe we are working constructively and in partnership with the overseas territories in a responsible way, including those within the financial services sector who recognise the importance of consultation. That is exactly what the OTs are doing.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, last Monday I met a delegation from the British Virgin Islands, including the speaker, deputy speaker and leader of the opposition. I asked them direct questions about beneficial ownership. They refused to answer any questions, saying it was not the responsibility of Parliament. Does that not sound very suspicious to the Minister? Could he take it up and raise with the British Virgin Islands Government parliamentary accountability and the concern that a territory which has 45% of all offshore companies registered on it really ought to come clean?
Lord Ahmad of Wimbledon (Con)
My Lords, I am surprised that the noble Lord let the speaker of the BVI leave without giving a straight answer to his question. Perhaps he should have been slightly more persuasive in his normal way. That said, I agree with the noble Lord that it is important. Of course, it is the responsibility of Parliaments and Governments to ensure that appropriate access is given. I have already indicated that there is a working, constructive relationship, particularly with those OTs which have financial services at their core. Equally, the commitment that the overseas territories have given, both in terms of response to the sanctions and their commitment to public registers, is something we welcome. We continue to work very practically and pragmatically with them.
Lord Browne of Ladyton (Lab)
My Lords, the scale of this challenge is enormous. Transparency International UK has found £250 billion worth of funds diverted by rigged procurement, bribery, embezzlement and unlawful acquisition of state assets from across 79 different countries sheltering in companies registered in the UK’s overseas territories. Why is there a reluctance to deal with this problem? Why has it taken so long—since 2018—to have the Order in Council enacted for this register? Is it because, for example, the British Virgin Islands, with a GDP of $1.027 billion is responsible for $24.3 billion of inward investment into the United Kingdom? Is that the real reason?
Lord Ahmad of Wimbledon (Con)
No, my Lords, the real reasons are that there is a practical working relationship with the overseas territories, and that the SAML Act which was brought forward, approved and became not just something we debated but an Act, guaranteed that the overseas territories would respond with public registers. As I have already explained, that is happening. There are existing arrangements in place. There is no reluctance, but it is right that we work constructively with the sectors, and of course there are issues, as the noble Lord points out, about corruption and criminality. It is right that we act, and act accordingly.
Lord Anderson of Swansea (Lab)
My Lords, if, as the Minister claims, the overseas territories are totally committed, surely speedier progress would have been made since 2018. What is the problem? Are, for example, the BVI asking for compensation for loss of revenue? If so, what is the government response?
Lord Ahmad of Wimbledon (Con)
My Lords, what was agreed with the overseas territories was that they would have public registers by the end of 2023. That is the timetable they are working with. However, in terms of immediate needs as, again, has been discussed regarding sanctions in response to Russia, we worked hand in glove with them to ensure that every sanction passed by your Lordships’ House and the other place—by Parliament—is immediately incorporated into our overseas territories.
There is no delay or dither on this; we are working practically and pragmatically with our overseas territories. As I said to the noble Lord, Lord Wallace, we are working both in partnership and overseeing as part of our offering of global Britain. It is an important partnership, and we respect their rights to legislate locally on key issues, but at the same time they need to be held to account where there are issues of corruption and criminality.
Lord Campbell of Pittenweem (LD)
My Lords, if the partnership is so productive, why is it taking five years to implement the responsibility contained in the statute of 2018? What does the Minister think the miscreants have been doing during the five years?
Lord Ahmad of Wimbledon (Con)
My Lords, at the risk of repeating myself, they are working to a timetable. For example, Tristan de Cunha, the main export of which is lobsters, is still required under legislation to have a public register; in that particular instance, and for a range of other overseas territories, we are providing direct technical support, working through both the FCDO and the Treasury, and where assistance is needed we are providing it. The bigger territories, as I have said, are actively consulting with industry to ensure that they get their partnerships right and the registers are established in line with the timetable that I have already indicated.
Lord Sikka (Lab)
My Lords, the UK has legal and moral responsibility for good governance of OTs and Crown dependencies. With that in mind, can the Minister assure the House that the register of beneficial ownership of companies in the BVI and in other territories will at least match the transparency standards applicable in the UK, and that they will all be publicly available?
Lord Ahmad of Wimbledon (Con)
That is exactly the standard we are working to with the overseas territories. We are also working to ensure that these are verifiable registers. As we see further legislation coming on increasing the robustness of the UK register, we will also apply the key principles. I agree with the noble Lord: we have a moral responsibility for good governance in the overseas territories and to ensure strong partnerships with our overseas territories’ Governments.
P&O Ferries
(2 years ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Rosser (Lab)
A week ago, I asked the Government what had happened to the two commitments given on 25 June 2020 to
“consider other options in regard to these operations”—
that is, low-cost employment models on some ferry routes—and to
“consider whether further changes are required when the Equality Act regulations are reviewed towards the end of this year”,—[Official Report, 25/6/20; col. 431.]
that is, the end of 2020, in relation to nationality-based differential pay in the maritime sector, the only sector where this operates. Last week the Government conceded that the review had not been completed. In other words, the Government have known about the issues over differential pay levels, which are at the heart of this dispute, and have done nothing about them over the past year and three-quarters. As a result, we now have this unacceptable crisis situation with P&O Ferries and DP World: 800 people are losing their jobs and P&O Ferries is taking unacceptable profit-maximising or loss-reduction action that was wholly predictable, as the Government have known for at least one and three-quarter years. Why have the Government failed to act over that period?
The Parliamentary Under-Secretary of State, Department for Transport (Baroness Vere of Norbiton) (Con)
My Lords, the Government share the outrage expressed by the noble Lord at the behaviour of DP World and P&O Ferries. When they are developed and ready, which I expect to be shortly, we will update the House on a package of measures to ensure that P&O Ferries cannot see through its plans. We will address the immediate challenges faced by those affected and include measures to strengthen legal protections, including coverage of the national minimum wage.
Baroness Randerson (LD)
My Lords, in 2020, when the Government announced that UK seafarers would be entitled to the minimum wage, they made the exception of ships exercising innocent passage and transit passage through UK waters. P&O Ferries is not the only company doing that. Can the Minister explain why the exception was made? Can she tell us whether the Government are aware of any other ferry companies operating in that way which are seeking to exploit this loophole on pay? Can the Government confirm that they will not repeat the PR disaster that P&O Ferries has made by continuing to work with the company on its freeport programme or any other government-based project?
Baroness Vere of Norbiton (Con)
I can reassure the noble Baroness that we are looking at all relationships that the Government have with DP World and with P&O Ferries. We will develop our thinking on that as more information comes forward. We are in conversation with the unions and other operators as part of an ongoing, constructive dialogue about the package of measures which will be announced shortly. I reassure the noble Baroness that we are able to provide greater employment rights to seafarers operating in UK waters than to those operating on international services, where the rights are different and come under different law.
Lord Balfe (Con)
My Lords, does the Minister accept that, although the Government seemed to be a bit slow off the mark, the measures now taken are appreciated by the many trade unionists who have lost their jobs? I encourage the Government to maintain this pressure on P&O and to look at other ways in which this company can be made to realise that its behaviour is unacceptable and will have consequences.
Baroness Vere of Norbiton (Con)
I can reassure my noble friend that we are maintaining the pressure on P&O Ferries. The Secretary of State wrote to the chief executive of P&O Ferries yesterday, explicitly asking him to reconsider the actions that it is taking, to take the opportunity to do right by its workforce, and then to return to the table to have discussions with seafarers to ensure that we can find a way forward.
Lord Lennie (Lab)
My Lords, now that Mr Hebblethwaite has apparently rejected the Government’s proposals which they made to him in writing yesterday, where they explained that they wanted him to re-engage the workforce, how will the Government ensure that he does it?
Baroness Vere of Norbiton (Con)
I too noticed that a letter from Mr Hebblethwaite had been published on Twitter earlier today. Unfortunately, I do not have an update following that letter. Obviously, we are considering his response and will have an update in due course, while of course working speedily on a package of measures. We note the response from Mr Hebblethwaite; we have views on that.
Lord Cormack (Con)
What are we going to do to put Mr Hebblethwaite on the spot and make sure that the 800 people who have been shamefully and appallingly treated get some recompense? What about the remark that he made about compensation? Has he explained what he means by that?
Baroness Vere of Norbiton (Con)
We are aware that Mr Hebblethwaite has made a number of remarks recently. We are trying to get to the bottom of them. We are also trying to get to the bottom of the explanations by P&O Ferries for some of the actions that it has taken recently. We are looking at them to establish whether they are legal. We are also aware of some suggestions that there have been breaches of the national minimum wage. Therefore, the Business Secretary has asked the Employment Agency Standards Inspectorate to investigate that. Of course, the Maritime and Coastguard Agency is inspecting every single ship that is due to sail on these routes. To date, two have failed their inspections and therefore further work is required.
Lord Hendy (Lab)
The noble Baroness is to be congratulated that a package of measures is to be introduced, late thought it may be, but will that package include the preservation of the right to collective bargaining and consultation, which this company so clearly flouted?
Baroness Vere of Norbiton (Con)
When it comes to collective bargaining and negotiations with the unions, we need to get to the bottom of whether the existing law was disregarded in this case. Mr Hebblethwaite seemed to suggest that it might have been, which was unwise.
Viscount Hailsham (Con)
Does the inspection by the Maritime and Coastguard Agency extend to the competence of the agency workers who have been recruited or is it simply as to the quality of the ship itself?
Baroness Vere of Norbiton (Con)
I can reassure my noble friend that the port state control inspections being undertaken on all affected vessels include a normal PSC inspection. They also look at crew employment contracts, crew qualifications, crew familiarisation and emergency preparedness.
Lord West of Spithead (Lab)
My Lords, 40 years ago next month, a task force went to the south Atlantic. It had 73 merchant ships. The bulk of the people on board those were of course British merchant seamen, because when we fight a war with our merchant ships, we need British merchant seamen there. Part of the problem with all the complexity in this area is that it has driven British merchant seamen out of the business. Do the Government have any plans to ensure that we have sufficient merchant seamen for any strategic needs we might have in the future?
Baroness Vere of Norbiton (Con)
Yes, the Government are well aware of that issue. We started the work back in 2019 when we published Maritime 2050. We want to ensure that we have British people with the right skills to work on British ships in British-based operations.
Lord McCrea of Magherafelt and Cookstown (DUP)
My Lords, surely letters from Ministers will not be sufficient to solve this problem. The deadline for workers to accept the terms put forward by P&O is fast approaching. Legislation will be urgently needed to resolve the situation for workers who have been so cruelly abused by P&O.
Baroness Vere of Norbiton (Con)
All I can say to the noble Lord is to reiterate what I have already said: we are working at pace on a package of measures which we hope to announce very shortly.
Lord Snape (Lab)
My Lords, does the Minister agree that it is not just P&O, appalling though its conduct has been? Will she answer the question from the Liberal Democrat Front Bench and tell us how many other shipping companies which ply British waters are not meeting the British minimum wage?
Baroness Vere of Norbiton (Con)
I do not have that information to hand. However, following our discussions with the operators, I will certainly write to the noble Lord about the package of measures and how they may operate in the future.
Baroness Bennett of Manor Castle (GP)
My Lords, a statement made in the other place said that the Government are continuing to review the contracts which P&O Ferries has with them. Does that include reviewing the contracts with DP World, the owner of P&O Ferries and, specifically, the freeports contracts?
Baroness Vere of Norbiton (Con)
I reassure the noble Baroness that we are reviewing all of our relationships and contracts with both P&O Ferries and DP World.
Lord Berkeley (Lab)
My Lords, following on from the questions from my noble friend Lord Snape and the noble Baroness, Lady Randerson, can the Minister explain the difference in employment rights and arrangements between the various ships operating in UK waters? What are UK waters? Do they include Dover to Calais, Northern Ireland to Scotland or England, and—I think probably not—Dublin to Holyhead? How do these arrangements vary or differ from the contracts for ships which may be registered in the UK but are longer distance and still international, carrying containers or oil? There seems to be a lot of confusion, which I suspect P&O directors are trying to take advantage of by various devious means.
Baroness Vere of Norbiton (Con)
The noble Lord has highlighted the complexity of employment law in the maritime sector. The International Labour Organization has the Maritime Labour Convention, which sets out the minimum standards for some key employment and working conditions policy areas. However, it does not go nearly as far as we are able to go from a UK perspective for seafarers who are UK residents, work on a UK-registered vessel and are ordinarily working in the UK. We are able to offer them the same levels of protections as they would get if they were working onshore.
Building Safety Bill
Tuesday 29th March 2022
(2 years ago)
Lords ChamberRead Full debate Building Safety Act 2022 View all Building Safety Act 2022 Debates 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.
Schools White Paper
(2 years ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Watson of Invergowrie (Lab)
My Lords, I thank the Minister for the briefing that she and her officials provided for the Labour education team yesterday.
This White Paper is a thin document that we believe represents a missed opportunity in many ways. Paragraph 123 says:
“The system that has evolved over the past decade is messy and often confusing … Unclear expectations of academies and local authorities permit grey areas which have sometimes allowed vulnerable children to fall through the gaps. Government has not been able to intervene adequately in the small number of trusts that have fallen short in the expectations of parents”.
So what have the last 12 years been all about?
Other than an attainment increase at key stage 2 and GCSE, for which there is minimal detail, this White Paper betrays a real lack of ambition by the Government. When the headline soundbite is some schools staying open for 10 or 15 minutes longer, there is something seriously lacking.
The Secretary of State would have done well to have studied the speech given by his shadow, Bridget Phillipson, at the ASCL conference earlier this month, where she spoke about the broader aims of education and the importance of soft skills, creativity and balance in the curriculum. The White Paper never really gets beyond a fixation with maths and English.
There is no recognition of why many employers are seriously critical of the current school system and curriculum. There is seemingly no understanding that England is becoming an outlier internationally in its narrowness and fixation on academic subjects and end-of-course exams. There is no attempt to set out a vision of what education is for and of the kind of world that we are preparing children for.
There are no funding commitments of any seriousness, and inflation will surely erode much of what has already been agreed. This needs to be seen in the context of the new funding formula, which has been introduced at the expense of the most disadvantaged areas and is quite contrary to the Government’s levelling up ambition.
One proposal that I welcome is the introduction of a register for children not in school, which is long overdue, not least in terms of safeguarding issues.
On structures, some potentially interesting changes are proposed, but without the detail it is hard to assess them. It could imply the effective replacement of individual funding agreements by a statutory framework. It could imply the end of the free school programme except where there is a demographic need for new schools. In recent weeks, the education media have been fed stories of all schools being forced to become academies. The White Paper does not state that explicitly. Can the Minister clarify the Government’s intent? I read paragraph 146 as enabling forced academisation where the local authority wants it, irrespective of what individual schools want, as has been the case in places such as Hull, Leicestershire and Thurrock.
The Government admit that contracting with academy trusts is at an end and will be replaced with “academy trust standards”. No further information is given. Is this a return to direct grant schools, which Labour abolished in the late 1970s, with academies remaining independent schools? Is the intention to set up a new type of school which is “Secretary of State maintained” rather than local authority maintained, similar to the grant-maintained schools? We just do not know, and there is scant evidence that the Government do either.
The premise that trusts are the best way of organising schools is asserted but not proved. Occasionally, data is cherry picked. I ask the Minister how many trusts do not contain 7,500 pupils, which is said to be the benchmark for efficiency and effectiveness. How does the DfE propose to deal with the many trusts that are not that size? Talk of a family of schools quickly comes up against a basic problem: that of geography. How can you have a family of schools scattered the length of the country?
Chapter 3 focuses on targeted support. There is no definition of students falling behind, but the White Paper says that you must not label children as “behind”. Can the Minister clarify where the funding for this support will come from? Of course, the elephant in the room on the whole question of education recovery is the Chancellor. Sir Kevan Collins knew exactly how much was required to deliver meaningful programmes, but the Chancellor callously put his red pen through it and hundreds of thousands of children throughout the country are living with the consequences of his parsimony. Yesterday’s DfE-commissioned report on pupil learning loss from the pandemic bears that out.
There is no recognition of the huge issues in teacher recruitment at present but quite a lot about the current attempts to change initial teacher training, with the imposition of a political ideology on all stages of teacher development. The proposals around the Oak academy turning into a provider of resources and lesson plans could be a worrying step towards enforcing a national model of pedagogy and curriculum content.
After two years of pandemic chaos and six years since the Government’s last schools strategy, this plan will leave parents, teachers and pupils wondering where the ambition for children’s futures is. Clearly, it is not with this Government.
Lord Storey (LD)
My Lords, I apologise for being a few minutes late; I hope that I shall not be sent to the back of the class.
I thank the Minister for the Statement. I like the tone of it; I like the fact that we are celebrating schools and the hard work that teachers do. I detect a real change in the way that we look at our education system.
All the research shows that parents are not interested in structures. We go on about academies, academy chains and LEA schools, but parents want good teachers, good leadership of a school and a curriculum which excites, motivates and enthuses pupils. I am afraid that we get hung up far too often on structures. I think I detect the glimmer of hope that we will again move away from the notion that structures are the way forward—they are not; it has to be about the quality of the education provision and of the teacher.
Turning to academy trusts—we have long debated this in the past—I have a number of observations resulting from the Statement. First, we hear that the voice of the parent should be heard. Perhaps the Minister could assure us that those academy trusts—few, thank goodness—which have done away with governing bodies for each school will be a thing of the past. Schools, even in multi-academy trusts, need to have a governing body, particularly so the parent voice can be heard.
My second observation, which I raised time and again with the Minister in the Lords before this Minister, is about chief executives of academy trusts and how their salaries have got completely out of control—some are getting up to £300,000. Over the last two or three years the number of chief executives of even small academy trusts earning more than £100,000 has grown. I remember the noble Lord, Lord Agnew, assuring us that he was going to tackle this issue, but his tackling of the issue has seen the problem escalate rather than get better.
As was mentioned in Oral Questions, academies can choose the curriculum they want. There are certain things which are crucial for all children. Again, when we discuss the White Paper, we need to look at giving all schools the same freedoms and opportunities, but with those freedoms come responsibilities. There are areas of the education curriculum where we should ensure that every school, whether a local authority academy—there is a new thing—a free school, or, if they still exist, any local authority schools not in academy trusts, must teach.
One thing that slightly jarred with me in the Statement was that only one school was mentioned. It was not that anything this school—Oak National Academy—had done was wrong, just that only one was picked out. A teacher would not pick out one clever pupil in the class, they would celebrate the whole class. There are lots of examples of schools which have done just as much, if not more, innovative things than the Oak National Academy. That jarred slightly.
This afternoon we talked about creative subjects and the EBacc. I challenged the Minister to give a direct reply, which she was not able to do, and I understand why. The White Paper will give us all an opportunity to explore the effect the EBacc has had on certain subjects in the curriculum. It might well be—it is not my particular wish, but I got this sense from the Minister’s reply—that she sees T-levels as providing the less academic, more vocational route, hence they would not be part of the EBacc. That would be a grave mistake and the EBacc should encourage creative subjects as well.
I am pleased the Government have listened to the issue of a national school register, but there are a number of other matters, as the Minister well knows, such as unregistered schools. One of the reasons we are not able to take action against unregistered schools, as Ofsted will tell you, is that they can morph into very small units. Unless we are prepared to see home education treated in a different way, it will be very difficult to deal with unregistered schools. That is an area where we need to focus.
We are told that Ofsted will inspect all schools. That is right, but let us remember that schools have been through a terrible time just keeping the doors open and keeping children educated. I would hope that Ofsted would be more about an opportunity to work with schools and would offer a supportive inspection. Rather than waving a big stick where perhaps the wheels have wobbled during the pandemic or things have gone wrong, I hope that Ofsted might proverbially put its arm around the school and say, “Look, these are the issues that need sorting out.”
I have a few questions. First, we know that children from deprived communities have suffered the most for all the reasons that we have debated and discussed in the past. I was a bit disappointed that that issue was not particularly addressed in the comments. Secondly, children have missed out on extra-curricular social and academic experiences—opportunities to develop the skills that they will need for the future. Why have the Government not used the first White Paper in six years to change and expand the range of opportunities that are given to children? Where is the ambition?
The White Paper has so far had quite surprisingly mixed reviews. Geoff Barton, general secretary of the Association of School and College Leaders, said that, although the paper outlined promising measures, it lacked ambition or “big ideas”. The Education Policy Institute think tank said that pushing all schools to become academies was “no silver bullet”, and that, although the White Paper contained “some bold aims”, it seemed
“unlikely that many of these bold pledges will … be met.”
My party looks forward to the opportunity that this White Paper gives to address not just the questions that I have raised or those raised by the noble Lord, Lord Watson, but issues such as children being permanently excluded from school, how they are treated, and how we need to make sure that we give them a much better opportunity and a much better education. I look forward to working with the Government on the White Paper.
The Parliamentary Under-Secretary of State, Department for Education (Baroness Barran)
My Lords, I thank both noble Lords for their remarks. I will do my best to respond to them now, but I look forward to further opportunities to discuss the White Paper in more detail.
The noble Lord, Lord Watson, asked where all this comes from and criticised the thinness of the document. The White Paper stems from a very clear ambition for our children at every stage of their schooling and beyond. We have approached this by trying to understand what is already working well in our school system and scaling that up. The gap between what the best schools and trusts achieve for our children at key stage 2 and key stage 4, and what that means for their future prospects, is very sizeable, particularly for disadvantaged children. Our focus is on scaling up what works and has been shown to work over the last 12 years.
The big idea is to make that work on a national scale. I understand why the noble Lord questions where the sparkly new policies are. There are, of course, new elements within the White Paper but the big, difficult idea and the hardest thing to do will be to scale up that quality. Our ambition is crystal clear: it is about quality for all our children. We have approached it in a spirit of looking at the evidence and being very transparent about that evidence. I hope that the noble Lord will have a moment to look at the data annexe that sits with the White Paper; it is not in the hard copy but is available online. I hope he will feel that it is anything but cherry picked. We have made every effort to be as transparent as possible, including both data that supports our arguments and data that does not, so that we can show how we have reached our conclusions. Most importantly, we have approached this in a spirit of fairness—it should feel fair to all of the actors in the system as we move forward.
The noble Lord asks why we have a fixation on academic standards, particularly in English and maths. Of children who did not reach the expected standard at key stage 2, just 21% achieved grade 4 or above in English language at GCSE and only 14% achieved that at key stage 4 in 2019. Of those with five or more GSCEs, 55% completed a degree, compared to 6% of those with fewer; post GCSE, they are 16 percentage points more likely to be employed, and they earn on average £9,000 more a year. I could go on. The impact on the economy is massive—these are huge and important markers at the start of a child’s life which translate to their future prospects, their future social mobility and the future health and wealth of them, their families and our nation.
I did not follow the noble Lord’s argument on the funding formula. It is clearly not at the expense of disadvantaged areas—quite the reverse. We currently have an outdated mechanism for funding our schools. We now have a national funding formula, and we will be working progressively and incrementally to make sure that funding goes to schools directly in response to the need and nature of the cohort that they serve.
The noble Lord also asked about compulsion and requiring schools to become academies. We are keen and have worked very hard in this White Paper to try to make sure everyone involved in the schools system feels they are part of this journey. We are considering all options, and we will engage with the sector to deliver a fully trust-led system.
The noble Lord, Lord Storey, talked about the importance of local governing bodies. In preparing the White Paper, we—and I personally—spent a great deal of time with local authority-maintained school heads, particularly primary school heads. One of the things they talked about that was almost universal was a sense of being local and part of their local community. Therefore, in the governance plank of the five planks of our “strong trusts” framework, we are clear that schools need to feel local, have a sense of local identity and have a role in their local community.
The noble Lord, Lord Watson, talked about families of schools and families being strung out across the country. I will not take the analogy too far, but we will be working hard on commissioning to make sure we have geographically coherent trusts, so they can benefit from all that that offers.
The noble Lord, Lord Storey, talked about CEO salaries. We take that seriously and are continuing to follow on from the good work of my noble friend Lord Agnew. The Oak National Academy is not an individual school; it was the platform that was created during the pandemic that delivered all the digital lessons for children across the country. I apologise if the name was confusing.
To finish, the noble Lords, Lord Storey and Lord Watson, said we would need a number of measures to turn things around for our children. That is what is in this White Paper—it is about great teachers, a great curriculum, good attendance, good behaviour, a pledge to parents if their children fall behind, and creating a system that delivers the strongest, fairest and most ambitious school system for our children.
Baroness Blower (Lab)
My Lords, I do not doubt the commitment of the Minister to equality for all children. However, in responding to the White Paper, the National Children’s Bureau comments that too many children still live in poverty. That must be addressed for education success to follow. The White Paper has left many in education underwhelmed and, as my noble friend Lord Watson said, it has left our schools underfunded.
In all the years that academisation has been an option, only 44% of schools have taken it, some voluntarily, often with inducements, and some not. No solid evidence can be adduced that academy status per se equates to better outcomes for young people. School leaders have declared that total forced academisation would be a distraction, so why does the Minister think that politicians know better than school leaders?
With one in six children reporting mental health difficulties, an opportunity to reassess assessment and the curriculum should have been taken. The potential for centralisation of pedagogy through Oak Academy is a problem. It looks like deskilling our teachers, with talk of “delivering” lessons. While the White Paper is about England, will the Government take the opportunity to learn from the very good practice in evidence in Scotland and Wales, including on school governance, curriculum and assessment?
Baroness Barran (Con)
I thank the noble Baroness for her remarks. On academisation, she will be aware that the picture is very different in secondary and primary education. About 78% of secondary schools are now academies compared to about 38% of primaries. She questions their performance. Our emphasis has been very clear. We are talking about creating strong trusts and we are building on the experience of the existing strong trusts. If all children did as well as pupils in the top-performing 10% of trusts at key stage 2, our results nationally would be 14 percentage points higher, going from 65% to 79%, and would be 19 percentage points higher for disadvantaged pupils. I know the noble Baroness shares my passion and the passion of my colleagues in the department for supporting particularly those disadvantaged children.
On Oak Academy, far from deskilling teachers, we are going to make the most enormous investment in teachers in terms of teacher training opportunities and continuing professional development at all stages of a teacher’s career. We are aware that, particularly in primary, individual teachers are writing lesson plans from scratch. Oak Academy is by teachers, for teachers and of teachers. It is there as an option for teachers. Again, I know the noble Baroness shares our concerns about teacher workload. One way we can support teachers is by providing them with the best-quality curriculum to draw from.
The Lord Bishop of Worcester
My Lords, I echo the noble Lord, Lord Storey, in his thanks for the White Paper. In doing so, I declare my interest as president of the Woodard Corporation. In expressing gratitude, I appreciate in particular how the White Paper recognises the vital role the Churches have played in the educational landscape of this country for more than 200 years and that it sets out how the role needs to continue to be enabled in the future development of the school system. I will focus on two questions regarding the move towards the fully academised educational landscape set out in the White Paper and invite the Minister to agree that it requires two key things.
First, it requires significant investment of resource to make that transition possible. The Church of England is the largest provider of academies, with over 1,500 of our schools having already converted, but that still leaves two-thirds of our schools waiting to become academies. This will require time and resource for the conversion process, as well as strong, new trusts to be formed to enable that transition. Recognition that MATs must grow to a sustainable level of about 7,500 pupils means thinking carefully and strategically about small rural schools and how a funding model can work for them, to enable their vital education to remain at the heart of communities, particularly rural communities, across our land.
Secondly, I hope the noble Baroness can give assurance that legislation will be introduced to ensure that the statutory basis on which the dual system of Church and state as partners in education, which has been in operation since 1944, securely translates into the contractual context in which academies are based, so that the sites on which schools are situated can continue to be used for the charitable purposes for which they were given. So, in expressing thanks, I ask the noble Baroness to assure us that these things will be addressed and secured in order to ensure that Church schools can approach this new future with confidence.
Baroness Barran (Con)
I thank the right reverend Prelate for his questions. I also extend my thanks to Church schools but also to all schools that have been working in the most difficult circumstances, particularly in the second half of this term, with the pressures that Covid has placed, once again, on their staff. I can, I hope, reassure the right reverend Prelate that we will be protecting the faith designation of diocesan schools on a statutory basis as we move forward with our plans. We are providing funding to support academisation and to make sure that schools, particularly schools in the most entrenched areas of educational underperformance, are funded to join strong trusts.
On small rural schools—to go back to the point of the noble Lord, Lord Storey, about feeling local—perhaps there are no schools more local than small rural primaries, which often play a really important part in their community. We will be putting a great deal of thought into this and look forward to working with the right reverend Prelate’s colleagues at the diocesan education board in thinking through how we can deliver this in a way that supports small rural primaries.
Baroness Bottomley of Nettlestone (Con)
My Lords, the Secretary of State deserves the warmest congratulations, with the ministerial team and all those officials and others who have been involved in Opportunity for All: Strong Schools with Great Teachers for your Child. I suggest that anyone who thinks there is excessive focus on English and maths should consult parents. Parents want their children to read and write; parents know the world is difficult; they know that numeracy and now digital skills are critical. They know that a good education is the passport for the future, and the most disadvantaged parents know that quite as much as the most affluent. I really like this White Paper for its coherence, its ambition, its relative simplicity and its evidence base. How many times have we all heard head teachers saying, “I’ve had so many documents come through that I have to read—I’ve got to teach my school and do everything else”? Somebody once said to me, “I’ve given the documents to my husband to read because I just don’t have time to read it all.” This is accessible and approachable.
Children spend around 15,000 hours at school; the same amount of time as they spend at home. Professor Sir Michael Rutter, the architect of child psychiatry, wrote a book, Fifteen Thousand Hours, with the team at the Maudsley, comparing the output of 12 secondary schools in Southwark. They found that the brightest children at some schools were doing worse than the least able children at another school. This is about teachers, about expectations and about rigour. For those of us who want to see what can be achieved, we can only celebrate again the extraordinary results at the Brampton Manor Academy. This year, 89 young people got Oxbridge offers—ethnic minorities, school meals, first generation university.
I have so much to say, I had better be quick. I have two questions I want to ask. Will the Minister say a little more about the Education Endowment Foundation; and will she say just a bit more about excluded pupils? They are a really vexed problem. They can be disruptive in a class aiming for high standards, but we do not want them to fall out of the system, so I very much hope she will address that.
Baroness Barran (Con)
My Lords, I will pass on my noble friend’s very warm words to my right honourable friend the Secretary of State. I am glad that she appreciates the White Paper. I agree with her wholeheartedly about what parents want. I was lucky enough to spend some time with a group of parents yesterday while visiting a school in Newham, where 94% of the children have English as an additional language. The mothers and fathers to whom I spoke were all crystal clear about how important it was for their children to achieve.
In relation to my noble friend’s specific questions, the Education Endowment Foundation, which we fully endowed through, and announced in, the White Paper, provides us with the academic rigour in terms of evaluating different interventions across the education system, so that teachers, school leaders and MAT leaders can feel confident in the interventions that they use. All that we have suggested in the White Paper has been supported and recommended by the EEF. In relation to excluded children, if my noble friend will bear with me for another day, we are taking the Statement about the special educational needs and alternative provision Green Paper in this House tomorrow, when I will be delighted to talk about that in more detail.
Lord Addington (LD)
My Lords, there is a great deal in this White Paper on special educational needs and teacher training. Indeed, teacher training is the main thrust of it. Then we talk about 90% literacy. Some 15%—or 10% if you are being conservative—of the population are dyslexic. Another 5% are dyscalculic. If you put the other “disses” in there, you have a great pot of people who are going to struggle in the classroom. How, unless you have a major investment in special educational needs, are you going to hit that target? Or are we going to do something very sensible such as saying that if somebody communicates through a computer coherently—every computer that you buy now has a built-in voice-operated section and read-back facility—we will count that as being literate? If we are, we can achieve it. If not, we are basically going to break the back of people achieving an unrealistic target if it is still with a pen and paper. If the Minister can give me an answer now, it will help the rest of the debate today, and the debate on the Statement tomorrow.
Baroness Barran (Con)
I hope I can give the noble Lord a fuller answer tomorrow, when we talk about the SEND Green Paper. But in terms of this document talking a lot about children with special educational needs and disabilities, that is intentional. We are absolutely clear that the best place for the majority of children with special educational needs is in mainstream education close to their home and their friends. We need to make sure that mainstream schools are a safe, welcoming, supportive and effective environment for those children. We have looked at and tried to model the interventions that are set out in the White Paper to see how we can reach the targets that we have set out. As the noble Lord knows, however, currently only 22% of children with special educational needs reach the expected standard, compared with an average at key stage 2 of 65%—so it is well below what we need to get to.
Baroness Bennett of Manor Castle (GP)
My Lords, one of the themes that the White Paper majors on is listening to the voices of parents and making sure that they are heard. However, More Than a Score and Parentkind today put out a survey from YouGov, showing that 80% of parents think that SATs do not provide useful information about a child’s progress; 95% say SATs have a negative impact on their child’s well-being; and 85% do not consider SATs results when choosing a school. Only 1% of the members of the National Association of Head Teachers thought that key stage 1 SATs should go ahead this year; 3% thought that key stage 2 should go ahead. The White Paper is on the bigger, longer-term issues, but are we not seeing, both in terms of the Government’s determination to push ahead with SATs and in terms of the focus on academic targets and testing in this White Paper, a push to schools to more and more teach to the test in a narrow range of subjects? Are we yet again not listening to parents and not listening to pupils? I take the point from the noble Baroness, Lady Bottomley, about pupils spending 15,000 hours in school. We have the unhappiest children in Europe. We are failing our children, and focusing just on tests in a narrow range of subjects is a big part of that. Will the Government think about the happiness of our children?
Baroness Barran (Con)
The Government think a lot about the happiness of our children. We worry a lot about the children who are in underperforming schools, and where their life chances are being held back because of the nature of the education they receive. This is why we are focusing our education investment on areas of really entrenched under-performance. The noble Baroness shakes her head, but 54% of children in secondary schools in Knowsley today are in schools which have been judged more than twice as requiring more improvement. That is what will turn around our children’s life chances, and that is where we are focusing.
Lord Davies of Brixton (Lab)
I thank the Minister for the answers she has given. I welcome the ambition of the Government’s policies as set out in the White Paper. I will look at the statistics they have provided with some care. Are such statistics in a White Paper run past the UK Statistics Authority—not just the figures, but the conclusions drawn from them? It would be useful if we could be told.
I hope I will be forgiven if I suggest, for those with long enough memories, that the support expressed in the White Paper for well-managed families of schools delivering high-quality and inclusive education, coupled with the encouragement in the White Paper for LEAs to establish their own strong trusts, might be taken as an attempt to recreate the achievements of the Inner London Education Authority after many years. Of course, the fear of many people is that academies—particularly when we have multi-academy trusts—lead, in effect, to the privatisation of the education service. The distinction between an MAT and a commercial organisation is often hard to discern.
My first question for the Minister is, what are the Government going to do to ensure that all academies, whether SAT or MAT, operate with a social purpose? My second question, given the emphasis on what parents want from education in the previous question, is, what role do the Government want for parents in the governance of academies? There is a reference in the White Paper to a review of the governance of the system, but it is notable that in the document, The Case for a Fully Trust-Led System, there is only one reference to parents, and then only as passive observers. Should the Government not do more to enable the participation of parents in school governance?
Baroness Barran (Con)
I am really puzzled by the image the noble Lord paints of multi-academy trusts representing privatisation. They receive exactly the same funding as any other state-maintained school, and they are inspected in exactly the same way. The majority of them are charities. I am not sure quite where privatisation comes in. What we see in the best trusts—and perhaps this is behind the noble Lord’s question—is that they use the resources from the taxpayer intelligently, in the interests of the child. I will give an example from the north-east of England. I recently visited a trust which, through better procurement, was able to reinvest those savings in dedicated tutoring for all their students. I do not know where the noble Lord’s concern comes from, but I genuinely think it is misplaced.
I turn to the noble Lord’s second point, about trust standards. We will be working with this sector. There is not a lot of detail in the White Paper because we want to co-create those standards together with the sector, and we look forward to reporting back more on that in the future. This would, of course, include the role of parents.