House of Commons (22) - Commons Chamber (9) / Westminster Hall (6) / Written Statements (4) / Public Bill Committees (3)
House of Lords (16) - Lords Chamber (16)
My Lords, I regret to inform the House of the death of the noble Lord, Lord Stunell, on Monday 29 April. On behalf of the House, I extend our condolences to the noble Lord’s family and friends.
(5 months, 1 week ago)
Lords ChamberTo ask His Majesty’s Government what proposals they are considering to reform the House of Lords, in particular with regard to the size of the House.
My Lords, I start by sharing the sadness at the sudden death of Lord Stunell.
The House of Lords plays a crucial role by scrutinising, debating and holding the Government to account. However, reform, including in relation to the size and membership of this House, is not a priority in this Parliament.
My Lords, the noble Lord, Lord Campbell-Savours, is participating remotely.
My Lords, I will ask a very simple question. Due to the ageing nature of Labour’s membership of the House, we are now down to as few as 100 Labour Peers regularly attending proceedings. Meanwhile, the Government are openly challenging the excellent and well thought-through Fowler-McFall reforms with a stream of their own introductions, bringing the Conservative membership to nearly 300. If a Labour Government are elected, how can we possibly secure the public business against a background of such overwhelming odds? Is the Government’s strategy to fill the House to capacity and make it difficult for Labour to appoint without further breaching the reforms?
I thank the noble Lord for his Question. On the numbers, we now have 787 Members. The Conservatives have 277 Members, 35% of the House. As the noble Lord points out, the Labour Members are fewer: 172 Members, 22%. But the appointments that have been made, which he referred to, have not changed the dial. It is still hard for the Government to get their business through the Lords, and the numbers fall a long way away from the make-up of the House of Commons, where 53% are still Conservatives. Our priority is to ensure that this House continues to play its important role in scrutinising and revising legislation, which is what the country wants the House of Lords to do.
I thank the Minister for paying tribute to our dear colleague, Andrew Stunell, whom we have lost.
Given that the Government have no time left in this Parliament for fundamental reform—I agree on that—why have they continued to appoint Peers at a rate that clearly prejudices any claim the House has to be generally representative? There have been 74 new Peers. Is the Government’s intention to maintain a situation in which they can always dismiss the views represented by the House of Lords when it is arguing with the Commons, on the grounds that we are not sufficiently democratically representative?
I did not give the Liberal Democrat numbers, but there are 80 Liberal Democrat Members—10% of the House—which is a lot more than in the House of Commons. It is important that we continue to refresh the Benches in this House. There has been a good process of parties encouraging retirements at the right stage. Sadly, we lose people; we have just lost Lord Stunell, and we lost Lord Field last week. It is necessary to continue to make appointments, and it is the Prime Minister’s prerogative to advise the sovereign as to who should join this House. There have been some recent appointments to the Labour Benches, which I very much welcomed.
My Lords, further to that last question, is it not the case, as my noble friend pointed out, that the one party overrepresented in this House is the Liberals? Is it not also the case that the Government lost at least two votes this week because of people voting remotely?
The noble Lord is right that it has been an extraordinary week in that we have had such close votes. I agree with the general sentiment of what he is trying to say. What is really important about this House—people who admire this House say the same—is that we have a different, unique mix of expertise, age, where people come from and the jobs that they have done; some are part-time while others, such as the Front Benches, turn up regularly. That makes for better legislation and better policy-making.
My Lords, I express from these Benches our sadness at the loss of Lord Stunell, a dedicated public servant; our thoughts are with his family and friends, and especially his friends and colleagues on the Liberal Democrat Benches.
Is the Minister comfortable with the fact that when Labour left office in 2010, there were 24 more Labour Peers than Conservative Peers serving in your Lordships’ House, while today, after 14 years of Conservative government, there are over 100 more Peers on the Government Benches than on the Labour Benches? Does she think this disparity is in the interests of the House?
It is important that the House is refreshed, and I have already explained that the current Prime Minister recently encouraged Labour to put forward candidates for peerages—I am particularly pleased to see the noble Lord, Lord Hannett, with whom I used to work when we were in retail together. The numbers change over time. There are large numbers on the Cross Benches as well as on the party Benches. We have to make sure that we scrutinise the legislation, do our job and refresh the House from time to time. I am grateful for the work that all the parties have done in encouraging retirement and supporting new people to join this House with new perspectives.
My Lords, in considering changes to the House of Lords, many advocate an elected Chamber. But I suggest that it is usually good practice, before determining the composition of any group, to first consider its function—function before form. I think many would agree that the function of this House, as articulated by the Minister, is as a scrutinising, revising Chamber to make legislation better. In considering that, does the Minister agree that an appointed Chamber, as now, is better placed to deliver that function than an elected Chamber?
I agree that an elected Chamber has problems, because there would inevitably be a clash with the Commons and indeed the devolved legislatures. An appointed Chamber allows the Commons to prevail constitutionally and serve constituents across the country. Reform is not ruled out in the longer term but we have been very clear, certainly ever since I joined the Front Bench, that we should not have piecemeal reform and that any reform should be very careful, considered and comprehensive.
My Lords, I remind the House of one of the greatest reforms of the House of Lords, which I am sure the vast majority of noble Lords agree with, brought in by a Conservative Government—the Life Peerages Act in the 1950s.
I agree with my noble friend, who always has good historical angles, that the Act was a great move forward. Many of us who are lucky enough to serve in this House benefit from that excellent constitutional change.
My Lords, surely our objective is the reduction of the number in the House, which is continually criticised outside this place. Can we not revisit the excellent report submitted some years ago by the noble Lord, Lord Burns, who is in his place? Can we not persuade Governments at least to abide by that report or stop complaining about the size of the House?
I pay tribute to the work that the noble Lord, Lord Burns, and his committee did, but a number of Administrations have not signed up to those recommendations and have not wanted to move in the direction of a cap. I think I understand why. You want to focus on the number of Peers who attend, not simply the overall figure. As I have tried to explain, we have a mixture of full-time Peers and some who contribute only occasionally but bring unique insights to what they do. It is a little unclear, when people are made Peers, whether they will not come very often—which is certainly what I intended when I became a Peer—or end up contributing in a very substantial way, particularly at different parts of their career.
My Lords, the Minister talked eloquently about the important role of this House, but why will the Government Front Bench not recognise that public opinion on the role of this House and the quality of its work is diminished badly by the criticisms of its size and the appointments process by which people get here? Will she not reconsider her view about piecemeal reform, which is the only way we ever get anywhere in this House, and look at having a statutory appointments commission with proper scrutiny powers over appointments?
There were a lot of points there. There are many ideas for reform, some of which have a lot of merit, but to take the final point about making HOLAC statutory, I do not favour that. It is the prerogative of the Prime Minister and the sovereign to appoint. We really value the work done by HOLAC and its new chair, the noble Baroness, Lady Deech, in ensuring the propriety of proposals that come forward, but we do not believe we should move the composition of the House away from nomination by a democratically elected person to a more corporate model. That would be a mistake. On the popularity of the House of Lords, when you talk to people about the work we do, they are much more understanding. We need to get about and explain the work we do in revising legislation and in helping the country to come to better conclusions on matters of policy.
(5 months, 1 week ago)
Lords ChamberTo ask His Majesty’s Government what estimates have been made of the distributable reserves of each water company now that OFWAT has taken powers under the Environment Act 2021 to change their licence conditions, including whether they can pay dividends.
My Lords, I declare my interests as set out in the register. The best proxy for distributable reserves is retained profits. This is the profit and loss reserve on a company’s balance sheet. Company boards are responsible for determining how much of their profit and loss reserves is distributed. The Government have not carried out an exercise to calculate each company’s distributable reserves. Where a company in cash lock-up breaches its licence by paying a dividend, Ofwat will take enforcement action.
My Lords, as I have previously pointed out in this House, water company accounts are not only massaged but cooked and roasted with abusive accounting practices. Ofwat and the Government have said that under certain circumstances they will block the payment of dividends, which presupposes that they know what the legally defined distributable profits of each company are. The Minister has just said that the Government have not got a clue; therefore, there is no way of knowing whether any of those dividend payments is actually lawful. Can the Minister explain why the Government announce policies when they do not have the basic data to implement them?
The Government have a very clear idea about the information that they are reviewing because every single water company, like every other public company, has its accounts audited. That information is publicly available, and I refer the noble Lord to the public audited accounts of all those water companies.
My Lords, I support everything said by my friend the noble Lord, Lord Sikka. I wonder what regular representation, if any, the Government make about the quality of the water provided to us via various water authorities. I do not know if the Minister is aware that there is an exponential rise of allergies and eczema in east London. The water quality there is poor; I have raised these issues privately and on previous occasions. Can he assure me and this House that the water quality is as important as the profits that the water companies are making?
I absolutely assure the noble Baroness and the House that that is the case. I was not aware of the issue that she outlined around the outbreak of eczema. I am not sure if that is related to the water, but I can certainly look into that matter for her. The Environment Agency spends a great deal of time on this, and it is one of the issues that we can be really proud of. We get an unbelievably good service provided in terms of clean water that goes into every household across this country for a very modest price.
Why do the Government allow these water companies to retain profits when there is so much need for investment and given their poor performance and the way that they are polluting our rivers and seas?
The noble Lord perhaps needs to refresh his memory on exactly what a private company is and how that works. When you make an investment into a public company, like a water company, you expect to get some return on that investment, and it is only right and proper that everybody does. We are talking about pension funds as well as individuals.
My Lords, does the Minister agree that the continuing secrecy and uncertainty surrounding the future of Thames Water is unhelpful and damaging to the water sector and the whole UK economy? When does the Minister expect to fully update the House and provide some certainty on Project Timber, the Government’s contingency plan for Thames Water?
The noble Earl knows that it would be improper of me to comment on the details about Thames Water. I assure him and the House that we are taking an extremely close and careful look at this. It is in all our interests that the financial resilience of our water sector, as well as the individual players within it, is maintained and enhanced to ensure the level of investment required to improve water and address the issues related to sewage.
My Lords, given the increasing regulatory and compliance burdens on water companies due to the Environment Act and such other essential recent legislation, is it not simply becoming unprofitable to invest in the water industry, which surely will make nationalisation at some point inevitable?
I do not think that I agree with that assessment at all; it certainly is not this Government’s policy to nationalise the water industry or indeed any other industry. Environmental issues around water companies are certainly highlighted more greatly than they ever were in the past. The Government have put a huge effort into monitoring the level of sewage and other pollutants going into the water systems. That, in part, is leading to much greater awareness of issues that have probably been going on for a very long time, and we are committed to fixing those issues.
My Lords, I want to come back to the Minister’s response on dividends, investments and payments. Earlier this month, the Financial Times revealed that the 16 water companies paid out a total of £78 billion in dividends in the three decades since privatisation to March 2023, building up £64 billion in borrowing over the same period. It is worth remembering that the utilities were debt free when they were privatised. Frankly, I find these figures incredible. Is the Minister justifying his response to my noble friend as to how much money is acceptable to be paid in dividends?
The noble Baroness raises a lot of very detailed numbers in her question, but the principle of dividends for public companies is well established and every other public company produces dividends for its investors. Perhaps I might take away those thoughts and come back to her.
My Lords, may I assist the Minister? It is one thing a company paying a dividend if it makes a reasonable profit, but does he not agree that it is completely different if a company is borrowing heavily to pay a dividend? I ask him also to comment on this, because he has not done so yet: we are all for the leaders of these industries being properly rewarded, but they should not be given bonuses when their environmental duties fall short.
I entirely agree with my noble friend on that issue. Ofwat will also take forward a consultation to consider a ban on water bosses receiving bonuses when their company has committed a serious criminal breach. As part of that consultation, Ofwat will consider the criteria for a ban on bonuses. This would likely include successful prosecution for a category 1 or 2 pollution incident, such as causing significant pollution at a bathing site or conservation area.
My Lords, given the uncertainty of Thames Water’s finances, what are the prospects of it being able to go ahead with its scheme for water transfer from the Severn to the Thames to meet the needs of south-east England? Does that not put the capital requirement for that scheme very much in doubt?
The capital requirement will be considered at the next spending review, which is due this year, so we will hear more about that in due course.
My Lords, once again, your Lordships’ House is indebted to the forensic skills of my noble friend Lord Sikka. He is the one person in this House who needs no instruction about where to look for what is going on in businesses and in companies, and how important accounts are. With some assistance from him, I had a look at Thames Water’s accounts. Its accounts, directors’ reports and cash-flow statements say that it paid dividends to its parent company as follows: £37 million in 2022, £45 million in 2023, and another £37.5 million in September 2023. However, its own PR spin says that these are not dividends and that this is the way it is paying interest on its debt. That is not what the accounts are for, and the accounts are not right if that is correct. In December, a spokesperson for Ofwat said:
“Following notification that Thames Water has paid a dividend to shareholders, Ofwat is investigating whether this payment meets its licence requirements”.
The Minister is a knowledgeable man in this area, as he tells us, so he should be able to explain what is to be investigated. More importantly, does he know why Ofwat has not reported since December?
I also pay tribute to the accountancy skills of the noble Lord, Lord Sikka; they are very thorough. Indeed, the noble Lord, Lord Browne, has himself made an extremely good attempt at interpreting the accounts on that front. The issues around Thames Water and the dividend that it paid last year are subject to an investigation at the moment. Therefore, it would not be appropriate for me to comment on them.
(5 months, 1 week ago)
Lords ChamberTo ask His Majesty’s Government, following recent announcements of proposed university staff cuts, what steps they are taking to support the study of the arts and humanities in higher education.
My Lords, we recognise the importance of the creative and performing arts to our economy. While some higher education providers have seen decreases in arts and humanities staff, academic staff numbers across England rose by 1.9% between 2019-20 and 2022-23 to 21,640.
My Lords, Gillian Keegan’s freezing of further funding for creative arts courses at universities, which has occurred since I tabled this Question, is surely pouring oil on already extremely troubled waters. We have a Government who seem wilfully blind to both the current threat to the arts at universities and the strategic importance of that pipeline. Will they reconsider that funding decision and take steps to protect the jobs and departments at Goldsmiths, Middlesex, Kent and elsewhere that are so necessary for the creative and economic future of this country?
We absolutely agree with the noble Earl that high-quality provision across a range of subjects in the arts and humanities is critical both for our cultural enrichment as a society and for our workforce. That is why we require the Office for Students to at least maintain funding for those high-cost subjects at the current level of £16.7 million. As the noble Earl is also aware, we have dedicated funding for both our world-leading cultural institutions and other performing arts institutions.
My Lords, the cap on student fees has meant that funding for students is at its lowest level in over 25 years. There is a £1 billion hole in domestic teaching funding, which will inevitably mean some very difficult decisions, as my noble friend indicated. Does the Minister agree that arts and humanities graduates have the creative and critical thinking essential for problem solving, which will be crucial to support businesses to get the most out of AI tools?
As the noble Baroness knows, the Government strive to create a sustainable student finance system that both remains responsive to the needs of the wider economy and of the labour market, which she referred to, and is fair to students and taxpayers. As she remarked, those with creative and critical-thinking skills in relation to AI are of course important, but so are students with STEM skills.
My Lords, ahead of the local and mayoral elections tomorrow, would my noble friend the Minister say what the impact of slashing the graduate route will be on arts and humanities provision, as well as on the levelling- up agenda? I am thinking specifically about towns such as Middlesbrough and Darlington, where every intake of international students at Teesside University brings £240 million of benefits each year to the local economy.
My noble friend is aware that we remain absolutely committed to our international education strategy, which has been extremely successful in terms of both the number of students who study in this country and their contribution to the economy. I cannot comment on the specifics of individual towns, but we absolutely recognise the value that those students bring.
My Lords, the Minister quite rightly pointed out the importance of the arts to our cultural and creative industries, but they are also important to soft power. We are seeing 15 universities making job cuts in their arts and humanities departments and 35 others considering it. I do not need to go through the individual universities, but drama, film, music, dance and entire theatre departments are at risk. Two problems need to be addressed. The first is funding, if we want to keep these creative and humanities subjects at such a high level. The second is the pipeflow. We have talked about the EBacc before, but would the Minister now care to consider what damage it is doing and the danger it poses to the pipeflow to our university and FE sector?
With the greatest respect to the noble Lord, I really do not follow the logic of how the EBacc is damaging the flow to our universities. Humanities and modern foreign languages are absolutely central and at the heart of the EBacc, but we are building on that with our higher technical qualifications and T-levels in areas such art and design, which will be introduced this year. I remind the House that bursaries and scholarships for, say, modern foreign language teachers are at the same level as for physics teachers.
My Lords, does the Minister agree that it would be crazy to restrict entry from overseas students to particular universities or particular faculties or courses within those universities, not least because it would say that all the rest were perfectly okay for our daughters and sons but were not good enough for overseas students?
I am not aware that that plan has currently been proposed. Where we have concerns about quality, they are about courses rather than subject areas at individual institutions, where the outcomes for those students, whether they are international or domestic, are significantly poorer than for the same course at another institution.
My Lords, almost every armed conflict in the world at present has a religious dimension, making informed and respectful dialogue increasingly critical for international peace and security. In that context, the steady decline in the numbers of those studying religion, theology and ethics in our higher education institutions is a cause for real concern. Given the dearth of graduates in these subjects at present, can the Minister tell us how the Government will nurture the necessary religious literacy of our public life in the coming years?
This is a very important subject and, I may say, goes wider in terms of critical thinking and understanding the information that we receive both in reality and online. I do not have the specific figures for religious studies on their own, but historical, philosophical and religious studies have declined over the last three years, as the right reverend Prelate said, but only by 5%. Multiple issues impact on that, but I think we also see young people seeking debate, and the moves that we have made as a Government on free speech within our universities are critical to underpinning that.
My Lords, the Government indicated that they would publish a cultural education plan by the end of last year, but they have given no commitment on a date for publishing. If they are keen, as we are, to put creativity at the heart of education, can they now give us a timeline for the publication of the plan?
I am unable to give the noble Baroness a precise timeline, but the Government have already acted on cultural and creative education, for example through our investment in the institutes of technology: all 21 of these will be open by this autumn and seven are already working directly with creative, film and entertainment industries, addressing just the sort of cultural and creative jobs that I know the noble Baroness aspires to.
My Lords, I declare my interest as a graduate in classics, or literae humaniores as they were called at Oxford. Studying classics can open doors to a vast range of knowledge and experience, including language learning; grammar and vocabulary; literature and history; scientific, botanical and medical terminology; arts, architecture and sculpture, so much of which is based on classical themes and models, as is classical music; and logical thinking, which is so important to digital technologies and coding and to other fields of activity. So what steps are the Government taking to promote and enhance continued teaching of classical subjects at university?
The noble Lord will be aware that the Government do not impose in any way on universities what subjects they should teach. The noble Lord has done a most marvellous marketing pitch for classics; I expect to see applications rise in response this autumn. But it is up to individual universities to decide. In schools, we have been encouraging the greater teaching of Latin, and certainly that is much appreciated by those students who benefit.
(5 months, 1 week ago)
Lords ChamberTo ask His Majesty’s Government how many small boats impounded from illegal migrants they have in their possession, and whether they plan to grant requests from the Ukrainian authorities to contribute these to the Ukrainian war effort.
My Lords, no such request by the Ukrainian authorities has been received by the Home Office. These boats, which are not manufactured to commercial standards, are completely unsuitable for anything other than endangering those who use them. Border Force has seized and disposed of hundreds since 2018.
I thank the Minister for his reply, but I think it is ridiculous to tell the Ukrainians what is safe for them to use in the situation they are in. They want these boats because they are the only way they can get across the Dnipro to their bridgeheads on the other side, and ferry men and munitions in and the wounded out. The Ukrainian authorities have asked for them; I am afraid it is a mistake to say that they have not. The Ukrainian embassy asked for them twice in February, and I have heard today that the Ukrainian ministry of defence is about to ask for them again now. I find it very puzzling. I would be grateful if the Minister could explain why there is such reluctance to help—particularly as, at last, the American aid has come through—Ukraine get on the front foot, doing something incredibly brave, with these tiny boats, to get across the Dnipro and progress. They know more about what craft are seaworthy; they will repair these craft, because they need to—because they use them in matters of life and death.
My Lords, there are a number of questions there. First, just to repeat, the UK’s total committed military, humanitarian and economic support for Ukraine now amounts to almost £12.5 billion. As recently as 23 April, the Prime Minister announced that the UK will send our largest ever package of equipment from the UK, which is designed to help push back the Russian invasion on land, sea and air.
I go back to my initial Answer: these craft are unseaworthy. It is for us to determine their seaworthiness. They are built to extremely poor standards; they do not really even make it across the channel. They are not worth sending to Ukraine. As far as we are aware, the Ukrainian authorities have yet to ask for these boats. If they do, they should approach the Home Office and we will certainly come up with some other solutions.
My Lords, perhaps I could help the Minister, because the Times last Monday had the answer to some of the questions about how many boats the Home Office has impounded. There are
“20 rigid inflatables … 62 folded-up inflatables and 131 engines”.
The fact that they have made it over the channel and been impounded suggests that they were seaworthy at a certain point. If the Ukrainians want them, why on earth does the Home Office not allow them to have them? Why do we need to keep them? Surely it is a win-win situation simply to hand them over to the Ukrainians to enable them to use them on the Dnipro.
Far from being rigid inflatables, these boats more resemble oversized rubber tires—inner tubes. The engines on these things tend to be very underpowered; they are less than 30 horsepower. They are bolted to a plywood transom and riveted to the back of the boat. They are unsafe.
My Lords, assuming that the seized boats are not going to Ukraine, could my noble friend tell the House how quickly they are destroyed?
Some are kept for evidential and investigation reasons, but they are destroyed as quickly as possible. They are actually recycled; they are not put into landfill.
My Lords, a year ago I asked this same Question and I got the same Answer from the Minister. Does saying that the boats are not safe indicate that the Maritime and Coastguard Agency has a role to play, in making sure that we can give boats to the poor people of Ukraine only if the MCA has approved it? It is nothing like crossing the channel to cross the river; it is a big river, but it is nothing like the channel. I know that the Swindon Humanitarian Aid Partnership is sending aid out all the time; it is taking buses and could take boats. It has said it can do it with no problem with security, but still the Minister rejects it. Could he think again?
No. I am rejecting it because these boats are unsafe. What I will do, however, is share a good news story from last week. The seventh convoy run by the National Fire Chiefs Council delivered to the border of Ukraine a large amount of the sort of aid that the noble Lord is describing, including 33 fire and rescue vehicles, two mechanics’ vehicles, an HGV carrying more than 2,800 items of surplus equipment, and 30 fire and rescue vehicles, including 20 fire engines, eight command units, an aerial ladder platform and a 4x4 LPP vehicle. That is practical help. I commend the 100 volunteers from all over the country who drove the fire services aid to the Ukrainian border. That is worth having. These boats are not.
My Lords, speaking as a simple sailor, none of those things float so they will not help the Ukrainians much on the Dnipro, will they? It seems extraordinary. Perhaps these things are unsafe, but can we not leave it to the Ukrainians to decide? If you are fighting for your survival, my goodness me, it is amazing what you can do. I would like to think that we could do the same if we were in that position, so why not let them do it? Is it because we are frightened of litigation against us? What is the reason, really?
I am very disappointed that the noble Lord the admiral does not support the Government’s position on this. An unsafe boat is an unsafe boat. He knows more about them—and ships, of course—than I do. The fact is that the Ukrainians, as far as we are aware, have not even asked for these things, so that judgment does not need to be made.
If these boats are unsafe, why can the Government not let them have other boats?
As I have just said and will continue to say: because the Ukrainians have not asked for them.
My Lords, I commend the Government’s efforts to support the people of Ukraine. Does my noble friend agree that we must do everything we can to try to protect the brave people of Ukraine when in many ways they are fighting on the front line for our own democracy? If there were a request from the Ukrainians for these boats, would his reply be different?
My reply would be that we should look into the appropriate sorts of boats that we should send as part of our aid. Again, to remind noble Lords about the type of aid, since the start of the conflict the UK has sent almost 400 different types of capabilities to Ukraine. If the Ukrainians asked for boats, we would certainly look at providing them, but not these.
My Lords, I visited Western Jet Foil just over a year ago, and I agree with Minister. I saw oversized rubber tyres which looked extremely dangerous, so I support the Minister in what he just said. I want to ask the Minister about the seizure of Russian assets. We have had the same answer from the Government on this question for a long time now. Will the Minister outline what concrete steps the Government are taking to access those assets for the benefit of the Ukrainian people?
I thank the noble Lord for his support for the Government’s position regarding the boats. On the seizure of Russian assets, I am afraid I am not more aware of the discussions than he will be from having read in the papers about what is going on at a very high level among the international community. I am sure that as soon as there is more to say on the subject, we will be back at the Dispatch Box.
Having listened to the conversation, I think the enthusiasm in your Lordships’ House to support Ukraine in any way that we can is highly commendable. After two and a half years of conflict, there is a now a highly mature system of gifting in kind from the UK to Ukraine based not on—dare I say?—bright ideas of what we think we have that they want but on what they need and what they request. If we simply start gifting everything that we think they want, rather than what they actually ask for, we are in danger of overburdening them with all sorts of kit they know not what to do with.
My noble friend makes an extremely good point. If there is a genuine request from the Ukrainian authorities to provide them with boats, we will absolutely look at it, and we will find the appropriate vehicles.
Can my noble friend clarify this? I understand that he is saying that there has been no request through the embassy here in the UK. Equally, the noble Lord, Lord Moore, said that there was a formal request in February. Could my noble friend, for the benefit of all of us here who feel quite strongly about this, double-check whether there was or was not such a request?
I say to my noble friend what I said earlier: no request has come to the Home Office, and, as far as I am aware, the same goes for the FCDO and the MoD. As far as I am concerned, there has been no meaningful request to the authorities which could provide the boats that are under discussion.
My Lords, the noble Lord, Lord Ponsonby, asked about seizing Russian assets to use them to support the war effort by Ukraine. That idea came from the Foreign Secretary. He said it on a BBC programme and everyone else there said it was the most brilliant idea that had come from the United Kingdom, so I am surprised that there has been no further conversation. I happen to agree with the Foreign Secretary; he has his finger on the pulse. Is it not time that these assets were seized and used to help Ukraine to fight its war?
As I think I made clear, I do not disagree or otherwise with the noble and right reverend Lord. He makes a perfectly reasonable point, but the Foreign Secretary is having those discussions and I am not.
(5 months, 1 week ago)
Lords Chamber(5 months, 1 week ago)
Lords ChamberMy Lords, I understand that no amendments have been set down to the Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Unless, therefore, any noble Lord objects, I beg to move that the order of commitment be discharged.
(5 months, 1 week ago)
Lords ChamberMy Lords, I remind the House of my entry in the register of interests, specifically my association with the Royal Navy.
Our service personnel are currently deployed in multiple theatres across the Middle East, reinforcing regional stability, protecting freedom of navigation in the Red Sea, fulfilling our ongoing commitments under Op Shader and of course assisting vital humanitarian efforts in Gaza. As ever, we are grateful for their service, their dedication and the sacrifices that they make daily to protect British national interests.
I ask the Minister to update your Lordships’ House on the new role of the RFA “Cardigan Bay” in helping to build the temporary pier on the Gaza Strip. How long is this deployment and what specific role will the UK play in the pier’s construction? As always, the Royal Fleet Auxiliary is on the front line supporting UK operations. My right honourable friend John Healey asked in the other place about the RFA, but the Minister there was seemingly unable to assist, so can the noble Earl confirm that the RFA is protected from his new Civil Service cuts? Can he provide an update on the current state of the industrial dispute with the RFA, given its important role?
My Lords, there were about six different questions there. First, I confirm that the UK Armed Forces operate under a number of international coalitions in the Middle East and have done so for some time. They include the Jordanian-led international effort for humanitarian aid into Gaza, the RAF drops, the support that we are giving in building the pier, the global coalition against Daesh, Operation Shader and Operation Prosperity Guardian. We do all that to protect life, uphold the rules-based international order and secure UK interests against malign forces in the region. “Cardigan Bay” is providing living support for the American soldiers and sailors who are building the bridge. It lies off Gaza now in international waters, and will be there for as long as it takes.
My Lords, can the noble Earl tell the House, first, whether the Government would give a parliamentary vote if there were to be boots on the ground? Secondly, what conversations have His Majesty’s Government had with the Israeli Government about looking for appropriate ways of getting aid into Gaza and ensuring that those delivering that aid are protected, be they UNRWA or other charitable organisations?
My Lords, I cannot remember the first question, but on the question of talking with the Israeli Government, we continue to press them on international aid to open up as many opportunities as we can to get a considerable amount of aid in. That includes via Ashdod, Erez and this new floating pontoon. It is extremely important to get as much aid in as we possibly can.
My Lords, can my noble friend update us on the situation regarding the malign influence of Iran, which has of course recently attacked Israel? It has certainly armed Hamas in the past, whatever its situation now, and is almost certainly controlling Hezbollah. Can he please update us on that?
My Lords, the diplomatic situation with Iran is that we are using every possible effort to quieten down what could have become an extremely dangerous situation. So far, that diplomacy does seem to be working.
My Lords, would the Minister and the Opposition Front Bench recognise that neither of them referred, in their replies, to the role of the sovereign base areas in Cyprus? Does he not agree that the bases we have there have played an extremely positive role in recent times, and indeed in more previous times than that? Would he offer some thanks to those who are manning those bases?
My Lords, I certainly will and would. We are part of international coalitions and there is a certain level of sensitivity around precisely which states are involved in what. But I can assure the House, in all respects, that the level of support from various areas could not be higher.
My Lords, away from the valuable operations of the Royal Navy and Royal Air Force in the region, it is easy to overlook the regular tempo of land exercises with our allies there, which not only build strategic capabilities over time but act as a deterrent to our foes in the region. Despite the large increase in pending announced last week, there remain in-year saving challenges. These exercises, being uncommitted spend, are the first things to be cut. I simply ask my noble friend to look carefully at ensuring that, away from operations, these exercises continue.
My noble friend makes an extremely good point. The prioritisation of all the activities that we are engaged in through the UK Armed Forces is extremely important. To be ready to war-fight and win is absolutely paramount; to train to achieve that is critical.
My Lords, the “Cardigan Bay” is of course one of our crucial Royal Fleet Auxiliaries. I refer to my noble friend’s question about the work that is going on about conditions of service. There is a very real risk of an impact on our Royal Fleet Auxiliaries because of this debate—and fight—going on about pay, conditions of service and the like. Can the Minister possibly tell us where we have got to in these negotiations? Is this going to impact not only there but on our amphibious group out in the Pacific and so on? These ships are so important.
My Lords, I entirely agree about the importance of these ships—what better example than “Cardigan Bay”, which is providing an absolutely vital role in supporting our allies to build this bridge? I will write to the noble Lord with specific detail; I think that is the best thing to do.
My Lords, I refer to my registered interests in the Royal Navy. I encourage the Minister to take this opportunity to pay tribute to the work of HMS “Diamond”, particularly its recent contribution to continued freedom of the high seas in the Red Sea.
My Lords, I could not pay greater tribute to our forces out there, whether on “Diamond”, “Lancaster” or “Cardigan Bay”. They are all providing absolutely critical support to an extremely important initiative.
My Lords, we should applaud the role of the RAF, with the recent contribution it made in the interception of Iranian drones launched against Israel. I ask my noble friend the Minister: was that under Operation Shader? If so, is the role of Shader now being expanded?
I thank my noble friend for that question. It was indeed under Operation Shader, which has been in place since 2014. In fact, I answered a question about this the other day. The RAF has flown nearly 9,000 missions under Operation Shader and released more than 4,000 precision weapons, which gives noble Lords an idea of the scale and importance of ensuring that Daesh in Iraq and Syria is ultimately destroyed. There is no intention to increase the scope of that operation, but back in April it was the appropriate asset to use for that particular sortie.
My Lords, I would like to take up the point in the question asked by the noble Baroness opposite and hopefully have further information. I had concerns about some of the news that came out at the weekend that, in the project taking place in Gaza, we could end up looking at deploying British troops to be involved in the delivery of lorries on to the land. I would have great concerns about British troops being put into that position. We would not want to look as though we are condoning any of the Hamas actions that took place on 7 October; humanitarian aid is another issue. Could my noble friend give us reassurance that British troops will not be deployed inappropriately in this matter?
My Lords, I can give an absolute assurance that that report was pure speculation. That is exactly where the situation remains.
(5 months, 1 week ago)
Lords ChamberMy Lords, I will speak to Amendment 92 on behalf of my noble friend Lady Taylor of Stevenage. This new clause would ensure that leases on new flats included a requirement to establish and operate a residents’ management company responsible for all service charge matters, with each leaseholder given a share. The amendment has dual purposes. It would remedy two significant current flaws in the leasehold system that the Bill does not address, and it would provide a step forward to commonhold, without doing so in a piecemeal way.
I turn to the current flaws. First, unless leaseholders in blocks of flats acquire the right to manage, collectively enfranchise and then establish a residents’ management company, or buy a property in a development where a residents’ management company has already been set up, they have no control whatever over how their money is spent. This is despite having to pay all the costs to maintain and manage their buildings. Secondly, the rights that leaseholders do have to exercise control over how their buildings are managed—whether through a tribunal, the appointment of a manager or the right to manage—are locked behind difficult and often costly legal processes to which many will not have access.
Our amendment would address both these problems by requiring that when a new residential block of flats was constructed and its units sold the development should be a three-way lease between the freeholder, the leaseholder and the new residents’ management company. Each leaseholder in the block would then own a share of the residents’ management company, and it would be under their exclusive control, giving them full responsibility for services, repairs, maintenance, improvements, insurance and the cost of managing their building. This would give them control over how their money was spent. This ability to influence the management of their building would come at no additional cost.
The Minister will no doubt say that our amendment leaves no space either for limited cases in which a mandatory residents’ management company is not appropriate or where leaseholders simply do not want this responsibility. The Government have said many times that they are keen to give more home owners control over the management of their buildings, and we welcome that the Bill is moving in the right direction. Would it not make sense to have leaseholder management of their buildings to be the default?
Where mandatory residents’ management companies are not appropriate, could the Government not put forward such cases to be incorporated as exceptions? In the case of leaseholders not wanting to be compelled to manage their buildings, could there not be a provision for leaseholders to use the power of the management company to appoint a manager or simply return management to the freeholder? I would be keen to hear the Minister’s thoughts on these alternative options.
The real importance of this clause, however, comes from it being a key way of laying the groundwork for a future where commonhold is the default and leasehold becomes obsolete. It would help to create a cohort of leaseholders who have experience in running their buildings, as they would under a commonhold arrangement, even if that experience is limited both in time and the extent to which they have carried it out.
This is certainly not a perfect solution. It would do little for leaseholders who have already purchased their flats and do not currently have a residents’ management company. We need other solutions, building on measures already in the Bill to address the challenges they will continue to face. I look forward to the Minister’s response and beg to move Amendment 92.
My Lords, I support Amendment 92 in the name of the noble Baroness, Lady Taylor of Stevenage, and explained so well by the noble Lord, Lord Khan of Burnley. The right to manage was first introduced in the leasehold reform Act of 2002. From the start, it was, as the noble Lord said, intended as a simple and cost-effective alternative to collective enfranchisement, but, despite the happy intentions of that Act, the reality was quite different. Take-up has not been what we would all have hoped for or expected, because the right to manage has proved incredibly problematic in practice.
These problems culminated in the Law Commission’s final report in 2020—time has marched on—on exercising the right to manage. It summarises the difficulties as follows:
“The ‘simple’ RTM process envisaged in the original consultation which led to the 2002 Act has not come to pass. The requirement for strict compliance with the statutory procedures, such as the service of certain notices on particular parties, can be unforgiving to leaseholders. In many cases, small mistakes made by the RTM company have afforded landlords opportunities to frustrate or delay otherwise valid claims. The Court of Appeal has noted that while the procedures ‘should be as simple as possible to reduce the potential for challenges by an obstructive landlord’, in fact they ‘contain traps for the unwary’”.
This is not a good advert for anyone seeking to exercise the right to manage, which we believe is fundamental to the change we need. The Law Commission subsequently made 101 recommendations, of which the then Government adopted two.
Whole swathes of actions could be happening to make this process simpler and to encourage residents to take this up. We have no doubt that the process is not an easy one and that the provisions in the Bill as it stands are actually quite limited. The uplift from 25% to 50% is welcome, as are the beneficial changes in cost provision, and minor changes to courts and tribunals. They are all positive but underwhelming—a far cry from the 101 recommendations.
In debates throughout the course of the Bill we have heard numerous instances of excessive charges and unfair practices, from both Houses. The Law Commission summed it up best when it said that
“the landlord and leaseholder have opposing financial interests—generally speaking, any financial gain for the landlord will be at the expense of the leaseholder, and vice versa …Their interests are diametrically opposed, and consensus will be impossible to achieve”.
This amendment is quite realistic: it is starting only with new build, but what it does is symbolic, in that it draws a line under the past and clearly points the way forward. Noble Lords will notice that I am not wearing rose-coloured spectacles, and we are not saying that the residents’ right to manage will be any easier—but it will be fairer. Those paying the bills control the bills and can remove any poorly performing providers. We believe that a leaseholder-controlled resident management company with an elected board, accountable to all leaseholders, is a far more democratic arrangement than one middleman freeholder controlling block management, spending leaseholders’ money freely and not involving them in the decision-making processes. It is fundamentally a better way to go, and there seems to be widespread support for it.
We support this amendment because we believe that it is a step in the right direction and could reinvigorate right to manage with the right support. It seems that the Government are finding reasons not to do something instead of working to enable something better to happen.
My Lords, I thank the noble Lord, Lord Khan of Burnley, for speaking to Amendment 92 in the name of the noble Baroness, Lady Taylor of Stevenage, and I am grateful for both contributions in this brief discussion.
The amendment seeks to require the establishment of leaseholder-owned management companies for all leasehold flats. I understand the intention to ensure that, by default, all leaseholders of new flats would be responsible for the management of their buildings. The Government support the desire to give more home owners control over the management of their buildings. This Bill is intended to do just that, and will make it cheaper and easier for more leaseholders to own and manage their homes should they wish to.
In some cases, developers have voluntarily set up residents’ management companies to transfer management responsibility to leaseholders. We welcome this, and encourage the industry to adopt this model where appropriate. However, we believe that the best way in which to achieve resident-led management for new buildings is not for government to mandate change to leasehold but to reinvigorate and improve the uptake of commonhold. Commonhold does not require involvement from a third party.
We will reinvigorate commonhold so that it is a genuine alternative to leasehold for new flats. However, there are limitations in the current legal design of commonhold which can limit its use in some settings. We must get any changes right, and preparing the market for the widespread uptake of commonhold will take time. Existing leaseholders can already use the right to manage to take over management responsibility for their building. This is an established, no-fault right that allows leaseholders to take over management responsibility when a majority of leaseholders wish to do so.
There are some situations where the right to manage is not available because leaseholder-led management is not considered appropriate—for example, in largely commercial buildings or where there are social tenants. We believe that it would not be appropriate to apply a blanket provision requiring residents’ management companies for all new buildings without considering where equivalent protections should apply.
Further practical challenges include determining at what point during development and the sale of units management responsibility would be transferred; what position the freeholder would have in the management company if they retained non-residential units or those on short leases; and what protections would be required should leaseholders not wish to take up management responsibilities. Answering these questions would require significant additional consideration—consideration that is ultimately unnecessary because a reinvigorated commonhold is the answer for new buildings, and the right to manage for existing leaseholders makes sure that home owners can already control the management of their building.
My Lords, I thank the Minister for his response, although it does not satisfy exactly the issues that we have raised. I thank the noble Baroness, Lady Thornhill, for saying that this
“draws a line under the past”
and is a
“step in the right direction”.
It is a fairer process when those who are paying the bills have control of the bills.
We would not need this amendment if the Government had followed the Law Commission recommendations to move to a commonhold system now. This is a missed opportunity. That is why we have argued that this is a limited Bill. I wish that the noble and Lancastrian Lord had gone for the Lancastrian approach and been absolutely candid and answered the questions. In the meantime, I accept his reasoning and beg leave to withdraw the amendment.
My Lords, in moving Amendment 93B I will also speak to linked Amendment 107 and Amendments 105C to 105G standing in my name. These amendments offer a range of proposals to enhance the protection of leaseholders from the costs of remedying fire protection or other structural defects.
I make no apology for returning, once again, to this matter of basic consumer protection for leaseholders and for going over some old ground. My mailbox tells me that the issues are far from resolved. Too many leaseholders remain seriously encumbered by the defects in the original construction of flats that they occupy or own. The plain truth is that the Building Safety Act—I shall refer to it as the BSA—is not delivering the protection that leaseholders ought to expect as a basic right, and this Bill serves to undermine it further in certain material respects.
There is cross-party consensus that the BSA needs amendment. I pay tribute to colleagues who, with me, continue to press the Government to make changes. I support the other amendments in this group for reasons that will become apparent. The BSA is convoluted. It complicates, excludes, creates uncertainty and risk, and delays remediation. It leaves some leaseholders—and their lenders—with permanently impaired assets. Where before there was one market, the BSA creates three tiers of flat ownership, with such complex rules that conveyancers frequently decline instructions and, increasingly, insurers are unwilling to offer professional indemnity cover to practitioners.
The Government have placed substantial remediation obligations on landlords. The courts should be the last resort, yet the BSA and the Bill force landlords to take legal action as a first resort on initial unfunded remediation and, thereafter, to recover the costs of defects that they did not cause from the developers. Where the developer no longer exists, they must fund it themselves. There is no automatic developer liability to meet any of the costs in the 85% of buildings not covered by the developer contract. There is no legal obligation on any contracting developer to cover non-life-critical fire defects and structural defects. Landlords are the backstop if public funding for cladding costs happens to prove insufficient. Construction inflation, moreover, has risen by a quarter since the announcement of the building safety fund in March 2020, so my first question is: what assurance exists that all eligible claims on the building safety fund and the cladding safety scheme will be met even if they exceed those historic cost budgets?
More broadly, this model seems to be based on little more than political bias and destined to fail, and fail in a way that will ultimately harm leaseholders and the leasehold market. I have questioned previously whether the major landlord groups can afford to fulfil their remediation obligations as demanded. I was therefore surprised to learn that under the Bill, and despite relying on landlords to fund non-cladding remediation works or related legal action, the Government proposed to eliminate or reduce the ground rent income. I was further surprised to learn from the noble Baroness, Lady Swinburne, in a letter last week, that the Government have no estimates of the risk of freeholder insolvency.
The main asset of many landlord groups is ground rent income, as we have heard before in discussions on the Bill. It is used to repay the long-term bonds or loans over many decades. If the income is removed, some will likely declare insolvency: the Government acknowledge this risk in their own impact assessment. I mention this again because it is critical to the remediation obligation. So that leaseholders are not left completely exposed if their landlords are insolvent, I trust that the Minister will regard as an essential lifeline my amendments, which are the only ones providing for alternative remediation funding sources. I would like to know what contingency plans the Government have in place apart from this, should buildings with remediation obligations escheat to the Crown, an eventuality the Minister alluded to on Monday.
Valuers are already marking down portfolio valuations because of material uncertainty. Permanent impairment of leaseholder and lender assets is also risked under the Government’s model. Basel III pillar 1 standards come into force next year. Lenders will have to revalue a loan if an
“event occurs resulting in a permanent reduction of the property value”.
Leaseholders will also be hit by these provisions; specifically the unprotected and partially protected—that is, the capped liability leaseholders—and those leaseholds covered by the developer contract. The contract allows combustible materials, now banned, to remain on buildings so long as they do not cause that “life-critical fire safety risk”. I put that in quotes: it is a non-statutory definition and my Question for Written Answer on this still awaits a response. But leaving these in place gives rise to a B1 category of building risk rather than the fully remediated A1 classification. At the same time, these flaws are evident to the market, which values an asset not according to life safety but according to the risk of material loss. The result is permanently higher insurance premiums. Ministers may wag the finger at the FCA in relation to its insurer members but, in truth, the market has spoken on the BSA and on building and professional indemnity cover risks, and no amount of political manipulation is going to alter that.
There is one group that faces a very bleak outcome, unless the Government change course, and that is in enfranchised leaseholders. Theirs are, in the terms of the BSA, “not relevant buildings”, a point that the noble Lord, Lord Young, makes in his amendments. The limit of any new protection afforded to resident management companies is the cost of obtaining a remediation contribution order, so can the Minister explain how enfranchised leaseholders will deal with non-cladding defects or effectively force the original developer to make a contribution, especially if it happens not to exist any longer?
Better policy is clearly needed. Simply, the BSA should be amended to protect all leaseholders, regardless of circumstances, in buildings of all heights. A separate, dedicated funding stream is needed so that leaseholders are not left in limbo, particularly when their landlord becomes insolvent.
The Committee will be familiar with Amendments 93B and 107 from the debates on the levelling-up Bill and the then Building Safety Bill, so I will try not to labour the point too much. Amendment 107 requires the Government to establish a building safety remediation scheme and Amendment 93B proposes a new schedule setting out the scheme’s key features. The scheme would serve to protect all leaseholders, without exclusion, from building safety remediation and interim safety costs. As drafted, it is fully funded.
Joint and several liability for remediating building safety defects is placed on the developer and principal contractor where a building did not comply with regulations at the time of construction. If neither can pay, or if the regulations have moved on and a building is retrospectively deemed unsafe, remediation funding comes from a levy across the wider building and materials industry. That approach has been extensively scrutinised by a range of legal and other professionals. In particular, I thank David Sawtell KC, of 39 Essex Chambers, for making himself available when I recently met with the Minister, whom I thank for facilitating the meeting.
I have added a second option for good measure. Amendments 105C to 105G amend certain arrangements already in the BSA. The developer contract limits developer responsibility to undefined “life-critical fire safety defects”. That means that all other defects are excluded. Amendment 105C closes that loophole by requiring developers to remedy all defects defined in the BSA. That brings all fire and structural defects within the scope of the developer contract—and, therefore, the responsible actors scheme—and puts that in line with primary legislation. It ends the arrangement whereby Parliament set in legislation one definition of defects requiring remediation while the Secretary of State entered into some side agreement with the industry for something rather different. At present, the government scheme requires developers only to remediate their own buildings. The Secretary of State has not given effect to Section 126(4)(b) of the BSA on the costs of remediating other buildings. Amendment 105D would put that right by amending the responsible actors scheme regulations.
Amendments 105E and 105F set out to end the three- tier system of leaseholder exclusions from remediation cost protection. Amendment 105E removes the exclusions according to building height and type of lease set out in the BSA. Amendment 105F removes the conditions and exclusions around remediation cost protection in Schedule 8 to the BSA.
The risk of major landlord insolvency is real. Amendment 105G reinstates and expands the original BSA provisions on insolvent landlords. It obliges insolvency practitioners and Law of Property Act receivers to commence or continue remediation work. Remediation costs are to be considered part of their expenses and therefore paid ahead of other creditors. It also reinstates their power to apply for a remediation contribution order, which the Government seek to remove through the Bill. But—this is a very big “but”—insolvency practitioners need secure funding if that is to work.
In closing, I draw attention to the great gulf between the Government’s self-praise about what they are doing—although, to a great degree, there is a lot of good in the Bill—and the reality. That reality is measured in the anguish and distress of hundreds of thousands of leaseholders who bought properties in good faith and now cannot sell them, get mortgages or move on with their lives. It is measured in the 15,000 people evacuated from their homes, as reported three days ago in the Sunday Times and referred to by the noble Baroness, Lady Thornhill, on Monday. It is measured in the 37% defect rate found in developer-contract buildings; in the glacial progress of remediation revealed in the Government’s most recent progress statistics; and in the FCA’s frank warning that insurers price risk not according to the loss of life, as the Government may wish, but according to the stronger test of total loss of asset. It is measured by the fact that this debate continues to play out seven years after the Grenfell fire.
This inequitable scattering of liability across innocent parties begs the question: why do the Government not make the wider construction industry, which designed, built, sold and banked the profits from these defective properties, the primary backstop for the damage done? We do not have an answer to that.
I have provided in these amendments two possible routes to effective protection of leaseholders, the most vulnerable group in this sorry tale of shame. I ask the Minister and noble Lords: if not by these proposals, how? When will the Government act to protect all innocent, home-owning consumers from market failure, and are they content to risk their reputation and legacy on simply making this a problem for the next Government? I beg to move.
My Lords, it is a pleasure to follow the noble Earl, Lord Lytton, who has been at the forefront of the campaign to extend protection to leaseholders since the Building Safety Act was passed. I say at the beginning that I will miss the contributions to our debates from the noble Lord, Lord Stunell, who was a regular contributor to housing debates and spoke with great authority.
This group of amendments is for many leaseholders the most important, and it differs from the rest of the Bill. The rest of the Bill gives rights to leaseholders that they did not have when they bought their lease. This group restores rights that leaseholders thought they had when they bought the lease but have now discovered that they did not. That right was to live in a building that complied with the safety regulations at the time. These leaseholders took all the necessary precautions, employing professional people before buying, but now find that they are faced with unaffordable bills, unsaleable properties and, quite often, repossession. As the noble Earl referred to, the Sunday Times revealed that more than 15,000 residents have been forced to leave homes due to fire or fire safety defects. These decants are on the rise, with residents decanted from 21 buildings last year. Until these injustices are addressed, the Bill, with its new rights, is meaningless to those leaseholders.
I welcome the steps the Government have taken through the Building Safety Act, and I am grateful to my noble friend the Minister for patiently listening to me during our many meetings. But despite the steps forward in recent years, there is still a gap between what the Government promised at the outset and where we are now. I will not repeat the quotes I gave at Second Reading but here is one I did not use, from Michael Gove:
“Most importantly, leaseholders are shouldering a desperately unfair burden. They are blameless, and it is morally wrong that they should be the ones asked to pay the price”.—[Official Report, Commons, 10/1/22; col. 283.]
I will come back in a moment to those who fall outside the protection.
Amendment 102 asks for a progress report. It covers the same ground as my Amendment 101, which was down for Monday but which I was unable to speak to owing to an aggressive Covid jab over the weekend. I am grateful to Giles Grover and the team at End Our Cladding Scandal for their briefing.
According to the department’s own figures on overall remediation, of the 4,329 buildings identified with unsafe cladding, over half had not started remediation at the end of March this year—seven years after Grenfell. Only 23%, 976 buildings, have completed remediation works. Within that overall figure there are 1,501 buildings 11 metres and over in height that have life-critical fire safety defects and where developers have committed to remediate or pay to remediate, but over half have not started remediation. Some 1,001 of the developers’ buildings have not even been assessed.
Looking at the cladding safety scheme, there are now 1,105 buildings within the scheme after the pilot was launched in November 2022. Work has been completed on not one. Work has started on two and the rest are in various stages, the largest number being in “pre-application”. Nor am I reassured by the statement by the department:
“All residential buildings above 11 metres in England have a pathway to fix unsafe cladding, either through a taxpayer-funded scheme or through a developer-funded scheme, protecting leaseholders from these costs”.
Having a pathway is like a traveller having a map. It does not follow that he has begun his journey. Where there is grant funding, the money is not being disbursed at pace. Because of these delays, the department had to surrender nearly a quarter of a billion pounds to the Treasury last year. We need a firm grip and oversight of remediation through the available schemes—which have no visible oversight or co-ordination—and that is what Amendment 102 provides.
The rest of my amendments have broadly the same objective as those tabled by the noble Earl, Lord Lytton, while getting there by a slightly different route. They would ensure that the Building Safety Act operates as intended, as was the Government’s stated objective in the King’s Speech last year. On Amendment 96, on buildings under 11 metres, the department’s view was set out by the Minister, Lee Rowley, on 22 April:
“Of those, we can count on one hand where there has been a problem. We are working with each of those three buildings to make the progress we need to make”.—[Official Report, Commons, 22/4/24; col. 636.]
Those three require full remediation but leaseholders are now reliant on the good will of their developer, without any mechanism in place to compel work to take place to the necessary standard. In Inside Housing on 26 April, it was reported that there are 586 homes under 11 metres in Barnet with defective cladding. One 25% shared owner has a bill of £23,000, and this falls outside the Building Safety Act. The other 75% is owned by a housing association, Notting Hill Genesis, which has said that under the terms of the lease the shared owner is responsible for all remediation costs. Mortgage lending on buildings under 11 metres is still inconsistent. Based on data from four or five mortgage lenders, an EWS1 certificate was deemed to be required for mortgage valuations on approximately 2,000 low-rise flats last year, although the Government have said that it is not necessary.
Insurance in low-rise buildings is another quagmire, with several insurers mandating work as a requirement of providing cover. There are many cases of difficulties with insurance; I cite only one. Aviva was the only insurer that would give cover on one low-rise block, but on the condition that HPL cladding would be removed within an urgent timeframe of four months. The judge at the First-tier Tribunal hearings was satisfied that this was the case, having seen the correspondence. There was no means of funding other than leaseholders. Cladding was removed in 2022 as instructed. It has taken two years to raise funds to replace the cladding, with the replacement due to begin in February 2024. The total cost will be £45,000 per leaseholder.
I remain concerned over resident-owned—or enfranchised —buildings, which were referred to by the noble Earl, Lord Lytton, and are covered by Amendment 99. Last November the department issued a press release confirming that this Bill would
“include measures to amend the Building Safety Act 2022 to make it easier to ensure that those who caused building-safety defects in enfranchised buildings are made to pay”.
Five months later, it remains unclear what measures these will be. Those who were encouraged by the Government to take ownership and control of their buildings remain beset with uncertainty on how and when their homes will be made safe. They do not have the protection afforded to those who did not enfranchise. The same press release also said that the Government would ensure that
“the leaseholder protections are not unfairly weighted against those who own properties jointly”.
This is addressed in Amendment 100. This is known as the marriage penalty, whereby a couple owning four properties together do not have this part-ownership accounted for in the leaseholder protection, despite tax law recognising this pro rata weighting. A call for evidence on this was opened in early April. However, time seems to be running out for the Government’s commitments to be kept in respect of joint-owner leaseholders—unless my noble friend can tell me otherwise.
The Secretary of State has repeatedly expressed his desire to ensure that
“those with the broadest shoulders must pay”,
so Amendment 100 would also help those who invested in buy to let but whose shoulders are not broad. It would ensure that all received protection for the first three flats that they owned, rather than the current cliff edge, and introduce a leaseholder wealth criterion, which is the same basis on which freeholders and developers are tested to assess whether they have the means to pay. The department is well aware of the case of Malcolm in Salford, a leaseholder of a number of properties with a total value below £1 million, who asked the department for help two years ago but has now been forced to enter into bankruptcy. Who will now pay his share of the remediation costs?
Finally, that amendment would end
“the distinction between qualifying and non-qualifying leases once prescribed conditions are met”—
once remediation is complete. This would ensure that the value of flats owned by leaseholders who are still deemed to be non-qualifying would be returned to somewhere near their market value without the severe impairment that non-qualifying leases currently suffer, even where no work is required.
Without this set of amendments, ordinary people across the country will still shoulder a desperately unfair burden, still face financial ruin and still be no closer to moving on with their lives, all at odds with the assurances that Ministers have given. I know my noble friend is sympathetic and I look forward to her reply.
My Lords, I stand to support the amendments in the name of the noble Lord, Lord Young of Cookham. My right reverend friend the Bishop of Manchester has put his name to the amendments and regrets that he cannot be in his place today. As we have heard, the Building Safety Act 2022 contained welcome measures to address historic building safety defects, but the fact remains, as other noble Lords have noted, that it does not go nearly far enough. Seven years on from the Grenfell fire, only 21% of high-rise blocks have been fully remediated—and they are the ones that are eligible; there remain gaps in provision where leaseholders are disqualified for such arbitrary reasons as their block being 10.9 metres tall rather than, say, 11.1. The Act disqualifies huge numbers of people who are now trapped in potentially unsafe flats which they will struggle to sell. They might face very high bills through service charges and insurance premiums.
My right reverend friend’s diocese of Manchester has been identified, as mentioned by the noble Lord, Lord Young, as one of the areas most at risk from inadequate cladding. More than 20 buildings have been identified with ACM cladding in both Manchester and Salford, and in Salford between six and 10 of those are yet to be remediated. The measures are not being implemented fast enough, which is why I also support the amendment from the noble Baroness, Lady Pinnock, which would require a statement to Parliament on progress, because, clearly, more scrutiny is needed. But for those buildings which are ineligible for support entirely, a statement to Parliament does not go far enough. Does the Minister believe that living on the top floor of a block of 11.5 metres is significantly safer than living on the top floor of a block of 11 metres, where both have flammable cladding? Beyond this obvious safety issue, my right reverend friend has received correspondence evidencing the difficulties that some leaseholders face in selling ineligible properties due to the difficulties in obtaining a mortgage on those flats. Will the Minister commit to ending this injustice once and for all?
My Lords, I support the thrust of the amendments in general. I also much regret the news we had today about the noble Lord, Lord Stunell. The points I am going to raise relate to a previous debate we had on the levelling-up Bill where he followed me and also raised some very practical issues on safety.
I want briefly to follow up the points I raised on 18 September last year during the passage of the levelling-up Bill, at Hansard cols. 1252 to 1255, regarding the issue of electrical safety and what are known as NCDs—neutral current diversions. I have no interest to declare, other than my 60-year membership of the Institution of Engineering and Technology and that I came across this issue via an article in the April 2023 issue of the IET magazine.
Since I raised the issue in September last year, I have been contacted by several electrical engineers. Indeed, I visited one factory involved in preventing neutral current diversions. I will keep the techy bit brief. A neutral current diversion can occur on the network when the combined protective earthing and neutral—PEN—conductor fails. The current is then diverted, making a circuit via exposed metalwork on buildings, including gas, water and oil pipes. This can lead to a significant build-up of heat, because those pipes are not designed to carry electricity, which can lead to fires and gas explosions. These conductors are susceptible to damage, corrosion, and general wear and tear across what is an ageing network. We probably have the second-oldest electrical network in the world—and it will vastly expand due to our net-zero obligations.
My Lords, before I get into the detail of these amendments, I will comment on some significant absences from our Benches. First, my noble friend Lady Pinnock is up for re-election tomorrow. She has been a passionate and doughty fighter from the beginning and throughout this tragic journey.
The second absence, as has already been mentioned, is due to the recent shocking death of Lord Stunell. His expertise and attention to detail, often peppered with a gentle sense of humour, were a perfect foil to my noble friend Lady Pinnock: they worked well together. We have missed him significantly during the passage of this Bill; I am truly a poor sub from the bench.
In truth, the significant contributions from the noble Earl, Lord Lytton, and the noble Lord, Lord Young of Cookham, are grounded in solid evidence and reality. We support and endorse them and I have no intention of going anywhere near the detail that they described. I admit openly that I have learned a lot.
All the amendments in this group relate to building safety and to the fallout of the Building Safety Bill and the gaps that were created as a result of it. Noble Lords have outlined them very well and I am certain that the noble Baroness, Lady Taylor, will too.
After the tragic events at Grenfell Tower in 2017, in which 72 people lost their lives, it became clear that millions of leaseholders would need to make their buildings safe and habitable. The campaign group End Our Cladding Scandal—some of its members are here today—estimates that as many as 3 million leaseholders are caught up in the scandal. That is a huge number of families and people and, if you think of the people who they know, care for and love, you will be talking about considerably more.
The Building Safety Act sought to protect leaseholders from the cost of remediating these safety defects but, as has been amplified, the scheme has a glaring issue: a huge number of affected leaseholders are not included. We support the amendments that are clearly designed to widen that pool—if we do not just say “Let’s do the whole caboodle”.
Estimates included in a briefing from the National Residential Landlords Association suggest that there are approximately 1.3 million leaseholders of buildings less than 11 metres in height who are not able to qualify for support. This is in addition to the 400,000 leaseholders in high-rise buildings who are non-qualifying due to other eligibility criteria, such as, as has been mentioned, the enfranchised leaseholders and leaseholders owning more than three flats. On learning about that a little bit more, it seems to me that this is a travesty. As has been stated by others, these leaseholders are facing eye-watering sums and many are living in unsafe buildings that are unmortgageable, uninsurable and unsellable. That they have been abandoned is unconscionable.
Amendments 93B, 96, 97, 99, 100, 105 and 107 seek, in different ways, to expand the number of leaseholders eligible for remediation support. This is the right thing to do. It is also obvious that some small adjustments can be made to make things better for more: for example, simply looking at the wealth—what is known as the affordability test—or the issues of joint ownership.
Amendment 93B, tabled the noble Earl, Lord Lytton, is very clear that only a building remediation scheme will ensure that all buildings with safety defects undergo remediation, irrespective of ownership or building height. We agree with that. Too many people are falling through the gaps that have emerged post the Building Safety Act. Insurance has already been mentioned, so I will not make any more comments on that.
It seems to us that the pragmatic Amendments 96, 97, 99 and 100 from the noble Lord, Lord Young of Cookham, are arguably the neatest way of achieving this aim. They simply amend the Building Safety Act so that these non-qualifying leaseholders are included in the support available to other leaseholders.
Amendment 102, in the name of my noble friend Lady Pinnock, would require the Government to report on progress relating to the building safety remediation. I am sure that she would probably agree with the comments made by the right reverend Prelate. This amendment was drafted in response to concerns raised by End Our Cladding Scandal, namely the speed at which remediation is occurring, alongside the progress in ensuring that leaseholders have access to a robust and independent dispute resolution process, and the fact that not all affected leaseholders are able to access protection.
I note that the Government publish monthly figures relating to the remediation of building safety defects, but there is no clear target for when these works should be completed. It would be appreciated if the Minister could perhaps clarify this. I am reminded of the saying that you do not fatten a pig by simply weighing it. To us, the lack of speed or a plan or any sense of urgency is clearly the impetus behind the amendments from the noble Earl, Lord Lytton. It seems that no one is holding anyone’s feet to the fire.
The Government also promised a robust and independent resolution process that would allow leaseholders to challenge building assessments or remediation. This has arguably not come to pass, with the process being more ad hoc and without sufficient leaseholder representation. It is vital that leaseholders are able to hold developers to account and ensure that remediation is completed safely, in a timely manner and at good value, but they need more government clout.
There was something mentioned only briefly that I would like to expand on a little. It seems to me that developers are getting all the flak. We all agree that lease- holders are blameless, but developers are not the only party to blame. Many of us still need to be brought to the table, preferably with cash, to provide the funding that will fix the problem. I am talking about product manufacturers, architects and designers, contractors, building control, testing houses and insurers. They all have a part to play and they should all play their part.
I suspect that, when the Grenfell Tower Inquiry reports later this year, the role that successive Governments, to be fair, have played will also be unavoidable. We feel that it is time that the Government really stepped up and gripped this problem comprehensively. They are the ringmaster, after all.
I am most grateful to the noble Baroness for giving way. She mentioned a list of people who had a degree of responsibility. One of them, of course, is building control. My experience of building control in local authorities is that they can be extremely pernickety and difficult, and can enforce very high standards. All of us, in our different cities, will have seen examples of absolutely grotesque omissions and failures. But is it not the case that a local authority has a statutory liability, through building control, and that that, in and of itself, could and should be a source of remedy for a person who finds themselves in this position? On top of that, is there not an incentive for a developer, having built a structure and sold on the units, to wind up and move on to a different company to build the next one? We end up with people slipping out of the net entirely.
The noble Lord has hit on a point; in some estates, you build one building that might just meet the requirements, and then more and more are built, and it expands the problem. I agree with a lot of what he said. I was trying to point out that we tend to say it is all on the developers, but I think this is a systemic failure of a series of accountable people. That is what I am trying to say.
Ultimately, I am saying that, sadly for democracy, this is yet another state failure—like WASPI, blood contamination and Windrush, to name but a few. The harsh reality is that the impact of this is felt every day by some people, and is growing: when a leaseholder decides that they want to reinsure or somebody decides that they want to sell, suddenly they are faced with, “Wow, I didn’t realise that there was all of this”. Therefore, the number of people affected is actually growing.
I will end on what my noble friend Lady Pinnock always says: leaseholders have done nothing wrong and everything right. Excellent campaigning from groups such as End Our Cladding Scandal and the non-qualifying leaseholders group has helped us achieve the progress we have made on remediation support. We owe it to them to keep pressing the Government on making sure that all leaseholders are protected from the costs of a situation they did absolutely nothing to cause.
My Lords, I add my tribute on the sad and sudden passing of Lord Stunell. We worked very closely with him on the levelling-up Bill, and he was such a great asset during the passage of that Bill. Looking at his record over the years, his was a life dedicated to public service, to both national and local government. I hope the noble Baroness will take our condolences back to the Liberal Democrat group, and we will pass them on to his family as well.
The noble Earl, Lord Lytton, is right to call this issue a sorry tale of shame. It is clear from the number of building safety amendments in this group and this Bill, and previously in the levelling-up Bill, that there appears from our debates to be a cross-party consensus from most of us, except the Government Front Bench, of such deep dissatisfaction with building safety in general and the glacial progress on remediation in particular. It was carefully calculated in the recent Times article by Martina Lees, referred to earlier, to show that only 8% of buildings in need have been remedied, not the 21% that the Government claim, and which was mentioned by the right reverend Prelate the Bishop of Lincoln.
As important is the huge number of non-qualifying leaseholders whose dreams of property ownership have turned to nightmares, as the horror of their uncertain financial position, the escalating costs of remediation and the impossibility of selling homes—I have seen evidence of this, as valuers are currently placing values at zero or negative—snatch away their aspirations and leave behind only extreme anxiety. Numbers vary, but the Times estimates the number of affected homes to be up to 1.5 million and, as other noble Lords have said, upwards of 4 million people are affected.
An excellent briefing from the National Residential Landlords Association points out that data remains lacking and estimates that there are approximately 1.3 million leaseholders in buildings less than 11 metres in height and 400,000 leaseholders, referred to by the noble Baroness, Lady Thornhill, in high-rise buildings who are non-qualifying because of other eligibility criteria. Many leaseholders are unaware of their non-qualifying status or are alerted to it only when they receive an invoice for remediation works or attempt to sell their property. It is important to remember that many leaseholders are understandably reluctant to speak out on this issue for fear of further devaluing what they thought was going to be a very valuable property asset.
The scale of this problem is eye-watering. I agree with comments made previously by Members of your Lordships’ House that, unless this is addressed urgently, as more and more leaseholders discover their liability, another enormous injustice scandal will unravel, which will scar whole generations of home owners. The noble Earl, Lord Lytton, referred to the fact that this will escalate over time to the detriment of freeholders and leaseholders, but with the balance of personal financial risk sitting with leaseholders.
The system the Government put in place, which was subject to an update in your Lordships’ House at the end of March, may have made some progress, but as a spokesperson for Grenfell United said:
“Government’s shockingly slow progress towards remediation shows a complete lack of political will to keep people safe in their own homes”.
Giles Grover, of the excellent group End Our Cladding Scandal said:
“The majority of unsafe buildings across the country still don’t have plans in place to fix all issues”.
The 7,283 mid-rise buildings that the Government have estimated to be unsafe are missing from any plan for remediation as they are deemed non-qualifying, and the unbearable pressure of remediation is falling on the ordinary people who make these flats their homes. While the Government have brought forward legislation and statutory instruments to deal with this situation, progress has been slow because issues are being dealt with piecemeal as they arise. Even when legislation has been considered, such as the Building Safety Act 2022, which should have been a comprehensive solution, too often amendments were rejected with serious impacts and consequences for leaseholders only now becoming more apparent.
The noble Earl, Lord Lytton, proposes a comprehensive and detailed framework to encompass the whole situation around building safety remediation that would give more structure to the current piecemeal approach. While I understand that the level of detail that he proposes in this scheme will almost certainly not be greeted by the Minister with the wholehearted approval that it probably deserves, I hope the principle of having such a framework in place and the thorough approach set out by the noble Earl will at least be a matter for reflection and future consideration as the Bill progresses.
Amendments 96 and 97, tabled by the noble Lord, Lord Young of Cookham, his Amendments 99 and 100, to which I have added my name, and Amendments 105E and 105F, tabled by the noble Earl, Lord Lytton, are aimed at ending the iniquitous distinction between qualifying and non-qualifying leaseholders. We cannot simply allow the nightmare that many non-qualifying leaseholders are enduring to continue.
We totally support the aim of Amendment 102, in the name of the noble Baroness, Lady Pinnock, in terms of holding the Government to account for the building safety remediation programme. The reporting mechanisms so far do not appear to have accelerated progress on remediation, although it has to be said that the bringing to justice of some of the worst developer offenders, such as those involved with Vista Tower in Stevenage, is welcome. I hope the Government will accept this amendment and bring regular updates before your Lordships’ House, but it would be even better if there could be target dates for outstanding work to be completed. The fact that remediation has dragged on for so many years is a cause of great frustration, anxiety and financial hardship to those affected. Do the Government have a view about a projected end date for these works to be completed? A deadline, even if it is not met by everyone involved, is great for concentrating the minds of those involved in remediation.
In response to the points made by the noble Baroness, Lady Thornhill, and the noble Lord, Lord Empey, I agree with the noble Baroness that it is not just developers who are responsible for this issue. But a big problem here has been the deregulation of the building control function, taking it away from local authorities and allowing developers to pick and choose who their building control inspectors will be. That has been greatly responsible for some of these issues.
Our Amendment 105 is simple and straightforward in its aim. It would bring the beleaguered non-qualified leaseholders, who are in desperate need of remedies for their building defects, within the remit of the Building Safety Act 2022. Surely, if we are concerned about ensuring that people feel safe and are safe in their homes, we can all support that. It remains our position that it should not be the responsibility of leaseholders to suffer the financial consequences of defective building. Amendment 105C in the name of the noble Earl, Lord Lytton, has a similar aim.
I support my noble friend Lord Rooker in his campaign to highlight the danger of—I was going to call them electricity surges, but I had better not now because I will get into trouble with him—neutral current diversion. I want to come back to the case that Martina Lees quoted of Viv Sharma and his Ukrainian wife Julia, who had to leave their nine-storey block when the fire service deemed it unsafe. It had more than 17 defects, caused by the original developers, which should never have been approved by building control. They have been offered less for their property than they bought it for 15 years ago, and they have had to pay for temporary accommodation. Julia has said:
“I’m now 50. How am I supposed to rebuild my life?”
That situation—which is morally wrong, as the noble Lord, Lord Young, said—remains in place. Such situations should have been remedied by the Building Safety Act but were not. We now have another opportunity to put things right, so I hope the Government will do so by accepting the amendments before us today.
My Lords, I first add my tribute to Andrew, Lord Stunell. I have sat opposite him for many hours in this Chamber and in Committee, being challenged by him in a detailed but always good-humoured way. I am going to miss him. I did not know where he was this week to begin with, and I asked questions. He will be sorely missed, particularly on the issues that we talk about as a group of Peers. I send his family, friends and colleagues our best wishes. May he rest in peace.
I thank noble Lords for the amendments on building safety and for this thoughtful debate. It is an important issue. I will take all the amendments in turn and put the Government’s view. I thank the noble Earl, Lord Lytton, for Amendments 93B and 107. Their aims were debated extensively during the passage of the Building Safety Act 2022 and the Levelling Up and Regeneration Act 2023. I thank the noble Earl for his years of important campaigning on building safety, and for tabling these amendments again and speaking to them in such a detailed way. We continue to consider his arguments and are always willing to listen carefully to the ways in which we could improve the current regime. That is why the Government tabled several clauses in the other place to clarify and extend the protections in some particular areas of this Act.
However, I reiterate that implementing a new building safety remediation scheme would reverse what has been achieved by the regulatory regime set out in the Building Safety Act. Creating a system which mirrored the existing regime would delay essential remediation already being carried out. It would also create uncertainty for leaseholders across the country. The responsible actors scheme, the developer remediation contract, remediation orders and remediation contribution orders are already delivering many of the noble Earl’s objectives, requiring developers to fix problems that they have caused.
On that matter, if a company was responsible for defective property and the company became insolvent, am I to understand that the directors of that company would be capable of recommencing building another property? Or is the Minister saying that the individuals could be followed through the courts for remediation, rather than being able to sidestep their responsibilities?
My Lords, that is an interesting and very legal point. Rather than speaking off the top of my head, I would like to get it right and write to the noble Lord.
I move to Amendments 96, 97, 99 and 100. I thank my noble friend Lord Young of Cookham for these amendments. Amendments 96 and 99 would extend the leaseholder protections to buildings under 11 metres and to collectively owned leaseholder buildings. It is generally accepted that the risk to life from historic fire safety defects is proportionate to the height of buildings. As this risk is lower in buildings under 11 metres, such buildings will require remediation only in very exceptional circumstances. Given the small number of buildings that have required this—it is three across the country; the developers have remediated two of them and we are in negotiations on the third to get that remediation done—our assessment remains that extending the leaseholder protections to these buildings is neither necessary nor proportionate.
Where leaseholders in buildings under 11 metres face remediation costs, it is important, as I have said so many times at the Dispatch Box, that they contact the department immediately and we will look into that individual building on a case-by-case basis. If necessary, we will write to the building owner to seek assurances that any proposed works are necessary and proportionate, and that the rights to redress are being fully utilised.
The Government understand that some leaseholders in these buildings are still facing higher insurance premiums, with insurers citing building safety as the reason for the increase. The Association of British Insurers and its members have stated that premiums should reduce where buildings comply with building regulations. We expect insurers to honour their commitments and make sure that premiums are priced fairly and appropriate to the level of risk.
Regarding collectively owned leaseholder buildings, the Government made the decision that the leaseholder protections in the Building Safety Act would not apply to these buildings. As a result, people would still have to pay to remedy the safety defects in their building as owners. Residents who own the freehold would have to pay not only their portion of remediation costs but for any residents who did not participate in the purchase of the freehold.
Since the Building Safety Act, the Government have continued to examine the situation faced by collectively owned leasehold buildings. For instance, the Building Safety (Leaseholder Protections) (England) Regulations 2022 provide owners in these leaseholder-owned buildings with access to remediation contribution costs. We have listened and we have acted.
I turn to Amendment 97. The existing leaseholder protection package is designed to maintain a fine balance between leaseholders’ and freeholders’ rights. The amendment distorts the balance disproportionately in favour of leaseholders and risks unfairly benefiting one group of investors, leaseholders, to the detriment of another—the freeholders.
Regarding Amendment 100, our intention has always been to protect individuals living in their own homes, rather than those who have purchased property for financial or commercial reasons. Changing the leaseholder protection regime so that it is linked to a share of ownership, rather than individual properties, would also introduce an unnecessary level of uncertainty and complexity into the protections.
Regarding cessation certificates, it is not clear what effect such a certificate would have or how a landlord would know when to serve one. The responsibility for the costs of fixing historical building safety defects should rest with those responsible for creating them. The Building Safety Act was clear that, when this is not possible, responsibility for remediation should be shared between stakeholders in the property. Concentrating responsibility on a single group would risk a number of unintended consequences, including freeholders becoming insolvent. Taken together, the changes made by this amendment would therefore complicate the regime unnecessarily and slow the progress made towards the remediation of buildings.
I thank the noble Baroness, Lady Thornhill, who spoke on behalf of the noble Baroness, Lady Pinnock, to Amendment 102 about the reporting requirement for building safety remediation. The Government are committed to accelerating remediation and protecting affected residents. The total number of buildings reported to have started or completed remediation works in England has more than doubled since the end of March 2023. Along with monthly updates, Ministers have also committed to providing the other place and those interested with regular updates on progress, the latest of which was provided on 26 March.
My noble friend Lord Young of Cookham asked about ACM cladding. Another noble Lord mentioned pathways. I realise that pathways do not mean delivery, but, importantly, all residential buildings in England taller than 11 metres have a pathway to fixing unsafe cladding, either through taxpayer-funded schemes, developer-funded schemes or social housing provider-led remediation. This protects leaseholders from these costs. In addition, 99% of high-rise buildings with unsafe Grenfell-style ACM cladding identified before 2023 have been made safe or have work under way to make them safe. The proportion of buildings remediated continues to shift as more buildings are being identified and 90% of all high-rise buildings with ACM cladding have been made safe or have work under way on them.
My noble friend Lord Young also brought up the issue of decanting. The Government amended the Bill in the other place to make it explicit that the costs of alternative accommodation for residents, when they are decanted from their homes to avoid imminent threat to life or of personal injury, or because remediation works cannot take place while residents are in occupation, can be recovered. They can recover those costs through a remediation contribution order, which is an important change to the Bill.
The department continues to take steps to support applicants to start on site more quickly. Local authorities, fire and rescue authorities and the Health and Safety Executive can take enforcement action against those not progressing remedial works. Where building owners are failing to make acceptable progress, those responsible should expect further action to be taken.
Some 55 of the largest developers signed legally binding contracts committing to remediate, or to pay to remediate, life-critical fire safety defects in 1,500 buildings over 11 metres that they had a role in developing in England over the 30 years to April 2022. Together with the building safety levy, this will see industry contribute an estimated £6 billion. The department publishes information on developer progress based on quarterly returns submitted by developers, and this is available. I make it clear that the introduction of new reporting requirements involves time and cost, which need to be balanced against the need to continue our progress in building remediation. So I ask the noble Baroness not to press the amendment.
I thank the noble Baroness, Lady Taylor of Stevenage, for her Amendment 105. Similarly to Amendment 97, it would open the door to changes which distort that balance disproportionately in favour of one group, to the detriment of another. It is important that legislation provides clarity for leaseholders, freeholders and the courts. The Government believe that having definitions of qualifying and non-qualifying leases in primary legislation provides greater certainty to all interested parties—an important consideration given that this is a pivotal part of the legislation for so many people across the country.
I thank the noble Earl, Lord Lytton, for Amendments 105C to 105G, which seek to make several changes to the building safety regime and, in the case of Amendment 105G, the insolvency regime. Amendment 105C would rewrite the developer remediation contract by statute. This would unfortunately serve to create operational legal confusion about what developers’ obligations are, which buildings need to be identified and remediated, and what standards this should be done to, resulting in delay and litigation. I hope the Committee agrees that the Government should instead focus on holding developers to account for remediating unsafe buildings as quickly as possible.
On Amendment 105D, it is right that the Government have worked with major developers that have built defective buildings to secure binding commitments to remediate, worth an estimated £3 billion. However, I do not believe it would be fair also to target these specific developers to pay a disproportionate share of other remediation costs for buildings that they have no connection with. That is why we are focused on setting up the building safety levy to contribute funds to our programmes to remediate buildings over 11 metres. The levy is estimated to raise a further £3 billion over 10 years, or more.
We have had much debate on the merits of Amendment 105E, and I gave my views on Amendments 96, 97 and 99. As I mentioned, relatively small numbers of residential buildings under 11 metres or five storeys require remediation. These buildings are considered to be at low risk of historical fire defects, and I maintain that this change would disproportionately and unfairly place the obligation for remediation of non-life-threatening defects on freeholders. Meanwhile, extending protection to leaseholders who have not purchased the freehold would place the financial burden of remediation entirely on leaseholders who own a share of the freehold, making it less likely that these buildings will be remediated.
As for providing leaseholder protections to leaseholders who own more than three dwellings, I reiterate the points raised earlier. Landlords owning a number of properties are likely to have these as investments, and a fair balance needs to be met. The Building Safety Act was not designed to benefit investors; it is to help individuals living in their own homes.
On Amendment 105F, removing qualifications for passing on costs for defects in service charges would widen the scope of the leaseholder protections considerably. This would risk the burden of remediation costs falling disproportionately on landlords, whether or not those landlords are also some or all of the leaseholders in the building. The amendment also provides for members of a building industry scheme to cover remediation costs. I have already mentioned my concerns with the similar approach in Amendment 105D.
My Lords, I thank all noble Lords who have spoken in this debate. Needless to say, too many further questions arise out of all this, and there are too many points for me to be able to address anything other than the odd one—other than by making a very long speech and incurring the wrath of the Government Whip for the second time in the week.
I preface my further remarks by saying a word about Lord Stunell. His death is a great loss to all of us. He was forensically well-informed and always delivered his contributions with care, tact and supreme authority. I had the great honour of serving with him on the Built Environment Committee and, of course, I was with him throughout the Fire Safety Bill and the Building Safety Bill, as well as the levelling up Bill. He will leave a very great hole in our deliberations.
There is a fundamental common purpose between what the noble Lord, Lord Young, and I are trying to achieve. I simply say that I look forward to working with him to see whether we can find a common way forward—and indeed with other noble Lords, such as the noble Baronesses, Lady Thornhill and Lady Taylor, and the Minister, because there is a consensus that something needs to be done.
The right reverend Prelate and all the Bishops have been fantastic in their support on this—right the way through the passage of the now Building Safety Act and Levelling-up and Regeneration Act, and again on this Bill—in order to get justice for innocent leaseholders.
The noble Baroness, Lady Thornhill, referred to the wider liability and systemic failures. I get that, which is why I keep referring to the wider construction industry. There are lots of people involved there and they all have some responsibility.
The noble Lord, Lord Empey, referred to building control. This takes us back to the Building Act 1984 measures, which allowed for approved inspectors—as privatised entities—effectively to take over the role of local authority building control. The local authority then lost control of the process at that stage. The construction sector gamed the system. Indeed, I know at least one large body that had its own wholly owned subsidiary as its approved inspector. Where is the objectivity there?
The noble Lord, Lord Rooker, was absolutely right on the question of electrical safety, which is a subset of the fire safety issue.
The noble Baroness, Lady Taylor of Stevenage, has always been a fantastic supporter of what I am trying to do; I say to her and to all noble Lords that I am not set on the particular solution that I have put forward, but I am dead set on wanting something that protects consumers and protects leaseholders in their own home—this is the recurring theme. The chickens are going to come home to roost: the bottom line is that this will always end up with leaseholders by default picking up the pieces; they are the most vulnerable. The problems do not go away; whether you kick the political can down the road or whether you do not, it just leads to more grief.
I will not go through the comments of the Minister, but I thank her for them and will look at them with very great care. I am sorry that the argument still seems to be that, because this matter was raised in the passage of the then Building Safety Bill and levelling up Bill, it somehow should not be discussed any more. The point is that the problem has not gone away. The Minister may not want to listen to me—certainly not for much longer this afternoon—but she needs to listen carefully to what leaseholders are saying about their experiences. We in Parliament may start turning a tin ear to what is happening out there, but it is evident in the media and in emails to me and other noble Lords, and it cannot be ignored or avoided any longer. The mercury in this respect is going up the tube quite fast, and this will become more and more of an issue.
If my proposals are destined to slow down the process, all I can say is that, politically, I suspect that this is going to start speeding up very rapidly. The Government may say that they will take further action if the players do not perform, but this is another bit of finger-wagging. We know that something needs to be done and that it needs to be done now.
I end by saying that I will consult with other noble Lords about how we can take this forward. I certainly may return to this matter on Report. None of us wants to delay this Bill but, unamended, the agony for lease- holders will go on and on. On that note, I beg leave to withdraw Amendment 93B.
My Lords, Amendment 94 is in my name and those of the noble Lord, Lord Young of Cookham, and the noble Baronesses, Lady Hayter of Kentish Town and Lady Taylor of Stevenage, and I am very grateful for their support. Before I speak to the amendment, I want to add my appreciation of the life and shock at the loss of Lord Stunell. Andrew Stunell was a terrific advocate for better housing, as a notable Construction Minister in the coalition Government and an eloquent speaker on a range of Bills, not least the Bill we are debating today, which he analysed brilliantly just a month ago in this Chamber. He will be very greatly missed indeed.
Amendment 94 represents the grand finale in our Committee debates on the Bill. It would empower the Secretary of State to establish an independent statutory regulator of property agents who sell and manage leasehold property. It would introduce into law the recommendations from the Government’s own Regulation of Property Agents working group, which I had the honour to chair and which reported in July 2019. The twin objectives of the regulator would be to protect consumers and to raise standards. Although the working group recommended a regulator for all property agents covering estate agents, sales agents and letting agents as well as property agents handling leasehold property, the amendment relates only to the leasehold managing agents, to keep within the scope of the Bill. However, many property agents involved in leasehold sales and management also engage in sales of freehold properties and in the management of rented sector lettings, so would be covered. Moreover, a twin amendment in the Renters (Reform) Bill, due in this House shortly, could extend the regulators’ role to cover agents managing rented properties as well.
The need for regulation was spelled out graphically at Second Reading, and many of your Lordships have shared details of agents’ misconduct brought to their attention. The unsuitability of badly behaved agents ranges from simply not communicating with leaseholders to misleading them and taking advantage of their leaseholder status with exorbitant commissions, charges and fees, not least in retirement housing developments. Although there are some excellent agents providing a good service and value for money, there are also inept, incompetent and exploitative agents whose reprehensible behaviour cries out for proper regulation. The urgency for regulating the sector has now increased, following the passage of the Building Safety Act 2023. This legislation has meant managing agents of blocks of flats taking responsibility for spending substantial sums of leaseholders’ money and of taxpayers’ subsidies to cover remedial building works in blocks of flats. It is now more essential than ever that such responsibilities are exercised only by reputable and qualified professional agents.
There is rock-solid support for a regulator of property agents from the professional bodies and trade associations representing the sector: the RICS; Propertymark; and the Property Institute, which comprises the Institute of Residential Property Management and the Association of Residential Managing Agents. Those property agents who are acting honourably are undermined by the unprofessional conduct of too many. Of course, the organisations representing consumers, such as Citizens Advice and the Leasehold Knowledge Partnership, are extremely supportive of the proposals encapsulated in this amendment.
A regulator would establish requirements for relevant qualifications and continuous professional development and would require adherence to an overarching code of conduct and to subsidiary-specific codes covering the different components of property agency. The regulator would have a full range of enforcement powers, from requiring specific changes to levying fines or removing the licence for a firm or individual to operate. That would provide the same consumer protections as for social housing, with its social housing regulator and Housing Ombudsman, and as for the financial sector, with its Financial Conduct Authority and Financial Ombudsman Service.
As with accountants, lawyers or surveyors, property agents deserve to be respected as professionals with expertise and with the proper attributes that go with professional status. Why would the Government resist a measure that is likely to be extremely popular with millions of leaseholders, which is earnestly requested by those who would themselves be the subject of regulation, and which has been given so much support from this House, particularly following the strong encouragement from the cross-party scrutiny of your Lordships’ own Industry and Regulators Committee last month?
My Lords, I declare a non-financial interest in having worked with the Property Institute and other groups that have supported this area for many years. Also, as the noble Lord, Lord Best, alluded to, I chaired a committee working on one aspect of this matter, which I will come to shortly.
As the noble Lord said, it is quite unusual for this call for regulation to come not only from the consumers who would benefit but from the professionals already working in the field. It is virtually unanimous; in fact, among the organised groups, it is unanimous that this is the regulation under which they would like to work. The agencies and their representative bodies are waiting for this to happen.
As has just been described, in a way the reasons are obvious, not only outside but within this House. We know that, as was mentioned, the Best report was welcomed, I think universally; the Select Committee on Industry and Regulators has called for it to happen; and in the world outside there is still an expectation—a hope—that this might happen. A number of us want an election soon but we could even put it off—if that would be the only thing needed to get this through, we will put up with more of this Government.
It is fairly obvious that housing is not just bricks and mortar. Homes are fundamental to people’s financial and emotional well-being. Get this right, and their own quality of life improves dramatically. Get it wrong, and it is debilitating, stressful and expensive. It starts, of course, with the purchase, or indeed the sale, of a leasehold property, which is a more complicated transaction than simply buying a freehold house. So even at that stage, transparency, clarity, openness and proper explanation by estate agents are essential, and so, therefore, is the need for their expertise in these specialist areas of purchase and sale.
However, even once it has happened and you are living in the leasehold property, that can be a particularly fraught arrangement. With leasehold management there is a three-way relationship between the landlord, the resident—that is, the leaseholder or the owner—and the managing agent. Marriages with three in are always a bit complicated, but in this case, of course, you have the managing agent, who is appointed by the landlord but who has duties and, even more importantly, a close working relationship with the leaseholder. That adds an element of necessary expertise in how to handle it.
As important is the complexity of the law involved in this. It covers particular rights that are different from those associated with a freehold house. There are the safety issues, which have been well rehearsed in Committee. There are consumer issues and fiduciary duties, as well as myriad external bodies and requirements that have to be met. Frankly, managing agency is no task for an amateur. Agents need to be trained in ethics as well as the law and building regulations, and they need to be checked to ensure that they are fit and proper to handle both people’s money and their safety, and to prepare all the legal and other paperwork essential for running a complex operation. That is why we require regulation and oversight of this important profession.
As was mentioned, a code of conduct is needed across the industry, not simply to provide the requirements on agents but, importantly, to enable consumers to understand and thus to be able to enforce their rights. As the noble Lord, Lord Best, said, a cross-industry group that I had the privilege to chair and whose outcome was welcomed by the department has prepared the code and it is ready and waiting, so the work in setting up this regulatory body would be less than otherwise. It is there, ready and waiting for the legislation to make adherence to that code a legal requirement. That is the key to professionalising the industry and enhancing the experience of all who deal with managing agents—landlords and leaseholders alike.
It is not sufficient, welcome though it might be, to have an ombudsman to adjudicate and put things right when things have gone wrong. We need to prevent problems arising, which means raising standards, ensuring compliance, requiring training and qualification, and continuing professional development in a world of statutory requirements that seem to be changing, not just year by year but month by month, as is the technology involved in building, which we know about.
The Best way is the only way. Let us give the noble Lord what he has been asking for for so long and just get this report into law—let us get on with it. I am delighted to support Amendment 94.
My Lords, I will add a very brief footnote to the excellent speeches made by the noble Lord, Lord Best, and the noble Baroness, Lady Hayter.
The point I want to make is that the market is changing. We are moving away from a position where the freehold of blocks of flats was owned by the Grosvenor estates, Cadogan Estates, the Portman Estate —professional freeholders—and they were well able to choose responsible managing agents and keep an eye on them. We are moving away from that to a position where more and more of the blocks of flats are owned by the leaseholders. It is a trend that I that I welcome—indeed, the Bill accentuates that trend—and eventually we will end up with commonhold. Against that background, it becomes even more important that the managing agents should be professional. The background is changing and the need for this is now much more urgent than it was a few years ago.
I very much hope that the Government will be able to respond to the eloquence of the noble Lord, Lord Best, and introduce regulation of managing agents. However, if they cannot, he hinted at two intermediate steps, which I think the Government might be able to take. One is requiring mandatory qualifications. As the noble Lord said, these have already been introduced for the social housing sector and could be expanded to protect leaseholders and private tenants. The second thing the Government could do, which the noble Lord also mentioned, is to introduce the mandatory code of practice, drawing on his working group on the regulation of property agents—this case was well made by the noble Baroness, Lady Hayter.
The Government could do one final thing which has not been mentioned so far. There is a government document called the How to Lease guide, and they could make that a mandatory document to be shared with consumers who purchase a leasehold property, in exactly the same way in which landlords and agents must provide the How to Rent guide to tenants. Therefore, if my noble friend cannot go the whole hog, I very much hope that she can smile warmly on intermediate steps, which might then pave the way to the final introduction of regulation of managing agents in the very near future.
My Lords, I am pleased to follow the noble Lord, Lord Young of Cookham, and I agree with the comments that he just made. I remind the Committee that I have been a leaseholder for around 30 years, and over that time I have dealt with several property management companies.
I wholeheartedly support Amendment 94 in the names of the noble Lords, Lord Best and Lord Young of Cookham, and the noble Baronesses, Lady Hayter of Kentish Town and Lady Taylor of Stevenage. I pay tribute to the dogged determination of the noble Lord, Lord Best, in pursuing the reform and regulation of property agents over a number of years, and, of course, to the sterling work of the noble Baroness, Lady Hayter of Kentish Town.
I fail to see why His Majesty’s Government should not support this amendment in full. I also fail to see why the Government have failed to bring forward their own measures to regulate property agents, which, as we have heard, are long overdue. I know that the Minister will say that this is all very complicated and requires detailed and thoughtful legislation, that she will describe how property managing agents are making voluntary strides to improve their standards and operation, and how there are redress schemes in place. However, I do not really buy that argument. This amendment gives His Majesty’s Government two years to lay down regulations to regulate property agents. That is enough time even for this Government, and if not them, then certainly for the next one.
No other sector I know of handles potentially millions of pounds of other people’s money but is unregulated by statute. The City of London looks at property management companies aghast given the lack of oversight. I will give some practical examples of why property management companies should be effectively regulated, following the comments of the noble Lord, Lord Best.
My Lords, I apologise to the Committee. From what the noble Lord has said, I realise that I probably should have said that I was a leaseholder when I spoke.
My Lords, I rise briefly to offer Green support for this clear, obvious and essential amendment, which already has strong support across the Committee.
I want to pick up a point made by the noble Baroness, Lady Hayter, about how both buyers and sellers desperately need confidence and how that confidence is utterly lacking at the moment. A lot of our discussion has focused on the problem of estate management, where there are clear and obviously pressing problems, but to focus a little on sales of properties and the need for some oversight there, I note that, last year, trading standards warned that many agents were not passing on the best offers that they had received from purchasers, as they are legally required to do, because they were getting commission fees from mortgage brokers, solicitors, surveyors and other third parties. They were choosing to go with what would produce a better result for them but a lower price for the seller. The only way that this is generally uncovered is if the would-be buyer who did not succeed in purchasing the property happens to look at the Land Registry sales price, says “but that’s less than I was offered” and creates a fuss. That is a sign of just how utterly cowboy the current situation is without regulation.
A report out yesterday noted that for 34% of the “for sale” stock on some major websites there had been an asking price reduction. People often need to sell for all kinds of reasons—including divorce, bereavement or perhaps because they need more bedrooms for extra children. These are all stressful, difficult situations where delays can cause damage and create uncertainty. We have a cowboy situation out there, and as the noble Baroness, Lady Hayter, said, the people in the industry who want to do the right thing know that there are cowboys out there who are a threat to them. Therefore, the amendment is clearly essential to making our housing sector less of a cowboy environment than it is now.
My Lords, I too support Amendment 94 in the name of the noble Lord, Lord Best, which was so well outlined by him with his usual clarity and reason. It is an amendment that I was determined to put my name to, but its popularity was such that I was too late. However, I listened intently to the informed contributions from the noble Baroness, Lady Hayter, and the noble Lord, Lord Young of Cookham, and look forward to the contribution of the noble Baroness, Lady Taylor. This will therefore be possibly my shortest and easiest contribution to the Bill, simply saying that, between them, the proposers have nailed this issue with an amendment that should be workable and which we hope that they will take forward on Report.
The noble Lord, Lord Best, listed the broad coalition of support for a regulator and indeed it appears that it is ready to go. This is something which the noble Lord has campaigned on for years. His report was widely accepted and praised for its thoroughness and its remarkably workable plan for the way forward, which he has stated in detail. Interestingly, the recommendations of his working group went much further than this amendment, so the movers of the amendment are being pragmatic and measured because they want to see change now—we support that.
I found the contribution of the noble Lord, Lord Truscott, on redress, particularly interesting. It reminded us that, currently, regulation in the property sector is voluntary and sanctions are limited. This Bill will not change that enough. Do your Lordships not think it is shocking that anyone can set up a firm from their bedroom and very soon be handling hundreds of thousands of pounds of leaseholders’ and taxpayers’ money while being largely unaccountable to the leaseholders who, on the whole, do not choose them to manage their block or control their service charges? This cannot be right. An individual can set up in business as a property manager without any formal qualifications, experience or even insurance.
It seems shocking that there has been so much good legislation to protect much smaller sums, such as deposits for renters, but nothing to protect leaseholders’ funds. We have regulations and regulators for individuals and companies handling much smaller amounts of people’s money. Leaseholders are usually required by the terms of their lease to make advance payments towards the service charge and to contribute to a sinking fund or reserve fund. These sums can be substantial, especially if major works are planned, which is why we supported the amendment tabled by the noble Baroness, Lady Fox, earlier in the Bill on consultation on major works. The Federation of Private Residents’ Associations has asserted that there is no other area in the UK in which money is held by a third party that is not regulated—unless somebody can tell me otherwise. The federation suggests that moneys held by unregulated and unprotected third parties may well exceed £1 billion.
If we want to change the behaviour of such property agents, there needs to be a much more professional approach to training and development, as the noble Baroness, Lady Hayter, exemplified well. Mandatory professional standards should be set, along with the oven-ready code of practice.
Even within the sector, the good guys—and there are good ones—do not want the rogues giving them a bad name and tarring everyone with the same brush. It is clear that the Government are procrastinating on this issue, so much so that several years after the report from the noble Lord, Lord Best, very little has happened. The fact that the Government have not taken the opportunity with this Bill to introduce relevant property agent regulations proves that they have probably yielded to the anti-regulation voices among their ranks, despite their acceptance in principle of the case for regulating property agents, which has also been accepted by the majority of interested and affected parties. We are all seeking a solution, and Amendment 94 is certainly worthy of consideration, and we urge the Government to give it that consideration. I look forward to the Minister’s reply and to Report, definitely.
My Lords, I have not heard a voice in the Chamber this afternoon against the amendment from the noble Lord, Lord Best. It is such a refreshing amendment, it is long awaited, and we have heard, and we all knew, that his report was kicked into the long grass many years ago by the Government, and that is something of a disgrace. Even in the Levelling- up and Regeneration Bill debates last year, this subject was much discussed. We must not overlook that large cohort of hugely responsible and professional property managers—and there are many—but our focus must be on those who fail to adopt high standards, those who knowingly overcharge, those who take discreet commissions, and those in the pockets of clients with dubious standards.
This subject of rogue managing agents has come up again and again in this Bill; the time has come to act. The amendment clearly has strong cross-party support, and we have heard that the Government want to do it in principle. If the Government really want to do something for leasehold occupiers, this is it: simple regulation of property managing agents and other related property advisers; no one to practise without registration; a no-nonsense, strictly monitored and enforced system of effective supervision; and a simple, advertised complaints procedure for the lessees and rigorous monitoring of those complaints. This amendment has my wholehearted support. I hope the Government will adopt it; if not, I hope it is pressed on Report.
My Lords, I do not want to jump in front of my Front Bench, but this is not a Bill that I have followed in detail. I did not take part in the Second Reading, and I have not taken part so far in Committee, but I was in the House this afternoon, and that is why I am standing up to very briefly address your Lordships on Amendment 94, which should be fully supported. I declare a personal interest, and your Lordships will see how I can link that to supporting this amendment. My wife and I are both freeholders and leaseholders of five flats, which are in an adjacent house to our own house. We personally manage them and know all the tenants well, and we try to deal with all their needs and circumstances, but the time will come when we have to sell. It is that stage that I am worried about, to ensure that these leaseholds are properly managed under the auspices of the regulator.
My Lords, it is a great pleasure to take part in this debate and to hear from such eminent experience across the Committee on this issue. On one of the points made by the noble Baroness, Lady Thornhill, about how far back this goes: one of my very first jobs in the early 1970s was at an estate agent. It was a family business run by somebody who had trained as a journalist and had a career in journalism, but he did, at least in that case, have the grace to train as a chartered surveyor as he carried on his business as an estate agent. You would have thought that things would have changed a bit over the subsequent years—it is quite a long time ago now—and it is ridiculous that it can still happen that people with little experience or qualification can be in charge of huge sums of other people’s money and property, and I hope that we can move matters on, at least in that respect.
I thank the noble Lord, Lord Best, for his Amendment 94, and for his and other noble Lords’ persistence in pushing for the creation of a new regulatory body to oversee property agents. I put on record my sincere thanks to him for his valuable work on regulation over very many years. I note that he is also a member of the Industry and Regulators Committee, which recently concluded that the case for regulation of the property agent sector still remains. Ministers will respond to the committee in due course.
However, as the noble Lord is acutely aware, the Secretary of State indicated in the other place that he did not consider that this was the right time or the right Bill to set up a new regulator for property agents. I know that he and other noble Lords will be disappointed, but perhaps not surprised, by this. However, the Government remain committed to driving up professionalism and standards among property agents. Leaseholders deserve a good service for the money they pay, whether from their landlord or their managing agent, where one is in place.
The noble Lord once again brought up, as he has many times with me, mandating professional qualifications. This was one of the areas that the Government asked the noble Lord’s working group to look into as part of its review. I assure him that that remains on the table.
At this point, I will respond to the interesting idea from my noble friend Lord Young of Cookham about the How to Lease guide. Interestingly, I spoke to officials about this idea not too many hours ago, building on the guide to renting. That is something that could be put in place. I will work further on it and talk to my noble friend more.
Industry plays an important role in driving up standards, and we welcome the ongoing work being undertaken by the industry and others to support this. This includes the efforts of the noble Baroness, Lady Hayter of Kentish Town, and her independent steering group in preparing an overarching code of conduct. I thank her for that. I know that the Government are very interested and looking at it in much more detail. This is an important development to ensure that all consumers are treated fairly and agents work to the same high standards. I echo what many noble Lords have said. We have some excellent agents in this country who do a fantastic job. The agents we are talking about are the rogue agents, who I know noble Lords are trying to ensure come up to the same high standards. I thank the noble Baroness for her work on this.
I should also stress that measures in this Bill, alongside existing protections and work being undertaken by the industry, seek to make managing agents more accountable to those who pay for their services. That includes making it easier for leaseholders to take on the management of their buildings themselves, where they can directly appoint or replace agents.
However, I recognise the strength of feeling expressed on this issue at Second Reading and today by a number of noble Lords, and the ambition of all noble Lords who spoke to drive up the standards of property agents. The noble Lord, Lord Truscott, the noble Baroness, Lady Bennett of Manor Castle, and others spoke about individual cases where managing agents have been either good, as we heard from the noble Lord, Lord Truscott, or extremely unacceptable.
I will continue to engage with the noble Lord, Lord Best, my noble friend Lord Young of Cookham and any others who would like me to on this issue during the remainder of the Bill’s passage. I know I already have a meeting in my diary with the noble Lord, Lord Best, in a week or so. With the assurance that we will keep working on this, and following what I have said, I hope the noble Lord will withdraw the amendment.
My Lords, I am very grateful to all noble Lords who have spoken—all of them in favour of the concept of a regulator of property agents. I think the case is now unavoidable. My especial thanks to the noble Baronesses, Lady Hayter and Lady Taylor, and the noble Lord, Lord Young of Cookham, for supporting this amendment, and to the noble Baroness, Lady Thornhill, who, if we were allowed one more name on the list, would have been there as well. It was great to hear illustrations from real life from the noble Lord, Lord Truscott, bringing a consumer perspective to the story. The noble Baroness, Lady Bennett, shared stories of cowboy agents. I am afraid they do exist, and we should be doing something about it.
The Minister offered me some consolation. We are going to meet again soon, and she recognises the strength of feeling that everybody has been expressing. I thank her for continuing to engage on the subject and I hope there is something we can salvage, before the Bill finally passes, that will at least make a start on this really important mission of creating a regulator to the benefit of the 5 million leaseholders out there. I beg leave to withdraw my amendment.
(5 months, 1 week ago)
Lords ChamberMy Lords, with kind agreement from the usual channels and with the leave of the House, I will read in the form of a Statement the Answer given in the Commons by my right honourable friend the Secretary of State for Wales. In doing so, I declare my farming and heritage interests in Wales, as set out in the register. The Statement is as follows:
“On 25 April Tata announced its strategic direction to proceed with its Port Talbot transformation, following the launch of the formal national consultation with the unions on 6 February. Technically, the consultation has not concluded at national or local level. The statutory consultation remains under way, and I understand that the company intends to move to local consultation with staff who may be affected.
This is a deeply concerning time for the Tata workforce and the wider community. I hold regular conversations and meetings with the unions and management, and will continue to do so as we develop interventions to build a brighter future for Port Talbot. On 15 September we announced an unprecedented £500 million government grant as part of the £1.25 billion investment by Tata Steel to build a new electric arc furnace. Tata Steel employs more than 8,000 people, including at Port Talbot. All those jobs—along with many thousands more in the supply chain—would be under great threat were it not for the agreement that we struck. The transformation will be difficult, but the funding has saved 5,000 jobs in the company. It is not the case that we have paid money to put people out of work; we have paid money to save 5,000 jobs. We are also looking to modernise production and ensure that steel-making in south Wales can continue for generations to come.
Going beyond that, to support those affected by Tata’s decision we have put £100 million towards the creation of the transition board, which I chair, and which includes representatives of the UK and Welsh Governments, local authorities and industry. The funding includes £80 million from the UK Government and £20 million from Tata—unfortunately nothing as yet from the Welsh Government, but we hope that there will be some in the near future. These funds will be used to achieve the transition board’s priorities, the first of which is to support those affected employees to find new, well-paid jobs. The board’s priorities also include supporting businesses in the supply chain and the longer-term regeneration of the region.
In its most recent meeting last week, the transition board endorsed a local economic action plan, which will act as a road map for how best to use the funding to support those affected. While the ongoing consultation is a matter between the trade unions and the company, we will continue discussions with all parties. We hope a resolution is found that avoids industrial action. The UK Government will continue to work closely with industry to secure a sustainable and competitive future for the Welsh steel sector.
I am confident of a good future for Port Talbot and the region, with the UK Government progressing the bid by Associated British Ports to the next stage for up to £160 million of funding to support our nascent floating offshore wind industry, and our progress towards establishing the Celtic freeport, backed by £26 million of government funding”.
We are proud of our steel sector in Wales: it is an asset for the whole of the UK, so this closure is devastating news. Yesterday, in the other place, the Minister said that the Government would encourage Tata to come to an agreement so that there are no compulsory redundancies. What steps are the Government taking to protect workers whose jobs are at risk? There are also those in the supply chain: what commitments have the Government secured from Tata for the workers at downstream facilities about the security of their jobs after the electric arc furnace is built, and what are they doing to secure more?
My Lords, the deal struck by the UK Government with Tata will safeguard around 5,000 jobs in the UK steel industry, as well as 12,000 jobs in the wider supply chains. However, we all recognise that this is a devastating blow for the community of Port Talbot, and we are committed to doing everything that we possibly can to save jobs and support anyone who loses their job. This is why the UK Government have set up the Port Talbot transition board, backed by £80 million from the UK Government and £20 million from Tata.
My Lords, the people of Wales well understand the suffering that can be the consequence of industrial decline and the loss of a major industry. What we see happening in Port Talbot will blight the current generation and those to come, unless the Government invest in the national skills strategy that we need to prepare for the “new, well-paid jobs” that the Secretary of State talked about and for the future workplace. We need to develop skills for the remainder of the 21st century, so will the Government commit to a national skills strategy?
My Lords, I thank the noble Baroness for her question. In addition to the £100 million funding for the Port Talbot transition board, £15 million is being put towards the regeneration of Port Talbot town centre, with improvements to the civic square, the refurbishment of the Princess Royal Theatre and improvements to green space. Seed funding of £26 million for the Celtic freeport will support regeneration of local communities by attracting new businesses, jobs and investments, and we are investing £790 million in city and growth deals across Wales, including the Swansea Bay city deal, which is building on the region’s strengths in the areas of life sciences, energy and manufacturing.
My Lords, as others have said, this will have a devastating impact on the south Wales community. It reminds me of the 1980s when the pits were closed; south Wales valleys were devastated and never recovered. I hope that that is not going to happen in Port Talbot. As the UK will now become the only country in the G20 to leave itself without the capacity to make virgin steel, how does the Minister feel about the legacy of this Government in making the UK reliant on foreign imports? What discussions has he had with the Welsh Government? Could he give us a report on them and are they ongoing?
My Lords, the noble Baroness asked a range of questions. What came through was her passion, which I think everyone involved in this Question shares, that these jobs and the steelworks are part of the community—it is an identity, not simply a job, and we feel that deeply. I am afraid to say that the Welsh Government have not offered financial support towards this transition. However, we are doing everything we can to create new jobs for the ones that have been lost. Without our investments, there was a threat that all jobs within TATA, not just those in south Wales, could have left the UK.
The noble Baroness also asked me about virgin steel. We have heard these arguments. We are ensuring that the UK, by moving to green steel, will be less dependent on international supply chains. By moving to green steel—electric arc furnace steel—we are securing the future of UK steel capability and our economic and national security.
My Lords, the events in south Wales are a real demonstration of the Government’s absolute failure to deliver a just transition for the workers of the region and indeed beyond, and nor are we seeing the growth in renewable energy we should be seeing in uses of steel. I have questions for the Minister about the supply of steel for recycling. The EU is looking to secure the supply of scrap steel by 2027. It is going to bring in rules to ensure that scrap steel is exported only to places with very high environmental standards. That contrasts with the situation here in the UK. More than 50% of our scrap steel is now exported to three countries: Turkey, Egypt and India. Pakistan is the next country on that list, and none of those places is known for the environmental standards of its steel industry. Will the Government bring in a plan for the long-term future of a steel industry using electric arc furnaces?
My Lords, that is exactly what we are doing. I find it quite staggering that the Green Party fails to recognise that moving to electric arc furnaces will reduce carbon emissions by around 5.5 million tonnes per year—the noble Baroness shakes her head, but that is a fact. The UK produces 11 million tonnes of domestic scrap per year. Currently, demand is lower than supply, so 8 million tonnes of that scrap is exported. This gives plentiful and reliable future supply in the UK for electric arc furnace production from domestic scrap.
(5 months, 1 week ago)
Lords ChamberMy Lords, I am grateful to have the opportunity at last to ask some questions about this Statement, because the route here has not been pretty or swift. The Prime Minister made a speech on 19 April about the need to reform sickness and disability benefits. Cue lots of headlines about sick note culture and the need for a crackdown. Then, there was silence: 10 days of expecting a Statement which did not come; 10 days of asking for detail; 10 days during which, if noble Lords are anything like me, they will have had a succession of messages from sick and disabled people who were very anxious about what was going to happen to their benefits.
When the Secretary of State finally talked, it was not to Parliament but to the media, of course, so we began to find details there. The Telegraph ran the headline, “Disability benefits could be vouchers, not cash”. The Sunday Times said, “Depressed and anxious face losing … benefits”, with the sub-headline, “Tories plan welfare reform as election divide”. I sorry to say it, but there we have it. The Secretary of State was quoted in the Sunday Times as saying that
“it was ‘extraordinary’ that Labour was refusing to say whether it supported his benefit changes”.
At this point, there was no document, there had been no Statement in Parliament, and no details were available. In fact, when the Statement was made in Parliament, the Secretary of State did not even observe the usual courtesies of giving an advance copy to the Speaker and the shadow Secretary of State. I do not know why the Government would sit on the Statement and document for 10 days and then publish them in the week of the crucial local elections—it is a mystery.
Now we have the details, although it is not very detailed. I read the Green Paper from cover to cover, and if you exclude questions and the padding in the annexes, there are 14 pages of content. The Green Paper could hardly be any lighter green.
How did we get here? In 2013, the Government abolished disability living allowance and created PIP. According to the Green Paper:
“PIP was intended to differ from DLA by being fairer (by paying greater regard to needs arising from mental health, sensory and cognitive conditions)”.
It was also to be
“more consistent … objective … transparent … sustainable … modern and dynamic”.
The Government committed to undertake an independent review of PIP after two years and again two years later. There have been two consultations covering PIP since then.
Then, in July 2021, the Government published Shaping future support: the health and disability green paper, which launched a consultation on PIP and ESA. Nearly two years later, in March 2023, the Government published a health and disability White Paper which set out the Government’s vision
“to help more disabled people and people with health conditions to start, stay and succeed in work”.
That paper announced the plan to remove the existing universal credit limited capability for work and work-related activity element and replace it with a new universal credit health element. It was also going to abolish the work capability assessment, which was people’s gateway to those benefits, so there would be only one health and disability functional test in future: the PIP assessment.
Now, a year after that White Paper, we are back to a Green Paper, which proposes abolishing the PIP assessment. What is going on? How will anyone be assessed for anything? Will the Minister tell us what happens to people who are clearly too sick to work at the moment but are not disabled? How will they have their support assessed when there is neither a work capability assessment nor a PIP assessment? Is the plan still to have a new universal credit health element, or is that under consideration again as well? The Government suggest that some health conditions can be taken out of PIP assessments. Can the Minister tell us which conditions they have in mind? PIP is also passport to the carer’s allowance. How will that work if there is no PIP assessment? Do people risk losing their benefits and their personal care from family or friends at the same time?
The Government said that DLA was the problem and PIP was the answer; now it seems that PIP is the problem. The fact is that we have a problem in this country: we have a record 2.8 million people locked out of work due to long-term sickness. But what or who is to blame? How much of that is down to the Government's record on the NHS? When the Statement was debated in the Commons, the chair of the Work and Pensions Select Committee pointed out that:
“PIP assessment providers confirm that worsening delays in NHS treatment are a big factor in the increase in the number of people applying for PIP”.—[Official Report, Commons, 29/4/24; col. 52.]
We have also been hearing strong hints that the real problem is people with mental health problems. I do not doubt the Minister on this, but politicians in general need to be very careful about how we speak about mental health, for risk of stigmatising people or making them afraid to speak out or seek help. Can the Minister say whether the Government’s plans involve treating people’s mental and physical health differently? If so, can he explain the legal basis for making such a distinction? Can he also say what the Government will do about the near impossibility, for many people, of getting any timely mental health support at the moment?
A Labour Government would take a different approach. Among those who need the help of the state, there are some people who are temporarily or, in some cases, permanently unable to work and who need support to have a decent life. There are many others who need extra help to get, keep and advance in a job, and it is the state’s job to give that to them. For those people, health and work are two sides of the same coin.
Rather than blaming people for being sick, a Labour Government will support our NHS. The last Labour Government delivered the highest patient satisfaction level on record, and that is the record on which we want to build. We will drive down NHS waiting lists by getting patients treated on time, with 2 million more weekend and evening appointments, and we will ensure more support for those with mental health problems through an extra 8,500 mental health staff.
We will focus constructively on work, the other side of that coin, because the costs of failure in this area are a disaster for individuals and the country. Where it is possible, work is good for us—for our mental and physical health. Labour will have a new deal for working people, improving rights for the first time in a generation. We will drive up employment in every region, devolve employment support and end the tick-box culture in jobcentres. We will tear down the barriers to work for disabled people and provide help for young people.
Labour will carefully review the issues raised by this latest Green Paper. Clearly, sick and disabled people need appropriate help and support, but we also want to be a country where disabled people have the same right to a good job and the help to get it as anyone else. We will judge any measure that the Government bring forward on its merits and against that principle. I look forward hearing more from the Minister.
My Lords, I will not repeat what the noble Baroness, Lady Sherlock, has just said about the lead-up to the publication of this Green Paper, but it can hardly be described as ideal. When announcing the Green Paper and the reforms to PIP on Monday, the Prime Minister said that something had gone wrong since the pandemic, leading to more people not working because of long-term ill health; he singled out the rise in people unable to work because of mental health conditions. Of course, I agree with helping people to get back into work, where that is possible, and I agree that for some people with mental health problems, it can improve their well-being. What I worry about greatly is putting the spotlight on people with mental health problems in such an unhelpfully divisive and—I agree—stigmatising way.
We need to go back to the root causes here. Can it be any surprise that so many people are claiming sickness and disability benefits when millions are still waiting for NHS treatment, and mental health wait times are through the roof, due to an acute shortage of mental health professionals, including doctors, nurses and counsellors? Does the Minister agree that if the Government are serious about getting people back to work, they need first to reduce waiting times for NHS treatment and tackle the crisis in our mental health services which makes accessing mental health treatment so difficult and protracted?
The Prime Minister also claimed that these changes are about “compassion”, but does this not rather miss the point that most young people claiming PIP are doing so because they have ADHD or autism, rather than anxiety and depression? Last year, 190,000 young people claimed PIP due to autism, ADHD or other learning disabilities, compared to just 129,000 claiming for all other disabilities. Could the Minister explain why, in the announcement of these proposals, there has been such a strong focus on anxiety and depression and how far this is based on the evidence?
I am concerned that potentially stopping cash payments will be seen as an affront to the dignity of benefit recipients. The BBC News website yesterday quoted one 71 year-old recipient, who said that for her PIP is about
“maintaining independence, not being a burden on my family and keeping my dignity”.
It could hardly be said that the reaction from the sector has been favourable. The charity Scope has said that these plans do not fix the underlying issues faced by disabled people. The chief executive of the charity SANE has pointed out that
“mental health problems are often invisible and fluctuate from month to month or day to day, and … assessments for benefits are all too often based on ‘snapshot’ judgments that do not take account of how hidden and disabling mental illness can be”.
Can the Minister say what consultation took place with the mental health sector and those who work closely with people directly affected by these issues prior to the Green Paper being published?
Finally, I turn to a wider issue. The Statement talks about a
“new conversation about how the benefits system can best support people to live full and independent lives”.
I am sure we can all agree with that, but we need to look at these issues in the round. Being able to live independently in the community can often rely on the help and support of unpaid family carers. Does the Minister agree that it is simply unacceptable for over 150,000 unpaid carers to be facing severe financial penalties—pushing many into debt or financial hardship —for often quite unknowingly breaching the earnings limit while caring for a loved one? What urgent steps are the Government taking to stop this outrage, and will they agree to an amnesty while it is being sorted out? If the Minister cannot answer that now—I accept it is not within the immediate focus of this Statement—would he please write to me?
My Lords, I start by thanking the noble Baronesses, Lady Sherlock and Lady Tyler, for their questions; I will do my best to answer them.
Indeed, the Prime Minister did make a speech on 19 April, and I was there in person. He covered a whole range of announcements in the world of welfare. I found it to be a very caring and compassionate speech; that is a really important point to make, because it did not come across in some quarters in the media. On how the Statement was communicated, I will not dwell on that other than to say that both noble Baronesses will know that apologies were given. That is on the record, and I do not think it is right that I should say anything more about that now.
The noble Baroness, Lady Sherlock—and it was alluded to by the noble Baroness, Lady Tyler—spoke strongly about mental health and the link with physical health. I want to make a few remarks about this, because we should see it as a sign of progress that people can talk about mental health more openly. The Government will never dismiss or downplay the conditions that people have; it is precisely because we take mental health so seriously that we need to reform the system. There is no one-size-fits-all approach, but the current system does not reflect that. It is simply wrong to write people off when there is a growing body of evidence that good work can improve mental health.
In terms of the evidence raised by the noble Baroness, Lady Tyler, I visited a jobcentre only this morning and asked various questions of the job coaches. I reassure her, or alert her to the fact, that the evidence is certainly there. I am sure she will know from her own experience there is an increased level of mental ill-health, some of a severe nature. Action must be taken.
But it is more than that; it has been over 10 years since the introduction of PIP. We need to ensure that our system is fair and accurately targeted at those who need our support most. Although we have made significant progress, the disability benefits system for adults of working age is not consistently providing support in the way it was intended. In terms of a point raised by the noble Baroness, Lady Sherlock, I reassure her and the House that we will and intend to continue to support those who need it. That includes those who genuinely are not able to work—that is what we are doing at the moment. In terms of what may come out of the Green Paper, and indeed this conversation or consultation, that is a most important point that I want to emphasise—which, by the way, the Prime Minister also emphasised.
The noble Baroness, Lady Tyler, asked about the importance of investing in mental health services. She is right; we want to ensure we are providing the right support to those who need it most, targeting our resources most effectively, and supporting disabled people and people with long-term health conditions to live independently and reach their full potential, irrespective of whether this is a physical or mental health condition—which alludes to the point that the noble Baroness, Lady Sherlock, made. Mental health remains a key government priority; that is why we are investing £2.3 billion a year into NHS mental health services, and why we brought in the long-term workforce plan, which will deliver the fastest expansion of mental health services in the NHS’s history. Just this morning, as I said, I visited a jobcentre and found out more about that.
The noble Baroness, Lady Sherlock, asked about PIP and mental health. I will give a few more statistics to back up the views I have given so far. In 2019, there were an average of 2,200 new PIP awards a month in England and Wales, where the main disabling condition was mixed anxiety and depressive disorders. That figure more than doubled to 5,300 a month in 2023. As I said earlier, we will and must continue to support everyone with mental health conditions, recognising that the severity and individual circumstances will vary and that there is no one-size-fits-all approach. Those with the most debilitating conditions should be entitled to the support they need, as I said earlier. That is exactly what PIP is intended to do, and that core aim will not change.
However, we need to have an honest conversation, which we have just started, about whether individuals with some conditions are better served by treatment and tailored support than by cash payments—which I think was a point raised by one of the noble Baronesses. To increase support, we have expanded mental health provision. Altogether, between 2018-19 and 2023-24, spending on mental health services has increased by £4.7 billion in cash terms, increasing access to mental health services. This has put 400,000 extra people through the NHS talking therapies programme, which the House will be aware of.
On the question raised by the noble Baroness about the amount going on, I say that there is a huge amount. We fully intend to go ahead with the reforms that we announced in Transforming Support: The Health and Disability White Paper, because the Government are committed to doing everything that we can to help disabled people and people with long-term health conditions. These changes are separate from this PIP consultation but, as we develop our proposals, we will consider how some interactions with the current welfare system will be reflected in a reformed system. This will be carefully worked through and reported on before we consider introducing any changes. I say again that this is the start of a conversation. We are asking as many people as possible to input into the Green Paper. Already, we have received a good number of responses in the past few days since it was announced.
The noble Baroness, Lady Tyler—it might have been the noble Baroness, Lady Sherlock, as well—spoke about too many piecemeal publications and not enough action. Since 2010, we have delivered significant welfare reforms, including introducing universal credit, a modern benefit that ensures that people are better off in work than on benefit. There are nearly 4 million more people in work than in 2010 and 1.1 million fewer people in absolute low income. However, we are now seeing a new challenge—they come up in government sometimes —that emerged in recent years and accelerated post pandemic. As the Prime Minister said, the current system is unsustainable, unfair for taxpayers and no longer targeted at those who need it most. That is why it is essential that we take action.
On the point raised by the noble Baroness, Lady Tyler, about carers, there probably is not enough time to go into everything I want to say, but perhaps I can give her some reassurance on the issues circling at the moment. We must carefully balance our duty to the taxpayer to recover overpayments with safeguards to manage repayments fairly. Claimants have a responsibility to ensure that they are entitled to benefits and to inform my department, the DWP, of any changes in their circumstances that could impact their award. To be helpful, we have improved, rather urgently, customer communications to remind them of the importance of telling us about any earnings, including in the annual uprating letter that all claimants receive. We are looking to make the best possible use of earnings information collected by HMRC—so-called real-time information—to help to prevent some overpayments occurring in the first place. I reassure the noble Baroness that we are taking this extremely seriously.
My Lords, I declare an interest as I have for decades been the person who has supported two near relatives in receipt of PIP. In fact, I spent two hours on Sunday night helping to fill in a PIP review form—26 pages—for a PIP application that was refused in the first place and given at an enhanced rate on appeal. My noble friend will recognise from this that there is a lot already wrong with PIP and the way questions are asked and formulated.
I am particularly concerned about autism-related anxiety. It is not the same as people who just have the slings and arrows of outrageous fortune to cope with, which we all do. The brains of people with autism are wired differently. The things that make them anxious can very easily lead to a downward spiral that can result in suicide. I say to my noble friend—I know we are limited on time—that when it comes to the worried well, I put my hand up, because every day of my life now I wonder who on earth is going to help with those forms and applications when I am no longer here. It is a nightmare.
I take very seriously what my noble friend has said. On the PIP process, she is right. Work needs to be and is being done to modernise the health and disability benefit services to create a more efficient service, reduce processing times and improve trust in our services and the decisions that we make. As part of this, from July 2023, a limited number of claimants have been able to begin their claim for PIP entirely online, which we aim to roll out across England and Wales.
My noble friend’s substantive question was on the important subject of autism. She will be aware of the Buckland review. It is important to say that we will link whatever comes out of this conversation, which may include matters to do with autism, with the progress we are making on the Buckland review. I am aware of the huge challenges linked to assessing those who have autism. On a brighter note, we know most autistic people want a job, and evidence shows that they may bring positive benefits to their employers. Now is the time to raise our ambition. On 2 April 2023, World Autism Acceptance Day, the DWP announced the launch of this new review. My noble friend will know that a task group has been set up that will include people with direct lived experience of autism, and be chaired by a respected independent person who is separate from government and clearly represents autistic people and their needs. The members of the task group will cover a broad range of interest groups to ensure that their views are represented. It is important to link this to what we may do out of the review on PIP. I say “may do” because this is a consultation, and we want to hear from people.
My Lords, I declare an interest as a bishop relating to L’Arche UK and worldwide, which cares for people with intellectual and physical disabilities. The aspiration outlined in the Ministerial Statement to create a Britain in which disabled people can be supported to thrive is one that we all share. At a time of economic challenge, any responsible Government must pursue priorities and make difficult choices, but I have been in your Lordships’ House for 10 years and this kind of Statement reminds me of the circularity of this debate about welfare provision within that 10 years, where we do not seem to have made huge progress. We heard a lot from previous speakers about the varied needs of people with disabilities, some people with temporary health issues and those with severe and enduring mental health conditions. The Joseph Rowntree Foundation has noted that almost two-thirds of people living in destitution or direct homelessness have a chronic health condition or disability. These people may be unable to meet their most basic needs to stay warm, fed, dry and clean. Does the Minister agree that energy for further reform of disability benefits might be best applied to meeting the needs of this cohort rather than seeking to make eligibility even tighter?
I gently correct the right reverend Prelate, or give my view, which is that the current PIP system has served a purpose; that is a fair comment to make. However, as I said earlier, after 10 years—it was our Government who brought in PIP—now is the time to review it. To put this in perspective and explain why we are doing it now, I say that since 2015 the proportion of the caseload receiving the highest rate of PIP has increased from 25% to 36%, and 7% of working-age people in England and Wales now claim PIP or DLA, which is forecast to rise to 10% by 2028-29. Going back to 2022-23, the Government spent £15.7 billion on extra costs for disability benefits for people of working age in England and Wales, and the OBR has forecast that the cost will rise to £29.8 billion in nominal terms by 2028-29. On the right reverend Prelate’s question, we believe that now is the right time to do something. In fact, not doing something would be highly negligent. It covers everybody at all levels. I know he referred particularly to those who are the most vulnerable, and he was quite right.
My Lords, this Statement should fill us with joy, but anyone familiar with the history of this issue will actually be worried. The assessment has just got a hell of a lot more complicated. In the past, people have been told that they cannot get their benefits, whatever they are called, because they can walk 10 yards—except they could do it one day but not the next, and it was a nightmare. The Government have just made a quantum leap in the complexity of conditions that they are dealing with. That is good, but unless they back it up with better support to make the assessment then they are guaranteeing failure. There is no real argument about that; the noble Baroness, Lady Browning, hinted at it, and others will back me up,
I suggest that something the Minister could do to make the Government’s life easier is to start passporting the identification of problems such as education in earlier life. For instance, there are education, health and care plans, and the disabled students’ allowance. If we cannot passport those into the Department for Work and Pensions, we are going to waste a huge amount of time and effort. Most of these things will have been tested in the courts, or with an assessment. What are we doing there? When we are making new assessments, are we investing in proper identification? That has been a chronic problem in this area. I hope that by now the Government have realised that and put some sort of plan in place.
I encourage the noble Lord, with his knowledge and experience, to input into the consultation, as I suspect he probably will. He will know that the consultation is limited in scope to PIP, which is open only to claimants aged 16 and over. That is quite broad, but it is payable regardless of whether you are in work, education or, as he spoke about, training. We are keen to hear from people from all walks of life and backgrounds, and encourage everyone, including students, to respond to the consultation.
I take note of the noble Lord’s point about passporting. I know about EHC plans from my previous brief. It is important that the student diaspora and those who represent it also input to the conversation.
As I said, we believe there may be better ways of supporting people in living independent and fulfilling lives. This could mean financial support being better targeted at people, including students, who have specific extra costs, but it could involve improved support of other kinds, such as for physical as well as mental health, leading to better outcomes.
My Lords, I commend the Statement and the Green Paper. I regard the Secretary of State as someone with a warm and sincere heart, and a clear head. I think he is an impressive Secretary of State in a complex area. I also commend his Permanent Secretary, who is a quite excellent man.
Obviously, the understanding of disability and ill health changes all the time. This benefit has been around since 2013, and it is time for a strategic review. Earlier this week, we were talking about the late Frank Field. When I worked on benefit agencies with him, it was quite different. With these vast sums of money, we should focus and make sure that the money is spent wisely and well. There is only a certain amount of public money, as another party may discover in a few months’ time, although I can say nothing about that. Money cannot go both on doctors and nurses and on welfare payments, so we have to look strategically.
There are partners. Charities have a big part to play, and the Church is important in dealing with mental health. I remember the effect of Pentecostal choirs on West Indian boys with schizophrenia. They went to the Pentecostal choir, and said that they felt like new men, and I am not surprised.
I want to talk particularly about employers. Good employers have transformed the support that they offer to people with mental illness problems. Prevention is much better than cure, if you can reach out and help someone in the workplace to talk about their mental health problems. I agree about stigma. If you have schizophrenia then you say you have depression, and if you have depression then you say you have the flu. There are a number of employers that have impressed me, which I would point out to the Secretary of State, where there are ally groups supporting people’s mental health, and where facilities and services are provided. Yes, the Government have a part to play, but so does the wider community. Work, for most of us, is a lifesaver. I have never been more miserable than when I was stuck at home during Covid, and I do not think I am alone.
I thank my noble friend for her kind comments about the Secretary of State and the Permanent Secretary, with whom I am working closely, as she will know.
My noble friend made an important point about the variations among individuals who have conditions. As she alluded to, some claimants will have considerable extra costs related to their disability, while others will have fewer or minimal costs. This is why we have brought forward the Green Paper, looking at whether there are ways in which we can improve how we support people, where that is better suited to their needs and to the way they want to run their lives. I should also say that it is right that it is fairer to the taxpayer than the current system.
My noble friend is right that my department has been undertaking a huge amount of work with employers and that, with the rise in mental health conditions, sometimes people in work feel that they cannot stay in that job because of their condition. A lot of work has been going on to persuade or help them to stay in work, while holding their hands and giving them detailed, experienced, skilled advice on how to cope with their lives. That is working, and I could go into more detail on it, but it just shows that we are alert to the increase in mental ill health that has come about for a variety of reasons, not just because of Covid.
I want to ask the Minister about applying for PIP. Similar to my noble friend Lady Browning’s case, my son-in-law has applied. He has MS and has been advised by his consultant. He has waited six years for a diagnosis and is 32 years of age. His application for PIP was turned down. He works 50 hours a week—he is not lazy at all, or anything like that—and he provides. When he reapplied, it was out of date, and he has just been told that, because he applied online once, he has to use the paper form. That form is 44 pages long. He cannot write or hold a pencil because of his illness—he has his daughter write Christmas and birthday cards. Unfortunately, the person on the other end of the phone does not seem to be sympathetic about that.
It is diabolical that someone with a medical illness like that has been sent a 44-page document to complete in two working weeks when he already feels that he is holding out a begging bowl. But he has been advised to apply by his consultant because working the many hours that he does is having an impact on his health. I ask the Minister to look at that. If we are going to digital, surely the message should not be that you get one chance only to apply online and then any other applications must be on paper.
I have every sympathy with what I have heard from my noble friend. I will not repeat what I said about the huge changes that we are making to the PIP process, but I am aware of the example that she has given of the 44-page form, which falls into that category.
Perhaps I can go a bit further—this is linked to the waiting times that we know have been apparent for applying for PIP—and say that we have seen a decrease in PIP clearances since August 2021. The latest statistics show that the average end-to-end journey for those applying for PIP had reduced from 26 weeks in August 2021 to 15 weeks at the end of January this year. So we are clearing claims faster than we were prior to the pandemic, which is going in the right direction, and we are committed to ensuring that people can access financial support through PIP in a more timely manner. Managing the customer journey times for PIP claimants is a priority for the department, and we are working constantly to make improvements to the service.
My noble friend mentioned the issue of online. Online is a way forward but it is not necessarily for everyone. We have increased the availability of case managers and assessments, and provided health professional resources, and we have been triaging and prioritising new claims in a better way.
My Lords, the justification for this Statement and the Government’s plan, repeated by the Minister, is that the level of claims has risen significantly since 2009, specifically mental health claims. Since 2009, we have had a global pandemic and the acuteness of the climate emergency has become obvious to everybody. We have had a cost of living crisis; we have a huge crisis in housing. Surely it is not a surprise that we have very poor levels of mental health across our society. That is a measure of government failure rather than individual responsibility.
Does the Minister acknowledge that there are social determinants of health and that what we have to do is create a healthy society? This Statement makes no reference to that. Also, do the Government accept the social model of disability, acknowledging that the way in which society is arranged and organised is what truly disables people? Why is there nothing in this Statement—not a single reference—to what can be done to push employers to provide appropriate arrangements for disabled people, to allow them to continue to work, rather than focusing on the behaviour of disabled people?
I know that we— the noble Baroness, Lady Bennett, and I—have had several sessions across the Chamber, and I say gently that, for her to say that all the instances of mental health that have cropped up are purely to do with decisions that the Government have taken wholly misrepresents the situation. She will know, as I think most of the House will, that it is much more complex than that. It is linked to all kinds of issues: for example, the rise in social media and the fact that more young people are on their phones is talked about a lot. So I might chide her that she might have mentioned that, for example.
This allows me also to give one reason why now is the time to look at PIP, given the very sobering figures that I gave out slightly earlier. I now want to go a little further. If we did nothing, over the coming four years PIP spending alone is forecast to rise by 63%, from £21.6 billion to £35.3 billion. That would be for the period 2023-24 right up to 2028-29. But it is not just about the cost. As I said earlier, I hope fairly, it is important that we review PIP to be sure that it is directed in the right way, targeted at those who need it most, delivering the right sort of support for people with disabilities and health conditions and, as I said earlier, providing better value for the taxpayer.
My Lords, I agree with what my noble friend has just said and the point made by my noble friend Lady Bottomley that, whoever is in power, the present regime is financially unsustainable. However, I also agree with what the noble Baroness, Lady Sherlock, said at the beginning: the tone and language that one uses when discussing reform is crucial. My noble friend gets that right, but can I ask him about the proposals for the so-called sick note?
At the moment, yes, GPs are under pressure, but they at least know the patient and have access to a wide range of information before they come to their decision. Under the proposals, this will be done by a DWP assessor, who will not know the claimant and will have a limited amount of background information—and relatively limited interaction with the claimant. How confident is my noble friend that that process will be fair and robust?
Absolutely. This allows me to talk a bit about the so-called fit notes. I start by saying that we know that work positively impacts people’s physical and mental health and well-being. The current fit-note system, which is the gateway to accessing sick pay and ill-health unemployment benefit assessments, is writing off too many people as “not fit for work”. By the way, it is quite a sobering figure that it is 94% of all fit notes. We need to fundamentally overhaul the system, so that it changes the default assumption by focusing on what people can do with the right support. We know that 10 million not-fit-for-work fit notes are issued every year, so there is a real missed opportunity here.
On my noble friend’s question, we are working on a new process and there is a call for evidence out. This was published on 19 April and we are gathering evidence to assess the impact of the current fit-note process in supporting work and health conversations. It asks stakeholders how they would like to see the fit-note process change to better support people to start, stay at and succeed in work. To that extent, it very much chimes with and links into my department. That is why we are working ever more closely with the Department of Health and Social Care to take forward this important area.
(5 months, 1 week ago)
Lords ChamberMy Lords, we on the Labour Benches are grateful today to the Government for this short Statement, setting out where they are on the future acquisition of the Telegraph Media Group. As the House knows, we have been steadfast in our support for a free and independent press across the political spectrum. We will always champion the right of a free press to hold power to account, speak hard truths and expose corruption and wrongdoing.
We oppose foreign powers owning our free press, which has been consistently raised by parliamentarians across all Benches both here and in another place. We also welcome investment into the UK, in particular in news media businesses. For that reason this Statement is important, as it sets out how the Secretary of State intends to use her powers. It is our expectation that the Secretary of State will use these powers wisely to protect the diversity of our media landscape and encourage inward investment. The Government can be assured that we will follow the auction process closely.
I have a few questions today for the Minister. First, can he say a little more about the timescale for the auction? Can he assure the House that the Telegraph Media Group will at all times keep its workforce and unions informed? I noted from the Secretary of State’s Statement that the order governing this process not only prevents actions that might prejudice a phase 2 reference to the CMA; it also effectively freezes organisational and staff changes. To us, it would seem that union consultation is a small move on from that step, so have Ministers had any discussions with the relevant trade unions representing Telegraph Media Group staff? Can the Minister also tell the House what principles will underpin the approach to the auction and what steps the Secretary of State will take to guarantee that there is a free and open sale of the media group?
This is a year of multiple elections: we have local elections tomorrow and a general election, we hope, as soon as possible afterwards. It is essential to our working democracy that we have a free, honest and independent press. For our part, although we may not always agree with the editorial line of the Telegraph, we will champion its right—and the right of all publications—to hold us all to account.
My Lords, I had always imagined that the noble Lord, Lord Bassam, was a Telegraph reader.
Yes, the cricket.
We welcome this Statement. Sometimes I am teased by my colleagues about my membership of the Puttnam committee on the Communications Act 2003, but actually the Puttnam amendment to that Act is the origin of the powers that the Secretary of State has used here. The Puttnam amendment widened the reasons for Secretary of State interventions and has been used very usefully at key times in the last 20 years. In terms of these bids for purchase of our media, it means that we are able to take in the wider public interest and we support the Secretary of State in so doing.
I am not naturally a supporter of RedBird IMI, but I have some sympathy for the question of whether it is fair to either would-be bidders or the wider public interest to be so behind the curve and reactive when such bids arise. Media ownership is becoming more interlocking and intertwined between print, broadcasting and online. In many ways, although they might not like it, print journalists are becoming almost like the hand-loom weavers in the world of fast-moving technological change—and that is before we feel the full impact of artificial intelligence on the sector.
I would like to probe the Minister. Yesterday, Sir John Whittingdale in the other place pointed out that
“it is six years since Ofcom said that there needs to be fundamental review of our media merger regime”.—[Official Report, Commons, 30/4/24; col. 165.]
I agree with him, and I ask the Minister whether the Government are actively considering such a review.
With the Media Bill now before this House, will the Government seek cross-party agreement on clarifying and strengthening our media ownership rules for the future? I see the noble Baroness, Lady Stowell, is in her place. She has already put down an amendment to the Media Bill which could take this forward, but I think it could be done much more comprehensively at this time. If we do not do it comprehensively at this time, we will find that we have another 20 years of drift and that we are behind the game. It is essential that we have in place protection from foreign influences and state players, while, as the noble Lord, Lord Bassam, emphasised, seeing sustained plurality in both ownership and opinion in a free press—as all sides of the House want.
My Lords, I should reassure the noble Lord, Lord Bassam of Brighton, that the Government do not always agree with the editorial line of the Telegraph either, but that is the point. The independence of the press, holding Governments of all colours to account, is why the Secretary of State has always taken this so seriously and used the powers available to her under the Enterprise Act in the way that she has. It is why, as I outlined in debates on the digital markets Bill, we have acted to put beyond doubt and make explicit the ability for her to act in this scenario following the concerns raised, not least by my noble friend Lady Stowell of Beeston, about the potential influence of foreign Governments over our newspapers.
I am grateful to both noble Lords, Lord Bassam and Lord McNally, for their comments and their welcome of the Statement. I am grateful to the noble Lord, Lord McNally, for recalling rightly the role that Lord Puttnam played in the legislative landscape, which the Secretary of State and her predecessors have been able to use in this important area.
The noble Lord, Lord Bassam, referred to the balance between taking action to preserve the freedom of press, which we hold dear as a cornerstone of our democracy, and attracting investment into the UK. We have always been clear, as have my noble friend Lady Stowell and others, that our actions in relation to the potential influence of foreign Governments are not prejudicial to our welcoming of foreign investment more generally in media businesses, and I am glad to have the opportunity to say that again.
The noble Lord, Lord Bassam, asked about consultation with trade unions. The Government will not be engaging with potential buyers or be involved in the sale process from this stage on. We have obviously been careful in the stages so far. From now on, it will be run by RedBird IMI alone. The Secretary of State made her decision based on the evidence provided by Ofcom and the Competition and Markets Authority, which issued a call for evidence and spoke to relevant parties. The unions could have made representations to both those bodies—whether they did or not, I do not know, but that is the appropriate way for views to be fed in. The noble Lord is right to refer to the people whose jobs and livelihoods depend on this. Some of them, who have jobs that allow them to write freely, have made those points, but there are many more people whose jobs in these important sectors are affected by it, which I am happy to acknowledge.
On timelines, RedBird IMI will now proceed with a sale of the call option. The details of that are not finalised, and it would not be appropriate for me to comment further on the next steps as they are a commercial matter. I will say, as the Secretary of State has, that she will monitor the outcome with a view to deciding in due course if she should take any further regulatory action under the Enterprise Act.
The noble Lord, Lord McNally, asked about our consideration of the media mergers regime more broadly. That work was already under way before this issue came to a head. We have taken the action that we have in the digital markets Bill. That action continues, and we will have more to say on that, not least during our debates on the Media Bill. I know that he and others will rightly use this as an opportunity to return to these matters.
My Lords, I will pick up on the theme of timescales. I am grateful to my noble friend for the answers he has given to the noble Lords, Lord Bassam and Lord McNally, because they cover some of the issues I wanted to ask about. Could my noble friend also tell us what the expectation is for the Government to bring forward the secondary legislation that covers the carve-out for legitimate indirect foreign state investors, such as sovereign wealth funds? That is important in providing clarity for prospective buyers. This has already been said, but it is worth saying again: in raising this, I am very conscious that, in meeting our essential objective of a sustainable future for our free press, we should ensure that there is a proper channel for inward investment into the media industry. If my noble friend could give an update, that would be helpful.
Many of the provisions we have made in the digital markets Bill require the Bill to receive Royal Assent, which I hope it will very soon, and they will come into force then. Once that has happened, we will be able to bring forward the measures we have committed to via secondary legislation. I will be writing in the coming days with a bit more information about that and about the consultation process on some of the points my noble friend raised, and we discussed in debates during the passage of the Bill. I will write to all noble Lords with further information about that very soon.
My Lords, the questions so far have focused on the intersection between this and the previous regime, which was established, as noble Lords have already said, by Lord Puttnam and his Enterprise Act—it was not exactly his; it was the House’s Enterprise Act, and it was published by a Government we were proud to be part of. That has stood the test of time, but I am afraid time is accelerating. We are now in a situation with a rather hard edge.
I am grateful to the noble Baroness, Lady Stowell, whom I worked with on the amendment we eventually put through, which will also be referred to within the forthcoming digital media Bill. However, that provides an absolute block against further foreign ownership; it is not just ownership, but interests in the freedom of the press and the plurality of it. Of course, there are other issues, which under the old regime would be considered, including those looked at in detail by Ofcom and the CMA.
I want to pick up on the exchange the noble Lord, Lord McNally, quoted, between the Secretary of State and John Whittingdale. In response to his question about whether these things need to be brought forward and accelerated, she said that she was
“looking at whether online news should be included in the scope of Ofcom’s powers ”.—[Official Report, Commons, 30/4/24; col. 165.]
I rather had the view that Ofcom had those powers. Could the noble Lord explain a little bit where he sees a gap and, if so, given what he said about timescales, whether we can look forward to the gaps being filled in? That seems to be a very important part of it, in the context of us needing to look more widely at what we want out of a free press, without reflecting government intervention and recognising that plurality is one of the main concerns. There are other bidders for the current holdings in the Daily Telegraph, one of which is a media interest. I wonder if the Minister would like to opine on that.
The noble Lord’s question gets to the heart of an important distinction: there are newspapers that have websites, there are websites that are news providers, and there are online services that are not principally news providers but from which people increasingly derive their news. It is right that we look at all those things. He is right that the Communications Act 2003 has served us well for the last 20 years but, as we said in our debates on the Online Safety Act, it was written at a time when the internet was in its infancy and did not look at it. Of course, we touched on that in the debates on that Act and will return to some of the points in the Media Bill. We will shortly consult on expanding the existing media mergers regime and the foreign state ownership provisions to include online news websites, and we will touch on other matters when we discuss the Media Bill.
My Lords, it has been a long time since 1855 and the start of the Telegraph at the time of the Crimean War and when David Livingstone found the Victoria Falls. Can the Minister tell us how many owners the Telegraph has had in that time? He may wish to write to me. It was started by Arthur Sleigh as a way of airing personal grievances against the future commander-in-chief of the British Army, Prince George, Duke of Cambridge. We should have a sense of proportion. I thought Rupert Murdoch, Roy Thomson and Conrad Black—the noble Lord, Lord Black of Crossharbour—did not have British passports, and there was Max Beaverbrook and many others, so this is not something new.
However, I respect the way the Government have acted fast to block a loophole. I pay particular tribute to my noble friends Lady Stowell and Lord Forsyth. In my day as Secretary of State, it was my noble friend Lord Inglewood who handled all the impossibly complex issues around media ownership. The Lords questions were always so much more difficult than those in the Commons, so I could simply sail through. I believe that it is extraordinarily important for there to be transparency about media ownership—so can the Minister inform us who the real owners of the Jewish Chronicle are?
I will have to write to my noble friend on that and to give a precise number of owners of the Daily Telegraph since 1855, and of the Spectator, which is linked to this and older still. She is right to refer to a number of the foreign owners that there have been. We have made the distinction throughout between foreign Governments and foreign investment; it is important to underline that again. We have no problem with foreign investment in our media businesses, just as in so many other areas of our economy. The problem raised by my noble friend Lady Stowell of Beeston and a number of others was foreign government interference. They made it clear that they would have as much of a problem with the Government of the United Kingdom having influence over newspapers in this country. However, it remains true that the Daily Telegraph is the only newspaper that has produced an editor who also sat in Cabinet: Bill Deedes. It has a long history of representation in your Lordships’ House and the fine line between politics and the media, but it is important that we maintain its independence so that it can continue to hold Governments to account.
My Lords, I apologise—I have received a text from the Father of the House of Commons, who says that I never declare my interests. For the past 10 years, I have been an unremunerated trustee of the Economist newspaper, where we went through a change of media ownership, which we took extremely seriously. I am delighted to tell the House that the Economist is as flourishing today as ever it was.
(5 months, 1 week ago)
Lords ChamberThat this House regrets the Statement of Changes in Immigration Rules (HC 556), published on 19 February, in particular the provisions preventing overseas care workers from bringing family to the United Kingdom, as this will (1) deprive migrant care workers of the basic right of caring for their own children, (2) increase workers’ dependency on their sponsors by removing the safety net of a par