(2 months ago)
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Lord Carrington of Fulham
That this House takes note of the role of Modern Methods of Construction in the housing construction sector.
Lord Carrington of Fulham (Con)
My Lords, it is a great pleasure to introduce this debate and to propose this Motion. As many noble Lords will be aware, my noble friend Lord Moylan won the ballot for this debate, but he has been appointed to the Opposition Front Bench and so is unable to stand where I am standing. Fear not: he is on the list of speakers so he will get his two minutes’ worth to say what really should be said by me standing where I am. He is chairman of the Built Environment Select Committee and chaired our inquiry into modern methods of construction. I had the pleasure of serving on the committee during that inquiry, which is one of the reasons he asked me to speak today.
This debate comes at a time when our country is in desperate need of more housing. The previous Government had a target of 300,000 homes per annum. As I understand it, the new Government have a target of 1.5 million homes over the term of the Parliament, which noble Lords with a ready reckoner will quickly work out is the equivalent of 300,000 per annum, possibly back-loaded. There is considerable doubt, given the demographics of our country, whether either figure—300,000 or 1.5 million—is enough. It is certainly the minimum we need, but even so it has not been achieved in recent years. We got over 200,000 recently, but it looks as though this year the figure will be nearer 150,000. There is a strong case that we need an increase of 400,000 homes a year.
The problems in achieving this target have bedevilled housing Ministers for generations: our planning system, skills shortages in the building trades, and sometimes violent local opposition to new housing. MMC, as I shall call modern methods of construction for speed, could have a role in solving at least some of those problems. With MMC homes can be built fast, or faster than using traditional methods on-site, and it would go a long way towards resolving the dire shortage of skilled construction workers, whether they are bricklayers, plumbers, electricians, roofers or carpenters.
Perhaps I ought to explain what MMC is. Those of us of a certain age will remember prefabs, which after the Second World War were used to urgently house people made homeless by the Blitz. They were factory-built homes that could be transported on the back of a lorry to parks and open spaces, where they were then connected to the services—drains, water, electricity and gas. I remember many of them in Chiswick, where I was brought up. They were much loved by the tenants who lived in them, possibly because they were placed on public open spaces and had small gardens.
MMC is a modern version of that idea. The homes, or the components that are assembled to make up a home, are factory-built and then transported to the building site, which is preprepared with services such as foundations, sewerage, water and electricity. There are seven categories of MMC, and in ascending order they require increasing amounts of assembly on-site. I propose to concentrate only on types 1 and 2. The first is when the unit or home is fully finished in the factory and needs only to be lowered on to the foundations at the site and connected to the services. Type 2 is best described as a flat-pack version of type 1—or an IKEA tribute act—where the components of the structure are stuck together on-site. The other five MMC types have some benefits but require much more work to assemble them.
The advantages of MMC over traditional building methods are essentially that less skilled work is required on the site because the building work is done in a factory-controlled environment. This has major quality-control advantages, and therefore less snagging after completion, which is the curse of the building industry. The people building the home in the factory can be trained and supervised to a much higher standard, and use can be made of modern production techniques such as 3D printing. There are of course logistical benefits: building materials can be delivered in bulk and stored at the factory to be used as required.
However, there are problems. It requires a lot of capital investment to build the factory, train the workforce, establish reliable supply chains and buy the high-tech equipment required. If the factories can attract only small numbers of orders and no long-term commitments to place more, the unit costs of the homes are high—certainly as high as building homes in the conventional way. It is a bit of a vicious circle: high prices lead to few orders, and few orders lead to even higher prices. So it is perhaps not surprising that many of the companies that entered into this market have gone bust or just packed up and gone away.
The only way of solving this problem is to guarantee the suppliers of MMC homes a sufficiently large order book. Then we might end up with a virtuous circle, of full order books leading to highly competitive unit prices, giving speed of construction and higher quality. Why has that not happened? There has been resistance from planners, resistance from insurance companies and warrantee providers, and, in many cases, resistance from the big housebuilders. Last but not least, there has been vocal opposition from local communities concerned at dozens or hundreds of identical box homes being foisted on them.
Planning consent seems to be a major problem in some parts of the country. MMC should not find it more difficult to get planning permission than traditional housing, but there may be resistance by planners to new ideas, concern about ease of maintenance or worries about design quality. Perhaps building blocks of flats in urban areas using MMC should not cause a concern to planning authorities or to local residents, but, after Grenfell, the industry will need to demonstrate that MMC is as safe as, or safer than, conventional building methods.
The image and anticipation of tower blocks made up of factory-built units, identical and slotted together, is off-putting, so quality of design is vital for getting public acceptance. Even tower blocks need to be well designed. A beautiful tower designed by a talented architect can be a delight—you have only to look at some of the commercial and residential blocks designed by Mies van der Rohe—but, equally, housing estates or new towns of identical or near-identical homes are guaranteed to raise objections and opposition, which slows the planning process and, in worst cases, can blight a whole district. Good design makes getting planning consent easier and community acceptance more likely.
Variety of design is also important. The Built Environment Committee was told that MMC could be adapted to any finish. That may well be so, but the same unit with a brick finish, or tiles or wood cladding or whatever, will still be the same unit—rather like, in the immortal words of Sarah Palin, putting lipstick on a pig. What is needed is to incorporate brilliant design, with a wide variety of styles and floor-plans, as well as finishes, that respect the traditional materials of the region, to gain acceptance by planners and local communities.
We know from experience with MMC that the problems are not going to solve themselves, but solving them could bring massive benefits, with well-built, well-designed, varied houses and flats fitting into their communities, providing much-needed homes at a smaller price than traditional building methods and delivered much faster. It is worth noting that both the Netherlands and Germany use MMC extensively and with considerable success, so these problems can be resolved.
However, the industry cannot solve the problems on its own, nor can local authorities, with the budget and planning constraints they have. It will take a concerted effort by the Government, and perhaps Homes England, to ensure that the flow of orders for these homes allows for the capital investment required in the factories. Budget constraints must not be allowed to lose design quality and variety of floor-plan and materials, all of which will push up the cost. That will guarantee failure, through both the bankruptcy of the MMC companies and rejection by the local communities.
I guess the real question of this debate is whether the new Government are committed to acting as a midwife for this industry, helping it into the brave new world of rapid, cost-effective homebuilding, with all the financial support, design encouragement and tearing up of red tape that that entails. I look forward to this debate and, in particular, to the Minister’s reply, which I am sure will lay out the Government’s policy towards MMC.
Baroness Warwick of Undercliffe (Lab)
My Lords, the housing sector is struggling. It is universally acknowledged that the country does not have enough affordable homes. This Government have committed to solve the housing crisis for good, but how best to do that where previous Governments have failed? The shortage of labour supply means that traditional building methods cannot deliver housing targets, and traditional private builders have shown that they cannot meet the need.
There is a consensus that MMC must be a major part of the solution, but delivering MMC has been challenging. Some companies have gone bust. Against a backdrop of insolvencies across the construction sector, the perception of MMC has suffered disproportionately. There has been a lack of clear strategy surrounding MMC. A long-term housing plan could provide the certainty to invest in MMC and deliver the Government’s ambitious housing targets.
Social housing must clearly play a central role. Housing associations are planning to build, via MMC, about 10% of the new build currently forecast by the regulator. With the right mix of low-cost incentives and support, that proportion could double.
The recent National Housing Federation survey found supplier insolvency to be the biggest risk to uptake. The Government underwriting risk contracts would have an immediate effect on MMC delivery.
The House of Lords Built Environment Committee’s inquiry into MMC urged the Government to step back and set achievable goals and develop a coherent strategy. The noble Lord, Lord Carrington, gave a thorough and fair picture of what we found. The previous Government committed to a £10 million-backed MMC task force, but it never met. Will the Minister commit the new Government to a central body dedicated to research, training and promotion that will allow MMC to flourish. Will the newly established New Towns Taskforce embed MMC in its delivery plans? At the next spending review, will my noble friend press for a long-term plan for new and existing social homes, including specific policy steps to increase the use of MMC in the social housing sector?
Baroness Brinton (LD)
My Lords, I declare my interests as a vice-president of the LGA and vice-chair of the All-Party Group on Fire Safety and Rescue. I congratulate the noble Lord, Lord Carrington, via the noble Lord, Lord Moylan, on securing this important debate and on his excellent speech. I note that MMC are already used successfully in student and hotel accommodation in this country.
I shall focus on two things, the first of which is fire safety. Yesterday, the Grenfell inquiry final report was published. From these Benches, our hearts go out to those who lost family members and friends and, of course, their homes and everything in them. Fire safety standards must be at the heart of modern building methods. As importantly, the recommendations of both the Grenfell inquiry and the Hackitt report should be implemented, so that maintaining and adapting all buildings is always done in the context of fire safety.
Secondly, all new homes from now on should be built to M4(2), or lifetime, standards. This is not just about disabled people, although we certainly need to be able to live in and visit homes, whether owned or rented, that meet our needs. Shockingly, well over 90% of homes do not. I am talking about the homes we need to have as we get older. Habinteg Housing Association’s research shows that M4(2) significantly reduces the cost of care assistance, because people can manage for much longer in their own homes with level access, grab rails, wet rooms et cetera. But there is a further benefit too: staying in your own home, which is what people really want to do, delays the need for expensive residential care. There are typical savings of over £20,000 for basic home care services in unadapted homes, and considerably more in residential care. Lifetime standards would save substantial public money in the NHS, and in welfare too. The extra cost for building is well under 10% yet the quality of life and lifetime savings to individuals and the state make it an obvious thing to do.
Lord Mair (CB)
My Lords, I declare my interests as a civil engineer, both in practice and as an academic, at Cambridge University, and as a consultant to Laing O’Rourke, the company that pioneered MMC in the construction industry. I am currently a member of the House’s Select Committee on the Built Environment; I was not a member when that committee, chaired by the noble Lord, Lord Moylan, undertook its short inquiry on MMC for housing, culminating in its excellent letter to the Government.
However, I was a member of the Select Committee on Science and Technology, which in 2018 undertook an inquiry highly relevant to today’s debate, its report being entitled Off-Site Manufacture for Construction: Building for Change. That report concluded that off-site manufacture, synonymous with MMC,
“provides clear and tangible benefits which make a compelling case for its widespread use”.
Recognising these benefits, in the Autumn Budget of 2017 the Government announced a “presumption in favour” of off-site manufacture for five specific government departments: transport, health and social care, education, the MoJ and the MoD. Significantly, that presumption in favour was not stated as applying to MHCLG. For infrastructure generally, there have been many success stories: high-rise buildings, hospitals and schools are increasingly being built with MMC, demonstrating excellent design, significantly faster and higher-quality construction, and less waste.
The Science and Technology Committee heard that a significant barrier to MMC for house construction at scale was the need for longer lead times: the housebuilder has to commit to a production schedule well in advance of actual unit sales, risking that market conditions might deteriorate. This and other barriers could be overcome if there were a substantial guaranteed pipeline of MMC housing across the country—the point made by the noble Lord, Lord Carrington of Fulham. My question for the Minister is therefore this: should not MHCLG—and Homes England—confirm its wholehearted support and announce forthwith a presumption in favour of MMC, as five other government departments have done?
Lord Rooker (Lab)
My Lords, I support modern construction methods. In February 2003, Lord Prescott published a seminal document, Sustainable Communities: Building for the Future. Ministers would be well advised to look at this, rather than trying to reinvent the wheel. We then in ODPM promoted off-site construction and committed to encouraging the private sector to invest in factories and new techniques.
In an Oral Question I asked on 8 June 2023, I made the point that you cannot switch factories on and off, and a stable demand is a prerequisite. What stops a big uplift? Both off-site and onsite require new skills and techniques; they are not separate.
I once visited a factory in Birmingham and three weeks later visited a site in Stratford-upon-Avon to see the construction of what I had seen in a factory. It was made clear to me that techniques on both the site and the factory are linked. The Government need to ensure that the new skills are developed, and they need to create demand. Perhaps a density directive, which Lord Prescott used, to stop wasting land could help.
My final point concerns the Building Research Establishment. Lord Prescott and I visited it in its early years of being a Tory privatised body to see examples of modern methods. I had visited one in opposition, when it was government-owned. Given the Grenfell report, the BRE should no be longer be involved in certifying modern methods of off-site construction techniques or products. Such work should be seen to be fully independent and professional.
Lord Banner (Con)
My Lords, I declare my interest as a King’s Counsel practising in planning law. I have many clients in the housebuilding and construction sector. I am also chair of the advisory group at the property developer SAV.
There is widespread recognition that MMC have a range of important benefits, including, in particular, faster and greener construction of the new homes this country desperately needs. It is therefore both curious and regrettable that this widespread recognition has not yet translated into widespread uptake. I draw attention to the role that the planning system could play in stimulating the critical mass of pipeline and demand necessary for the MMC market to flourish.
By that I do not mean greater planning regulation; there is arguably enough of that already. Instead, I encourage the Government to look to how the planning regime has encouraged greater uptake of custom and self-build housing in recent years, through a combination of legislative targets for local authorities to deliver specific levels of custom and self-build housing; a favourable planning policy climate for that kind of housing; and relief from the community infrastructure levy and VAT for those who develop them. Those measures are generally judged to have been successful in stimulating greater uptake of custom and self-build housing over the past decade. A similar package could help do the same for MMC.
There are also good reasons for inferring that variations between local authority development plans in relation to the standards required of new housing development are having a repressive effect on MMC, the business model of which requires greater consistency. National standards, for example, through national development management policies, may be a solution to this. Such ideas would need to be worked and consulted on thoroughly. The committee’s letter has flagged that there are significant gaps in the understanding of the MMC market, meaning that rushed solutions risk unintended consequences. But there is, in my view, undoubtedly a case to answer for the planning system playing a role, and I encourage the Government to consider it.
Lord Thomas of Gresford (LD)
My Lords, I have personal experience of building and owning two houses of non-traditional construction. One was built in 2006 of larch, pine and oak with a green roof, solar panels, hemp insulation of the external walls and an internal wall forming a heat sink built of granite recovered from the burnt-out cottage it replaced. Large south-facing windows maximise solar gain and ground-source heating is carried under the floor.
Labour costs were saved by assembling large sections, built to size by expert workmen in comfortable factory conditions. Although the noble Lord, Lord Carrington, referred to the difficulty in obtaining a warranty and insurance as a barrier to the uptake of MMC, I had no problem in that regard. As Peers for the Planet pointed out in its briefing for this debate, a fireproofed wood construction brings a 25% reduction in embodied carbon emissions.
The other house, built in 2016, is a Passivhaus—the gold standard of energy-efficient construction—and there were no difficulties with a warranty or insurance. The block-built walls have an external thick layer of high-density expanded polystyrene coated with render. It looks like a traditional house, and blended without objection into a highly prized conservation area. The insulation is under the floor as well as in the walls and roof. The windows and doors are triple-glazed and there is active filtered ventilation. South-facing large windows and smaller windows facing north result in a warm house with no need for heating of any sort for eight months of the year. The solar panels take care of the hot water. The lesson, as the noble Lord, Lord Carrington, pointed out, is that modern design and innovation is everything, and the sooner the planners and builders get the message, the better.
Baroness Twycross (Lab)
My Lords, the speaking time in this debate is two minutes. I apologise for being hard on this, but it is important that we allow everybody the opportunity to speak without cutting short the Minister’s response.
Lord Best (CB)
My Lords, as a member of the Built Environment Committee under the able chairmanship of the noble Lord, Lord Moylan, which investigated this matter, I thank the noble Lord, Lord Carrington of Fulham, for introducing this debate so helpfully. Deploying modern methods of construction is obviously the way forward, yet the industry has recently been characterised by a succession of business failures and even bankruptcies. Can we still expect the modern methods of construction sector to fulfil its clear potential?
I suggest three prerequisites for success. First, the MMC industry needs a more certain and consistent pipeline of orders. The important stipulation of Homes England and the GLA that a proportion of the affordable homes they fund must be built using MMC techniques needs to be refined to provide greater certainty for the manufacturers. Will the Government’s agencies be more specific as to the appropriate categories of MMC—and, indeed, the systems that have the lowest embedded carbon emissions, such as prefabricated timber frame construction?
Secondly, to comply with the new future homes standard, developers and social landlords will be propelled into using prefabricated homes, because of the greater precision achieved in factory settings. Will the Government be firm in ensuring enforcement of the new standards that will inevitably mean more use of MMC? Thirdly, will the new Skills England give priority to workforce skills for MMC in its much-needed reforms of apprenticeships and training for the construction industry?
With attention to these issues, modern methods of construction can indeed make possible the quantity and quality of new homes this country desperately needs.
Baroness Wilcox of Newport (Lab)
My Lords, the Government have promised 1.5 million new homes for England over the next five years, which will see the biggest increase in social and affordable housebuilding in a generation.
When leader of Newport City Council, I held meetings with many MMC companies to examine how we could determine a solution for the acute social housing shortage we faced in the city. Last year the council secured Welsh Government phase 2 homelessness grant funding to increase the supply of affordable social housing, and a development of 12 new ultra-low-carbon high-quality homes on an underused council-owned car park was opened using MMC.
Linc Cymru, Newport City Council and ZEDpods developed a unique low-energy, low-carbon affordable housing scheme for the area. His Royal Highness the Prince of Wales visited the housing development in Hill Street, Newport. It was in support of Homewards, a new five-year project from the Royal Foundation of The Prince and Princess of Wales. I am pleased to inform the House that Newport is one of the six flagship locations across the UK working in partnership with Homewards to tackle homelessness and make it rare, brief, and unrepeated.
His Royal Highness said:
“In a modern and progressive society, everyone should have a safe and secure home, be treated with dignity and given the support they need”.
We now have a real opportunity to develop housebuilding at pace, supported by a Government in Westminster who fully believe in a modern and progressive society and will serve the needs of the people across the UK by fixing the foundations for a better future.
Baroness Eaton (Con)
My Lords, I thank my noble friend Lord Carrington for his insightful introduction to the debate, and declare my interest as a vice-president of the Local Government Association. The previous Government rightly identified MMC as a potential game-changer in addressing our housing needs. As their 2021 commitment to the MMC Taskforce highlighted, there was recognition that MMC could significantly improve the quality, energy efficiency and speed of housing delivery, while reducing waste and addressing the skills shortage within the sector. MMC offers numerous benefits, as we know.
However, while the recognition was there, the execution fell short. The Government’s approach to MMC was marred by a lack of co-ordination and coherent strategy. As highlighted by the House of Lords Built Environment Committee, of which I am a member, public funds were invested, but without a clear plan, measurable objectives or sufficient understanding of the challenges faced by the industry. This disjointed approach led to missed opportunities and the financial collapse of several MMC firms—firms that could have played a pivotal role in addressing our housing needs. The committee’s findings reveal a troubling picture of an industry that has not been given the support or clarity it needs to succeed, particularly in securing insurance, warranties and the necessary regulatory approvals.
Thus far, we have heard little about the detail from the Government, and I hope that the Minister, when she responds, will tell us clearly just how they will address all the particular difficulties with MMC.
Baroness Wheatcroft (CB)
My Lords, I thank the noble Lord, Lord Carrington, for his introduction to the debate, and the Committee on the Built Environment for its hard work on this important issue. Clearly, MMC is the way ahead for building, and it has been for a long time. Given the climate in this country, apart from anything else, getting as much done as possible under the cover of a factory makes sense. But, as we have heard today, there are many obstacles to making this the way in which so much building should be done.
The noble Lord, Lord Best, outlined three areas where the Government could move quite quickly to make a difference. I would add another area, and that is public confidence. There was always a potential problem over the image of prefabricated housing, but gradually that has changed. Not everybody had quite the romantic view of the noble Lord, Lord Carrington, but now prefab houses—HUF HAUS, in particular—have become much sought after. Now the biggest problem will be public confidence in modern methods of building, which will be at an all-time low after the publication of the latest Grenfell inquiry report.
I second the noble Lord, Lord Rooker, in looking for a replacement for the Building Research Establishment. The Grenfell report dismissed the BRE as
“marred by unprofessional conduct, inadequate practices, a lack of effective oversight, poor reporting and a lack of scientific rigour”.
Who is going to feel comfortable being asked to buy, or live in, a property that has been overseen by such an organisation? Can the Minister assure us today that the Building Research Establishment will no longer have a role in establishing what materials are safe and what properties are okay for people to live in?
Baroness Uddin (Non-Afl)
My Lords, I thank the noble Lord, Lord Carrington, for the details that he alluded to. I begin with my thoughts and prayers to all who perished in Grenfell Tower and I pay respect to their loved ones. Grenfell is the context of continuous neglect in social housing provision. With two major fires only last week, we may not be learning the lessons quickly enough, with thousands of family homes remaining unsafe. If we utilise MMC, it must be using material tested to the highest safety standards. Since the 1980s, thousands of homes have been built in Canary Wharf and elsewhere without proper consideration of family needs, so a national housing plan is essential. If MMC meets industry standards, we should utilise it while mandating the strictest regime for the safety and well-being of family homes.
We can look at some of the challenges. Models exist in Japan, Sweden, the Netherlands and China using MMC building cost effectively with energy-efficient homes. Housing is not a building or buildings. It is homes for families across the generations. How will the Government use a national planning framework to secure the highest-quality MMC standards if we are to use it continuously for the well-being of a cohesive community?
Baroness Miller of Chilthorne Domer (LD)
My Lords, I am very pleased to have joined your Lordships’ Built Environment Committee, but I was not a member for this report.
The noble Lord, Lord Mair, has reminded us that this is not the first report that your Lordships’ House has done into MMC, and spelled out what the 2018 report from the Science and Technology Committee concluded. There was also a 2019 report from the other place on modern methods of construction. It seems very strange that the Government did not take up any of the lessons of either of these reports. I am sure that this Government will do better.
The noble Baroness, Lady Wheatcroft, referred to one of the big problems—confidence—and I agree with her. This was absolutely underlined by the Competition and Markets Authority, which did a market study into the housebuilding sector, concluding in February 2024. On MMC, it concluded that there is a
“lingering negative stigma amongst consumers, builders, investors, and insurers”.
What will the Government do to overcome this lingering negative stigma? Without overcoming it, MMC will always be dragged down by it.
Lord Horam (Con)
My Lords, we all know that we have a serious housing problem in this country. Any serious attempt to increase supply should include modern methods of construction. They do get over the problem of a shortage of traditional skills. They do save time. They improve precision and quality, and they improve productivity. As the noble Baroness, Lady Warwick, said, they are already used extensively in Germany and the Netherlands. As the noble Baroness, Lady Brinton, said, they are used in this country in student accommodation.
I was therefore extremely disappointed to find that in the list of measures on housing in the Labour Party manifesto—a commendably long list of measures on the supply side—there was no mention of modern methods of construction. It ought to look at this again, particularly because its avowed intention is to get the private sector and the government sector working together. That is what it should do, particularly in this area.
Lord Griffiths of Burry Port (Lab)
My Lords, the noble Lord, Lord Horam, has just made precisely the points that I wanted to make. The time has come for these discordant experiences, this diffuse energy, to be pulled together. The Government must surely accept the role of ringmaster—or whatever other metaphor you want to use—pulling all this together, achieving a foreseeable path forward. I know nothing about building but I do know about homes, and it is urgent and of vital necessity that we crack this one and soon.
I am hoping to hear the Minister say what the noble Lord, Lord Horam, said was not in the manifesto, namely that as part of the solution that has to be worked out, an energetic and investing commitment to the MMC aspect of a housebuilding scheme is part of the thinking of the present Government. On the present evidence, I am hoping to hear it in order to resolve a disappointment. The noble Baroness, Lady Kennedy of The Shaws, the noble Lord, Lord Robertson of Port Ellen, and I have been working with John McAslan + Partners on a very ambitious scheme from the private sector that would provide a real, focused attempt across the country to use, among other ways, these traditional methods. We submitted a lavish document and, more than a month later, have not even had a reply of acknowledgement. Those little things that are lacking need to be made good and a positive way forward, led by the Government, needs to ensue.
Lord Fuller (Con)
My Lords, I have been talking to a number of builders and they all say the same thing: “When we build a home, standard build is cheaper, while meeting the complexity that often comes with awkward and constrained sites”. Steel frames, precast floors and other off-site techniques can speed certain aspects. Pre-manufacture always has a role in high-rise situations, where space is constrained on inner-city sites. MMC is best introduced in institutional settings such as hotels and care homes, where identikit standardisation has value. But when all is said and done, they tell me that MMC is more expensive. Let us not kid ourselves that it is cheaper; it is not.
We must not ignore cost. To meet our national targets, we need to recognise that layering ever more well-meaning but expensive burdens on building, such as CIL, GIRAMS, SANGS, nutrient neutrality, BNG, water neutrality, MVHR and EV—all worthy things in themselves—has cumulatively added £40,000 to the cost of a new family home, before we even start to consider the proposed 50% affordable housing targets on grey belt that will push housing costs even further out of reach. We must have limits on cost.
We will make rapid progress if we prevent the mortgage, warranty and insurance companies discriminating against modern rather than traditional builds. We must make it easier for smaller, family firms to finance perhaps a dozen homes a year using materials sourced locally, and we must roll back the regulatory creep from self-serving national agencies such as Natural England, not councils, that layer ever more onerous, overlapping regulations and undermine the equality of the three levels of sustainability—economy, environment and society—in pursuance of their own judicial activism.
These are the basics to focus on before we spend disproportionate attention on the shiny MMC thing, which diverts focus from getting Britain building.
Lord Teverson (LD)
My Lords, MMC can make a big difference in energy efficiency and embodied carbon in buildings. I will give a quick bit of history for 15 seconds. The previous Labour Government, and indeed the coalition Government, had targets for net-zero buildings for homes for 2016. That legislation was about to be enacted when the Government changed and George Osborne, as Chancellor of the Exchequer, stopped that process. In the meantime, we have had 1.5 million homes built below that standard that need not have been and will have to be retrofitted. That was a national disgrace and probably one of the largest bits of environmental vandalism that we have had in recent years.
The Labour manifesto says two things around this. On page 56, on fuel poverty and net zero, its “Warm homes plan”, which I hugely welcome, says:
“The energy shock of recent years has highlighted the urgent importance of improving energy efficiency in British homes”.
Page 38, on housebuilding, says:
“Labour wants exemplary development to be the norm not the exception. We will take steps to ensure we are building more high-quality, well-designed, and sustainable homes and creating places that increase climate resilience”.
I welcome that and all the aspiration behind it. We have for next year the future homes standard that has been mentioned, but that is not a net-zero commitment in terms of housebuilding. Will that aspiration be improved to return us to what we should have been doing in 2016?
Lord Birt (CB)
My Lords, we have paid a very heavy price indeed as a country for the combination of the 2008 economic shock, the pandemic and the monumental distraction of Brexit. Thus preoccupied, we have failed to grip many areas of national policy, but housing has been our most grievous and pernicious failure. We now need a holistic framework, an action plan covering every aspect of housing policy, involving all relevant departments.
First and foremost, we need once again to make a substantial investment in social housing, publicly procured. We obviously need a new building standards framework, inter alia embracing 360-degree insulation as well as fire safety. We need to embrace modern construction methods: as in other industries, modularisation and off-site construction has to be more efficient and cost effective. In 2015, China built a 57-storey skyscraper in 19 days. In under 20 years, embracing streamlined processes, China has built 45,000 kilometres of high-speed rail. A modern methods of construction taskforce was announced in the 2021 Budget; can the Minister confirm that it has never met?
We need a national plan to build homes where they are needed, with social and other infrastructure as part of the plan, but there are some don’ts. We must not in any way sacrifice the UK’s precious areas of natural beauty—and please let there be no more featureless box-houses, a hallmark of the most recent past and devoid of any aesthetic. Let us act quickly but with care.
Lord Jamieson (Con)
My Lords, I thank the committee for its report and my noble friend Lord Carrington for his introduction. I also declare my interest as set out in the register as a councillor and, previously, a member of the previous Government’s London housing task force.
As with so many issues in the development and housing market, the key is providing confidence to investors, suppliers and prospective workforce that there is a long-term market. Currently, everyone in the housing market lacks certainty, most particularly that they will be able to access land upon which to build. This is exacerbated by the ever-changing regulatory and planning environment. It is no wonder that companies seek to maximise value in the short term and are unwilling to invest in technology and training when they have no long-term visibility.
MMC has significant potential, particularly in our cities, but adoption has been limited to date and tends to focus on the limited area of timber-frame open-panel houses. To really move forward, an investor in MMC will need to be confident that there is a market, which means they are no longer hamstrung by a lack of sites and the delays and unpredictability of the planning system.
It is not that this nor the previous Government do not recognise the need for site availability. However, it is crucial that the detail of government planning proposals delivers sufficient viable sites and gives the industry confidence this will continue. I ask the Minister: how will they ensure that mandatory targets are delivered, particularly in urban areas that have previously delivered so little?
Viscount Hanworth (Lab)
My Lords, the recently elected Labour Government have proposed that there should be mandatory targets for housebuilding that local authorities must adhere to. The ambition is for 1.5 million houses to be built in the current Parliament, with annual targets of 370,000 units.
This target, which far exceeds recent levels of housebuilding, is comparable to what was achieved in the early post-war years. A large proportion of those houses were council houses, and they were subject to direct procurement, financed by local authorities. They were built mainly by small local building firms, which typically employed their labour on a permanent basis. Nowadays, a few large firms build most of the residential accommodation. They hire their labour on a temporary basis. However, the supply of such skilled labour has shrunk drastically. Moreover, the big firms do not undertake to train their workforce.
It has been widely proposed that, in order to accomplish a revolution in housebuilding and to meet the targets, it will be necessary for builders to adopt modern methods of construction. These will involve a substantial proportion of off-site construction in factories with assembly lines. Contemporary methods of housebuilding are slow and wasteful of materials. They also make inordinate demands on a scarce labour force. It is doubtful whether, if such methods were used preponderantly, any of the targets could be met.
The houses that are so urgently needed must be subject mainly to direct public procurements. Much of the new housing stock would therefore remain in public ownership, albeit that the right of the occupants to buy their houses should be preserved. It was an ideological aversion to public ownership that inspired the Thatcher Governments to promote the right to buy, while preventing councils from investing the proceeds from the sales in replacement buildings. This has been a major factor in creating the current housing crisis.
Lord Moylan (Con)
My Lords, I thank my noble friend Lord Carrington of Fulham for introducing this debate, especially when I had to withdraw due to a change of circumstances. It was a privilege for me to chair the short inquiry into modern methods of construction, undertaken by the Built Environment Select Committee. I add a word of thanks, although time precludes me from naming them all, to the clerks and the team that supported that inquiry when we undertook it.
Ten years ago, modern methods of construction were the future, particularly the top level of MMC, which is modular construction, where a whole unit—a whole home—can be built off-site, more or less, and be delivered to the site. However, in the last couple of years, most of the firms engaged in that activity have either withdrawn from the market or closed. The purpose of our inquiry was to try to find out why.
Time precludes me from explaining at great length why that is, but we certainly found disarray at the heart of government. The policy was good, but the implementation was almost totally absent. Reference has been made to the committee that never met. I also refer to the strange attitude of Homes England, which claimed that it had a strategy in the shape of the five Ss—five words that all began with S—but when we asked for the document that underlaid the strategy, it was not able to produce it. I hope that the new Government will look very carefully at that.
What is the role of government in this? It is very important for the Government to have a regulatory role that unblocks some of the things identified by my noble friend when he introduced the debate. I would be very cautious on one matter: I agree with the noble Lord, Lord Rooker, that you cannot switch a factory on and off. Many of these firms are demanding a pipeline but, as he said, every factory needs a pipeline. Why is it that the Government should supply the pipeline in this case, rather than encouraging these firms to go out and find and create their own market?
Baroness Thornhill (LD)
My Lords, I say at the outset that I am really grateful that, yesterday, the Government Whips’ Office gave the winders some extra time, but I feel that two minutes for a speech is not making use of the expertise in this Chamber. That said, all the two-minute contributions have been insightful and informative and have, amazingly, captured all the issues around modern methods of construction—and the debate has definitely bounced along. What is striking is that there is a consensus that there is a role for modern construction and agreement about the challenges and barriers to MMC but plenty of suggestions for improvement, which I hope the Minister will take back to her department.
I, too, was a member of the Built Environment Select Committee, which carried out the inquiry, ably chaired by the noble Lord, Lord Moylan, whose contribution it is a pleasure to follow today. It was a wide-ranging, if frustrating, inquiry, as the noble Lord, Lord Carrington, accurately outlined.
It was not that the Government were not putting money into tackling the problem—our usual complaint—but that they had done so in an undirected and haphazard way without a coherent strategy and measurable outcomes, although I am certain that the noble Baroness, Lady Scott, will put up a spirited and informed defence of the previous Government’s advances in modular build, and I genuinely look forward to her contribution.
I turn to the consensus that we have a housing crisis and that modular build could and should be a way to build more homes, more quickly and, more importantly, to the future homes standard. It will add diversity to provision, which is at present monopolised by the big builders.
The number one issue for the industry is the supply chain, which was mentioned by several noble Lords. There are clearly real issues of business survival when you have inconsistent and insufficient demand for your product, unpredictable delays and workforce challenges. In this climate, we have unfortunately had recent experiences of companies going out of business or struggling to continue in business. I really have only one question for the Minister: what is going to change and what plans do the Government have? Will they consider incentivising builders to use MMC by offering tax breaks, reducing VAT on modular homes, or giving tax credits to companies that invest in modular construction? We hear excellent mood music from the Deputy Prime Minister about a revolution in social housing. Will the Government consider setting targets for the construction of modular homes within public housing projects? Will the Government actively use their own land as part of a deal to create more public/private partnerships to build more modular homes and encourage and incentivise councils to do likewise?
The regulatory framework mentioned by the noble Lord, Lord Banner, and others is designed with traditional construction methods in mind, making it more difficult for MMC builders to navigate the approvals process. The regulatory maze can deter builders from opting for modular approaches, even when they might wish to use them. This applies particularly to SME builders. Could the Government consider a fast-track approval process for modular housing developments to encourage quicker construction? Creating a streamlined process aided by national policies specifically for modular homes, as mentioned by a noble Lord—I apologise for forgetting his name—would encourage plans to come forward, reduce delays and overcome the bureaucratic hurdles that are currently faced.
As we heard in the contributions by my noble friends Lord Teverson and Lady Brinton, we feel that the Government should use the future homes standard to ensure that modular-built homes are built to high environmental and safety standards and provide for more lifetime M4(2) homes. In that regard, we disagree with the remarks of the noble Lord, Lord Fuller, about building to a lower quality.
There is some disagreement about the overall costs of MMC build versus traditional build but from the perspective of housing associations, which was touched on by the noble Baroness, Lady Warwick of Undercliffe, the upfront costs are more expensive than traditional build. The upfront costs are more pertinent to housing associations than the lifetime costs as they are under considerable financial pressure now and, regrettably, environmental standards are often reduced to keep costs down. Additionally, as more accessible homes take a larger floor plan you get fewer homes for your money, a realistic dilemma that targeted grants could help to solve.
As the noble Lords, Lord Rooker and Lord Best, pointed out, there is a skills shortage in construction in general and in MMC specifically. The skill sets and technological challenges are different. The Government should encourage more investment in research and development in MMC technologies to improve efficiency, reduce costs and enhance design options. There are still too many stories of poor construction and construction failure. As we know, this does not need to be the case; we can only envy my noble friend Lord Thomas’s tenants. The risk aversion of warranty and insurance providers plus the reluctance of lenders to provide mortgages on homes built by MMC are further barriers. These issues need unpacking and only the Government can do that and offer strong clear guidance about what will be expected in future.
Finally, to make this shift needs radical change, and the current system is not being sufficiently incentivised to change. We have a risk-averse culture and are cautious in trying new methods. Therefore, the Government have a real role in being the driving force for change. I do not think we can wait for demands from clients and homeowners because for me the other significant barrier, mentioned by the noble Baroness, Lady Wheatcroft, and my noble friend Lady Miller, is public perception and the stigma left over from the prefabricated homes of the past. I remember visiting my Auntie Marion’s prefab in Tenby, south Wales. She lived in it happily until she was forcibly evicted. These two things—cautiousness and public stigma—act as barricades to change.
It seems from the debate that MMC is part of the housing crisis solution, but nobody is dewy-eyed about this. It is certainly not a silver bullet. It could contribute significantly but it needs political will and leadership to create a whole-market approach to ensure that consumers, manufacturers and lenders are all aligned in their aim of embracing MMC to create sufficient demand in the market to grow the approach. Without this alignment and subsequent demand there is no clear catalyst to drive the change needed. Will the Government provide that catalyst and be the ringmaster? If the answer is yes, how and when?
Baroness Scott of Bybrook (Con)
My Lords, the final report of the Grenfell inquiry was published yesterday. With the leave of the House, I take this opportunity to send my condolences again, and my thoughts and prayers, to a very brave and courageous community in London.
I thank my noble friend Lord Carrington of Fulham for bringing this Motion to the House, and my noble friend Lord Moylan for his chairmanship of the committee and for chairing this short inquiry. On every side of this Chamber, we know that more homes are desperately needed across the country and that it is crucial that we deliver the right homes in the right places. Ministers should consider carefully whether modern methods of construction have a greater role to play in delivering the homes we need. The Opposition want the Government to deliver enough homes to enable the next generation to get on to the housing ladder, and we will hold Ministers’ feet to the fire on the pledges they made in their manifesto at the last election.
In approaching this debate, it is important to note that we have made significant progress on housing delivery in recent years. Successive Conservative Governments have delivered 2.5 million more homes since 2010 while respecting local communities and ensuring that those homes were built in the right place. We hope that the Government will build on our success and continue to respect local people while prioritising developments on brownfield sites, as we did in government.
At the last election, the Labour Party made a solemn pledge to the British people that it would deliver 1.5 million homes over this Parliament. In doing so, it has set itself a target that people across the country are relying on. We need more homes, and Ministers need a clear plan to deliver them. We on the Opposition Benches will be watching the Government very closely, as they watched us, and pressing for the right homes in the right places, as we delivered in government.
The Labour Party manifesto focuses almost entirely on planning reform to deliver more homes, but industry experts are clear that the challenges we face go well beyond the question of planning law. One crucial challenge is labour supply. The Construction Industry Training Board states in its report Focusing on the Skills Construction Needs that the sector
“needs to recruit the equivalent of 251,000 extra workers over the next five years”,
based on existing predictions. That number is likely to rise if the Government are serious about hitting their targets.
The simple fact is that, if we want to build more homes, we will need hundreds of thousands more construction workers. Even as the party that helped 4 million more people into work since 2010, it is clear to those of us on the Opposition Benches that the supply of labour in the construction sector will be a challenge for the Government. This is where Ministers should perhaps take note of the arguments from the noble Lord, Lord Carrington, today.
In the face of labour supply challenges, modern methods of construction, which encompass a range of techniques, including off-site fabrication and the use of on-site robots in the construction process, could have an important role to play in housing delivery. Homes England has concluded that modern methods of construction are capable of driving greater efficiency and productivity, which the Built Environment Committee noted in its letter to the department.
One stark example of the impact that modern methods of construction can have is the delivery of the Grange University Hospital, in south Wales. The £350 million hospital building project was completed four months ahead of schedule—which is unusual—with parts of the hospital completed a year ahead of the projected completion date, in large part thanks to the use of modern methods of construction.
Modern methods of construction could have a bright future and an important role in housing delivery, but, as the Built Environment Committee has referenced, the sector has seen a number of businesses fail in recent years. This may be a result of those businesses not benefitting from the necessary economies of scale that other large housebuilders benefit from. Ministers should look at this closely to see whether the Government can support the sector so that it can play a full role in driving efficiency and boosting the delivery of more homes.
I have a number of questions for the Minister, which I hope can be addressed in her speech, though I am happy for her to write if not. What assessment have the Government made of the role that modern methods of construction might play in speeding up the delivery of the homes that we need? Do the Government anticipate hitting their housebuilding targets early if modern methods of construction are harnessed effectively? Will the Government consider actively supporting the modern methods of construction sector as part of their housebuilding programme? What other steps will the Government be taking to overcome the labour supply challenges faced by the construction sector? Do Ministers anticipate labour supply becoming more of a problem in the light of their new housebuilding targets?
The modern methods of construction sector is interesting and it is growing. Ministers should watch the sector closely, so that innovations can be harnessed to the benefit of the British people.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)
My Lords, I am pleased to respond for the Government on this important issue. I am conscious that the debate takes place following the publication yesterday of the report on Grenfell. Our huge sympathy is with the relatives and friends of the 72 people who lost their lives in that incident, and with the brave communities that have waited seven years for that report. We will consider the issues of safety that relate to this topic very carefully, and we will learn all the lessons of the Grenfell report as we go through the further development of MMC.
I thank the noble Lord, Lord Carrington, for leading the debate, and the noble Lord, Lord Moylan, and his committee for the work they did in the inquiry into the role of modern methods of construction, which concluded earlier this year. It was a very thorough inquiry, and I am grateful for the work that was done.
I should declare an interest, having used MMC for a Housing First homeless project in my borough when I was leader of the council, and for a further affordable housing project with a housing association. Both of these were very successful, very quick, and delivered on time and to budget.
I am grateful to all noble Lords for their contributions to today’s debate. I recognise the expertise in the House—that is quite nerve-wracking for a Minister, but I am grateful for it, nevertheless. I will try to respond to the points that have been raised. I have been variously described as a ringmaster and a midwife in this debate, so I will do my best to fulfil those roles.
I start with the role of MMC in meeting housing supply, an issue rightly raised by a number of noble Lords, including the noble Lords, Lord Fuller, Lord Banner, Lord Carrington and Lord Best, and the noble Baroness, Lady Wheatcroft. As noble Lords will be aware, this Government were elected on a decisive mandate of change and national renewal, with an overriding mission to deliver economic growth and the higher living standards, good jobs, stronger public services and greater opportunities that go with that, for all parts of our country.
Getting Britain building again and tackling the housing crisis we inherited will be critical to achieving our ambition of building 1.5 million homes over the course of the next Parliament—a target referred to in the opening speech of the noble Lord, Lord Carrington, by the committee chaired by the noble Lord, Lord Moylan, and by the noble Baroness, Lady Warwick of Undercliffe. We agree with the noble Lord that modern methods of construction have an important role to play in this endeavour.
Innovation has revolutionised so many sectors and transformed the way we live, with incredible gains in productivity and living standards, yet much of the housebuilding industry continues to build in the same way it has for hundreds of years. Of course traditional build has, and will continue to have, its place. The noble Lord, Lord Carrington, referred to the historic use of prefabs, way back when, and mentioned Chiswick, where my grandmother lived, so I remember that well. The noble Viscount, Lord Hanworth, also referred to this. The noble Baronesses, Lady Wheatcroft and Lady Bowles, and others, referred to the public perception of this issue, which is vital to our consideration.
The serious challenges we face, not least in meeting our net-zero goals, demand that we take a much more ambitious and innovative approach, which is why I believe it is time to realise the great potential of modern methods of construction. That relates to the point of the noble Lord, Lord Mair, about being committed and having the commitment to drive this forward.
I am delighted to see a number of MMC firms succeeding, such as Vision Modular building Europe’s largest residential modular tower in Croydon, or a number of manufacturers delivering affordable modular homes on challenging brownfield sites. The noble Baroness, Lady Scott, referred to Grange University Hospital being built with these techniques.
The benefits MMC brings are truly impressive. It can help to deliver high-quality greener homes more quickly than traditional methods, which is good news for boosting supply and for the environment. I agree with noble Lords’ comments about the importance of good design and a variety of design, all of which are possible with MMC. It is therefore no surprise that an increasing number of housebuilders are already using off-site construction methods. Last night, I met with one who was talking to me about their innovation in this area.
MMC can help to create new well-paid jobs, attracting a wider pool of talent than traditional construction work. I recognise the challenges in the skills area, but this can attract a new cohort of talent, meaning that housing delivery is no longer held back by housing challenges. The noble Lord, Lord Best, referred to the involvement of Skills England. The noble Baronesses, Lady Thornhill and Lady Scott, and the noble Lord, Lord Carrington, all referred to skills, and I assure them that colleagues in MHCLG take that issue incredibly seriously.
MMC offers a broad range of technologies and approaches and, while much of the committee’s work focused on the category 1 market, we welcome the housebuilding sector’s increasing adoption of category 2 MMC, such as timber frame and panelised systems. Timber frame is already used in over 90% of new homes in Scotland, and a growing number of developers—such as Barratt, Vistry and Persimmon—are investing in and expanding their factories. That is in addition to both long-standing and emerging category 2 suppliers, such as British Offsite and Donaldson, investing in their manufacturing facilities to provide greater capacity and productivity. So there are reasons to be very optimistic about the future of MMC and what it could contribute to our housing and growth options.
That said, it has also undoubtedly been a challenging period for the low-rise modular market, with a number of high-profile exits over the last two years, as referred to by the noble Baronesses, Lady Warwick and Lady Eaton, and the noble Lords, Lord Carrington and Lord Moylan. This was not entirely unexpected: all innovative sectors experience failures as they develop and refine their business models, and the traditional construction sector has also been hit by a few failures over the same period.
What has happened in the MMC sector illustrates some of the key challenges of wider MMC adoption, many of which the committee considered. First and importantly, it illustrates the need for a steady pipeline of demand, which many noble Lords referred to, including the noble Lords, Lord Rooker, Lord Mair and Lord Jamieson. Large-scale MMC manufacturers will require that steady pipeline of demand, which is currently hampered by a lack of certainty in the planning system and the cyclical housing market.
The noble Lord, Lord Moylan, and the committee were also right to reflect on the significant role of warranty and insurance providers, and other noble Lords referred to the finance sector. There needs to be clarity for manufacturers and developers on requirements to ensure that they can deliver high-quality homes without stifling innovation. The closures over the past two years have demonstrated the supply chain risk that manufacturer-specific systems create, should those firms exit the market, leaving purchasers unable to complete their homes. So we need to tackle the interoperability to help restore market confidence, and we must ensure that manufacturers have access to finance to ensure that viable firms can invest and grow in the market, as referred to by the noble Lords, Lord Carrington and Lord Griffiths.
Tackling these barriers will be challenging, and it will be for both developers and government to help drive the wider adoption of MMC. The noble Lord, Lord Carrington, referred to full order books, which is what they are looking for, and we need to build the confidence to create that. But many in the sector are not letting this stand in their way, and they are blazing a trail to making MMC more mainstream. We want to accelerate that journey, and we have lost no time in getting that work going, starting with significant steps to reintroduce mandatory planning targets and release grey-belt land for development, thereby driving demand across the country and giving developers and MMC manufacturers the certainty and stability they need to invest confidently and increase their capacity.
The sector is already stepping up, with a very public commitment from 43 housebuilders to utilise, and expand their use of, MMC in response to the planning reforms we set out in July. The committee highlighted the role that the affordable homes programme plays in providing a pipeline of demand for MMC manufacturers, while also improving awareness among social housing providers. I appreciate the key point of the noble Baroness, Lady Brinton, about specialist housing provision—I will take that back.
We have clearly heard this message from manufacturers. The current £12.5 billion AHP is being implemented, and we will set out details of future investment in social and affordable housing at the spending review. Our aim is to deliver the biggest increase in social and affordable housing for a generation, and we truly believe that MMC will very much contribute to this.
The department is working with the British Standards Institution and the sector to deliver a new publicly available specification for MMC. This will bring greater clarity on the important issue of warranty and insurance providers, hopefully without squashing innovation in the sector. We are considering further options for greater standardisation, not only reducing the supply chain risk for customers but supporting suppliers to yield greater benefits from the manufacturing process, as well as protecting innovation and intellectual property. In addition, financial support is available to MMC manufacturers wanting to grow and expand through the £1.5 billion levelling-up home building fund. This is just the start; we recognise that there is a lot more to do, and we will set out further details in due course.
Our approach will be informed by support for different construction methods, in recognition of the fact that we need a diverse number of approaches to deliver on our housing targets. Not all parts of the sector will require the same types of support, and we must make sure that we do not focus simply on picking winners. This is about removing the sector-wide barriers to adoption, so that we have an MMC market that can deliver the decent homes and strong communities we all want to see. We will continue to engage with key stakeholders to develop the right approach for the sector, and I look forward to sharing more details about that in due course.
I will pick up some of the individual issues that noble Lords have raised. The publishing of an MMC strategy and the task force was raised by a number of noble Lords—the noble Baronesses, Lady Eaton and Lady Warwick, and the noble Lords, Lord Mair and Lord Birt, talked about this, as well as cross-government work on the issue. The Government are committed to delivering 1.5 million homes, and we view the adoption of MMC as key to that. We are reflecting on the committee’s recommendations and views from across the sector to establish how best to increase the use of MMC in housebuilding as part of the wider housing strategy.
Noble Lords talked about the comparative cost of MMC, including the noble Baroness, Lady Thornhill, and the noble Lords, Lord Fuller and Lord Carrington. Some stakeholders report that MMC has a higher upfront cost than traditional build, although others note that it is achieving cost parity or better. We anticipate that this will change as MMC demand and capacity continues to increase—it is a virtuous cycle. It is important to consider the whole-life cost of a building and the wider benefits that MMC can bring to a project.
I have already spoken about the affordable housing programme, and I hope that answered Members’ questions about how we will engage our own funding to drive this market forward.
On supporting supply, we are working to establish how best to address the strategic barriers to further uptake of MMC, including improved supply chain confidence, clarity for the warranty and insurance markets, and planning reform. The noble Lord, Lord Banner, raised an important point about custom-build and self-build, which I will take back to the department and let him have a written answer on that.
Before I run out of time, I want to address the issue of safety, because I recognise the concerns there will be following the Grenfell report. Many noble Lords referred to this issue. The Government take very seriously their responsibilities for ensuring that homes are safe for people. Building under factory conditions has the potential to improve consistency of finishes and details, but the level of quality achieved in both on-site and off-site construction depends on what is designed, specified and constructed. Building regulations—and this is really important—apply equally to homes built using MMC as to those built using traditional methods. Buildings must meet the safety and performance requirements in the building regulations, no matter how they are constructed or what materials are used. MMC developers and manufacturers are responsible for ensuring compliance with the regulations for any construction project, including ensuring that new techniques are used correctly.
The noble Lord, Lord Rooker, and the noble Baroness, Lady Wheatcroft, raised issues around the BRE, and I shall reply to those points in writing.
We share the sector’s ambition, and the ambition that we have heard today, for it to grow and succeed and play its part in getting Britain building, delivering the jobs, growth and opportunities that our country needs and deserves. We are hugely thankful to the sector for its support in getting us this far, for the continued efforts to realise its potential and for the exciting gains to come.
Lord Carrington of Fulham (Con)
My Lords, I am very grateful to everybody who has participated in this debate. It has been an extremely useful debate. I particularly commend the response of the noble Baroness, Lady Taylor, which answered most of our points and showed clearly that this is not a party-political issue; it is one on which there is consensus on both sides of the House. We all wish this industry to develop well. The points made in the debate highlighted the challenges that everybody involved in providing homes in this country will face to meet the demand that is there already.
I was deeply impressed by the quality of this debate and of the contributions to it. It is very sad that everybody except me and the Front-Bench speakers were limited to two minutes. The quality of the debate that we got in two minutes would, I believe, have gone up exponentially if we had had five or even 10 minutes for contributions.
With that, I thank everybody. It has been a good debate, and one that has taken forward the cause of revolutionising housebuilding in this country.