Leasehold: Building and Fire Safety

Thursday 16th September 2021 Lords Chamber

Question

11:16

Asked by

[Lord Kennedy of Southwark]

To ask Her Majesty’s Government what plans they have to ensure leaseholders do not bear the costs of repairing building and fire safety defects for which they are not responsible.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I refer the House to my interests as set out in the register and say that I am from the wonderful borough of Southwark.

[The Minister of State, Home Office and Ministry of Housing, Communities and Local Government (Lord Greenhalgh) (Con)]

I declare my interest in the London Borough of Hammersmith and Fulham. The Government have invested more than £5 billion to remediate unsafe cladding in buildings over 18 metres. For the small number of 11 to 18-metre buildings with cladding remediation costs, our finance scheme will ensure that leaseholders pay no more than £50 per month towards this. A new levy and tax will ensure that industry contributes, and under the Building Safety Bill building owners must explore all reasonable ways to meet remediation costs before passing these on.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, the action taken by the Government to date is just not good enough. Leaseholders feel abandoned by the Government. All the talk of levelling up and supporting communities means nothing. It is deeds not words that the victims need today. What will the noble Lord do today after this exchange to persuade his new Secretary of State that further action is needed? Will he come down with me to Parliament Square at 1 pm today to meet some of the victims and listen to their heartbreaking stories?

[Lord Greenhalgh (Con)]

My Lords, I am very happy to join the noble Lord in visiting the people who will be demonstrating today at 1 pm. This is continually a moving feast. I am happy to announce that we are increasing the amount of money we are putting in the waking watch relief fund, which has been a crippling cost for many leaseholders, by a further £5 million to the initial £30 million. That has helped around 20,000 leasehold dwellings and 264 buildings to date. We continue to ensure that we find ways to make sure that the original developer pays wherever possible.

[The Lord Bishop of St Albans]

My Lords, many people do not seem to realise that this is having a devastating effect on people of every social class. I was 10 minutes late coming in because I was hearing about a lawyer living in St Albans, where I live, who now faces bankruptcy and may no longer be able to practise if she is made bankrupt. If you buy a defective car it gets recalled and has to be sorted out. What attention and consideration are Her Majesty’s Government giving to the polluter pays principle, which we need to build into this issue if we are to address this devastating problem unfolding before our very eyes?

[Lord Greenhalgh (Con)]

My Lords, we recognise that if you buy a defective dwelling you expect the person responsible for the building of it to do something about it. That is precisely why the Government, as part of the Building Safety Bill, are proposing to increase the Defective Premises Act redress period from six years to 15 years retrospectively, which will bring in a great number of buildings to be able to seek redress from developers. That is why we continue to work on measures that will ensure that the polluter does pay wherever possible, and we are looking very closely at proposals from Steve Day and his team around the polluter pays amendments.

[Lord Young of Cookham (Con)]

My Lords, the Government have provided substantial support to deal with the cladding crisis, which I welcome, but that support, together with the new tax on high-rise development the Minister mentioned, will be inadequate to avoid hardship and inequity for many innocent leaseholders. Further to what the right reverend Prelate just said, would it not be fair to bridge the gap by a levy on developers that built and sold these substandard homes?

[Lord Greenhalgh (Con)]

My noble friend is right, which is why we are looking at a new levy and a developer tax to ensure that the industry contributes. At this stage we are in consultation. We need to ensure that it is set at a level that raises substantial funds precisely for that purpose.

[Lord Paddick (LD)]

My Lords, I declare an interest as a leaseholder whose freeholder is trying to persuade us to allow him to extend the building by three storeys, with the inducement that it will cover the cost of the cladding remedial work if we agree to that extension. What right do leaseholders have to apply for a government grant when the freeholder, who also owns the management company, does not want to do so himself?

[Lord Greenhalgh (Con)]

First of all, the duty to keep the building safe is on the building holder. There seem to be a small number of isolated cases in which the building owner is able to access funds and is not doing so. We would like to be apprised of that situation, so that we can see what we can do to encourage them to do the right thing.

[Baroness Blake of Leeds (Lab)]

Earlier this month Dame Judith Hackitt, chair of the independent review of building regulations, urged homeowners to seek a second opinion on fire safety bills, warning that many are being “fleeced”. Do the Government support this advice?

[Lord Greenhalgh (Con)]

My Lords, the Government support the principle that—in the same way you might go to a doctor and get an opinion, then seek a second opinion—we get the opportunity to have a second opinion on these matters, particularly where there are eye-watering costs. We do not want to see eye-watering costs levied when other mitigations provide a much more cost-effective solution.

[Baroness Jones of Moulsecoomb (GP)]

My Lords, it is not only the developers that might be at fault. The manufacturers of the cladding and insulation also knew they had problems with materials but carried on marketing them anyway. Are the Government going to let them get away with murder?

[Lord Greenhalgh (Con)]

We recognise that many people are responsible and that the standard of construction products has not been at the level we expect. That is why we have brought in a construction products regulator, situated in the Office for Product Safety and Standards, to oversee that within BEIS. Obviously, we are looking at how best to ensure that this does not happen in future and that those responsible make a contribution.

[The Lord Speaker (Lord McFall of Alcluith)]

The noble Baroness, Lady Neville-Rolfe, is not present, so I call the noble Baroness, Lady Pinnock.

[Baroness Pinnock (LD)]

My Lords, the Minister has just said that he is considering a further levy on developers to enable leaseholders not to have to pay huge bills. One leaseholder I know has a bill of £200,000 landing on their doormat to pay now. Why are the Government so willing to protect developers’ profits while throwing leaseholders to the wolves?

[Lord Greenhalgh (Con)]

My Lords, I do not recognise that as a sensible position to hold. Admittedly, this is a situation that has built up over many decades and leaseholders face those eye-watering costs, but we need to recognise that in the 18 months since I have been a Minister, the amount of money put up by the Government, recognising that we needed to step up and in many cases support the leaseholders, has increased from £0.6 billion to £5.1 billion. That is a staggering sum of money. You could always do more, of course, and that is why we are trying to bring forward measures in the Building Safety Bill to make sure that this failure of regulation and of construction quality never happens again. That is what this Government are trying to do.

[Baroness Fox of Buckley (Non-Afl)]

My Lords, I want to issue a trigger warning: the demonstration by thousands of leaseholders from all over the country at 1 pm today is likely to be very noisy. Luckily, they sneaked it in before the police and crime Bill could ban it. But seriously, I am delighted the Minister says he will come and meet the people affected. They have a range of creative solutions to offer and feel that their best ideas are being ignored and that they are treated like whingers. In addition, will the Minister do some internal lobbying of the incoming Secretary of State for Housing and explain the strength of feeling, frustration and fury across this House about the inadequacy of the solutions so far put forward? Leaseholders have ideas; listen to them.

[Lord Greenhalgh (Con)]

My Lords, I agree that it is really important to engage with the people affected. I have a considerable number of meetings with leaseholder groups and am in constant virtual contact with some of the people who I believe are doing their very best to see how we can creatively address this difficult issue. I am very happy to meet the people today. It is important that as politicians we step forward and meet those people affected.

[Baroness Uddin (Non-Afl)]

My Lords, does the Minister accept that seeking redress retrospectively will not save hundreds of thousands of leaseholders from painful and mounting bills, as all noble Lords have said, causing enormous distress? Has he considered having proper discussions with housing associations and local authorities, which have also sold houses to leaseholders?

[Lord Greenhalgh (Con)]

We continue to have a number of discussions with members of the G15 housing associations, and particularly with local authorities. The hard yards of achieving a situation in which the same cladding as Grenfell—the aluminium composite material—has been got off around 96% of those buildings, much of that during this pandemic, have required work at every level of government. We will continue to engage with them to come up with practical steps to deal with other buildings with unsafe cladding.

[The Lord Speaker (Lord McFall of Alcluith)]

My Lords, all supplementary questions have been asked and we now move to the next Question.