Building Safety

Baroness Pinnock Excerpts

Tuesday 11th January 2022 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

My Lords, before I begin, I would like to pay tribute to my colleague Jack Dromey. Jack was a fearless campaigner for equality and justice, and always stood up for those without a voice. We will miss him.

Moving to the Statement, the Grenfell Tower fire was, as we all know, a dreadful and shocking tragedy which killed 72 men, women and children and ruined the lives of many others. One of the outcomes from this tragedy has been the knowledge that thousands of homes in hundreds of high and medium-rise blocks have deficiencies in their construction.

We are more than four years on from Grenfell, and hundreds of thousands of people are still living in dangerous blocks, while many flat owners have been left with spiralling costs for insurance and service charges. People have been facing huge bills and have endured enormous stress. The Government’s announcement of new statutory protection for leaseholders is therefore welcome confirmation that developers, not leaseholders, should pay to make homes safe. We should also recognise that this is only the start of the solution.

The Government’s plan currently seems to cover only the cost of cladding replacement, which makes up a small fraction of the building safety work required, because remediation work is not just about combustible cladding but about missing cavity barriers, firebreaks and fire doors, for example. A significant number of buildings have both cladding and non-cladding defects.

I understand from the Minister that the Government have withdrawn the consolidated advice note that left thousands of leaseholders in low-rise buildings unable to move home. This is significant progress, but there remains a gaping hole in the Government’s proposals. Leaseholders will still face ruinous costs to repair many non-cladding defects. I ask the Minister why the Government are not properly and completely supporting residents who have been hit with these huge costs, through no fault of their own.

We welcome the Government’s change in tone, so that leaseholders in buildings of between 11 metres and 18.5 metres will no longer be expected to take out personal loans to cover the cost of the work. Instead, the Government are focused on securing up to £4 billion towards the costs from developers. However, leaseholders are concerned about how the Government will force the developers to pay and experts have questioned whether £4 billion will be sufficient to cover cladding in buildings under 18.5 metres.

The Secretary of State said that he will begin negotiations with those responsible and resort to increased taxation if they fail, but reports have suggested that the Chancellor could block this. Documents from the Chief Secretary to the Treasury to the Secretary of State, Michael Gove, say that no new Treasury funding will be available to pay for this extra work; that the cost of the extra cladding removal must not exceed £4 billion; and that, if Mr Gove is unsuccessful in persuading or compelling developers to pay for the costs, they must be paid from existing housing budgets and

“safety should be prioritised over supply”.

I ask the Minister if there has been an assessment of what this would mean for the Government’s housebuilding programme. If the Government are serious about making developers pay, they should also take steps to make sure this never happens again. In the past four years, at least 70 schools and 25 hospitals and care homes have been built using potentially dangerous material, yet the Government still have not responded to a consultation on a ban on combustible materials, which closed over a year ago. I ask the Minister when we can expect to see the response.

Leaseholders are the innocent victims of this scandal and they need the Government to act as quickly as possible to resolve the situation, but remediation has been painfully slow. The Government continue to publish monthly updates on the progress of ACM cladding remediation, which do not include non-ACM buildings. Does the Minister agree that being transparent about the progress to make homes safe is vital to restore leaseholders’ trust? According to Labour analysis, at the current rate, it will take until 2026 for cladding to be removed from all social housing blocks and until 2024 from private blocks. Will the Government put forward a timescale to complete the remediation of all dangerous buildings?

Yesterday, the Secretary of State confirmed that he will meet Labour’s call for new clauses in the Building Safety Bill, when it comes to this House, to protect leaseholders. I ask the Minister to work with the Opposition Benches and other interested parties, so that we get these amendments right. Can he confirm that time will be allowed for proper scrutiny? I assure the Minister that, when the Building Safety Bill comes to this House, we will welcome the opportunity to work with him to achieve the much-needed improvements in this area.

The Statement before us has new measures that the Opposition welcome and genuinely want to see succeed, but the Government also need a clear plan to make developers pay for the works or leaseholders will continue to be stuck in limbo—stuck in their unsafe homes, unable to sell up and move on. People expect to live safely in their homes and I look forward to the Minister’s response to the ongoing concerns.

[Baroness Pinnock (LD)]

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

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

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

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

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

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

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

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

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

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

[The Minister of State, Home Office and Department for Levelling Up, Housing & Communities (Lord Greenhalgh) (Con)]

My Lords, I join the noble Baroness, Lady Hayman, in paying tribute to Jack Dromey. I never met him, but it is fair to say that he touched my political career. All political careers end in failure—I do not know said that; it might have been Enoch Powell—but at the height of my political powers, Jack Dromey, then deputy general secretary of Unite, said at the TUC conference on 15 September 2009 these words, as recorded in the verbatim report

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

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

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

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

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

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


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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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