Leasehold: Building and Fire Safety

Baroness Pinnock Excerpts

Thursday 16th September 2021 Lords Chamber

[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.

Grenfell Tower: Demolition

Baroness Pinnock Excerpts

Monday 6th September 2021 Lords Chamber

[Lord Greenhalgh (Con)]

My Lords, I am happy to clarify that there has been ongoing engagement not only with the bereaved and survivors but also with the community. I also want to put on record that there are no immediate safety concerns and that safety and maintenance are ongoing as part of a programme of works that will be completed only in the spring of 2022. Therefore, the coverage reporting that the school is in danger is absolutely wrong. At this stage, the tower is safe and is being kept safe until next spring.

[Baroness Pinnock (LD)]

My Lords, I draw the attention of the House to my entry in the register of interests. As we all know, Grenfell Tower is the site of an appalling tragedy. The sight of it is a constant reminder of the building safety and fire safety crises that Grenfell exposed. Does the Minister agree that the demolition of Grenfell is also the removal of that potent symbol, which is a much-needed reminder of the absolute necessity that the Government solve the cladding and building safety crises that are destroying the lives of thousands of leaseholders? Does he also agree that demolition before the end of the Grenfell inquiry might remove some absolutely important information and facts that could lead to the resolution of this problem?

[Lord Greenhalgh (Con)]

My Lords, I have been very clear that the police have said that they do not require any evidence from the tower as part of their investigation. I am also aware that we need to engage very carefully on the future of the site. That is why we have asked an independent commission—the Memorial Commission— to look at options for the future. As I said in response to the noble Lord, Lord Kennedy, no decision has been taken at this point.

Leasehold Reform (Ground Rent) Bill [HL]

Baroness Pinnock Excerpts

Report stage
Tuesday 20th July 2021 Lords Chamber

Moved by

[Baroness Pinnock]

27: After Clause 18, insert the following new Clause—
“Review of the financial impact of the Act
(1) Within 6 months of the day on which this Act is passed the Secretary of State must carry out a review of the financial impact of this Act on leaseholders.(2) The review must make a recommendation as to whether further legislation should be introduced to extend the ban on ground rents to existing long leases.(3) The recommendation in subsection (2) must take into account the potential financial impact of an extension of the ban on ground rents on those leaseholders and tenants who have been charged for the cost of fire remediation work.”Member’s explanatory statement
This amendment would require a review of the financial impact of this Act and make a recommendation as to whether a further extension of the ground rents ban could benefit existing leaseholders, especially those facing bills for fire remediation work.

[Baroness Pinnock (LD) [V]]

My Lords, I speak to Amendment 27 in my name and those of my noble friends Lady Grender and Lord Stunell. I draw the attention of the House to my relevant interests in the register as a member of Kirklees Council and a vice-president of the Local Government Association.

Amendment 27 asks that:

“Within 6 months of the day on which this Act is passed”


the Government

“carry out a review of the financial impact”

on leaseholders. Reviewing the impact of legislation is important, especially in instances such as these, where changes to an already complex situation are likely to result in unforeseen consequences—despite many noble Lords and the Minister doing their utmost to ensure that all aspects are fully considered. The amendment then goes further to ask that the review actively considers and makes a recommendation about “further legislation” —either for or against it.

Subsection (3) of the proposed new clause makes specific reference to those leaseholders and tenants who have been charged for “fire remediation work” consequent to the Grenfell tragedy. Noble Lords will notice that I am taking the opportunity provided by this Bill to raise again very grave concerns many of us have for those leaseholders and tenants who are, through no fault of theirs, at the heart of the cladding scandal.

The fact that up to 1.3 million households are at a very considerable risk of bankruptcy as a direct result of serious construction failings must never be allowed by decision-makers to remain unresolved. Leaseholders have done everything right and nothing wrong, yet they are being expected to pay for the failures of construction, developers and materials manufacturers.

I recognise that the Government have provided over £5 billion towards remediation but the total cost is anticipated to be over £15 billion—the vast proportion of which is being passed via so-called service charges to leaseholders. We are not talking about charges that are in any way affordable. For example, Pippa in Leeds has a bill for £140,000. The highest bill I have seen was reported in the latest article on this issue in the Sunday Times: a staggering £204,000.

Perhaps the Minister will be able to provide advice on how these leaseholders are to pay the bills that have landed on their doormats. He will be aware that a leaseholder’s major asset is their flat and that, currently, has no value. It is not only the costs of remediation that are pressing down on leaseholders, there are service charge increases—consequent, again, to the cladding scandal.

I have heard from a leaseholder today, who says: “I am knee-deep in service charge admin. I am being harassed with bills that I know are inflated and incorrect, and with huge penalties for late payment. No one should have to live like this. It takes a toll on every aspect of your life, and that is before consideration of planning bills.”

It is not only leaseholders who fear the worst. The Investors Chronicle has reported in the last two weeks that this may become the next PPI scandal. Flat sales are in decline. They affected flats are neither sellable nor mortgageable. Before long, the Government will have to take action to save leaseholders from bankruptcy and homelessness and the housing market in flats from collapse. This amendment simply asks the Government to take stock within six months and, in doing so, to be cognisant of the leaseholders whose dreadful plight I have described. The leaseholders have done everything right and nothing wrong, which is a phrase I cannot attribute to developers, constructors, material manufacturers or the Government, as the final regulator. Between them, they have responsibility for this absolute scandal.

I will listen carefully to the Minister’s response. However, if he is not inclined to accept this simple amendment, I give notice of my intention to seek the opinion of the House. I beg to move.

--- Later in debate ---

While I sympathise with the good intentions behind all three of these amendments, and thank the noble Lords for tabling them, I remain of the view that the benefits of any of these impact assessments would not be proportionate to the time and resource needed to satisfy all the requirements in these amendments. Both in this Chamber and in various meetings, noble Lords have impressed upon me, time and again, the need to introduce our leasehold reforms at speed, and I agree with them. These amendments would inevitably slow down the pace of reform, with little, if any, tangible gain for leaseholders to make up for this. It is for that reason that I ask noble Lords not to press their amendments.

[Baroness Pinnock (LD) [V]]

My Lords, I thank all noble Lords for their contributions and support on the very important issue I have raised again today. I particularly thank the noble Earl, Lord Lytton, for his supportive contribution. He is a recognised expert on these issues, and he expanded on my points. He has raised them before, and I certainly think the Government need to listen carefully to what he has to say.

The Minister has been handed the impossible task of defending the indefensible. Unfortunately, he always has to rely on the fact that future Bills will help solve this problem—but the future will never come soon enough for leaseholders struggling now. They have these bills now and will have to pay them by the end of the year.

As my noble friend Lord Stunell said, this is just a modest amendment. All it seeks is a review of the Bill’s impact in six months, with special reference to leaseholders who have been adversely and gravely affected by the consequences of the Grenfell tragedy.

I apologise to the House for not having moved my amendment formally at the end of my initial speech. I beg to move it now, but I also have to say that, having heard what the Minister said, I wish to seek the opinion of the House on this matter.

Leasehold Reform (Ground Rent) Bill [HL]

Baroness Pinnock Excerpts

Committee stage
Monday 14th June 2021 Grand Committee

[Lord Lennie (Lab) [V]]

My Lords, this Bill has the support of these Benches because it begins to address the myriad problems facing leaseholders across the UK, but unfortunately it barely scratches the surface. That is why Amendment 19 would require the Government to

“consider whether further legislation is necessary”

in four areas: lease forfeiture, transfer fees, redress schemes and enfranchisement.

On lease forfeiture—the concept of a freeholder taking possession of a property over a debt of a few thousand pounds—there is a clear need for reform. The Law Commission has already consulted on this. Transfer fees—where freeholders place a charge on the sale of a property, often of around 0.25% of the sale price—are preventing home owners selling their homes. There seems no justification for the continued existence of these fees. Meanwhile, the potential for redress schemes should be evaluated to consider the most serious of leasehold abuses. On enfranchisement—the process of extending a leasehold or purchasing a share of the freehold—the Government must look at some of the obstacles currently in place. All in all, as I said earlier, the Bill barely scratches the surface of the issues facing leaseholders. Further legislation in this area is clearly required.

I am pleased that the noble Baroness, Lady Pinnock, has tabled Amendment 20, which raises the question of

“whether a further extension of the ground rents ban could benefit existing leaseholders, especially those facing bills for fire remediation work.”

The issue of remedial costs was brought up in my earlier Amendment 9, and I hope that, this time, the Minister will give a cast-iron date for when the Government will bring forward legislation to properly protect leaseholders.

In Amendment 21A, the noble Lord, Lord Berkeley, probes the application of ground rents charged by the Crown, including the Duchy of Cornwall. The noble Lord is right to probe the issue and to draw attention to the Law Commission’s work in this area. I look forward to clarification from the Minister. I would be interested to hear whether the Minister can confirm how many Crown properties this relates to and whether the Government intend to engage the residents of these homes.

[Baroness Pinnock (LD) [V]]

My Lords, I will speak to Amendment 20 in my name and that of my noble friend Lady Grender. I draw the Grand Committee’s attention to my relevant interests, recorded in the register, as a member of Kirklees Council and a vice-president of the Local Government Association.

Today marks four years since the Grenfell tragedy, which cost the lives of 72 people. It took away from many others their homes and their livelihoods. Those who survived will for ever have the dreadful memory of that night, leaving a dark mark on the rest of their lives. That tragedy has rightly cast a long shadow over the construction industry. Questions asked immediately following Grenfell are still failing to be adequately answered.

The Government know that the Grenfell fire was accelerated by the use of flammable cladding. They know that hundreds of other buildings have the same or similar cladding, with the same fire risk. They also know that post-Grenfell investigations of these self-same buildings have uncovered further fire safety defects, such as the lack of building regulation-required fire breaks. The Government’s response to this life-threatening catalogue of errors is half-hearted at best. Leaseholders are being forced by the Government to carry the financial and emotional burden of the total inadequacy of the Government’s response.

The reform of leaseholders’ obligations is of course a central purpose of this Bill. I understand that the Bill seeks to prevent future unwarranted financial burdens being placed on leaseholders through ground rent demands. The purpose of Amendment 20, in my name and that of my noble friend Lady Grender, is for the Government to assess the financial impact on leaseholders of this Bill after six months. It is a perfectly reasonable and sensible amendment that I hope the Government will be minded to accept.

The cladding scandal has revealed the enormous financial impact on leaseholders. In a housing association block of flats in the Manchester area, leaseholders have been sent bills for £95,000, when those very flats were built to enable people on lower incomes to buy their own homes. Given that the value of their asset is now zero, paying any bill of that size is simply impossible for the leaseholders.

Those leaseholders who have, often unknowingly, signed up to escalating ground rent penalties are also omitted from the Government’s thinking. For instance, one leaseholder found that his annual ground rent for a one-bed flat in London was to double every five years on a flat that was purchased for £170,000 in 2018. In 20 years’ time, the ground rent will have risen from an affordable £1,050 per annum to a completely unaffordable £16,800 per annum. As with the innocent victims of the cladding scandal, these leaseholders need help from the Government, hence subsection (2) of my amendment.

There is an accumulation of evidence that leaseholders are not getting fair treatment as malpractices are uncovered. Those leaseholders facing massive bills for putting right fire safety defects have done everything right and nothing wrong. Those leaseholders who face increasingly large bills, having unwittingly signed up to ground rent clauses, are also victims of a housing scandal.

Amendment 20 is the opportunity for the Government to turn their attention to righting failures in the housing system for leaseholders, current and past. On the day when we remember Grenfell, let this also be the day when the Government finally agree to find financial solutions for leaseholders who have been left to pay the enormous price of the wrongs of the housing industry. I look forward to the Minister’s response.

[Lord Berkeley (Lab)]

My Lords, my Amendment 21A is grouped with Amendments 19 and 20, spoken to by the noble Lord, Lord Lennie, and the noble Baroness, Lady Pinnock. They have one thing in common, in seeking further information and reports from the Government to clarify and provide more information to help us debate not only this Bill but subsequent ones. I will confine my remarks to the Crown issues listed in Clause 23(2), which comprise the Crown Estate, the Duchy of Lancaster, the Duchy of Cornwall and government departments in summary, and in particular the definitions and scope of excepted areas.

It is interesting to refer to paragraphs 7.149 and following in the Law Commission’s report. These basically suggest that the Crown, in its totality, is happy to comply with whatever legislation the Government put forward on these issues, except in relation to what are called “excepted areas”, which are listed in paragraph 7.151. To summarise, those are:

“(1) where the relevant property stands on land which is held inalienably; (2) where particular security considerations apply”—


which is fair enough—

“(3) where the property is in”

or closely connected to

“historic Royal Parks and Palaces; and … (4) where the property … has a long historic or particular association with the Crown”.

When it comes to the Duchy of Cornwall, which of course claims to be part of the Crown, the report goes on to say that the Duchy of Cornwall estates

“are specifically stated to fall within the fourth category”.

I would challenge that; I think that it is specifically stated by the Duchy, and I will come on to why.

Town and Country Planning (General Permitted Development etc.) (England) (Amendment) Order 2021

Baroness Pinnock Excerpts

Tuesday 8th June 2021 Lords Chamber

Moved by

[Baroness Pinnock]

That a Humble Address be presented to Her Majesty praying that the Town and Country Planning (General Permitted Development etc.) (England) (Amendment) Order 2021, laid before the House on 31 March, be annulled because it introduces a significant policy change without being subject to sufficient parliamentary scrutiny; it affects the ability of communities to have a say in important changes to their local areas; and it does not present an effective or sustainable solution to the housing crisis (SI 2021/428).

Relevant document: 52nd Report from the Secondary Legislation Scrutiny Committee, Session 2019-21 (special attention drawn to the instrument)

[Baroness Pinnock (LD)]

My Lords, I draw the attention of the House to my relevant interests as a member of Kirklees Council and as a vice-president of the Local Government Association.

I thank the Minister for taking part in this debate. I am sure he will give a clear explanation of what he believes this piece of secondary legislation will do. However, until today, none of these significant changes has been the subject of political debate either in this House or in the other place. As a negative instrument, this piece of secondary legislation would have sailed into law without any further ado. My colleagues and I between us have extensive experience of planning matters, particularly as they impact individuals and local communities. We believe that legislating for significant changes to planning law in this way, by stealth and without public scrutiny, is totally inappropriate in a democracy.

The report of the Secondary Legislation Scrutiny Committee drew this conclusion:

“Given that the changes made by this Order are permanent and may have a considerable impact on high streets and the development of key infrastructure, such as schools, colleges, universities, prisons and ports, the instrument again raises the question whether it would have been more appropriate to make these changes in a Bill, enabling Parliament to scrutinise the changes and their potential impact more fully. This is particularly apposite as the instrument also puts the Government’s approach to protecting historic statues, including those which may be controversial, on a statutory footing.


This Order is drawn to the special attention of the House on the ground that it is politically or legally important and gives rise to issues of public policy likely to be of interest to the House.”


I concur completely.

Those are the reasons why I have tabled a fatal Motion against this statutory instrument. To be clear, I am not opposed to the process enabled by the general permitted development order, which permits some planning changes without a full planning application process. The process of permitted development has been successfully used for some time. The Government, though, have gradually increased the number of planning changes that can be made without full local consideration of the impact on communities. With this SI, there is a considerable extension of permitted development rights to include, for instance, major extensions to schools and prisons. Permitted development explicitly removes the right of the voice of local people, often those directly affected, to be heard and considered. People care deeply about the place they live in and want to be able to voice an opinion.

This instrument permanently extends permitted development rights in four further ways. There is an extension of the right to change shops, offices and commercial buildings to residential use. This has been enabled by the changes made by an SI last year that altered the planning use classes, whereby all shops except small local ones, offices, cafes, gyms and some commercial properties were moved to the same planning use class and thus more easily given permitted development rights to move to residential use.

Some minor caveats are proposed. Prior approval of the local planning authority has to be given in some instances. Those relate to noise and transport impact—but just those related to rights of access—and ensuring space standards and even adequate light. Who would have thought that that needed to be controlled? Of course, it is good to regenerate town centres by enabling more residential use. Some of us have been arguing that for several years but this order is not the way to go. Shop fronts could be changed to residential and the cohesive attraction of a high street completely lost. These changes are permanent and apply equally to conservation areas, which have special protection under planning law. A full planning application would enable such issues to be more readily and openly resolved.

In a further insult to leaseholders who are currently fighting the Government’s complete intransigence on safeguarding them from developers’ fire safety failings, the Government note that prior approval to consider fire safety issues will not be part of the instrument and will be added later. Fire safety as regards changes to residential use is seen as an afterthought. Yet, changing offices to residential use will have considerable implications for fire safety.

The instrument also enables schools, colleges, universities and prisons to expand by as much as 25%. That is a large extension for, say, an average high school of 1,000 pupils. Just think of the consequences in terms of traffic and, more importantly, school admission planning. Growth in one school is often at the expense of another, which is harmed as a consequence. The idea that this huge change can be made less bad by submitting a travel plan that is unenforceable, which it is hoped will be sufficient to quell the anger of local people at a significant rise in school traffic, cannot be and is not a serious proposition.

Port facilities can be built and extended just by saying so. There will be no consideration for local people and certainly no opportunity for them to have their say.

Meanwhile, in the fourth part of this statutory instrument, statues and monuments are being protected by the requirement for a full planning application and for the Secretary of State to be informed of any changes. Statues to the respected and the notorious are to be fully protected but the rights of people to have their say on major changes in their communities are to be removed by the flick of a pen.

In my experience, earlier extensions of permitted development are not going well for the Government. The right to erect 25-metre mobile phone masts without any ability for local people to amend the outcome caused outrage in one of the villages that I represent as a councillor, as did the right to build an extra storey on to a retirement bungalow in a street of retirement bungalows. People just want the right to influence what happens in their neighbourhood or wider community. It is what you expect in a democracy.

The Motion that I am proposing is definitely not to hinder change and halt development but is aimed at ensuring that individuals and communities are engaged and involved in planning decisions that affect their lives. Any argument that suggests that this is all about the speed of planning decisions ignores factual evidence that shows that planning decisions are currently made within reasonable timescales—set by the Government—and are of the same timescale as those that require prior planning approval. I urge Members to support my Motion for the sake of good governance and the democratic process. I beg to move.

--- Later in debate ---

[Baroness Pinnock (LD) [V]]

I thank the Minister for his response. I am grateful for the very well-informed and passionate debate that we have had in this hour or so this afternoon.

Many Members have drawn attention to the value of engagement and decisions that are taken with a wider range of views. Unfortunately, this instrument is a continuation of the erosion of the rights of local people just to have their say on changes that affect them and their communities. There is no need for the extension of permitted development to achieve the Government’s aims. For instance, the Minister has just talked about the need to enable the expansion of schools without going through a full planning application. A response to a full planning application can be achieved within eight weeks if the right information is provided to the planning authorities. That is a drop in the ocean compared to the time it takes to organise a development or extension of a school on that scale, and it is worth doing because it engages everybody in what is happening and what the consequences will be, for good and for ill.

It is a sad day for democracy and good governance when the Government believe that this approach is acceptable. It is such an assault on democratic decision-making at a local level. I do not take these matters lightly: I have never before in my time in your Lordships’ House proposed a fatal Motion and I have done so not necessarily on the content of the statutory instrument, but on its principle, which is the erosion of local democratic rights and good governance. We cannot allow this to continue—this steady drip, drip, drip of democratic rights disappearing. It is not right, and it has to be stopped. That is why I maintain that a fatal Motion is appropriate in this case and, as such, I wish to test the opinion of the House.

Fire Safety: Leaseholder Bankruptcies

Baroness Pinnock Excerpts

Monday 24th May 2021 Lords Chamber

[Lord Greenhalgh (Con)]

My noble friend is right. We believe that developers should contribute and make buildings safe without passing the costs on to leaseholders. There have been a variety of announcements by developers: Bellway has announced a cladding removal fund of £46.8 million, Persimmon one of £75 million and Taylor Wimpey has pledged £125 million. The Government have also announced a gateway levy on high-rises, as well as a developer tax that will raise £2 billion over 10 years.

[Baroness Pinnock (LD) [V]]

My Lords, I refer the House to my relevant interests. Given the answer to the previous question, will the Minister provide any valid reasons at all for the Government expecting innocent leaseholders to pay the huge costs of remediating cladding and non-cladding fire safety defects, while those who created the problem—the developers he just mentioned—get off virtually scot free?

[Lord Greenhalgh (Con)]

My Lords, we are very clear that we expect building owners to make buildings safe and not to pass on costs to leaseholders where possible. We have provided a substantial sum of money to ensure that the costs of cladding will be affordable for those in medium-rises and that those in high-rises will not have to contribute to the remediation of the most dangerous element of the building.

Leasehold Reform (Ground Rent) Bill [HL]

Baroness Pinnock Excerpts

Monday 24th May 2021 Lords Chamber

[Baroness Pinnock (LD) [V]]

My Lords, I draw the House’s attention to my relevant interest as a vice-president of the Local Government Association and a member of Kirklees Council.

The basic tenet of the Bill is to be welcomed. The excellent briefing by the House of Lords Library states very clearly the intention that

“freeholders or landlords will no longer be able to make financial demands for ground rent. It seeks to do this by establishing that new, long residential leases are only permitted to charge a peppercorn rent (which has zero financial value) … In addition, the bill would prohibit the charging of administration charges relating to peppercorn rents. The bill would also establish a civil penalty regime for those who charge a prohibited rent”.

The Bill sets out the 26 clauses needed to enact that intention.

The Bill is, therefore, both technical and detailed, and I am sure that other noble Lords will be able to use their expertise to probe and challenge different aspects of the Bill and whether it achieves its stated intention. In her excellent contribution, the noble Baroness, Lady Andrews, has already started to challenge and probe the meaning of the clauses in the Bill. I concur with all the questions she asked; they are both relevant and important.

As the Minister said in his opening speech, there are 4.5 million domestic properties with leasehold agreements, of which approximately 3 million are flats and 1.5 million houses. This is, therefore, not a niche issue but one which affects millions of people. My attention was first drawn to an impending scandal when it was reported in local Yorkshire media some three or four years ago that new-build houses had been bought with the new owners seemingly unaware that the developers had attached a spiralling ground rent charge to the property. As the Minister has stated, the Competition and Markets Authority became involved. The situation has been likened to the mis-selling of PPI. An individual case was highlighted in a report in the Independent this weekend. There, the annual ground rent for a one-bed flat in London, purchased for £170,000 in 2018, was to double every five years. In 20 years’ time, the ground rent will have risen from an affordable £1,050 per annum to a completely unaffordable £16,800. Such abuse is the scandal that the Bill seeks to prevent, by permitting only a peppercorn ground rent and banning administrative charges on ground rents, thus closing any further legal loophole through which leaseholders are at the mercy of unscrupulous freeholders. This is welcome news, but it does, of course, penalise those freeholders who have acted responsibly and not exploited the situation.

The additional huge gap in the Bill is its failure to address the situation of existing leaseholders faced with spiralling ground rent costs. This means that leaseholders—often, but not always, first-time buyers—could be left with costs spiralling to unmanageable levels and their property becoming unsellable. The failure of the Bill to deal with past abuses of ground rent and service charges will leave existing leaseholders in a worse position, because it will create a housing market where new-build properties, with zero ground rents, will be far more attractive than those with spiralling ground rents. Who in their right mind is going to purchase a property with those extortionate additional costs attached to it? Then there is what I define as a scam, which some freeholders are using: the so-called informal lease extension, which also includes clauses of doubling ground rents. Using this approach, freeholders agree to an extension, not of 90 years, which reduces ground rents to zero, but, say, of 125 years, which then has within it clauses which double ground rents every five or 10 years. That is an abuse by some freeholders that has to be prevented.

There is a theme in this Bill, which I have challenged before in relation to the Fire Safety Bill: existing leaseholders being left to hang out to dry or, more exactly, of the Government wringing their collective hands, offering empty promises and absolutely failing to take action to protect those who have been completely failed by existing legislation, by highly profitable developers and by freeholders who have lost all sense of integrity. The challenge for this Bill, as in debates on the Fire Safety Bill, is: what are the Government going to do for the innocent leaseholders? The scandal of flammable cladding and fire safety defects, which the Government have contrived to avoid, is happening on their watch. The scandal of spiralling ground rents hitting leaseholders is happening on their watch. This Bill could have been used to provide wider protection for leaseholders: both the innocent victims of the cladding scandal and construction crisis and, now, those who are victims of abuses and unscrupulous behaviour by some freeholders. Will the Minister outline to the House what effective action is being proposed by the Government to provide redress for those leaseholders who are innocent victims in both these scandals? I look forward to the Minister’s reply and to further stages of debate on the Bill.

Queen’s Speech

Baroness Pinnock Excerpts

Monday 17th May 2021 Lords Chamber

[Baroness Pinnock (LD) [V]]

My Lords, I draw the attention of the House to my relevant interests as a member of Kirklees Council and a vice-president of the Local Government Association.

I listened to the gracious Speech with eager anticipation, then read the Government’s more detailed explanation of their intentions. I was to be disappointed. There was the slick headline of “Build Back Better” and a sub-heading of “Public Finances”. I looked in vain for any mention of local government finances.

The Conservative Government have a cunning plan, it seems. First, cut grant funding to local government by 60%—£16 billion in cash terms—forcing deep cuts to the fabric of local places. Then, accuse councils of closing these selfsame services. The trump card of levelling up is then played, where central government comes to the rescue by carefully selecting additional funding for a few cash-strapped areas. Meanwhile, more councils are on the verge of issuing Section 114 notices—the equivalent of bankruptcy. A positive change to local government funding is one major missing element.

Another is the absolute failure to reform social care funding. This matters to local government, as 57% of council tax income is spent on social care. Council tax—a regressive tax—is being forced to bear the burden of the Government’s failure to deal with the challenge of social care funding. Each year since 2016, the Government have added the adult social care precept to council tax, resulting in a 13% rise to council tax bills. As council tax rises, so potholes increase, to the extent that even the Conservative-led County Councils Network is complaining publicly about the £400 million cut to local roads maintenance even after the pothole fund has been taken into account.

The two major Bills outlined in the gracious Speech that affect local government are the planning Bill and the building safety Bill. It is, I suggest, disingenuous to state in the “Key facts” section on the planning Bill that

“only … 3 per cent of local people engage with planning applications”,

when the majority of applications are, of course, of a minor nature. People are concerned about the changing nature of the place they live in, whether it be the loss of green fields, pressure on local facilities, traffic congestion or air quality. Neighbourhood planning showed that people will engage positively when given the opportunity. Sadly, the principle behind this Bill is that local voices need to be excluded in the interests of development companies—the same development companies that have failed to build 1 million homes for which there is a current planning permission.

The building safety Bill is to be welcomed in that it is the major response to the Hackitt review and the Grenfell inquiry. It will, I hope, put right the decades of regulatory failings in the construction industry. Unfortunately, it will fail to respond to the cries of anguish from leaseholders who are trapped in tower blocks where flammable cladding has to be removed and where the costs of other fire safety defects are being passed to leaseholders. These costs amount to tens of thousands of pounds. It is a scandal of growing proportions, and the Government have an absolute duty to put it right. Are they committed to fulfilling their responsibility in this regard?

Councillors of all parties and none have at their heart a passion to improve their local place. They are the people who can truly help level up. They need the tools to do so. Starving councils of funding and essential powers will seriously hamper any hope of significantly growing and improving the opportunities and prosperity of both people and places. With that, I look forward to the maiden speech of the noble Lord, Lord Morse.

Tower Blocks: Cladding

Baroness Pinnock Excerpts

Wednesday 12th May 2021 Lords Chamber

[Lord Greenhalgh (Con)]

My Lords, I start by pointing out that on 95% of the buildings that were identified at the start of last year as having the same cladding as Grenfell Tower either the cladding has been removed or work has started to remove it. We have made great progress in the past year, with some 159 starts on site. The building safety fund is open and continues to approve a number of works that will ensure that other forms of unsafe cladding are removed.

[Baroness Pinnock (LD) [V]]

[Inaudible]—the management companies for their blocks are refusing to sign up to a grant from the building safety fund unless leaseholders also sign an agreement that commits them to pay for all other remediation works. As a consequence, essential and urgent fire safety work is not being done. Leaseholders cannot commit to pay when they have no means to do so. How do the Government intend to break this impasse in the interests of fire safety?

[Lord Greenhalgh (Con)]

My Lords, we have to be clear that the agreement is with the building owner and not with individual leaseholders. No leaseholder will be required to fund additional works as a condition of government funding for cladding remediation. Of course, where building owners voluntarily decide to carry out works at the same time, we need assurances from them that this can be covered.

Fire Safety Bill

Baroness Pinnock Excerpts

Consideration of Commons amendments
Wednesday 28th April 2021 Lords Chamber

[The Deputy Speaker (Lord Lexden) (Con)]

If Motion A1 is agreed to, I cannot call Motion A2. I call the noble Baroness, Lady Pinnock, to speak to Motion A2.

[Baroness Pinnock (LD) [V]]

My Lords, I remind the House of my interests as a vice-president of the Local Government Association and a member of Kirklees Council.

Throughout the course of this Bill, I have said that I support its contents and purpose. I cannot support the unintended consequences that will have a devastating impact on individual leaseholders and a very damaging effect on the housing market. Those are the reasons for my asking again for the Government to take responsibility for the consequences of this Bill, which despite the Minister’s best efforts has been totally underwhelming so far. Promises have been made by the Government and not kept.

The Government’s response to date is to provide grant funding of £5 billion while knowing that the total cost is estimated at £16 billion. The grant includes only blocks over 18 metres and only removes the flammable cladding. For those in lower blocks, there is the prospect of paying up to £50 per month for years to come.

Conveniently, the Government fail to take into account the non-cladding issues that are a result of construction failure of immense proportions. These non-cladding issues are the ones that will finally push individuals over the edge. Meanwhile, those who have literally built this catastrophe walk away with their billions of profit. The Government have a duty to protect their citizens—it is their prime duty—yet here we are today with perhaps a million of our fellow citizens being thrown to the ravages of financial bankruptcy, and the Government wash their hands and look the other way.

The Government will argue that the Bill is a vital response to the Grenfell tragedy. It is so vital that it has taken four years to get to the statute book. The Bill’s purpose is to include external walls, doors and balconies in the fire safety order of 2005, so that action is taken to protect people from another Grenfell tragedy. However, a Bill is not now needed to force action to remove cladding; that is happening. It is not needed to get fire alarms put in; that is happening. Those who own the buildings, and those who are leaseholders and tenants, already know that action has to be taken to make their buildings safe. It is no longer urgently necessary to get legislation to force the issue and it is no longer possible to force construction firms to take the necessary action; there is not capacity to do so. If, though, the Bill does fall, this provides a breathing space for the Government to develop a package of further measures that will protect the interests of leaseholders and save them from penury.

The amendment in my name seeks to achieve that breathing space. It is based on the original one in the name of the right reverend Prelate the Bishop of St Albans and has been adjusted to include the various very valid points that have been made during the passage of the Bill. We must all recognise that passing this Bill will not magic away the crisis that individual leaseholders are facing. It will not remedy the construction scandal. It will not provide stability for a foundering housing market. It will be the beginning of a scandal of individual bankruptcies, homelessness, intense stress and mental illness. It will become a public scandal and I for one will at least have on my conscience that I have done all in my power to prevent it. Leaseholders have done everything right and nothing wrong. Liberal Democrats will stand by them. I give notice that I wish to test the opinion of the House on the amendment in my name.

[The Earl of Lytton (CB) [V]]

My Lords, as we seem to be in the last chance saloon, I will try not to repeat myself too much, but declare my interests as both a property professional and a vice-president of the LGA. As I said yesterday, the House seems to be presented by the Government with a choice. On the one hand is the evident desirability of implementing fire safety measures in pursuance of the valuable recommendations in the report by Dame Judith Hackitt into the Grenfell tragedy, plus a partial solution to some of the effects of cladding replacement on a limited class of taller buildings, as we have heard. On the other is what I am afraid I must describe as the effective hanging out to dry of hundreds of thousands, if not millions, of other home owners. It should not be a question of either/or in dealing with a growing and pressing social and economic disaster. I too support improved fire safety, but not on the basis of creating further untold, and probably unquantified, problems.

Yesterday, the Minister endeavoured to persuade us by saying that this brief and simple Bill merely clarified the Regulatory Reform (Fire Safety) Order 2005. I am afraid to say that, on my own rereading of that, he is plainly mistaken. This Bill amends the scope of the fire safety order by inserting an exception to paragraph 1a, referring in turn to two newly inserted paragraphs, 1A and 1B, that substantially expand the scope of the order. The fact that anything was attached to the named elements means the Bill has far wider implications than might be supposed. So I am afraid to say that the Minister’s assertion really did it for me. I felt it was misleading and what my late father would have described as an exercise in intellectual sharp practice. My distinct impression is that I am being taken for some sort of fool. The indisputable fact that must be regarded as plain is that this Bill makes the changes that by direct chain of causation have created the issues and caused the results that the noble Baroness, Lady Pinnock, and the noble Lord, Lord Kennedy, seek to resolve.

Another issue appears to be one of definition. The Government are concerned that any scheme that might be put in place could be used to avoid regular maintenance and routine upgrades. The amendment of the noble Baroness, Lady Pinnock, in particular, seeks to address that. In my experience there may be grey areas, but I do not have any difficulty in my work in distinguishing repairs and the like, or like-for-like replacements, from those items that are improvements. Nor do most leaseholders and property owners.

Let us be clear—and here I take a cue from the noble Lord, Lord Kennedy, for a bit of historical background—that it was on the watch of a Conservative Government that the 1984 Building Act brought in the approved inspector regime and the effective privatisation of the regulatory oversight of construction quality, previously exercised by local authority building control. Despite indicators of shortcomings and shortcutting, this process continued, without adequate checks on who was doing the inspection of the works, or how good the oversight was in practice. It is on the basis of the subsequent 37 years of construction and its legacy of known and unknown deficiencies, scattered randomly about the nation’s housing stock, that modern housebuilding, construction warranties, lending and home ownership have been founded.

If the Government consider that they need to take steps to protect the valiant and much-abused postmasters from system failure, how can they, with it any cogency or conscience, make a distinction concerning a far greater number of home owners who are affected at least as severely? So, while I note that the Minister in the other place this afternoon sought to point the finger at the unelected Lords blocking the democratic decision of the Commons, I simply say that the exercise of raw political power vis-à-vis the party whip to procure a majority in the Lobby does not endow the Government with a moral superiority, or indeed the social advancement of justice and ethical treatment of citizens. I note the reasons for rejecting our amendments, which simply translate as “too difficult”. I suspect not half as difficult as picking up the bits after this has rolled itself out.

At one point I believed the Government had it hand to corral all the potential damage, but I believe they have not done so. It would not concern me if this Bill fell, so unreasonable do I believe its true effects to be, and so lacking is the willingness of the Government to deal with it. What it has proposed will roll out far too slowly: eight months to do the highest-risk buildings, and how much longer to deal with the far greater number in future stages? What about capacity in terms of manpower, training and so on?

I took note of the comments from the noble Lord, Lord Cormack, but I find that sitting on my hands, signifying my acceptance of the Government’s position here, does not sit comfortably with my conscience—knowing, as I do from professional experience, just what harm the Bill is likely to do, alongside its undoubted good.

I suspect that the Bill will ultimately pass into law, even if the Parliament Act has to be invoked—but I am afraid I cannot agree to it as it stands. I fear that Lobby fatigue may mean that this is the end of the matter for now. Either way, I shall return to this subject in the new Session—as, doubtless, will the noble Lord, Lord Kennedy, and the noble Baroness, Lady Pinnock. Meanwhile, I have absolutely no hesitation in supporting the thrust of the amendments—any one of them, whichever might gain approval. And I hope I will sleep with my conscience clear as a result.

--- Later in debate ---

Moved by

[Baroness Pinnock]

At end insert “but do propose Amendment 4N in lieu—

4N: After Clause 2, insert the following new Clause—
“Prohibition on passing remediation costs on to leaseholders and tenants pending operation of a statutory scheme
(1) The owner of a building may not pass the costs of any remedial work attributable to the provisions of this Act on to leaseholders or tenants of that building.
(2) This section has effect only until a statutory scheme is in operation which ensures that leaseholders and tenants of dwellings are not required to pay more than £50 per month during the course of the lease in respect of remedial work attributable to the provisions of this Act.
(3) Subsection (1) does not apply to a cost that—
(a) is permitted under a lease or tenancy agreement that was made before this Act is passed, and
(b) does not exceed £500, whether as a one-off cost, or in total across a 12-month period.
(4) Subsection (1) does not apply to a leaseholder who is also the owner or part owner of the freehold of the building.””

[Baroness Pinnock (LD) [V]]

I thank all noble Lords for another excellent debate—the fourth in the series—and their contributions tonight.

Again, the tune from the noble Lord, Lord Greenhalgh, the Minister, has not changed—it is the same old record: “This is not the right Bill”. Well, if it is not the right Bill, where is the Government’s Bill to address the horrendous problems that are going to be faced by leaseholders? Where is the Bill that will keep the Government’s pledge that leaseholders would not have to face the unaffordable consequences of fire safety defects? Where is it? Its absence tells us more than anything else about the Government’s commitment to help leaseholders.

To pledge, as the Minister has done, that the building safety Bill will pave the way, forgets the fact that bills are landing on doormats as we speak. Time is of the essence, and still the Government refuse to move. It is a thoroughly depressing moment when people can be thrown to the wolves in order to save the Treasury from paying what it ought to pay and extracting what it ought to extract from those who have caused the problem. The construction scandal—the cladding crisis—is the Government’s, and the Government’s alone.

I thank the Minister for his criticisms, once again, of the amendment I have proposed today. I just wish he would do something about it rather than saying that he cannot do this and cannot do that. What is he going to do?

I have taken heart from the impassioned speech by the noble Earl, Lord Lytton. He is an expert in the housing field and has frequently shared his expertise in this House. The fact that he too cannot in all conscience vote for the Fire Safety Bill as it stands, unamended, gives me heart that we have got this in the right place from the point of view of those of us who want to protect people from exorbitant costs of putting right fire safety defects.

I will say one last word. Let us remind ourselves that leaseholders are those that have done everything right. They have saved up for their house, put down the deposit and budgeted for the expenses they anticipate. They have done everything right and nothing wrong, yet the Government—and, it seems, others in this House—are willing to make them pay the price. That is not acceptable, and the Liberal Democrat Benches will not stand by and let it happen if we can help it. It is a depressing moment, as I believe the noble Lord, Lord Kennedy, has indicated that he is not prepared to vote for the amendment to try to get safeguards for leaseholders. He has thrown in the towel, and I find that disappointing and utterly depressing.

However, with those words, I am prepared to have one more go to try to protect leaseholders and, indeed, tenants from the awful, if unintended, consequences of this Fire Safety Bill. I wish to seek the opinion of the House and I beg to move.