Non-Domestic Rating (Levy and Safety Net) (Amendment) Regulations 2022

Lord Greenhalgh Excerpts

Tuesday 8th February 2022 Grand Committee

Moved by

[Lord Greenhalgh]

That the Grand Committee do consider the Non-Domestic Rating (Levy and Safety Net) (Amendment) Regulations 2022.

Relevant document: 28th Report from the Secondary Legislation Scrutiny Committee

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

My Lords, these regulations make changes to the way in which we calculate levy and safety net payments as part of the business rates retention scheme. The changes are necessary to ensure that the calculations reflect the current circumstances of local government and that individual authorities receive or pay no more or less than they should.

Under the business rates retention scheme, authorities that see their business rates income fall significantly in any year can receive a safety net payment. The cost of the safety net is paid for by recovering, through a levy on growth, a percentage of the business rates income of authorities that, in any year, have seen their business rates income significantly increase. The detailed rules about the calculation of levy and safety net payments are set out in the Non-Domestic Rating (Levy and Safety Net) Regulations 2013.

The regulations before the Committee make a number of changes to the 2013 regulations. They do four things. First, they update the 2013 regulations for 100% retention authorities. The Committee will recall that, since 2017-18, the Greater Manchester, Liverpool City Region, West of England, West Midlands and Cornwall authorities have retained not 50% but 100% of the business rates they collect. As a result, we made changes to the levy and safety net calculations to reflect authorities’ higher business rates income. These changes have been reconfirmed periodically in regulations as and when the Government have extended the 100% arrangements.

As things currently stand, the changes to levy and safety net calculations for 100% retention authorities apply in every year up to and including 2020-21. However, because the Government have now confirmed that the 100% arrangements will stay in place in 2021-22 and 2022-23, we need to extend the timeframe over which the changes to levy and safety net calculations apply. This is provided for in regulations.

Secondly, in Regulation 6 we amend the levy rate of the Greater Manchester authorities. Until recently, the Greater Manchester authorities were part of a pool with an authority that was not involved in the 100% arrangements, so the levy rate was calculated for the pool as a whole. The pool arrangements finished at the end of 2021. From 2021-22 onwards, therefore, these regulations will ensure that the levy rate that applies to the Greater Manchester authorities will be zero, bringing it into line with the levy rate in other 100% retention authorities.

Thirdly, the regulations make a number of changes to deal with the consequences of local government restructuring. When the structure of local government changes, some of the values in the levy and safety net calculations need to change so that they reflect the business rates bases and revenue needs of the new authorities. For the current year, 2021-22, amendments are needed in respect of the newly created authorities of North Northamptonshire and West Northamptonshire, and for the creation of the Hampshire and Isle of Wight Fire and Rescue Authority. These changes are made in Regulations 3, 5, 6, 7 and 8, with the updated figures set out in new Schedule 6.

Lastly, the regulations make changes to reflect the exceptional financial support that was made available to authorities in 2020-21 and 2021-22 following Covid. Noble Lords will recall that, in response to Covid, the Government exceptionally waived the business rates bills of the occupiers of eligible retail, hospitality and leisure properties and of eligible childcare providers, thereby helping those ratepayers to cope with the financial impact of the lockdowns and restrictions that were put in place to tackle the pandemic. Ratepayers’ bills were reduced by over £11 billion in 2020-21.

We have continued to provide support to retail, hospitality and leisure businesses and childcare providers, with an estimated £5.8 billion of relief to be given this financial year. Furthermore, we have recognised the strain on other businesses and have announced an extra £1.5 billion of Covid additional relief funding, to be allocated by local authorities in line with the needs in their local areas.

Of course, this unprecedented reduction in bills, although welcome to ratepayers, has deprived local authorities of a commensurate amount of business rates income. To support the delivery of local services, the Government have therefore compensated local authorities for every pound of business rates income that they have lost as a result of awarding additional reliefs to ratepayers. The compensation, via a grant from central government under Section 31 of the Local Government Act, has been paid up front to authorities to ensure that they had the cash they needed to deliver local services in 2020-21 and 2021-22. The further support, in the form of the £1.5 billion of Covid additional relief fund, will be paid to authorities as soon as possible.

If we did nothing to the 2013 levy and safety net regulations, the loss of income caused by the reduction of ratepayers’ bills and the additional reliefs awarded by authorities would mean that in some cases authorities would receive substantial safety net payments, even though they have already been compensated by means of a Section 31 grant. Therefore, in Regulation 7 we make changes to the 2020-21 and 2021-22 levy and safety net calculations to strip out the impact of income reductions that have been, or will be, compensated via a Section 31 grant. This means that those authorities will not be compensated twice for the same loss of income.

As well as compensating authorities pound for pound for the estimated £18.5 billion of support that we are providing to ratepayers over two years, we have taken further steps to help authorities through a tax income guarantee. Under that guarantee we are providing additional compensation to authorities for losses of business rates or council tax income in 2020-21. For business rates losses over and above those resulting from the reduction in ratepayers’ bills, authorities are being compensated for 75% of the additional loss. But, of course, in the same way as for the Section 31 grants paid to major precepting authorities, we need to change the regulations in 2020-21 to ensure that authorities are not compensated twice for the same loss of income. Regulation 8 and new Schedule 1B change the basis of the calculation of levy and safety net payments to ensure that losses of business rates income do not generate safety net payments if the authority is receiving support through the tax income guarantee.

In conclusion, these regulations make a series of very technical changes to the calculation of levy and safety net payments to ensure that they reflect current circumstances and that authorities will pay or receive the correct levy and safety net payments. I commend them to the Committee.

[Lord Shipley (LD)]

My Lords, I should first remind the Committee that I am a vice-president of the Local Government Association.

In the House of Commons, these amended regulations took just 15 minutes to be explained and approved, and that seems to be because they are appropriate in the circumstances. The revised levy rate for Greater Manchester looks right, since the pool arrangements, as the Minister said, have ceased. It is also right that the restructuring of a few local authorities has been reflected in new, updated figures.

We should support financial relief from business rates for businesses impacted by Covid being fully compensated to local authorities, in line with previous decisions earlier in the pandemic. It is, however, clearly important that the businesses rates retention scheme works as it was intended to. I think it would be wrong to give safety-net payments to some local authorities when they are already compensated by the Government directly, and the proposals on proxy figures for the limited number of 100%-retention authorities seems appropriate.

All the amendments in this statutory instrument today are technical and sensible. But the context is one of a system of business rates that is no longer fit for purpose. It does, however, generate a huge amount of income. I am left wondering what the Government are now thinking about the future of business rates—so anything the Minister can tell us on that would be most welcome.

Finally, I read the comments of the Secondary Legislation Scrutiny Committee published on 3 February, and I think the committee was right to raise the issue of whether the public are adequately protected against fraud, given public concern about false claims in other areas of Covid support payments. This is, of course, a relief scheme, and relief schemes are part of normal local authority systems and subject to normal audit systems. However, the Minister might wish to confirm that the Government feel adequately protected, given that it is their money that is helping to fund the cost.

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank the Minister for his introduction to this instrument, which, as we have heard, makes various changes to the business rates retention scheme. As we also heard from the Minister, each change is very technical, including amendments to levy and safety-net payments, the restructuring of certain local government areas and the payment by central government of specific grants to local authorities. I will not cover any of the technical detail: the noble Lord, Lord Shipley, amply covered that and asked the questions in these areas that needed to be asked of the Minister, so I will not repeat them.

I will briefly say that Labour supports these changes. However, in the other place when the matter was discussed, some important points were raised about business rates and our high streets. The Minister may remember that yesterday, in the Statement on levelling up, I talked of the need to completely reform and replace the current system of business rates. I appreciate that the terms of the SI before us today are very narrow and that this is not the place to debate that, but I ask the Minister to take our concerns about the current system back to his department. The Government have spoken already about the need to reform the business rates system and have conducted a review, but we have seen little progress to date beyond narrow technical legislation such as that before us today. I encourage the Minister to give his department a nudge. Having said that, we are very happy to support the regulations.

[Lord Greenhalgh (Con)]

My Lords, I thank the noble Baroness, Lady Hayman, and the noble Lord, Lord Shipley, for their contributions. I thank them both for raising similar issues. While this is a very narrow statutory instrument, it is probably worth saying, thinking about the future business rates is very much a matter for the Treasury. There is a recognition that future business rates need to be thought through. Obviously, there is a review and, self-evidently, there needs to be reform.

Equally, there is the issue alluded to by the noble Lord, Lord Shipley, on what we do about local government in the context of the income for local authorities being council tax and business rates, and business rates fundamentally needing to change to reflect the changing dynamics of our high streets. There is an intellectual debate that can be had about whether we continue to resource equalise, or whether we think about life as a race, whereby we ensure the start line is level and fair and then you get places essentially to compete and, through competition, raise the game. That is an intellectual debate that is entirely proper, not for this statutory instrument, but it one that I like engaging in with people who have a very deep knowledge of local government and care about its future. It is really hard to be fair if you have officials working formulae that only they seem to understand to determine whether a place gets x money or y money. It is job of work that, necessarily, the Secretary of State will be looking at—it is far above my pay grade—but I have been a huge advocate of ensuring that local authorities can be set free to be able to determine their own destinies, rather than being necessarily being always funded from the centre, in the relationship we have today. That is how it has always been, for over 20 years, in my time in local government—but that is not really a matter for today’s debate. I am sure that we will have many debates about this in the Chamber over the coming years.

I have something else on this as well. Local authorities are responsible for the administration of release and provide us with assurance on the use of release. These are not grants but reflect a discount on the liability of a business. Local authorities can take action against any relief that is fraudulent. Does that help the noble Lord, Lord Shipley?

[Lord Shipley (LD)]

My Lords, that is what it says in the Explanatory Notes. This issue is whether everybody is auditing it very carefully. That was my question really.

[Lord Greenhalgh (Con)]

Clearly, we need to ensure there are proper controls in place, both at the local authority level and the Government need to look at it as well. I think that is very wise advice, and we will take that away from this debate.

In conclusion, these regulations are necessary to ensure that the rates retention scheme continues to operate as was intended and that authorities receive the safety-net payments to which they are entitled or make the levy payments due from them. Without these regulations, the amounts paid or received by authorities will be wrong and will impose additional costs on local government as a whole. The regulations ensure that this does not happen, and I hope the Committee will join with me in supporting them.

Motion agreed.

Levelling Up

Lord Greenhalgh Excerpts

Monday 7th February 2022 Lords Chamber

[Baroness Pinnock (LD)]

My Lords, I remind the House of my interests as a member of Kirklees Council, a vice-president of the Local Government Association and someone who lives in a part of west Yorkshire where there are significant areas of deprivation; I see it every day.

Nearly three years have passed since the levelling up slogan was first used. It is good at last to read some definition of what it may mean. It is good that there is a recognition that deep-seated economic and social deprivation can be tackled successfully only through long-term sustained change. Batley in west Yorkshire, has, for example, been the recipient of City Challenge and Single Regeneration Budget funding—the earlier iterations of levelling up. Yet, sadly, Batley remains an area of considerable deprivation, partly because this earlier funding failed to deal with the basic issues of a lack of well-paid jobs, poor transport links and health inequalities. Therefore, a commitment to sustained and very long-term investment for change is welcome.

However, the challenge for the Government is that of investment—or, in this case, the lack of it. Fundamental and continual gradual change such as that described in the White Paper takes many years to achieve. Without substantial additional funding, change will be imperceptible to those who live in the towns and cities described. Further, any additional funding is on the back of huge cuts to the very local services in the so-called 12 missions.

Let us take public transport. We already know that HS2 to Leeds has been axed, HS3 is a pipe dream and even basic electrification of the trans-Pennine route is to be partial. What about bus investment? Even today, mayors and council leaders in the Midlands and the north have exposed a 50% cut to improving bus services. Access to jobs and opportunities are rightly emphasised in the White Paper. Will the Minister explain how mission 3, on public transport, can be realised when the starting point is even more cuts to services?

Then there is the issue of enabling all children to reach their potential, especially in the crucial areas of numeracy and literacy. It is a great metric to measure, but the widespread closure of Sure Start children’s centres due to major cuts in funding, combined with schools funding falling, is hardly the backdrop to enabling school improvement. At this point I ought to bring the House’s attention to my interest as a local school governor. Does the Minister agree, and will he point to an increase in funding that would enable the skills, literacy and numeracy targets to be reached?

A key metric, which I was genuinely pleased to see, is narrowing the gap in healthy life expectancy. This is such an important measure because it is linked to many key determinants of health: quality of housing, affordability of healthy food, access to skills providers and the quality of local health services and the environment. Perhaps the Minister can say how the Government will improve access to GPs for residents in my area, which has many fewer GPs per capita than the average.

Access to dental health is also vital. Yet Dentaid, a dental charity that operates in developing countries, also provides services in my area due to the lack of NHS dentists. It is shameful. Will I be able to assure those residents that the Government will provide easy access to NHS dental care for all who need it?

The creation of skilled, and thus better-paid, jobs is a basic requirement for improving the economic well-being of areas such as mine. Perhaps the Minister can explain how inward investment can be achieved and combined with providing local people with the skills to take up the higher-skilled jobs that are created. Seeing cities as the centre of development is insulting to the local towns that are supposed to be providing the jobs for these cities.

Finally, the governance issues are not highlighted but are slipped in almost under the radar. I have come to the conclusion that the Government despise local government. They want to abolish district councils and create more mayoral authorities without any evidence that reducing democratic representation and involvement leads to better decision-making and accountability.

Levelling up, however desirable, will not be effective without also levelling up funding. The shared prosperity fund, for example, shows the direction of travel the Government are going in. The north of England loses over 50% of that replacement funding for EU structural and regional funds. In total, it amounts to nearly £100 million lost money for the north. Will the Minister commit to levelling up funding through fair funding for councils, equivalent transport funding with the London area, and the shared prosperity funding for the north of England that fulfils the promises made during Brexit? Until any of that can be agreed to be a starting point, levelling up will remain a pipe dream for most of us.

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

My Lords, it is difficult to follow those two speeches because we have had a speech that is more balanced from the noble Baroness, Lady Pinnock, and, I am afraid, quite a pointed speech from the noble Baroness, Lady Hayman of Ullock.

As a relatively new Minister, I understand that there are so many examples of government policy that never get published. Those who have served in government will know that there are very many areas where policy is discussed, debated and raised but never sees the light of day. The first thing I want to do is to pay tribute to my right honourable friend the Secretary of State, as well as one of the most tireless, policy-heavy and thoughtful Ministers I have had the pleasure of working alongside: Neil O’Brien. Minister O’Brien has even signed my copy of the levelling-up White Paper, which, in decades to come, will be worth a lot of money.

I think it is a tremendous document with a very clear plan to level up this country. As someone who spent 20 years in local government, with some of the most deprived areas alongside some of the wealthiest, I believe in the mission to level up without levelling down. That is not to forget the technical annex of this plan, which, I have to say, I have not read yet but I am happy to say that I will be reading it, probably after this Statement.

There is no single policy or intervention that can achieve change on its own. This is a plan for England, Wales, Scotland and Northern Ireland. Levelling up across the United Kingdom does not mean levelling down, as I have said; it means boosting productivity, pay, jobs and living standards by growing the private sector. We on this side of the House recognise the importance of the private sector and spreading opportunities and public services, especially in those places where they are weakest, and restoring that sense of community.

I am very interested that both the Opposition and the Liberal Democrat Front Bench accuse this of being a White Paper without the necessary resources to level up. I did a word count of this document—that is the kind of thing I did. In first place, mentioned nearly 1,000 times—994 times—were “fund”, “funding pot” and “grant”: plenty of opportunities to channel the money that was committed in the spending review at the end of the last year into the means by which we will level up. In second place, with only 31 mentions, was “tax” or “taxation”. This is a plan with plenty of opportunities to channel that money precisely to ensure that we level up this country.

I want to deal with the two specific points around skills and an area I feel very strongly about—as a former deputy mayor for policing and crime at City Hall, serving the then mayor and our current Prime Minister—that is, ensuring that we reduce violent crime and that our cities are safe. It is fair to say that if we do not feel safe walking around and being part of our community then there is no chance for some forgotten areas to regenerate and to revive. I take very seriously that commitment around public safety.

Surely, if you have a clear mission around crime, which is safer streets by 2030—homicide, serious violence and neighbourhood crimes will have fallen—focused on the worst-affected areas and you back that up with money channelled into the safer streets fund, you are doing precisely that. You are ensuring that communities that are riven by crime and violent crime have the funding they deserve on top of their existing funds to tackle the very thing that has been raised.

There is a very clear mission on skills—how we can improve skills and therefore see the productivity improvement that this nation really yearns for. I discussed this today with Rob Halfon, who is very much a champion of skills in the other place. He said it was so great to see skills front and centre in an agenda and see it with its own mission statement. Interestingly enough, when we want specific examples about how skills will be improved, we should look at the plans in Blackpool and Walsall, two of the three pathfinder areas that bring employment and skills provision together. Bringing employment and skills provision together will enable people to get into work and to get on in their lives.

Frankly, it is quite hard to stomach the idea that this is an empty vessel when there is so much detail in here. I could spend the next 45 minutes—although time eludes me—explaining point by point what levelling up means and how we can deliver those 12 missions. This is a Government who want to deliver—not over a couple of years; these missions are set to 2030. This is clearly a Prime Minister who does not want to be elected again but again and again. That is why this levelling up is precisely what this Government will achieve. It will take time but here is the mission and we will deliver it in due course.

[Lord Young of Cookham (Con)]

My Lords, I hope my noble friend will sign my copy of the levelling-up White Paper. The Public Services Committee, ably chaired by the noble Baroness, Lady Armstrong, produced a report on levelling up last year and I am delighted that the Government have responded to two of its recommendations: first, that there should be clarity about what levelling up means; and, secondly, that there should be regular milestones so that we can see whether progress is being made. We also commented on transparency and I wonder whether my noble friend will recognise that under the levelling-up White Paper very substantial sums of central grants will continue to be allocated to local areas. So I ask my noble friend whether there will be total transparency about the basis of those decisions.

[Lord Greenhalgh (Con)]

I always thank my noble friend for his comments and his probing in the right areas. I failed to mention in my response to the Front Bench that, of course, there will be an annual report that will measure progress on that mission to 2030 and beyond. The point that my noble friend raises is precisely right. We need to have transparency. It is important to track the money. I think a policy that was actually delivered under, I believe, the Blair Government, the Total Place agenda, is a very important one to ensure that we get the money into the right areas across the piece, whether it is funded by central government, regional government or, indeed, local government and make sure that the money gets to the people who need it most. Transparency is a key part of achieving success and we will take that point on board.

[Baroness Armstrong of Hill Top (Lab)]

My Lords, the Minister has somewhat depressed me today.

[Lord Greenhalgh (Con)]

Oh, I am sorry.

[Baroness Armstrong of Hill Top (Lab)]

We are fed up with joyous optimism which does not have much underpinning. Can we have real attempts to tackle the things that are affecting people fundamentally? In the north-east, the difference between those who are doing well in schools and those who are not has increased over the last two years. When does the Minister expect that they will be able to get the same sorts of opportunities because of them being levelled up to what, for example, young people in Surrey Heath will be able to expect? When, on behalf of my noble colleague from Darlington, will they have the jobs that they were promised by the Treasury—300 within the next month, or six weeks, I am told? They have not arrived at all. On transparency, I urge the Minister to look at what the National Audit Office has said and then come back to the House and tell us that the Government are following the advice of the National Audit Office on transparency.

--- Later in debate ---

[Lord Greenhalgh (Con)]

My Lords, can I answer?

[Noble Lords]

My Lords—

[Lord Greenhalgh (Con)]

Sorry, maybe noble Lords do not want to hear my response. I was pretty depressed at leading a council from 2006 to 2012 in one of the most deprived parts of the country, according to the index of multiple deprivation: White City—

[Baroness Armstrong of Hill Top (Lab)]

[Inaudible.]

[Lord Greenhalgh (Con)]

Can I respond? I listened to the noble Baroness, and I hope that she can listen to me for just a moment. I was depressed to watch the grant farmers at work, filling in forms and collecting the money—whether it was local, regional or national money—and not making a blind bit of difference. That was during the Labour years; I saw no progress at all, so I was depressed. But here we have 12 key missions, all measurable, backed up by an annual report. Admittedly, this is not the end of the programme and plan for levelling up—I would say that we are at the end of the beginning—but it is now a substantial plan, with 12 clear missions set out and milestones to get there, which will be measured in an annual report. I do not think there has been a Government who have tried to be more transparent than this one.

[The Lord Bishop of Chichester]

My Lords, I am grateful to the Minister for the enthusiasm of his presentation but also for looking forward to the rest of this decade. I also want to speak about those communities in which I have served that are the inheritors of decades of deprivation and need. I was intrigued to see in the executive summary that, even in the affluence of Sussex, where I serve, there are deep pockets of deprivation and need which are recognised. What I do not see recognised here is the vital importance of the social capital of faith groups, of which the Church is one, which make a significant contribution not only to sustaining life in those areas of deprivation but to sustaining hope for a better future.

When I was newly ordained and serving in Devonport in Plymouth back in the late 1980s, in those days, it was recognised by the statutory agencies that were our partners that funding to Church-monitored projects by the statutory agencies—such as the probation service, mental health service and social services—enabled those projects to be delivered in the most acute areas of need through a voluntary agency, the Church, which already had levels of trust that enabled the services to be more easily received than they would be from statutory agencies, for a wide range of reasons. I hope that the Minister will reassess the place of those faith and community organisations, which are part of our social capital. It has been the privilege of the Church to be a co-ordinator with other groups in that respect.

Finally, the focus here has been, understandably, on our towns—we have mentioned our cities and the balance between them—but I am also responsible for an area of huge rural deprivation, and looking at how levelling up in those rural areas can occur is another major need. I hope, once again, that the social capital of faith groups such as churches will be recognised.

--- Later in debate ---

[Lord Greenhalgh (Con)]

My Lords, I thank the right reverend Prelate for bringing up two very important points, the first of which is the role of faith communities in helping us to bring about opportunity and enable and support people to get on in life. I saw that for myself as the leader of Hammersmith and Fulham Council, where we saw the extension of a church in Hammersmith, which was particularly active in providing skills training and reaching parts of the community that, frankly, the statutory agencies never got to. We do recognise that, and it is a very important point to build on that insight.

I am told by my ministerial colleague Danny Kruger, who is a PPS in the department, that he will be looking at building on the narrative because apparently this thinking is tucked away in the technical annexe, which, as I say, unfortunately I have not yet read. Some of that needs to be brought out—the importance of working with faith groups and the wider community in helping to level up the country. Of course, poverty does not happen just in cities and towns but in rural areas. That point is well made, and that is why we need to ensure that the levelling-up agenda embraces those rural communities as well.

[Lord Sentamu (CB)]

My Lords, I first declare an interest: I used to be the convenor of One Yorkshire. At the last general election, the Labour Party and the Liberal Democrats committed themselves to bringing in One Yorkshire, if elected. The Conservatives were slightly equivocal. In the light of the Secretary of State for Levelling Up saying that we need mayors of the type that we have in London, and, given that the need that quickly comes up is to have one for the whole of Yorkshire because of its economy, people and geography, will the Minister give the House his further thoughts on One Yorkshire, because it is still committed to that dream and ideal?

Secondly, the Prime Minister has told us that the pandemic has been the biggest challenge we have faced since the Second World War. At the end of the war, there was a huge social impact on the people of the United Kingdom. Most noble Lords will remember that it was the Beveridge report that began the work of transforming this great nation. Beveridge said there was want, caused by poverty; ignorance, caused by the lack of education; squalor, caused by poor housing; idleness, caused by a lack of jobs or inability to gain employment; and disease, caused by inadequate healthcare provision, which resulted in the National Health Service and social welfare. I read the whole report. What are the giants that the Minister thinks need to be slain so that we can get to where we ended up at the end of the Second World War, when the Beveridge report led to real transformation?

Finally, the greatest thing that has been bedevilling a lot of people who feel left behind is the great gulf of income inequality, but I did not hear or read it—maybe I have missed it, but I did not see it in the report. Will the Government continue to pursue the whole question of income inequality? If that is not dealt with, I am afraid you may level up some people, but you will leave a lot in poverty. Maybe I could give the Government the motto of Barnsley to become the motto for levelling up. It is in Latin, but I will give noble Lords the translation in English: spectemur agendo—let us be judged by our actions. That is what we are looking for in levelling up, not big words.

[Lord Greenhalgh (Con)]

The noble and right reverend Lord raised three principal points. The first is whether, as part of levelling up, there is still enthusiasm for One Yorkshire. My name is Greenhalgh, a Lancastrian name, and when I look at the map, Lancashire seems to have almost disappeared; it has disappeared to Cheshire and Greater Manchester, and there is a little county called Lancashire. Meanwhile, Yorkshire on a map looks absolutely humongous. I am not sure that creating a humongous entity called “One Yorkshire” will necessarily accelerate the levelling up. Maybe it will ensure the independence of Yorkshire from the rest of the country, but I am not sure that it will help us in any way.

However, there is a huge commitment to help mayors who represent functional economic areas. We have the mayor of South Yorkshire, Dan Jarvis, who is part of the education investment areas; there is regeneration of one of the 20 places in Sheffield. We are extending brownfield and bus transformation funding, exploring further flexibilities to raise CA funding thorough business rates, and looking at further and deeper devolution. There are also measures in West Yorkshire with Tracy Brabin, who is far keener on this levelling-up White Paper than the noble Baroness, Lady Hayman, who managed to dredge up some person I have never heard of in the Conservative Party—an individual in Shropshire. Tracy Brabin welcomed it. She is receiving education investment areas, extended brownfield funding, support for family allocations and bus transformation funding—all of it seems to be going into West Yorkshire. There is a commitment to, at least, parts of Yorkshire that shows a true commitment.

I am not going to say that this is the Beveridge report—even though it is a signed copy—but it is a substantial document with technical annexes, and only time will tell whether we deliver against our missions.

On the third point, on income inequality, I do not think that is an end point. I do not think we are all equal; I believe that the starting line needs to be equal. Everyone needs an opportunity and we need to equalise opportunity, but some of us will take that opportunity and go further in life, and that is why I am a Conservative.

[Baroness Scott of Needham Market (LD)]

My Lords, I declare an interest as the president of the National Association of Local Councils. It is good to see a recognition of the role of parish and town councils in developing improvements in their localities and creating a better quality of life, but is the Minister aware that most of the funds that have emerged from the shared prosperity fund are not available for parish and town councils to bid for, even though they are delivering the services? Will he undertake to have another look at that, so that they can really do a good job instead of having to recreate structures especially for bidding purposes?

[Lord Greenhalgh (Con)]

My Lords, I thank the noble Baroness for raising that on behalf of parish and town councils. I think she is saying that they are excluded from the UK shared prosperity fund, as things stand. The UK shared prosperity fund money has not yet been spent. There has been the community renewal fund, which is like a pathfinder. I will take that away, go back to my department and understand some of the thinking; it is a fair point. Another fair point is that we need to make it easy for people to apply. We do not want to see a lot of money spent on the bureaucracy of grant applications; we want to help people back into work and to get on with their lives.

[Baroness Wyld (Con)]

My Lords, I declare my interest as a non-exec at Ofsted. I am far less depressed than the noble Baroness, Lady Armstrong, although I was on her committee. I was delighted to see education as a mission in the Statement. That key stage 2 ambition is highly ambitious, and so it should be. What I cannot quite see is how early years fits into that and how the foundation years have been addressed. Given that they are quite literally the foundation years, can my noble friend please say a bit more about that?

[Lord Greenhalgh (Con)]

My Lords, I first pay tribute to my current boss, the Secretary of State, for his role in building on the substantial achievement of the noble Lord, Lord Adonis. I served in local government when the noble Lord pioneered the academy programme, and I worked very hard to open up the first academy in my council, which transformed the lives of people in Hammersmith. Then the free school programme, like a lot of government policy, built on that thinking. We know that schools are the engines of opportunity, and in this White Paper we see a real commitment to continuing that programme of introducing more academies and more free schools.

My noble friend is quite right: it is far harder to achieve success if you do not have that strong foundation in early years. People’s potential is often almost set for them. If you do not get—

Sorry, I just heard a bit of chuntering. I am not sure it was adding very much.

[Lord Boateng (Lab)]

Sure Start.

[Lord Greenhalgh (Con)]

The noble Lord is throwing out words such as “Sure Start”. That was an example of how not to govern: to throw loads of money in an incontinent way, set things up and then see it slowly withdrawn. That is not the way to transform people’s lives.

I will respond to my noble friend in writing on how we deal with the issue, because it obviously involves DfE and others.

[Lord Knight of Weymouth (Lab)]

My Lords, 2030 will be 20 years since Michael Gove became Secretary of State for Education. Two-thirds of pupils currently achieve the expected standards in literacy and numeracy at the end of primary, which the noble Baroness, Lady Wyld, just referred to. Mission five of the White Paper anticipates this jumping magically to 90% by 2030. The child who takes those SATs in 2030 starts reception this September. What is going to change for that child’s journey through primary school? The Minister talked about the details earlier. Let us have the details on the transformation of primary school that is coming.

--- Later in debate ---

[Lord Greenhalgh (Con)]

Okay, test the Minister’s knowledge on the details of a policy area he is not Minister for—I am not sure that is very constructive. It is important to measure progress; that is a start point. I remember schools in my part of London at which 50% did not meet the minimum standards of employability, so we start in a better place and are setting a mission to be in a far better place by 2030. As I said, the commitment in this White Paper—and I am sure there are many other commitments—is to continue ensuring that there are schools of choice in local areas to which parents want to send their kids to give them the best possible start in life.

[Lord Kakkar (CB)]

My Lords, I thank the Minister for taking questions on this Statement, and in so doing declare my interest as chairman of the Office for Strategic Coordination of Health Research. I welcome the focus on health and extending healthy life expectancy as part of this levelling-up agenda. Are the Minister and Her Majesty’s Government content that the opportunities afforded by the passage of the current Health and Care Bill through your Lordships’ House and this Parliament are being fully exploited and addressed in terms of the levelling-up agenda for health, with particular reference to the co-ordination between local government and institutions providing healthcare with regard to addressing the disparities that drive inequalities in health outcomes and the research agenda at a local level, which needs to be addressed to achieve these objectives?

[Baroness Armstrong of Hill Top (Lab)]

Good question.

[Lord Greenhalgh (Con)]

My Lords, it is an incredibly good question from someone who actually knows what he is talking about. I thank the noble Lord for raising this. I declare an interest as the son of a vascular surgeon who ran his service for more than 30 years in our local hospital. One of the great frustrations, of course, is the Berlin Wall between health and social care, which this Bill is trying to address. As someone who spent 20 years without becoming a vice-president of the Local Government Association—it did not give that to me, so I cannot declare that interest—I can say that it is important to address that. The systems need to come together, which is the commitment, to ensure that we do not have that friction between the two and that we get the care organised in the most efficient way possible to give people the best possible start and a healthy lifestyle so that they can reach their potential.

Leasehold Reform (Ground Rent) Bill [HL]

Lord Greenhalgh Excerpts

Consideration of Commons amendments
Monday 7th February 2022 Lords Chamber

Moved by

[Lord Greenhalgh]

That the House do agree with the Commons in their Amendments 1 to 5.

1: Clause 1, page 1, line 9, at end insert—
“(but see subsection (5)).”

--- Later in debate ---

5: Clause 6, page 5, line 7, after first “of” insert “premises which consist of, or include,”

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

My Lords, before I turn to the Commons amendments, I will take a moment to remind us all of what the Leasehold Reform (Ground Rent) Bill will do. The Bill will put an end to ground rents for most new residential leasehold properties as part of the most significant changes to property law in a generation. The Bill’s provisions will lead to fairer, more transparent homeownership for thousands of future leaseholders.

Throughout the Bill’s passage, there have been helpful discussions with Members of both Houses and with key stakeholders in the industry and from consumer groups. This has been crucial and has led to a number of refinements being made to this Bill during its stages in the other place. At our last opportunity to debate this Bill, in September 2021, changes were suggested by noble Lords to help improve it. I undertook to ensure that these would be made; and as promised, this was done. I hope that noble Lords will agree that the Bill returns to this Chamber in an even stronger position than when it left. We meet today to consider these amendments as made in the other place, and I beg to move that the House do agree with the Commons in its Amendments 1 to 9.

Commons Amendments 1 and 2 relate to the process known as a “deemed surrender and regrant.” Taken together, these amendments mean that a lease can have a peppercorn rent after it has been regranted, even where no new premium is paid. Especially for the noble and learned Lord, Lord Etherton, I can confirm the provisions in the amended Clause 6, Amendments 1 to 5, are amended also to apply in the case of a deemed surrender and regrant by operation of law where there is an extension of the term of a pre-commencement lease or the addition of further property. Commons Amendments 3, 4 and 5 are also connected to the “deemed surrender and regrant” process. But more specifically, they clarify the matter raised by the noble and learned Lord, Lord Etherton with regard to a lease variation.

As noble Lords may remember, it was pointed out very diligently that the legislation as drafted was perhaps not as clear as it could be in relation to permitted rent within leases where they replace a pre-commencement lease. The noble and learned Lord, Lord Etherton raised his concern that it was unclear whether the Bill as then drafted would require that any existing ground rent in such leases would be reduced to a peppercorn. I thank the noble and learned Lord for bringing this to my attention. I can confirm that the amendments made in the other place make it clear that, where the property demised is changed, the resulting surrender and regrant will not reduce the ground rent on the remaining term of a pre-commencement lease to a peppercorn. Any extension to the term of the pre-commencement lease will be required to be a peppercorn. Crucially, this amendment ensures that freeholders need not withhold consent for a lease variation unnecessarily. I hope noble Lords will agree this is a positive development.

I turn to Commons Amendment 6. Noble Lords will remember that on Report an amendment was passed that inserted a new clause into the Bill, the “duty to inform”. It placed a statutory duty on landlords to inform an existing leaseholder of the changes introduced by the Act ahead of commencement and linked this duty to the Bill’s enforcement penalty regime, should a landlord fail to comply. Of course, we recognise the importance of leaseholders being aware of their rights and that they are therefore not rushed into lease extensions before this Bill takes effect. I thank the noble Baroness, Lady Grender, who is not in her place, and the noble Lord, Lord Stunell, for raising the important matter of consumer awareness, which the Government take seriously.

I support the principles behind the original Lords amendment. It is vital that there is transparency in the leasehold system. However, the Government continue to have doubts as to whether placing a duty to inform in the Bill would be the most effective and expedient means of meeting the objective that noble Lords set out to achieve. We remain of the view that this can be accomplished without the need for further primary legislation. The reasons for leaving out the duty to inform include legal and practical considerations that I hope noble Lords will allow me to explain a little.

As drafted, the duty to inform, although well intentioned, is unworkable. The original amendment placed a duty on all landlords, even if they were not residential, and did not specify how each landlord may satisfy their legal duties contained within the clause. Including the clause would require the penalty enforcement process for the duty to inform to align with the rest of the Bill; for instance, the duty to inform clause provided no mechanism for landlords to appeal and did not offer a concrete explanation of the means for enforcement, such as notices and requests for written representations. To make this clause workable would take up further parliamentary time and cause delay to the implementation of the new peppercorn rents that we all want to see. Furthermore, in terms of practicality, the clause related only to the short period between Royal Assent and the peppercorn limit coming into effect. It would therefore place a quite significant burden on enforcement authorities if it was included in the Bill.

Again, I thank both the Labour Front Bench and the Liberal Democrats’ spokesperson, the noble Lord, Lord Stunell, for their recent engagement on this matter. As I have said before, they can rest assured that I agree with them on the principle behind the amendment. We all understand how important it is to ensure that these changes to leasehold law are publicised for the good of leaseholders. However, I appreciate that noble Lords may want a little more. We have looked very closely at how to achieve the objectives that informed the original new clause, so I wanted to share some of the detail on measures that we will take ahead of commencement to close the gap.

We are developing a suite of communications activities, from social media to encouraging the broader press to cover these changes. We will work closely with our partners such as LEASE, the body that provides free and independent advice to leaseholders, as well as National Trading Standards and, of course, our industry partners, to do what we can to raise awareness of the coming changes. We will also contact our friends in the Leasehold Knowledge Partnership. Everyone who can help to communicate should be brought on board. We are also preparing updates to existing government guidance for consumers and will publish new detailed guidance for enforcement officers in England. We expect Wales to produce separate guidance, which should mirror any guidance that we publish for England, and we will work closely with Welsh colleagues to ensure that we get this right.

After Royal Assent, we will write to solicitors, legal executives, licensed conveyancers and relevant professional bodies, detailing the new peppercorn restrictions. We should also contact those who represent property agents and managing agents—ARMA—as I mentioned in our discussions. Nigel Glen has a tremendous database, as does the Institute of Residential Property Management, where Andrew Bulmer can also help communicate the message.

I hope that this is reassuring to noble Lords who have raised concerns about the importance of accurate, independent legal advice to leaseholders. More generally, as part of the enforcement of the Bill, National Trading Standards will assist with advising local enforcement authorities. The department will fund National Trading Standards’ implementation costs from our budgets. We are in discussions with the Local Government Association on this. As I have stated previously, I am open to working with anyone across the House on any further activities that they believe we should pursue.

I hope noble Lords are sufficiently reassured that the Government are serious about raising awareness of the Bill among consumers ahead of it coming into force and can agree that the suite of actions we are taking represent the best course of action. On this basis, I ask that your Lordships agree to Commons Amendment 6.

--- Later in debate ---

Moved by

[Lord Greenhalgh]

That the House do agree with the Commons in their Amendment 6.

6: Clause 8, leave out Clause 8

--- Later in debate ---

[Baroness Hayman of Ullock (Lab)]

My Lords, I have not previously spoken in the debates on this Bill, but I will be brief. I start by thanking noble Lords who have done a lot of work to improve this much-needed legislation. The amendment in the name of the noble Lord, Lord Stunell, is a welcome reminder that the Bill lacks any obligation for landlords to alert leaseholders in advance of changes relating to ground rents and leasehold extensions. We fully support the noble Lord’s amendment, which seems to be an entirely proportionate measure and in no way presents an obstacle to the core provisions of the Bill.

The Government have been unable to bring forward any safeguards to address this specific power imbalance at the expense of leaseholders. Without it, we believe that the legislation remains flawed. The relationship between leaseholders and landlords should be defined by the principle of transparency and accountability—as, in fact, the Minister agreed in his opening remarks—but this is simply not possible without provisions such as these. So I ask the Minister, even at this late stage, to provide further assurances that have not previously been forthcoming to allay the concerns from across the House.

[Lord Greenhalgh (Con)]

My Lords, I am not sure whether we have moved all the amendments up to Amendment 9—because then I can wind up, so to speak. I can appreciate the—

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

If I may interrupt the noble Lord for a moment—we have moved only Amendments 1 to 5. We are now discussing Amendment 6, and we will then come to Amendments 7, 8 and 9.

[Lord Greenhalgh (Con)]

Okay. I am just getting used to this process. On Amendment 6, it is really helpful that the noble Lord, Lord Stunell, raised the issue of timing. Of course, in order to start the gun, if you like, we need Royal Assent, and then there needs to be a commitment around commencement, which means having all the regulations in place. So let us get this Bill on the statute book as quickly as possible. I have already made a commitment—which perhaps goes beyond where I should have gone because I am, perhaps, a little naive—that, within six months of Royal Assent, we will have commencement. So we know what the window is, effectively, because I made that commitment at the Dispatch Box and I do not want to let anyone down. That is the timeframe: let us get Royal Assent and then, within six months, we will have commencement—and that is the period of time we should be concerned about.

We have very genuinely tried to respond to the issues that have been raised to ensure that the greatest number of people are aware of the dangers and the risks of carrying out a lease extension in that window in a way that would be detrimental to their interests. That is why we have that suite of communications measures. I hope, therefore, that with that and a better understanding of the timeframe, the noble Lord, Lord Stunell, will withdraw his amendment.

On the timing, I have now been in post and responsible for leasehold reform for nearly two years—I have survived one reshuffle—and it is fair to say that both Secretaries of State, particularly the right honourable gentleman in the other place, are absolutely committed to the second wave of leasehold reform, which will be far harder than this modest ground rents Bill. I cannot give a commitment about what will appear, but my expectations are that leasehold reform will be front and centre around his ambition for a wider reform of housing.

[The Deputy Speaker (Baroness Barker) (LD)]

My Lords, the Motion is that this House do agree with the Commons in their Amendment 6. As many as are of that opinion will say “Content”. Lord Stunell?

--- Later in debate ---

Moved by

[Lord Greenhalgh]

That the House do agree with the Commons in their Amendments 7 to 9.

7: Clause 23, page 14, line 13, leave out “consideration in money or money’s worth” and insert “pecuniary consideration”

--- Later in debate ---

[Lord Greenhalgh (Con)]

My Lords, I have a few words in conclusion to thank everybody who has worked so hard to get the Bill to this stage. I thank particularly the noble and learned Lord, Lord Etherton, who has been helpful in tidying up this Bill, the noble Earl, Lord Lytton, with his knowledge as a professional surveyor, and my noble friends Lord Young of Cookham and Lord Hammond of Runnymede, who have been extremely insightful.

I probably should put on record, because I forgot to do so until the very last moment, my residential and commercial interests. I want to make sure that I have declared them, although they are properly set out in my declaration of interests.

I also thank the Benches opposite. I have had to deal with changes and am sorry to have lost the noble Lord, Lord Kennedy, who I believe has gone off to be Chief Whip. Then Labour sent the noble Baroness, Lady Blake of Leeds, from Yorkshire. and now we have the noble Baroness, Lady Hayman of Ullock, who has an incredible reputation in the other place for being fair-minded and constructive. It is marvellous to work with her.

It has been great to work with the Liberal Democrats as well. I will even thank the noble Baroness, Lady Pinnock; she described herself as a Yorkshire terrier, which is why my ankles seem to get bitten quite a bit when she intervenes; she does so on behalf of the interests of leaseholders and fighting their corner, which is appreciated.

The noble Baroness, Lady Grender, who is not in her place, raised the issue of the gap in the first place. I know the noble Lord, Lord Stunell, is representing her, but she raised an important matter, and it is to her credit that the Government have responded to those genuine concerns. I thank everybody—the Opposition Benches, the Liberal Democrats and the Cross Benches—for a very constructive approach to the Bill.

No Minister should ever leave the Dispatch Box without thanking the officials, many of whom are in the Box and have been simply tremendous in supporting me. We should all be proud of what this House is putting forward in legislation, which is much improved because of the contributions of noble Lords. I commend the Bill to the House.

Building Safety Bill

Lord Greenhalgh Excerpts

Monday 7th February 2022 Lords Chamber

Moved by

[Lord Greenhalgh]

That it be an instruction to the Grand Committee to which the Building Safety Bill has been committed that they consider the bill in the following order:

Clause 2, Schedule 1, Clauses 3 to 21, Schedule 2, Clauses 22 to 26, Schedule 3, Clauses 27 to 42, Schedule 4, Clauses 43 to 54, Schedule 5, Clause 55, Schedule 6, Clauses 56 to 104, Schedule 7, Clauses 105 to 113, Schedule 8, Clauses 114 to 121, Schedules 9 and 10, Clauses 122 to 128, Schedule 11, Clauses 129 to 143, Clause 1, Title.

Motion agreed.

Building Safety Defects

Lord Greenhalgh Excerpts

Monday 7th February 2022 Lords Chamber

[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 am sure the whole House will join me in congratulating Her Majesty on her 70 years on the Throne and her service to our country and the Commonwealth. I draw attention to my interests as set out in the register.

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

My Lords, industry must fix the buildings that it was responsible for developing. The Building Safety Bill will protect leaseholders from remedial costs beyond the removal of dangerous cladding by providing a legal requirement for building owners to exhaust all ways to fund essential building safety works before passing on costs to leaseholders. Building owners must provide evidence that this has been done. If this does not happen, leaseholders will be able to challenge these costs in the courts.

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

My Lords, I have been raising these matters for some considerable time, so I thank the Minister and acknowledge that progress has been made. Having said that, more needs to be done. I heard what he said about the courts, but I want to hear what the Government are going to do. What specific enforcer measures will be deployed to deal with building owners and developers who refuse to take reasonable action to correct mistakes and poor construction, to deal with fire safety failures, to make their buildings safe and to protect the people living in them—whatever tenure they hold?

[Lord Greenhalgh (Con)]

My Lords, I salute the tenacity of the noble Lord. He will understand that next Monday will be a very special day: it will be the day he writes a card to his wife, the noble Baroness, Lady Kennedy, but it will also be the date when we will see a series—a slew—of amendments from, I am sure, the Labour Party, the Liberal Democrats, the Cross Benches, my noble friends behind me and also from the Government as we reach Committee on the Building Safety Bill. We have two objectives in mind: to protect leaseholders and to ensure that the polluter pays. We are starting a process to encourage voluntary contributions, but we are very clear that, if they do not pay up, there will be measures in law to make sure that they do.

[Lord Young of Cookham (Con)]

My Lords, I welcome the very positive statement that my noble friend has just made, and his personal role in making the progress that has just been announced. On 10 January, the Secretary of State said in another place:

“First, we will make sure that we provide leaseholders with statutory protection—that is what we aim to do and we will work with colleagues across the House to ensure that that statutory protection extends to all the work required to make buildings safe.”—[Official Report, Commons, 10/1/21; col. 291.]


Can my noble friend confirm that that is the case and that protection extends beyond cladding replacement?

[Lord Greenhalgh (Con)]

My Lords, I do not want to pre-empt 14 February, but it is very clear that, from Florrie’s law, which sought to protect leaseholders from high-cost building safety and remedial works, there will be a principle which protects leaseholders. I thank my noble friend for raising this issue.

[Baroness Jones of Moulsecoomb (GP)]

But there is still nothing in law, is there? The Government are talking large and saying, “From round the House, there’ll be lots of good ideas and householders can take these companies to court”. But why does the Government not set the law? Instead of expecting us to do their work, why not do the work themselves and make the rules?

[Lord Greenhalgh (Con)]

My Lords, I am used to the interventions from the noble Baroness. I had four years of it in City Hall and it is nice to join this great place and continue where we left off in 2016. However, I believe there is a process, which is getting Royal Assent. It is very clear that the passage of the Building Safety Bill is critical to ensure that we have those protections for leaseholders and that the polluter pays.

[Baroness Pinnock (LD)]

My Lords, there is a big difference between protecting leaseholders and ensuring that they do not pay a penny piece for wrongdoings that were none of their making. Will the Minister give an absolute guarantee that leaseholders will not have to pay a penny piece, whether or not it is after the Building Safety Bill has passed into law? As for leaseholders who have been forced into bankruptcy or those who have already paid their bills, will they still have to pay or will there be compensation?

[Lord Greenhalgh (Con)]

My Lords, it is very clear that we must differentiate the need to protect leaseholders from finding the funds to pay for these buildings. That is why my right honourable friend in the other place has sought to raise, voluntarily in the first instance, some £4 billion for medium-rise cladding. But we need to look at how we protect the leaseholder and get the polluter to pay. For the detail, as I say, noble Lords will have to wait until Valentine’s Day.

[Lord Watts (Lab)]

My Lords, have the Government learned their lesson about being so dependent on the industry when they are making building regulations? Is there not a need now to increase the public ability to set these regulations and not depend on the industry itself?

[Lord Greenhalgh (Con)]

My Lords, that is a very good point, in the sense that we need to have a proper relationship with industry. We need to recognise that, in order to build homes—frankly, we do need great developers and good construction companies to do that—but we need to ensure that the regulatory system works. One of the reasons for Grenfell was the total failure in the regulatory system, from Whitehall right through to local authorities. Again, that is why we need the Building Safety Bill.

[Earl Howe (Con)]

My Lords, the noble Baroness, Lady Brinton, has indicated her wish to speak and this may be a convenient moment.

[Baroness Brinton (LD) [V]]

My Lords, while we all hope that the Government will hold developers and industry to account for paying for the remedial work, not just in due course but promptly, will that include and be backdated for waking watch payments that were and are required because of the unsafe cladding and other safety defects and which do not appear to be covered by the Secretary of State’s announcement of £27 million for fire alarms on 27 January?

[Lord Greenhalgh (Con)]

My Lords, I cannot give a guarantee around retrospective application, but through these measures we are ensuring that many hundreds of thousands of leaseholders do not face eye-watering bills. These measures are about ensuring that that does not happen.

[Lord Naseby (Con)]

Is my noble friend aware that this problem has been with us for over four years? Is he confident that this demand that Her Majesty’s Government are making on the construction industry is the right way forward? Using the law, as every Member of this place knows, takes an awfully long time. Would it not be better if everyone sat down round the table and found an answer without implying the use of a new law?

[Lord Greenhalgh (Con)]

My Lords, that is an incredibly helpful point, because in fact it is exactly what I did on Friday. On Friday we sat down to a virtual meeting with the developers and sought precisely that: to understand how we could ensure that we brought resolution to this crisis, which has taken over 30 years to evolve. In seeking voluntary contributions, that is precisely what is happening: engagement at every level.

[Lord Dholakia (LD)]

My Lords, has the Minister consulted Barratt Developments? At one time, it found the premises where I live full of cladding defects and, having removed the cladding, found structural defects. The result of all this was that Barratts paid full compensation for almost all 70 tenants who were living on the premises. If it is possible for Barratts, why is it not possible for others?

[Lord Greenhalgh (Con)]

There are examples where Barratt has behaved very honourably and provisioned quite a considerable sum of money. A number of the other major developers have also put provisions forward and acted, to the tune of some £1 billion. But that is not nearly enough—£1 billion will not deal with a crisis that extends far beyond that. Some estimate that there has been £15 billion or more in costs. We have to recognise that this is a failure and that the polluters are very much broader than the Barratts of this world. We have to make sure that they pay.

[Lord Davies of Oldham (Lab)]

Would the Minister accept that many of us in this House would not take the same view that he has taken about the plethora of amendments that the Government feel obliged at this stage to make to their own proposals, or about welcoming the many other amendments that have been presented by other Members of this House? Surely it is the Government’s job, when they face a problem as acute and long-lived as this one has been, to produce legislation that is implementable almost immediately.

[Lord Greenhalgh (Con)]

My Lords, I respectfully disagree. The original purpose of the Building Safety Bill, which remains its primary purpose, is to fix the regulatory system that patently failed in 2017 for future buildings, and essentially to create in law a high-risk regime for high-rises, where we have seen these tragedies approximately every 10 years. We also recognise, as has been raised by many noble Lords, that we need to ensure that we protect leaseholders and get polluters to pay. That is why we are bringing forward these amendments at this time. They are two wholly different matters.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, is the Minister aware that, although some progress has been made for England under the sustained and excellent pressure of my noble friend Lord Kennedy of Southwark, there is not the same kind of progress in Scotland, which is falling behind? Will the Minister have a word with Ministers in Scotland and use his—I was going to say use his not inconsiderable weight.

[Lord Foulkes of Cumnock (Lab Co-op)]

There might be some pots and kettles there, especially from me. Will he use his considerable powers of persuasion to see whether Scots Ministers can follow the lead that he has given?

[Lord Greenhalgh (Con)]

My Lords, this problem extends to all four nations. I meet regularly with my counterparts in Scotland, Wales and Northern Ireland. In fact, there is quite a lot to be learned from Wales, I have to say. Indeed, I will engage and take that advice forward.

Building Safety Bill

Lord Greenhalgh Excerpts

2nd reading
Wednesday 2nd February 2022 Lords Chamber

Moved by

[Lord Greenhalgh]

That the Bill be now read a second time.

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

My Lords, it is a privilege to open the Second Reading debate of this landmark Bill today. I will never forget the events that led us to this moment, nor the 72 people who lost their lives in the most appalling circumstances in the largest loss of life in a residential fire since the Second World War. The fire at Grenfell Tower in the early hours of 14 June 2017 should never have happened. The legislation we are bringing forward today is part of our wider reform to make sure that something like this tragedy can never happen again.

We cannot bring back those who lost their lives on that terrible day, and nothing can undo the errors that led to their deaths. Yet, if anything is to come from this disaster, it must be the lessons that we have learned from the mistakes that were made. That is why the Government appointed Dame Judith Hackitt to review the current building safety regime and recommend wholesale reform. Her findings were unequivocal and clear. Too often, regulations and guidance were misunderstood or misinterpreted. The drive to do things quickly and cheaply—the noble Earl, Lord Lytton, mentioned the concept of value engineering—meant that concerns were ignored and safety was not prioritised. There was ambiguity around who is actually responsible for the safety of buildings, with insufficient oversight and enforcement.

Dame Judith called for a complete overhaul of the system, and her recommendations underpin the Bill, with a golden thread that will ensure that, henceforth, people remain safe in the homes that we build for them. The Bill is unapologetically ambitious, creating a world-class building safety regulatory regime that holds all to the same high standard. The Fire Safety Act, which we will commence shortly, was the first legislative step towards delivering meaningful change following that dreadful tragedy. The Building Safety Bill represents the next step, delivering significant improvements to both the regulatory framework and industry culture, creating a more accountable system.

The Bill will deliver improvements across the entire built environment. It will strengthen oversight and protections for residents in high-rise buildings and give them a greater say, and will toughen sanctions against those who threaten their safety. Its focus on risk will help owners manage their buildings better, while giving the homebuilding industry the clear, proportionate framework it needs to deliver better, higher-quality homes. It is proportionate and strengthens fire safety requirements in all premises regulated by the fire safety order. It rightly focuses the new, more stringent requirements on those buildings and issues that pose the greatest risk.

To that end, we are strengthening our regulation of high-rise residential buildings which are over 18 metres or above six storeys in height, whichever is reached first; those buildings pose the greatest safety risks in the event of a spreading fire or structural failure. We are including hospitals and care homes that meet the height threshold during their design and construction. We will establish a robust link between safety, design, construction and occupation, with stringent duties to ensure safety throughout the building’s life cycle.

The Bill provides the framework to ensure that, during the design and construction, defined duty holders have clear responsibilities for compliance with building regulations, including fire and structural safety. They will have to clear a series of hard stops, through the new gateway system for in-scope buildings.

In occupation, every building in scope will have an identified accountable person with clear responsibility for safety matters. Their duties include registering the building with a new regulator, building an evidence and risk-based safety case, and the continued evaluation of potential hazards. Importantly, it will be a criminal offence not to carry out these duties effectively, punishable by an unlimited fine and up to two years in prison.

We are giving residents a stronger voice in the system through the Bill, making it easier for them to seek redress and raise concerns. The Bill will require an accountable person for a high-rise residential building to engage with their residents and establish a formal complaints process for residents to raise concerns. Both the accountable person and the responsible person for premises regulated by the fire safety order will be required to provide residents with access to key building safety information.

These measures will be overseen by the new building safety regulator within the Health and Safety Executive. The regulator will be equipped with robust powers to crack down on substandard practices. It will oversee the safety and standards of all buildings and will provide important independent advice to government on building safety and standards. It will support a significant improvement in the performance and competence of industry and building control professionals.

The Bill ensures that the regulator will regulate in line with best practice principles, being proportionate and transparent and targeting activity where action is needed. Crucially, it will act to ensure that proportionality is embedded within its operations and in its work with accountable persons to assess buildings.

I turn now to construction products. The testimony we have heard at the Grenfell Tower Inquiry has been shocking to say the least and has exposed a culture of corner-cutting, Spanish practices and disgraceful behaviour by an industry that has compromised building safety. We intend to put a stop to this. Following the Grenfell Tower fire, we banned the use of combustible materials on the external walls of high-rise residential buildings. The Bill creates powers to strengthen regulatory oversight for firms that manufacture and sell construction products and, crucially, powers to remove unsafe construction products from the market and take action against those that break the rules. The Bill will improve the standards of our construction products oversight regime.

The polluter must pay; developers and construction product manufacturers must be held to account. Residents must be protected against substandard materials, workmanship and practices that make homes unsafe. Our new regime will help address these issues for high-rise residential buildings, but we need to expand legal safeguards for residents wherever they live. That is why the Bill retrospectively extends the period during which compensation for defective premises can be claimed by over double the current period—from six to 15 years prospectively and by 30 years retrospectively —to make sure that the failures of the past can be addressed. This is a significant step forward, and we are going further, expanding the scope of the work for which compensation can be claimed to include future renovations.

We are also strengthening redress for people buying a new-build home through provisions for the new homes ombudsman scheme that will provide dispute resolution and resolve complaints involving the buyers of new-build homes and developers.

We also know that we must go further to protect innocent leaseholders, who are the victims, from bearing the financial burden of this crisis. I thank your Lordships, in particular my noble friends Lord Blencathra and Lord Young of Cookham and the noble Lord, Lord Stunell. I could not forget the noble Lord, Lord Kennedy, as well for being ever so helpful during these debates. I also thank the noble Earl, Lord Lytton, the noble Baroness, Lady Pinnock, and, of course, the right reverend Prelate the Bishop of St Albans, who has been an inveterate campaigner on behalf of leaseholders. This is a hugely important issue; it is important that we continue to do our best collectively to protect leaseholders.

The Secretary of State in the other place has been unequivocal in his determination that leaseholders living in their own flats in medium and high-rise buildings will not pay a penny to remediate unsafe cladding. We have scrapped proposals for loans and long-term debt for medium-rise leaseholders. We have allocated a further £27 million to help bring the misuse of waking watches to an end, and we are working towards making sure that leaseholders are protected from the risk of forfeiture relating to historical building safety issues, until a new industry-developed system is in place. But we know that more is needed. We will also explore further statutory protections for leaseholders and we will bring forward proposals for this House to consider at the earliest opportunity. I look forward to working with your Lordships on the Opposition Benches, with the Liberal Democrats, with the Cross-Benchers, and even with my own awkward squad, to ensure that this 143-clause Bill perhaps adds the odd extra clause and is the best possible Bill that we can take forward and get on the statute book.

The Government have accepted their share of responsibility and made significant financial provision—over £5 billion—through the ACM remediation programme and the building safety fund. Some developers have already done the right thing and provisioned or are funding remediation works. We are also seeing that among registered providers. But too many others have failed to live up to their responsibilities; in some cases, they are not engaging at all with government. We cannot keep looking to the taxpayer to keep bailing out this failing industry: we must get the polluters to pay.

We have already announced a £2 billion tax on the biggest residential developers through the residential property developer tax and a further levy on developers building tall buildings through the Building Safety Bill, and we are now engaged with industry to ensure that it pays its fair share for fixing cladding problems, rather than the leaseholders. I point out that where both private developers and social housing organisations have developed land, they are equally culpable if they put up unsafe buildings and they must pay. Our expectations are clear: industry and the owners of land, such as registered providers, should fix the buildings they were responsible for. They need to contribute to a wider fund to ensure that remaining buildings are remediated to protect leaseholders.

In a round table held with the Secretary of State, senior executives from the country’s biggest developers agreed that leaseholders should not pay. We continue to engage with them on how they will deliver a fully funded action plan by early March. We are also acting directly to make sure that those who manufactured dangerous products, built unsafe buildings and knowingly put lives at risk are also properly held to account. We have had a similar meeting with construction products manufacturers. I was shocked that Arconic, one of the manufacturers of the material used on Grenfell, did not show up; that is completely unacceptable. We have been clear in our intent: industry needs to develop real proposals to fund this crisis. If it does not agree a solution soon, we will, if necessary, impose one in law.

The Bill represents the most radical revision of our building safety regime in generations. It is a complete overhaul of safety management, putting residents’ safety at the absolute heart of our reform. I commend the Bill to the House.

--- Later in debate ---

[Lord Greenhalgh (Con)]

My Lords, I really enjoy the tutorials I get from the noble Lord, Lord Kennedy. I shall do my best to start at a high level because this is a serious debate. There have been a lot of expert contributions and I have, as noble Lords will know, listened carefully to them all. I should start by saying that when I joined the Government I was told that I could have any job I wanted and was then assigned building safety and fire. The offer changes as one goes through the process.

It means that I have spent some time thinking about the root causes of the Grenfell Tower tragedy. I like to think about things and today we are addressing two of the fundamental root causes. That is why the Bill has the support of this House. We saw a corrosive construction industry culture that needs addressing and the Building Safety Bill seeks to do that. That is why it is so important. We also have, as admitted by my right honourable friend the Secretary of State in the other place, a building safety regulatory system that is, frankly, broken. That is why we need the Bill and we are all keen to make sure that it gets on to the statute book. That is important.

I also want to respond as Fire Minister to the comments of the noble Lord, Lord Kennedy, about the ordinary firefighter and the Fire Brigades Union. I engage; I met Andy Dark and Matt Wrack last week and will engage with them again. However, it is important to reflect that, as regards the Manchester Arena attack and the night of the Grenfell Tower tragedy, there are lessons to be learned for fire and rescue services. We must not mistake the need for reform, which should get widespread support from this House. As Fire Minister, I am about to publish a White Paper that will seek to reform professionalism and ensure that we get better people into the fire and rescue service. The paper will also look to improve governance. It should not prove particularly controversial and will, I hope, have widespread support. However, the reform agenda does not take away from the fact that the ordinary firefighter goes forward into danger, rescuing people’s lives. They certainly have my support and, I am sure, the support of everybody in this House.

It is virtually impossible to respond to the contributions of 32 speeches in the time available. We are then going on to Committee, where the Bill will be debated in depth in the unfortunately slightly less well-lit Moses Room—although it is now dark in here without natural light. We will, however, have an opportunity to debate these matters at length during the passage of the Bill.

First and foremost, we need to understand the issues around scope. This Bill affects the whole built environment. The new building safety regulator will be responsible for building regulations, looking at standards and competence and working with the British Standards Institution to set the competence of the professionals involved in the development of all the built environment.

I want noble Lords to realise that it is important to set the high-risk regime at an appropriate level. If we say we want everything in the high-risk regime then, frankly, the building safety regulator will fail. There are 12,500 high-rise and 77,000 medium-rise buildings—the lower one goes, the more buildings there are. It is very important to have an appropriate scope for the high-risk regime and not ask too much of a new fledgling regulator who exists in shadow form. I hope noble Lords will be patient about scope. This does not mean that it will not widen over time, but we need to start in the right place.

I really enjoyed the valedictory speech of the right reverend Prelate the Bishop of Winchester. I do not think I have heard the right reverend Prelate speak before, but I listened to almost every word. While I do not think the Palace of Westminster is an example of remediation at pace, I completely agree that “caring for building safety is caring for the health of our nation.” That is absolutely right. It is one of the reasons why I am passionate about this ministerial brief. It is very important that we get this right, and I thank the right reverend Prelate for raising it in that way.

As someone who loves history, I recognise that the Victorians did not get everything right, but they got the built environment right. They worked off pattern books. They built some of the finest homes that—like the Romans’—will probably last for a thousand years. We must get back to those principles of quality that the Victorians pioneered and that the Edwardians followed. Somewhere along the way, we lost the culture of building quality in this country.

I also single out my noble friend Lady Fox of Buckley—although she is not my noble friend because she is not on these Benches. She raised a very important point. The proportionality needs to be right in both council homes and social housing, as well as in private housing. There are people who profiteer from this stuff; they create a disproportionate approach and people pay for that. I was approached, not about a council home, but about Saxon House—a home in Sutton—where, essentially a cowboy did an EWS1 form and failed it. This caused untold stress and misery. A young man, called George Martin, managed to challenge it. It is important that we stop in their tracks those who are not acting properly. I involved the police in that case and supported the leaseholders in Saxon House. It is important to have a greater sense of proportion when approaching this crisis. We must remember that some people simply want to profiteer from a problem that has effectively been built up over 30 years. It is shameful to see such instances.

I was given a list of everyone who referenced protecting leaseholders and the polluter pays principle. I could spend the next 40 minutes reading out everybody’s names. In trying to answer all the questions, I will pick out those from my noble friends Lord Blencathra and Lord Young. In essence, we have made a commitment to protect leaseholders and make the polluter pay. Voluntary contributions can go so far, but we want this in law. From my noble friend Lord Blencathra I have learned about a framework—a toolkit in my language—for protecting leaseholders and getting the polluter to pay. The Government will bring forward amendments—I think the deadline for Committee is Valentine’s Day, 14 February. We will be ready to debate many of these amendments at the next stage of this Bill, although some may not be ready. Some are not government amendments. I have been working very hard and listening very carefully to Steve Day, whom the noble Earl, Lord Lytton, has been championing. I have put him in touch with lawyers with real expertise. Professor Susan Bright of Oxford, a land lawyer of the highest quality, has been helping to draft an amendment —now known as the Bright-Day amendment, which is better than the dark night amendment. I hope that this will be ready for noble Lords to consider, although it has not yet gone through government processes. We want every tool in the toolbox to make sure that we protect leaseholders and make the polluter pay.

The comments from the noble Baroness, Lady Warwick of Undercliffe, were very interesting. I want to find out more about the statistic she quoted. It is staggering to think that many registered providers put £6 billion towards remediating their own housing stock. The leading developers have made provision of no more than £1 billion for their share of this crisis. I therefore pay tribute to the registered providers who are doing the right thing and making their buildings safe and not relying entirely on the probably £300 million or £400 million of taxpayers’ money that has gone towards remediation. However, that is a small fraction of the amount of money that the noble Baroness referred to. That is a very useful contribution toward resolving this crisis, because of the balance sheets of the G15, whose shoulders are considerably broader than the average leaseholder and shared owners who live in their homes. That is a tribute, and I look forward to having a summit with the National Housing Federation and leading registered providers to see how we can move forward in that vein.

I was a little disappointed when I saw a tweet that a small number of registered social landlords were effectively engaging a lobbying agency to try to promote ways to stop leaseholders being able to pursue claims. That is not the way to go. We have to recognise that there are people who are doing the wrong thing, and we have to encourage them—whether they are developers or registered providers—to do the right thing by leaseholders.

I thank the noble Baroness, Lady Grey-Thompson, for sharing her speech, but it got to me quite late; it really struck me, and stopped me in my tracks. I got to know some disabled leaseholders who are leading the campaign, Claddag. Sarah Rennie and Georgie Hulme are incredible people, and I want to be pointed to some other examples. When it comes to public procurement —I declare my interest as someone who has been in local government for 20-odd years, although I never became a vice-president of the LGA; I do not know what I did wrong—it is important that we look at that. However, public procurement has the potential for litigation and there are all kinds of things that, as a Minister, I cannot do. I hear what the noble Baroness says, and there is an intention to do all we can to help disabled people to live safely in their home, whether in high-rises or medium-rises. I want to give her that assurance as the Minister responsible.

I have known the noble Lord, Lord Best, for a long, long time. He asked around 15 questions about the new homes ombudsman. I spent the weekend talking to my honourable friend Natalie Elphicke, who is interim chair of the New Homes Quality Board. She assured me that the governance is clear—although they seek contributions from developers to pay for this scheme, they have no say in how it is run. I was reassured by her clear explanation. While the detail of the scheme is going to follow this legislation, I can confirm that the Bill explicitly allows the new homes ombudsman scheme to expel members—that is one assurance that I can give. The scheme must also include provision about the enforcement of determinations made by the ombudsman that may include expulsion from the scheme, alongside setting out the circumstances in which an expelled member would be able to rejoin the scheme. I hope that gives some assurance.

The noble Lord, Lord Shipley, and the noble Baroness, Lady Hayman of Ullock, wanted to know about information for residents. Existing leaseholders and landlord-owners of flats will be able to request building safety information from the accountable person and to share this with prospective purchasers and tenants. Transparency is an essential way of getting this new system to work.

I have not had the benefit of the British Woodworking Federation information about fire doors, but I am pretty shocked by the numbers that have been quoted in this debate. I am aware, of course, that some of the newer fire doors perform far less well than some of the older ones. In many cases, the older the fire door, the better it performed. There is a real fundamental issue with the construction products testing regime carried out by the BRE or the BBA—we have to recognise that it is broken. That is why the previous Secretary of State asked for a construction products testing review. We are not that far away from having the report. We have a draft; I do not know how long it will be, but it is not miles away from being made public. We are looking at it very closely in draft form, but the usual phrase is “in due course”.

I was very struck by the speech of my noble friend Lady Sanderson, someone who has been a community adviser to the Grenfell bereaved and survivors and lived this since the night of Grenfell, along with Nick Hurd, the Prime Minister’s adviser on Grenfell; it is a fantastic way of staying connected with the community. It was a buck-passing culture and a pass-the-parcel approach that led to a lot of the tragedies we have seen. No one takes ownership or responsibility; frankly, that is why we need this Bill. My noble friend rightly questioned whether we should continue to build high-rises with a single staircase. That is a very important point that we need to look at and find out how to address.

The noble Lord, Lord Shipley, and I have one thing in common: we were at Procter & Gamble. I was there in the 1980s and 1990s, but he was probably there in the 1960s.

[Noble Lords]

Oh!

[Lord Greenhalgh (Con)]

I am only joking; that is not fair.

[Lord Shipley (LD)]

It was the 1970s.

[Lord Greenhalgh (Con)]

The 1970s, okay. One of the things it taught you was to really distil your arguments down and to learn things over time. The noble Lord specifically asked whether we could review this on an ongoing basis. I take that suggestion as a very sensible one. Any Government—this Government in particular—need to do things and then see whether they work, review and reflect, and try to take that on board. I do not know whether I have overstepped the mark as a Minister, but I think that is a very sensible suggestion.

We will ensure that we improve competence. One of the things we must recognise is that, to improve competence, which was raised by the noble Lord, Lord Shipley, you need to establish what competence is. That is one of the things we are doing very carefully; it is being done by officials and the shadow building safety regulator. You then have to find out how the accreditation will work, and I know that UKAS and others want to step forward and do that. That will all happen as a result of this Bill.

The noble Lord, Lord Aberdare, gave a really thoughtful speech on something that was new to me, so I appreciate his contribution on cash retention. The Government continue to work with industry on the future of retention payments in the construction industry. However, I am told that there is not a clear consensus as to what may replace the practice, so there is more work to be done. I thank the noble Lord for raising an important issue.

The noble and learned Lord, Lord Etherton, raised Part 5 and the duty on landlords, and asked whether we were going to cause litigation by setting unreasonable demands on landlords. He also came up with a solution. I really appreciate him raising that issue; leaseholders need as much protection as possible. We are requiring landlords to seek claims only where reasonable, but we note the noble and learned Lord’s suggestions for the guidance, and we will take them on board as we continue with the passage of the Bill.

The noble Baronesses, Lady Jolly and Lady Young of Old Scone, the noble Lord, Lord Jordan, and my noble friends Lady Eaton and Lord Naseby all mentioned the Safer Stairs campaign. As someone who has an elderly father—sadly, my mother did not survive the first wave of Covid—I worry. The thing I worry most about, as someone gets frailer, is staircases. I almost have to declare a personal interest. It is important that we look at staircase standards and recognise how best to achieve that end point, so that new builds have the right level of minimum standard. That does not mean it has to be enshrined as a maximum standard, but we have to work out what we would be proud of as a minimum standard in regulations. I thank noble Lords for raising this issue.

I think it is ironic that one of the sponsors of this campaign is Berkeley homes, because Richmond House, which someone mentioned, is of course a Berkeley build, as is Worcester Park, which really was a shoddy building, although luckily there was no loss of life there. Some developers who normally build good stuff have built things that they should be ashamed of. It is ironic that Berkeley is sponsoring what is a very noble campaign—none the less, I support it.

The noble Lord, Lord Foster, raised electrical safety. I am sure we will work through some of his suggestions—along with pretty much everything else he is interested in—in Committee. I have the briefing and I understand the issue; it is something that we have debated many times.

The noble Baroness, Lady Pinnock, raised building safety managers, and I have the note that was prepared by ARMA and IRPM on this. I hear the concerns about cost, and we take those concerns extremely seriously. There is not a one-size-fits-all approach, and if you are not prescribing how you do it, we do not see why you cannot have a property manager continue to discharge the functions of a building safety manager, going to the expertise only when it is needed. Think of the equivalent in healthcare: you typically go to a GP but see the specialist only when required. I have some sympathy with the issue, but I think that we are not being prescriptive about it, and so it should not be used as an excuse by managing agents to whack up the prices for leaseholders.

I welcome the clear cross-party support from so many noble Lords. There is broad support for the principles set out in a Statement by my right honourable friend the Secretary of State in the other place, on 10 January. We will continue to work with your Lordships —even the noble Lord, Lord Kennedy—and by working together we will ensure that homes are safe for future generations. It is a worthy ambition. I commend the Bill to the House.

Bill read a second time and committed to a Grand Committee.

Building Safety

Lord Greenhalgh Excerpts

Tuesday 11th January 2022 Lords Chamber

[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.

[Lord Young of Cookham (Con)]

My Lords, I commend the Minister for his tireless work over the past few months, which has led to this very welcome initiative. Will he clarify two points that arose from the exchange in another place yesterday? First, when asked about costs relating to fire doors and external wall insulation, the Secretary of State said that

“the freeholders, as the ultimate owners of these buildings, will be held responsible for all the work that is required, and we will make sure that leaseholders are not on the hook.”

He then confirmed this in a subsequent reply to Matthew Offord, saying:

“It is our intention that the ultimate owner of a building is responsible for all of the safety steps that are required, and we will use statutory means in order to ensure that that happens.”—[Official Report, Commons, 10/1/22; col. 301.]


I read that as saying that leaseholders are protected for all safety steps, not just dealing with cladding. Secondly, while the Secretary of State repeatedly promised statutory protection for leaseholders, it is not clear what they should do about bills sitting on their mantelpiece for work completed or under way but not paid for. Do those leaseholders have statutory protection?

[Lord Greenhalgh (Con)]

My noble friend always asks very pertinent questions and he knows this issue inside out. Rather than obfuscating this, I will give the straight answer. Of course, in protecting the leaseholders, someone else has to pay—that is the thrust of the question from my noble friend. When it comes to cladding, there is now funding in place and a plan to deliver that without touching anyone beyond the polluter, if we can get back the money put up by the taxpayer. Some leaseholders have obviously borne the brunt of the costs as well and that is regrettable. We cannot apply these protections retrospectively but, by having the reset statement issued by my right honourable friend, we can ensure that we protect many thousands—potentially hundreds of thousands—more leaseholders from being affected in the future by having those statutory protections in place.

[Lord Kerslake (CB)]

My Lords, I declare my interest as chair of Peabody housing association. I welcome the Statement; it is a really important step forward in terms of dealing with this long-running and difficult issue. I particularly welcome the proportionate approach to building safety, the polluter pays principle and the move to end the uncertain and unfair position for leaseholders. These are all welcome, but we need to move on from the principles to delivery. This is the critical issue. Of course, the work to address the issues of building safety is already under way, particularly by housing associations. The question now is: how do we bring certainty to leaseholders? What will the approach to collaboration be here? We will make more rapid and better progress if we can have a very close, collaborative relationship with the department and the new dedicated team. I would be interested to hear how the Minister sees the process of resolving the outstanding issues that are still in front of us all working.

[Lord Greenhalgh (Con)]

My eyesight is not the best, but I now know that those were the lovely dulcet tones of the noble Lord, Lord Kerslake. I remember that, when I was leader of Hammersmith and Fulham Council, the noble Lord visited me to discuss housing policy. He has had a long-standing interest in this area and has been a distinguished chief executive and an extremely senior civil servant in Whitehall, so he has worked at all levels of government and I know he comes from a good place. Peabody is a provider of extremely good social housing and there are great examples of that where I live. I commend the work it does. It provides housing for some of the most vulnerable people, but also people of all income streams who cannot afford market housing.

We have to work with Kate Henderson at the National Housing Federation and with the G15 associations, all of which have development arms and have built housing. We have to accept that some of the G15 associations may have built houses with unsafe material. I take the view that, if you are social developer, particularly as you have had a subsidy to do the development, and have made the same mistakes as a private developer, then the consequences should be the same. We should do that in a way that is fair and proportionate to ensure that the polluter, whoever it is, contributes to fixing the mess that they have played some part in creating. It should be collaborative; I have spent a lot of time reaching out to the National Housing Federation and different chief executives, and will continue to do so.

[Baroness Neville-Rolfe (Con)]

My Lords, I have an interest as chair of the Built Environment Committee. I very much welcome the package of measures, although I regret the time that it has taken to get to this stage. My experience on the ground is that we need flexibility at the edges to apply common sense, so I welcome the notion of proportionality. Risk assessments by external advisers can jeopardise good businesses, as we know from the overzealous enforcement of a number of EU regulations and the disastrous EWS1s, which, if I understand it correctly, my noble friend is rightly withdrawing. Will the Government ensure that the new British Standards Institution guidance prevents the needless recrafting and remediation of buildings—especially old buildings with an old balcony or a wooden beam, which pose a low risk of fire?

[Lord Greenhalgh (Con)]

I first praise the efforts of my noble friend in raising issues throughout my time as Building Safety Minister, and particularly for her passion about how we improve the built environment. The honest answer is that the introduction of the British Standards Institution’s Publicly Available Specification 9980 will go some way, and it will take time to ensure that we have a more proportionate approach. As I have already said in responding to questions, there is no silver bullet, but it is good to have the right direction of travel. That requires the lenders, insurers and valuers who follow valuation guidance from RICS to all take a sensible approach, and that takes time. The more we focus on proportionality and risk, as opposed to having a binary view that everything needs to be fixed in the most expensive manner possible, the closer we get to a far better place.

[Lord Stunell (LD)]

I thank the Minister for his Statement; it is very welcome. Following on from that last point, there is a clear problem created by the insurance industry, which has made matters significantly worse. Will he have meetings with the insurance industry to guide them through the new British standard that will be published so that we do not go through another two years of overengineered responses based on an extravagant risk-based system?

[Lord Greenhalgh (Con)]

I thank the noble Lord, who was a distinguished Minister in the very same department in which I find myself. He has been at the Dispatch Box in the other place and has great experience. He is absolutely right that we need to see movement from the insurance industry. I have had many meetings with the ABI. In fact, most recently, I have had a series of individual meetings with primary insurers—you get more out of a meeting when you have one of them in front of you; they speak more candidly to a Minister than if you have a group of them together. The new chair of the ABI is my noble friend Lady Morgan of Cotes, and I have engaged with her about how we can get a more sensible approach. Some of these hikes in insurance are not just 100%; they are 1,000%. The Father of the House in the other place, Sir Peter Bottomley—a distinguished parliamentarian—has raised the prospect that, if insurers are not going to be sensible about this, let us get the Competition and Markets Authority looking into some of these practices. There is carrot and stick to this, but of course I will continue, as I have been asked—in the Statement yesterday I was namechecked once—to follow up and make sure that we get a sensible and proportionate response from insurers; that is my job.

[The Lord Bishop of London]

My Lords, like many others, I welcome this Statement, because clearly, it is a move in the right direction. I too pay tribute to those who have campaigned with tenacity to try to resolve what is an awful situation for people’s lives. I may just be slow, but I would really appreciate the Minister clarifying whether the Government will bring forward legislation in the Building Safety Bill to ensure that the polluter pays, and not the taxpayer or the leaseholder.

[Lord Greenhalgh (Con)]

The right reverend Prelate is not being slow; if you are the Bishop of London, you have to be pretty quick. As a backstop, we have committed to look at solutions that involve tax, which is a Treasury matter—it has been very clear about that—or legal means to do these things. I am well aware of the work that has been done by Steve Day, supported by many experts, in bringing forward the polluter pays proposal. My personal view, as a humble Minister, is that we need a building-by-building assessment of liability if we are to ensure that the polluter pays. But that is down the road, and the sequence is: voluntary contributions first, and some of these other things are being positioned as backstops.

[Lord Blencathra (Con)]

My Lords, I declare a potential interest as someone who has some wooden decking on a balcony. I congratulate my noble friend on the wonderful Statement he has made, his own personal views today, and the work he has done over the last 12 months. More particularly, will he convey to my right honourable friend the Secretary of State the thanks of millions of leaseholders for the astonishing announcement he made yesterday? I always believed that, when he was appointed, there was no one better than Michael Gove to cut through and deliver success.

I do not want the taxpayer to spend a penny on this, but I want the developers and the freeholders to do so. With regard to the backstop, I suggest that we need to hold a sword of Damocles over the developers’ heads. The voluntary approach, I am afraid, will not work. Can my noble friend therefore bring forward urgent legislation—which we pass but hold in abeyance as that sword of Damocles—to let them see that Parliament means business and that we want legislation on the statute book that we can implement at a moment’s notice if they fail to deliver, rather than spend a year putting it through afterwards? I suggest that as a good tactical approach.

[Lord Greenhalgh (Con)]

My noble friend is a very wise man. With regard to my right honourable friend the Secretary of State—having worked with the Prime Minister for four years when he was mayor, I know that he likes the odd Latin phrase—quod erat demonstrandum: he has done an amazing job coming in to reset this. Of course, there is more work to be done, but I pay tribute to him myself, and I thank my noble friend Lord Blencathra for those kind remarks. I agree with him; they are very wise words.

When we look for the polluter to pay, as in all negotiations, you need both the carrot and the stick. I will use the metaphor of the very distinguished late Archbishop Desmond Tutu: you need your moment of truth and reconciliation, where people come forward and make a voluntary contribution. That could work to a degree, and time will tell how well it works. But equally, as a backstop, you need to prepare for the moment where you go to the Nuremberg trials and look, building by building, at who caused the mess, and make sure that they pay for it. We have started that process with Operation Apex, which looked at who caused the problems in particular buildings. We are getting some specific figures. My right honourable friend got a series of forensic accountants to look at some of this stuff, and more work will be done in that regard. That is very helpful advice.

[Viscount Stansgate (Lab)]

I thank the Minister for his comments. Yesterday’s Statement by the Secretary of State was a welcome and much overdue step forward. Can the Minister tell the House a little more about a point raised by the noble Baroness, Lady Pinnock, about the way in which the Government intend to pursue freeholders and landlords who are not based in the UK but overseas?

[Lord Greenhalgh (Con)]

Not today. But we are well aware of the practice, which goes beyond just whether they are domiciled, of using special purpose vehicles. We are looking at how we deal that issue, where the developer is known, creates an entity over there, away from the rest of the business, does the development in isolation using the funding, and then wraps it up at the end of the development. We are looking at all these issues, through law and tax. Whatever levers the Secretary of State has, he is looking to deploy them to make sure that the polluter, in the broadest sense, will pay.

[The Earl of Lytton (CB)]

My Lords, I add my congratulations to the Minister on his untiring work here. The Statement made in another place yesterday is certainly extremely welcome. As a practising chartered surveyor and valuer, I am particularly determined to ensure that the regime where the purveyors of shoddy buildings have not been properly held to account must stop, but I understand the immense complexity, raised by other noble Lords, to do with insurance and other matters downstream from the immediate problem.

My first and last concern is the point made, in particular, by the noble Baroness, Lady Pinnock: namely, that innocent people have devoted their life savings and invested their homemaking, their very being and their work/life balances in properties which have been found to be not constructed to safe standards. This is an appalling social and mercantile evil—let us make no bones about it.

I request that the Minister confirm that this cannot and must not be turned into a tax solution. The reasons for that will be self-evident. It would be both unfair and an unbelievably blunt instrument. It will almost certainly require hypothecation, and would merely serve to collectivise what should be an individually assessed liability; the Minister mentioned that it will be property by property.

Like the noble Lord, Lord Blencathra, I fear that there will not be a great queue at the Minister’s door with open cheque books, and I suspect it will be necessary to move to plan B, because it is not just the cladding but an awful lot of other defects—

[The Earl of Lytton (CB)]

Does the Minister agree that the only remaining viable route that is coherent across the piece is, in effect, the polluter pays amendment, the draft of which had the scrutiny of top legal minds, such as Daniel Greenberg QC? Furthermore, does he agree that this is the only means whereby the perverse habits of what is known in the trade as value engineering will become something of the past, and in future that the inculcation of consistently good construction methods will be the lasting legacy of Grenfell?

[Lord Greenhalgh (Con)]

The noble Earl is right that this is a crisis of epic proportions that has affected hundreds of thousands of leaseholders and has been caused over many decades. I have probably visibly aged while holding this brief, because some of the stories from leaseholders are simply harrowing. That is one reason why I am delighted that the House collectively feels that we are making a big step in the right direction.

I also agree that we should challenge some of the practices that have led to this, such as value engineering, which is essentially a way of cutting corners and trying to inflate profits, often by compromising the integrity of the building. These practices simply must stop. Making the polluter pay and doing so at the individual building level is the way to ensure that the quality of the buildings in future will be far better than what we have seen in the past 30 years in this country.

[Lord Shipley (LD)]

My Lords, the Minister said that this may take time, but what assessment has been undertaken to unlock mortgages, which at the moment are a huge barrier to the sale of properties?

--- Later in debate ---

[Lord Greenhalgh (Con)]

I am very pleased that the issue of lenders has been raised: it is one area where we need to see a greater sense of proportion. When I have spoken directly to primary insurers, they have given the undertaking that their practices are that, at the moment at which it is clear that cladding remediation costs have been found and that remediation will be undertaken, they can begin to reduce building insurance premiums. That is not the case with the banks. I have had many leaseholders come to me to say that they cannot move on with their lives because the banks are not changing their practices and are not offering mortgages, even when the remediation is locked in or even begun—it often takes about a year to do some of these projects. We will engage with lenders to say, “Can you take a more proportionate approach to risk, to ensure that people can move on with their lives?” I thank the noble Lord for raising that point.

[The Lord Bishop of St Albans]

My Lords, the Secretary of State announced an additional £27 million for fire alarms. Are similar grants being considered for installing sprinklers in buildings over 11 metres?

[Lord Greenhalgh (Con)]

My Lords, I am delighted that we have heard from not just one but two Bishops, because the right reverend Prelate has been a tireless campaigner on behalf of people in St Albans and beyond. The additional £27 million comes on top of the first tranche of money, which was £30 million, so we are talking about nearly £60 million towards providing alarm systems in buildings, rather than the ridiculous practice of having “waking watch” costs month by month, which run to hundreds of thousands of pounds for leaseholders to bear. We must look at how we encourage mitigation as the solution. I am not sure—I am not a fire engineer—but sprinklers are a potential way to achieve that, particularly in low-rise buildings. We have not necessarily looked at taxpayer funding, but we will take that away and see how we can best encourage more mitigation where that is a safe and sensible end-point and ensure that we can avoid costly remediation being the preferred option, if we can make a building safe enough.

Building Safety Defects

Lord Greenhalgh Excerpts

Wednesday 5th January 2022 Lords Chamber

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

My Lords, I beg leave to ask the Question standing in my name on the Order Paper and in doing so refer the House to my interests as set out in the register.

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

A new levy and tax will ensure that industry contributes; building owners and industry should make buildings safe without passing on costs to leaseholders. We are examining the support offer for residents in 11 to 18-metre buildings where the fire risk is lower. The Government have stated that leaseholders should not be paying for excessive building safety costs and the Secretary of State is looking into the issue closely.

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

My Lords, we come to this issue again. Will the noble Lord set out to the House what actual measures additional to those previously announced he intends to take to protect the innocent victims of this scandal?

[Lord Greenhalgh (Con)]

My Lords, it is for my right honourable friend to set out this approach. It is entirely proper that he should do that, and he has undertaken to do so. He has set out the principles around greater proportionality, protecting leaseholders and getting the polluter to pay, as I have said previously at the Dispatch Box. We must wait for that detailed announcement, but I am taking a personal interest. I have called in registered social landlords who seem to be passing on costs to shared owners and leaseholders, and held them to account. The chief executive of Optivo has indicated to me that it is now not proceeding with costly remediation for Oyster Court or Mill Court. I am also calling in another RSL—Shepherds Bush Housing Group—which seems to be considering passing on costs on a medium rise to shared owners who do not have the bandwidth to be able to pay it. Actually, Shepherds Bush Housing Group was the original developer and was subsidised to do the development; I think it wrong that these registered social landlords are in some cases seeking to pass the costs on to people whose shoulders are not broad enough to bear them.

[The Lord Bishop of St Albans]

My Lords, one of the very serious results of this problem is that many people are desperate to move, but simply cannot sell their properties any longer. This is causing huge difficulties for people trying to get jobs in other parts of the country. What assessment have the Government made of the Welsh Government’s proposal to start buying some of the properties that cannot be sold for the moment and turn them into affordable housing and social housing and so on, as a way of trying to break the deadlock?

[Lord Greenhalgh (Con)]

My Lords, I have always loved a magic bullet, but the reality is that the scale of the cladding and building sector crisis in Wales is a fraction of that in England. That is just a fact: I could give the right reverend Prelate the statistics if he is interested, but we are not going to solve it that way. We need to have a greater sense of proportion. We have made this a bigger scandal than it needs to be because too many buildings have been declared unsafe that are perfectly safe. Frankly, there is an industry profiteering on the back of this, and we need to do something about that. There needs to be a call for innovation to encourage mitigation, more often than not, rather than full-scale costly remediation; we need to make sure that there is an adequate, sensible, proportionate approach to this crisis.

[Baroness Garden of Frognal (LD)]

My Lords, we have been very silent on these Benches so far, so I hope that I might intervene at this stage on behalf of my noble friend Lady Pinnock, who cannot be here. The Government intended that Grenfell-style cladding on social housing would be removed by the end of 2019—yet another broken promise. It is reported that the earliest that this will be achieved is 2024. Can the Minister confirm that report? What action are the Government taking to speed up the process and support those affected?

[Lord Greenhalgh (Con)]

I know that there is a “broken promises” line, but the reality is that 95% of ACM buildings have been remediated. Actually, we have accelerated at pace while I have been Building Safety Minister, despite the global pandemic. The reality is that for many of these buildings—about 20, and a lot of them happen to be in the London Borough of Southwark—it was literally discovered only months ago that they had ACM cladding. I am not blaming the noble Lord, Lord Kennedy, but we are doing our best. This is tough, and we should not be trying to score points. We are absolutely committed to remediate these buildings, especially those with aluminium composite material, the most deadly form of cladding. Very shortly, we will have that removed from all buildings in this country.

[Lord Young of Cookham (Con)]

My Lords, since we last discussed this matter, on 1 January, thousands of leaseholders will have received service charges from the freeholder demanding very substantial remediation sums—sums which are not affordable for many of these leaseholders—which will lead to either repossession or bankruptcy. While the Government have provided substantial support, which I welcome, does the Minister recognise that this is insufficient to prevent hardship? Will he have urgent discussions with a view to raising more resources, possibly through a levy on those developers and other builders responsible for the defects in the first place?

--- Later in debate ---

[Lord Greenhalgh (Con)]

My Lords, my noble friend has decades of experience in government, and he knows that levies and taxes are a matter for the Treasury. However, not only my department, but others as well, have gone through countless numbers of fire risk assessments and external wall surveys. The results are littered with examples of people who did not build to building regulations, who cut corners and who, as the noble Earl, Lord Lytton, will know if he is here, used value engineering to make a bit more profit. The reality is that we cannot keep looking to the Treasury to keep bailing everybody out—we have to get the polluter to pay.

[Baroness Chakrabarti (Lab)]

My Lords, I appreciate the Minister’s frustration that he is not in a position to launch a magic bullet or even to make an announcement today, so might he instead share some of his own developing thinking? Following on from the very constructive suggestion from his noble friend, the noble Lord, Lord Young of Cookham, why not produce a legislative scheme to immunise the victims and take from those who have been unjustly enriched?

[Lord Greenhalgh (Con)]

I take that as a helpful interjection. We need to think about how we protect leaseholders, and sometimes statutory protection is a good thing. We know that the Building Safety Bill, that will have finished Committee in the House, provides a vehicle to do precisely that, but I cannot say any more on the subject.

[Baroness Finlay of Llandaff (CB)]

What is the Government’s response to the statement on 10 December from the chair of the board of the Royal Institution of Chartered Surveyors, in which he calls for the EWS1 checks not to be scrapped for buildings under 18 metres and estimates that there are 77,500 low-rise buildings that urgently need fire remediation work, at an estimated cost of £15 billion?

[Lord Greenhalgh (Con)]

We have quite a lot of the data on the number of medium-rise buildings, and there are far more medium-rise buildings than there are high-rise ones. The figure of 77,000 is broadly correct, but the number within that requiring remediation is very small indeed. I cannot give the noble Baroness those statistics, but I have seen our survey work. The number requiring mitigation is also very small. Frankly, the Royal Institution of Chartered Surveyors seems to be more interested in how it can raise money for surveyors than being proportionate in terms of the approach towards this crisis.

[Lord Naseby (Con)]

Nevertheless, does my noble friend recognise that there is great hardship for significant numbers of people who are stuck in the middle? I speak as a former chairman of the housing committee in the London Borough of Islington. I am sure that local authority housing departments would, if it were put to them properly, be willing to look at taking over a limited number of flats to ensure that those who have to move can move.

[Lord Greenhalgh (Con)]

As someone who has served in London local government in, I think, Lambeth—

[Lord Naseby (Con)]

No—Islington.

--- Later in debate ---

[Lord Greenhalgh (Con)]

Sorry; that is north London. Someone who has served in local government will have experience, obviously, of public housing. I was leader of Hammersmith and Fulham for six years and a councillor there for 16 years. Of course, when it comes to public housing or social housing, there are things that you can do, but this is something that goes right across the built environment—both private housing and public housing. We will look at measures, obviously driven through local government, but that will not solve this crisis in the round. Noble Lords have to await the announcement from my right honourable friend in the other place.

[Lord Addington (LD)]

My Lords, do the Government not agree that the arbitrary line of 18 metres has led to much of this confusion and the fact that people feel they have been trapped? Can the Government please give us an assurance that they will not make that sort of arbitrary line in future?

[Lord Greenhalgh (Con)]

It is not arbitrary; it is well established that 18 metres is the cut-off point for a high-rise building. It helps us to categorise buildings. We do it in storeys as well. We have had The Cube, which I think was 17.5 metres in height rather than 18 metres, so it is anything above six storeys. But it helps us to understand the scale of the problem. The reality is that the scale of the problem is far greater in high-rise buildings; you cannot get ladders up tall buildings. As many will know, when it comes to firefighting— I happen to be the Fire Minister as well—it is much harder to help evacuate high-rise buildings than medium or low-rise ones. Therefore, I think it is right to have this line. But we will have something called a PAS 9980 that will help to risk assess the problem, irrespective of height, and that will be introduced shortly.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, the Minister has effectively conceded that this has dragged on for far too long. He said in reply to the question from my noble friend Lord Kennedy that his right honourable friend—not him, as the responsible Minister—is going to make a detailed announcement soon. Could he tell the House when that announcement will be made? People want to know.

[Lord Greenhalgh (Con)]

When it has happened, people will know. But it is important to understand that this department, under the leadership of the Secretary of State, has worked incredibly hard to come up with a comprehensive response to this crisis. As I have said already in this House, it has taken decades to come to this point, and we have needed some months to come forward. That announcement will be happening very soon; I will not use the “in due course” line.

Building Regulations: Sanitary Provision

Lord Greenhalgh Excerpts

Wednesday 5th January 2022 Lords Chamber

[Baroness Greengross]

To ask Her Majesty’s Government, further to their review of the Building Regulations Part M on access to and use of buildings, what assessment they have made of the commissioned research into design issues regarding sanitary provision, including for those with hidden disabilities; and when they expect to update statutory guidance regarding the provision of sanitary bins in toilets for men.

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

As part of our review of Part M of the building regulations, we have commissioned research on the experience of disabled people, which will inform future policy and potential upgrades to the statutory guidance for fixed items and spaces in buildings, including sanitary provision for disabled people.

[Baroness Greengross (CB)]

My Lords, I thank the Minister for his Answer, but on Report on the Non-Domestic Rating (Public Lavatories) Act in March 2021 the Minister informed the House that there were 6,087 public toilets in the UK in 2000 and that number had reduced to 4,383 by 2016. What further action will the Government be taking to ensure provision of suitable public toilets, which includes sanitary bins and disability access? How will they ensure that there is no further decline in the number of public toilets in the UK?

[Lord Greenhalgh (Con)]

My Lords, the noble Baroness is absolutely right that there has been a long-standing decline in public toilet provision. In fact, I got the department to produce up-to-date statistics that chart that decline, which went from 6,916 to 6,391 between 1994 and 2000, and fell further, to 4,486, in 2018, according to the most recent statistics. I will share the statistics in writing with the noble Baroness. Clearly, the Act she refers to is one way of improving the situation, through providing rates relief, and she will be well aware of the changing places programme, through which my department has provided £30 million for local authorities to encourage the building of further provision.

[Baroness Hayman of Ullock (Lab)]

Further to the question of the noble Baroness, Lady Greengross, during debates on the Non-Domestic Rating (Public Lavatories) Bill, to which she referred, Ministers agreed that steps should be taken to encourage making new public toilets accessible for people with disabilities. Have the Government estimated how many new public toilets have opened since the passing of the Act, and what proportion of these toilets are considered to be accessible?

[Lord Greenhalgh (Con)]

My Lords, to respond to that very sensible question, it is not in the gift of central government to control the number of toilets, but what we can do is provide funds to encourage further provision, as we have done with the changing places fund, and provide tax relief, as we did with the Act that was mentioned. Indeed, a lot of other legislation—I could go through a list—places a duty on workplaces to provide accessible toilets. I am happy to write to the noble Baroness if we have those statistics to hand, because it would be useful to see whether this has had an impact.

[Lord Sterling of Plaistow (Con)]

I have brought up this subject in the past. By the summer we are going to have very large numbers of people coming to this country from abroad, including those with young children, and elderly people coming in their thousands to celebrate the Queen’s upcoming Jubilee, among other things. In practice, and as we have seen in the past, there is a huge shortage of toilets in this country. People will be tired, it will be hot and they will not be allowed to go into restaurants—no restaurant is going to let 50 people through. The provision of toilets is absolutely lacking. The number of people who will be travelling here, we hope, during the next year or so will be huge, and we need vastly more decent toilet facilities in this country.

[Lord Greenhalgh (Con)]

My Lords, there is no doubt that the pandemic has reduced the number of visitors in the last couple of years, as we know from the contraction of our airline industry, but we are looking forward to a deluge of people coming to his great country. Of course, we want them to have a wonderful experience and access to toilets—both accessible and ordinary toilets—and I am sure we will work hard to meet that.

[Lord Cashman (Non-Afl)]

My Lords, joking aside, at the heart of the Question of the noble Baroness, Lady Greengross, is the fact that people with disabilities, often unseen disabilities, are overlooked. We recognise that work and research has been undertaken, so I ask the Minister to reflect on bringing together disability NGOs and others with expertise in this field so that we can reassure people with disabilities that their needs will be provided for.

[Lord Greenhalgh (Con)]

My Lords, as part of my ministerial duties, I am the Building Regulations Minister, and we are reviewing, in response to the Hackitt review, all our building regulations, including Part M. We commissioned an interesting bit of research that has not yet been fully published, which provides further insight. This is something that needs to happen cross-government, and the noble Lord makes a very useful suggestion.

[Lord Dubs (Lab)]

My Lords, it is many years, alas, since I have had a holiday in France, but I seem to remember that if one is, as it were, caught short there —it may not be the position now but it certainly was then—one can go to any café, pay a small sum of money and it is fully acceptable for one to use the loo. Could we not introduce a similar practice here?

[Lord Greenhalgh (Con)]

I personally try to avoid paying, but I think it is a very good policy. Most people want custom, as long as you do not abuse it; I know that McDonald’s in Cannes makes you buy a burger before you can go to the loo, but most places want to be open and helpful. As long as you do not abuse those facilities, I think most will be prepared to do that. It is a great suggestion which should be looked at, but obviously it is for local business owners to decide.

[Baroness Ritchie of Downpatrick (Lab)]

My Lords, considering the gravity of this issue and the need to address the sanitary requirements of those who are disabled, will the Minister consider having discussions with Ministers in the devolved Administrations—and the appropriate local government associations where local government has a responsibility for toilet provision —to ensure that best practice can be implemented so that the best-quality provision can be provided for all, particularly those who are disabled?

[Lord Greenhalgh (Con)]

My Lords, as we review Part M and think about increasing accessible toilet provision, it is important that we bring along all the devolved Administrations. I take the point on board and we will look for the appropriate opportunity to do so.

[Lord Anderson of Swansea (Lab)]

My Lords, my noble friend has mentioned cafés and restaurants. Public houses are also a partial solution. Should there not be some more effort to encourage public houses, by financing them, to make themselves more available for people?

[Lord Greenhalgh (Con)]

We move from cafés to pubs. Public houses are the bedrock of local communities; they not only provide toilets but most outlets often provide safe havens for people who need safety. This is an opportunity to see them as places that provide not only a commercial service but a community one as well.

[Baroness Blackwood of North Oxford (Con)]

My Lords, if he is not already planning to, can I suggest that the Minister pick up on the excellent suggestion of the noble Lord to work with not only NGOs but perhaps search engines, to increase the visibility of facilities for those who need them most?

--- Later in debate ---

[Lord Greenhalgh (Con)]

I have been listening very actively and am happy to take that point on board. I thank my noble friend for it.

Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill

Lord Greenhalgh Excerpts

3rd reading
Wednesday 8th December 2021 Lords Chamber

Moved by

[Lord Greenhalgh]

That the Bill do now pass.

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

My Lords, it is a pleasure to see this Bill through to its conclusion.

The pandemic has had far-reaching and unexpected impacts and the business rates part of this Bill seeks to address its potentially distortive effects on the rating system and local government income. By clarifying that coronavirus and the Government’s response to it will not be considered a “material change of circumstances” for the purpose of property valuation, the Bill ensures that the rating system will continue to operate as it was intended to. It also removes a significant source of uncertainty for local councils.

I thank noble Lords for the engagement we have had during the passage of the Bill. We have sought to strike the right balance between getting this important measure passed quickly and leaving space for legitimate discussion on the wider issues at play, for instance the future of business rates. Considerable expertise has been in evidence, which will be of great value when we come to debate the more substantial changes that the Government have announced. In particular, I thank the noble Baronesses, Lady Blake and Lady Pinnock, for their careful scrutiny and, ultimately, the very welcome support they have offered.

The new power to investigate the conduct of former directors of dissolved companies and seek to disqualify them where appropriate will have far-reaching benefits to the economy, in terms of improved confidence in lending, and to business and the wider public, in protecting them from the actions of rogue directors.

Of course, there is the very pressing matter of ensuring that the Government have the tools they need to tackle those reprehensible individuals who have taken advantage of a public health crisis to line their own pockets, and this new measure will play its part in bringing them to task. I am sure noble Lords will agree with me that it is only right that the retrospective provision in this measure will mean that the investigation of those individuals may start immediately upon Royal Assent.

As well as the noble Baronesses, I extend my thanks to the noble Lord, Lord Fox, and my noble friend Lord Leigh, who have provided thoughtful and constructive contributions to the debate on the director disqualification part of this Bill. Finally, I thank the Bill teams in the Department for Levelling Up, Housing and Communities, and the Insolvency Service for bringing me up to speed on some of the more detailed provisions and helping me get a proper understanding of the Bill. I beg to move that this Bill do now pass.

[Baroness Blake of Leeds (Lab)]

My Lords, it is fair to say that there has been some significant consternation from noble Lords at the way this Bill was initially put together. However, in the main, we support its passage to get help to those in serious need.

We expressed our ongoing concerns at different stages of this Bill. It is obvious that the whole area of business rates needs urgent review and root-and-branch reform. Likewise, enormous concerns remain as to whether the Insolvency Service is sufficiently resourced to meet its obligations under the Bill with regard to the significant increase in business, as outlined.

I put on record my appreciation of the informed contributions from the noble Lords, Lord Fox and Lord Leigh, the noble Earl, Lord Lytton, and the noble Baroness, Lady Pinnock. I thank my noble friends Lord Hunt and Lord Sikka for their invaluable insights and knowledge on these matters.

From these Benches, we express our gratitude to the Bill team, the clerks and the staff of the House, and the Insolvency Service for the in-depth briefings it provided. I also thank both Ministers involved in this Bill: first, the noble Lord, Lord Greenhalgh—I particularly acknowledge the further detailed investigation he went into when the cause of our concerns over the business rates issue came to light—and the noble Lord, Lord Callanan, for his continued courtesy in offering regular briefings from his team and the insolvency support service on the various matters under consideration.

Finally, I thank both Ben Wood and Dan Harris, our excellent advisers, for their unfailingly high standard of support throughout the proceedings.

Clearly, both matters leave further work to be undertaken in both Houses, as has been outlined. I will watch the implementation of provisions with great interest.