High-rise Buildings: Evacuation of Disabled Residents

Debate between Lord Greenhalgh and Lord Stunell

Wednesday 25th May 2022 Lords Chamber

[Lord Greenhalgh (Con)]

My noble friend is right that the concern is ultimately for those buildings where simultaneous evacuation is in place. We are making progress in ACM buildings and high-rises with other forms of flammable cladding. Most importantly, we now have a situation where we are getting the polluters to pay and the funding in place to get remediation done as quickly as is practical.

[Lord Stunell (LD)]

My Lords, the Prime Minister gave an undertaking that every recommendation of the Grenfell inquiry would be implemented in full. PEEPs were a clear recommendation of that inquiry. That commitment was underlined by the Secretary of State for what was then the Ministry of Housing, Communities and Local Government. The Minister himself made similar comments during the passage of the Building Safety Act. Can he not understand the anger, fear and frustration of disabled people living in high-rise blocks about what, from an earlier question, appears to be what we might understand to be a delay but might be a U-turn on the Government’s commitment to implement PEEPs?

[Lord Greenhalgh (Con)]

I genuinely understand the concerns and frustrations, but we have come forward with what we believe to be a sensible proposal. This is a genuine consultation with a call for evidence for examples of practical, proportionate and safe PEEPs and other fire safety initiatives. It also includes a working group with responsible persons, residents and disability groups to examine the role that neighbours and friends can play in supporting the evacuation of vulnerable residents. We are listening and it is important that we get a policy position that works.

Building Safety Bill

Debate between Lord Greenhalgh and Lord Stunell

Consideration of Commons amendments
Tuesday 26th April 2022 Lords Chamber

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

My Lords, with the leave of the House, I will also speak to Motions B to H.

Here we are again: debating this landmark Bill which will bring forward the biggest changes to building safety legislation in our history. I will turn quickly to the outstanding non-government amendments. Noble Lords, led by the dynamic duo, my noble friends Lord Young of Cookham and Lord Blencathra, extended the definition of “relevant building” to buildings of all heights containing two or more dwellings. As the Government have said on many occasions, we must restore proportionality to the system. That is why we cannot agree to extend leaseholder protections to include buildings under 11 metres. As I have said repeatedly, there is no systemic risk of fire for buildings below 11 metres. Such buildings are extremely unlikely to need costly remediation to make them safe. Despite research and lobbying from a number of areas, the department has been made aware of only a handful of low-rise buildings where freeholders have been commissioning such work, and even fewer where that work was actually based on a proper assessment in line with the PAS 9980 principles.

My right honourable friend the Minister for Housing was clear that leaseholders in buildings below 11 metres should write to my department should they find that their freeholder or landlord is commissioning costly remediation works. I have already intervened directly with building owners and landlords to challenge freeholders, such as in Mill Court, and will continue to do so. Your Lordships can be assured that I will bring my full weight to bear where landlords are looking to carry out works that are not needed or justified. However, given the very small number of buildings involved, it is not appropriate to take forward a blanket legislative intervention and bring hundreds of thousands more buildings into scope. I must point out to noble Lords that doing this could backfire, sending mixed signals and encouraging the market to take an overly risk-averse approach to this class of buildings.

Turning to leaseholder-owned—or collectively enfranchised and commonhold—buildings, the Government’s original proposals included an exemption from the leaseholder protection provisions for leaseholder-owned buildings: those in which the leaseholders have collectively enfranchised, and those which are on commonhold land. Noble Lords agreed an amendment in the names of my noble friends Lord Young and Lord Blencathra—the dynamic duo again—and the noble Earl, Lord Lytton, to remove that exemption.

Those noble Lords will know that I have a great deal of sympathy with their position. I know that the amendment is well-intentioned and driven by a desire to protect these leaseholders, and the Government share those aims. However, as I said on Report, these amendments will not have the intended effect of protecting leaseholders living in those buildings. Those leaseholders who have enfranchised would still have to pay, but in their capacity as owners of the freehold rather than as leaseholders. Worse, where some leaseholders have enfranchised and others have not, the enfranchised leaseholders would have to pay for remediation of the whole building in their capacity as owners of the freehold, including the share of remediation costs that would otherwise have been recoverable from those leaseholders who have not enfranchised, once they have paid up to the cap. This would create the perverse situation where the leaseholder protections result in an increase in liability for those leaseholders who have chosen to collectively enfranchise. That is why the other place agreed to reinstate the exemption for leaseholder-owned buildings. My right honourable friend the Minister for Housing announced last Wednesday that the Government would consult on how best leaseholders in collectively enfranchised and commonhold buildings can be protected from the costs associated with historical building safety defects to the extent as all leaseholders.

Turning finally to the qualifying leaseholder contribution caps, the Government proposed that lease- holders’ contributions should be capped at £10,000, or £15,000 in Greater London. We believe that this approach protects leaseholders, while ensuring that work to remediate buildings can get under way. Noble Lords agreed with the amendment of the noble Baroness, Lady Hayman, to reduce that cap on contributions to zero.

I will not repeat all of the Government’s arguments here, but I want to remind Peers of just how far the Government have come. Leaseholders are fully protected from costs associated with the removal of unsafe cladding. On non-cladding defects, where a developer has signed up to our developer pledge—that is more than 35 developers—they will fix non-cladding defects, as well as cladding defects, in their own buildings, and these leaseholders will pay nothing. If a building owner is, or is linked to, the developer, that building owner will be liable for the costs associated with non-cladding defects, and their leaseholders will pay nothing. If the building owner or landlord is not linked to the developer but has the wealth to meet the non-cladding costs in full, their leaseholders will pay nothing. If a leasehold property is valued at less than £175,000, or £325,000 in London, the leaseholder will pay nothing, and, if the leaseholder has already contributed up to the cap, they will pay nothing. Based on this approach, the Government’s assessment is that the vast majority of leaseholders will pay less than the caps, and many will pay nothing at all.

In relation to safety checks, noble Lords agreed to an amendment that requires the new building safety regulator to look at a number of important safety matters. We have consulted with the HSE and are happy to confirm that we fully accept the principle of this amendment, and the building safety regulator will be happy to take forward these safety reviews. I thank the noble Lord, Lord Stunell, for his passionate advocacy in this area. The Government therefore proposed an alternate version of this proposal, which was agreed in the other place. I hope noble Lords will agree that this provides clearer drafting and a more practical and pragmatic approach. Importantly, we have increased the time available to the regulator from two years to three years. This reflects the time needed for the regulator to develop the capacity to carry out these reviews alongside all its other functions. We have also made a number of technical improvements to the Bill, and I am happy to answer questions while summing up.

[Lord Stunell (LD)]

My Lords, as the person who has just had his name mentioned, I will start my very brief contribution by saying that there will be noble Lords who have a lot of criticism of what has come back from the Commons, but I am not one of them in respect of Amendment 6A. I am very pleased to see that the Government have responded well to the views that were very strongly expressed by Members of your Lordships’ House on all sides on the importance of tackling these issues. The Minister has come back with an amendment that is longer than the one that we tabled, and he has come back with a period of time that is longer than the one that we suggested. I am delighted with the first, which shows that he has better drafters than I had at my disposal, but I am not so happy about the three years.

However, it is going to be a major step forward if we get these issues of fire suppression, stairways and ramps, electrical equipment and safety, and provision for people with disabilities properly examined and costed, with the regulations coming in front of the House and in front of the Secretary of State. Even if it takes three years, it will be a significant step forward, and I am very pleased indeed to see that it is included in this Bill.

Building Safety Bill

Debate between Lord Greenhalgh and Lord Stunell

Committee stage
Wednesday 2nd March 2022 Grand Committee

[Lord Greenhalgh (Con)]

“St George,” “St Stephen,” “It is so easy, just do it”: I have had all the usual exhortations. I did really enjoy meeting the noble Lord, Lord Aberdare, and David Frise. I think it was towards the end of last month, so relatively recently. David Frise, part of the Building Engineering Services Association but representing Actuate UK, had gone through the quite traumatic experience of building up a business then effectively seeing it dismantled because of the pressures of being a subcontractor. I have declared my business interests—as someone who has started a small business, I know exactly what it is like when you are working for bigger businesses, particularly in the early days. It is tough, particularly when people withhold payments that you are contractually due just because they know they can.

Another practice we see in payments is: “Why do we not pay you in 180 days’ time?” You have delivered the services and paid all the costs, but: “We are a big company, and our payment run is every 180 days.” It is that kind of line; it does not happen all the time, and I know that is not something Every Little Helps would do; it will have a code of practice. But that is the kind of thing we have seen, and it is important, if we want to encourage smaller organisations, that we see the end of those kinds of practices. I think we are, generally speaking; certainly, blue chip companies would not do that.

One of the things I would also say about the whole construction issue is that one of the things I want to know as a businessman is who makes the money. It is clear that developers have made good money since Grenfell. Before Grenfell they made good money, but since Grenfell even more. Some of the manufacturers of the construction materials have done really rather well as well. But actually, construction is a cash-flow business on wafer-thin margins, and the further you go down from the prime contractor, the more they squeeze the margins, and that is the kind of the thing the noble Earl, Lord Lytton, has been talking about—the value engineering. That is why you start to see the corners being cut.

We have to understand that we are dealing with a real cultural issue. That is what we said to the noble Lord, Lord Aberdare, in the meeting. Yes, I would like to wave my magic wand and say there is a legislative solution—but we recognise that he is going to set out in writing to me a number of thoughts about this. I think that is what we agreed. Then, we are going to take some of those thoughts to Dame Judith Hackitt and also talk to Amanda Long, who ran the Considerate Constructors Scheme and is also building a building safety charter, to try and get players on board. Perhaps they can consider cash retentions within that. There is also the New Homes Quality Board and the new homes ombudsman, which operates underneath that. Perhaps they can think about some of these issues.

There are a number of things I can talk about that could potentially also help. The Construction Leadership Council has a business models workstream focused on collaborative contractual practices, which I think has been raised by the noble Lord, Lord Aberdare. We are also looking at the culture of late payments that I already referred to. Our efforts include introducing payment practices, reporting through legislation and guidance. Prompt payment is also important.

What I resolve is not to accept the amendment but to work with the noble Lord, Lord Aberdare, because I really feel passionate about this. It is an abhorrent practice, and we should do what we can to ensure the culture of good practice prevails and that we address those that are not following the right way. But let us get the culture right.

[Lord Stunell (LD)]

Before the Minister sits down, I wonder if he could comment on the Department for Education’s performance.

[Lord Greenhalgh (Con)]

That is a really good way to end the debate. I will have to write to the noble Lord, because I do not know a lot about the Department for Education other that it is on the street near Marsham Street. I have been there maybe two or three times when I was a council leader. I will write to the noble Lord, but I think it is probably something, as he would well know, that I am not in a position to answer at the Dispatch Box right at this minute.

At this point, I am allowed to sit down. I have avoided a Latin phrase for the whole four hours of this debate, but the noble Lord, Lord Kennedy of Southwark, has provoked me: he responded to me saying that I would not resort to Latin by saying, “Id gratum esset”. I knew enough Latin to know that that means, “It would be appreciated”. Well, I have appreciated this debate, and I look forward to moving on to Report and taking this landlord Bill through this House.

Building Safety Bill

Debate between Lord Greenhalgh and Lord Stunell

Committee stage
Monday 28th February 2022 Grand Committee

[Lord Stunell (LD)]

My Lords, first, I am very sorry if taking a long time last time irritated the Minister. It was an important set of amendments and I think these amendments are also important, although I will try not to irritate him. It is a pity that he did not feel able to accept the amendment in the name of the noble Baroness, Lady Neville-Rolfe, about openness and transparency and impact assessments. I remind him that he dealt with my argument by assuring me that I would know that the Government clearly would not have brought forward proposals unless they had been cleared at the highest level and that lawyers had looked at them and he wanted to assure me that they all worked. That sounded to me very much like an impact assessment or, at the very least, an explanatory note, so I am hoping that he can publish the documents that were used inside the department to decide that this is indeed a viable system to place before your Lordships.

With that preliminary, I enthusiastically support my noble friend Lady Pinnock’s Amendments 93 and 94 proposing a peppercorn figure for the cap. The Minister indicated at an earlier stage that the figures in the Bill are, to an extent, arbitrary. A number has been decided, perhaps based on some total amount of money that the Treasury thinks it is prepared to pay which has been divided by an assumed number of residents to produce a cap figure. It may be neat arithmetic for the Treasury, but it is not neat arithmetic for leaseholders facing their payment.

Some very pertinent questions have been asked by the noble Baroness, Lady Hayman, and other participants in this debate. I hope that the Minister will at least be able to commit to writing a letter, having carefully read Hansard, about this group of amendments and the previous group to make sure that he has ticked off all the queries that have been raised. They have all been advanced by noble Lords who very strongly want to see effective legislation but have various levels of severe concern about whether this legislation will be effective. I am sorry that it may be a little painful for him, but we need to understand the correct answers to this and, if not, to try again on Report.

This is a sensational policy development by the Government in interfering with the market. We believe it is justified in principle, but we want to see that it has not just been waived through without serious thought and consideration. It is easy to have popular legislation, although it would be more popular if the cap were a peppercorn, as my noble friend Lady Pinnock has proposed, but that does not mean that it will work. Plenty of popular legislation turned out not to work. The Dangerous Dogs Act occurs to me, and we must not turn this into a dangerous buildings Act full of good intentions but unable to deliver.

In relation to the other amendments, in Amendments 56 and 57, the noble Lord, Lord Young of Cookham, has produced, as he always does, extremely reasonable amendments and it is hard to see how the Minister can dismiss them. When we look at this, and bearing in mind that the Minister said in relation to the whole of this debate that the Government are still in listening and learning mode, it might be important to listen to them and to bring them forward again.

There was a theme too about excluded groups. It starts with a bold statement that no leaseholder will have to pay and then, as the noble Lords, Lord Leigh and Lord Naseby, and others have pointed out, there are little nooks and crannies in this which means that there are groups of leaseholders who will not benefit from the pledge, apart from the fact that there is a cap, which there certainly should not be.

In the debate on the last group, I commented on government amendments in some detail. I am sorry that it was a bit too hard for some people—it was a bit hard for me and I probably got some of it wrong—but I want to pick out from this current group some points that arise from government Amendment 70, which puts in place remediation contribution orders. I have a feeling that when it comes to assessing what the sum should be, the quantum that appears in a remediation order, all the issues I raised on the last group will raise themselves again. I hope the Minister is not persuaded by an argument that says, “The facts will speak for themselves. It is easy with a building, you can just go and look at it and tell whether it is compliant or not, and then you can decide how much it cost, and then they have to pay.” It is all a question of who decided that that would be used, who put it up in that particular way and what kind of regulation was carried out. We are talking about events that may have taken place 20, 25 or 30 years ago; the current opportunities to retrieve that information are very small and the chance of delivering it is very small as well.

The noble Earl, Lord Lytton, raised the point about the interaction of this process with the courts, which will be required to decide what a building safety order and a remediation contribution order should actually be. What should it be when it gets signed off by the courts? They will want to know the answers to this and I think the Minister will have heard that a number of noble Lords have a sneaking feeling that that will prove a very difficult hurdle to get over with the provisions in the form that they are.

[Lord Greenhalgh (Con)]

My Lords, this has been a fascinating debate, it really has. I shall start with the noble Lord, Lord Stunell, because he served as Minister from 2010 to 2012 and we are graced by his presence. I think that in the coalition he was succeeded by the noble Lord, Lord Foster, from 2012 to 2014, and then there was a chap called Stephen Williams, who never made it to this place. If the noble Lord talks to his colleague Stephen Williams of the Liberal Democrats, who was in the coalition Government, he will know about Florrie’s Law, because that came into existence in 2014. The protection we are talking about today is based on Florrie’s Law that came into effect in public housing. This is about applying that principle of a liability cap across all types of tenure. In fact, I had a meeting in this place with the noble Lord, Lord Pickles, who introduced that amendment in response to a leaseholder who received an enormous bill which was so great that, through the shame of receiving it, she subsequently died. That is why we came up with the cap, as a coalition Government, through Florrie’s Law, and it is that principle we are looking to apply.

I turn to the noble Baroness, Lady Hayman. My admiration for her has increased, with her detailed grip of policy. She read it out with such aplomb, I have to be honest. I think it is important for me to take the high level and I will respond to her in writing, but I want to give her the outline. She is absolutely right in her assessment; what she read out was absolutely correct and the phrases “cascade” and “waterfall” have been applied to the approach we are taking. The waterfall or cascade is in five parts. We start with the developers. Then we move to the freeholders, via an affordability test, and other interim landlords; that is the second wave of the cascade. The third is freehold and interim landlords seeking redress from third parties that have contributed to pollution. The fourth is leaseholders who pay a capped amount—that is for non-cladding costs, to be clear, and is where Florrie’s Law kicks in. Of course, the fifth is freeholders and interim landlords who pay the remainder. That is the cascade approach, but I will write to the noble Baroness, because it was so eloquently put that I believe her questions of me deserve full and detailed answers.

Building Safety Bill

Debate between Lord Greenhalgh and Lord Stunell

Committee stage
Monday 21st February 2022 Grand Committee

[Lord Greenhalgh (Con)]

I will combine the letter for the noble Lord, Lord Shipley, and the noble Baroness, Lady Pinnock. Essentially, they want an answer to this question: “If you take a non-residential building, whether it is an office block or a Yorkshire mill, and you create a residential dwelling, will that be in scope when it comes to a new build?” The start point does not matter—it is non-residential—so is it included? I will answer both noble Lords in writing and lay a copy in the Library.

[Lord Stunell (LD)]

My Lords, we have had an interesting debate. It might be summarised by the Minister saying, “Don’t worry, it’s already all in the Bill and everything’s in hand.” I say to the Minister that we shall want to look very carefully to see the extent to which it is, or is not, in the Bill.

On the interaction between the two clauses to which the Minister referred—Clauses 32 and 33—with Clause 30, which is entitled “Higher-risk buildings etc”, the essence and nub of my amendment on this aspect is to ensure the capacity for the building safety regulator to get straight in as necessary with every building, not simply higher-risk buildings. The Minister seemed to tell me that Clauses 32 and 33 achieve this. I will look carefully at that. If that is the case, I will be absolutely delighted, but if it is not, I shall come back again.

I beg leave to withdraw the amendment.

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[Lord Greenhalgh (Con)]

My Lords, I have some experience of this, having led the council that includes Shepherd’s Bush and Hammersmith and Fulham for six years. Even in that time, there were significant incidents of flooding in basements and quite serious concerns. It did not just happen in Shepherd’s Bush, but from Hammersmith and Fulham right up to Old Oak, and it is the same for many inner London boroughs that have basements as well. It was a very significant issue for local authorities, but I think it is quite proper that the mayor, as the first port of call, should have strategic oversight of how we develop the built environment in our capital city. I expect the mayor to take a lead role on this, if I were to pick any level of government. At a national level, I am the Resilience Minister and am happy to take away anything else we need to do to address the specific concerns the noble Baroness has raised, because it is important we recognise that this is a real risk to our built environment, which will get worse in the coming years.

[Lord Stunell (LD)]

My Lords, I listened carefully to what the Minister had to say. Here we are, on the first day in Committee, with one set of amendments dismissed for one set of reasons and an absolutely contrary set of reasons given to deal with this one. Previously, the case was that we should not add any extra duties to the list of requirements of the building safety regulator because it would confuse it; now the risk is that, by listing only four things, we are limiting the scope of the building safety regulator to take on additional things.

I would have thought that, if in two years we had reports before us on what to do about fire suppression systems and whether the safety of buildings would be enhanced—and, if so, to what effect—by making some changes to the current regulatory environment; if we had a similar thing on the safety of stairways and ramps, on which a number of noble Lords spoke eloquently at Second Reading; if we had the certification of electrical equipment and systems properly analysed by the building safety regulator, with the expertise it can bring, and a proper evaluation of their importance, or lack of importance, brought back to us; if we had provision for people with disabilities, which the noble Baroness, Lady Grey-Thompson, and my noble friend Lady Brinton spoke about so eloquently earlier; if all those matters could be brought back in two years, the building safety regulator would have done a real service to the safety of homes in which people live and would have answered many of the questions and put in train solutions to many of the concerns that noble Lords raised at Second Reading.

I absolutely do not believe that that limits the subjects the building safety regulator might be able to get to grips with. In case it did, the amendment goes on to say that it should also

“give notice of such other matters relating to safety of people in or about buildings that they determine require further examination.”

That is the “and anything else” requirement to go with those four. I do not accept that the Minister’s criticisms of this amendment are right—there may or may not be other criticisms he could have made, but he did not choose to do so. Although I will withdraw this today, I give notice that this will certainly come back at a later stage.

Building Safety

Debate between Lord Greenhalgh and Lord Stunell

Tuesday 11th January 2022 Lords Chamber

[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.

Leasehold Reform (Ground Rent) Bill [HL]

Debate between Lord Greenhalgh and Lord Stunell

3rd reading
Tuesday 14th September 2021 Lords Chamber

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

My Lords, I join the Minister in thanking Members on all sides of the House for their contributions and expertise in working to get the Bill to where it is today. I also thank the Minister, the noble Lord, Lord Greenhalgh, for his courtesy in his dealings with my noble friend Lord Lennie and myself. We appreciate that very much. I also thank all the officials and his Bill team for their work with us. I place on record my thanks to Ben Wood and the office of the Leader of the Opposition for the work that they did.

My involvement was in the Second Reading of the Bill. I then became the Chief Whip, so I departed the scene, leaving it all to my noble friend Lord Lennie. I have come back to make these final remarks as my noble friend cannot be here today. I thank him in particular for all the work he did in taking up the Bill very much at short notice. I think we have made the Bill better than it was when it first came to this House. This is the first stage in leasehold reform; there is very much more to be done. We look forward to the work of the Law Commission and to a Bill that will address other leaseholder problems—but this is a good first stage and I am very happy with where we have got to so far.

[Lord Stunell (LD)]

My Lords, I too offer my thanks to those who have contributed to the improvement of the Bill and, in particular, to say that the Minister has been exceptionally helpful and generous with his time in proceeding with it through Committee and at the intermediate stages. My noble friend Lady Grender would have liked to be here, but I am speaking in her place on this occasion.

I have given notice to the Minister that I believe there is one aspect of this that still requires a word of clarification, which I hope he will be able to give as we move on. It is clearly very important that this Bill makes rapid progress, and even more important that the second Bill, long promised, follows close on its heels. The issue relates to retirement homes and those blocks that are partially occupied at the time that the changes instigated by this Bill come into force. There is a serious risk of a two-tier market in those blocks if this is introduced wholesale across every part of the same block. I hope that the Minister will be able to clarify the Government’s intent and the effect of this legislation, so that those who have made representations to me can have some understanding of the direction in which this legislation will now proceed. With those few words, I am very happy to see the Bill pass into law.

[Lord Greenhalgh (Con)]

My Lords, I thank the noble Lord, Lord Stunell, for giving me advance notice of his question. I have pushed to give him a clear answer on that. It is clear that there is a transition period until 1 April 2023. The Government propose not to exclude part-occupied developments from that cut-off period once the legislation takes effect, which will obviously be later than for all other areas. That is the balance that we are trying to strike, in the interests of consumers but also of the sector.

Leasehold Reform (Ground Rent) Bill [HL]

Debate between Lord Greenhalgh and Lord Stunell

Report stage
Tuesday 20th July 2021 Lords Chamber

[Lord Greenhalgh (Con)]

My Lords, in constructing a penalty regime for any landlords who breach the provisions of this legislation, we wanted to set the penalty at a level that was proportionate but acted as a deterrent. As the average ground rent is around £250 per year, we felt that £500 would be a reasonable and proportionate minimum penalty. Once again, I remind noble Lords that this would be paid in addition to repaying the prohibited rent with any interest due, and that £500 is a minimum penalty amount. Breaches across multiple leases could also be penalised, resulting in heavy fines.

However, both at Second Reading and in Committee, noble Lords felt that the balance between proportionality and deterrence was not quite right. The noble Baronesses, Lady Grender and Lady Jones of Moulsecoomb, and the noble Lord, Lord Naseby, were among those who made very strong arguments that the proposed regime was set at too low a level to act as a serious enough deterrent to freeholders, particularly larger freeholders with high annual turnover. In addition, while local authorities should not design their enforcement strategy to function as a revenue stream, we have been clear that we believe that any penalty recovered through the enforcement process should cover the cost of that enforcement.

I have listened carefully to the arguments made in Committee in favour of higher financial penalties and considered the impact that changing these amounts would have. We have concluded that the maximum should be raised to £30,000 which, as some noble Lords may know, is in line with this Government’s Tenant Fees Act 2019. However, we intend to keep the minimum penalty at £500, in recognition that this is proportionate where, for example, a small freeholder charges a non-peppercorn rent.

For those noble Lords who think we are a soft touch, I note that this is the first example of a minimum penalty in leasehold law. This amendment will significantly strengthen the enforcement regime and further deter freeholders from attempting to breach this legislation. I beg to move.

[Lord Stunell (LD)]

My Lords, I enthusiastically welcome this amendment from the Government. I am very pleased that the Minister has seen the strength of the arguments put forward by noble Lords from all around the House on this issue. It is not just that the original figure would not have been a significant deterrent for those determined to carry on with bad practice. Worse than that, it was not going to be sufficient to fund or permit trading standards to carry out their enforcement duties. The enforcing body around the country is short of funds and staff, and a new burden placed on it to enforce this provision without the means to do so was a recipe for failure. I am delighted that the Minister has seen the compelling strength of the view that my noble friend Lady Grender and others advanced passionately and congratulate him on persuading his colleagues around government of the need to move forward on this as he has.

[Lord Lennie (Lab)]

My Lords, the sole amendment in this group increases the maximum penalty to £30,000 per lease, in line with other housing legislation—namely, the Tenant Fees Act. I am pleased that the Minister has brought forward this change following concerns raised in Committee, but I trust that the sum of £30,000 has not been decided purely based on precedent —not just because there is not a direct precedent to compare it to. The use of £30,000 penalties in this legislation will apply to freeholders, many of which are incredibly wealthy businesses. Does the Minister believe that £30,000 will be sufficient deterrent in such cases? As I said, I am concerned that this figure has been chosen because of the so-called precedent. Can the Minister dissuade us of that notion by confirming that an impact assessment has been carried out and, if so, tell us when it will be published?

We welcome an increase in the maximum penalty, but I am not entirely confident that it will be sufficient deterrent. I look forward to the Minister’s assurances.

--- Later in debate ---

[Lord Greenhalgh (Con)]

My Lords, before coming to the detail of this amendment, I want to stress the importance of the broad definition of “rent” as it appears in the Bill. Your Lordships are aware of the Government’s position. We believe it is vital for the effectiveness of the Bill that the definition of ground rent is drawn up in such a way as to head off the potential for avoidance measures by the small proportion of landlords who are intent on abusing the leasehold sector for their own financial gain. Any attempts to change this approach would do little more than provide a fixed obstacle around which a nimble landlord may divert with relative ease, certainty and confidence.

Alternative versions for the definition of a rent that stray away from this approach have been considered but they all reached the same conclusion and were found to be lacking. It is precisely because of the broad definition of rent in the Bill that any landlords and their investors seeking to charge what is in essence a ground rent by any other name will need to think very carefully if they believe the definition provided in the Bill offers an easy workaround—it does not. That is to say, if a landlord were to attempt to charge a ground rent by any other name and that charge provided no meaningful benefit or service to the leaseholder, that charge may be considered within the nature of a rent for the purposes of the Bill, and a tribunal or enforcement authority could consider the case for enforcement against that landlord.

I believe that Amendment 41 will provide further clarity regarding the meaning of a “rent” for the purposes of the Bill. Noble Lords will recall that there was a good deal of debate over that definition in the Bill in Committee. My noble friend Lord Young made reference to the Law Society and raised his concerns that the wide definition of rent contained in the Bill could give rise to unnecessary litigation as the lawfulness of certain charges being able to continue as being “reserved as rent” was not wholly clear.

I have listened carefully to the arguments made by my noble friend and others and am not unsympathetic to the views expressed that tighter wording of what is considered a rent would provide even greater clarity for both leaseholders and landlords. The amendment therefore provides that valid charges, even if they are “reserved as rent” in a lease, are not intended to be captured by the provisions in the Bill just because they are “reserved as rent” within a lease.

It is not our intention for valid charges, such as the charging of insurance or service charges, to be adversely affected by the Bill. Neither is it the purpose of the Bill to address the practice of reserving as a rent charges that are not in fact rent. The amendment simply clarifies that, just because a charge is reserved as a rent, it does not automatically follow that it is a prohibited rent for the purposes of the Bill.

I reassure noble Lords that the amendment does not give a green light for landlords seeking to avoid the measures of the Bill to merely reserve any charge as a “rent”. As I have described, the definition of a rent is drawn deliberately as widely as possible and will capture any charge that is in fact in the nature of a rent, whatever it is called. I beg to move.

[Lord Stunell (LD)]

My Lords, I always welcome efforts by Ministers to clarify the law, although I sometimes struggle to understand exactly how the law has been clarified. It has been suggested that this is, if you like, a step of relaxation or at least inclusion that will permit landlords to get away with—I think that is the technical term—bad practice. I am sure the Minister will reassure me that that is absolutely not the case and, far from opening a door, it is trying to make sure that the door is firmly shut.

I fear that the technicalities of this will be worked out in the law courts over time, whatever provision the Minister puts in the Bill or takes out of it. I wish him luck and I hope he has succeeded in what he hopes to succeed in. I guess we shall find out, when we do the evaluation in a year or two, how accurate that is.

[Lord Lennie (Lab)]

My Lords, the Minister will be glad to hear that this amendment is another technical change that we on these Benches fully support. However, has the department identified whether the same drafting issue is present in any earlier legislation?

--- Later in debate ---

[Lord Stunell (LD)]

My Lords, I speak only briefly to say that the noble Lord, Lord Lennie, has raised an important issue that was debated in Committee, to some extent, when I heard voices calling in both directions. The overwhelming requirement of this legislation is that it leaves certainty in the market about the position of leaseholders. However partial or slow it may be, or however much you might criticise it overall, the noble Lord, Lord Lennie, has advanced a very strong case that this should apply to all leasehold contracts from a set date and not with a phased introduction.

I would be interested to know if there is a reason for this staggered introduction and, if so, what it is. A number of major landlords run very large businesses on the leaseholding of retirement homes, not all of which have always proceeded entirely ethically. There have been some well-evidenced scandals, one of which I played a part in unravelling when I was at the other end of this building. I hope the Minister has not been too influenced on this provision by any pressure he may have received from landlords about some complexity, difficulty or whatever with an earlier introduction. I would be interested to hear the Minister’s justification for the subsection that the noble Lord, Lord Lennie, is proposing to delete.

[Lord Greenhalgh (Con)]

My Lords, in considering Amendment 44 in the name of the noble Lord, Lord Lennie, it is important to once again lay out the rationale for the transition period for the retirement sector. In October 2018, the Government launched a consultation on reforms to the leasehold system, which attracted over 1,200 responses. In our response to the consultation, published in June 2019, we announced that we would

“proceed with the proposal to exempt retirement properties”

from the peppercorn ground rents policy. This decision was made on the basis that developers of retirement properties incur additional costs, as a result of the communal spaces that are characteristics of these kinds of developments.

However, having reviewed this in further detail, we concluded that arguments in favour of an exception did not outweigh the desirability of ensuring that those who purchase retirement homes are able to benefit from the same reform as other future leaseholders. Therefore, we decided to capture retirement properties in the Bill, so that those who live in retirement housing are protected from exploitation in the same way as other leaseholders. We announced this in January this year, and it is effectively a change in the Government’s position. I am sure all noble Lords agree that, as a basic matter of fairness, those buying retirement properties should also benefit from these reforms.

As a result of this change, we have consulted closely with the retirement sector and continue to do so. As such, we have decided to grant a transition period in recognition. As a result of their initial exemption, this new transition period will allow developers of retirement properties time to adapt to the forthcoming changes. We believe this transition period has been fairly granted, in balancing the needs of developers and fairness to leaseholders. It will be sufficient to allow the retirement sector to adapt to the changes. The Government do not wish to extend the period at the expense of leaseholders. I give that undertaking; we believe we have got it right.

As it stands, the commencement date for retirement properties is no earlier than 1 April 2023. We have no reason to believe that the commencement date will be any later than this. Given the sector was first informed in January this year, this commencement date has given them over two years’ notice.

This issue has been carefully considered and we believe we have struck the right balance for both lease- holders and developers. Indeed, in Committee, we had a competing amendment from the noble Lord, Lord Best, which would have extended this transition period. I am sure noble Lords agree that our proposals are a pragmatic and fair compromise between these two positions. I beg to move that the noble Lord withdraws Amendment 44.

Leasehold Reform (Ground Rent) Bill [HL]

Debate between Lord Greenhalgh and Lord Stunell

Committee stage
Monday 14th June 2021 Grand Committee

[Lord Stunell (LD) [V]]

My Lords, this has been a very interesting debate. Everybody has spoken with a sense of understanding and concern, remembering that today is four years since the Grenfell tragedy. It should be a matter of particular regret in the kind of debate that we are having that, four years on, so few of the deep issues that have been revealed subsequent to that fire have yet been fully dealt with or accounted for. It is a matter of regret to me that the building safety Bill is still somewhat on the distant horizon, and that we have not yet solved at all the question of who will pay for the costs of this tragedy, since it affects households right across the country.

Noble Lords would expect me to focus particularly on Amendment 20 in the rest of my remarks. Before I do, I will comment briefly on Amendment 19 from the noble Lords, Lord Kennedy and Lord Lennie, which calls for a review. I will skip the number of days and focus on the four issues that they have said need urgent reform and which every speaker in this debate and anybody who has considered the issue would agree on: lease forfeiture, transfer fees, redress schemes and enfranchisement. The Bill does not deal with those four issues. It is time that the Government face up to that and present to Parliament—preferably in the form of legislation, but if not a published report—precisely what their view is on those issues.

The move of the noble Lord, Lord Berkeley, to clarify where Crown exemptions come into play for leaseholders raises an issue that he has brought to your Lordships on a number of occasions. I would be very interested indeed to hear whether the Minister is brave enough to accept his challenge to write to the Duchy of Cornwall and get it to answer the noble Lord’s letter. Your Lordships certainly deserve to hear from the Duchy precisely how it intends to proceed. If the legislation needs change and reform to take account of that, we need to hear the Minister say that he is ready to do that and to make sure that Crown exemptions are used with appropriate discretion and not in any way at all to put residential leaseholders of Crown land in a more disadvantageous place than those holding leases where the freeholder is a private body.

On Amendment 20, my noble friend Lady Pinnock set out, as she has done many times before to your Lordships, the grievous burdens placed on leaseholders across the country as a consequence of the remediation made necessary following property inspections post Grenfell. Before I go on, I remind noble Lords that I served as a Minister in the Department for Communities and Local Government, as it then was, with responsibilities for building regulations between 2010 and 2012.

The Grenfell inquiry has been hearing evidence of failures at many levels: building owners, building managers, designers, materials suppliers, on-site contractors, inspection teams and enforcement bodies. No one has escaped damning evidence of their failures. What there has not been is any evidence at all of failure by residents or leaseholders. On the contrary, it was the residents of Grenfell Tower who repeatedly warned of the dangers that other people chose to ignore. That led to the terrible tragedy, the deaths and the unmeasurable impact on so many lives of families in and around Grenfell Tower who survived that night.

It also led to the discovery that this was not an isolated case of many unfortunate things coming together in a sequence of horrible coincidences to make a one-off dangerous, combustible building. We now know that more than 400 other residential blocks have been found to have similar dangerous cladding, and the enforced inspection of those blocks has brought to light many other fire safety defects, costing billions of pounds in total. Many of those blocks are occupied by blameless leaseholders who find that they now live in a dangerous and unsaleable home and are being presented with enormous bills for remediation under the terms of their leases.

The Minister will say that this is not the place to insert a proper compensation scheme—nor does Amendment 20 do that—but he needs literally to take stock. That is what Amendment 20 tabled by my noble friend Lady Pinnock does. It asks for a taking stock of the impact of this Bill on leaseholders who live in those defective properties.

Time after time your Lordships have pressed the Government to come forward with a proper scheme of compensation for leaseholders all over the country who have been unwittingly caught up in the Grenfell scandal. Every time your Lordships have pressed Ministers—this Minister in particular—we are told, “Not here and not now”. Meanwhile, as my noble friend Lady Pinnock spelt out, leaseholders are being sent five-figure bills with 28 days to settle or face the forfeiture of their lease. They cannot raise finance on their now-worthless properties, and the Government still have not issued the vital information on how they can even access the loan scheme the Government announced months ago.

Will the Minister tell your Lordships today when those missing loan scheme criteria will be published and what the distribution system of those loans will be? Please can he assure us that it will not be administered via an outsourcing company such as that in Virginia, USA, which earlier this year was the nemesis of the green homes grant fiasco? Let this piece of work be started soon, carried out efficiently and delivered to the benefit of leaseholders as quickly as possible.

Secondly, will he urgently bring forward a proper compensation scheme and lift the threat of forfeiture and bankruptcy from innocent leaseholders trapped in these blocks? Will he, as an earnest of good intent, accept my noble friend Lady Pinnock’s amendment today so as, at the very least, to commit to take stock of the impact that a ground rent ban could have on those affected leaseholders and tenants?

[Lord Greenhalgh (Con)]

My Lords, I turn to Amendments 19 and 20 from the noble Lords, Lord Kennedy and Lord Lennie, and the noble Baronesses, Lady Pinnock and Lady Grender.

Under Amendment 19 the Government would be required to carry out a financial assessment of the Bill within 30 days of Clause 3 coming into force. The Government would also be required to consider whether further legislation would be necessary to address any financial consequences related to the Bill

“for tenants in long leases of dwellings, including but not limited to in relation to … lease forfeiture … transfer fees … redress schemes”

and

“enfranchisement.”

The effect of Amendment 20 would be to require the Secretary of State to complete a financial assessment of the impact of the Bill on leaseholders, specifically with regards to building remediation costs.

Fire Safety: Leaseholder Bankruptcies

Debate between Lord Greenhalgh and Lord Stunell

Monday 24th May 2021 Lords Chamber

[Lord Greenhalgh (Con)]

My Lords, I was asked to carry out a waking watch review on behalf of the Secretary of State some months ago. The noble Baroness is right that it is a significant cost for leaseholders. This is why we created the £30 million waking watch relief fund, which will help between 300 and 400 buildings put a fire alarm in place and benefit between 17,400 and 26,520 leaseholders, who will no longer have to pay those high interim costs for waking watches.

[Lord Stunell (LD) [V]]

During the passage of the Fire Safety Bill, the Minister repeatedly assured your Lordships that measures to protect leaseholders from cladding remediation costs would be coming forward in the building safety Bill and so would be out of place in that Bill, and at his fourth attempt, a majority of the House gave him the benefit of the doubt. Can he now confirm that the draft building safety Bill will be amended by the Government to achieve that comprehensive protection for leaseholders, or will he again leave it to your Lordships’ House to do it for him?

Non-Domestic Rating (Lists) (No. 2) Bill

Debate between Lord Greenhalgh and Lord Stunell

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Thursday 4th February 2021 Grand Committee

[Lord Stunell (LD) [V]]

My Lords, it is a privilege to speak after the noble Lord, Lord Thurlow, because he has more or less stolen my thunder, which means I can be really quite brief. He outlined very clearly a common thread in all the debates so far today: the absolute urgency of getting this problem fixed. We all know that it needs a longer-term fix, with a complete overhaul of the system, but, if we are to stay where we are with the current system unamended while we wait for that golden day of amazing reform, I fear that many businesses in the country will collapse and fail, not just in the high streets, but, as the noble Lord, Lord Thurlow, so elegantly and persuasively said, in the office sector and elsewhere. Something has to be done in the meantime—which, of course, was the burden of some of the earlier debates.

The point of the amendment and the impact review is to challenge the Government by saying that what they propose to do—or, perhaps more accurately, what they propose not to do—will leave many businesses in profound despair about how they will manage in the next 18 months or two years. It is obvious that many people will appeal. The number of appeals will be large, not small, and if we start with a backlog from the previous system, that will get worse still.

My noble friend Lady Bakewell asked the Minister some piercing questions that I hope he will respond to about the efforts being made to train panels and find the expert support needed to get the appeals in the system moving through at a proper level. What about the waiting times? Is the Minister, or indeed the VOA, setting a target to deal with this backlog to make sure that it does not pile up behind the new unfolding situation? The noble Lord, Lord Kennedy, has already pointed out the 40,000 appeals. I know that some of those are very specific to one or two topics, but that is not quite the point: one or two specific topics might crop up in this round of appeals and this revaluation that will cause similar problems.

So I strongly support the thrust of the amendment and I believe that we do need an impact assessment. We need some positive action from the Government and I look forward to hearing how the Minister proposes that that should happen.

[Lord Greenhalgh (Con)]

My Lords, this proposed new clause would require the Secretary of State to publish an assessment of the impact of the Act on the appeals waiting lists. The Government recognise the importance for businesses and local government of having an effective appeals system. The process we have put in place allows ratepayers to understand how their rateable values have been assessed and how to challenge those valuations where they feel that is necessary. Of course, changes to the revaluation cycle can impact on the appeals process, so I welcome the opportunity to consider this through the amendment.

I will first explain the system for appealing rateable values. The Government introduced the check, challenge, appeal system in 2017, known as CCA, because the previous system was failing. Over 1 million cases were received from ratepayers on the 2010 rating list. Many were submitted with little or no evidence and around 70% of Valuation Office Agency appeals resulted in no change. This delayed the VOA’s ability to deal effectively with well-founded cases.

The CCA system introduced a new “check” stage, at which ratepayers must first check and confirm the details of their property. This ensures that factual matters are resolved without any further action. At the next stage, “challenge”, the ratepayer must set out the basis of their case. This provides that only substantive cases progress into the system to be considered by the VOA. The final stage, “appeal”, allows the ratepayer access to the independent Valuation Tribunal, but only where they have exhausted discussions with the VOA. The amendment as drafted is concerned only with the last stage, “appeal”, but I trust that the Committee will want me to discuss more generally the CCA system.

By March 2020, the VOA’s CCA system had been showing modest volumes: around 158,000 checks and only 31,000 challenges. Of course, the pandemic has increased these numbers, and as of 31 December 2020 the VOA had registered over 440,000 checks and over 90,000 challenges. Of these, the VOA has resolved over 400,000 checks and 24,000 challenges.

Nevertheless, I know that some ratepayers and agents have concerns about how CCA operates. The Government acknowledge the issues ratepayers faced when CCA launched, particularly with the software and the use of the system. However, the VOA has improved, and continues to improve, its service for ratepayers. This includes changes to enable CCA users to submit multiple property claims, as well as improvements to the registration process to make it simpler and quicker to register.

In February last year my department published an interim review of the CCA system. Although we recognised that it was still too early to fully judge the system, the review concluded that the reforms were helping to reduce the number of speculative appeals and to improve engagement between ratepayers and the VOA.

I know that noble Lords are also concerned with a number of cases—around 50,000—that have been outstanding for longer from the 2010 rating list. In fact, the majority of the 2010 appeal backlog cases concern ATMs and were stayed pending the outcome of a Supreme Court case. So these cases did not impact on most businesses and the delay was largely outside the VOA’s control. The Supreme Court issued a decision on this matter on 20 May 2020 and I can assure noble Lords that these outstanding 2010 cases are now being settled quickly.

As the amendment we are considering highlights, the CCA process is, of course, affected by the frequency of revaluations. Looking specifically at the Bill’s provisions, to ensure that rateable values better reflect the impact of the pandemic, the Bill will move back the next revaluation to 2023. This of course will give the VOA and the Valuation Tribunal at least an extra year to clear cases on the 2017 rating list ahead of the next revaluation.

More generally, as I set out at Second Reading, the Government are undertaking a fundamental review of business rates. This includes a commitment to look at more frequent revaluations, and we would need an appeals system which supported that. The fundamental review will therefore also examine what reforms might be necessary to the CCA system to support more frequent revaluations.

The call for evidence on the review was published in July and asked respondents to provide proposals for changes to each stage of CCA to improve the system, while recognising ratepayers’ desire for a quicker resolution of cases and greater transparency. The Government are currently considering the responses to the call for evidence, and the review will conclude in spring 2021.

I hope that I have been able to reassure your Lordships about the importance that we place on delivering an effective, functioning appeals system that resolves cases in a timely manner. The proposed new clause raises important questions about appeals and the frequency of revaluations, which the Government are already fully considering as part of the fundamental review. I hope that, with those assurances, the noble Lord, Lord Kennedy, can agree to withdraw the amendment.

Housing: Cladding

Debate between Lord Greenhalgh and Lord Stunell

Tuesday 22nd September 2020 Lords Chamber

[Lord Greenhalgh (Con)]

My Lords, I agree that it is unacceptable. That is why I wrote to all owners of buildings where there is no remediation plan currently in place, to let them know that we will look to enforcement action if they do not remediate and get on site by the end of this year.

[Lord Stunell (LD) [V]]

At the Grenfell inquiry yesterday, Mr Bailey of Harley’s, the cladding contractor, said that he had had no training in building regulations, no training in fire protection of buildings and no awareness of the industry guidelines. Day after day we are getting mounting evidence of the catastrophic failure of the industry to deal with this problem. The Minister has an oven-ready Building Safety Bill. Will he please give us the date that it will come in front of your Lordships, so that we can very quickly put in place a far more effective and stringent regulatory regime?

[Lord Greenhalgh (Con)]

My Lords, the noble Lord points to the woeful culture in the construction industry. All I can say is that the pre-legislative scrutiny of the Building Safety Bill has started, and we look to get this through as quickly as possible with the support of Members of this House.

Housing and Construction Sector

Debate between Lord Greenhalgh and Lord Stunell

Thursday 14th May 2020 Lords Chamber

[Lord Greenhalgh]

I thank my noble friend for that question. I will take it away and ensure that, where there are breaches in social distancing, we take it up with the appropriate authorities, and I will look specifically at HS2.

[Lord Stunell (LD)]

The government guidelines this week are very welcome indeed, but they are silent about the need for Covid testing for construction workers, and they do not say too much about the availability of hygiene and sanitary products either. Can the Minister give an assurance that it is possible for the construction industry to open and function, and to draw down on tests and equipment, without putting at risk the NHS or the care home sector, which is clearly pressing hard on the same issues?

[Lord Greenhalgh]

I thank the noble Lord for his question. I will work with ministerial colleagues to provide the appropriate guidance and ensure that there is availability of both personal protective equipment and testing to enable construction work to be carried out safely.