Building Safety (Responsible Actors Scheme and Prohibitions) Regulations 2023

Debate between Lord Naseby and Baroness Pinnock

Tuesday 20th June 2023 Grand Committee

[Lord Naseby (Con)]

My Lords, I had finished two of the three key features I wanted to address, which were eligibility and obligations. I now turn to probably the most important of the lot: sanctions. As I understand it, failure to join the RAS means exclusion from the planning and building control systems. In effect, that means exclusion from most commercial and residential development in England for all companies, including non-developer companies—for example, an engineering subsidiary wanting to expand.

These sanctions are automatic. The regulations remove discretion in their use from the Secretary of State. The underlying Act originally contemplated the availability of discretion, but somehow it does not appear to have been carried through to the regulations. There are no mechanisms to determine whether the sanctions are proportionate to the risk or the harm. These coercive penalties would also apply to any further membership conditions applied in future, including compulsory financial contributions for works to buildings to which the scheme member had no connection at all.

I conclude with my reading of the situation. The severity of the penalties and the sanctions, the lack of discretion in their application, the arbitrary nature of inclusion in the scheme and the effect on employees, subcontractors, other stakeholders and shareholders seem to me, and to others outside who I have talked to, to be disproportionate and suggest that—I hope—His Majesty’s Government will think again. This industry is absolutely vital to this country; we see that daily in the newspapers.

My noble friend mentioned the material suppliers. In many ways, to any of us who take a real interest in this, they are equally liable. After all, without rotten materials that were highly inflammable, we probably would not have had Grenfell. I am surprised that, if I understand what my noble friend said, so far no single firm in that field has contributed anything or is proposing to join the scheme and contribute.

The other area that my noble friend did not cover was overseas developers. A fair number of projects was undertaken by overseas developers. We have a diplomatic corps in these countries. I hope that our ambassadors or high commissioners in the relevant countries have been given the information to pursue these developers. They should be looked upon just as firmly as are our developers. If they do not wish to contribute at all, frankly, in my judgment they should be barred from working in the United Kingdom in future.

[Baroness Pinnock (LD)]

My Lords, it is seven years since the Grenfell Tower fire that killed 72 people and devastated the lives of countless others. We owe it to them, and to all those still living in buildings deemed to be unsafe, to find a route to full remediation that excludes innocent tenants and innocent leaseholders from any of the costs.

As the Minister stated, the Building Safety Act included the measures that the Government intended to take to enforce the cost of remediation on those who developed the buildings. They should also have included a route to impose the costs of remediation on those who used the flammable cladding. I know that the Minister referenced this but to date, seven years on, the Government have not been able to find a route to force the three substantial manufacturers that the Minister named to accept responsibility and accept that they ought to pay towards the costs of remediation.

Then there are the construction companies that omitted fire breaks, relied on false material-testing outcomes and relied on building inspectors contracted by the very same construction company. We Liberal Democrats have said from the very beginning, seven years ago, that whatever legislation is passed to put these wrongs right, leaseholders must not pay a penny.

Through the Building Safety Act and this statutory instrument, the Government have focused entirely on the developers. Of course, that is right, but there are government responsibilities here as well. I am talking about all Governments, not necessarily this one. Thirty years ago, those who privatised the Building Research Establishment and the British Board of Agrément enabled building control inspectors to become independent of the local planning authority. All these policy decisions played a part in enabling the Grenfell disaster. I say that because that has been said in the Grenfell Tower inquiry.

No doubt, when the inquiry publishes its findings, hopefully sometime this year, it will expose these facts and attribute relative responsibilities. Meanwhile, these regulations are draconian; in many cases rightly so. However, there are inevitably some unforeseen consequences. The first of these relates to developers that are brought into the scheme and discover that, following intrusive building inspections, their developments need no further action. The noble Lord, Lord Naseby, and I have obviously had access to the same lobbying material from those in the industry who are concerned about some aspects of these regulations.

The principle is sound; the implementation is leading to some circumstances in which those who are not responsible will be required to fund remediation for which they have no part to play. The issues arise, first, from the criteria the Government have set. As the noble Lord, Lord Naseby, pointed to, these are around profitability—so those developers that were unprofitable but nevertheless built these faulty and dangerous buildings are excluded. I am sure the Government did not intend that to be the case, so I hope the Minister will point to the way in which that will not happen. It does not seem right at all, because we know how companies can evade some of the requirements put on them.

The next area has again been raised by the noble Lord, Lord Naseby, but I want to emphasise some of it. I remember the debates on the Building Safety Act. Initially, it was all about trying to ensure that only those developers and construction companies, and those who knowingly supplied flammable cladding—I am still waiting for that bit; I say “knowingly” as it is in the evidence of the Grenfell Tower inquiry—would be made liable for the remediation cost. That is fair and is absolutely the right thing to do. Those who did these things knowingly must be made to pay for them, but not those who did not. Unfortunately, the great scoop of these regulations will pull in some companies and developers that built blocks of flats of over 11 metres but kept to the rules that existed at the time. That does not seem right.

Another issue with these regulations—I am sure that the Minister will recognise this as an unforeseen outcome of them—is that I could see no way by which developers, once they join the scheme and then assess their buildings, at a considerable cost, are able to leave the scheme if they find that there is no action to be taken. This issue was in the lobbying material as well. Perhaps the Minister will either give me an assurance that they can or point me to where it says that they can leave, because that would be helpful.

There is another issue with these regulations, which are very extensive. Many developers are part of a wider family of companies, some of which will have had no part to play in development. That family of companies is being brought into the scheme and could be sanctioned, even if it is a company that has nothing to do with development. That does not seem right either, and I am sure the Government did not want it to happen. It would be foolish, but the sanctions are automatic.

This is all about the unforeseen outcomes of some draconian regulations, which I support. But we have to try to find a way in which good players are able to escape the scheme, and the sanctions and obligations that are part of it.

I will now raise the consequential impact of these regulations on local planning authorities. I remind the Committee that I am a councillor and a vice-president of the Local Government Association. I notice that there is an impact assessment, and calculations have been made of additional costs, but I am not sure that it has taken into account the differential impacts on local planning authorities across the country. The regulations will have very little impact on some, and a major impact on others. For those on which there will be a major impact, there will be expectations of additional members of staff, either in building inspection or as local planners. That does not seem to have been raised in the impact assessment as a calculation of costs to local planning authorities. I know the Minister agrees with the “new burdens” philosophy—the agreement that any new burdens that the Government impose will be met in full—so will the costs be met in full and, importantly, over the lifetime of these regulations?

Secondly, in her opening remarks—for which I thank her—the Minister emphasised social housing remediation a couple of times. Can she remind us where the costs for essential remediation of social housing—either local authority housing or social housing providers—will come from?

My next point is about the end date for the regulations. It seems that they are designed to respond to a specific set of issues so, once all the remediation work has been done, will the regulations cease? I could not find a sunset clause; should there be one? Otherwise, we will have sets of regulations that are no longer relevant.

Finally, I remind the Minister that these regulations address the safety issues facing only those who live in buildings that are more than 11 metres high. She will know what I am about to say, because I feel very strongly about it: those living in blocks that are 11 metres or lower are being forgotten. The leaseholders who live there still face extortionate insurance costs, for example, and many are still trapped in their flats, unable to sell. My big ask of the Minister is this: will she agree to meet those of us in the House who are concerned about this situation to discuss it and see whether we can find a way forward? It is not going away. The Government have tried; I am not pointing fingers. It is just that this is where we are, and we have to try to find a solution.

In conclusion, I totally support these regulations, with the caveats that I have explained. I want them to succeed, but I want the Minister and the Government to think about the unconsidered consequences. I look forward to what she has to say in response.

Building Safety Bill

Debate between Lord Naseby and Baroness Pinnock

3rd reading
Monday 4th April 2022 Lords Chamber

[Lord Naseby (Con)]

My Lords, as one who has been involved in housing policy for over 50 years, I pay tribute to my noble friend for his time, care and effort, and his listening qualities, which have not always been a feature of those on either Front Bench. I offer sincere thanks to my noble friend.

[Baroness Pinnock (LD)]

My Lords, I start by thanking the cladding and building safety campaigners who have been resolute and unremitting, since the Grenfell fire tragedy, in pursuing justice for leaseholders and tenants. Without them, this Bill would not be in the shape it is today. It has been transformed but not transformed enough, as we have heard from others. Across the House, people have worked together to make it a better Bill. I thank them for the way we have worked together to make improvements, but it is not yet enough.

I, too, urge the Government to accept the amendments that we accepted on Report. I, for one, am not giving way. I hope that the Government, at the other end, will say that the argument has been made for a nil cost to all leaseholders. That is where I shall firmly stand to the bitter end. Leaseholders are the innocent victims; they must not pay a penny.

I pass on my thanks to the Minister for being so free with his time, discussing the various amendments, and to the officials from various parts of the Government for explaining the detailed changes that had been proposed. Particularly, I thank Sarah Pughe in the Liberal Democrat Whips’ Office, and my noble friend Lord Stunell. Without their expertise, knowledge and experience, we would not have been able to do the job that, between us, we have done. I look forward to the Bill coming back, having been accepted by the Commons.