Leaseholders: Safety Remediation Costs

Lord Shipley Excerpts

Thursday 4th November 2021 Lords Chamber

[Lord Shipley (LD)]

My Lords, I agree with the right reverend Prelate the Bishop of London that those responsible for the cladding crisis should pay for the remediation. I found the proposal made by the noble Lord, Lord Young of Cookham, for an extra levy and a Treasury grant to be particularly convincing, and I hope it will command broad support in your Lordships’ House.

I congratulate my noble friend Lord Stunell on his wide-ranging and forensic examination of the key issues in relation to the cladding crisis, the need for fire and building safety remediation, and the desperate position of so many leaseholders who are being asked to pay large sums of money, when they were not responsible, for cladding on their properties having to be replaced or for other essential fire safety work. I subscribe to all that he has said.

But in my contribution today, I want to look at government housing policy more generally in the context of the second part of the Motion, which refers to the need for safe, green and affordable housing. When I say affordable, I mean housing that is affordable to those on average incomes, rather than housing that is priced at 80% of the market rate.

I look forward to hearing from the Minister when he replies. He has a new departmental title, of course, in that he represents the Department for Levelling Up, Housing and Communities. Very recently, the department was the Ministry for Housing, Communities and Local Government, and just before that it was the Department for Communities and Local Government. These constant name changes cannot disguise the failure of the Government to build enough homes. Low-paid workers have been priced out of buying a home in many parts of the country. Over recent years, property prices have risen well ahead of earnings, and the Government have been obsessed with encouraging demand to the detriment of increasing supply. Are the Government still committed to reaching 300,000 new homes a year by 2025? If so, how will they do that when a handful of developers control the timing of so much of our supply, which has led to their substantially higher profits? Do the Government have a plan?

On plans, what are the Government’s plans for the planning system? Over 40,000 responses were sent in as part of the recent consultation on the planning system. What is happening to all those replies? What lessons have the Government learned about subsidising demand through Help to Buy and stamp duty holidays? Both seem to have led to higher prices for buyers and higher profits for builders. Indeed, the stamp duty holiday has apparently cost just under £5 billion in lost revenue to the public purse.

As the noble Lord, Lord Barwell, who was Housing Minister from 2016 to 2017, wrote in a letter to the Times on 15 May this year:

“Demand-side interventions such as Help to Buy and stamp duty holidays, while helping some, fuel house price inflation, making it harder for others to get on the ladder.”


I agree with him, and I also agree with his later statement that we need more homes for rent which are affordable. What is the Government’s plan to meet the lengthening waiting lists for social housing, estimated by the Local Government Association—of which I am a vice-president—to be over 2 million households?

The affordability crisis has impacted on very many people. This has proved particularly acute recently in rural areas, where prices have risen by 14% over the year May 2020 to May 2021. I conclude that the Government need a clear strategy to deal with the shortage of homes. Again, I hope the Minister will confirm that there is to be no watering down of the commitment to 300,000 new homes a year.

The Budget announced some more investment in housing and specific funding for affordable homes on brownfield sites. That is all welcome. But what is the Government’s thinking on the need for more supported housing units? The National Housing Federation forecast earlier this year a shortfall of around 47,000 supported housing units by 2025. Why did the Chancellor refuse to proceed with an increase in the stamp duty surcharge for the purchase of second homes, as suggested by the Office for Budget Responsibility? It seems to have been seriously considered.

Are the Government still committed to ending rough sleeping by 2024, and is the plan for doing so sufficiently robust?

On greening our housing stock, is the sum of money announced in the Government’s Heat and Buildings Strategy sufficient to deliver all the changes needed for decarbonisation and retrofitting of buildings? Many experts claim that it is nothing like enough and that prices will not drop over the coming years as the Government hope they will.

I return to cladding. It was reported in the Times on Friday 29 October that Robert Jenrick, the then Secretary of State, had fought the Treasury for more money for two years to deal with the cladding crisis but that no extra funding was forthcoming. I do not know what Governments are for if they are not there to solve problems like this. A large number of leaseholders, through no fault of their own, have been landed with huge bills when owners and developers should be responsible. More than the £5 billion pledged so far will be needed, as the noble Lord, Lord Young, reminded us, so why are the Government raising developer contributions with only a 4% levy on company profits over £25 million and why is it seen as a contribution towards the £5 billion already announced as opposed to being an extra sum that would then generate £7 billion?

As all speakers have said today, the cladding crisis needs resolution.