Building Safety Bill

Royston Smith Excerpts

Consideration of Lords amendments
Wednesday 20th April 2022 Commons Chamber

[Stuart Andrew]

My hon. Friend has invested a considerable amount of time in his campaign and I have enjoyed the opportunity to have those discussions with him. I will come to that point shortly, but yes, as a Department we will deal with those buildings on a case-by-case basis. I shall give more details as to why we have come to that conclusion.

We are protecting qualifying leaseholders from costs associated with non-cladding defects, including interim measures such as waking watches. Building owners and landlords will be prevented from passing on the costs to fix non-cladding defects if they are linked to, or are, the developer.

While the Bill was in the other place, the Government made a number of amendments to it that will restore fairness to the system and help those who have been unfairly impacted by building safety issues. I know that many Members wish to speak, so I do not propose to go through each of the amendments made in the other place. The Bill now not only provides for a new regulatory regime but provides an extensive set of tools, in law, to ensure that those who bear the responsibility for defects are made to pay and to protect leaseholders from crippling bills for historic defects. In response to concerns expressed by Members in both Houses and by stakeholders, we have changed how the building safety charge works and removed the legal duty to appoint a building safety manager.

[Royston Smith (Southampton, Itchen) (Con)]

The EWS1 form, which was brought about by the Royal Institution of Chartered Surveyors, has caused many problems for people trying to sell their properties. We now have PAS 9980, which will not replace EWS1, but could the Minister say that from his perspective he would rather people look at PAS 9980, as opposed to EWS1?

[Stuart Andrew]

I pay tribute to my hon. Friend, who has also been heavily involved in all this work. Yes, I can confirm that. I will elaborate later in my speech.

Let me turn now to the Government amendments to the Lords amendments. Lords amendment 94 inserts a clause that sets out the meaning of “relevant building”. The clause defines the categories of buildings to which the leaseholder protection measures apply. The Government originally proposed to apply the leaseholder protection measures to buildings containing at least two dwellings above 11 metres in height, or with at least five storeys. Amendments made in the other place extended the definition of “relevant building” to buildings of all heights containing two or more dwellings. We will take a very dim view of freeholders who seek to exploit leaseholders to pay for unnecessary works. The Department is aware of a handful of low-rise buildings where freeholders have been commissioning such works and we are addressing such buildings, as I said a moment ago, on a case-by-case basis, but we must restore proportionality to the system. That is why the Government do not agree with the extension of the scope of leaseholder protections to include buildings under 11 metres. There is no systematic risk of fire with buildings below 11 metres. Low-rise buildings are therefore unlikely to need costly remediation to make them safe. Lower-cost mitigations such as fire alarms are likely to be far more appropriate and proportionate. Assessments carried out in accordance with the new PAS 9980 principles should produce more proportionate responses than costly and, ultimately, unnecessary remediation. The Government have been clear in their view that an EWS1 form should not be required for buildings below 18 metres in height.

--- Later in debate ---

[Stuart Andrew]

Actually, the responsibility lies with those who built the building defectively in the first place. They are the ones we are chasing. I pay tribute— I should have said this right at the beginning—to officials in the Department, who have worked incredibly hard to get this new package of measures from the developers in place. It has not been an easy task, but they have done it with great passion and have been incredibly successful. As I say, it is the developers who should be paying, and we expect a minimal number of leaseholders to pay.

[Royston Smith]

I am grateful to the Minister for giving way. I know he wants to get on. On insurance, which has been my bugbear as well, it is not just that many of the insurance companies insured the development beforehand, and therefore provided a warranty of sorts, but that since then they have increased premiums on leaseholders, sometimes by more than 1,000%. Does he have something to say about that particular activity from insurance companies?

[Stuart Andrew]

Yes. My right hon. Friend the Secretary of State has asked the Financial Conduct Authority to look at that, because it is an area of great concern. I hope to update the House on further progress in the near future.

Turning to Government amendment (a) in lieu of Lords amendment 6, the Government have accepted the principle of the Lords amendment, requiring the Building Safety Regulator to conduct a series of safety reviews. We believe the new version provides clearer drafting and a more practical and pragmatic approach. The amendment inserts a new clause that increases the time available to the regulator from two years to three, reflecting the time needed for the regulator to develop the capacity to carry out those reviews alongside all its other functions.

The new clause aligns the reviews with building regulations to address safety issues, focusing on the costs and benefits of measures to improve safety. It sets specific priorities for the regulator to review while fulfilling its duty under clause 5 to keep,

“the safety of people in or about buildings”,

under review. The scope remains true to the intent of the original amendment, and it is important to assure hon. Members that the reviews will be conducted within the principle of proportionality placed on the operation of the regulator’s building functions by this Bill.

I now turn to a number of technical improvements that the Government are proposing to Lords amendments. Lords amendment 93 inserted a new clause called “Remediation of certain defects”, which provides an overview of the leaseholder protection measures contained within the Bill. Government amendments (a) and (b) to Lords amendment 93 make two minor and technical amendments to that new clause.

The first amendment, to leave out “under qualifying leases” at line 12, is a minor and technical amendment to reflect that some of the protections in schedule 8 apply to leases that are not qualifying leases. When the landlord is, or is linked to, the developer they will not be able to pass costs on to any leaseholders in the building, including non-qualifying leaseholders. The second amendment, at line 23, is a minor and technical drafting change.

I now turn briefly to Government amendments (a), (b) and (c) to Lords amendment 93 regarding trusts. I must take this opportunity to pass on my appreciation to the noble Lord Young of Cookham and Lord Blencathra, who raised this matter through their work in the other place. I acknowledge the concerns raised about the use of trusts and how their misuse could undermine vital leaseholder protection provisions. The Building Safety Minister, my noble Friend Lord Greenhalgh, committed on Report in the other place to consider this further. Government amendments (a), (b) and (c) amend clause 120 to ensure that a body corporate or a partnership can be regarded as associated with another if they are the beneficiary of a trust that has an interest in a relevant building. In other words, the existence of a trust will not enable a group of companies to evade their responsibilities under the leaseholder protections. We have also inserted wording into clause 130 so that beneficiaries of trusts can be considered for building liability orders—that is, can be required by the High Court to contribute to remediation. The remaining amendments to Lords amendments 107, 108 and 190 are consequential to the amendments I have described.

--- Later in debate ---

[Royston Smith]

I refer hon. Members to my entry in the Register of Members’ Financial Interests.

I thank the Secretary of State, the Minister and the Department for what they have done to get us to this stage. I also pay tribute to the cladding groups, which have acted with great integrity and determination. If they are not completely content today, at least they are in a much better place than they were during the passage of the Fire Safety Bill.

That Bill now seems quite a long time ago, but that is nothing compared with how long it has felt for the leaseholders who are still caught up in this awful scandal. We were promised at the time that the Building Safety Bill would deal with the issues of leaseholders having to pay. It seems that the Government have been as good as their word and have made sure that at least leaseholders will not be held responsible—we all know that they are the only people in the entire situation who are not responsible. I was cynical when the Government said that they would deal with the issue in the Building Safety Bill, so I am particularly happy. Of course, I was not nearly as cynical as the leaseholders who were facing bills for tens of thousands of pounds and were wondering whether the issue would just be kicked down the road and into the long grass. I am pleased that at least we are now somewhere that we can all be a lot happier.

The Bill is infinitely better than what we have seen before and is definitely a move in the right direction. I have mentioned to the Minister, who has made himself available numerous times now, my concerns about buildings under 11 metres. I think it was the Chairman of the Select Committee on Levelling Up, Housing and Communities, the hon. Member for Sheffield South East (Mr Betts), who said that if a building were 1 cm lower than it needed to be, that could be the most expensive centimetre in history. That is exactly the point: some of these numbers are a bit arbitrary.

What the Minister has said at the Dispatch Box has given me some comfort—enough comfort, as it happens, to support the Government today. Going forward, however, we need to make sure that we are all as good as our word. If we say that things will be assessed on a case-by-case basis, they must be. When I remove myself from the national picture, which I never intended to be involved in, and go back to representing my constituents first and foremost, although perhaps not exclusively, I hope that each time an issue comes up and I take it to the Government, they will be as accommodating as they suggest they will.

I know that everyone is talking about the insurers, which I spoke about in one of my first speeches on the Fire Safety Bill. In a way, I am really pleased that we are all fed up with talking about the insurers, because if we are all talking about them, hopefully the Government will hear us. We think—and it is not an unreasonable position—that insurers should be part of this. As the Chairman of the Select Committee said, when the ABI was in front of the Committee it said that some of these premiums were helping them to put money aside in the event that they would need to pay in future. The way I look at it, they think they will have to do something anyway, so let us make sure that they are involved.

[Sir Peter Bottomley]

May I suggest that it would be a good idea if the Government had a roundtable with the insurers about what informal provision they are making in case there are successful actions, and about whether they would like voluntarily to contribute, say, £4 billion to £5 billion? No residential leaseholder would then carry the cost, and the insurance company would know that it would not be chased with legal claims that were likely to succeed.

[Royston Smith]

That is an excellent suggestion. The Government have been very successful in talking to developers and persuading them to sign up voluntarily, and there is no reason why they could not have similar conversations with insurers.

I do not want to make a case in defence of developers. I have made the case throughout that they should pay, but we need to be a bit careful about the possible unintended consequences of only going after them. I am pleased to note that they are taking responsibility for their own buildings, although they should have done that in the first place and they are a bit late to the party. Asking them then to remediate buildings that are not their responsibility will have all sorts of effects, not least in making them think about whether they will want to be in that particular market any more. I doubt that they will ever withdraw from the house building market, because it is their business, but if we want to ensure that we can build 300,000 homes a year—a proportion of which would, I am sure, be high-rise—we should bear in mind that some developers will now be saying, “This may not be for us in the future.”

I promised that I would not speak for too long, because we want to get through this business as quickly as possible, so I will end my comments by thanking the Minister again for what he has done and welcoming the changes that have been made. Given the Minister’s assurances today, I will be supporting the Government.

[Paul Blomfield]

It is a pleasure to follow the hon. Member for Southampton, Itchen (Royston Smith). I pay tribute to him and to the hon. Member for Stevenage (Stephen McPartland) for the work that they have done in this regard.

As others have said, we have made considerable progress, but it is a disgrace that, so long after the Grenfell tragedy exposed the scandal of cladding and fire safety issues, the Government have yet to provide the comprehensive response that would address all the issues faced by the thousands of leaseholders caught up in that scandal across the country. This evolving Bill—it was clearly still evolving yesterday, with a body of new amendments tabled by the Government—and, indeed, the Secretary of State’s announcement in January were significant steps, but they still fall short of the Prime Minister’s promise—and I think we all know how much that is worth—that no leaseholders should have to pay for the remediation of problems that are not their responsibility. Moreover, there is still too much uncertainty surrounding the Government’s proposals, which in itself is frustrating progress on making buildings safe.

Let me give just one example. Mandale House, in my constituency, faces a range of problems, and has secured £3.4 million from the building safety fund towards the necessary remediation. However, that falls short of what is needed, and Mandale House is left with £7.4 million to find in order to complete the work. The building’s original developer is one of many to have gone into liquidation, so the building management are on their own. The builders who had been scheduled to carry out the remediation works have now pulled out because of the uncertainty over whether they would be paid. That leaves no foreseeable prospect of the building’s being made safe. The building management are now worried that if the money they have been granted from the building safety fund is not used promptly, it may be withdrawn. I understand that that has happened in respect of other buildings, and I would welcome the Minister’s confirmation that it will not happen in this case—as well as his advice on how Mandale House leaseholders should now proceed to make their building safe.

The second point that I want to make concerns enfranchised buildings. I urge the Government to think again about Lords amendment 117, and I hope to persuade them to do so by citing the case of Wicker Riverside, another building in my constituency, whose residents were evacuated just before Christmas 2020 because of safety concerns.

It is not good enough for the Secretary of State to write to us, as he did yesterday, saying that the amendment highlights a real problem which must be addressed, but then to reject it without putting anything else in its place. I welcome his late announcement today of a consultation, but it should have been possible four years on, and after all the months of knowing that this remained a problem following the Government’s January announcement, to include an amendment that addressed the concerns and provided a solution that the Government felt was robust, along with the bundle of amendments that were added yesterday.

Let me illustrate the problem. In 2019, Wicker Riverside leaseholders took their freeholder to court after years in which building maintenance had been neglected, with the freeholder also failing to provide proof of whether the money collected through service charges had actually been spent on the building. The freeholder did not even turn up for the court case. The leaseholders then exercised their right to manage, and took over responsibility for the building. Now they are being penalised for doing so. By treating right to manage companies in the same way as institutional freeholders, the Government are excluding them from the protections that exist for other leaseholders, such as the remediation bill cap. I would like us to go further and provide zero liability for leaseholders, but the fact remains that the cap is there for some and is not there for those in Wicker Riverside. They should qualify for the same protection as others, because without it they will face unmanageable costs, and as a result the building will not be made safe.

The Government must set out their plans. If they will not accept Lords amendment 117, I respect their concerns, but the Minister needs to explain—and I hope that he will, in his closing remarks—exactly what they intend to consult on to ensure that right to manage leaseholders are protected. I hope the Minister will also give a clear guarantee that the outcome of the consultation will be that those leaseholders will have the protection that is being provided for all others.

Building Safety

Royston Smith Excerpts

Monday 10th January 2022 Commons Chamber

[Michael Gove]

First, I thank the hon. Lady—it is always difficult for me to praise a Liberal Democrat, but she has been campaigning consistently on this issue for some time and has done a great job of bringing to light some of the defects that need to be addressed. It is the case that the BSI work, we believe, will ensure a properly proportionate approach. There are incentives either way—incentives, sometimes, for some to seek to do work on the cheap and for others to exaggerate the scale of the work that may be required to generate business. I hope, however, that a truly proportionate and safe approach will now be followed as a result of the BSI’s work.

[Royston Smith (Southampton, Itchen) (Con)]

I joined this campaign a year or so ago because, as the Secretary of State said in his statement, leaseholders are blameless and it is morally wrong to make them pay. I look forward to seeing this become part of the Bill so that leaseholders know that they will never have to pay. However, let me go back to insurers: not only are they increasing premiums by up to 1,000% for people who cannot really afford the premiums that they were paying before, but insurers are part of the problem. They were indemnifying these developers and underwriting these developments. They are part of the warranty issue and yet, this has not been brought into scope as part of the solution, so will the Secretary of State look again and make sure that insurers have to pay in the way that developers will?

[Michael Gove]

My hon. Friend makes a very important point and his campaigning has been a significant factor in helping us to get to the right, or certainly to a better, position. We want insurers to be part of the solution, as we want everyone to be, and Lord Greenhalgh is doing great work with them. I am sure that there will be an opportunity before too long for me to explain in greater detail, with Lord Greenhalgh, to my hon. Friend and others the progress that we are making, but he is absolutely on the button in pointing out some of the mistakes that have been made that need to be addressed by the insurance sector.

Budget Resolutions

Royston Smith Excerpts

Monday 1st November 2021 Commons Chamber

[Royston Smith (Southampton, Itchen) (Con)]

Levelling up is not about geography, it is about opportunity. When highlighting the deficiencies and challenges of a place, it is a tricky balancing act. When bidding for funding it is necessary to highlight the weaknesses, and when encouraging businesses to locate or relocate we emphasise the strengths.

Southampton has many strengths: it has historic medieval walls and one of the busiest ports in the country; it is home to the iconic Spitfire; and it is from Southampton that the pilgrim fathers set sail to the new world more than 400 years ago. The Port of Southampton and Carnival cruises are large private sector employers, and we benefit from a healthy public sector too, with two world class universities, the National Oceanography Centre, a renowned specialist hospital and a Premier League football club. On the face of it, it all sounds rosy, but if we scratch beneath the surface, we see a different picture. The city and my Southampton, Itchen constituency have some of the most deprived wards in the country. We have too many children in care, our schools underperform and we have generations in the same family who have never worked. The city had a proud shipbuilding and aviation heritage. It produced the famous Ford Transit van until 2013, and was home to Pirelli Cables and British American Tobacco. Those blue-collar jobs have mostly all gone; all too frequently, they have been replaced with jobs in retail, hospitality and leisure, with few, if any, prospects, no job security and notoriously low pay.

If the city is to thrive again, we need to create jobs with security, career prospects and good rates of pay. Our reliance on retail and hospitality was brought into sharp focus when covid arrived. When the country shut down, Southampton and, in particular, its young people, bore the brunt. Construction was quickly back and the port carried on, albeit somewhat differently, but hospitality and retail could not reopen and thousands found themselves either furloughed or redundant. With our major manufacturing gone, Southampton is like any post-industrial city of the north. Where once 4,500 people were employed in the Ford factory alone, and thousands more in Vosper Thornycroft and Pirelli Cables, now we have few manufacturing jobs and few with the job security that our former manufacturing base provided.

Levelling up is not about geography, it is about opportunity. In the first round of the levelling-up fund, Southampton City Council, then controlled by Labour, did not even bother to bid. Thankfully, in May they were kicked out of office and were ably replaced by a dynamic Conservative council, led by Councillor Daniel Fitzhenry and his deputy, Jeremy Moulton. We can be sure that Southampton will bid for the next round of the levelling-up fund in the spring.

To create more secure jobs, we need infrastructure. I agree with the direction of travel on net zero and clean air, but that does not mean that vehicles will not need to access the city—we just need cleaner, greener ones. Our port welcomes 2 million cruise passengers per year. It is the busiest car-export port in the country and the second-busiest container port. More containers and cars are going by rail, but it will never be all of them that do so, or anything like it.

As the Government look north to the red wall seats so dreadfully served by Labour for decades, they must remember to look south to those cities that fared little better from years of Labour representation. Levelling up is not about geography; it is about opportunity. If we do not understand that, we are likely to sleepwalk into a situation in which the rush to level up north will leave the south as left behind as it always was. We simply cannot allow that to happen.

Building Safety Bill

Royston Smith Excerpts

2nd reading
Wednesday 21st July 2021 Commons Chamber

[Sir Mike Penning (Hemel Hempstead) (Con)]

Welcome to the Chair, Madam Deputy Speaker, and perhaps I should declare an interest as a former firefighter and a former fire Minister.

I took the promise of the Housing Minister, who is a good friend and an honourable Gentleman, that the previous Bill, the fire Bill, was not the vehicle in which to bring forward measures to protect the leaseholders in my constituency. I tabled or signed some amendments as probing amendments, but then withdrew them, and I took a lot of flak from leaseholders in my constituency, who said I had let them down. I am not going to let them down with this Bill, because it was supposed to address their concerns.

Thousands of my leaseholders are trapped within their properties. Thousands of them have already paid unbelievably large amounts of money which they cannot afford, and even if they could afford to pay it is morally wrong in the first place.

[Royston Smith (Southampton, Itchen) (Con)]

While I understand that the ministerial statement was late in being shown to us, does my right hon. Friend agree that there is much in it to be optimistic about?

[Sir Mike Penning]

I agree. There is a lot in it that is good. I did not have a chance to read it while the Secretary of State was still making his speech because I am not that brilliant at doing such things, but I have read it since the Secretary of State sat down and there are some good things in there. There are questions about it and I hope to serve on the Bill Committee; I hope those on the Treasury Bench listen to me on that, although that might be slightly difficult for Ministers.

I completely agree with my hon. Friend the Member for Stevenage (Stephen McPartland), I agree with the Chairman of the Select Committee, the hon. Member for Sheffield South East (Mr Betts), and I agree with much that was said from the Opposition Front Bench as well. This should not be party politics; this should be about what is right and what is wrong. This is a homeowning nation, and that includes freeholders and leaseholders, and the party I am proud to be a member of is a home- owning party.

On Grenfell, I pay huge respect to the families who lost loved ones or whose loved ones were injured, and to my former colleagues who went in the right direction with their paramedic friends and the police when the rest of the public quite rightly got out of the way— the bravery of the firefighters at that incident is to be commended.

However, there are issues that are not addressed in the Bill. This is not all about cladding. It is about the remedial works people are being charged for and the fire watch. I have heard of situations where residents in one block—a fairly low-rise block, actually—were told they could not have any mats outside their front doors. As a former firefighter, I think that is bonkers. They were told to take pictures of the wall in the communal areas. That is not what went wrong at Grenfell; what went wrong at Grenfell was a systematic failure across the picture—including within the fire service, to be fair. I was trained on high rise and in high-rise fires we told residents to stay in their flats. We told them they were safe in the stairwell, but often they would not be.

There is one area that fascinates me. We have heard about insurance and keep talking about insurance premiums, but where are the insurance companies paying out on premiums paid by the developers and contractors? When I was a builder I could not walk on to a building site without having liability insurance.

We can do this; we did this as a Government when the mesothelioma Bill went through this House and we compensated people dying from asbestos who could not find an insurer or a contract. The Government intervened to compensate those families and loved ones, and that is what we will have to do here, too.

I will be joining my colleagues on amendments that we have signed, and if I cannot serve on the Bill Committee what a great opportunity there will be for me on Report, not because I want to be difficult, but because I want to get this right for leaseholders. I was promised the previous Bill was not the answer. This has to be the answer to put things right.

--- Later in debate ---

[Royston Smith (Southampton, Itchen) (Con)]

For the avoidance of doubt, I refer the House to my declaration in the Register of Members’ Financial Interests; I do not think this does affect me, but just in case and for the avoidance of doubt.

I really hoped that we would have resolved the awful situation for leaseholders during the passage of the Fire Safety Bill, but of course we all know that did not happen. During those many debates, the Government told us that the McPartland-Smith amendments to the Fire Safety Bill were defective and the Fire Safety Bill was not the place to deal with who pays for remediation. The Government said that the Building Safety Bill was the Bill to address those issues. We now know that the Building Safety Bill in its current form does nothing to address the fundamental issue: leaseholders should not and will not have to pay.

Too many issues have been deemed fire safety defects when they are not. The Secretary of State and his statement have referred to it, but it cannot be repeated often enough. Most people in high and low-rise apartments are safe. Most buildings are not dangerous. Not all cladding is flammable. I am not sure, Madam Deputy Speaker, what you would have to do to ignite a wooden balcony, for example. But people living in properties with those features cannot sell and have extortionate insurance bills. Some simple changes such as smoke alarms and fire alarms and a realistic reinspection would make the properties that are currently dangerous safe again. I hope that the written statement becomes legislation and will go some way to address that. If we look at the properties that should not be failing EWS1 and we remove them from the process, the remaining buildings could be remediated far more quickly. Most properties would then see their values restored and the market will again operate successfully.

There are of course other issues, and in summing up, I hope the Minister will explain why insurers have apparently been let off the hook. Every development has professional indemnity insurance. It is the law. As soon as there is a complaint, the insurers are informed. As soon as they are informed, they should start the process of settling any claims. Why are they allowed to remain in the shadows while innocent leaseholders pick up the tab? Is it not time for us to name and shame the insurers that covered the risk of development, but have not offered to put right the defects?

One solution is a levy, as house builders now accept. They know, as I know and everyone else knows, that that is the only way out, and they want out of this nightmare as quickly as everyone else. They are suffering reputational damage for issues that were no more their fault than the fault of the leaseholders; it was down to regulation and legislation, and the failure of the insurance companies, which have some way to go on that. Taxpayers should not pick up the tab, but they can underwrite the remediation not covered by insurance. The levy can then pay back the underwriting and everyone can go back to living in a safe property, which is what they deserve to do.

Fire Safety Bill

Royston Smith Excerpts

Wednesday 28th April 2021 Commons Chamber

[Madam Deputy Speaker (Dame Eleanor Laing)]

We have a very short time for this debate, so I am afraid that we have to have a limit of three minutes on Back-Bench speeches.

[Royston Smith (Southampton, Itchen) (Con)]

First, I have agreed with pretty much everything that the hon. Member for Croydon Central (Sarah Jones) has said in these debates over the last few weeks, but I disagree fundamentally with her bringing into it this political trope that the reason the Government will not act is that they are all in the pocket of the developers. That does not help this debate, it does not help us move it forward, and it does not help the leaseholders to keep putting in their minds that there is some sort of conspiracy. I agree with the hon. Lady on almost everything, but certainly not on that.

In yesterday’s debate, the Minister said—this was repeated just a few moments ago from the Dispatch Box—that

“all of us in this House agree that residents deserve to be safe, and to feel safe, in their homes.”—[Official Report, 27 April 2021; Vol. 693, c. 264.]

He is correct. We all agree on that. I think we all agree —at least, the Government, from the Prime Minister down have repeatedly said they agree—that leaseholders should not have to pay for historical fire defects.

Fire Safety Bill

Royston Smith Excerpts

Consideration of Lords message
Tuesday 27th April 2021 Commons Chamber

[Madam Deputy Speaker (Dame Rosie Winterton)]

We now move to a three-minute time limit. I call Royston Smith.

[Royston Smith (Southampton, Itchen) (Con)]

The longer this debate drags on, the more damaging it becomes to the Government and the worse it becomes for innocent leaseholders. On Saturday evening, there was a fire in the tallest tower block in Southampton. That building has ACM cladding. As I understand it, it was alight. Hampshire fire and rescue responded quickly and dealt with the fire with its characteristic professionalism. Fortunately, the fire was not too serious, but it could have been. What would we be saying today if the worst had happened, I wonder?

I have said from the start that there are three dimensions to the fire safety scandal: the moral, the economic and the political. The moral obligation is obvious: this Government have a duty to hold those who are responsible to account and to defend the innocent leaseholders. There should be no disagreement on that issue.

Secondly, on the economic, the Government clearly think that my concerns about toxic debt, mass bankruptcy and repossession are wrong, but it is not just me who thinks it is a risk. The Bank of England is concerned, too—so concerned that it is assessing whether the fire safety scandal could cause a new financial crisis. With up to 1.3 million flats unmortgageable, perhaps the Government should be a little more concerned about the economic issue.

Finally, on the political, the Government believe in the home-owning democracy. It defines us. We have encouraged it. We have incentivised it. In fact, many people would not be in their own property without the support of Government. How do we look ourselves in the mirror when we have helped people to buy a home in a dangerous building that is worth less—sometimes much less—than they paid for it? The truth is that most MPs, including Conservative MPs, agree that the Government should resolve this issue. They believe, as I do, that it should not be the taxpayers who pay, despite what some in government have been saying. It should be those who are responsible—the manufacturers, the developers, the National House Building Council and development control. Some of those, of course, are local authorities. The Government can underwrite what is needed and then take it back from the industry. It may take years, but we will charge interest. It should be those who are responsible who pay.

We have been accused of wanting to kill the Fire Safety Bill. Nothing could be further from the truth. If the Government wanted the Bill to succeed as much as I do, they would do what was necessary to get the Bill through this place and the other place, but they have thus far chosen not to. After today, the Bill will go back to the Lords, and it will, in all likelihood, come back again. The amendment may come back with a different name and moved by someone else. If that happens, the Bill may well fall. That will not be my fault or our fault. That will be the Government’s fault.

[Hilary Benn (Leeds Central) (Lab) [V]]

It is a great pleasure to follow the hon. Member for Southampton, Itchen (Royston Smith). Here we are again debating a Lords amendment to protect leaseholders from having to pay to fix construction defects and unsafe cladding that never were and never should be their responsibility, and yet Ministers continue to resist, even though they have repeatedly said that leaseholders should not have to bear the cost. The trouble with this endless debate is that the clock is ticking and innocent leaseholders continue to face unreasonable costs as bills now start to arrive demanding sums of money that they simply do not possess. One constituent wrote to me last week enclosing a photograph of the bill he has just been sent, for £27,000. Another thinks that their bill will be £40,000. They obviously cannot remortgage their flats. So I ask the Minister: what are people in this situation meant to do? Sadly, we know that the Government do not have an answer to this, or indeed to the mental and emotional torment that these people are being put through. That is why this amendment is needed, and needed now.

Even taking account of the Government funding already announced, the Leasehold Knowledge Partnership estimates that about two thirds of the total cost will still fall on leaseholders: the very people whom the Government say should not pay. The Association of Residential Managing Agents estimates that the average remediation bill will be about £50,000 a flat and that insurance costs have risen by 400%. The Government estimate that the average cost of a waking watch outside London is over £2,100 a year for each flat. Leaseholders in shared ownership properties are in a particular bind. The building safety fund is moving too slowly. There is a shortage of companies who can, or will, do the work. There is total uncertainty as to what is meant to happen when we know that there are other works that have to be done to make buildings safe but for which the Government are not prepared, so far, to offer funding. I find it very hard to believe that Ministers do not understand that the remedy they have come forward with so far is patently insufficient, or that, without a comprehensive plan, leaseholders will, month by month and year by year, inevitably face financial collapse because of the huge burden of costs being put on their shoulders.

In conclusion, can I assure the Minister that the growing number of MPs who support the Lords amendment are not going anywhere, and that is because our constituents have nowhere else to go?

Fire Safety Bill

Royston Smith Excerpts

Consideration of Lords amendments
Monday 22nd March 2021 Commons Chamber

[Mr Deputy Speaker (Mr Nigel Evans)]

I will call the Minister to wind-up the debate at five to 9.

[Royston Smith (Southampton, Itchen) (Con)]

First, may I put on record my thanks to the Lord Bishop of St Albans and the Bishop of London, without whom this amendment would not be back here tonight?

Not to try to outdo the right hon. Member for Leeds Central (Hilary Benn), in my hand this evening I have an invoice. It is an invoice for service charges and remediation of fire safety defects; it is an invoice for nearly £79,000. Imagine for one moment you are trapped in a flat you have been told is unsafe. Night after night you go to bed with the fear of fire. You cannot sell your flat because it is worthless. Everyone knows that none of this is your fault, but then an envelope drops through your letterbox. When you open it, there is a bill for £78,000 to put defects right that are not of your making.

I am asking Members across the House to vote tonight to agree to the Bishop of St Albans amendment—better, or formerly, known as the McPartland-Smith amendment to the Fire Safety Bill. I am asking them to vote with us tonight because bills like this one have already started to arrive and they are not going to stop. Everyone knows what is happening, and if they do not they should open their emails and read the heartbreaking experiences of their constituents. This is not politics; it is not ideology—in fact I do not know what it is, but is it any wonder that some leaseholders feel that there is some sort of a conspiracy against them?

Are we going to let the innocent continue to pick up the tab for the guilty? What are we doing about the developers, the contractors and the manufacturers? What are we doing about the insurers and the National House Building Council? What are we doing about local authority development control and others that signed off these buildings as safe? Are they sleeping soundly in their beds tonight?

There is an economic reason for voting for the amendment, and there is a political reason for voting for it, but beyond that there is a moral reason. If this Bill becomes law, we will be abandoning hundreds of thousands of innocent people, and I am not going to have that on my conscience.

[Vicky Foxcroft (Lewisham, Deptford) (Lab) [V]]

I am grateful for the opportunity to speak this evening. I have been contacted by and met hundreds of concerned constituents, many of whom are trapped in unsafe leasehold properties. I have also met Clad DAG, a group set up to ensure the voices of disabled leaseholders are heard, and I hope the Minister will also meet them. Many of those I have spoken to bought their first home through Government schemes that they believed would help, rather than hinder, them. They now wish to move on, but are instead facing bankruptcy due to astronomical bills. Understandably, they want to know why those who should be taking responsibility are not.

Let us look at the example of Berkeley Homes and its subsidiary St James. Unlike other developers and housing providers in the constituency, the chief executive officer of Berkeley Homes has refused three times to attend public meetings that I have organised, or to answer leaseholders’ reasonable questions about remediation costs. The company remains in dispute with the owners of Aragon Tower in Deptford about whether the fire breaks in the building are faulty. Meanwhile, more than 160 residents are fearful of what might happen while they are asleep.

--- Later in debate ---

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I draw the House’s attention to my entry in the Register of Members’ Financial Interests.

The first thing to say is that I agree with many of the comments that have been made. It simply cannot be right that leaseholders are faced with bills of tens of thousands of pounds. Nevertheless, I cannot support the amendment because I do not think it is effective, for a number of reasons. First, it seems to put somebody—an indeterminate person—on the hook for fire safety remediation forever. As I read it, it is not limited to historical defects.

[Royston Smith]

Will my hon. Friend give way?

[Kevin Hollinrake]

I do not think I should, because of the timescales, but as my hon. Friend is an author of the amendment, I will.

[Royston Smith]

I am grateful to my hon. Friend. I want to ask him this simple question, which I am sure he will appreciate. We have been back here three or four times now to discuss this, over and over, and every time I have said that if the amendment is defective, the Government should make it work and have it as their own. Does he agree that that is the way to go?

[Kevin Hollinrake]

After the previous debate, I offered my hon. Friend the opportunity to sit down and look at an amendment that might work, in concert with the Government.

The other difficulty with the amendment is that it would put the onus back on a building’s freeholders. Many people would say that that is fine—that it is better than the leaseholders having that responsibility—but I do not think it would put the leaseholders in a better situation, because the freeholder would simply close down the company and hand back the responsibility, which would fall back on to the leaseholders. I simply do not think the amendment works.

I have a couple of general comments. I was a member of the Housing, Communities and Local Government Committee at the time of the Grenfell tragedy, and the first thing for which we campaigned—straightaway, like many Members in this House—was a complete ban on combustible cladding. That is exactly what the Government stepped in to do. Of course, that ban is prospective, and it left a retrospective issue. The Government have clearly stepped in on the retrospective issue of cladding on high-risk buildings, which is exactly what the Select Committee campaigned for—those 1,700 high-risk buildings that were over 18 metres. That is what the £5 billion of funding remediates.

Many people in this debate have asked about the other elements, such as the missing fire breaks. It is of course absolutely right that we cannot expect leaseholders to take on a debt of tens of thousands of pounds; that is simply not right. We need to take a risk-based approach to the issue. Lots of buildings, particularly lower-rise buildings, can be safely remediated without necessarily replacing cladding: sprinklers, fire alarms and other systems can make those buildings just as safe.

We need to form a coalition of people right across the sector—be it building owners, contractors, managers or manufacturers—to find the best risk-based solution to the problem while minimising the cost for anybody, not least leaseholders. Of course developers should pay, and in many cases they have—Persimmon has just put £70 million to one side to remediate some of its buildings—but the difficulty is that we are often trying to deal with developers that are no longer there. The levy that the Government have introduced is absolutely the right solution, and I urge them to extend it to materials manufacturers and in particular insulation manufacturers, which I feel are principally responsible for the scandal of the situation in which we find ourselves.

On leaseholders, we of course do not want to see anybody go bankrupt as a result of these costs. There is a cap on costs for lower-rise buildings; it may well be that there should be a cap on the costs of remediating these issues for any leaseholder in any building. We should look into that, along with the possibility of the Government top-slicing the risk to make the insurance costs much lower. There are solutions and we all need to work together to provide them.

Unsafe Cladding: Protecting Tenants and Leaseholders

Royston Smith Excerpts

Monday 1st February 2021 Commons Chamber

[Royston Smith (Southampton, Itchen) (Con)]

I draw the House’s attention to my entry in the Register of Members’ Financial Interests. I say that just for the avoidance of doubt, as I do not think the leasehold property that I own is included in this matter.

The cladding and fire safety crisis has blighted too many lives for far too long. Leaseholders bought their homes in good faith. They would have trusted the developer to build a safe home and they would have trusted the Government to ensure that it conformed with the law. Most would have needed a valuation for a mortgage and nearly all would have used a solicitor to ensure that everything was legal. Governments have encouraged them to buy by offering them incentives to do so. Buyers had every reason to expect that our building regulations were sound and could be more than forgiven for believing that modern flats built in Britain would be safe. However, the events of the past few years have shown that this is not the case. Leaseholders have had to wake up to a sobering reality that the dream of home ownership has turned into a living nightmare as they face huge bills and bankruptcy.

Let me make something clear: the Government are not to blame for this situation. This is not the fault of my right hon. Friends the Secretary of State or the Housing Minister; it is a failure of building safety regulation over many decades, involving many Governments. Regardless of what happens today, the Government have an opportunity to sort this out once and for all. They can give leaseholders the certainty and security they deserve and let the unwitting victims of this crisis once again sleep soundly in their beds at night.

The Government may feel that our amendment to the Fire Safety Bill is defective. Perhaps it does not do what leaseholders would like or it would slow the progress of the Bill. There is a simple solution, which was mentioned by my hon. Friend the Member for Harrow East (Bob Blackman): accept our amendment, tidy it up, and ensure that it does protect innocent leaseholders.

The shadow Minister for Housing and the Leader of the Opposition said in interviews today that we should put party politics aside and work together. I could not agree more. Labour has had seven weeks to sign our amendment—seven weeks of victims of this scandal begging it to join us—and what has it done? It has done as it always does—ignored the opportunity and instead jumped on a passing bandwagon. Labour has led the victims of the cladding crisis up the hill, and now it is going to abandon them at the top.

There are options for the Government, and I know that they are working hard to find one that works, but today I ask them to accept our amendment and once and for all tell the leaseholders that it is not their fault and they will not have to pay.