Building Safety Bill

Baroness Brinton Excerpts

Committee stage
Thursday 24th February 2022 Grand Committee

[The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)]

My Lords, the noble Baroness, Lady Brinton, is taking part remotely, so I invite her to speak now.

[Baroness Brinton (LD) [V]]

My Lords, I declare my interests as a vice-chair of the All-Party Parliamentary Fire Safety and Rescue Group and a vice-president of the Local Government Association. I support all the amendments in this group in the names of my noble friends Lady Pinnock and Lord Stunell.

In his response to the previous group and to some groups on the first day of Committee, the Minister rightly said how shocking some of the revelations have been to him, to us and to many others as more systemic failures have been uncovered, and how far too many people were able to refuse to take responsibility for their role in the problems.

Along with other parliamentarians, I heard Dame Judith Hackitt speaking on a number of occasions during and after her review, and I have also read her Independent Review of Building Regulations and Fire Safety—both the interim and the final reports. Her foreword to the final report published in 2018, which she describes as a personal view, is extremely powerful as a summary to the cultural and regulatory structures in the built environment sector and explains exactly why the amendments in this group are so necessary.

--- Later in debate ---

[The Deputy Chairman of Committees (Baroness Henig) (Lab)]

My Lords, the noble Baroness, Lady Brinton, is taking part remotely, and I invite her to speak.

[Baroness Brinton (LD) [V]]

My Lords, I wish to speak briefly to the amendments in this group, particularly in relation to the issue of perpetrator pays for fire hazard remediation—work that must be carried out speedily to ensure the safety of the inhabitants of the building. Amendment 24 and others, introduced by the noble Lord, Lord Young of Cookham, sets out the removal or alteration of offending work that contravenes fire safety regulations. It is interesting to note that he joins a group of former Ministers who are now trying to remedy the problems that were around during their time as Ministers. I think we should thank them not just for their humility but for their acknowledgment, through their amendments, that change is needed even more urgently than ever.

The noble Lord is right that his and other non-government amendments in this group are critical to delivering what the Government want to achieve, despite their own proposals being inadequate. I echo his point that if the Government think that things can be done more effectively to achieve the objectives that he outlined, I suspect that the Grand Committee would want to hear them.

The Minister spoke earlier of his surprise about the mechanisms of current building work guarantees and the role of insurers and warranties. Insurers have, rightly, made it clear that they are not responsible for this crisis. Insurance is not eligible in the event of defective work, and insurers never sign off work; they rely on the assurances of the companies they are insuring that the work is safe. The practical problem is that too many companies have relied entirely on their insurers. In my former professional life as a Cambridge college senior bursar, I have been that client who has sat in the middle and watched arguments about who should pay for defective work on blocks of flats, including works on a fire hazard in a medium-rise building.

The problems we faced as a college, even though they were with student accommodation, were absolutely nothing compared to the problems that leaseholders and renters in blocks of flats face. Talk to any of the current leaseholders living in blocks known to be unsafe: even with waking watches overnight, families are constantly on edge, and too many face the threat of worthless homes that are unsaleable until the perpetrator pays principle is fully brought into effect. I think “perpetrator pays principle” will be one of the next speech therapist phrases that people have to articulate; it is quite difficult to get your mouth around. The current government proposals do not take into account too many leaseholders who, like those in high-rise cladding buildings, are also not responsible for the defective work done by others.

Amendment 118 makes it clear that those who should pay, in the event of a block of flats having fire hazards, are those who did the work itself. The Government’s current proposals do not go far enough and still leave too many loopholes for those living in unsafe flats. This is the moment that legislation can and should make it absolutely clear that the perpetrator is responsible and must effect the remediation work and pay for it. In the event of a gap between that work being necessary to be carried out and it being agreed that the perpetrator should pay, the Government should indeed step in to help out.

[Lord Greenhalgh (Con)]

My Lords, before I get my bearings, it is always good to have a few Latin phrases. “Quis custodiet ipsos custodes?”—well, I am just going to say, “Res ipsa loquitur”.

This is the “PP” group of amendments: “polluter pays” if you are my noble friend Lord Young, or “perpetrator pays” if you are the noble Earl, Lord Lytton. Although I will respond formally at the end— I am now speaking to the government amendments—I honestly agree with the sentiment of working with noble Lords and that a pick-and-mix approach is the right way forward. I am very keen to do that between now and Report. That is not in my speaking notes. The important thing is that we need a practical approach. We need one that works in law and in practice, and of course we want the polluter to pay.

I have taken noble Lords’ amendments and sought external counsel opinion, off my own bat, from a leading QC who deals with these issues in the courts to get their opinion. While I know my noble friend has tremendous ministerial experience, he perhaps has not always been in the courts when these things go into dispute. I know the noble Earl has considerable professional experience, but, again, this has to work in law as well as in practice. As the Committee will all appreciate, any scheme that requires government funding is not just a matter for this department; it is a matter for the Government and, in particular, needs Treasury approval.

I have always accepted that, in order for the polluter to pay, we have to have something that establishes liability at the building level. It is not an either/or. That is not to say that the Government’s approach is wrong; I think the Government’s approach is right. We have to have a waterfall effect that goes down the list of the polluters but recognises that not all freeholders are equal—some are “more equal than others”, to quote George Orwell—and that perhaps assignment of liability can be varied in regulation to reflect that. But all that detail is something that happens at later stages of the Bill, as my noble friend will know. Perhaps we will tease out some of those points in due course.

Clearly, if you are a developer like Ballymore that retains its freeholds, it is very easy. But if you are a developer like Berkeley, which often sells off its freeholds to a freehold investor, it becomes slightly more complex. But the intention of the Government is certainly not to let the Berkeley Group off the hook because it took another £20 million or £30 million by selling its freeholds off to another group to manage. It is still in the frame for the buildings that it built. I mention those developers just as examples, because we are obviously talking about a crisis that affects all the major housebuilders, as they freely acknowledge—not just the large ones but the medium and small ones, which have all contributed to a crisis that has brewed up over decades.

Let us move to the government amendments. Following my 11 January repeat of a Statement to this House, we have been clear on our expectations that developers should commit to self-remediate all unsafe high and medium-rise buildings for which they are responsible. They should agree contributions to fund the remediation of all cladding on buildings of 11 to 18 metres. The department has been in discussions with industry leaders on this matter and is making good progress towards a solution. I have had discussions with the medium-rise developers and have been alongside the Secretary of State in all those substantive discussions. However, should we need to take action against those unwilling to make these commitments, amendments tabled in my name will make it possible to impose a solution in law and make sure that developers and manufacturers take responsibility for rectifying building safety defects. I will now outline these important government amendments.

The first measure we are proposing as part of our package to ensure that the burden of paying for fixing historical building safety defects does not fall on leaseholders or taxpayers is a group of amendments to the building safety levy. They are an important part of the solution as they allow the building safety levy to be imposed in relation to building work going through the building control process on all residential buildings, not just buildings over 18 metres or seven storeys. This will enable the Government to raise funds to remediate cladding should the industry fail to step up and pay for the problems it has caused. It is our intention to set out in secondary legislation the levy rates and the details of who the levy applies to. By then negotiations with industry should have been concluded.

I now turn back to the package of government amendments and outline the further amendments that we are proposing to ensure that developers and manufacturers take responsibility for rectifying building safety defects. This package of amendments addresses many of the concerns highlighted today. They introduce measures to allow us to distinguish between companies that commit to shouldering their share of the blame and those companies that do not. The measures will incentivise industry actors to take responsibility in resolving issues with unsafe buildings, through firms committing to remediate buildings with which they are associated, and to contribute towards the funding of remediation of other unsafe buildings.

The first two amendments in this package would give the Secretary of State a power to establish a scheme or schemes for the building industry. This would act as a means of identifying which industry actors, including developers, and cladding and insulation manufacturers, have done the right thing and committed to act responsibly. Regulations will set out which persons in the building industry may be members of the scheme. In the first instance, the Government are minded to focus this measure on major developers of residential buildings and manufacturers of cladding and insulation. We are keeping this under review as talks with industry continue. Industry actors will be considered “responsible” if they meet published membership criteria for a scheme for which they are eligible. The membership criteria for a scheme will be set out and will include a commitment to rectifying building safety defects. The distinction between responsible actors and actors who have failed to do the right thing will be taken into account by the Government and regulators in their interactions with firms that are eligible for inclusion in a scheme.

The third amendment would give the Secretary of State a power to block developers that have failed to act responsibly from carrying out development for which planning permission has been granted, and to make sure that any breach of this block would be subject to enforcement action. The amendment would also allow the Secretary of State through regulations to require a developer to serve a notification of proposed development commencement and to prevent the grant of certification of lawful development for affected developers, should they seek it.

The fourth amendment would give the Secretary of State the power to prevent developers that have not committed to act responsibly, as set out in regulations, obtaining building control sign-off on their developments. This will make selling developments difficult for these developers, as building control approval is in most cases a prerequisite to occupancy and sale. The building control prohibitions will be imposed by regulations that will also set out details such as prescribed documents.

These new measures will help to make sure that while responsible industry actors can go about their business freely and with confidence, others will face significant legal, commercial and reputational consequences. They align with two of the principles set out by the Secretary of State: that the industry must pay for remediation and that the burden should not fall on leaseholders or the taxpayers. These measures will ensure that the burden is shared among the relevant industry actors while protecting leaseholders and the taxpayer. We cannot continue to allow those who are unwilling to commit to resolve the building safety crisis to have a role in building homes of the future. These amendments are being tabled to ensure that we have the legislative provision to help us to do this. I beg to move.