Building Safety (Remediation of Unsafe Cladding etc) Bill (Second sitting) Debate
Full Debate: Read Full DebateBob Blackman
Main Page: Bob Blackman (Conservative - Harrow East)Department Debates - View all Bob Blackman's debates with the Ministry of Housing, Communities and Local Government
(1 day, 13 hours ago)
Public Bill Committees
Sean Woodcock
Q
Ben Hopkinson: These kinds of tasks necessarily take time. It would be brilliant if you could snap your fingers and remediate all of the buildings really quickly. Unfortunately, there are inherent bottlenecks in capacity and skills—on which good progress has been made on resolving. However, it is not resolved completely yet. I suspect that with this Bill and more time, more buildings will be remediated.
Q
On centres, we heard this morning that Manchester, for example, has 129 buildings that have not been touched yet. That demonstrates that this is not just a London issue but a nationwide one. Equally, in London the building of high-rise properties has virtually come to a halt. In your opinion, is that because of the constraints that we are putting on them, to which this Bill will add, or is it because of the lack of skills? Alternatively, is it other costs or something else that we are not aware of? Will this Bill that we are considering end up causing further delays? I know that is a complicated question, but this is where we are coming from.
Sam Dumitriu: Ben, you published a paper on this yesterday.
Ben Hopkinson: Yes, I had a paper out two days ago about this.
It is important to remember that the macroeconomic conditions right now are not that favourable to housing. We have high build-cost inflation and high interest rates. That is a complete reversal of the situation 10 years ago. Yet, while we have a worsening macroeconomic environment, we are also seeing an increased burden on construction. Just in the past four or five years we have seen biodiversity net gain requirements, the residential property developer tax, the building safety levy, the second staircase requirement and the future home standard. All of those are burdens and all have a cost. Individually, they might be justified, but taken together we have seen a complete slowdown in new construction, especially in London, where over the past two years starts have been running at about 10% of the housing target.
These are the worst conditions for housebuilding in London since the second world war. We have to be honest about what new builds can be expected to pay for. It is not like there are infinite amounts that can be taken for Government priorities. In London specifically, my modelling found that 57% of the clearing price of a new build flat is downstream of Government policy. If we are building only 10% of the target, have a desperate housing shortage and new homes are inherently safer than older homes, we have to be realistic about the burdens that we are placing and work on easing them. I think that the Bill will not have that much of an impact on new builds—it is more about existing properties—so I am not really concerned about that.
Q
Sam Dumitriu: There are two real channels through which this could further increase costs. One would be about access to capital. If you are a developer and it turns out that you have to do some remediation works, that comes from your balance sheet, which means you do not have that money to invest in future projects. The extent to which that is a constraint is up in the air: if you are a developer that mainly focuses on London, you probably have capital to spare, and you are returning money to your shareholders anyway because of all the other problems that Ben has just described. The other concern would be about further cost inflation: increasing demand for those skilled workers will have knock-on impacts. However, I do not think they will be particularly large.
There is a broader point about the way we treat development as a cash cow. One of the problems is that politicians of all parties tend to shy away from raising taxes through the most visible means. There is the famous quote, I think from a French economist, that the art of taxation is plucking the goose with the least hissing. We tend to look for places where taxation can be done off the books—where we can fund spending in ways that are not particularly visible. We saw at the Budget—I welcome this—greater scrutiny by the Treasury of what goes into our energy bills, because we have kind of treated energy bills as a source of taxation.
The Chair
May I steer you back to what the Bill is about and to the questions, rather than a much more general view?
Sam Dumitriu: I am just saying that if we want to place cost burdens on developers, we need to be transparent about when there is a strong justification for doing so. At the moment, I think the justifications in this Bill make a lot more sense than those for many of the other burdens we place on developers.
Andrew Cooper
Thank you, Minister. I was going to ask you about the draft Commonhold and Leasehold Reform Bill, but you got ahead of me.
Q
Florence Eshalomi: I am happy to take that away, look at it and come back to the Member.
Q
Florence Eshalomi: It is important that we try and get a Bill that can get support across the House. That might mean sitting down with Opposition and Government Members to make sure we are bringing forward amendments that would help strengthen the Bill. We feel that the range of packages, as drafted, are strong enough, but that is something I would be willing to work with Members on.
Q
Florence Eshalomi: I am hoping so. One of the areas that Lord Andy Roe and Charlie Pugsley outlined was capacity across industry. A key issue that has been raised is around the quality and competency of fire assessors; making sure they are in place to carry out the assessments, first and foremost, is quite important. We are working to ensure we are helping and speeding that up.
I know that local government colleagues will raise the extra burdens cost, and we are looking at that. Hopefully, all these different measures should help, ultimately, to speed up that remediation. We have a target; we have not met that target yet, but we are on course and working at pace to make sure we hit it in time.