Building Safety Bill

Clive Betts Excerpts

Report stage
Wednesday 19th January 2022 Commons Chamber

[Christopher Pincher]

I will give way to the Chairman of the Select Committee on Levelling Up, Housing and Communities, and then I probably ought to make a little more progress, having thus far read out only one paragraph of my opening remarks.

[Mr Clive Betts (Sheffield South East) (Lab)]

It was very well read, though.

I re-emphasise the point raised by the hon. Member for Harrow East (Bob Blackman). The Select Committee will have a very short but very thorough inquiry into the issues that the Secretary of State rightly raised in his statement to the House last week and the follow-up, but debating time in this place is an issue. The Minister’s answer is very helpful because the Lords will have lots of time, and then it is normal for us to have one hour to consider their amendments. The Bill needs a full-day debate because the amendments that the Government intend to make, following consultation with industry, are key to resolving the issue. I appreciate what the Minister said, and I hope the business managers are as supportive when they come to allocate time.

[Christopher Pincher]

The hon. Gentleman and others remind me of what is often said of politics: even though everything that can be said has been said, not everybody who could say it has said it. He has just spoken for the entire House, and it is of course for the usual channels to determine the time allocated for debating and disposing of business, but the point of view of both sides of the House has thus far, very early in the debate, been heard.

--- Later in debate ---

[Matthew Pennycook]

It does apply to England and Wales, and I think that as a general point the Government need to co-operate much more closely with the Welsh Government on action on the building safety crisis.

As I was saying, new clause 13, proposed by the hon. Members for Stevenage and for Southampton, Itchen, does the same and we fully support it, as well as their new clauses 5 and 6. We will seek to divide on new clause 3 today, simply to reinforce to the other place the importance we attach to the issue of leaseholder protection, but we do want to work constructively with the Government on this matter in the period ahead, in the light of the change of tone and approach signalled by the Secretary of State last week. We hope that the absence of Government amendments providing for robust leaseholder protection today simply reflects the fact that they are not yet finalised and that we can expect them to be tabled, perhaps along with an amendment implementing a version of the polluter pays proposal, in the other place in due course. The Minister has had a couple of chances to answer this point and obfuscated to a certain extent, so I would appreciate it if he would clarify whether that is indeed the case in his closing remarks on this group, because many leaseholders across the country are seeking certainty on that point.

[Mr Betts]

Does my hon. Friend agree that there is a fundamental point here: if for individual blocks of flats we cannot track down the developer or whoever else was involved in the construction and get them to pay through the legal process, and if the Secretary of State’s charm offensive does not persuade the industry as a whole voluntarily to cover these costs, would it not be absolutely wrong if the costs were, effectively, passed on to the social housing sector through cuts in the Department’s budget? Is the alternative, therefore, to look at an extension of the levy or taxation scheme to make the industry pay if it will not voluntarily agree to do so?

[Matthew Pennycook]

The Chair of the Select Committee is absolutely right; it would be a travesty if the Government or this Department were forced to raid the affordable homes programme to cover the costs of fixing the building safety crisis. In those circumstances, they would have to look at other options, such as those he has set out.

I will finish by using this brief opportunity to put to the Minister four issues relating to those expected Government amendments on leaseholder protection that arise directly from the commitments made by the Secretary of State last week. The first issue relates to the point mentioned by my right hon. Friend the Member for Leeds Central (Hilary Benn) in his intervention: which leaseholders will any such robust legal protections cover? The Secretary of State’s statement last week caused a great deal of confusion in that area, so can the Minister clear up the matter today by making it clear that any such protections will apply to all leaseholders, not just leaseholder-occupiers and certainly not just the leaseholders that the Government deem, based on some unknown or unworkable criteria, to be deserving?

--- Later in debate ---

[Stephen McPartland]

I am very grateful to the Father of the House, and I would like to thank the cladding groups up and down the country, such as End Our Cladding Scandal UK, the UK Cladding Action Group and the Leasehold Knowledge Partnership. I record my thanks to the Father of the House and all my colleagues on both sides of the House who have done everything they can to get us to a position where we are working together to secure something that is in the best interests of leaseholders. The way in which the tone has changed, as all of us who have been working on this Bill have seen, and the way in which we now feel we can give the Government room to try to improve the Bill, give us great hope.

A number of the amendments—new clauses 4 to 13 —are specific technical amendments to give the Government examples of how we could fix the problem. The Government have tabled 70 amendments, but of course they still have to come forward with the amendments that we want in the Lords, otherwise the Bill will come back to this House and we will be in the same position, so I think it is important that we continue our efforts.

One of the issues facing leaseholders was the real frustration that VAT is levied on some of the costs. We are asking for the VAT to be scrapped, because when the Treasury puts forward £5 billion, £1 billion of it will be going back to the Treasury automatically; the frustration is understandable. Another example we give is how a previous defects Act—the Defective Premises Act 1972—could be used, as it was for properties with prefabricated concrete. The legislation exists, and these leasehold properties could be incorporated in it. There are a variety of other amendments on technical points, and they are the means of giving the Government examples of how we can support leaseholders.

There is a huge opportunity with new clauses 4 to 13 for the Government to think a little further outside the box. For example, I have a property in my constituency, Vista Tower—one of the famous properties—where the remediation costs are £15 million for 73 flats. The leaseholders paid £200,000 for their flats, and their remediation costs are £212,000, so hon. Members can understand what we are doing and why we originally got involved in this debate. Those people are beyond bankrupt. The mortgage companies are losing money, and that was before the leaseholders got into paying over £300,000 for waking watch and all the other interim costs that have added to the bills.

The Government have come with us and are working in a place where we can try to fix the problem, but there is still a lot more to do. Collectively across the House, we have to find a way forward. For that particular property, with the announcement that the Secretary of State made, leaseholders’ costs went from £200,000 down to £60,000. If we can get commitments from Ministers to include internal developer-responsible fire safety defects such as missing firebreaks, where the developers illegally constructed the building, leaseholders’ costs will collapse again.

I keep asking the Minister every time he looks at me, speaks to me or walks past me whether he will commit to protecting leaseholders in law with his amendments in the Lords. Obviously we all want that, and it is what leaseholders want, because we want to be in a position legally where we can say to a management company or freeholder, “You can’t charge them for this, and you can’t tell them”—as the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) has referred to—“that they’ve got 28 days to make this payment.” That is ridiculous, and it is not fair. The Government are working with us and listening to us, but there is a lot more work to do. I would like to continue working with the Government to ensure that we get out there and protect leaseholders.

Madam Deputy Speaker is now staring at me, so I shall bring my remarks to a swift conclusion. I would like to thank everybody who supported us throughout the campaign. We are not there yet, but we are very close to getting there and supporting millions of constituents up and down the country. I will not be pressing my amendments.

[Mr Clive Betts (Sheffield South East) (Lab)]

The principle that leaseholders should not have to pay for issues that are not their responsibility, as they bought properties in good faith, was first established in the Select Committee report in July 2018. I congratulate the hon. Member for Stevenage (Stephen McPartland) on the excellent work he has done in pursuing this issue from the Conservative Benches. The Select Committee, on a cross-party basis, has pursued it as well. I checked today, and we have done five separate reports, all of which have said that leaseholders should not have to pay. The hon. Member for Harrow East (Bob Blackman), who is in his place, has been party to all those discussions and reports. We have worked on an absolutely cross-party basis, as is correct. It is welcome that the Secretary of State made his statement the other day and effectively confirmed that as well. We have made it clear that this problem does not just apply to cladding; it applies to other defects as well. That has been an important issue, which the Government did not accept to begin with but have now got to the point of accepting.

The Government have responded with the initial money to deal with the aluminium composite material cladding that was on Grenfell, and then with the £1 billion—extended to £5 billion—building safety fund. That has been a step forward, but it will not cover the totality of the cost. We on the Select Committee have said right from the beginning that those who are responsible for defects on individual buildings should have to pay, but we recognise the impossibility of leaseholders taking on legal actions and being successful with them. Certainly, the Government are stepping in and adding some weight to try to involve the developers of buildings—the building firms that did the construction work—and the product suppliers. Of course, an awful lot of responsibility lies with them; Dame Judith Hackett’s report identified how many of the suppliers of products and materials were hawking their wares from one testing station to another until they found one that approved them. That is completely unacceptable, and they should be held to account as well. In the end, there will be many buildings for which even the owners, and certainly the initial developers, cannot be properly traced, and there may have to be a responsibility placed on the whole industry.

I come back to the point that I just raised with my hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook): what happens if the industry does not volunteer the money that is necessary? Let us make it clear that social housing providers are already having to pay some of the costs. On the initial scheme for ACM cladding, social housing providers were treated equally with private owners. That has not been the case since with the building safety fund. A social housing provider has to show almost extreme distress to get any money.

What is happening now? An interesting article in Inside Housing says that social housing providers, particularly housing associations, are passing on 500% increases in service costs—not just to leaseholders, but to tenants. It is absolutely wrong that among people living side by side in a flat, the leaseholder should eventually be protected through the legislation that we hope eventually to see from the Government, which is to be welcomed, while the tenant next door has to pay extra costs—not merely for their own flat, but possibly to take up the costs on the flat next door, which is now owned by a leaseholder. That cannot be right, that cannot be fair, and that cannot be just. The challenge is to treat social housing tenants the same. We are hearing evidence all the time—from housing associations, the National Housing Federation, the Local Government Association and councils—that the costs that are being incurred by social housing providers are not merely adding to the costs of their tenants but mean that they are cutting back on future house building programmes. That is what is happening and it has to be addressed.

[Andy Slaughter (Hammersmith) (Lab)]

It is happening now on a very large scale. This is what one of my major social landlords said about remedial works:

“The cost of this…is in the tens of millions of pounds and has led to us having to significantly reduce our development plans and slow down some of the investment work that we had planned to complete in our existing homes. If we were to try and fund the costs of this work for our leaseholders…this would effectively mean that social housing rents were being used to subsidise costs for leaseholders.”

It is robbing Peter to pay Paul.

[Mr Betts]

Absolutely. We have those immediate problems with the costs that are being borne by social housing providers.

If, in the end, the Government cannot get the money from the industry on a voluntary basis, and the Treasury is saying that there will be no extra money from the central pot and no extra taxation or levy, then there will be a cut to the Department’s own programmes, which effectively means the social housing programmes for the future. That will be another cutback to the badly needed homes that should otherwise be built. I say to the Minister and to my own Front-Bench colleagues that, in the end, these are the principles that we have to achieve: no costs on leaseholders, no costs on tenants, and no cuts to the future social house building programme either.

[Several hon. Members rose—]

--- Later in debate ---

[Mr Deputy Speaker (Mr Nigel Evans)]

I call Clive Betts, who has tabled amendment 73 and 74.

[Mr Betts]

And new clause 23, but let me comment briefly on two other new clauses. New clause 17, which was tabled by the hon. Member for Blackpool North and Cleveleys (Paul Maynard), is about safety on stairs and ensuring that stairs built in new properties conform to British standards. He is absolutely right and I have put my name to the new clause. Each year, 300,000 people are admitted to A&E because of falls on stairs. That is a staggering figure and anything that we can do to reduce that has to be considered. This proposal is not a difficult one; as he said, it should be easy to implement and cost-free because it would be in new properties. Making sure that the stairs are wide enough and have proper handrails is not rocket science, and I hope that the Minister might indicate agreement on that in future, even if he cannot agree to the new clause today.

I just want to make it clear that nothing I am saying here is meant to try to improve harmony in the Conservative party—that is not something I want to be associated with, as the hon. Member for Blackpool North and Cleveleys indicated. However, I am more than happy to have harmony with him in promoting new clause 17.

My hon. Friend the Member for Hammersmith (Andy Slaughter) is right that there should be similar standards for social tenants in social rented properties. The Select Committee on Levelling Up, Housing and Communities has an ongoing inquiry into the regulation of social housing, and if he could drop a note to the Committee as evidence so that we can take account of his proposals, that would be useful.

I turn to new clause 23 and amendment 73 in my name, which reflect what the Select Committee has looked at. Building control has come up as an issue as a result of the Hackitt review. Dame Judith Hackitt made it clear that two of her concerns about the construction industry were: the whole culture of the industry with its race to the bottom; and—this goes alongside that—conflicts of interest.

In the previous debate, I mentioned conflicts of interest on approvals for products in the industry, with suppliers hawking products around until they found someone—a friendly approver—who would approve them. Building control is the same—it is about the developer finding someone less likely to give them difficult scrutiny. The Government have addressed that for the highest-risk buildings, for which in future building control will be appointed by the regulator. However, for all other properties the developer can say, “Yes, I’ll have you to do my building control” or, “I won’t have you, because you gave me a difficult time with the last property I built.” That is not acceptable.

We need someone to approve a building who is independent of the developer. The Committee has gone on record on that several times, and we recommended it when we scrutinised the draft Bill. So far, the Minister has come back with, “The Government don’t agree.” I hope that at some point the Government will reconsider, because that seems to be a fundamental principle and something that will make all buildings safer in future. It would provide security for the owners, occupiers and tenants that their buildings have been approved by someone independent of the developer.

[Kate Green]

This is exactly the point. My constituents are deeply concerned as a result of some developers’ unscrupulous behaviour in appointing inspectors and building control approvers who they know will give them an easy ride. My hon. Friend may be familiar with the case of New Lawrence House in the constituency of my hon. Friend the Member for Manchester Central (Lucy Powell), which has the same developer that turns up often in my constituency. The issue was not that there was a definite intent to collude with the developer but that it was easier to turn a bit of a blind eye. Leaseholders in my constituency are worried about that real issue, so I strongly support his amendments.

[Mr Betts]

I am not aware of the particular scheme that my hon. Friend mentions, but unfortunately it is all too common that concerns are raised after the event about the quality of building control. It can sometimes be that an independent building control inspector approved a development, but all too often it is someone appointed by the developer, and that is not right. I am sure that the Minister will not have a conversion when he responds to the debate, but I hope that he might consider that this needs addressing in the future.

Let me turn to amendment 74, which is about the buildings in scope for the new regulatory regime. The Select Committee has been on the record as welcoming the Government’s approach to stronger regulation with the new Building Safety Regulator under the umbrella of the Health and Safety Executive. We supported all that, with one or two questions and reservations in our response on the draft Bill, but we said that the scope of that regulation should eventually be expanded to include other buildings. I think that the Government accept that in principle but do not want to lay down on the face of the Bill the other factors that might be taken into account to expand that scope of regulation at a future date.

--- Later in debate ---

[Mr Betts]

As my hon. Friend the Member for Luton South (Rachel Hopkins) said, the Bill is a response to Grenfell, and the intention must be to make sure that such a tragedy never happens again. That is a clear objective that everyone can share.

The Bill before us is welcome. It does many good things, and I would like to think that the Levelling Up, Housing and Communities Committee has helped in the process. We have had five inquiries and five reports, which I think have pushed the Government in the right direction, although probably not as far as we would want them to go in some respects. Certainly, the provision of funds for cladding removal, the initial move on the ACM cladding, the £1 billion and the extension of the building safety fund to £5 billion have all been welcome. That is something the Select Committee has recognised. Nevertheless, we are still in an imperfect position—we hope it is a position in progress, as the Minister has explained. I still want to see the objectives that I set out earlier to be met: that leaseholders, who are not responsible for these mistakes, should not have to pay; that tenants, who are not responsible, should not have to pay; and that there should not be cuts in the social house building programme to pay for this.

We welcome the Secretary of State’s recent announcement, and we are going to hold a short inquiry—it will be short in how quickly we are going to do it, but not short in the detail—to follow up on it. We join the Secretary of State and the Minister in wanting to ensure that those responsible for these defects are held to account and that the whole of the construction industry, in its widest sense, including product manufacturers, insurance providers and everyone else, ultimately has to pay for these costs. That is absolutely right.

To summarise, as the Minister rightly said, we are not, on Third Reading, at the end of the process, but at the end of the beginning. I welcome the Government’s and the Minister’s commitments to bring the issues back to this House for detailed consideration once they have been considered in the other place.

Two other issues need to be addressed in due course. We cannot legislate for one of them, as Dame Judith clearly identified: regulation is important, but there has to be a complete change of culture in the construction industry. The objective of that industry for too long has been to get around regulation; whatever regulations are in place, it has found ways to avoid them and to cut corners. That cannot continue, and that is a major challenge; we share the challenge but this is going to be very difficult to achieve. Parts of the industry have woken up and recognised this, but other parts hope that this will all go away and they can carry on as before. That cannot be allowed to happen.

Finally, let me return to the comments made by the Father of the House, who has done magnificent work in pushing the case for leaseholders and leasehold reform. After we have, as we hope to do, got this Bill and subsequently the Act into a form that we can all thoroughly support, we will then move on to dealing with the issue of leasehold reform in full. I offer again to the Government the Select Committee as a way to look at that proposed legislation in draft form. It is going to be complicated and detailed, but I think there will be cross-party support in principle for it. So I hope that the Government will look at bringing that forward in draft form. We will look at it and scrutinise it rapidly but thoroughly in the Select Committee. By doing that, we can make that also a better piece of legislation.