Building Safety Remediation: Leaseholders

Jonathan Lord Excerpts

Wednesday 22nd June 2022 Westminster Hall

[Shabana Mahmood (Birmingham, Ladywood) (Lab)]

I beg to move,

That this House has considered the financial effects of building safety remediation on leaseholders.

It is a pleasure to serve under your chairmanship, Mr Stringer. I am grateful to have the opportunity to directly address the Minister on some of the ongoing financial impacts of building safety remediation—what has come to be known as the cladding scandal—on behalf of leaseholders in Birmingham, Ladywood, and all over the country.

Last week, we saw the five-year anniversary of the Grenfell disaster. It was a truly horrific tragedy that claimed the lives of 72 people. No one who saw that building aflame or the images on the news will ever forget them. It has left a mark on not just those affected but the whole country. The inquiry into that disaster is ongoing. I have a real concern that it may prove to be one of those cases, which we have seen too many of in this country, of justice delayed being justice denied, and that, while the inquiry may result in new procedures, those responsible for the events that led to that disaster may not be held directly to account. We live in hope and I send my solidarity—I am sure everyone present will agree—to the loved ones of those who perished at Grenfell.

The impact of Grenfell has extended much further than most of us could have imagined. That tragedy has exposed a shocking litany of regulatory failures and, in my view, outright negligence, which has led, as I say, to what we now call the cladding scandal. We have gotten a little too used to calling it a scandal when we consider the huge impact it has had on my constituents and people all over our country. It has exposed huge issues in building safety. My experience has been that just as I get my head around one part of the problem, many more present themselves—I am sure that that has been the experience of the Minister and his predecessors.

The cladding scandal has cost many of my constituents their peace of mind. It has cost them financially and wiped out life savings. It has left people languishing in the stress of knowing that the building where they live, raise their family and go to sleep every night is unsafe and poses a real fire risk. It has brought many to the brink of a complete mental and physical breakdown. I have sought to support my constituents and have dealt with many of the issues they have raised with me over the many years since this scandal was revealed. We have been campaigning together ever since, along with other leaseholder action groups that have sprung up all over the country. I am particularly grateful to the UK Cladding Action Group and the Birmingham Leaseholder Action Group, as well as other groups across the country, which have relentlessly supported leaseholders. Of course, many of them are leaseholders themselves trying to press the Government to act.

The Government have passed new legislation, and I state at the outset that I recognise how much the Government have moved from their original position, and I welcome many of the changes. However, and it will not surprise the Minister to hear me say this, I do not consider the new cap, which means that some leaseholders will pay some money towards the cost of remediation, to be fair, because they have done nothing wrong. This is not, and should not be, on them—not any part of it, not even at a capped amount. They should be spared any financial contribution. I regret that there is no direct assistance in the Building Safety Act 2022 for leaseholders who have already paid towards remediation work. There is the possibility of redress through civil action but the Act does not offer any direct assistance.

Nevertheless, the main provisions of the Building Safety Act, which received Royal Assent on 28 April, come into effect next week and the landscape in respect of leaseholders will change. However, as the Minister has already heard from me and other hon. Members, getting to this point has taken far too long. The Government have resisted acting in respect of many of the issues that MPs have been raising from the outset, only to concede that space some years later.

I remember my first pieces of casework relating to the cladding scandal, when Government Ministers and officials were still distinguishing between aluminium composite material cladding and non-ACM cladding. All of us involved in trying to seek redress, including Members of Parliament from across the House and leaseholders all over the country, pointed out the unavoidable truth that non-ACM cladding was just as dangerous as ACM cladding and would have to be removed from all the buildings where it was present. Originally, the Government held their ground and maintained the distinction, but then gave ground and bowed to the inevitable acceptance that non-ACM cladding would have to be removed.

In fact, most of the topics on which the Government have had to give ground represent issues that have been campaigned on from the start by all the groups I have mentioned, and by the Levelling Up, Housing and Communities Committee as well. We have come a long way, but these five years have taken a very heavy toll.

[Mr Jonathan Lord (Woking) (Con)]

I congratulate the hon. Lady on securing this important debate. I speak on behalf of many of my constituents in Woking, Surrey. As well as the direct costs of remediation, many leaseholders have difficulties getting insurance or face huge premiums of three, four or five times more than they would have been historically. That also brings the possibility that people cannot sell their flat if they wish to move. Is the hon. Lady looking to the Minister and to the Government for further reassurances on those financial impacts as well?

[Shabana Mahmood]

The hon. Gentleman is absolutely right. I will be coming on to the issues in relation to insurance later in my remarks. May I take this opportunity to say how refreshing and positive it has been to be able to work with Members from across the House? That has been the House at its best and I am sure that is the reason why we have been able to make so much progress in the Building Safety Act. I hope we will continue to work together on the ongoing financial impacts, and I hope to persuade the Minister to give further necessary ground. I will come to the matters of insurance very shortly.

Many hundreds of people in my constituency have been affected and have been living with the consequences of the cladding scandal for five long years. With work having started on some of these buildings, if people are very lucky they may finally be able to live in safe buildings in about five years’ time. At best, we are looking at an entire decade of normal life being wiped out for people caught up in this scandal. Even that timescale, with people losing a decade of their life, will be out of reach for many thousands of people in our country.

I want to bring some of the ongoing issues to life for Members and the Minister by using an example in my constituency: the development at Islington Gates. There are 141 flats in the development, which is now described as an orphan block. The original developer, Midlands and City Developments, went into liquidation in 2007, and Miller Construction, which built the block, was bought out by Galliford Try in 2014. The remediation works at Islington Gates come in at a total of £9 million. Some 80% of that—£7.2 million—relates to the removal of the non-ACM cladding that covers the building. The remaining 20%—£1.8 million—relates to additional defects that were discovered and revealed as a result of the scandal, including deficiencies in fire compartmentation and other measures. As per the new rules in the Building Safety Act, the £1.8 million will need to come from the developer and, through the cascade effect that the legislation envisages, could be passed on to the owner and potentially to leaseholders, up to the value of the new cap.

Let us consider the issues relating to the ongoing work for cladding remediation. The bid that Islington Gates submitted to the building safety fund for cover was accepted, but the payments came in later than anticipated, creating huge cash-flow problems that have further exacerbated the crisis for many of my constituents.