Building Safety Bill

Joy Morrissey Excerpts

2nd reading
Wednesday 21st July 2021 Commons Chamber

[Lucy Powell]

My hon. Friend makes an excellent point. Leaseholders have very little recourse and, from the announcements today, their passage of recourse remains incredibly uncertain.

Let me start with what is in the Bill. The first major change sets up the building safety regulator, a key recommendation of the Hackitt report. The regulator will oversee “higher risk buildings,” which have been defined as essentially over 18 metres. The Select Committee raised questions about whether the scope should be extended. The Fire Brigades Union says that 11 metres or four storeys would be a safer threshold, as that is the threshold that firefighters can reach with their ladders. The Secretary of State himself said last year that we should not rely on

“crude height limits with binary consequences,”

that do not

“reflect the complexity of the challenge at hand.”—[Official Report, 20 January 2020; Vol. 670, c. 24.]

The two-tiered system this Bill creates is particularly stark when we look at privatised building control, which will continue to operate below 18 metres. The Hackitt report recognised that choice over building control inspection is a major weakness in the current system, allowing cosy relationships to flourish between developers and the private inspectors they pay handsomely.

The regulator will be the building control body for taller buildings, but not for those under 18 metres, even where other risks could remain. The Government should think again about their arbitrary definition of high-risk buildings.

Secondly, this Bill establishes clear responsibilities for building safety throughout a building’s life, in a golden thread of information. Lack of transparency was a key issue identified in the Hackitt report. The Grenfell inquiry has exposed how some building owners belittled residents as troublemakers rather than keeping them informed about the safety of their homes. The new system must be fully open and transparent to residents and leaseholders.

The need for transparency extends to the testing regime, which the Hackitt report found to be opaque and insufficient. While the Bill sets a framework for the regulation of construction products, the Government have kicked the issue of product testing down the road. This must be re-examined.

Thirdly, the Bill sets up limited mechanisms to recoup costs from developers, through legal action and a levy. The principle of the polluter must pay should apply to the building safety scandal. Labour has long been calling on the Government to take stronger action against developers who cut dangerous corners.

Extending the period in which a developer can be sued is welcome, but residents in many buildings will not be able to take advantage. The relationship of leaseholders and developers is like David and Goliath. Legal action is uncertain, expensive and risky, requiring money that leaseholders simply do not have. It also requires that a company still exists to sue, yet many have disappeared. What is more, given what we know from the Hackitt report and elsewhere, in how many cases can all the blame be legally pinned on a developer, given the failures of the regulatory regime at the time? Very few, I would imagine.

Finally, the Bill makes some changes around the new homes and social housing ombudsmen. After significant delay, some social housing reforms have finally come through, but how will the Secretary of State ensure that the social housing regulator has real teeth?

Although there are things we welcome in the Bill that will improve building safety into the future, there are, as I am sure we will hear from Members across the House, serious concerns about what is missing and the way in which ruinous costs for remediation works will still fall on leaseholders. What began as a cladding scandal after Grenfell has now led to a total breakdown in confidence in most tall and multi-storey buildings. This has now become a building safety crisis affecting hundreds of thousands of people. Young, first-time buyers have gone bankrupt. Couples have put having children on hold. Marriages have broken down. Life savings and assets have gone. Retirements have been ruined. The mental health and financial toll is incalculable.

Fundamentally, the Bill betrays leaseholders who will still face life-changing costs for problems that they did not create and who are trapped in unsellable, uninsurable and unmortgageable homes, notwithstanding some of the Secretary of State’s announcements today, which I fear will do little to resolve the situation. Two Prime Ministers, his two immediate predecessors and the Secretary of State himself have all said that leaseholders should not pay. I agree—I think we all agree in here—so why does the Bill not say it? On at least 17 different occasions in this House, they promised, even to their own Back Benchers, that they would protect leaseholders. We heard during the passage of the Fire Safety Act 2021 that the Building Safety Bill was the place to do so, so where is it? It is not in there.

What is more, legal advice on what is in the Bill says that the betrayal of leaseholders is even worse. As drafted, the Bill bakes in leaseholders’ potential liability. Our legal advice is that clause 124 provides very little additional protections. Their legal opinion is that this Bill in its totality, including clause 99, makes it

“more certain that remediation costs will fall under service charges”—

and be passed on. So on the Government’s fundamental promise to leaseholders, the Bill fails. No wonder they are furious, and bereft.

Of course, I welcome the building safety fund; it is a good thing, and it could provide a solution for many buildings. I have to commend the Secretary of State on getting £5.1 billion out of the Chancellor—he seems to have better negotiating skills than his boss, the Prime Minister. It is a lot of money and it could go some way to resolving the situation if it is properly used, but I do not understand why his financial commitment is not being met with the same zeal and determination to give it proper effect. His approach has so far been blighted by inertia and indifference and is now beset by increasing costs, relying on those in the industry who have created much of this mess to get us out of it. I have to tell him that it is just not working. Even his own Back Benchers accused him of “shocking incompetence”, and I feel that that view might be spreading after today’s shenanigans with his statement.

Let me explain: the scope of the fund is way too narrow and the deadlines for applying too tight, and yet it is being administered far too slowly, with just 12p in every pound of the fund allocated. At its current pace, it will be 2027 before the fund is even allocated. And because there is no grip on the wider issues, as we have been discussing today—such as risk, cost, work quality, accountability and sign-off—nearly all multi-storey buildings are now affected. Even when cladding is removed, a new, ever-growing list of additional seemingly necessary works are added. This means that innocent and drained leaseholders are constantly at the mercy of a system, with no accountability and no confidence in it, with an industry unable to take on risk, cornering a broken market for works, arguing over responsibility and unwilling to insure, mortgage or step up, all the while leaving leaseholders carrying the can. That is why this crisis is now affecting so many and costs keep going up. The truth is that all sense of appropriate risk has gone out of the system. The Secretary of State has talked about that today, and I have heard him say it many times before, but I am not sure what he is doing about it. Notwithstanding what is in his statement today, I still do not know whether this will provide the transparency, the recourse, or the scrutiny that leaseholders need. He says that there should be a clear route for residents to challenge. What would that route be? How would it work? What teeth would it have? He said that there will be more guidelines. What are they? When will they be published? Can we see them? Will this really have the effect that leaseholders need it to have, because time is a luxury that these homeowners simply do not have.

This is not just about the one-off high remediation costs that homeowners are facing today; it is that insurance premiums have gone through the roof, service charges are rocketing, and the waking watch, which we have heard so much about, and other costs are leaving leaseholders paying hundreds of pounds a month extra already.

Recent Government guidance has made the situation worse. Their advice note from January 2020 effectively brought all buildings of any height into scope of the dreaded EWS1 form. After today’s announcement, is that now scrapped? Does that guidance note still exist? [Interruption.] I do not know whether it is in the statement. I did not read it in there. The Secretary of State is pointing to it from a sedentary position. If it is in there, people need to know that now so that we can discuss it, and we should have known it before this debate; it is a very important thing to know. If he wants to come to the Dispatch Box to tell us whether that January 2020 advice note is now effectively scrapped, he can do so, because it is essential that people know that.

[Joy Morrissey (Beaconsfield) (Con)]

Will the hon. Lady give way?

[Lucy Powell]

If the hon. Lady knows the answer, I will happily give way.

[Joy Morrissey]

I am not completely positive, but it did say in the statement that the EWS1 form should not be required in buildings of 18 metres, which is a welcome change. Common sense seems to be prevailing in this debate now. I welcome that announcement. Does the hon. Lady agree that this is something that we have been campaigning on for quite some time and that it is a welcome change to the legislation.

[Lucy Powell]

Well, it is not actually legislation. The hon. Lady is wrong about that. Yes, of course, we would welcome that. The crucial words that she said there were “should not”, not would not, and that is a different thing entirely. We still need to know on what terms that will be enforced, what recourse would a leaseholder have, and to whom, and what teeth will they have in order to put that into effect. Is it legislation? [Interruption.] I think the Secretary of State is trying to tell me that it is going to be legislation. [Interruption.] Oh, it is just down to the lenders. I will give way to the right hon. Gentleman if he wants to explain.

--- Later in debate ---

[Joy Morrissey (Beaconsfield) (Con)]

I welcome the Secretary of State’s statement that the EWS1 forms should not be required for buildings below 18 metres; lenders were insisting on EWS1 forms, despite buildings not meeting the proper criteria in the new guidance, so it is a welcome announcement. I also welcome the announcements in the written statement on working towards market correction with regard to the total risk aversion that we are seeing in the market from lenders and surveyors, and the absolute stagnation in the market.

However, I echo the concerns raised by my hon. Friend the Member for Stevenage (Stephen McPartland) and by the Father of the House, my hon. Friend the Member for Worthing West (Sir Peter Bottomley), regarding leaseholders and the issue of clause 124. I would like to see much greater levels of legislation to support leaseholders. I am speaking on behalf not just of the leaseholders, but of the parents of leaseholders in my constituency—parents in Beaconsfield, Marlow, Flackwell Heath and Iver who have given their life savings to help support their child to buy their first home, usually in London. The children of my constituents are now stuck in homes that they cannot afford to move out of because of the spiralling cost of insurance and the cost to the leaseholder that has been incurred because of the building safety regulations.

I ask that we consider how to help leaseholders. These are Conservative voters and the children of Conservative voters, who are now frustrated and angry that they cannot move up the housing ladder. We need to consider a way forward for them and remember that they have done what we Conservatives say that we always want to do: enable people to buy a home and get on the housing ladder. We are blocking them from moving forward. I ask the Secretary of State please to consider further action to help and support leaseholders.

[Madam Deputy Speaker (Judith Cummins)]

I call Matt Rodda.