Building Safety Bill

Lord Blencathra Excerpts

2nd reading
Wednesday 2nd February 2022 Lords Chamber

[Lord Blencathra (Con)]

My Lords, first, I declare a personal interest as a leaseholder of a flat near here, which will qualify for some fire remedial works and was built by one of the big four, who collectively raked in almost £4 billion in 2020. I give a warm welcome to the Bill, particularly the creation of a regulator. However, of particular interest to me are the parts on high-risk buildings and other safety measures. While I welcome these, I believe that we now have an opportunity to go much further.

When the Bill left the Commons, we did not have my right honourable friend the excellent Michael Gove as Secretary of State, so the Bill does only half of what it needs to do. Then on 10 January we had the superb Statement from the SoS, repeated here by my noble friend Lord Greenhalgh, setting out all the actions the Government propose to take to really sort out the cladding problem and protect leaseholders. We all owe a deep debt of gratitude to the Minister: I know that he has been arguing for all the things that were in that Statement and he had the good fortune to get a new Secretary of State who agreed with him and had the guts to go for it. I congratulate him on his rather feisty introduction of the Bill today. I also congratulate the noble Lord, Lord Best, on his outstandingly succinct description of today’s construction industry—what the Spectator last year called the house mafia.

What did the Secretary of State say on 10 January? He set out the range of actions and initiatives he wanted to take. These were in two broad categories, which could be classed as leaseholder protection measures and “polluter pays” measures. He said in the Statement repeated by my noble friend that he would take action against those who mis-sold dangerous cladding and insulation and those who profited from the consequences of Grenfell. He would review government schemes and programmes to ensure there were commercial consequences for any company responsible for this crisis and refusing to help fix it. He would take powers to exclude any company from government schemes and impose proportionate risk assessments on organisations such as the RICS and powers to review the operation of the RICS.

He would set a higher expectation that developers must fix their own buildings, and possibly issue instructions to insurance companies. There would be statutory protection for leaseholders from certain building costs and protection of leaseholders from eviction and forfeiture. He would introduce a residential property development tax and a building safety levy, and there would be new collaborative procurement guidance on removing the incentives for industry to cut corners and to help stop the prioritisation of cost over value, and possibly put that on a statutory footing. That is what the Secretary of State said he wanted to do. I am absolutely certain that, if my right honourable friend Michael Gove had been in post one year ago, most of those provisions would be in the Bill today, but now we have the chance to add them.

I do not intend, in Committee, to add just a few new clauses; rather, I have asked the Public Bill Office to draft two whole new Parts to add at the start of the Bill. One Part would be on leaseholder protection, with clauses setting out that no leaseholder will have to pay for any fire-related remedial work. I want leaseholder protection to be first and foremost in the Bill as a new Part 1, or a new Part 2 at the very latest. I want clauses defining what fire-related remedial work is, and what buildings it should apply to; clauses prohibiting freeholders and leaseholders from gold-plating remedial works to add to the value of their property portfolio. For example, if wooden decking balconies have to be replaced, leaseholders must be protected from freeholders replacing them with, say, bronze-covered aluminium or Italian marble flooring, making lease- holders pay.

Then I need clauses setting out alternatives to cladding replacement for low-risk buildings and permitting the Secretary of State to prepare new risk assessments. These could replace those compiled by the Royal Institution of Chartered Surveyors—and I want to put in a legal power to review its modus operandi, since it has not exactly covered itself in glory over the past three years, I submit to the noble Lords behind me. Finally, in this Part, I want a clause creating a scheme similar to the Flood Re agreement between the Government and insurers to keep down the cost of flood insurance, but in this case covering fire insurance.

The other new Part will contain “polluter pays” provisions or schemes for fire hazard remedial works. In it, I want to have clauses setting out that developers will be primarily responsible for the costs of all remedial works. Where they have created special purpose vehicles which they have now wound up, then the holding company will be liable. All contractors who supplied materials which were not fit for purpose, whether or not approved at the time, will be liable. Where we cannot find the developer or their special purpose vehicle, or their holding company, or their contractor, or their supplier, then the whole industry should be liable and pay through a levy system that will raise a lot more than £5 billion. Clause 57 does not go far enough, since it applies to future bills and not to bad ones of the past.

Now, clearly, my proposals—if I lay them before the House—will impact on current company law, laws of limitation, the Building Act and a host of other Acts. There may be ECHR concerns and concerns about retrospectivity. But we have never had a problem such as this before, where companies have made billions from flawed construction in the past. I submit that it is therefore right that we reach back in time to make them pay to remedy it now. They did it, not the leaseholders. Therefore, those parts of the Bill will need to be more skeletal than I would have approved of last week when I was still the chair of the Delegated Powers Committee.

[Noble Lords]

Oh!

[Lord Blencathra (Con)]

Ahem. We will also need some Henry VIII clauses to make those changes to existing Acts of Parliament. It is a tall order, but in the time we have, we can do it. We cannot at this stage set out all the details in new clauses since we do not know exactly what powers and provisions we will need. However, we can draft sufficiently wide regulatory powers to deal with all eventualities. Naturally, I want these to take the affirmative procedure so that there is some element of proper parliamentary scrutiny.

Simply look at Clause 57. Five out of the eight new subsections begin with the words “regulations may” or similar, so the Government have already taken wide regulatory powers. In any case, no matter when we take forward a primary Act—in this Bill, next year or in two years’ time—we will still need extensive regulation-making powers for all the details. I say let us do it now so that all those who have raked in billions from property deals see that this Government and this Parliament mean business—I have almost finished.

I know that my amendments will have dozens of technical flaws and will need beefing up and filling out. But that is what government lawyers and the Office of the Parliamentary Counsel are for. All I want to do is set the parameters of the action we need to take—and we need to take that action because lease- holders, as the innocent parties, demand nothing less. We need to take it so that all developers and contractors see this sword of Damocles hanging over their heads, because that is the only way they will ever pay up.

I look forward to debating this further in Committee and to getting support from your Lordships, if not for the exact details then at least for the concept of my amendments. In the meantime, I warmly support the Bill.