Election Expenditure

Lord Stunell Excerpts

Wednesday 13th February 2019 Lords Chamber

[Lord Young of Cookham]

My noble friend raises a good point. The recent guidance by the Electoral Commission was issued before we had the judgment of the Southwark court. Certainly, the commission might see whether that guidance might be updated to help candidates and agents in the light of the judgment of the Supreme Court and the Southwark case.

[Lord Stunell (LD)]

My Lords, does the Minister agree that it is vital to retain a robustly independent Electoral Commission with political input but with a majority of independent members, and that we never return to the bad old days when the rules were decided by the party which formed the Government in the House of Commons?

[Lord Young of Cookham]

Yes. Before we had the Electoral Commission many of its responsibilities were discharged by the Home Office, which was, of course, run by political animals; namely, Ministers. It enhances confidence in the democratic process to have an independent commission, such as the Electoral Commission, in charge of the rules. We have no intention of departing from the principles which underpin the Electoral Commission. I think I am right in saying, as the Opposition spokesman at the time, that my party supported its establishment.

Building Regulations and Fire Safety: Government Response

Lord Stunell Excerpts

Thursday 17th May 2018 Lords Chamber

[Lord Beecham (Lab)]

My Lords, it is customary to thank Ministers for repeating in this House Statements made in another place. There is no one in your Lordships’ House, or indeed in the House of Commons, who is not saddened by the necessity for this Statement to be made. The tragedy of Grenfell, the dreadful loss of life, and the shock and terror generated by the events that have led to Dame Judith’s report will resonate for years.

Nobody who has read this week’s Guardian with its moving description of so many of those who perished in the conflagration will fail to welcome—indeed, to insist upon—stringent measures being taken to avoid any repetition of this catastrophe.

Noble Lords will welcome many of the proposals in the report, based, as it is, upon its clear findings of failings in the present system of building control and the need to secure more effective regulation and enforcement. It also stresses the need for clarity as to where responsibility will lie. It is, however, disappointing that the report does not appear to accept the need to ban the use of combustible material in cladding systems on high-rise residential buildings. The Government are to consult on this issue. I believe that most Members of this House would join the plea by survivors of the disaster, the RIBA and others in calling for a ban on combustible construction materials, certainly in high-rise developments but perhaps more generally.

The Secretary of State agrees that,

“residents must be empowered with relevant information. They must be able to act to make their homes safer”.

With due respect to the Secretary of State, I find that a curious formulation. What, beyond expressing concerns, can residents do about issues such as those which led to the disaster?

There are some issues not mentioned in the Statement which I would like to raise. The first is to ask the Minister for an update on the progress of rehousing the survivors of this tragedy in housing which meets their needs. Too many tenants and their families continue to live in accommodation which fails to meet their needs.

The second is to ask for clarification in relation to the funding of the essential work necessary to ensure the safety, and alleviate the fear, of residents of high-rise accommodation. Will this be met by the Government?

The third is to ask about the position of residents in blocks of flats where the freeholder is not the local authority. Some will be leaseholders; others will be renting. In the former case, do the Government expect the leaseholder to finance the necessarily expensive work? If not, what steps will they take to ensure that the freeholder does so and that the cost is not borne by the resident? Will local authorities have a role in enforcing any requirements in such cases and, if so, will the cost be treated as being within the new burdens doctrine, under which they can look to the Government for the necessary funding?

Finally, the Statement, perfectly properly, deals with high-rise housing. What consideration is being given to other high-rise buildings—offices, shopping centres, hotels, hospitals and the like—which may also present problems, in relation to both existing buildings and those which might be built in future? The tragedy of Grenfell must never be repeated.

[Lord Stunell (LD)]

My Lords, I associate myself with the remarks of both the Minister and the noble Lord, Lord Beecham, in relation to this terrible tragedy and the need to make sure that it never occurs again.

I should start by declaring that between 2010 and 2012 I was the Minister with responsibility for building regulations.

I very much welcome the report and I welcome the Government’s endorsement of its recommendations. We share the Secretary of State’s commitment to making sure that they are brought into force as quickly as possible. In that respect, my first point is to raise with the Minister the following phrase in the Statement:

“Changing the law will take time”.


When will the primary legislation that the Secretary of State has promised be introduced? We know that there is a legislative logjam further in the system. Can the Minister give us an assurance that this legislation will vault over that logjam and reach this House and the other place in good time for an early introduction and passage through the parliamentary system?

Secondly, does the Minister recognise that in fact the Secretary of State already has powers to start the process? The Building Act 1984 was amended by the Sustainable and Secure Buildings Act 2004 to provide a power requiring a nominated person to be appointed for each building project to sign off on building regulation compliance. That power is not yet in force but it would produce what the Hackitt report calls a “dutyholder”. That can be introduced now by statutory instrument and could be in force by October this year. Changing the law does not always have to take time, and I hope that the Minister will undertake to press his colleagues in the department to get on and make sure that this simple, straightforward introduction of a duty holder takes priority and does not get stuck in the legislative logjam.

The Hackitt review rightly outlined the dysfunctional and fragmented nature of the construction industry and identified a culture of cost-cutting and corner-cutting at the expense of good quality, good safety and common sense. I want the Minister to recognise that it is not just fire regulations in high-rise buildings that have been the victim of, or bypassed by, that cost-cutting, corner-cutting approach. Buying a new house in 2018 is like buying a new car was in the 1960s, with complaints very high and quality standards very low. Will the Government learn from this review and make sure not only that compliance with the right fire regulations is automatic in future but compliance with the full range of measures in building regulations, all of which are aimed at saving life, promoting the health and well-being of the buildings’ occupants, and delivering a long-term, sustainable environment?

Finally, I welcome the Government’s £400 million allocation for social housing repairs to cladding. I want to press the Minister on this, as I did the noble Lord, Lord Bourne, last week: is it not time to give a similar “pay now, recover costs later” pledge to tenants and leaseholders living in privately owned high-rise flats? Surely they are just as deserving of living in safe homes as anybody living in social housing.

[Lord Young of Cookham]

My Lords, I endorse the moving words of the noble Lord, Lord Beecham, at the beginning of his remarks. Like him, I listened to a survivor on the “Today” programme emphasising his very strong view that we should ban the use of combustible materials. I know that, as we consult on that option, a number of professional bodies, as well as survivors, will strongly endorse that suggestion.

The noble Lord may not have had time to read the whole of the Hackitt review but there is an interesting section on resident empowerment, regular safety reviews, improved communication with residents and a duty holder —as was mentioned by the noble Lord, Lord Stunell. It recommends that, where there is an unsatisfactory response from the freeholder, there should be an opportunity to leapfrog over the freeholder to an independent body with powers to intervene.

The noble Lord will know that £400 million has been allocated to local authorities to compensate them for the costs of remediation. Both noble Lords raised the issue of leaseholders. In many cases, the leaseholders are also the freeholders because they have used the legislation to enfranchise themselves, so it is no good telling them to get the money from the freeholder because it is a circular discussion. I was interested in the noble Lord’s suggestion that local authorities might intervene to underwrite in some way the costs of remediation. Discussions are continuing at a ministerial level about the problems facing private sector leaseholders. We hope that, where it is possible, freeholders will follow the example of Barratt, which has, I think, undertaken in one case to pay for remediation itself and not pass the cost on to leaseholders. Where practical, we would encourage other freeholders to do the same.

The noble Lord asked whether the recommendations could apply beyond high-rise buildings. Many recommendations—on changing the culture and on ownership of risk, for example—apply to the wider construction industry and not just to high rise. There is read-across there.

The Government place a high priority on public safety, and the legislation involved is quite extensive. Dame Judith suggests establishing a new body—the joint competent authority or JCA—combining powers from the Health and Safety Executive and building standards departments. There are other legislative changes also. We want to consult and we want to get it right. The Secretary of State will make a progress report before the Summer Recess and again in the autumn on how we are taking forward the legislative consequences from this report.

I agree with what the noble Lord, Lord Stunell, said towards the end of his remarks. The culture should filter through not just to fire safety but to the whole range of building regulations. Dame Judith wants what she calls an outcomes-based strategy—where people assume responsibility for risks and do not shield themselves behind prescriptive solutions and try to game them, to use her words.

Finally, to pick up the point made by the noble Lord, Lord Stunell, we are considering whether any of the current powers could be used to take forward Dame Judith’s vision. I think I put the Building Act 1984 on the statute book in an earlier capacity, and I am delighted to learn that those powers are still relevant. We are inviting people to contact us with views on how we implement the review, which will include using existing powers where they are available.

Carillion

Lord Stunell Excerpts

Monday 15th January 2018 Lords Chamber

[Lord Hunt of Kings Heath (Lab)]

My Lords, I thank the Minister for repeating the Statement. However, I have to say that it seems remarkably complacent in the face of the catastrophic failure of Carillion. Millions of pounds of public money is threatened, hundreds of thousands of public service users are vulnerable and tens of thousands of jobs are at risk—yet the Government could have ameliorated the crisis. The Statement claims that the Government have been closely monitoring the company since last July—some monitoring. Remarkably, contracts worth £2 billion were awarded during this period, when no fewer than three profit warnings were given by Carillion. Why was that, and why was a consortium of which Carillion was a part so recently given a lucrative deal to work on the HS2 line?

Why did they leave vacant the position of the Crown representative—responsible for helping a company in a situation such as Carillion’s—from August to November during a crucial period of the company’s difficulties? That was surely a gross neglect of their responsibilities to monitor the company? Does the Minister plan an investigation into the Government’s handling of the matter? The Statement refers to the official receiver’s statutory duty to investigate the cause of failure in any company. That will not cover the action of Ministers—and they have their fingerprints all over this debacle. Who will investigate their conduct?

The outcomes of this liquidation will be wide-reaching. Carillion ran 50 prisons, almost 9,000 schools, 200 operating theatres and 11,800 hospital beds. What assurance can the Minister give that none will be affected? The information the Government have released through the Insolvency Service makes no reference to their plans for the ongoing delivery of public services. Will the Minister commit to inform the House about this as soon as possible? Will he act quickly to bring these public sector contracts back in-house?

The Statement says that taxpayers will not bail out this company, but is that believable? The Government have form: there is a pattern of the taxpayer being asked to pick up the pieces of wildly irresponsibly bidding and grotesquely high pay and perks for executives, with the Government using yet more public money, as in the case of the east coast main line, to bail out these failing companies. It is vital that shareholders and creditors are not allowed to walk away with the profits from profitable contracts while the taxpayer bails out loss-making parts. Will the Minister commit to make sure that that does not happen?

Carillion employs almost 20,000 people, with far more in its supply chain. The Minister referred to them, but will he confirm that the pay and conditions of these workers will be the Government’s priority in any financial assistance? The workforce will have turned up today not knowing whether their jobs and pay are safe. Will the Minister commit to doing everything in his power to protect the jobs of those working on public sector contracts? My understanding is that in a compulsory liquidation the contracts of all employees are automatically terminated. Will he say whether that is so? Will the Redundancy Payments Service pay out huge sums for redundancies, arrears of wages, holiday pay and protective awards?

The Minister mentioned pensions. Can he tell us how much the Pension Protection Fund will have to put aside to cover the deficit in Carillion’s defined benefit pension schemes? He also mentioned the supply chain. Lots of SMEs and workers in the supply chain will be threatened, and contracts with large companies are clearly their lifeblood. What will the Minister do to safeguard jobs and workers in Carillion’s supply chain?

The Government are guilty of being too cosy, too incompetent and too profligate: too cosy with the companies; too incompetent in leaving the position of the Crown representative vacant for three months and awarding more contracts to a company that they knew was in severe crisis; and too profligate in handing over public money to the private sector as a result of their dogmatic belief that it should profiteer from our schools, hospitals and public services no matter what its performance.

[Lord Stunell (LD)]

My Lords, I thank the Minister for repeating the Statement. The collapse of the second-largest construction company in the country and a major provider of public services across the country is cause for concern and regret, not least for those employed by that company and those who depend on it because they are part of a long supply chain in many different industries, particularly the construction industry. The official receiver has been appointed and the Statement says that one of his duties will be to hold an inquiry. Can the Minister say something about the status of staff and employees working on public sector service provision and those working on private sector contracts? What is their future? What do the Government intend to do to protect them?

There is, of course, anger on the part of many of those working for and with the company that the warning signs were not quickly followed up by the Government after the alert in July—not least that a Crown representative was not appointed when good practice and ministerial guidelines say that that should have happened. I hope that the Minister will say something about that. If the official receiver’s inquiry does not cover such issues, I will certainly join the noble Lord, Lord Hunt, in calling for a wider inquiry.

In view of Carillion’s role in delivering numerous large-scale infrastructure projects, what are the implications of its collapse on those projects and their timetables, and what impact may it have on the Government’s industrial strategy? We should bear in mind that construction and construction training were key elements of that strategy and that many apprentices are employed not just by Carillion but by those in the supply chain, whose continuing apprenticeships are clearly at risk. Can the Minister help us on that? What are Ministers doing to minimise damage to public services and the capacity of the construction industry? Subcontractors face a very difficult time. It is one thing to say that contracts can be transferred to their partners—for instance, on HS2—but what about the backlog of unpaid bills that Carillion will owe them? Will that be coughed up by their new partners? Is that part of the deal that was arranged when the partnerships were set up, or is it more likely that the subcontractors will be expected to bear the loss?

Finally, what does the Minister have to say about the governance of that company and the way that the warning signs were there? Even the chairman has some form from times past. What exactly do the Government believe is the right governance structure for a major contractor for public services so that in future there will be protection for the public, for employees and for the country?

[Lord Young of Cookham]

I am grateful to both noble Lords for their interventions, and of course I understand the anxiety shared, I think, on all sides of the House, about the future for the employees and for those in receipt of the services provided by Carillion. To put it into perspective, if one looks at the current live contracts held by Carillion, roughly one-third were let before 2010, roughly one-third were let between 2010 and 2015, and roughly one-third were let between 2015 and now.

On the point about taxpayers’ money being at risk, as a matter of principle, money is transferred from the Government to contractors in return for work that has been undertaken. Looking ahead at the money we are going to pay for services, it would have been paid to Carillion for the relevant services, and obviously it will now be paid through the official receiver. The Government will look to the official receiver to sell off, if that is his decision, those profitable operations to get some resources in.

Reference was made to the statutory obligations of the receiver to look at the conduct of the company. I understand that the Select Committee on Public Administration and Constitutional Affairs in another place has already announced that it will make an inquiry. The National Audit Office and the Public Accounts Committee may also take an interest in this—that is a response to the point made by the spokesman for the Opposition as to how the Government will be held to account; there is a variety of means by which that can happen.

On contingency plans, before Christmas the Government made local authorities, academy trusts and others aware of the financial problems confronting Carillion and advised them to put in place contingency arrangements. From what I have heard so far today, most of the contingency arrangements are working satisfactorily—although, as I said, there may continue to be some difficulties.

As regards the loss, obviously the shareholders have been wiped out and the banks advanced substantial sums of money to Carillion, so the primary losers here will be, as I said, the shareholders, the banks, and any others who have lent money to Carillion.

On pay and conditions, I understand that for the time being they remain the same; the official receiver will continue to pay and employ them. There is a distinction to be made at some point between those carrying out public sector work and those doing private sector work for Carillion—a point raised by the spokesman for the Liberal Democrats. On contracts held by Carillion not with the Government but with private sector companies, I understand that the official receiver is allowing a period of up to two days for those companies to decide whether they want to take over the contracts. So far as the public sector contracts are concerned, as I said, the Government’s top priority is continuity of service. The official receiver will continue to make resources available to fund the public services.

The noble Lord asked about terms and conditions. I am very reluctant to give an off-the-cuff reply about whether TUPE and similar things will apply, and I hope that he will understand if I take advice on that rather than try to answer it.

On the pension fund, I think that there are 14 schemes under the Carillion umbrella, some of which may be in surplus and others of which are not. The Pension Protection Fund will carry out an assessment. If the schemes are not viable, they will be taken in-house by the PPF, together with the assets of the scheme. Those already receiving their pension will continue to get it. Those who are yet to retire will get, I think, 90% of their entitlement, subject to a cap of somewhere around £35,000.

On the supply chain, it is important that the subcontractors continue to turn up. The official receiver has the necessary resources to continue to pay them.

On the question of apprenticeships, I understand that the CITB, the Construction Industry Training Board, is aware of the issue and will try to find other companies to take on those apprentices who have been displaced by Carillion or the subcontractors, and indeed those who are hoping to take up employment with them.

I think that I have answered most of the questions that I am able to. I am conscious that I have not answered all of them but my right honourable friend will keep the House of Commons updated on developments as the official receiver starts to go about his work, and I am sure that that applies to your Lordships’ House as well.

Housing: Availability and Affordability

Lord Stunell Excerpts

Thursday 12th October 2017 Lords Chamber

[Lord Stunell (LD)]

My Lords, I welcome this debate and thank the noble Lord, Lord Smith, for introducing it. There have been some very good contributions, not least from the noble Baroness, Lady Young, and my noble friend Lord Greaves. I am strongly tempted to follow some of the tracks they set out, but I want to pick out one or two specific points and try to take a more strategic look at some of the questions that we are facing.

First, I want to give credit to the Government. I am sure that they actually believe that we need 1 million homes; I am sure that they want 300,000 homes a year, as their manifesto stated—I have heard spokesmen over the years as diverse as Michael Gove, Grant Shapps, Gavin Barwell and of course the Minister say so repeatedly—but the fact is that it has not happened. I do not think that the Government do not get the problem that we need more homes: rather, they have not spotted the problem with the solutions that they are offering.

The most important problem, which never seems to get a proper airing, is that there is an absolute ceiling on the number of private homes which will be built by developers without subsidy. It has never exceeded 180,000 homes a year since 1945 and it has usually been significantly lower than that: you cannot get builders to build homes that they do not believe they can sell and they will not do it unless you pay them to do so. That has very little to do with planning. There are 600,000 or more planning permissions lying waiting to be built. It is much more to do with economics.

I remember, as a very junior Minister in the Department for Communities and Local Government, how much joy there was when planning permission was given for the Ebbsfleet development in Kent: 20,000 homes. Out went the press releases and the spads went wild in the media—“Another 20,000 homes for our glorious Government”. I was at the back saying, “Hang on a minute—how soon are we due to get these 20,000 homes in Ebbsfleet?” I do not know whether the Minister has the current number; I think we may have got up to 1,000 having been built so far: perhaps he can confirm that. The reason the other 19,000 have not been built despite the planning permission is that if they had been built, 19,000 empty homes would be sitting in Ebbsfleet without people buying them. We need to reflect on the fact that planning is not the bottleneck. Incidentally, I support my noble friend Lord Greaves in saying that if instead of 20,000 homes at Ebbsfleet there had been 200 sites with 100 homes on them we would have had far more homes built by now because we would have had small numbers on 200 sites rather than small numbers on one.

My second point is that affordability is very double-edged. Who actually wants cheaper homes? Do existing owners want cheaper homes? Do builders want cheaper homes? Do developers want cheaper homes? Will any party have a policy objective or a manifesto commitment to halve the value of your home? I do not think so. So the private sector will deliver what the private sector will deliver—and after that, someone else has to pay. If this Government or any Government want more houses, more homes, they have to pay.

The policy issue therefore is surely, what is the cheapest way of buying those extra homes? The Government have tried Help to Buy, which is a very good way of inflating house prices. It is, of course, a demand and not a supply-side issue and it was described quite correctly at the Tory conference as “economically illiterate” by Steve Norris. Help to Buy is not the way to go. Affordable rents have been explored—but, of course, as affordable rents become higher and higher, so the local housing allowance cost balloons as well. We now have a £30 billion LHA budget. The least central government cost looks therefore to be the lowest rent that can be managed—which would lead, of course, to a lower local housing allowance payment.

The Government followed that by putting a cap on housing association rents, which means they can no longer invest in building homes through that route. So some of these things have unintended consequences which totally defeat the purpose of the game and you come to the view very quickly that the way to go is to get local authorities to invest in council housing in the traditional way. It is not ideological; it is value for money. The Tory brand of competence and the efficient management of money may have taken a few knocks recently, but surely this point cannot have escaped them.

I make a further point about this. We talk about the housing pipeline; it is not a pipeline, it is a hosepipe. At the moment we have a model where the Government and successive Housing Ministers stand at the kitchen door like a five year-old, manipulating the tap to the hosepipe, and the construction industry stands at the far end—the business end—of the hosepipe, sometimes trying to direct an empty hose on wilting seedlings and sometimes looking down the pipe to see what is happening and getting a splash of water in its face. The fact is that we need steady, consistent investment in public sector housing in order to reach the targets we need.

Finally, I raise a different and more immediate point. Whether the target is 200,000, 250,000 or any number we care to choose, who exactly is going to build these houses? The biggest demand for homes, the most acute housing pressure, is in London and the south-east. Barratt gave evidence to the all-party group last Session that 54% of its workers in London working on its housing programme were from the EU 27. The RIBA reports that 25% of registered architects in London are from the EU 27. Estimates vary from trade to trade and function to function, but at least 30% of the construction force in London is from the EU 27—so what exactly is going to happen? Delivery of housing and of every other kind of infrastructure depends on that labour force, and I urgently say to the Government that they must give an assurance to those EU 27 workers, and to their successors, that they will be there to build the housing we need. Talk of targets and objectives—

[Baroness Chisholm of Owlpen (Con)]

My Lords, the noble Lord’s time is up, I am afraid.