Building Safety Bill

Lord Young of Cookham Excerpts

Committee stage
Thursday 24th February 2022 Grand Committee

Moved by

[Lord Young of Cookham]

24: Schedule 5, page 166, line 16, at end insert—
“32A After section 36 insert—“36A Removal or alteration of offending work in contravention of Fire Safety Regulations(1) If any work contravenes any fire safety requirements in the building regulations, or breaches any fire safety duty in any relevant enactment, the appropriate national authority or building control authority, without prejudice to their right to take proceedings for a fine in respect of the contravention, may by notice require the person responsible for the work by a date specified in the notice to—(a) pull down and rebuild the work,(b) remove and replace the work, or(c) effect such alterations in it as may be necessary to make it comply with the applicable building regulations.(2) If a person to whom a notice has been given under subsection (1) above (called a “section 36A notice”) is unable to do the work specified in the notice because the person has no power to carry out the required work to the building and the building manager will not facilitate the required work within a reasonable period— (a) the appropriate national authority or the building control authority may order that person instead to pay to it the amount of the expenses reasonably to be incurred to perform the work specified in the notice;(b) the appropriate national authority or the building control authority shall hold the amount so received to be used by the building manager to carry out the work specified in the section 36A notice; or(c) the appropriate national authority or the building control authority shall serve a section 36A notice on the building manager and subsections (3), (5) and (6) of this section shall apply.(3) If a person to whom a section 36A notice has been given fails to comply with the notice before the expiration of the date specified in the notice the appropriate national authority or building control authority may—(a) pull down and rebuild the work,(b) remove and replace the work, or(c) effect such alterations in it as may be necessary to make it comply with the building regulations, and recover—(i) from the person responsible for the work the expenses reasonably incurred by the authority in doing so;(ii) from the Scheme in whole or in part, on an interim or final basis, the expenses reasonably incurred or to be incurred by the authority in doing so; or(iii) from the person responsible for the work any amount paid to the appropriate national authority or building control authority by the Scheme which if recovered shall be paid to the Scheme.(4) A section 36A notice shall not be given—(a) in respect of work completed before 1 June 1992 or such earlier date as the appropriate national authority may specify in regulations, or(b) in the case of work completed after the coming into force of this section, more than 10 years from the date of completion of the work in question.(5) Work specified in the section 36A notice shall be carried out so as to—(a) reduce, insofar as reasonably practicable, the risk of noise, cold, damp and other hazards to residents while the work is carried out; and(b) maintain, insofar as reasonably practicable, the design, character and amenity of the structure as it existed prior to the notice being issued.(6) Where the person responsible for the work has been taking reasonable steps to complete the work but is unable to do so before the expiry of the date specified in the section 36A notice that person may apply to the person who issued the notice to request an extension of time which is reasonable in the circumstances.(7) Where a section 36A notice has been issued the person responsible for the work shall—(a) be liable for the costs of interim mitigation or safety measures and reimbursement of or compensation for increases in insurance premiums, in either case as may be specified in regulations made by the relevant national authority; and(b) reimburse qualifying tenants for any such costs that they have been or are required to pay, the amount of such reimbursement if not agreed to be determined by the appropriate tribunal.(8) Where the person responsible for the work has not complied with the section 36A notice before the expiry of that notice, or before the expiry of the extension of that notice under subsection (6), the appropriate national authority or the building control authority may—(a) order that person to pay to it the amount of the expenses reasonably to be incurred to perform the work specified in the notice; and(b) require that person to pay a penalty in respect of that failure to comply.(9) Notice of a penalty under subsection (8) must be in writing and specify the date before which the penalty is required to be paid.(10) In fixing a penalty under subsection (8) the appropriate national authority or building control authority must have regard to the length of time that has elapsed since the person on whom the penalty is imposed has known that the work was in breach during which the person has not remediated the work, the seriousness of the infringement concerned, and the desirability of deterring both the person on whom the penalty is imposed and others from failing to comply with notices under section 36A, and—(a) no penalty fixed under this section may exceed 10% of the turnover of the person responsible for the work (determined in accordance with such provisions as may be specified in regulations made by the appropriate national authority);(b) any sums received by a national authority in relation to a penalty are to be paid into the Consolidated Fund;(c) any sums received by a building control authority are to be set off against any expenses paid by that authority under this section, with any remaining balance paid into the Consolidated Fund.(11) For the purposes of this section “the appropriate tribunal” is—(a) in respect of a long lease of premises in England, the First-tier Tribunal; and(b) in respect of a long lease of premises in Wales, a leasehold valuation tribunal.(12) Any person subject to a section 36A notice may not pass on to any qualifying tenant any expense, in whole or in part, arising from—(a) the costs of compliance with any such notice; or(b) the costs of any penalty for failing to comply with such a notice.(13) The prohibition in subsection (12) shall have effect regardless of any provision to the contrary in any agreement made before or after the coming into force of this section.(14) In this section—“building manager” means the responsible person in relation to the building in question, as defined in Regulation 3 of the Regulatory Reform (Fire Safety) Order 2005 (S.I. 2005/1541) or any such other person that has the power to carry out the required work;“fire safety requirements” means any requirement in Part B of Schedule 1 to the building regulations in force as at the date of the initial notice or full plans application;“initial notice” has the same meaning as in section 47 of this Act;“full plans application” means the date of any application under section 16 of this Act or an application for building control approval under paragraph 1B of Schedule 1 to this Act, as the case may be;“long lease” has the same meaning as in sections 76 and 77 of the Commonhold and Leasehold Reform Act 2002; “parent undertaking” has the same meaning as in section 1162 of the Companies Act 2006;“person responsible for the work” means a person responsible for or a person responsible for commissioning the construction, erection or refurbishment of the work and, where that person is a company, any parent undertaking of that person;“qualifying tenant” means any tenant under a long lease;“relevant enactment” means section 1 or section 2A of the Defective Premises Act 1972.36B Disputes over section 36A notices given by building control authorities(1) The appropriate national authority must make arrangements with a body to establish a committee called the Technical Committee which, if established in accordance with the arrangements, has the functions given by this section.(2) If a question arises between the target of a section 36A notice and a national authority or building control authority as to whether work contravenes the fire safety requirements of the building regulations in force at a particular time, the Technical Committee has jurisdiction to decide that question.(3) The Technical Committee’s decision is binding on the building control authority and any potential target of a section 36A notice who was given an opportunity to make representations, unless the matter is referred to arbitration under section 36C.(4) The Technical Committee does not have jurisdiction to decide a question that has already been decided by a court.(5) A certificate by the appropriate national authority that a specified committee has been established in accordance with arrangements under subsection (1) is conclusive evidence of that fact in relation to the period for which the certificate is in force.(6) Arrangements under subection (1) must, in particular, include—(a) a presumption that the proceedings of the Technical Committee will normally be held in public;(b) a requirement that the decisions of the Technical Committee are freely available to the public;(c) that members appointed to the Technical Committee have appropriate skills to assess issues raised by section 36A notices; and(d) that members of the Technical Committee are independent of—(i) any party involved in the reference to the Technical Committee; and(ii) any other member of the Technical Committee, or panel of the Technical Committee, hearing that particular reference.(7) Arrangements under subsection (1) may, in particular, include requirements about—(a) the composition of the Technical Committee or the appointment of its members;(b) the right of the Technical Committee to form separate panels to give decisions on its behalf;(c) the Technical Committee’s procedure or how its procedure is to be determined (including requirements for its procedures to be approved by the appropriate national authority); or(d) review by the Technical Committee of its own decisions, including by a panel constituted of different members. (8) The Technical Committee’s procedure may, in particular, include provision imposing time limits for making an application for a decision or the taking of other steps.36C Challenging decisions of the Technical Committee(1) If the Technical Committee has decided any question under section 36B(2), any person on whom the decision is binding may, if dissatisfied with the decision refer the question to arbitration.(2) But a person may not refer the question to arbitration until any review process has been exhausted.(3) Any arbitration under subsection (1)—(a) shall be commenced by the person seeking arbitration requesting the President of the Chartered Institute of Arbitrators to appoint a single arbitrator to hear the dispute;(b) shall be conducted in accordance with the rules of the Chartered Institute of Arbitrators; and(c) shall not have the power to award any costs against the Technical Committee.(4) The Technical Committee need not, but may if so advised, participate in any arbitration proceeding under this section.(5) The relevant national authority or relevant building control authority must be given notice of any arbitration proceedings under this section and must be joined as a party to the proceedings if it so requests.(6) Arbitrations under this section are statutory arbitrations in accordance with the terms of the Arbitration Act 1996.(7) The relevant national authority may amend the identity of the arbitral body named in subsection (3) by regulation.36D Notification by person with an interest in the building(1) Any person with a property interest in a building may give notice to the appropriate national authority or building control authority that that person has reason to believe that a building has been constructed in a manner that contravenes any fire safety requirements in the building regulations.(2) Where a notice under subsection (1) has been given the appropriate national authority or building control authority must, before the end of the period of 90 days beginning with the day on which it receives the notice, publish a response stating how it proposes to deal with the notice, and in particular—(a) whether it has decided to take any action, or to take no action, in response to the notice, and(b) if it has decided to take action, what action it proposes to take.(3) The appropriate national authority must make regulations regarding notices under this section, in particular regarding —(a) the manner of giving notice;(b) the calculation of time; and(c) the designation of a proper officer or proper officers to receive the notices;and any notice under subsection (1) given in accordance with regulations made under this section shall be deemed valid.(4) In this section, “property interest” means an estate in fee simple or a term of years absolute (whether legal or equitable).36E Duty to provide information(1) Where an appropriate national authority or building control authority has received a notice under section 36D, or acting on its own initiative has reason to believe that a building has been constructed in a manner that contravenes any fire safety requirements in the building regulations, the relevant authority may by notice—(a) require the person the relevant authority reasonably believes to be the person responsible for the work by a date specified in the notice to provide copies of all such plans, documents or other information as the authority may reasonably require at a time and place, and in a form and manner, and to a person specified in the notice;(b) require any person to attend at a time and place specified in the notice to give evidence to the relevant authority or a person nominated by the relevant authority for the purpose;(c) require any person to supply the relevant authority with such estimates, forecasts, returns or other information as may be specified or described in the notice and at a time and place, and in a form and manner, and to a person so specified.(2) A notice under this section shall include information about the possible consequences of not complying with the notice.(3) The person to whom any document is produced in accordance with a notice under this section may, for the purpose of this Part, copy the document so produced.(4) No person shall be required under this section—(a) to give any evidence or produce any documents which he or she could not be compelled to give or produce in civil proceedings before a court; or(b) to supply any information which he or she could not be compelled to supply in evidence in such proceedings.(5) In this section “court” means the High Court of England and Wales.36F Fees to be paid to relevant authority(1) The appropriate national authority may by regulations make provision for the payment of fees to the appropriate national authority or building control authority in respect of—(a) any notice given under section 36A; or(b) any decision by the Technical Committee under section 36B.(2) Regulations under this section may in particular—(a) make provision as to when a fee or charge payable under the regulations is to be paid;(b) make provision as to who is to pay a fee or charge payable under the regulations;(c) make provision as to how a fee or charge payable under the regulations is to be calculated (including who is to make the calculation);(d) prescribe circumstances in which a fee or charge payable under the regulations is to be remitted or refunded (wholly or in part);(e) prescribe circumstances in which no fee or charge is to be paid; or(f) make provision as to the effect of paying or failing to pay a fee or charge in accordance with the regulations.(3) Regulations under this section may—(a) contain incidental, supplementary, consequential, transitional and transitory provision and savings;(b) in the case of regulations made by virtue of subsection (2)(f) or subsection (3)(a), amend, repeal or revoke any provision made by or under this Act or by or under any other Act.(4) A relevant national authority or building control authority determining the amount of fees or charges in pursuance of provision made by regulations under subsection (1) must secure that, taking one financial year with another, the income from the fees or charges does not exceed the cost to the relevant authority of performing the function or doing the thing (as the case may be).(5) For the purposes of this section, a financial year is the period of 12 months beginning with 1 April.36G Penalties: failure to comply with information requirements(1) Where the appropriate national authority or building control authority considers that a person has, without reasonable excuse, failed to comply with a requirement imposed on the person under section 36E (Duty to provide information), it may impose a penalty of such amount as it considers appropriate.(2) The amount may be—(a) a fixed amount at level 5 on the standard scale,(b) an amount calculated by reference to a daily rate, or(c) any combination of a fixed amount and an amount calculated by reference to a daily rate.(3) In relation to a penalty imposed under subsection (1)—(a) in the case of an amount calculated by reference to a daily rate, the daily rate may not exceed level 4 on the standard scale;(b) in the case of a fixed amount and an amount calculated by reference to a daily rate, the aggregate amount may be at level 5 on the standard scale.(4) In imposing a penalty by reference to a daily rate—(a) no account is to be taken of any days before the service of the notice under section 36E, and(b) unless the authority determines an earlier date (whether before or after the penalty is imposed), the amount payable ceases to accumulate the day on which the requirement concerned is satisfied.36H Power to make fire safety remediation regulations(1) The appropriate national authority may, for any of the purposes of securing the health, safety, welfare and convenience of persons in or about buildings and of others who may be affected by buildings or matters connected with buildings, make regulations with respect to the matters mentioned in subsection (2) below.(2) Those matters are—(a) when a section 36A notice may be made only by either the appropriate national authority or a building control authority;(b) where there is more than one person responsible for the work, the designation of a lead person responsible and the contribution to be made by other responsible persons;(c) where money is paid under section 36A(2) to the relevant authority, the manner in which that authority shall hold that money and the conditions applied to it.(3) Regulations made under subsection (1) above are known as fire safety remediation regulations.(4) The power to make fire safety remediation regulations is exercisable by statutory instrument, which is subject to annulment in pursuance of a resolution of either House of Parliament.”Member’s explanatory statement
This probing amendment is consequential on the Building Indemnity Scheme, expanding and improving existing enforcement powers under the Building Act 1984.

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[Lord Young of Cookham (Con)]

My Lords, in moving Amendment 24 in my name and that of my noble friend Lord Blencathra, I will also speak to Amendment 130 and touch on my noble friend’s amendments. I begin by welcoming the fact that he and Michael Gove have made substantial advance on the Government’s initial response to the cladding crisis. I am very grateful for that and for the role he has played.

For the leaseholders involved, this group of amendments is probably the most important in the whole Bill. The object of my amendments is to deliver the Government’s policy that, so far as historical defects are concerned, the polluter should pay and not the leaseholder. I begin by reminding the Committee of the explicit commitments given by the Secretary of State that underpin that policy. In his Statement on 10 January, he said:

“We will take action to end the scandal and protect leaseholders … We will make industry pay to fix all of the remaining problems and help to cover the range of costs facing leaseholders.”


When pressed by an opposition MP, the Secretary of State said in reply:

“She specifically requested that we provide amendments to the Building Safety Bill to ensure that there is statutory protection for leaseholders. That is our intention—we intend to bring forward those amendments—and I look forward to working with her and colleagues across the House to provide the most robust legal protection.”


Later he clarified what he meant by statutory protection:

“First, we will make sure that we provide leaseholders with statutory protection—that is what we aim to do and we will work with colleagues across the House to ensure that that statutory protection extends to all the work required to make buildings safe.”—[Official Report, Commons, 10/1/22; cols. 284-291]


Finally, in his evidence earlier this week to the Select Committee in another place, the Secretary of State said:

“The approach that we have put forward is one that provides them”—


that is, the leaseholders—

“with the maximum available level of protection.”

We need to build on the substantial advance that I mentioned earlier, because the amendments tabled by the Government so far do not deliver the policy I have just quoted: statutory protection that

“extends to all the work required to make buildings safe.”—[Official Report, Commons, 10/1/22; col. 291]

The amendments proposed are not “the most robust”, and nor do they provide

“the maximum … level of protection.”

Why is that? It is because not all relevant buildings, leaseholders and defects are covered. The object of my amendments and those of others is to deliver the policy, fill in the gaps and make the protection more robust.

I have one other objective. I believe that in cases where the Government are unable to persuade those responsible to do the work voluntarily—I suspect there will be many—remedial work should commence promptly, without waiting for the proceeds of the levy to come in or for people to be fined after protracted litigation. It is crucial to make the buildings safe sooner, to lift the blight on sales and to let people get on with their lives. Under the current government proposals, where the developer will not fund the work, nothing happens until all the money is in place, including the contributions that the Government expect leaseholders to pay, which many will not be able to afford. We cannot wait that long.

My amendments are designed to provide a speedy and efficient route to getting buildings remediated at the cost of the person responsible and, when that is not possible, by a levy on the industry. I claim no exclusivity as to how this is done. We may need to pick and mix with some of the other proposals in this group, particularly those in the name of my noble friend Lord Blencathra and the noble Earl, Lord Lytton, who brings to this issue the wealth of professional expertise. I am grateful to Sue Bright and Liam Spender, who have given me advice in a personal capacity, and to the Leasehold Knowledge Partnership, which services the all-party group on this subject.

My proposal would operate by inserting provisions into the Building Act 1984 and, as my noble friend reminded me, in an earlier incarnation I put that on the statute book. At some point, I hope that the statute of limitations will kick in and hold me not responsible for all the things I may have done in the past. That amendment, however, would enable an appropriate authority, either the Secretary of State or the building control authority, to serve a notice on those responsible for fire safety defects that are in breach of either building regulations or the “fit for human habitation” requirements in the Defective Premises Act 1972, which I did not put on the statute book. Leaseholders can also start that process and request a relevant authority to act. When the polluter no longer owns the building, the relevant authority can recover the money from the polluter and require the work to be done. If the polluter cannot or will not pay, the resources to do the work come from the building safety indemnity scheme established under Amendment 130.

The amendment also proposes an absolute prohibition on any of these costs being passed on to long leaseholders through variable service charges, filling in one of the gaps I referred to earlier. There are penalties on the polluter for noncompliance with a remediation notice; they are also liable to pay the costs of mitigating measures in the meantime. These provisions incentivise prompt action rather than protracted delay. In the event of a dispute as to whether the work contravenes building regulations, this will be decided by a technical committee, the decision of which will be binding. Any challenge to its decision can be referred to arbitration. I believe this is quicker and cheaper than the complex dispute process in government Amendment 108.

These changes to the Building Act will require money to pay for remedial works while the authorities step in, which brings me to Amendment 130. This would create a comprehensive levy scheme to be established. Contributors to the scheme would include all applicants for building control approval and suppliers of construction products. Leaseholders and a relevant authority, acting under Section 36A, would be able to apply for grants under the scheme. I cannot claim authorship of this part of the proposal; it simply mirrors the Government’s own idea of linking future building control approval to payments into the scheme. The amendment proposes that anyone who does not pay a levy when due cannot receive building control approval for any works.

Those are my proposals, and I turn now to the Government’s amendments, covering some 24 pages of legal text. The Government’s objective, although not spelt out in these terms, is to create what has been called a statutory waterfall. The waterfall is intended to work as follows: develops and cladding manufacturers are expected to pay first; for cladding remediation, government funding then kicks in through the building safety fund, then freeholders are expected to pay next. Finally come the leaseholders, who are expected to pay only a capped amount towards non-cladding costs.

Each layer of the waterfall has to be put in place before you get to the next one. Its aim is to ensure that any contributions from leaseholders become, legally, the last resort. This addresses the conflict of interest inherent in the current leasehold system. At the moment, landlords can spend leaseholders’ money without any effective control. The fact that freeholders will be on the hook to pay will concentrate their minds on the question of cost-benefit analysis. Are the works that they deemed necessary really necessary when they did not have to pay? Are they still necessary when they do?

The current Bill and the government amendments do not have adequate measures to ensure that the developer responsible for the defects must pay. With no voluntary settlement, the only route to recover would be through costly and risky litigation, with the leaseholders or freeholders responsible for pursuing a well-resourced developer through the courts, potentially delaying remediation for years and incurring higher insurance premiums and, in some cases, waking watches. Amendment 24 avoids this.

There are a number of other problems with the Government’s approach. I start with putting freeholders in the firing line. Where the developer is the freeholder, that is wholly understandable, but resident-owned buildings are excluded from the Government’s proposed protection by Amendment 63. That is because leaseholders in those buildings are also the freeholders—they have enfranchised. It is then up to the residents to sort out their claims against those responsible. When there is no one to claim against, this may mean that those residents must finance all the non-cladding remediation costs themselves. This is plainly wrong. Many leaseholders have used legislation—which, I confess, I put on the statute book—encouraging them to enfranchise and buy the freeholds. This is a welcome step away from the feudal system of leasehold, which the Government have pledged to abolish, and towards commonhold. However, those leaseholders who have enfranchised are every bit as innocent as those who have not, yet they are excluded from the support in the government amendments.

Other freeholders now find themselves in the line of fire. Freeholds are often owned by housing associations, charities, local authorities and pension funds, which have bought freeholds and their ground rents—in the case of pension funds, to match their liabilities on annuities. They have found themselves exposed to major costs, although they were not responsible for the defects. It is not clear why pension savers should pay if they did not pollute. These freeholders, like the leaseholders, bear no responsibility for causing building safety defects, and they should not bear the cost. In some cases, the costs of remediation will outweigh the balance sheet of the freeholder, threatening insolvency. Has this all been thought through? A solution would be for the Government to propose to meet any costs not met by the developer, including cladding repairs in particular.

Under the government amendments, a developer must pay only if it is still the landlord. If it has sold the building, it is off the hook, under Amendment 76. If the polluter is to pay, it is not clear why there should be these exclusions, and there must be a direct route to hold polluters responsible that does not depend on leaseholders bringing claims under the Defective Premises Act. Even if the developer is the landlord, it can recover costs from all leaseholders who are not capped by the capping provisions—another important deviation from the policy of protecting the leaseholder. This is the case even though the developer is responsible for the defect and has, for example, failed to install cavity barriers. That is likely to be a common scenario.

There are other important exclusions which breach the policy that the polluter, not the leaseholder, should pay. Where a building has non-cladding defects and is more than 11 metres tall, leaseholders have to pay up to £10,000 outside London and £15,000 in it. Under Amendment 92, these payments can be spread over five years, but that conflicts with the requirement for all funds to be in place before the work can commence. Who will fund the difference? There may be buildings where there are only non-cladding defects. If the bill for remediation is £10 million and there are 250 flats, leaseholders must pay £40,000 each. They are subject to a cap of £10,000, but where does the missing £30,000 come from—£7.5 million for the whole building? I see that I have already caused some consternation on the Front Bench.

A further important exclusion is for buildings under 11 metres. Leaseholders in those buildings, or buildings with fewer than five storeys, get no assistance for cladding or non-cladding remedial works and are exposed to unlimited costs. The Government’s view is that such buildings are not at sufficient risk to justify remediation, but this will be a bitter disappointment when leaseholders in those buildings who are not responsible for the defects face costs. It is incompatible with the principles I set out earlier.

Another exclusion is for those who have invested in buy to let who have more than one such property. The press release that the Government published on 14 February, along with the amendment, said:

“New clauses will also enshrine in law the commitment the Levelling Up Secretary made in the House of Commons last month that no leaseholder living in their own home, or sub-letting in a building over 11m, ever pays a penny for the removal of dangerous cladding.”


Amendment 64 contradicts that assurance for those buy-to-let landlords who own more than one such property, the majority of whom are individuals and not property barons. They bear no responsibility for the defects. I think that Amendment 65 addresses that issue in a later group.

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This has been an extremely good debate, with everybody wanting to stand shoulder to shoulder with leaseholders and shared owners—who have even narrower shoulders than some leaseholders—and wanting to protect them and deliver for the campaigners who have fought inveterately for some months to ensure that we recognise, as we all do, that they are victims of this crisis and need to be protected, and that we must get the polluter to pay. This group of amendments and all the thinking here today has been incredibly helpful. I thank everybody for the spirit in which this debate has been carried out.

[Lord Young of Cookham (Con)]

My Lords, I am grateful to all those who have contributed to this long and important debate. I notice that what was the awkward squad last time has now been transformed into three wise men, so we are obviously making progress. On a more serious note, this debate is of enormous interest to thousands of leaseholders, many of whom have bills they cannot afford to pay on the mantelpiece. We have thousands of leaseholders who would like to sell but cannot, because their property is blighted. We have all wanted to come up with a solution this afternoon; I think we are making progress, as I will come on to in a moment.

One issue the Government will have to face is that leaseholders do not read 24 pages of legalese amendments to a government Bill. They remember the soundbites that I mentioned right at the beginning—the polluter should pay, not the leaseholder; the leaseholders are innocent; we have statutory protection. There is a risk that the exclusions in the small print will erode the good will that the Government have generated so far in the progress they have made. We need to do a little more to address those exclusions, which stop us achieving the principle to which the Government are committed—the polluter should pay, not the leaseholder.

The other thing I take from this debate—I hope the Minister will agree with this—is a point that I, the noble Earl, Lord Lytton, and the noble Baroness, Lady Pinnock, made, which is that we have to make an early start. We simply cannot wait until the money has come in from the levy to do the work. I will come back to this in a moment, but there was a suggestion from both the noble Earl, Lord Lytton, and my noble friend Lord Blencathra that the Government should provide the bridging finance—I think that was the word the noble Earl used—in order to get the show on the road and make an early start, rather than wait for the money to come in after long and expensive litigation.

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[Lord Greenhalgh (Con)]

Housing is ring-fenced.

[Lord Young of Cookham (Con)]

I know that housing is ring-fenced; I introduced the housing revenue account.

[Noble Lords]

Oh!

[Lord Young of Cookham (Con)]

I think we had better move on from that.

My noble friend mentioned a group that we have so far not mentioned at all: shared owners. I think we need to bear that in mind.

My noble friend Lord Blencathra had a veiled threat that if there was not an agreed solution with the Government, there would be a conspiracy of either the wise men or the awkward squad. I think my noble friend the Minister needs to go back to his Secretary of State and say, “Look, everybody was really grateful for what we have done so far, but, Michael, I am afraid that it’s not going to take the trick. Either we can do a deal and take the credit for making the last step, or we don’t do a deal and we go down in flames”. I think my noble friend could put that proposition in more colourful language than I have used this evening.

Next time I speak, I hope that instead of saying we are nearly there, I can say that we are there, but it is down to my noble friend to enable me to say those words. In the meantime, and in the spirit of amity, I beg leave to withdraw my amendment.

Amendment 24 withdrawn.

Building Safety Defects

Lord Young of Cookham Excerpts

Monday 7th February 2022 Lords Chamber

[Lord Greenhalgh (Con)]

My Lords, I salute the tenacity of the noble Lord. He will understand that next Monday will be a very special day: it will be the day he writes a card to his wife, the noble Baroness, Lady Kennedy, but it will also be the date when we will see a series—a slew—of amendments from, I am sure, the Labour Party, the Liberal Democrats, the Cross Benches, my noble friends behind me and also from the Government as we reach Committee on the Building Safety Bill. We have two objectives in mind: to protect leaseholders and to ensure that the polluter pays. We are starting a process to encourage voluntary contributions, but we are very clear that, if they do not pay up, there will be measures in law to make sure that they do.

[Lord Young of Cookham (Con)]

My Lords, I welcome the very positive statement that my noble friend has just made, and his personal role in making the progress that has just been announced. On 10 January, the Secretary of State said in another place:

“First, we will make sure that we provide leaseholders with statutory protection—that is what we aim to do and we will work with colleagues across the House to ensure that that statutory protection extends to all the work required to make buildings safe.”—[Official Report, Commons, 10/1/21; col. 291.]


Can my noble friend confirm that that is the case and that protection extends beyond cladding replacement?

[Lord Greenhalgh (Con)]

My Lords, I do not want to pre-empt 14 February, but it is very clear that, from Florrie’s law, which sought to protect leaseholders from high-cost building safety and remedial works, there will be a principle which protects leaseholders. I thank my noble friend for raising this issue.

Levelling Up

Lord Young of Cookham Excerpts

Monday 7th February 2022 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, I hope my noble friend will sign my copy of the levelling-up White Paper. The Public Services Committee, ably chaired by the noble Baroness, Lady Armstrong, produced a report on levelling up last year and I am delighted that the Government have responded to two of its recommendations: first, that there should be clarity about what levelling up means; and, secondly, that there should be regular milestones so that we can see whether progress is being made. We also commented on transparency and I wonder whether my noble friend will recognise that under the levelling-up White Paper very substantial sums of central grants will continue to be allocated to local areas. So I ask my noble friend whether there will be total transparency about the basis of those decisions.

[Lord Greenhalgh (Con)]

I always thank my noble friend for his comments and his probing in the right areas. I failed to mention in my response to the Front Bench that, of course, there will be an annual report that will measure progress on that mission to 2030 and beyond. The point that my noble friend raises is precisely right. We need to have transparency. It is important to track the money. I think a policy that was actually delivered under, I believe, the Blair Government, the Total Place agenda, is a very important one to ensure that we get the money into the right areas across the piece, whether it is funded by central government, regional government or, indeed, local government and make sure that the money gets to the people who need it most. Transparency is a key part of achieving success and we will take that point on board.

Building Safety Bill

Lord Young of Cookham Excerpts

2nd reading
Wednesday 2nd February 2022 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, like others, I welcome the introduction of this Bill, which will help restore confidence in homes built by the UK construction industry after the damaging revelations of recent months. If the Government’s ambitions for home ownership are to be achieved, buyers must have confidence in the homes they are buying and so must lenders.

I join others in wishing a long and happy retirement to the right reverend Prelate the Bishop of Winchester who, when I was a Member of Parliament for Hampshire, had responsibility for my spiritual health.

I want to refer to the helpful covering letter that my noble friend the Minister wrote to us on 20 January, entitled “Introduction of the Building Safety Bill” and, in particular, to the section headed “Protecting Leaseholders from Unnecessary Costs”; I do so alongside the Statement on building safety made in the other place by the Secretary of State on 10 January. My noble friend’s letter says:

“The Secretary of State recently announced that leaseholders living in their homes should be protected from the costs of remediating historic building safety defects.”


Amen to that, but none of the subsequent paragraphs in the letter, or indeed anything in the Bill at the moment, gives a guarantee that this will be done, nor do they explain how it will be done. Hence the need for further amendments, to which I will return in a moment.

The next paragraph of the letter covers one of the building safety defects—namely, cladding—but not others. It makes it clear that the costs are to be met by a scheme funded by industry, alongside a further push to make sure that developers fix the unsafe buildings they built. Again, amen to that, but it follows that unless and until industry pays, the work will not be done, and the last thing leaseholders want is more delay.

The initiative to get the industry to contribute voluntarily is commendable but the volunteers are not going to pay for other peoples’ buildings; their shareholders would complain if they did. We know that many of the offending companies either cannot pay or will not pay. At the moment, leaseholders have no bankable guarantee that their buildings will be fixed with someone else paying. I welcome all the recent initiatives to help leaseholders and applaud the work of my noble friend the Minister for his tireless campaign behind the scenes but, as he recognised in his opening remarks, we are not there yet.

Now we have to turn to the Statement I referred to earlier, which clearly stated:

“We will take action to end the scandal and protect leaseholders.”


The Secretary of State went on to say:

“We will make industry pay to fix all of the remaining problems and help to cover the range of costs facing leaseholders.”


The Statement concluded:

“I can confirm to the House today that if they do not, we will impose a solution on them, if necessary, in law.”


When pressed by an Opposition MP, the Secretary of State said in reply:

“She specifically requested that we provide amendments to the Building Safety Bill to ensure that there is statutory protection for leaseholders. That is our intention—we intend to bring forward those amendments—and I look forward to working with her and colleagues across the House to provide the most robust legal protection.”


So the Secretary of State must have some idea of the sorts of amendments that he plans to bring forward.

Later, he clarified what he meant by statutory protection:

“First, we will make sure that we provide leaseholders with statutory protection—that is what we aim to do and we will work with colleagues across the House to ensure that that statutory protection extends to all the work required to make buildings safe.”—[Official Report, Commons, 10/1/22; cols. 285-91.]


Note that that commitment extends to all building work, not just cladding. Again, this is all very good news, and I commend the work of my noble friend for pressing for those commitments. However, it raises some questions—I appreciate that my noble friend may not have all the answers, but he may be able to reply in general terms.

First, many leaseholders are currently threatened with repossession, eviction and bankruptcy because at the moment they are currently legally liable for the bills, which the Secretary of State has recognised are in no way their fault. They have been promised statutory protection—but statutory protection from what, and from when? Are buy-to-let landlords included, and what about private leaseholders in blocks owned by social landlords?

Does this protection cover all the work done for which they have been invoiced but not paid; does it cover invoices only from the date of the Statement? Does it become operative only when the necessary legislation is passed? Does it cover only cladding or—as one of the quotes I just referred to implies—all safety work? Should it be retrospective, as the noble Baroness, Lady Hayman, suggested in her opening remarks? Leaseholders need clarity on these issues, and they need it now.

Then, if both the statutory protection and the legislation to oblige industry to pay are to be included in this legislation—again, as the Secretary of State implied—that is a high legislative hurdle in a very short timescale. What progress has been made in drafting the necessary clauses? They are bound to be controversial if they are to be effective, and the House is allergic to Henry VIII clauses.

I and my noble friend Lord Blencathra—the so-called Awkward Squad; an unusual name for two former Conservative Government Chief Whips—are willing to help tackle the issues that will need resolving. How does one define a delegated powers clause which allows the Government to decide the meaning of “defective construction”, particularly if there has been no breach of building regulations? Will there be an appeals procedure? How do we do this without delaying essential remedial work? Will some sort of credit facility be available until the cash comes in? Will the scheme be proof against ECHR challenge?

How do we enforce against foreign companies domiciled overseas, where they have wound up the offending subsidiaries—and, if we cannot, how will the resulting shortfall be met if no more funds are available from the Treasury?

I hope my noble friend has some of the answers, not just for the sake of concluding our debate this evening but for the sake of leaseholders, who will be hanging on every word of his reply.

Building Safety

Lord Young of Cookham Excerpts

Tuesday 11th January 2022 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, I commend the Minister for his tireless work over the past few months, which has led to this very welcome initiative. Will he clarify two points that arose from the exchange in another place yesterday? First, when asked about costs relating to fire doors and external wall insulation, the Secretary of State said that

“the freeholders, as the ultimate owners of these buildings, will be held responsible for all the work that is required, and we will make sure that leaseholders are not on the hook.”

He then confirmed this in a subsequent reply to Matthew Offord, saying:

“It is our intention that the ultimate owner of a building is responsible for all of the safety steps that are required, and we will use statutory means in order to ensure that that happens.”—[Official Report, Commons, 10/1/22; col. 301.]


I read that as saying that leaseholders are protected for all safety steps, not just dealing with cladding. Secondly, while the Secretary of State repeatedly promised statutory protection for leaseholders, it is not clear what they should do about bills sitting on their mantelpiece for work completed or under way but not paid for. Do those leaseholders have statutory protection?

[Lord Greenhalgh (Con)]

My noble friend always asks very pertinent questions and he knows this issue inside out. Rather than obfuscating this, I will give the straight answer. Of course, in protecting the leaseholders, someone else has to pay—that is the thrust of the question from my noble friend. When it comes to cladding, there is now funding in place and a plan to deliver that without touching anyone beyond the polluter, if we can get back the money put up by the taxpayer. Some leaseholders have obviously borne the brunt of the costs as well and that is regrettable. We cannot apply these protections retrospectively but, by having the reset statement issued by my right honourable friend, we can ensure that we protect many thousands—potentially hundreds of thousands—more leaseholders from being affected in the future by having those statutory protections in place.

Building Safety Defects

Lord Young of Cookham Excerpts

Wednesday 5th January 2022 Lords Chamber

[Lord Greenhalgh (Con)]

I know that there is a “broken promises” line, but the reality is that 95% of ACM buildings have been remediated. Actually, we have accelerated at pace while I have been Building Safety Minister, despite the global pandemic. The reality is that for many of these buildings—about 20, and a lot of them happen to be in the London Borough of Southwark—it was literally discovered only months ago that they had ACM cladding. I am not blaming the noble Lord, Lord Kennedy, but we are doing our best. This is tough, and we should not be trying to score points. We are absolutely committed to remediate these buildings, especially those with aluminium composite material, the most deadly form of cladding. Very shortly, we will have that removed from all buildings in this country.

[Lord Young of Cookham (Con)]

My Lords, since we last discussed this matter, on 1 January, thousands of leaseholders will have received service charges from the freeholder demanding very substantial remediation sums—sums which are not affordable for many of these leaseholders—which will lead to either repossession or bankruptcy. While the Government have provided substantial support, which I welcome, does the Minister recognise that this is insufficient to prevent hardship? Will he have urgent discussions with a view to raising more resources, possibly through a levy on those developers and other builders responsible for the defects in the first place?

Smoke-free Pavements

Lord Young of Cookham Excerpts

Wednesday 24th November 2021 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, all previous legislation to reduce the harm done by smoking has been on a national basis, such as the ban on smoking on public transport and the ban on smoking in public places. However, despite representations from the Local Government Association that any ban under this measure should also be on a national basis, the Government declined and left it to local discretion. Will the Government follow up the suggestion by the noble Lord, Lord Faulkner, and, in the light of that, consider giving a clear health warning about the risks of damage from smoking and introduce a total ban on smoking on pavements?

[Lord Greenhalgh (Con)]

I thank my noble friend for making the point about how progress has been made and that it has been on a national basis. However, as someone who spent 20 years in local government— 16 as a councillor and four in City Hall as deputy mayor—I know that sometimes it is right to recognise that we do not have problems equally on a national basis. Smoking rates are higher in the north of England, so let us learn from there first before we take the next step.

Leaseholders: Costs

Lord Young of Cookham Excerpts

Thursday 18th November 2021 Lords Chamber

[The Lord Speaker (Lord McFall of Alcluith)]

I call the noble Lord, Lord Young. Apologies.

[Lord Young of Cookham (Con)]

My Lords, I am grateful to my noble friend for what I know he was doing behind the scenes to sort this. Can he confirm that when his Secretary of State was given his new job, he was instructed by the Prime Minister to resolve the cladding crisis? This clearly involves measures beyond those that my noble friend has already referred to. If innocent leaseholders are to avoid financial distress, bankruptcy and eviction, either the Treasury or those responsible for building these defective flats will have to dig deeper into their pockets. Does he agree?

[Lord Greenhalgh (Con)]

My noble friend makes it easy for me: yes, I agree. Implicit in the fact that the Treasury would have supported a subsidised financing scheme is that we need more taxpayer subsidy, but it cannot be the only answer. We need to make sure the polluter pays, and the Secretary of State is looking at every avenue to do that.

Levelling Up White Paper

Lord Young of Cookham Excerpts

Monday 15th November 2021 Lords Chamber

Asked by

[Lord Young of Cookham]

To ask Her Majesty’s Government when they will publish their white paper on levelling up.

[The Minister of State, Home Office and Department for Levelling Up, Housing & Communities (Lord Greenhalgh) (Con)]

We aim to publish by the end of the year. However, our priority is to have a White Paper which meets the scale of ambition and sets out our transformative agenda to deliver real long-term change across the United Kingdom. Levelling up is at the heart of this Government’s agenda to build back better after the pandemic. The recent spending review showed the significant action we are already taking to empower local leaders, boost living standards, spread opportunity and restore local pride.

[Lord Young of Cookham (Con)]

My Lords, I welcome the Government’s commitment to levelling up and to reducing some of the inequalities in our country. But if levelling up is to be more than a slogan, does it not need clearly stated objectives, transparency in the allocation of resources, and measurements so that we can monitor progress? Is my noble friend able to tick those three boxes?

[Lord Greenhalgh (Con)]

My Lords, in July, the Prime Minister set out that we will have made progress in levelling up when we have begun to raise living standards, spread opportunity, improved our public services and restored people’s sense of pride in their community. The forthcoming White Paper will set out the further detail, so that I hope we will be able to tick my noble friend’s three boxes.

Leaseholders: Safety Remediation Costs

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Thursday 4th November 2021 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, I thank the noble Lord, Lord Stunell, for his choice of subject for this debate, which I hope will come up with some helpful suggestions for resolving the crisis facing leaseholders, resolving the current impasse and enabling Michael Gove to respond to the rumoured injunction from the Prime Minister to “sort out the cladding crisis”.

I begin by thanking my noble friend the Minister for his tireless work behind the scenes to get a better deal for leaseholders caught up in the post-Grenfell cladding scandal. The steps the Government have taken so far to help leaseholders, which I welcome, have been in part due to his interventions in the intergovernmental discussions that have taken place. These started with the Treasury taking the view that there was no role for taxpayer funding in finding a solution, so we are making some progress.

My concern is that the combination of government help, freeholder support and voluntary action by developers still leaves a very substantial shortfall and, unless further steps are taken, we are likely to see bankruptcies, repossessions and evictions of people who took every reasonable precaution to protect their interests. As the noble Lord has just said, some 1.5 million householders are potentially caught up in this crisis, which is likely to come to a head next April when the bills fall due and land on leaseholders’ mats.

I agree with the unanimous recommendation of the Select Committee in another place, which it repeated in its report earlier this year:

“It has consistently been this Committee’s position that leaseholders should not have to contribute towards any of the costs for a problem they played no part in creating.”


Indeed, I believe that was also the Government’s initial position, though not the Treasury’s. The Select Committee’s proposal was that there should be a comprehensive building safety fund, fully funded by government and industry, and the Government should establish clear principles regarding how the costs should be split between the two. Total contributions should not be capped. I regret that the Government have not accepted the recommendation and have instead come up with a capped contribution from themselves and an inadequate contribution from industry.

There is a precedent for more generous intervention than the Government have offered so far. I refer to the Housing Defects Act 1984, which I put on the statue book 37 years ago. That provided for a 90% grant towards the cost of repairing the defect of a property, subject to an expenditure limit, or repurchase of the property at 95% of the defect-free value. That legislation covered Airey houses, built after the war, that were discovered to be defective in the 1980s. The background is similar in many ways to the problems confronting today’s leaseholders.

Under that legislation, properties were designated if they were defective by reason of their design or construction and if their value had been reduced substantially because the defects had become generally known. Designation was reserved for serious inherent defects that owners, councils or professional advisers could not have known about on survey, sale or purchase —a close parallel to today’s problems for leaseholders. Compensation was provided by the Government on the terms I have outlined.

So I pose the question: if it was right for the Government—a Conservative Government—to intervene generously then to protect innocent home owners, is there not a case for more generous intervention now? In this case, I am not suggesting the Government should pay 95% and I make no apology for repeating a suggestion I have made on earlier occasions, supported by the right reverend Prelate the Bishop of Durham and my noble friend Lord Blencathra, namely that there should be a retrospective levy on the developers who initially sold the defective flats—the “polluter pays” principle referred to by the noble Lord, Lord Stunell.

Instead, the Government have announced a prospective levy of a 4% tax on profits over £25 million on future residential development, to raise just over £1 billion in five years. There are three problems with that solution. First, it does not produce enough money. We are looking at a shortfall of some £10 billion between the cost of remediation at about £15 billion and the £5 billion now on offer. The levy falls well short. Secondly, the buildings on which the levy is payable will not be defective but built under the new higher building regulations. Thirdly, the levy will not fall exclusively on those who benefited from the sale of defective property. Many future developers who had no part to play at all in the Grenfell tragedy will pay, potentially passing the cost on to future purchasers.

So my suggestion to Michael Gove is that he meets the £10 billion gap with a £5 billion retrospective levy on the developers of the offending flats, most of whom are still around and have substantial reserves, and a further £5 billion from the Treasury, belatedly delivering the recommendation of the Select Committee that costs should not fall on leaseholders. I believe a solution along those lines would enable us to begin to draw a line under this problem and relieve thousands of leaseholders of the nightmares they now suffer from.