Building Safety Bill

Lucy Powell Excerpts

2nd reading
Wednesday 21st July 2021 Commons Chamber

[Lucy Powell (Manchester Central) (Lab/Co-op)]

On a point of order, Madam Deputy Speaker—

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. We suddenly have a flurry of activity. Interventions: hold for a moment. Secretary of State: pause for a moment. I call the shadow Secretary of State, Lucy Powell, to make her point of order.

[Lucy Powell]

On a point of order, Madam Deputy Speaker. I just wondered if I could get your advice. Is it normal practice that, moments before an important debate with dozens of Members down to speak, the Minister lays a ministerial statement about the matter before us that is not yet online so none of us is able to see it, therefore avoiding any scrutiny of the said ministerial statement? Is that in order, Madam Deputy Speaker?

[Madam Deputy Speaker]

I am sure that it is in order, and that is the question that the hon. Lady is asking me as the Chair. It is in order for the Minister to lay a written statement when he decides it is the right time to do that, but if there is a question of information that the hon. Lady is suggesting ought to be before the House in order to inform Members about the Bill that is before us now, I cannot make a judgment because I do not know what is in that statement. However, if the Secretary of State would care to answer that point, it might help the House.

--- Later in debate ---

[Lucy Powell (Manchester Central) (Lab/Co-op)]

I do not think the shambles lies with the House authorities. I am afraid the shambles lies with the Secretary of State. It is just not acceptable. I think it is a contempt of this place that we are given a ministerial statement and a new announcement in his speech that are totally relevant to this Bill and the topics we are discussing today.

Members on both sides of the House have spent weeks scrutinising the Bill, scrutinising what it means and preparing what they are going to say in response, and then they are given this piece of paper halfway through the Secretary of State’s speech. Madam Deputy Speaker says that this is market sensitive. Maybe I am naive about these things, but I do not understand what is market sensitive at 3.10 pm or 2.30 pm that is not market sensitive at 3.30 pm. I thought the markets closed at 4.30 pm, but maybe I have that wrong.

I will come on to some of the things in the Secretary of State’s statement shortly, but I will make some progress because, not only has his shambles now made it hard for Members to properly scrutinise the Bill, but it has cut their time. He has probably lost a lot of friends on both sides of the House in the process.

The starting point of this Bill and of our debate today is the awful tragedy at Grenfell tower. Again, we remember the 72 lives lost and stand with the families, friends and community of Grenfell who are campaigning for change. I also put on record my admiration and awe, as homeowners and tenants across the country are dealing every day with the building safety scandal that engulfs our towns and cities. Their tireless campaigning under such very difficult circumstances is beyond impressive.

Of course, people had been ringing the bell about building safety long before Grenfell, including the residents themselves. By 2017, the Government already had two coroners’ reports on previous fires that called for reform, yet they did not act. In the wake of Grenfell, the Government commissioned a review of building regulations, the Hackitt review, and this Bill implements her recommendations. Given that her final report was published more than three years ago, why has it taken so long for this Bill to reach us?

The Hackitt report is damning, finding that the entire system is not fit for purpose. She concludes:

“The ultimate test of this new framework will be the rebuilding of…confidence in the system. The people who matter most in all of this are the residents of these buildings.”

Dame Judith’s conclusion is the test against which the Bill, and now the new ministerial statement, must be set.

It is far too simple and wrong to say that all this is the fault of “shoddy developers”, as the Government have recently asserted. The tragedy at Grenfell, the fires before and the near misses since have happened as a result of many years of deregulation, lack of enforcement and accountability, and a culture where sign-off and inspection can be bought. These issues have been brought to light in the shocking evidence heard by the Grenfell inquiry, which is ongoing.

We support the majority of what is in this Bill, which at last strengthens regulation of high-rise buildings, although it could go further. However, we have serious concerns about what is not in the Bill. It abandons those leaseholders already trapped in the building safety crisis and we will seek every avenue to provide the cast-iron legal guarantees that have long been promised.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

Does my hon. Friend agree that the situation that leaseholders find themselves in compounds their ongoing and awful situation? They find themselves without leverage, with service charges that are often unjustified and with difficulty getting resolution for them. This has created much more uncertainty, stress and anxiety for hundreds of thousands of families across the country.

[Lucy Powell]

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

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

“crude height limits with binary consequences,”

that do not

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[Joy Morrissey (Beaconsfield) (Con)]

Will the hon. Lady give way?

[Lucy Powell]

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

[Joy Morrissey]

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

[Lucy Powell]

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

[Robert Jenrick]

The hon. Lady seems to misunderstand what an EWS1 form is. An EWS1 form is a product of the lenders and the Royal Institute of Chartered Surveyors. It is not the law and neither is it a product created by the Government.

[Lucy Powell]

I am fully aware what an EWS1 form is, thank you. Its scope and its effect came about from the advice note that the Government issued in January 2020. If it is a matter for the lenders, what recourse do leaseholders have? There is nothing in the Secretary of State’s statement about recourse and accountability and where the buck stops. That is my central argument here. In the vacuum of leadership, everybody from insurers to mortgage lenders, risk assessors and others are too concerned about their liability, leaving thousands of buildings with endless fire safety requirements, some of which are potentially life threatening, but others are an unnecessary symptom of this crisis in confidence. Who is it that says which is which? Where does that sit? With whom does that lie? The Government cannot leave this to industry and the private sector to sort out. The market cannot sort this, because it is completely broken—the Secretary of State said today that the market was completely broken as if this was news to him. Yet he says that he will not intervene in that broken market. The power is with him to intervene if he wanted to. That is why we have been calling for a building works agency. I am talking about a crack team of engineers and experts appointed by the Government, going block by block, assessing the real fire risk and what remediation works are absolutely necessary; commissioning and funding those works from the building safety fund; and then, crucially, certifying the building as safe and sellable. This rigorous approach would also keep costs down, and the agency can then go after those responsible for costs. It has been done before in Australia and it can be done again here—if the Secretary of State was prepared to step up, lead and intervene rather than leave it to the broken market he describes.

[Mr Betts]

I keep reading this statement and I am not sure I am any clearer than I was at the beginning. The Secretary of State said that EWS1 forms are not needed on properties below 18 metres because there is no systemic risk across those sorts of buildings. What I am not clear about is whether the lack of systemic risk applies to cladding that is of limited combustibility. Is he now saying that there is no need to remove combustible cladding from buildings below 18 metres, or that there is a need? If there is, is not an EWS1 form needed as part of that process? If it is not, we still do not know who is going to pay for the work.

[Lucy Powell]

My hon. Friend makes a good point. Of course, there are also many buildings over 18 metres that do not have cladding and are still facing the issues of fire remediation works, some of which may not be necessary. I am not clear whose job it is to decide whether they are necessary, and therefore whether a building can be mortgageable and insurable once again and people can move on with their lives. I am still not sure of that and I still do not feel that the Government are really providing the leadership and intervention that is necessary.

There is huge strength of feeling on these issues, as we can see from the number of Members wanting to speak in this debate. The toll of this crisis is immeasurable. Innocent homeowners want us to work together, and I will work with anyone to protect them from these costs. I am not interested in party political point-scoring, as it happens, but the Government have to step up on these issues.

Returning to the Hackitt test, her ultimate test of this new framework is the rebuilding of public confidence in the system. She says that the people who matter most in all this are the residents of these buildings. The honest truth is that, through the omission of cast-iron protections for today’s leaseholders, this test will not be met. It is not enough to simply will the ends; the means need real determination and focus too. We will work with all sides to protect leaseholders and meet the Hackitt test.

[Madam Deputy Speaker (Judith Cummins)]

I call Sir Peter Bottomley.