Leasehold Reform (Ground Rent) Bill [Lords]

Lucy Powell Excerpts

2nd reading
Monday 29th November 2021 Commons Chamber

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

The Leasehold Reform (Ground Rent) Bill sets ground rents on new leasehold homes to peppercorn levels. We welcome this very small step towards reform, and will not oppose the Bill this evening.

Generating income through high ground rents is an outrageous practice, as has been discussed, but serious leasehold reform is long overdue. Leasehold has been the main way that properties in shared blocks or converted flats have been owned in this country. It stems from arcane feudal laws that date back to an era of landed gentry and aristocracy, and it needs reform urgently. In its more recent manifestations, there has been what can only be described as a scam on an industrial scale, as was pointed out by my hon. Friend the Member for City of Chester (Christian Matheson), against innocent leaseholders—and it increasingly affected new houses, not just flats. It is totally wrong, and it needs ending.

[Mark Tami]

I have been struck by the way that two houses, next door to each other, may be exactly the same, but one can be leasehold and the other freehold. We see that all the time. When a house is advertised, the advert often says, “This is not leasehold”—it points out that fact. Leasehold properties are being devalued by the day.

--- Later in debate ---

[Lucy Powell]

My good and hon. Friend makes an extremely well-made point. The practice of new homes being built as leasehold, and sold as leasehold—buyers often do not even know that at first—has got out of all kilter lately, especially in north Wales and north-west England, where it has been a particularly egregious practice. I welcome this Bill, albeit that it is a bit too little, too late, but it does nothing to protect those trapped in the injustice of leasehold. It does not do anything for those facing excessive ground rent increases today or yesterday, nor does it put an end to some of the most egregious practices, such as selling new houses as leasehold.

The ground rent scandal typifies everything that has gone wrong with our housing market. Housing has become a commodity to be traded, packed up in financial products and thrown into an unregulated market. Large-scale developers and investors have been given free rein to create ever more complex financial products, in order to squeeze money out of homeowners. Many people do not even realise when they buy their house that they will not own the land underneath it, as my right hon. Friend has just made clear. Even worse, the leases often contain clauses that double the ground rent—in some cases, every 10 years, which means that a homeowner in a property worth a modest £200,000 might pay £10,000 a year in ground rents after they have owned the property for 50 years or so.

[Catherine West]

Does my hon. Friend share my concern that this has got so out of hand? The amounts being charged are rising in excess of the retail prices index, which we would expect to be a basic marker. People feel trapped, in that they cannot sell on.

[Lucy Powell]

Absolutely. My hon. Friend makes a really good point. People are trapped in this situation, because we all know that when we look to buy a home, we look at the overheads, and the ongoing service charges, ground rents and other costs. In recent years, those things have rightly been added to the affordability criteria, so people often cannot get a mortgage for these homes. That leaves the people living in them trapped in that situation with an unsellable home.

[Sir Desmond Swayne]

Does this not give rise to an extraordinary question about the legal advice provided by solicitors to those who made such purchases?

[Lucy Powell]

I am glad the right hon. Gentleman raises that point, because I am sure colleagues around the House will be keen to highlight—

[Mark Tami]

Will my hon. Friend give way on that point?

[Lucy Powell]

I will first try to answer it, and then when I do not answer it very well, I will give way to my right hon. Friend to give a better answer. What I do know is that, unfortunately, many people who bought houses in this situation were advised to use the solicitor of the marketing company or company selling the houses—I have many in my constituency. So they were given poor advice, and this is a mis-selling scam as well. Would my right hon. Friend like to give a better answer?

[Mark Tami]

My hon. Friend has in many ways made the point I was going to make. These people were often first-time buyers, keen to get on to the housing market and get their first home. They were told, “Don’t use this solicitor or that solicitor; use these ones, and we will give you a discount to use them”, and—shock, horror—many were not even aware, as my hon. Friend has made clear, of the property being leasehold, let alone of all the other charges associated with that.

[Lucy Powell]

Absolutely; my right hon. Friend makes a very good point as well. Many people, especially first-time buyers, do not understand the difference between leasehold, freehold and so on, and many of these issues come to light only as problems arise later or when they try to sell the property.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

On legal advice, it is worth pointing out that not only were some people told that they had to use particular solicitors, in breach of Law Society guidelines, but some were also told that they had to complete within a certain period of time, so even if they had used a different solicitor, it just would not have been practical for them to analyse or understand the documents correctly. That suggests to me that there needs to be a complete overhaul and inquiry into how the scandal was allowed to develop in the first place.

[Lucy Powell]

My hon. Friend makes an excellent point, and there is a very strong basis for a wider mis-selling scandal inquiry. Many properties are affected: in terms of houses, for which the practice has been particularly egregious, more than 500,000 leasehold houses have been built over the past 10 years. The vast majority of them are in the north-west of England and north Wales, which is why so many colleagues from those areas are here this evening.

The rights to collect the ground rents are bought and sold on the financial markets as steady income streams to investors, while leaseholders get nothing back for—in some cases—thousands of pounds a year. There is hardly a clearer illustration of the damaging pervasive tendency to treat housing as an investment opportunity—as a product to trade on the market—rather than as homes where people live and build their lives around. That should be the basis of housing in this country. We have lost somewhere what housing is: homes, places where we live, where lives are built, where we become successful —or not—and where we bring up a family. Housing is not a commodity to be traded on the financial market. We have seen more starkly than ever over the past two years that housing is also a public health issue, an educational issue, and a work, security and happiness issue, and we should begin to treat it as such.

Although we welcome this Bill, it is a very narrow first step; there are many glaring omissions—measures which could have been included even in such a narrow Bill. First, there is nothing to prevent freeholders from simply transferring their income stream from ground rents to service charges or administration or other charges, as has been highlighted. As shown by the ground rent scandal itself, there is no limit to the ingenuity that some freeholders will draw on to capitalise off the back of leaseholders. Service charges and administration charges are opaque at best, and far too hard to challenge. Will the Minister address that issue later on?

[Mark Tami]

Will my hon. Friend give way?

[Lucy Powell]

I will, because my right hon. Friend is an expert on this issue.

[Mark Tami]

To list just a few examples that I have come across, some leaseholders who—in theory—own a house and the land around it are asked to pay if they want a pet or want to change the flooring in the house or the layout of the garden. People have said to me, “I’m paying a mortgage on a house that I don’t really feel I own.”

[Lucy Powell]

My right hon. Friend is absolutely right and he gives good examples, some of which I was going to use later. He makes a very good point—some of these charges are outrageous. Will Ministers respond to that and address how we can stop that practice?

Secondly, the millions of people already trapped in leasehold homes will see no benefit whatsoever from the Bill, so none of the examples that we have heard will end as a result of it. The Government have chosen to limit the scope of the Bill to new homes, which means those already facing these bills will see no benefit at all. Delay has real costs for them; the Minister can pass the buck on to us for what happened 11 years ago, but more than 2 million new homeowners have been trapped in this feudal leasehold system since his Government came to power.

The Competition and Markets Authority has done some good work taking down the largest and worst-offending of the freeholders, but we cannot wait for it to take on every single company involved in this outrageous practice. Will the Minister work with us and support our proposal, which we will table in Committee, to protect existing leaseholders?

Thirdly, the Bill does nothing at all to stop new houses being sold as leasehold. Leasehold houses are straightforwardly wrong, for the reasons that we have already heard. At the same time that the Government promised to set ground rents at a peppercorn, which the Bill does, they committed to ending the practice of newly built homes being sold as leasehold.

Half a million houses have been sold as leasehold since 2010, 60% of them in the north-west. Those homeowners face not just exorbitant ground rents but restrictions on how they can alter their homes. We have already heard some examples: if someone wants to have a pet, or if they want to make changes to the building, they have to ask permission. All too often, people are left feeling that they do not really own the home. When the leaseholder tries to escape this nightmare by buying out the freehold, they often discover all kinds of other restrictions that they were not told about when they bought their home. This needs to change.

As recently as 2017, the Government promised legislation to prohibit the granting of new residential long leases on houses. When will that come in, and why is it not included in the Bill? It makes no sense to me whatsoever that that has not made it into the Bill. Again, perhaps Ministers will work with us, and with some of my colleagues who are in the Chamber today, in Committee to end new leaseholds on houses altogether.

There was a lot more that the Government could have done in a simple first-step Bill, but I hope the whole House will recognise that wholesale reform of leasehold is long overdue. The building safety crisis has brought into stark relief how terrible our feudal leasehold laws are. Innocent leaseholders can be passed remediation bills totalling hundreds of thousands of pounds with no right of recourse. It is a David and Goliath situation that is hitting more and more homeowners across the country. Fixing the building safety crisis truly must mean fixing our outdated leasehold laws too.

As the last few years have shown, this is now an urgent task, so we call on the Government to do these simple things when it comes to wider leasehold reform: enable leaseholders to extend the lease or buy the freehold; make commonhold the norm, and make it much easier for properties to operate that way; abolish marriage value, as they promised they would; strengthen leaseholders’ voices and simplify the right to manage; give real teeth and real recourse to the bodies that are supposed to arbitrate and act on behalf of leaseholders, or create new ones altogether; and prevent freeholders in law from passing on extortionate costs for remediation works, or for putting right problems that they have created that are not the problems of the leaseholders, as well as the things that I have already discussed. Those are just some of the reforms that are urgently needed to ensure that no leaseholder is trapped against their will in this broken, outdated system.

In conclusion, the Bill is a tentative attempt at reform. While it is welcome, it represents a massive missed opportunity to transform a leaseholder sector that continues to scam working people on an industrial scale. Even in a slimmed-down Bill, the Government have failed to close loopholes, protect those already in leasehold homes or end the sale of new houses as leasehold altogether. Wholesale reform is urgently needed to ensure that nobody continues to be voiceless, trapped in leasehold homes they cannot sell, and facing ever-growing bills and charges.

Oral Answers to Questions

Lucy Powell Excerpts

Monday 29th November 2021 Commons Chamber

[Eddie Hughes]

My hon. Friend is a doughty champion off all issues environmental and net zero. I am not sure I am the correct Minister to meet her, but if I am, I will, and if I am not, I will ask my right hon. Friend the Minister for Housing to do so instead.

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

With energy costs rising exponentially and the Government having scrapped Labour’s zero carbon homes policy months before it was due to come in, abandoned the green homes grant and delayed the future homes standard, is it not the case that families and taxpayers pay the cost for the Government’s failures to make our homes more sustainable? This is an obvious case of false economy, with all of us paying more in the long run for higher bills and future retrofitting costs. The Minister has already been asked this question, but will he answer it this time: will he adopt Labour’s plans for a national mission to retrofit every home that needs it and bring forward all aspects of the future homes standard without delay?

[Eddie Hughes]

The simple answer is that this Government already have a pretty good plan, so we do not need to look to others and adopt their plans instead. It is unfortunate that the hon. Lady wrote her questions in advance of my previous answers, in which I mentioned, for instance, the £450 million that we have committed to the boiler upgrade. So there is significant investment in this area, we have a strong and sound plan, and progress is moving at pace.

Budget Resolutions

Lucy Powell Excerpts

Monday 1st November 2021 Commons Chamber

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

In the days since the Budget, we have seen it unravel. The Chancellor tried to bury the reality—or should I say Burnley?—[Interruption.] You will get that one in the end. It is less levelling up and more hiking up: hiking up taxes, hiking up the cost of living, hiking up interest rates and inflation. The only thing it is not hiking up is growth. After 10 years of stagnant growth and stagnant wages, the forecasts for the next few years make yet more sober reading, with growth downgraded to a meagre 1.3% in 2024. Taken together, the rising cost of living, along with rising taxes, inflation and interest rates, mean that families will be worse off to the tune of £3,000 a year. You simply cannot claim an agenda of levelling up while presiding over an era of no growth and ordinary working people becoming worse off. A few tiny, piecemeal pots of cash to various places will not even remotely make up for that overwhelming tidal wave hitting those on modest and low incomes. This is

“not a set of priorities that is consistent with…levelling up”.

Those are not my words; they are the verdict of the IFS. This was

“an acid test for the government’s flagship levelling up agenda—and the Chancellor has fallen short... The country is no more on track to level up than it was yesterday.”

That is not my view, but the view of the IPPR North.

As is becoming the theme with this Government, they will the ends but they have no plan to will the means —that is otherwise known as rhetoric not matched by reality. That view was echoed in excellent speeches by my right hon. Friend the Member for Barking (Dame Margaret Hodge); my hon. Friends the Members for Sheffield South East (Mr Betts), for Ealing, Southall (Mr Sharma), for Garston and Halewood (Maria Eagle), for Barnsley East (Stephanie Peacock) and for Batley and Spen (Kim Leadbeater); my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne); my hon. Friends the Members for Rochdale (Tony Lloyd), for Mitcham and Morden (Siobhain McDonagh) and for Birmingham, Selly Oak (Steve McCabe), my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper); and my hon. Friends the Members for Birmingham, Erdington (Jack Dromey), for Bristol East (Kerry McCarthy), for Lancaster and Fleetwood (Cat Smith), for Wansbeck (Ian Lavery), for Brentford and Isleworth (Ruth Cadbury), for Warwick and Leamington (Matt Western), for Slough (Mr Dhesi), for Lewisham East (Janet Daby), for Dulwich and West Norwood (Helen Hayes), for Cynon Valley (Beth Winter) and for Streatham (Bell Ribeiro-Addy).

A plan for real levelling up begins with a plan for real and sustainable growth, disproportionately focused towards the people, places and industries most in need of it. That means a programme of real investment and a strategy. I know that the Secretary of State is not here this evening, but I am pleased that, in lauding the spending increases, he has finally accepted our view that we cannot cut our way out of a crisis. If only he had realised that before 10 years of austerity, which have left a million more people in poverty and the fabric of our public services in tatters. But it is obvious from today’s debate that most behind him have not had the same epiphany.

Given that the Resolution Foundation says that this must be a decade of high investment as we transition to net zero, it is astonishing that in the Chancellor’s flurry of giveaways there was almost no mention of green investment. The huge upheaval and change that meeting our net zero targets requires is the once-in-a-generation opportunity to truly level up and to create a fairer, better distributed economy—it is an opportunity this Government are frittering away. This is about winning the green global race in the sectors that power our regions, such as steel, aerospace, wind and wave, but there was not a single mention of that in this Budget. It is also about reducing demand and, in so doing, reducing the cost of living crunch through a major drive to retrofit homes and switch to green energies, but there was not a flicker about that in this Budget. It is also about investing in people, especially those who need it the most. The Government’s own report on lost learning during the pandemic, published just last week, shows the stark regional inequalities, with children in the north-east and Yorkshire and the Humber losing 15 times more learning than those in London, but that was not referred to in the Budget. Its stark findings should be at the heart of any Budget that claims to be levelling up. The Government cannot level up without a serious programme of catch-up.

On transport, at last we see some recognition for buses, but a major test of levelling up will be the Government’s commitment to Northern Powerhouse Rail and the eastern leg of HS2, neither of which was mentioned at all by the Chancellor. The Government should listen to the excellent speeches today from my hon. Friends the Members for Wythenshawe and Sale East (Mike Kane), for Barnsley Central (Dan Jarvis) and for Bradford South (Judith Cummins), and my right hon. Friend the Member for Kingston upon Hull North (Dame Diana Johnson) on this topic.

Key to addressing the deep divides in Britain is tackling the housing crisis, which was so brutally exposed during covid. Yet again, we see lofty ambitions not met by any kind of real plan. If the Chancellor’s announcements on housing sounded familiar, that is because they are: we have heard them all before. That £5 billion to address the building-safety crisis was announced back in February. It is a lot of money, but it is not working. The huge bills for leaseholders keep rolling in, insurance costs are soaring and mortgages are still virtually impossible to get. It is not about the cash; the fundamentals need to be fixed and the Government are not doing that. It is no surprise, then, that the Secretary of State did not even mention that today.

The funding for so-called affordable housing was another recycled announcement. The Government’s spin cycle goes round more often than a Hotpoint spin dryer—

[Mr Holden]

Oh God.

[Lucy Powell]

The hon. Gentleman might groan, but he was not here for the better jokes at the beginning of my speech. In future, he needs to be here at the beginning of the wind-ups—that is one of the rules of this place.

If the Government’s record is anything to go by, they will deliver neither truly affordable homes nor levelling up. Their house building targets look dead in the water. Their definition of affordable is anything but, aligned with overheated markets, not with what people can actually afford. The Secretary of State made no mention of social housing in his speech; perhaps that is because he is projected to build only 6,000 new ones a year—far fewer than the number lost through the right to buy. The Secretary of State heralded the brownfield sites fund, yet he did not mention the fact that more than three quarters of that money currently goes to the south-east. That is hardly levelling up. Without reform of the arcane compulsory purchase order laws, too much of that cash will end up in the hands of the speculators who buy up land on the cheap.

For hard-pressed renters hit by the pandemic, we heard the Chancellor take credit for a small relief fund, but he failed to mention that he has also frozen local housing allowance again. Add that to the cut in universal credit and the almost 1 million renters who already face a gap between their income and housing costs now face real hardship. It is no wonder that we have seen homelessness rise on the Government’s watch—

[Bob Blackman]

indicated dissent.

[Lucy Powell]

I am afraid we have.

We heard nothing in the Budget about stamp duty—perhaps because the last stamp duty cut drove house price inflation and volatility, according to the OBR. [Interruption.] Government Members should look at the figures. The Chancellor fuelled a buy-to-let and second-home bonanza while first-time buyers lost out. The Government’s disastrous starter homes pilot scheme—non-starter homes, more like—promised 200,000 homes for first-time buyers and cost £170 million, yet it did not build a single starter home. The Government’s new pilot for first-time buyers, the first homes scheme, is not working, because as house prices rocket, the discount is all but wiped out. It is no wonder we have seen home ownership fall under this Government. Do Government Members want to say anything about that? No, because it has. The Conservatives can no longer claim to be the party of homeowners, nor of renters, because they have become the party of landowners, landlords and speculators.

The Government might have the soundbites, the slogans and the Instagram posts, but they do not have a plan. They cannot level up while they are scaling back; they cannot level up while growth forecasts are so down; they cannot level up while hiking up taxes and cutting universal credit; they cannot level up without addressing the housing crisis; and they cannot level up while denying children in the midlands and the north the chance to catch up, which is what they have done. Government Members might laugh about it this evening but it is absolutely shameful. Although the Government might talk the talk, time and again they do not walk the walk. Levelling up is fast becoming a rather empty campaign slogan, and this bitty, piecemeal Budget does not amount to more than the sum of its parts.

Oral Answers to Questions

Lucy Powell Excerpts

Monday 25th October 2021 Commons Chamber

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

First, let me pay my respects to Sir David Amess. He was a tireless campaigner for building and fire safety, chairing the exceptional all-party parliamentary group on the subject. I last met him only a few weeks ago to discuss the omissions in the Building Safety Bill. His loss will be greatly felt in these crunch weeks of the Bill’s passage.

I also welcome the new Secretary of State to his role. He has been brought in by the Prime Minister he tried to torpedo to sort out the building safety crisis. Given his reputation for getting things done, expectations really are very high.

In the spirit of David Amess, I offer my commitment to help to resolve this crisis, because it is now urgent and getting worse. Every day, more innocent homeowners receive new and enormous bills for remediation, their insurance costs soar, and lenders will not lend. Does the Minister agree that we face an important, and closing, window to bring forward any necessary legislation? Will he work with us and campaigners to put into law the protection of leaseholders from any remediation costs and bring forward a comprehensive plan to resolve this?

[Christopher Pincher]

I am obliged to the hon. Lady for her question and the spirit in which it was asked. I certainly associate myself with her remarks about our late friend Sir David Amess.

During the passage of the Building Safety Bill, which is currently in Committee, a number of amendments have been tabled. Nine amendments tabled by the Opposition and have been withdrawn, and only one has been divided on. That is an example of the collegiality that we have managed to establish as this very important Bill progresses through Parliament. Of course we want to make sure that leaseholders are not exposed to unfair costs. That is what we have been working towards since the Grenfell disaster, and we shall continue so to do. The hon. Lady’s support in helping that endeavour will be gratefully received.

[Lucy Powell]

It is good to hear that that is what we are working towards, but it has been some time now and this does need enacting in law as the only way to ensure protection.

Can I give the Minister, in the same spirit, some gentle advice as someone who has been dealing with these issues for many years? He will not get resolution on this issue by rehashing some of the previous failed approaches like naming and shaming of developers, nor will it be dealt with by just looking at the symptoms of the problems such as insurance, as pressing as that is. Does he accept that he must tackle the problems at their root: namely, I repeat, by protecting leaseholders in law, as the Government promised; and bringing forward a comprehensive plan to assess, fix, fund and certify all tall buildings by overseeing risk assessment and removing the 2020 consolidated advice? We have the fund, but it simply will not work without dealing with those two fundamental issues, so will he do all this before the window closes firmly?

[Christopher Pincher]

I am obliged to the hon. Lady for her question and how she couched it. She will know that we have committed to raise a significant amount of funds through a residential developers property tax and a tall building levy, which will ensure that buildings that need to be remediated are remediated, so avoiding costs falling on leaseholders. In the Building Safety Bill, we have made it absolutely clear that we expect building owners to pursue every route to find funding before passing on any cost to leaseholders. If building owners do not do that, the costs they may impose can be challenged in the tribunal. We are looking at further evidence we have received on the prevalence of cladding in the 11 metre to 18 metre building cohort. That will help us finalise our decisions, and we shall bring them forward in due course.

High Rise Social Housing: Reducing Fire Risk

Lucy Powell Excerpts

Tuesday 14th September 2021 Westminster Hall

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

It is a real pleasure to serve under your chairpersonship today, Ms Rees. I congratulate my hon. Friend the Member for Hammersmith (Andy Slaughter) on securing this important and timely debate. As ever, he gave an excellent, knowledgeable, forensic and right speech.

We heard some other excellent contributions. The hon. Member for Crewe and Nantwich (Dr Mullan) made some important points, as did my hon. Friend the Member for Vauxhall (Florence Eshalomi), the hon. Member for Stoke-on-Trent North (Jonathan Gullis), my hon. Friend the Member for Rochdale (Tony Lloyd), the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier) and the Scottish National party spokesperson, the hon. and learned Member for Edinburgh South West (Joanna Cherry). Given her excellent speech, I look forward to working with the hon. and learned Lady on the Building Safety Bill, and I hope that the SNP will play a full and active role in that Bill.

It is timely because we are very much in the midst of the building safety crisis post the terrible events at Grenfell Tower four years ago, and timely because, as mentioned, we are in the Committee stage of the Building Safety Bill, which has come about because of that tragedy. This week Parliament will be lobbied by leaseholders and others calling for justice for leaseholders and to end the building safety scandal. I want to put on the record my admiration for those campaigners and their tireless work while suffering from mental health and financial anxiety and worry that has a life-defining toll.

[Stephen Doughty]

I praise my hon. Friend for her work on this topic in the months since her appointment. I, too, will be meeting leaseholders from my constituency of Cardiff South and Penarth on Thursday. There are huge concerns about mental health and finance. One of their great frustrations is the lack of clarity on the money from the UK Government to the Welsh Government and the lack of clarity on the consequentials. Is it not right that the UK Government now explain what is going to the devolved Administrations so that they can move forward with their plans?

[Lucy Powell]

Absolutely. As I will come on to say, the Government’s handling of the crisis has been characterised by delay, a lack of clarity and uncertainty.

I also want to put on the record my thanks to my hon. Friend the Member for Hammersmith for his campaigning on fire safety in social housing blocks. He has campaigned tirelessly for many years—before the tragedy at Grenfell Tower and following the fire at Shepherd’s Court. I hope that the Minister and the wider housing sector will take on board many of his proposals for the inspection of electrical goods by social landlords and will look further at the regulatory regime. I will come on to some of his wider questions about the impact on the social housing sector.

What began as a cladding scandal after Grenfell, as we have heard, has now led to a total breakdown in confidence in most tall and multi-storey buildings in this country. The building safety crisis, as it has now become, affects hundreds of thousands of people. Buyers and tenants who dreamt of a safe, stable home to live in, who often spent their lives working towards that, are now living in a waking nightmare.

I am sorry to say that the Government’s approach has been characterised by dither and delay. They are leaving it to the market, which caused the mess in the first place, rather than intervening strongly to get a grip of the crisis and resolve it. They have managed to get a £5 billion fund from the Treasury, which I applaud them for because that is not a small amount of money by any means, but they are not giving effect to the money as they stand back and watch costs soar while the remediation works required get out of control. They limit the scope and the timetables, and they are not doing anything to ensure certification and assurance. Leaving it to the market and those that created the crisis in the first place will not resolve anything. As we have heard, social landlords are inexplicably excluded from the fund.

We now face a total breakdown in the approach to risk. What are reasonable risks? Who decides that? Who will certify risk proportionately, and who can ensure that insurers will insure reasonably and that lenders lend? Nobody is standing by to do that at the moment. What are the appropriate policies to mitigate the risks, such as evacuation plans, sprinklers, and the capacity of fire services and so on? Is waking watch worth the costs that people pay for it?

[Florence Eshalomi]

Does my hon. Friend agree that there has to be an evacuation plan for disabled residents, who feel that their voices have not been heard on this really important issue?

[Lucy Powell]

Absolutely. I was going to mention that later in my speech, but I will say it now. Evacuation plans for disabled people are pretty poor in most cases, leaving them especially vulnerable, as others have said.

At the moment, there is an absence of clear and reasonable guidance, process and professionally indemnified experts. The result is that people are standing back and letting others pay the price and take responsibility for the risk. Ultimately, that leaves leaseholders, social landlords, those in shared ownership and others with the financial responsibility and risk. It leaves them living in fear, as we have heard.

More could be done on prevention, as many hon. Members have said. We have heard that waking watch patrols have been necessary in some cases, but they are extremely expensive. The Government’s own data estimates that they cost £130,000 a year for just one building. They are supposed to be a temporary measure, but many are still trapped with them. The Government keep talking about the problems with the lack of proportionate risk and the lack of confidence in the system, but what are they actually doing about it? Perhaps we will hear a little more on that today.

There are similar issues when it comes to regulation, accountability and oversight. The Building Safety Bill, which is in Committee, will set up a new building safety regulator. That is a long-overdue and much-needed step, but there are a number of areas where it falls short. The Government have stuck to their crude height limit of 18 metres to define higher-risk buildings. They are right to say that, for buildings over 18 metres, the choice over which building control body to use leads to serious conflicts of interest. That is one of the key issues that has got us here, so why is that not the case for buildings under 18 metres, for which developers can still choose their own building control bodies?

The fire service, which we have heard much about today, used to play a much greater role in inspecting buildings. The Fire Brigades Union has raised the alarm about the fact that the building safety regulator will still be able to contract out that advice to the private sector. What are the Government proposing to do about that?

As many leaseholders and tenants have discovered in recent years, since Grenfell and before, the bodies that exist supposedly to provide recourse and accountability very rarely do, and are largely toothless and totally inadequate. Fire safety issues have shone a light on that, but yet again the Government seem incapable or unwilling to act with the necessary true leaseholder reform, and are not giving voice to tenants.

We have heard about some particular issues affecting social housing. In contrast to many private developers and freeholders, social and council housing providers were the quickest to react post Grenfell. Analysis has shown that housing associations have paid six times more than developers to remediate dangerous cladding. Given the huge profits in the private sector, it is a scandal that it is not doing more to pay for the faults it created. The Government have been incredibly slow in using the stick they kept threatening, leaving many to disappear before they are made to pay.

According to the G15—an umbrella group of the biggest housing associations in London—associations have set aside nearly £3 billion for historical remediation costs. In contrast, the UK’s largest developers have collectively set aside half a billion pounds—the difference is stark. Housing associations have warned that building safety costs will put at risk their ability to build much-needed affordable housing. With an estimated required subsidy per affordable home of £50,000, nearly £3 billion for remediation costs could mean 58,000 fewer affordable homes over the next 10 years. That is a huge number, and that is before we even get to the impact on quality and much-needed investment in existing stock and things such as the zero carbon agenda.

Housing associations and local authorities have been all but excluded from the Government’s building safety fund. To be approved, they must demonstrate that the costs would otherwise have been borne by leaseholders, which they have not been able to do in many cases. This approach is wrong, and it ultimately falls on the shoulders of tenants and potential future tenants, who will no longer be able to get social housing because the stock will diminish. We have called for a building works agency to fix this problem. Our mantra has been “assess, fix, fund and certify”; that is what needs to be done, and we need a team of experts who are given the power to do all of those things. What will the Government say about that?

Leaseholders and tenants will be shouting from the rooftops about building safety on Thursday. However, as we have seen from the excellent reporting of Dan Hewitt and “ITV News”, social tenants are often not listened to by housing providers. “Surviving Squalor” was a shocking reminder of the conditions that some people are forced to live in, their pleas for action ignored by social housing providers. It is just not acceptable. It is a mark of shame on the sector, which should be putting tenants’ experiences first, not ignoring them. If the past few months have taught us anything, it is the importance of home, and that housing is a public health issue, a mental health issue, and an economic issue, as well as a bedrock of success.

It is a shocking indictment of our country’s housing system, and the blame should be laid at the doors of some of these providers, as well as the Government. They have diminished and defunded social housing, and they have reneged on the promises made after Grenfell to bring forward legislation to provide a real voice and teeth to the views and needs of social housing tenants. When is that coming forward? We still do not know. We have been tabling amendments on this matter in the Building Safety Bill.

The building safety crisis is having a profound impact on the lives of so many, and the impact on social housing providers worsens the measly number of social homes already being built. The building safety crisis requires the serious leadership and intervention that it is not getting, and we need major reform to give tenants and leaseholders trapped in these situations a real voice, recourse and accountability. It really is about time the Government got a grip on this.

[Christina Rees (in the Chair)]

This is where I usually ask the Minister to leave a couple of minutes at the end for Andy Slaughter to wind up.

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.

Oral Answers to Questions

Lucy Powell Excerpts

Monday 19th July 2021 Commons Chamber

[Robert Jenrick]

I completely agree with my hon. Friend that it is vitally important that new housing development is supported by commensurate infrastructure —both physical and social infrastructure—and affordable housing. Of course, it is also true that the majority of that infrastructure today is funded by developer contributions from new housing, but we need to ensure that developers pay their fair share. That is the idea behind the infrastructure levy, whereby local areas can themselves set the rate of taxation they require to capture more land value to put at the service of local communities. I think that if we can secure that passage—I hope we will get cross-party support for this—it will make a big difference, particularly in those parts of the country where planning is particularly challenging at the moment.

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

It is good to see the Secretary of State here, having survived yet another thankless broadcast stint on behalf of those in No. 10—sent out to defend the indefensible, only for them to U-turn as soon as he finished on air.

The Big Issue warned this week:

“More people are at risk of homelessness now than at any time in living memory.”

So can the Secretary of State tell us what assessment he has made of the number of evictions that will happen as a result of covid, and how much will the resultant homelessness cost local councils in temporary accommodation? In March 2020 he said that

“nobody should lose their home”

as a result of the pandemic. Can he confirm that this promise has now been abandoned, and if not, how is he fulfilling it?

[Robert Jenrick]

This Government took exceptional steps early in the pandemic, with cross-party support, and they were the right things to do. We legislated and, for example, we increased the notice periods for people with tenancies under section 21. That protected many thousands of people in a very difficult period for this country. They were also a product of a time when the housing market was closed as a matter of law, so it was impossible to move house. The position today is different— people are able to move house and the housing market is very open and active—but we still want to protect the most vulnerable people in society. We are doing that with longer notice periods and further support through the benefits system and local housing need, and of course we will keep this under review. However, I pay tribute to councils across the country for the phenomenal achievement of our Everyone In programme, which has seen rates of people sleeping rough on our streets reduced by almost 40%, and we must keep that going.

Oral Answers to Questions

Lucy Powell Excerpts

Monday 14th June 2021 Commons Chamber

[Robert Jenrick]

I am pleased to tell my hon. Friend that the Government are committed to making sure that young people have the opportunities that they need to live and work in their local community, both in North West Durham and right throughout the country. I encourage my hon. Friend’s constituents to go to the Government’s ownyourhome.gov.uk website to check out the brilliant schemes that are available. I am also glad to let him know that later this month we will launch the first set of first homes in County Durham.

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

Today, on the fourth anniversary of the terrible fire at Grenfell, we first and foremost remember the 72 people who lost their lives. Our thoughts are with the bereaved, as well as the survivors of that terrible night.

The Grenfell community has steadfastly campaigned for justice and for change, but it has come too slowly. Hundreds of thousands of people are living in buildings that we now know to be unsafe, with some even still wrapped in the same flammable cladding as Grenfell. Many of those people are first-time buyers who have watched their dream of home ownership become a living nightmare, in unsellable, worthless homes.

I welcome the building safety fund, but funds alone are not enough, not least because of the extremely slow progress in allocating them. We need active intervention and leadership, so will the Secretary of State commit that all buildings will be made safe—and not just in respect of aluminium composite material cladding—or at least be in the process of being made so, by this time next year? Will he free homeowners from the burden of the costs and anxieties of being trapped in unmortgageable, unsafe homes?

[Robert Jenrick]

I join the hon. Lady in giving my sympathies, thoughts and prayers to the survivors, the bereaved and the community of north Kensington. We all want to support them to ensure that their quest for justice continues and reaches its conclusion, as a result of the public inquiry and the police investigations. Of course, we will do everything in our power to ensure that it never happens again.

Earlier this year, I set out the next steps in our plan to ensure that homes in this country are safe. We are providing £5.1 billion to ensure that unsafe materials, such as cladding, are removed from people’s homes as quickly as possible. Some 95% of those high-rise flats that have the same ACM cladding as was on Grenfell Tower have either now been remediated or have workers on site as we speak, and the work on 65% of them has been completed. I want to see that work finished by the end of this year and we will do everything we can to ensure that that happens.

We are also working with lenders, insurers and surveyors to ensure that they also play their part and we have a proportionate, sensible approach to risk, so that those who do not need to be trapped because of this issue are not unduly trapped and those who created this situation in the first place—the builders and the developers—pay their fair share. We are currently consulting on an industry levy and we will encourage, as we have done throughout this process, those developers that have not already stepped up to do so, because it is unconscionable that leaseholders are having to pay for the faults of an industry that has profited at their expense.

Affordable and Safe Housing for All

Lucy Powell Excerpts

Tuesday 18th May 2021 Commons Chamber

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

I beg to move an amendment, at the end of the Question to add:

“but respectfully regret that the Gracious Speech fails to prevent the potentially ruinous costs of remediation works to make buildings safe being passed on to leaseholders and tenants; and call on the Government to set a deadline of June 2022 to make all homes safe.”

I am pleased to open the debate for the Opposition today. I look forward to shadowing the Secretary of State on housing. Although he and I may have different outlooks, I hope we can make positive progress together on the key issues, particularly the cladding scandal. I want to put on the record my thanks to and admiration for my predecessor, my hon. Friend the Member for Bristol West (Thangam Debbonaire), who will shine even brighter in her new role as shadow Leader of the House.

If this year has taught us anything, it is the importance of home. The stay at home order put that sharply into focus. For those of us in stable, warm, comfortable homes, with room to work and live, lockdown has been difficult in many ways, but we have not battled daily. For those renters sharing a home, for those living in damp and overcrowded housing or in unsafe, unsellable blocks covered in flammable cladding, or for those without a home, living in temporary accommodation or on the streets, and for those in insecure work or those missing out on support schemes with mounting rent arrears, “Stay at home,” has felt like a prison sentence.

Ministers have taken some welcome action, such as the moratorium on evictions, but alongside housing charities I am deeply concerned that the rolling back of those protections will now lead to a wave of homelessness. The Secretary of State promised that no one would lose their home because of coronavirus. He must now come forward with a comprehensive plan that achieves that. The pandemic has massively exposed the deep inequalities in our society. If now is not the time to bring the country together with a shared mission of decent, affordable homes for all, like the mission arising out of the second world war, when is?

Housing is a fundamental human right. Everything else—getting the kids to school, going to work, health and mental health, and holding down a job—flows from having security in your home. Yet far from the “Housing First” mission being at the heart of our response to build back better, the Government’s approach has all the hallmarks of the past eleven years of failure and their belief that the market knows best, and if they cut perceived red tape and pump prime the market even more, that will work. Well, it will not, and we have the last eleven years of that failed approach to prove it. Rough sleeping—doubled. House prices—up 50%. Home ownership down, new social house building down 80%, and 230,000 fewer council houses. Now, more people are living in expensive, poor-quality private rented housing, subsidised by a soaring housing benefit bill.

This Queen’s Speech doubles down on the Government’s failed ideology. It lays bare whose side they are on. Developers will have watched in glee—the planning Bill is a developer’s charter, with everything they could have wanted to maximise their profits off the back of communities and first-time buyers. We want more affordable home ownership in all parts of the country, but this approach will not deliver it. The issue is not whether developers are getting planning permission; they are. It is that they are not then building. Meanwhile, this Queen’s Speech says nothing on homelessness; nothing for renters living in overpriced, poor-quality homes, thousands of whom are on the brink of eviction; nothing on the social housing Bill promised after Grenfell; nothing for those stuck on council waiting lists because right-to-buy properties are not being replaced; and nothing to address the climate emergency after the Government’s flagship Green Homes grant was dropped. Those gaping holes speak volumes: millionaire developer donor mates dealt a winning hand; renters, leaseholders, first-time buyers and local communities dealt a busted flush. Far from a national mission to put homes for all first, we have more of the same.

Nothing illustrates that better than the building safety crisis—a crisis that now goes way beyond Grenfell-style cladding and has broken the market in flats across the country. Without serious intervention, the nightmare will continue for leaseholders and tenants for years to come. The fire in east London two weeks ago should have been a wake-up call—if the Secretary of State needed another—to tell him that his hands-off approach just is not working. Thankfully there were no fatalities, but it could have been much worse. The block was covered in the exact same cladding that caused the Grenfell disaster. What is more, residents tell me that the balconies contributed to the fire spreading, the waking watch failed to reach everyone and there was no plan for the evacuation of vulnerable residents.

Residents have been pleading with the Government to fix their block for years. New Providence Wharf was mentioned in the House of Commons at least 10 times before this fire. Even after receiving millions from the building safety fund and being put on the “name and shame” list, the developer had not even started removing the cladding by the time the fire took place. Leaving it largely to the private sector has not worked. It was never going to. We have asked, begged and pushed the Government to step in. Now must be the time to act. That is why with our amendment Labour is today asking every Member of this House to vote to enshrine a cast-iron deadline to make all homes safe.

June 2022 will be five years since the Grenfell disaster. Nobody should pass that milestone living in an unsafe block. I believe the Secretary of State when he says that he wants to do the right thing, but we need much more urgency. We need leadership. We need sustained and concerted action from the Government to underpin the process and restore confidence. I want to work with him to get this right, and quickly. The Housing, Communities and Local Government Committee has set out strong proposals. The Labour Front Bench has too. Let us work together across this House and sort it out.

I welcome the additional money put into the building safety fund, but the fund still has lots of problems with its scope, deadlines, application process and transparency. As ITV’s survey of leaseholders out today showed, the issue goes way beyond cladding and way beyond the current criteria. Most of the identified problems are not even covered by the fund, which is exclusively for certain types of cladding. Balconies, firebreaks, insulation and blocks under 18 metres are not covered, even if applications could be made by the very short deadline. We also need to get rid of the ludicrous “first come, first served” approach.

The building safety crisis goes well beyond funding. Without sorting out the underlying issues, just throwing money at the problem will not resolve it. The whole system, from mortgage lending to regulation, governance and risk assessment, is broken. Take the Green Quarter, which is just outside my constituency. Leaseholders and the developers were too early for the fund, so have footed the bill to remove dangerous cladding themselves. Works have now been completed, and they recently had a new risk assessment, but instead of getting the A rating that they expected for mortgages and insurers, it came back as B2, meaning that they are still trapped with further bills to pay having done all the right things.

That is why we need a national taskforce to develop a holistic approach to building safety and risk assessment, putting confidence back into the system with all the players around the table and proper regulation and guidance, driven by the Government. As has happened in Australia, the Government must also carry out a full audit of dangerous buildings, prioritise them according to risk and make it absolutely clear who pays and, crucially, who does not. Government Ministers, including the Secretary of State, have promised leaseholders that they will not be forced to pay. Yet despite the cross-party pressure, including from the hon. Members for Stevenage (Stephen McPartland) and for Southampton, Itchen (Royston Smith), amendments to the Fire Safety Act 2021 to enshrine that in law were rejected by the Government.

In its current form, the draft Building Safety Bill would shift responsibility for all costs on to innocent leaseholders. I will take the Secretary of State at his word, and I expect that clauses 88 and 89 will not be included when the Bill is finally published. If he wants to give that reassurance to leaseholders watching, I will happily give way to him. If he does not want to do that, MPs will have a chance tonight to vote on our amendment to do just that. The Government say that this is a Queen’s Speech for home ownership, yet that rings very hollow for those homeowners living in tower blocks across our towns and cities.

This Queen’s Speech is a clear sign of a Government running out of steam, with low or no ambition for this country. Where we needed big, bold action and a mission of housing first, we have tinkering around the edges and a piecemeal approach that does not rise to the challenge. The Government could have given more people security of ownership, not overheated the market. They could have implemented a planning regime that creates places and builds communities, not a developers’ charter. They could have driven forward their long-delayed reforms of the private rented sector, abolishing section 21 and giving people security of tenure—a commitment that Labour reaffirms today. On the 100th anniversary of Becontree, the first and largest council estate in the UK, they could have invested in a new generation of council housing for the 21st century. They could have made homes fit for the future, with net zero standards and large-scale retrofitting creating tens of thousands of jobs. They could have kept the spirit of Everyone In and committed to ending homelessness. They could have reformed wholesale our feudal leasehold system, whereby millions of families face extortionate fees, poor service and poor contract terms, with little or no recourse. While the Leasehold Reform (Ground Rent) Bill is welcome, it has to be the first step of wider reform and that cannot come soon enough. They could have done all this and more, but tellingly, they chose not to.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I draw the House’s attention to my entry in the Register of Members’ Financial Interests. The hon. Lady talked a number of times about home ownership but then implied that the Government are doing nothing about it but are reducing levels of home ownership. However, does she accept that home ownership peaked in 2003 and has declined since? It is now being reversed, including through some of the policies that the Government have brought forward, such as First homes, which gives first-time buyers on lower incomes a 30% discount on market price. Will she welcome that kind of intervention?

[Lucy Powell]

I do not accept the premise of the hon. Gentleman’s intervention. Home ownership, especially for younger people, is now falling as well, so he should check his figures on that. This Queen’s Speech will do nothing for home ownership. It is a developers’ charter when it comes to planning; that is not what is wrong with our planning system at all. For those who cannot afford to buy their own homes, there is absolutely nothing in this Queen’s Speech.

[Mr Clive Betts (Sheffield South East) (Lab)]

I welcome my hon. Friend to her Front-Bench position and I am very pleased to see her there. Just to come back to the First homes arrangement, there is no argument about encouraging young people, particularly first-time buyers, to buy their own homes. Is not the problem with First homes that it is going to take the first top slice of any funding through section 106 agreements and therefore displace an element of social and other affordable housing for rent? That is the challenge with First homes: it displaces homes for rent.

[Lucy Powell]

My hon. Friend makes a very good point.

[Mr Tanmanjeet Singh Dhesi (Slough) (Lab)]

I, too, welcome my hon. Friend to her place. Indeed, this is not just a failure of home ownership. There has been over a decade of Tory failures on housing. We have seen home ownership decrease. We have seen rough sleeping and homelessness increase. We have seen council house waiting lists increase. We have seen the failure to deal with the Grenfell tragedy, and, in the wake of that tragedy, the failure to ensure that all homes are safe, so does my hon. Friend agree that there is a litany of failures, not just on home ownership?

[Lucy Powell]

I very much agree, and when I made some of those points earlier, it was met with silence from Government Members.

In conclusion, the dream of having a secure, safe and affordable home is a powerful one, and rightly so. Housing is much more than an investment or a commodity. Homes are the places we grow up in, the places we grow old in. How safe and secure they are shapes who we are—the opportunities we can take, the freedoms we have, the successes and happiness we share—but for too many in this country after 11 years of a Conservative Government that has become a pipe dream. The Government’s market-driven ethos just will not create the homes we need, and for people trapped in buildings with dangerous cladding that dream has become twisted and has become a waking nightmare. Today we can start to fix that at least, and I hope Members from all parts of the House will join me in supporting our amendment.

[Mr Deputy Speaker (Mr Nigel Evans)]

I remind Members that while their contributions should address the terms of the amendment, it is in order to refer also to other matters relevant to the Gracious Speech. To begin with there will be a five-minute limit on Back-Bench contributions, but I suspect that may be shortened later.

Insolvency

Lucy Powell Excerpts

Wednesday 28th April 2021 Commons Chamber

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

Well, here we are again. The Minister and his officials, who have heard me make the same speech numerous times, are in for a little treat today, because I am going to detour slightly from my usual remarks, which have centred a bit around “I told you so” on extending these provisions. Today I also want to touch on some of the wider insolvency framework issues that I think are pertinent now.

I welcome the Government’s extending the safety net for businesses in distress because of the pandemic. As I said when we supported the emergency legislation last year, we welcome any measures that support businesses that close to keep us safe. We argued then that the protections in the 2020 Act should be extended over a longer period of time. I think this is now the third time—possibly the fourth time—that we have come together to extend them, on each occasion, unfortunately, causing real uncertainty and worry for businesses in the run-up to each previous expiry date.

As the economy reopens and restrictions ease, it is right that these measures are kept under review. Through the crisis, we have called on Ministers to ensure that economic support matches the public health measures in place. While we have seen welcome support for workers through the furlough, there have still been gaps in Government support that they have repeatedly failed to address. There is a cash crisis facing firms with high ongoing overheads but still no income coming in and those excluded from all Government support, and little or no help for those sectors still closed and likely to be closed or uncertain for some time, such as travel, large events and weddings, and the visitor economy.

As I have said before, we are very concerned about the levels of debt facing businesses, whether that is through the loans they have taken, the VAT they have deferred or the rent holiday they have had, but soon have to start repaying. These measures are welcome in staving off creditors, but they just kick the can down the road, and do little to change the fundamentals facing so many firms of large covid debt and low or no takings while the fight against covid continues. The bombshell that businesses face remains real, and that is why Labour has argued for a student loan-style scheme, in which covid debt can be repaid as businesses grow, so that we do not see waves of insolvencies. There is nothing in the provisions today to deal with those fundamentals.

Turning to the Corporate Insolvency and Governance Act provisions in general, it is clear that some of the issues we have warned about are coming home to roost, particularly when we look at the impact of Greensill Capital’s administration on the Gupta Family Group and Liberty Steel. The Government have consistently ducked the need for wider reform of our insolvency laws, particularly in providing greater protection and support for key industries and their workers. We argued for and sought to amend the legislation to this effect, and it is not too late for the Government to act.

It is clear from reports that the gulls are circling, and regardless of whatever judgment people make about GFG, the Liberty Steel plants are a critical asset to our economic and national security, and employ thousands of highly skilled workers directly and through the supply chain. The company must be given time to refinance, but if that is not successful, then the Government must keep every option open and have a plan for all eventualities to save the UK steelmaking capacity and its supply chain. However, our insolvency laws mean that there is no safe place to refinance or protect this company’s assets until it might be too late, all the while leaving the company searching for refinancing while trying to retain the confidence of suppliers and customers, who risk the most should it fail.

In the US, they have chapter 11 to shepherd important industries facing distress. There, the authorities are able to wrap their arms around strategically important companies to allow them time to resolve difficulties, refinance or restructure. The chapter 11 process, should we have that here, would have created a better context for the refinancing of Liberty Steel, without the spotlight and falling confidence. We argued for its inclusion in the Corporate Insolvency and Governance Act 2020. Ministers could have brought forward changes on that today, but unfortunately they seem content to let the company fail first. We know that this has a high cost for the suppliers as well.

Even without changes to the insolvency laws, if there is a political will, there could be a way. Ministers should not be bystanders. They should intervene early, before liquidation if necessary, and that would mean that workers would not lose their accrued services benefit as well as protecting the supply chain. When the Minister gets to his feet, I hope that he will reflect on the wider point about how we can protect nationally important businesses in future and assure us that his Government will do whatever it takes to save Liberty Steel from insolvency.

--- Later in debate ---

[Paul Scully]

I thank Members for their valuable contributions to this debate—and, indeed, to the other, general debate I seem to have been hearing about coronavirus support beyond the regulations. Members have highlighted the importance of the measures that the regulations extend and the necessity of extending them so that businesses can continue to benefit from them.

I welcome the return to working with the hon. Member for Manchester Central (Lucy Powell). We are in a grander setting than usual, but the conversation remains. I understand her concern about the fact that we have come back to extend these regulations, but it is important to remember that they contain some important powers on things such as wrongful trading and the moratorium, and that we are holding a lot of things in stasis. It is right that we get the balance right between giving businesses the certainty that she rightly asks for and using Government interventions in these matters sparingly and continuing to scrutinise them in this place. I would rather that we come back and do our work regularly than overstep in respect of these powers and intervene too much in the economy. It is important to keep an eye on these things.

The hon. Lady raised the issue of those businesses that have been excluded, or that have been coming back with requests for more support, including the travel sector, the wedding sector and the visitor economy as well. They are all hugely important businesses and sectors that are vital for our recovery. We are working on all those areas. We have the global travel taskforce. My colleagues in the Department for Transport are working on international travel. I am working with colleagues on weddings. The Under-Secretary of State for Digital, Culture, Media and Sport, my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston), is working on events and domestic tourism. All of these areas will be hugely important not just for the economy as a whole, but to get our towns and cities back open again. As Minister for London, that is something that I feel and see on a day-to-day basis.

The hon. Lady talked about Greensill and Liberty. Clearly, there are concerns here that need to be addressed, but, obviously, speculation about Liberty Steel and other businesses can in itself cause uncertainty to investors, employees, and people seeking to work with those companies. We are monitoring the situation. We are engaging with Liberty Steel, and we are engaging with the unions. I know that the owners of Liberty Steel are seeking a market solution, but we will continue to monitor that situation. We are also engaging with the sector, with trade unions and with the devolved Administrations to make sure that we can develop a long-term, sustainable future for the UK steel industry, because it clearly has an incredibly important role in the UK.

I say to my right hon. Friend the Member for South Northamptonshire (Andrea Leadsom), erstwhile Secretary of State for Business, Energy and Industrial Strategy, that we want to make sure that, within our Department, we are building on her excellent work in the areas of audit reform and corporate governance. She rightly pointed out some significant failures, including BHS and Carillion to name just two, and we want to make sure that we can work on that within our audit reform work. We have already published a consultation to enhance the UK’s audit control and regulation, and we will make sure that we have full debates in this place as we bring those proposals forward for scrutiny in Parliament and in terms of legislation.

Let me turn now to the hon. Member for Aberdeen North (Kirsty Blackman). I would like to pass on my thanks to others who noted her comments on depression in a previous debate. It is so, so important to speak out. I really welcome her personalised appeal to people, making sure that they know that it is okay not to be okay. They were wise words, and words that we must all take on board. There has been a mental health aspect to the lockdown. Obviously, business uncertainty plays a part. There are lots of businesses, small and large, that I see and hear from on a day-to-day basis, which are incredibly stressed and incredibly worried. I valued her words.

The hon. Lady talked about companies struggling to get back on their feet. Clearly, that is the case. I do not want to get into a wider debate about coronavirus support, but we realise that, with many of these measures, there is the risk of cliff edges, and we will continue to work through those and to flex to make sure that we can support businesses. She talked about smaller organisations as well, especially around tech and IP. Yes, we must make sure that we are working on those, too.

Over the past year, businesses have faced an exceptionally challenging time, with many unable to trade, or their ability to trade at full capacity restricted owing to social distancing measures. These regulations will provide the much needed support for businesses as we continue with the Government’s four-step road map out of lockdown, allowing them to concentrate their best efforts on reopening or continuing to trade and building on the foundations for economic recovery in the UK. We want to get to that economic recovery.

Finally, let me answer the hon. Member for Sefton Central (Bill Esterson). When he was looking to throw this open to a wider debate, I think he missed the strengthening of our prompt payment code, which was done in consultation with the signatories to the payment code, and indeed the fact that we have got more to sign up to that as well. When he was looking for a wider debate about coronavirus, he also missed the plan for growth, which does exactly what it says on the tin. It looks beyond these measures. It is a plan and, funnily enough, it is a plan for growth, which goes beyond 30 June. Careful consideration has been given to extending these temporary measures, and the Government will continue to monitor the situation closely.

I thank hon. Members for their valuable contributions to the debate. I commend the regulations to the House.

Question put and agreed to.

Ordered,

That the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2021 (S.I., 2021, No. 375), dated 22 March 2021, a copy of which was laid before this House on 24 March, be approved.

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

On a point of order, Madam Deputy Speaker. During Prime Minister’s questions today, the Prime Minister claimed that

“last night our friends in the European Union voted to approve our Brexit deal, which he opposed.”

That is totally incorrect. You will remember, Madam Deputy Speaker, that in an extraordinary sitting of this House of Commons on 30 December 2020, the Leader of the Opposition and the whole Labour party voted for the Brexit deal agreed by the Government and the EU. As limited as it was, we backed it and avoided a no-deal scenario. Do you agree, Madam Deputy Speaker, that it is vital that the Prime Minister returns to the House today to swiftly correct the record?

[Madam Deputy Speaker (Dame Rosie Winterton)]

I am grateful to the hon. Lady for her point of order. I hope she will appreciate that it is not really a point of order for me, but I am sure that the Treasury Bench will have heard what she has said and will report it back in the usual way, through the usual channels. The hon. Lady has obviously also placed it on the record by raising the point of order in the way that she has.

We will have a short two-minute suspension for cleaning before the next business.