Tackling Rogue Builders

Mark Hendrick Excerpts

Tuesday 13th June 2023 Westminster Hall

[Sir Mark Hendrick (in the Chair)]

I will call Mark Garnier to move the motion, and then call the Minister to respond. There will not be an opportunity for the Member in charge to wind up, as is the convention for 30-minute debates, although there will obviously be opportunities for interventions. I am sure that the Minister will accommodate those.

[Mark Garnier (Wyre Forest) (Con)]

I beg to move,

That this House has considered Government policy on tackling rogue builders.

Thank you very much, Sir Mark. I am conscious that we may have to break off to vote, so I will try to keep my words to the point. I thank my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston), who is my constituency neighbour, for stepping into the breach this afternoon. He and I are very good friends. He is an outstanding Minister for International Trade and is replying on behalf of the Minister for Enterprise, Markets and Small Business, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), who is held up in a Bill Committee. I appreciate that this Minister may not be able to answer every single issue that I intend to raise.

It was nearly 18 months ago that I first brought my presentation Bill to the House, seeking to require the Government to look into the possibility of a licensing regime for builders operating at the smaller end of the market—servicing those people, for example, seeking domestic repairs or small business repairs. That area is known as the repair, maintenance and improvement sector, and it is the RM&I sector that I will concentrate on today. The Minister—when I refer to the Minister, I am in fact referring to his colleague, the Minister for Enterprise, Markets and Small Business—will be aware that at the time the Government were not minded even to look at the possibility of the sector being regulated.

Since then, of course, we have had several new Prime Ministers and a reorganisation of Government Departments, but the Government appear to be, dare I say it, increasingly less interested in talking about this consumer minefield, not more. The Minister, who I have an immense amount of respect for, and I have chatted informally about that and we agreed to meet, accompanied by the Federation of Master Builders, which is championing the cause of improved experience for consumers. It has been difficult to get a meeting set up, but I am delighted to say that we now have a meeting in the diary for the beginning of July.

The issue of rogue builders in the RM&I sector is not widespread, but it is appalling when it occurs. It is important to set out that the majority of builders in the sector are good and decent people. Last week, I had the pleasure of being a judge for the Federation of Master Builders awards, which will happen later this year. It is refreshing to see just how innovating building companies are when it comes to training staff, ensuring health and safety, in some cases offering medical insurance and training for emergencies. Indeed, some of the building firms up for awards demonstrated to me that their reputation is second to none and that they work tirelessly to ensure the longevity of their business through word of mouth and positive endorsements from customers and clients.

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[Giles Watling (Clacton) (Con)]

I have a constituent, Michelle Thomas, who paid £70,000 for some restoration work to her house, and the house was left untenable. Building regulators said it should be destroyed. She has paid a further £70,000 and had a very honourable builder come and put it all right.

I am amazed that the Government are not minded to regulate the issue, because, as my hon. Friend says, it would be to the benefit of legitimate good builders who work hard and do good work. One of the issues is that we get repeat offenders, who offend time and again. In the case of my constituent, the rogue builder had been involved in six liquidations. That must be addressed in legislation.

[Sir Mark Hendrick (in the Chair)]

Order. Could I ask for interventions to be a bit briefer?

[Mark Garnier]

My hon. Friend raises the most important point. We have had six phoenix companies wind up; what we do not want is another six—another six victims who have to have their homes pulled down. That is why we are trying to come up with a system of regulation that can prevent that.

Most of us will only infrequently need the work of a builder or tradesman. When we do, most of us get lucky—it is important to say that. We hear stories of people who endorse workers and pass on their names, as their work is of good quality. However, when someone gets caught by a rogue builder, their life descends into a nightmare. I know what that is like. In the interests of full transparency, I declare my interest, having found myself in such a position a few years back. It is because of that experience that I am keen to help other victims find a way out of the problem and draw the issue to a close once and for all.

When a problem starts—from poor and potentially dangerous work, as we have heard, through to the other end of the scale, which is fictitious bills—ultimately the only recourse is expensive legal fees. My experience opened my eyes to just how many people are victims of those types of rogue traders in so many different ways.

Rogue builders do not just prey on their clients. Others who lose out are the subcontractors and suppliers who do not get paid, as well as the plant hirers who do not get paid and find their machinery is often stolen. Other building firms do not see business because rogue builders will undercut their prices only to hike them later. All of us lose out through tax fraud, as rogue builders take cash in hand to dodge VAT and corporation tax. Tax fraud distorts the market, with rogues undercutting legitimate builders, creating a false impression of costs. The wider economy also loses out; the Federation of Master Builders has estimated that billions of pounds of building work is not undertaken because consumers fear being ripped off.

After my presentation Bill had its Second Reading, I was contacted by a number of victims of rogue builders. I also appeared on an ITV programme talking about the issue, leading to more victims making contact with me. The Petitions Committee contacted me to let me know that there is not one but four petitions seeking a resolution to the problem. Between them, they have gathered over 4,000 signatures, and I urge anyone who hears this debate who has been a victim, or is interested in resolving the problem, to sign one of those petitions.

It is the stories of victims that crystalises the problem, as we heard earlier. I was contacted by a police officer married to a nurse—two fine public servants. They bought their dream home and engaged a builder to renovate it. The work turned out to be massively substandard: it failed building standards and was deemed so dangerous that they could not move back into their home without remedial work. They contacted trading standards, but the builder is refusing to engage and is hiding behind his solicitor.

Similarly, someone else who contacted me had wanted to improve her home so that her disabled sister could get access. She was so let down by the system that she was motived to get in touch with the FMB, and has now launched one of the petitions I referred to in order to seek a licensing regime. Again, I urge people to go on to the Parliament petitions page and add their name.

The problem is that there is actually little redress for victims of rogue builders. Trading standards will probably have a good go at trying to sort it out, but if the builder holds fast, it can do little more than give the builder a telling off and flag their name for future people. The reality is that the only recourse for everybody is the courts, but the legal process is hopeless. Those are not my words; they are the words of a number of solicitors and barristers who advised that, irrespective of the merits of the case, the risk of prosecuting was way too high, so people should cut their losses. “Cut your losses”—do we really think that is a way for 21st-century Britain to tackle a known problem that keeps repeating itself?

The reality is that rogue builders hold all the cards: they can do whatever they like, and there is no recourse. Anyone can pick up a brick and call themselves a bricklayer, anyone can pick up a plank of wood and call themselves a carpenter, and anyone can pick up a pipe and call themselves a plumber. Ironically, they cannot pick up a gas hob and call themselves a gas fitter; that job requires compulsory certification, so there is an acceptance that regulation can be necessary. When a problem arises, however, the only redress is in the courts.

A consumer can be completely rolled over by a rogue trader, but in order to get redress, they need to put aside up to £150,000 to prosecute a legal case, securing barristers, surveyors, solicitors, court fees and all the rest of it. They may win—in fact, they probably will win—but they then need to recover their costs and damages from the builder, who closes their business and moves on to the next scam, having taken all the money out of the business so that there is no way to recover anything. The next victim is engaged and the circus goes on, but our successful litigant is left facing appalling, unrecoverable costs. Meanwhile, more suppliers, subcontractors, plant hirers and the wider building trade lose a little bit more.

However, the solution is simple. The problem lies in the imbalance of jeopardy between the victim and the perpetrator. The reason why there is so much rogue building going on is because it is an easy way to rip people off. In some ways, it is a basic level of fraud, although proving fraud is incredibly difficult. With no loss to the perpetrator, they can go on and on while the victim bears all the costs. How do we balance the jeopardy between the victim and the rogue builder? The answer must lie in regulation, with something such as a compulsory licence that the builder will lose if he or she falls foul of the rules—rules, by the way, that can and will save lives.

--- Later in debate ---

[Giles Watling]

rose—

[Sir Mark Hendrick (in the Chair)]

Just before the Minister takes an intervention, I remind Members that this is supposed to be a short debate. I understand that we are possibly going to have as many as five votes, when the votes are called. In the short time we have available, I would be grateful if we could minimise interventions.

[Giles Watling]

I am very grateful to the Minister for giving way. Is it not the case that historically we have relied on the cry of caveat emptor so much that we have not regulated, but that the time has come to regulate now?