Draft Energy Performance of Buildings (England and Wales) (Amendment) Regulations 2022

Matthew Pennycook Excerpts

Tuesday 8th March 2022 General Committees

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

It is a pleasure, as always, to serve with you in the Chair, Mr Gray. I thank the Minister for so ably summarising the regulations, which, for reasons that will be obvious to Committee members, are entirely straightforward, as the Minister said, and uncontroversial. None the less, as I said to the hon. Gentleman before the Committee sat, I am going to make him earn his salary by asking a series of quick questions, some general and some specific to the SI.

First, in relation to the general issue of—

[The Chair]

Order. Before the hon. Gentleman starts, it might be worth reminding him that he may only put questions relating to this particular SI and not to more general matters at all. That would not be in order.

[Matthew Pennycook]

Thank you for clarifying that, Mr Gray. My questions relate directly to the instrument in the sense that it concerns EPC ratings.

The Minister is responsible for the climate change portfolio and net zero policy in the Department for Levelling Up, Housing and Communities, and therefore he will have a keen grasp of the scale of the challenge we face to retrofit our country’s extremely inefficient building stock, and the importance to that national effort of accurate information about current ratings. Given that the regulations relate to the EPC register, I am keen to understand whether the Department knows the exact proportion of buildings in England and Wales that are on that register and, crucially, whether all buildings with EPC ratings are adding their names to that register. How confident is he that it is accurate?

Secondly, as for the effect of the regulations, the explanatory memorandum notes that as a result of the progressive shift to cloud-based systems, as the Minister noted, the Government have been overcharging the fees to register for some time. The precise period of overcharging is not specified. The fees are required to cover the cost of the register and although the fees reduction may seem small, when aggregated we are talking about serious amounts of money that have been overcharged and over-recorded during that period, whatever it might be. I simply wish to know how long that overcharging has run; how much has been collected as a result and what the Government have done with that money?

Oral Answers to Questions

Matthew Pennycook Excerpts

Monday 7th March 2022 Commons Chamber

[Mr Speaker]

I call the shadow Minister, Matthew Pennycook.

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

The Opposition have repeatedly criticised the Government’s First Homes scheme on the grounds that, by top-slicing section 106 funding, it drastically reduces the number of social and affordable rented homes that are being built, but we also have concerns that the scheme is failing in practice to help large numbers of first-time buyers across the country. Given that the new build premium is continuing to rise, and given that UK house price index data suggest that average house prices in England have increased by 18% since the scheme was first consulted on, can the Minister tell us in how many local authority areas the discount on those homes has not already been entirely eroded?

High-rise Buildings: Remediation

Matthew Pennycook Excerpts

Wednesday 2nd March 2022 Westminster Hall

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

It is a pleasure to serve with you in the Chair, Mrs Miller. This has been an incredibly worthwhile debate on an issue that we all agree deserves more attention. That will only increase in significance in the months and years ahead as more and more buildings compromised by historical cladding and non-cladding defects undergo remediation.

I congratulate the hon. Member for Ipswich (Tom Hunt) on securing the debate. He spoke forcefully on behalf of his constituents in St Francis Tower. I add to the general and well-deserved praise bestowed on the hon. Member for Stevenage (Stephen McPartland), and thank my hon. Friend the Member for Sheffield Central (Paul Blomfield) and the hon. Member for Strangford (Jim Shannon) for their contributions, and for bringing to the attention of the House the plight of constituents in Mandale House, Vista Tower, and other affected buildings.

Each Member has touched on this, but any hon. or right hon. Member whose constituency contains buildings with historical cladding or non-cladding defects will know of the abject misery that the building safety scandal has caused to residents. At the point that they learn that the home they believed to be safe is a fire risk, they are immediately trapped—physically, mentally and financially.

The point at which remediation works finally begin—particularly when the full cost has been met by either the freeholder or the building safety fund—should be the moment at which that misery begins to somewhat dissipate. However, as the hon. Member for Ipswich brought home in his introductory remarks, and as others have argued on the basis of cases in their constituencies, those vital remediation works, for too many residents, are a continuation of the distress that they have been experiencing.

Whether it is the psychological damage of having their home shrouded in plastic sheeting for months on end, if not years, the associated physical and mental health implications of being denied natural light or fresh air, the security risk, which we have touched on, or the financial impacts of buildings being exposed to the elements, there is no doubt that remediation works that are not undertaken with the appropriate sensitivity can and do have a detrimental impact on residents in high-rise buildings.

We have heard several suggestions this morning about how the issue can be tackled. I think that the hon. Member for Stevenage raised the idea of a digital register of new and remediated buildings. I think that is absolutely unarguable, and I hope that the Minister will give it serious consideration.

Several hon. Members raised the idea of relocating residents from buildings. That may be necessary in some cases, but the idea that all affected residents could be provided with alternative accommodation for the duration of remediation works is deeply problematic, not only because of the astronomical cost, but the practical difficulties that would be involved in such an undertaking, given the thousands of buildings that must be made safe over the coming years.

I actually agree with the hon. Member for Stevenage: surely the simplest way to minimise the impact of remediation works on residents in these buildings is for the Government to look to introduce some kind of code of practice that would seek to ensure that remediation works are carried out as sensitively as possible. There may be a standard alternative to that opaque plastic sheeting, which we can encourage developers to take on board. Even if that is not possible, and plastic sheeting is required, there are ways, and examples around the country, of how freeholders, managing agents and those they contract, can undertake those works in a more sensitive manner, often as a result of extensive consultations with residents about their particular needs.

He is sadly not in this morning’s debate, but my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard) was telling me about a block in his constituency just the other evening. The landlord, Plymouth Community Homes, has ensured that a young boy with autism who loves looking out of his window at the ships coming and going from the dockyard—an important part of his daily routine, I was told—can still do so, despite the cladding remediation works, because the builder installed see-through plastic sheeting around his family’s flat.

That is just one example, taken at random, of what considerate remediation could look like. We know that there are many others across the country. It would surely be an incredibly low-cost initiative for the Government to bring forward that code of practice to ensure that all building owners and managing agents properly engage with residents in drawing up remediation management plans. I very much welcome the Minister’s views on the matter, as I once again welcome him to his place.

Remediation works are not being carried out as sensitively as they could be, and there is an additional problem related to that. As has been raised, residents are having to endure for longer than necessary the inevitable daily noise, dust and general inconvenience that come with building works, often because of a shortage of skills, personnel and materials. We know that there are many obstacles to the building safety crisis being resolved any time soon. However, shortages of suitable replacement materials and appropriately skilled remediation experts have been known about for some time.

All the evidence suggests that the sector is working at full capacity, with many of the firms able to undertake remediation works being booked up years in advance. There is anecdotal evidence that the constraints on people and materials are impacting on the duration of works on individual sites. That is why there is a need to ensure that the remediation works are carried out not only as sensitively as possible, but as quickly as possible. The need for both those things, I would argue, reinforces the case for the Government to look to establish a new building works agency, as Labour has proposed: a single body, accountable to Ministers, that could go block by block to determine which works are necessary under the new PAS 9980 guidance, commission those works, look at the ways in which the impact might be mitigated and certify buildings as safe at the end of the process.

At present, the debate around the building safety crisis is, for completely understandable reasons, focused almost entirely on the issue of who pays. However, if—and I do say if—and when that issue is finally resolved, as we hope it will be if the Building Safety Bill is overhauled as required in the other place, Ministers will have to confront the very real problem of tackling the remediation challenge across the country at pace, and in a way that best limits the harm to the blameless residents caught up in this scandal.

To ensure that, Labour argues that the Government will need to be more interventionist; otherwise, the work will simply never get done. The hon. Member for Stevenage argued that none of us have prepared for the scale of the forthcoming remediation challenge. However, it has been on a lot of our minds for some time. As the Minister will know, various professional bodies have for some time been urging the Government to grip this issue, whether by the Department chairing a taskforce or by creating a body of the kind for which Labour has advocated.

Labour remains of the view that the Government could learn many lessons from the model adopted in Victoria, Australia. As the Minister may know, Cladding Safety Victoria provides a dedicated officer for each affected building, who then appoints a project manager directly. It is obvious how that arrangement could help ensure remediation works are carried out swiftly and considerately. I urge the Minister to look again, if he has not already, at the Australian experience and at what might be learnt from it.

This has been a valuable debate and I welcome the opportunity to hear the concerns of hon. Members from across the House on the effect of remediation works on residents in high-rise buildings. Labour has long pressed the Government to bring forward a comprehensive solution to the building safety crisis that will restore common sense and proportionality to the system, resolve the fundamental issue of leaseholder liability, clear the backlog of building safety fund applications and accelerate the agonisingly slow pace of remediation. However, mitigating the impact of remediation works on residents should not be an afterthought in all this, and I look forward to hearing what the Government will do to ensure that it is not.

[The Minister for Housing (Stuart Andrew)]

It is a pleasure to serve under your chairmanship this morning, Mrs Miller. It is also a pleasure to take part in this important debate, and I commend my hon. Friend the Member for Ipswich (Tom Hunt) for securing it. As he mentioned, he has raised this issue with me before, even before I was in this new role as Minister. I know that he is passionate about trying to resolve many of the issues that his constituents face.

Other hon. Members have also raised important experiences that their constituencies have faced. One of the many things that struck me when I took on this role was the challenge that many of those constituencies have faced. Residents of high-rise buildings across the country probably went into those buildings with the dream of home ownership and the prospect of living in a nice new apartment, which rapidly turned into a nightmare the day they discovered that their flats were clad in dangerous and unsafe materials. That is why the contributions of hon. Members this morning have been so very important. I am deeply aware of the harrowing cases that many have discussed.

Although I am very new in post, I know and have known about the importance of remediation. I am obviously keen to get a grip of it during my time in this role, but I am also very keen to work with colleagues and to continue the cross-party relationship that has clearly delivered some important results for constituents. My door is always open to any colleagues who want to speak to me.

I will in a moment address some of the specific points that were raised. I want to reiterate that I hope that the announcement made by the Secretary of State for Levelling Up, Housing and Communities, my right hon. Friend the Member for Surrey Heath (Michael Gove), will indicate to the House how seriously the Government take this issue. The whole package of measures that has been announced and the amendments being introduced in the other place as we speak show that there is a shift in addressing the issue. Those who live in high-rise properties can be assured that this matter is being taken seriously, and that we will address their safety concerns. We will also bring a good deal of proportionality into the issue; there are some people living in perfectly safe accommodation who are also feeling very frightened, so we need a sense of proportion.

To come to some of the points that were made, my hon. Friend the Member for Ipswich talked specifically about St Francis Tower and other buildings in the town. The lack of consultation with residents is, frankly, unacceptable. It does not cost any money to consult with the people who live in those buildings and to explain the processes that have to be undertaken. There are some elements that are necessary: some of the shrink wrapping ensures that residents do not face astronomical heating bills as a result of the cladding coming off. That said, we perhaps need to look at the types of wrapping. He says that he does not believe that there are any other ways. Lord Greenhalgh is dealing with the detail of those things, and I will speak to him when I get back to the Department about the really important points that my hon. Friend the Member for Ipswich raised.

The hon. Member for Sheffield Central (Paul Blomfield) talked about Mandale House and the lack of natural light. I do not think any of us could understand how that would feel—lacking the only source of natural light in one’s building. Those are the sorts of experiences that we have to listen to and learn from, because this will become a bigger problem as remedial works happen all over the country.

I pay tribute to my hon. Friend the Member for Stevenage (Stephen McPartland). I know that when he gets his teeth into a subject, he does not let go—he is like a terrier—and he gave me a bit of a Christmas list of asks. He talked about developing a code of practice, and I will speak to Lord Greenhalgh about the merits of that. My hon. Friend raised the issue of compulsory purchases. That is a big ask, but these things are always worth exploring. I obviously cannot commit to that here, but it is an interesting point.

On the issue of a building safety register, for the high-risk buildings and buildings over 18 metres that are about to be occupied, there will be a register under the new Building Safety Regulator. However, if my hon. Friend has other concerns about that issue, perhaps we can talk about them later. Of course I will happily speak to my counterpart in Northern Ireland. Sharing best practice is right, as it is for the benefit of all the people of the United Kingdom and Northern Ireland: it is important that we share the vital lessons that have been learned.

I hope that we have come a long way in recognising that this is an important issue that needs addressing and that that gives people confidence that the places they live in will have the remedial works that they need, so that they can get back to enjoying the houses and the accommodation that they are living in and enjoying the things in them. I get the point about my hon. Friend’s constituents’ plants; such things are important to people. Someone’s home is the most important place in their life and they want to ensure that they are able to enjoy it safely.

I will touch on the pace of remediation, because that is an important point. We are forcing industry to step up to the plate and take responsibility, of course, but we are also pressing ahead with getting dangerous cladding removed from buildings without delay. As I have said, we have provided the £5.1 billion to address fire safety risk caused by unsafe cladding on these buildings in order to protect residents and we have made great progress in making safe high-rise buildings with the most dangerous form of cladding—ACM cladding, the type that was on Grenfell Tower. Some 93% of all high-rise residential buildings identified with unsafe ACM cladding have now been remediated or have workers on site as we speak, finishing the job, and that rises to 100% in the social sector. For high-rise buildings with unsafe, non-ACM cladding, £1.073 billion has already been allocated from the building safety fund, with £945 million relating to the private sector and £128 million relating to the social sector. So, in total, 892 private sector buildings and 123 social sector buildings are proceeding with a full application to the building safety fund.

[Matthew Pennycook]

I will not put the Minister on the spot with a question, but I will just request that he go away and consider how we can speed up that application process, because far too many buildings without ACM cladding that have applied to the building safety fund face, even with the portal and the information on it, inconsistencies about the information that is said to be required and submitted, as well as very severe delays in receiving that funding. We are talking about remediation works that can take a year or two, but these buildings are not even at that point because they are still being held up in terms of getting a final award or final decision on remediation. Can he consider what more he can do to speed up that application process for all the buildings across the country that are affected?

[Stuart Andrew]

I will happily commit to go away and look into that issue for the hon. Gentleman, and I will get in touch with him afterwards to update him on that. It is important to say that we have also improved the information available to leaseholders and residents about the building safety fund, with the new online services that provide real-time updates, but I take the point that he has just made.

Clearly, the mental health aspect is a very important issue. I have outlined the steps that the Government are taking to meet a lot of the financial costs of removing the cladding and how we are doing everything within our power physically to speed up remediation. However, in response to the points that hon. Members have made today, I will also say that we also recognise that the building safety crisis has taken a very heavy toll on people’s mental health. Of course, my Department regularly engages with leaseholder groups who have shared with us terrible examples of people being sick to the stomach with stress over the last few years because they are trapped in homes that they are unable to sell or that they cannot afford to fix. We believe that bringing these matters to a swift conclusion through the measures that I have spoken about today is the best way to alleviate the stress and concerns of so many leaseholders.

We know that many residents living in these buildings, including many who have had to endure 24/7 waking watches or who have faced acute financial difficulties, understandably need access to proper mental health support. That is one reason we are working across Government to ensure that all people, regardless of their residential situation, get that help and support they need. Where residents in buildings fitted with flammable cladding need specific mental health support, we are encouraging them to contact their GP to discuss these issues and ensure they are referred to appropriate mental health services. I recognise that we have to look at that in greater detail.

My hon. Friend the Member for Stevenage asked about the contribution of costs to waking watch being offset under the £10,000 cap, and I confirm that is the case. I am sure his constituent will be happy with that.

Non-commissioned Exempt Accommodation

Matthew Pennycook Excerpts

Wednesday 23rd February 2022 Commons Chamber

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

It is an absolute pleasure to follow that powerful speech from my hon. Friend the Member for Birmingham, Yardley (Jess Phillips).

This has been an excellent debate, featuring a great many thoughtful and impassioned contributions, and I thank all the Members who have taken part in it. As would be expected, there have been points of contention throughout, but there is clearly agreement across the House that far too many people find themselves living in unsafe, poor-quality shared housing without the support that they need to get back on their feet and improve their lives, and that the beneficiaries of this arrangement are the unscrupulous providers who, by exploiting gaps in the existing regulatory regime, have extracted—and continue to extract—significant amounts of public money through the “exempt” provisions relating to housing benefit.

As we have heard today from Members in all parts of the House, those who are suffering so that rogue landlords of this kind can get rich are some of the most vulnerable people in our society: those fleeing domestic abuse, those who have served their time in prison and are trying to make a fresh start, those with severe mental health needs, those battling addiction and substance dependence, those leaving care, and those who have sought and secured asylum in our country and are starting the process of building a new life for themselves. The impact of poor-quality, non-commissioned exempt accommodation on vulnerable individuals like those can be devastating, whether it is the physical and mental consequences of living in squalid conditions, the risks that arise from the absence of effective supervision and safeguarding arrangements, the money gouged from hard-up residents through service charge costs that are ineligible for housing benefit purposes, or simply the inability to sustain an exempt accommodation tenancy, or to move on from one, because of a lack of care or support.

Sharp practice in this sector is causing real harm, and, as we have heard today, it is not only causing harm to the vulnerable individuals placed in this type of housing. Communities with large numbers of badly run exempt-accommodation properties are struggling to cope with the impact of concentrated numbers of people whose lives are, by definition, challenging and often chaotic, and who are not being given the supervision, care and support that they need in order to manage. Most gallingly, it is taxpayers who are subsiding this exploitative arrangement, and are thereby indirectly facilitating its social consequences. This is a situation that cries out for urgent reform, and the motion therefore seeks to ensure that the Government end the exploitation of vulnerable individuals at the hands of unscrupulous agencies, and at the taxpayer’s expense, as a matter of urgency.

I want to respond to a number of the points that have been raised in the debate, and to explain why we believe that a package of emergency measures is required to end this profiteering. Today we have heard numerous accounts of the detrimental impact of poorly managed, poor-quality non-commissioned exempt accommodation across the country. That attests to the scale of the problem, and to the fact that it is not an issue that affects only some cities and towns or only a select number of local authority areas. It is obvious that some parts of the country are more badly affected than others, and we have heard how and why cities such as Birmingham have become hotspots for poor practice in this sector, but it is a problem affecting every corner of the UK. Given the steady increase in the number of exempt tenancies over recent years, it is likely to become more widespread and more acute in the years to come if the Government fail to act quickly to stop rogue providers gaming the system.

Today’s debate has also made it clear that this is a complex problem to which there is no simple single solution, and the necessary first step to addressing it is that the Government accept that it cannot be tackled simply by incremental improvements at local level. Local discretion is of course vital, and there is no doubt that individual local authorities have been able, by their own efforts, through measures such as enhanced scrutiny of benefit claims or the use of voluntary codes of conduct, to reduce their reliance on the exempt accommodation sector and to drive up standards within it.

However, leaving this problem purely to councils, even with additional support, is not a solution, because it fails to address the fundamental causes of the problem. It is akin to asking the passengers of a ship holed beneath the waterline to do their best to bale the rising water out with their hands rather than seeking to repair the damage at source. Because it does not address the fundamental causes, any progress made in one local area will inevitably mean rogue providers simply pick up sticks and move to prey on another. If the Government are truly committed to bearing down on this problem wherever it arises, it must be a question of how, not if, they should intervene at national level to support the efforts already being undertaken by individual local authorities across the country.

We know what underlying factors have combined to drive the marked growth of this sector under successive Conservative-led Governments: a chronic shortage of genuinely affordable housing; reductions in funding for housing-related support; and new barriers to access for single adults requiring social rented or mainstream privately rented housing. If we are to stand any chance of reducing reliance on non-commissioned exempt accommodation over the long term, the Government must take meaningful action in those areas.

However, those individuals and communities that are already suffering at the hands of unscrupulous exempt accommodation providers do not have the luxury of time. They cannot wait for patient reform over many years to reduce overall dependence on the sector and limit the opportunities for rogue operators to take advantage of it. They cannot wait for the Government to get around to analysing the results of local pilots that finished long ago. They require Ministers to act now—in a considered way, yes, but at pace. I have to say that the lackadaisical tone adopted by the Under-Secretary of State for Levelling Up, Housing and Communities, the hon. Member for Walsall North (Eddie Hughes), in his response suggested that the Government had not yet properly taken this on board.

We must act at pace, and that is why the motion specifically calls for a package of emergency measures to bring an immediate end to sharp practice in the sector. There are two obvious ways in which the Government could act swiftly and decisively to achieve that outcome. The first is to introduce some form of licensing regime, including fit and proper person requirements for providers of exempt accommodation. Ultimately, it is the exempt provisions of housing benefit that enable and encourage rogue providers to enter the sector and exploit vulnerable individuals at the taxpayer’s expense. There is therefore an overwhelming case for better regulating the eligibility for, and therefore access to, exempt benefit claims, to ensure that high-quality supported housing providers are the norm. Just as care home providers need to register with the Care Quality Commission and be subject to regular inspection, an effective licensing regime would see exempt accommodation landlords screened and monitored so that new unscrupulous providers were denied access to the system and the existing ones were progressively weeded out.

The second change would be to introduce a robust framework of national standards for the sector while ensuring that councils had access to the resources necessary to tailor that framework to local circumstances and enforce standards on the ground. At present, what qualifies as the more-than-minimal care, support or supervision to be provided by an exempt accommodation landlord is incredibly vague. As a result, local authorities are unable to judge effectively whether claims are valid and eligible. The reforms proposed in the social housing White Paper should make a difference to exempt homes that fall within that category, and we urge the Government to bring forward the legislation to enact them as soon as possible. Even if those proposals lead to an improvement, however, they do not cover all kinds of exempt housing, as the Minister well knows. Anyone who examines how rogue exempted accommodation providers are taking advantage of existing regulatory loopholes cannot but conclude that we need a new regulatory regime to drive up standards for supported housing across the board and to give all local authorities the tools they would need to make the regime work in their area.

These are only the two most obvious changes that are needed if we are to begin effectively bearing down on the problem that the House has debated today. Many other smaller changes are required to bring this scandal to an end. The motion deliberately avoids setting out an extensive shopping list of specific proposals, leaving it open to this House to debate at greater length, on another occasion, precisely what would be included in the kind of emergency package that the motion calls for in principle.

What is important today is that Ministers accept that the current state of affairs must be brought to an end, that what is required is for this House to enact urgent and fundamental reform at a national level, and that they must commit to bringing forward an emergency package of measures to that end. Anything less is tantamount to accepting that some of the most vulnerable people in our society are not worthy of immediate protection, that unscrupulous operators can continue to exploit them for financial gain and that taxpayers will continue to pick up the bill.

Oral Answers to Questions

Matthew Pennycook Excerpts

Monday 24th January 2022 Commons Chamber

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Eddie Hughes)]

The building regulations set out the minimum energy performance standards. They do not prescribe the technology that is required—they just set the goal—which allows builders and homeowners the flexibility to innovate and select the most practical and cost-effective solutions appropriate to any development. Obviously, our intention is to go further. We have had the part L uplift, and building regs will move towards the future homes standard for 2025.

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

Would the Secretary of State give the House a clear and categorical assurance that if he cannot ultimately extract enough money from industry finally to fix the building safety crisis he will not allow the Chancellor to raid his Department’s budgets, including funding already allocated for new affordable homes, to make up the shortfall?

[Michael Gove]

I am grateful to the hon. Gentleman for giving me an opportunity to update the House on the conversations we had with developers last Thursday. Those conversations were cordial and constructive, but we were also clear about the obligation developers have. I am confident that they will meet it.

Building Safety Bill

Matthew Pennycook Excerpts

Report stage
Wednesday 19th January 2022 Commons Chamber

[Christopher Pincher]

No, I will not.

We want to ensure that these matters are properly debated and properly agreed. We also want to ensure, through a suite of mechanisms such as the extension of the Defective Premises Act and working with the sector to ensure that it pays for the defects it has caused, that this issue for leaseholders, which has gone on for far too long, is finally put to bed. This group of Government new clauses and amendments make key improvements to the Bill and extend its benefits to include the whole of Great Britain. I hope therefore that Members across the House will feel able to support the new clauses and the new schedule and allow them to stand part of the Bill.

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

It will not have escaped your notice, Madam Deputy Speaker, that I have taken on this Bill in its final stages, so I must begin by thanking my hon. Friends the Members for Manchester Central (Lucy Powell) and for Weaver Vale (Mike Amesbury) for their prodigious efforts during its earlier stages. I also want to thank my hon. Friends the Members for Liverpool, West Derby (Ian Byrne), for Brentford and Isleworth (Ruth Cadbury), for Luton South (Rachel Hopkins), for Jarrow (Kate Osborne) and for St Helens South and Whiston (Ms Rimmer) for so ably scrutinising it in Committee.

The issues covered by the Bill have been extensively set out in debates on Second Reading and in Committee. I have no intention of seeking to reprise them this afternoon, but before I turn to part 5 of the Bill and the consideration of the amendments related to it, I feel it is incumbent on me briefly to restate why we believe this legislation is so important. As the House knows, on 14 June 2017, 72 men, women and children lost their lives in an inferno fuelled by the highly combustible cladding system installed on the outside of their 24-storey tower block in north Kensington. That tower block was also compromised by a range of other fire safety defects. I put on record once again our admiration for the survivors and the bereaved of the Grenfell Tower fire and for the wider Grenfell Tower community, who continue to seek not only justice for their families and neighbours but wider change to ensure that everyone is safe in their home.

[Catherine West]

Does my hon. Friend agree that it is extremely important that we give the debate the time needed to remember the loss of life and the community that survived that terrible moment in our shared history?

[Matthew Pennycook]

My hon. Friend is absolutely right. I hope that, as Members consider the Bill and amendments, they have the chance to reflect and to remember why it is going through.

One does not pre-empt the Grenfell Tower inquiry’s conclusions in stating that the horror of that dreadful June night was the product not only of pernicious industry practice, but of state failure—the failure of successive Governments in presiding over a deficient regulatory regime, and the failure to act on repeated warnings about the potential lethal consequences of that fact. The Hackitt review detailed a deeply flawed system of regulation and argued for a radical overhaul of it. To the extent that the Bill delivers on the recommendations of Dame Judith’s report, we remain supportive of it and want to see a version of it on the statute book as soon as possible, given that four and a half years have elapsed since the Grenfell tragedy; however, the House knows we have serious concerns about what is missing from the Bill, and particularly its failure as drafted to provide robust legal protection for leaseholders facing ruinous costs—a point already made by several hon. Members on both sides of the House—for remediating historic cladding and non-cladding defects. In the absence of such protection, the Opposition are clear that the Bill will fail to meet what Dame Judith described as

“The ultimate test of this new framework”,

namely,

“the rebuilding of public confidence in the system.”

As we have heard, part 5 deals with remediation and redress, as well as assorted provisions relating to safety and standards. In Committee, my hon. Friends raised concerns about the limitations of clause 126, which seeks to ensure that landlords take “reasonable steps” to pursue other potential means of recovering the costs before passing them on to leaseholders. We of course believe it is right that landlords be forced to exhaust all means of funding remediation works other than passing on costs to leaseholders, whether that be seeking redress from the original developer in cases where the two are not the same, exploring a claim against a warranty, or applying for grant funding; however, we remain of the view that this provision gives leaseholders extremely limited protection in practice and we want that to be supplemented with additional provisions for maximum legal protection against the costs of remediating all historical defects—an objective that I know is widely shared across the House, as evidenced by the numerous amendments on the amendment paper today relating in one way or another to leaseholder protection. I will speak on that issue in more detail later in my remarks.

Clause 128 relates to limitation periods and makes changes to the operation of the Defective Premises Act. We supported the proposed expansion of the Act but remain of the view that there are considerable practical obstacles to leaseholders’ successfully securing redress via that mechanism—a point made by the right hon. Member for Hemel Hempstead (Sir Mike Penning) and my hon. Friend the Member for Blackley and Broughton (Graham Stringer)—not least given the prevalent use of special purpose vehicles precisely to avoid liabilities of this kind. We believe that the Government are in general overplaying the significance of litigation as a solution of the building safety crisis.

[Hilary Benn]

While of course we all welcome the extension, in practical terms, our constituents who have, staring at them from the table, bills for sums of money that they cannot afford, will not be in a position to start a legal action that may take several years, at enormous cost and risk and with no guarantee that it will reach a satisfactory conclusion, as my hon. Friend is so ably pointing out. It is not an answer to the problems that so many of our constituents are facing now.

[Matthew Pennycook]

My right hon. Friend, as so often, is absolutely right that it is an uphill struggle for leaseholders to get together to begin legal action of this kind. He also raises the highly pertinent point that there is nothing in the Bill that prevents freeholders today from passing on costs to those blameless victims of the crisis.

[Kate Green (Stretford and Urmston) (Lab)]

Does my hon. Friend agree that there is a real opportunity here for the Department to link up with the companies registrar and companies law, and to use the options that exist there to take action early against directors who repeatedly set up these special purpose vehicles, repeatedly carry out substandard developments, and repeatedly liquidate those companies, leaving no assets for leaseholders to act against, and who it appears are in no way acted against, either proactively or reactively, under companies law or by Companies House?

[Matthew Pennycook]

My hon. Friend makes a very good point, which she has made in other debates in this place with regard to unscrupulous developers operating in her constituency. Changes to company law certainly warrant further consideration in that respect.

[Sir Peter Bottomley (Worthing West) (Con)]

May I add the problem that leaseholders do not have an interest in a brick of their building and that a claim would need to be made on their behalf by the freeholders to the landlord, who would require indemnity costs from the leaseholders who cannot pay?

May I, through the hon. Gentleman, suggest to the Government that between now and the House of Lords they consider taking a right to take the potential claims by the landlords on behalf of leaseholders into a public agency which can make a public claim against the developers, builders, architects, surveyors, building specification and building controllers, so that money can be brought back from those who were responsible, not the innocent leaseholders who are not?

[Matthew Pennycook]

I thank the Father of the House for that intervention. That is a very good suggestion, which I hope the Minister will take on board and give some considered thought to.

Notwithstanding our concerns with regard to the limitations of the Defective Premises Act, we argued forcefully in Committee for the Bill to be revised so that the period for claims under the 1972 Act be extended from six to 30 years, rather than from six to the 15 years the Government proposed. In response, the Minister urged my hon. Friends to withdraw our amendment on the grounds that a 15-year limitation period was appropriate and indeed that any further retrospective extension beyond 15 years would increase the chances of the legislation being tested against the Human Rights Act and found wanting. Because that argument was never convincing, we are extremely pleased that the Government have reconsidered their position on this matter in the light of the case made by my hon. Friends in Committee, and have brought forward amendments 41 and 42, which provide for that 30-year limitation period, as well as changes to the initial period. We fully support both amendments.

We also believe that new clauses 11 and 12, proposed by the hon. Members for Stevenage (Stephen McPartland) and for Southampton, Itchen (Royston Smith), warrant support. If the Government genuinely believe that litigation has a significant part to play in helping to fix the building safety crisis, they need to give serious consideration to permitting a limited class of claims relating to pure economic loss, rather than just actual physical damage.

Clauses 129 to 134 concern the new homes ombudsman scheme, the creation of which we support, albeit, as the Minister will know, with some concerns about its operational independence and the composition of the new homes quality board. While we remain unconvinced that the new ombudsman and the new code will lead to a step change in developer behaviour and thus a marked increase in the quality of new homes, we see no issue with the scheme being expanded to cover Wales and Scotland, so we support the various Government amendments to that effect under consideration today.

Finally, I want to turn to amendments relating to the fundamental and contentious issue of leaseholder liability. I know I need not detain the House for any great length of time on why it is essential that greater legal protection for leaseholders be put on the face of the Bill.

[Janet Daby]

My hon. Friend is making excellent progress. My constituents living in unsafe homes due to unsafe cladding feel trapped and isolated in their homes. Does he agree that the Government need to work with lenders to see if properties caught up in the cladding scandal can be sold and re-mortgaged?

--- Later in debate ---

[Matthew Pennycook]

My constituency neighbour, who shares many of the same case load issues relating to the building safety crisis as I do, is absolutely right. A lot that flows from the Secretary of State’s statement last week depends on lenders, insurers and other stakeholders agreeing with the Government’s approach. We wait to see whether that bears any fruit. We know there have been occasions when the Government have made announcements and the industries in question have not responded as the Government expected.

For many leaseholders across the country, lots of whom are first-time buyers who diligently saved to purchase their homes, all but the most superficial remediation and secondary costs will simply be unaffordable. The reason the building safety crisis has caused and continues to cause such abject misery is because so many blameless leaseholders not only feel trapped in their homes physically, mentally and financially, but because they feel let down by the Government. Despite allocating significant public funds to cover the costs of remediation for some buildings and repeatedly promising that all leaseholders should be fully protected, the Government nevertheless, until very recently, had only committed to shielding a proportion of leaseholders from unaffordable costs, which were defined by one Minister a few years ago, if memory serves, as “anything short of bankruptcy.” I must make it clear to this Minister that it has come as a bitter blow to the countless blameless leaseholders across the country who have already been hit with huge bills, both for remediation works and for interim fire safety measures, that the Secretary of State made clear in his statement last Monday that the Government have no plans to secure retrospective financial redress for them. We think that Ministers need to think again about that issue. However, he did commit in that statement, repeatedly and clearly, to bringing forward amendments to the Bill to provide leaseholders with the “most robust legal protection”, extending to

“all the work required to make buildings safe.”—[Official Report, 10 January 2022; Vol. 706, c. 291.]

Given that he rarely misspeaks, that clearly suggests historic non-cladding and historic external wall-related defects. I hope that the Minister can confirm as much today when he responds on this group of amendments.

That robust legal protection for leaseholders is what this legislation must contain, and it is disappointing that no Government amendments providing for it have been tabled for consideration today.

[Jonathan Edwards]

rose—

[Matthew Pennycook]

I am going to make some progress, if the hon. Member will forgive me. That legal protection must be delivered as a matter of urgency and in a way that brings immediate protection for leaseholders, because, as I have said, there is currently nothing, aside from the limited clauses in the Bill requiring them to take reasonable steps before they do, to prevent even more freeholders from passing on costs, as we know many are in the process of doing, even now, including several in my constituency, such as the Comer Group in the case of Mast Quay in Woolwich. As well as providing for the establishment of a building works agency, which we believe remains necessary if the Government are to ensure that the pace of remediation across the country is accelerated and that works are properly carried out and certified, our new clause 3 seeks to provide the maximum legal protection possible for leaseholders facing potential costs to fix historic cladding and non-cladding defects, irrespective of circumstance.

[Jonathan Edwards]

I fully support Labour’s new clause 3 and if there is a vote on it, I will be supporting it, particularly as subsection (6) would protect the small buy-to-let landlords the right hon. Member for Leeds Central (Hilary Benn) has referred to and I referred to in an intervention. As the hon. Gentleman knows, the scheme in Wales will be administered by the Welsh Government, so may I take it and inform my constituents that new clause 3 will be the basis of the scheme that we see apply to Wales, where Labour is in government?

[Matthew Pennycook]

It does apply to England and Wales, and I think that as a general point the Government need to co-operate much more closely with the Welsh Government on action on the building safety crisis.

As I was saying, new clause 13, proposed by the hon. Members for Stevenage and for Southampton, Itchen, does the same and we fully support it, as well as their new clauses 5 and 6. We will seek to divide on new clause 3 today, simply to reinforce to the other place the importance we attach to the issue of leaseholder protection, but we do want to work constructively with the Government on this matter in the period ahead, in the light of the change of tone and approach signalled by the Secretary of State last week. We hope that the absence of Government amendments providing for robust leaseholder protection today simply reflects the fact that they are not yet finalised and that we can expect them to be tabled, perhaps along with an amendment implementing a version of the polluter pays proposal, in the other place in due course. The Minister has had a couple of chances to answer this point and obfuscated to a certain extent, so I would appreciate it if he would clarify whether that is indeed the case in his closing remarks on this group, because many leaseholders across the country are seeking certainty on that point.

[Mr Betts]

Does my hon. Friend agree that there is a fundamental point here: if for individual blocks of flats we cannot track down the developer or whoever else was involved in the construction and get them to pay through the legal process, and if the Secretary of State’s charm offensive does not persuade the industry as a whole voluntarily to cover these costs, would it not be absolutely wrong if the costs were, effectively, passed on to the social housing sector through cuts in the Department’s budget? Is the alternative, therefore, to look at an extension of the levy or taxation scheme to make the industry pay if it will not voluntarily agree to do so?

[Matthew Pennycook]

The Chair of the Select Committee is absolutely right; it would be a travesty if the Government or this Department were forced to raid the affordable homes programme to cover the costs of fixing the building safety crisis. In those circumstances, they would have to look at other options, such as those he has set out.

I will finish by using this brief opportunity to put to the Minister four issues relating to those expected Government amendments on leaseholder protection that arise directly from the commitments made by the Secretary of State last week. The first issue relates to the point mentioned by my right hon. Friend the Member for Leeds Central (Hilary Benn) in his intervention: which leaseholders will any such robust legal protections cover? The Secretary of State’s statement last week caused a great deal of confusion in that area, so can the Minister clear up the matter today by making it clear that any such protections will apply to all leaseholders, not just leaseholder-occupiers and certainly not just the leaseholders that the Government deem, based on some unknown or unworkable criteria, to be deserving?

--- Later in debate ---

[Mr Deputy Speaker (Mr Nigel Evans)]

Before I call Matthew Pennycook, I ask colleagues who are trying to catch my eye that they please make sure that they address the new clauses and amendments in the group before us, not those in the previous group.

[Matthew Pennycook]

Scintillating they may not be, but it is still a pleasure to respond for the Opposition to the remaining proceedings on consideration. I will first deal briefly with several of the non-Government amendments selected, before taking the opportunity to ask the Minister several specific questions relating to Government new clause 19, new schedule 1 and various other amendments relating to special measures and protections against forfeiture. I hope he is able to answer at least some of them.

New clause 1, which stands in the name of my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams), who sadly cannot be in her place today because she has contracted covid, is a straightforward amendment that would place on the Secretary of State an obligation to review the effects of behaviour in the construction industry that have a negative impact on building safety, such as contract terms and payment practices that prioritise speed and low-cost solutions, and to report findings to this House. We support the new clause fully and urge the Government to give it due consideration.

New clause 18, which stands in the name of my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy), would establish minimum standards for property flood resilience measures in new-build homes. In response to my hon. Friend last week, the Secretary of State made it clear that “more could be done” on this issue. I hope my hon. Friend gets a chance to make her case in more detail in due course, and that the Minister will give serious consideration to her new clause and to what might be done through future planning legislation to drive up standards when it comes to flood mitigation and resilience.

New clause 15, which stands in the name of my hon. Friend the Member for Hammersmith (Andy Slaughter), would extent the electrical safety inspection duties that currently apply in the private sector to social landlords. It is straightforward and we believe it warrants support.

New clause 16 would extend the same duties to leaseholders. Although we do not want extra burdens to be placed on leaseholder-occupiers—those who sub-let are of course required to have the relevant certification anyway—and we do want further assurances that the provision would not duplicate powers and duties that the Bill confers on the building safety manager, we support in principle steps to ensure the safety of electrical installations in high-rise buildings and to reduce the risk of fire spreading between flats.

[Andy Slaughter]

My hon. Friend is a logical and fair man, and he will appreciate that there is an anomaly here. If a leaseholder rents out their property, as we have heard some are forced to do, they will be a private landlord and will be obliged to carry out these checks, but they will not be if they are living in the property themselves. In the name of safety, there has to be consistency. Not only landlords of high-rise blocks but social landlords and resident leaseholders need to do this, and the cost is estimated to be about £30 a year per flat.

[Matthew Pennycook]

I agree there is an anomaly, and I agree that we need consistency. I very much hope the Government give further thought to what might be done to achieve that objective.

The Opposition support new clause 23 and amendments 73 and 74, which derive from the Select Committee’s recommendations, and I hope the Minister will constructively respond to them in due course.

On Government new clause 19 and new schedule 1, which will replace clauses 104 to 113, and various related amendments, we fully accept the need for special measures in cases where a given accountable person fails to discharge their duties under the new regime, including the appointment via an order secured by the regulator at the first-tier tribunal of a special measures manager who will take on the management of risk in a given building in such instances.

We also support the changes made to the special measures arrangements by new schedule 1, such as the change to enable the regulator to provide financial assistance to the special measures manager by way of loans or grants. However, we would be grateful if the Minister provided some clarification on those parts of the new schedule that allow for payments to be made by the accountable person to the special measures manager if expenses exceed what can be raised by way of the building safety charge. Will he give a commitment this afternoon that those additional payments will not be able to be charged to leaseholders?

Building height was debated extensively in Committee and warrants a brief mention in relation to this group of Government amendments, because the Bill’s arrangements for special measures still apply only to higher-risk buildings, defined as those of at least 18 metres in height or of at least seven storeys—I note that new clauses 24 and 25, in the name of the hon. Member for St Albans (Daisy Cooper), directly address this.

Eighteen metres has always been a crude and arbitrary threshold that fails adequately to reflect the complexity of fire risk. It is absolutely right and long overdue that the Government made it clear last week that 18 metres will no longer be the difference between whether an affected leaseholder is protected by the state from the costs of remediation or made to take on a forced loan and long-term debt, although leaseholders will still face ruinous costs for the remediation of buildings under 11 metres. That requirement will not be entirely resolved by the withdrawal of the January 2020 consolidated advice note, and we urge the Minister to ensure those people are also protected financially.

Leaving aside whether a more proportionate approach to fire safety risk results in a reduction in the number of medium-rise buildings that ultimately require remedial works, many of them will clearly remain designated as high risk and will therefore require remediation. Can the Minister confirm that it is the Government’s intention eventually to bring high-risk buildings under 18 metres into the purview of the regulator and the gateway system once the regime has been given a chance to bed in and deal with the most complex high-rise cases?

Lastly, amendment 29 will extend existing protections against forfeiture of a lease on the ground of non-payment of a service charge to non-payment of a building safety charge. We do not oppose this amendment as it rebalances, even if only marginally, the disparity in power between a landlord and leaseholder when it comes to the building safety charge. This directly relates to our previous debate on part 5. No provisions prohibiting forfeiture would be necessary if the House had accepted any amendment, whether it be new clause 3, new clause 13 or potential forthcoming Government amendments, that provides sufficiently robust legal protection for leaseholders in all circumstances.

The difficulty of considering amendments on Report when other amendments that are likely to have a direct bearing on their operation, were they to be accepted, have not yet been tabled is that, if no amendments are made to provide legal protection for leaseholders against the costs of remediating historical defects, we would be concerned that amendment 29 could inadvertently incentivise freeholders to sue for unpaid building safety charges. I therefore ask the Minister and his officials to consider revising the amendment to make it clear that failure to pay a building safety charge can never be used as a basis for forfeiture, rather than merely regulating the process by which forfeiture takes place, as the amendment does in its present form.

[Peter Aldous (Waveney) (Con)]

New clause 2 and amendment 1, which stand in my name and are kindly supported by the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy), add “the protection of property” to the list of purposes for which building regulations may be made under the Building Act 1984, and require the Building Safety Regulator to carry out its work

“with a view to furthering the protection of property”.

In many respects, in terms of drafting, these are tweaks to the Bill, but they could have far-reaching and positive consequences. Modern methods of construction and the increasing compartmental sizes of industrial and commercial buildings are leading to more challenging and larger fires, which put lives at risk and also cause enormous social, economic and environmental consequential damage. That is exactly what happened at Wessex Foods in Lowestoft 11 years ago, in July 2011. If adequate property protection measures—in the form of sprinklers, in that instance—had been in place, a huge amount of disruption would have been avoided, and the firefighters would have been back at their station in four minutes.

If the consideration of “property protection” were added to the Building Act and the building regulations, we would secure a significant double dividend: greater safety for people, including firefighters, and more sustainable buildings. It is far better to be preventing fires than to be putting them out. I should therefore be grateful if the Minister gave serious consideration to accepting new clause 2 and amendment 1, so that the Building Act can be amended to provide for the protection of property. These proposals have the support of professionals across the fire sector: the National Fire Chiefs Council, the Fire Sector Federation, the Fire Brigades Union, the Fire Protection Association and the Institution of Fire Engineers.

The new clause and amendment would provide an appropriate framework for the future fire safety of building design, and we would therefore know that homes, schools, care homes, student accommodation and all industrial and commercial buildings had adequate property protection and fire prevention measures built in at the start, so that we were not putting people—including firefighters—and property at risk. As I have said, I should be grateful if the Minister considered these proposals.

--- Later in debate ---

[Matthew Pennycook]

I would like to start by thanking the Bill team, the Clerks, the House staff and the Library specialists for facilitating the debates in the House on this important piece of legislation, as well as all those hon. and right hon. Members who have contributed to the proceedings, particularly those on both sides who took it through Committee over a great many weeks last year.

The impetus for this Bill, and what I am sure has been at the forefront of our minds throughout its passage to date, is the horrific fire at Grenfell Tower four and a half years ago. As I suggested on Report, it is not pre-empting the Grenfell Tower inquiry’s conclusions to state that the horror of that dreadful June night in 2017 was the product not only of pernicious industry practice but of state failure: a failure that involved successive Governments presiding over a deficient regulatory regime, and a failure to act on repeated and clear warnings about the potentially lethal consequences of that fact. That is why the Government and industry have a shared responsibility to make all buildings safe and to resolve the building safety crisis fully and finally, in a way that protects all those living in dangerous buildings who bear no responsibility for it whatsoever.

To the extent that the Bill implements the recommendations of the Hackitt review, provides for a stronger regulatory framework for building safety and ensures clearer accountability on the management of risk in buildings over their lifecycle, we support it. We welcome the improvements made on Report, and we want to see a version of the Bill given Royal Assent as soon as possible,

However, this Bill leaves a range of fire safety issues unresolved, from the lack of a national strategy on how to evacuate high-rise buildings to the absence of a requirement to plan for the escape of disabled residents. The Bill is not in itself a panacea for the building safety crisis. Even on its own terms, we have argued that it could and should have gone further in several important respects, whether in relation to the arbitrary definition of height or the issue of product testing.

We have concerns about the Bill’s implementation, specifically whether the new building safety regime will be able to function as intended and whether the new building safety regulator within the Health and Safety Executive, which the Bill makes responsible for all aspects of the new framework, has the resource and capacity to perform all the complex tasks assigned to it.

Hoping that the hard deadline will conjure the necessary outcomes, whether in relation to building control, skills shortages or ongoing concerns about indemnity insurance, is not good enough and we intend to monitor closely whether the new regime operates effectively in practice. We are disappointed that, despite the clear strength of feeling across the House and following our extensive debates, we are being asked to send this Bill to the other place without changes having been made to provide robust legal protection for leaseholders who are facing ruinous costs for remediating historical cladding and non-cladding defects. The Opposition have been clear throughout the Bill’s passage that, without changes to provide for such robust protection from all costs, it will fail what Dame Judith described as the “ultimate test” of any new framework, namely the rebuilding of public confidence in the system.

The House will have noted the extremely legalistic language that the Minister used on Report in response to several questions on whether the Government will table amendments in the other place on leaseholder protection, on when they plan to do so, on what those amendments will look like and on whether this place will have sufficient time to debate them. Do not underestimate the degree to which expectations have been raised by the repeated and unambiguous commitments the Secretary of State made last week to amend this Bill in pursuit of protection for leaseholders in relation to all the work required to make buildings safe.

For all the gaps raised by the Secretary of State’s statement and all the obvious gaps that remain in his new plan, leaseholders across the country who are caught up in this scandal drew comfort from his words, believing them to be a signal that the Government are finally prepared to honour the promises given by successive Secretaries of State and Ministers from the Dispatch Box that leaseholders will be fully protected.

That the blameless leaseholders at the centre of this crisis should be protected is, we believe, incontrovertible. The mental and financial toll this crisis has taken on them is incalculable. Lives have been put on hold, relationships have broken down, retirements have been ruined and countless hours have been forever lost as a result of spending evenings and weekends researching, lobbying and campaigning. In far too many cases, savings have vanished entirely and homes have been lost to bankruptcy.

The Secretary of State spoke last week of the injustice of asking leaseholders to pay money they do not have to fix a problem they did not cause. He was absolutely right, but if it is unjust that leaseholders pay in the future, it surely follows that it is unjust that so many have already paid or are being asked to pay now. The Government must look at financial redress and how it might be secured.

When it comes to protecting leaseholders in the future, we forcefully made the case throughout the Bill’s passage for the maximum legal protection for all those facing potential costs to fix historical defects, irrespective of circumstance. On Report we asked the Minister to give serious consideration to several issues of concern arising directly from the Secretary of State’s commitment to amend the Bill to achieve that.

We support the passage of the Bill tonight because we want the recommendations of the Hackitt review to be implemented and a stronger safety regime to be put in place as soon as possible, but we await the tabling in the other place of the promised amendments on leaseholder protection. We sincerely hope that when the Secretary of State says he intends to protect leaseholders from paying any costs, he truly means it, and that consequently the Bill will not be yet another forestalling, but will deliver justice finally for all the blameless victims of the building scandal.

[Several hon. Members rose—]

Second Homes and Holiday Lets: Rural Communities

Matthew Pennycook Excerpts

Thursday 6th January 2022 Westminster Hall

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

As always, it is a pleasure to serve with you in the Chair, Mr Sharma. I congratulate the hon. Member for Westmorland and Lonsdale (Tim Farron) on securing this debate. He has a huge amount of knowledge about the subject. As he has done on numerous occasions in the past, he spoke with authority about the negative impact of second homes and holiday lets on his constituents, as well as outlining a number of suggestions that certainly warrant further consideration.

All speakers in today’s debate have acknowledged that, in order to thrive, rural communities need investment, employment opportunities and, in many cases, thriving tourism industries, but they also need affordable homes for local people. While second homes and short-term lets can undoubtedly bring benefits to local economies, those benefits must be continually weighed against their impact on local people.

It is clear from the strength of feeling expressed in this debate, and from other recent debates that have touched on these issues for coastal, urban and rural constituencies, that there is a clear view among a sizeable number of hon. Members on both sides of the House that, as things stand, the Government have not got the balance right. It is that balance, as so many have mentioned, that is important.

Informed by their respective constituency experiences, the hon. Member for Westmorland and Lonsdale and other hon. Members who have contributed this afternoon have detailed the negative impact that excessive numbers of second homes and holiday lets are having on the communities they represent. As we have heard, excessive rates of second home ownership in rural areas have a direct impact on the affordability and therefore the availability of local homes, particularly for local first-time buyers. As the hon. Gentleman mentioned, high rates of second home ownership entail the loss of a significant proportion of the permanent population, and have a detrimental impact on local services and amenities, whether that be local schools, transport links or local small businesses, and therefore the sustainability and cohesion of those communities.

The staggering growth in short-term and holiday lets in many rural constituencies—as well as, as hon. Members have said, in urban areas, including in my own city—is having a direct impact on the affordability and availability of homes for local people to buy. In many parts of the country the growth in this market is also having an impact on those who cannot buy or to secure social housing, in terms of access to private rentals. That point was highlighted powerfully by the hon. Member for North Devon (Selaine Saxby). That growth is also having an impact in terms of security for those renters, including key workers, who find that their landlord wishes to begin using their property exclusively as a short-term or holiday let, a situation unlikely to be ameliorated any time soon, given the fact we are still waiting for the Government’s promised renters’ reform Bill.

The emerging evidence suggests that the pandemic and the resulting attraction of staycations for domestic holidaymakers has accelerated markedly the growth in both second home ownership and holiday lets. Fuelled in part by the stamp duty holiday, the number of transactions liable for the second home stamp duty surcharge stood at just under 85,000 in the second quarter of this year—the single largest quarterly figure since the higher rate for the additional dwellings surcharge was introduced back in 2016.

As the Financial Times reported back in July, figures produced by estate agent Hamptons International using Companies House data show that the rate at which holiday let companies are being set up has more than doubled over the coronavirus crisis, with the vast majority of those incorporating being individuals owning only one mortgaged property, rather than large corporations holding multiple holiday homes.

It is worth reflecting briefly at this point on the issue of data—the point was well made by the hon. Member for North East Fife (Wendy Chamberlain) in her contribution—because the fact is that we do not know the numbers of second homes and holiday lets in any detail, other than that they continue to rise. We do not have an accurate grasp of the figures across the country. Council tax records are likely to significantly undercount second homes, both because there is no financial incentive to register a property in areas where a council tax discount is no longer offered and because second home owners can still avoid council tax altogether by claiming that their properties have moved from domestic to non-domestic use. When it comes to second home ownership, the estimates produced by the English housing survey are more reliable, but even they are based on a relatively small survey sample and rely on respondents understanding what is meant by a “second home” and accurately reporting their situation. Similar limitations apply to short-term lettings. There is no single definite source of data on rates for what is after all an incredibly diverse sector, with providers offering accommodation across multiple platforms.

It therefore seems logical that as well as considering what more might be done to mitigate the negative impact of excessive rates of second home ownership and short-term and holiday lets, the Government should give some thought to how we might obtain better data on overall rates, not least to provide a more accurate baseline as we emerge from the pandemic and also a better sense of precisely which parts of the country face the most acute challenges. I would be interested to hear from the Minister whether the Department has given data collection in this regard any thought and, if not, whether he will commit to taking the point away for further consideration.

In relation to how we might meet the housing needs of local people in rural areas and other parts of the country where there is high demand, the wider context is obviously crucial. The point was touched on in the debate, but if we had had more time, we could have had a much wider debate about affordability criteria and what needs to be done, not least in the light of the evident failings—here I have to disagree with the hon. Member for Thirsk and Malton (Kevin Hollinrake)—of the First Homes scheme, to give local first-time buyers better access to new homes.

On the specific issue of what more might be done to mitigate the negative impact of excessive numbers of second homes and holiday lets, it is useful to break things down, as the hon. Member for Westmorland and Lonsdale did, into potential planning and non-planning—primarily taxation—measures. On the non-planning side, the Government have taken action over recent years by reforming stamp duty, allowing local authorities to increase council tax to 100% for second homes and proposing that properties be required to have been let for 70 days in a given financial year in order to be liable for business rates rather than council tax, although I believe that we are still waiting for a formal decision to confirm that change in policy.

However, there is a strong case for exploring whether the Government should provide local authorities with powers to, for example, introduce licensing regimes for second homes and short-term lets, and for considering giving them even greater discretion over their council tax regimes—perhaps allowing local authorities, as Labour has done in Wales, to levy a premium or surcharge on second homes and long-term empty properties if they believe that that is required in their locality. There is also a strong case—this point was well made by my hon. Friend the Member for York Central (Rachael Maskell)—for reviewing whether the current 3% rate of stamp duty surcharge on second homes as well as the 5% rate levied on non-UK buyers remain at the appropriate level in the light of the boom that we have witnessed over the course of the pandemic. Is the Department even exploring those or any similar options?

When it comes to planning, the system now enables local residents to put in place neighbourhood plans that can go some way to managing second home ownership rates, but it is clear that further measures are required. May I therefore press the Minister to clarify whether the Government accept in principle that in order to bear down on excessive numbers of second homes and holiday lets in particular parts of the country, there may be a need for further changes in relation specifically to planning restrictions and enforcement—designed, obviously, so as not to exacerbate the problems of affordability and availability that have been touched on in the debate today?

This has undoubtedly been a worthwhile debate on an issue that is only going to grow in significance. I look forward to hearing from the Minister about what further steps the Government propose in order to ensure that when it comes to the benefits and liabilities of second home ownership and short-term and holiday lets, we begin to redress the current imbalance affecting rural and other communities across the country.

New Homes: Developers, Housebuilders and Management Companies

Matthew Pennycook Excerpts

Wednesday 5th January 2022 Westminster Hall

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

It is a pleasure to serve with you in the Chair, Mr Betts. I wish all hon. Members and staff present a happy new year, and add my congratulations to the hon. Member for Wantage (David Johnston) on securing this important debate, and on his comprehensive and extremely well-judged introductory remarks.

As expected, given the subject, this has been a wide-ranging debate, with a series of thoughtful contributions informed by the experiences of hon. Members on both sides with new build developments in their respective constituencies. I highlight, in particular, the contributions made by my hon. Friends the Members for Ellesmere Port and Neston (Justin Madders) and for Warwick and Leamington (Matt Western), who spoke of the importance of local authorities in housing and planning and the imbalance of power between councils and developers, and the constraints that the former therefore face when it comes to meeting the needs of their populations.

My hon. Friends the Members for Stretford and Urmston (Kate Green) and for Halifax (Holly Lynch) spoke powerfully about cases of unscrupulous developers in their own constituencies, as did the hon. Member for Keighley (Robbie Moore) in relation to Harron Homes, and the lack of accountability, at least in the current system, for redress for the serious defects that people face.

In the time available, I would like to expand on three issues that have featured in the debate this morning and that the hon. Member for Wantage touched on in his introductory remarks. First, what is the quality of new homes being built? Secondly, as well as building new homes, do we have a system that supports the creation of sustainable communities where individuals and families can not just live but thrive? Thirdly, are buyers of new build homes getting a fair deal?

I turn first to quality. It manifestly remains the case, despite the problem being both of long standing and widely understood, that a significant proportion of those buying recent new builds in England find, having moved into their new home, that their property has serious defects. As has been made clear today by cases from across the country, to which I could add a great many from my own constituency, we are talking here not about minor snagging issues but about major defects, whether that be in relation to the fabric of the building, unfinished fittings, or faults with utilities.

The fundamental reason why standards remain too low is simple: the housing market is broken and the planning system is in crisis. As the right hon. Member for Rayleigh and Wickford (Mr Francois) argued, the housing market does not have sufficient diversity of supply, and it is not one in which—aside from a minority of homes at the very top end of the market—quality of product is rewarded by price. A decade of planning deregulation has exacerbated that situation, and the relaxation of permitted development is the most egregious example of decisions taken by this Conservative Government that will increase the amount of substandard housing being delivered across the country, with all the negative impacts on health and life chances that flow from that. For all the rhetoric about beauty and the various initiatives announced in the wake of the Building Better, Building Beautiful commission, the present system still overwhelmingly produces, as extensive analysis by the Place Alliance has shown, “mediocre” or “poor” outcomes when it comes to build quality and design.

We of course must robustly challenge developers and house builders to improve their performance, and call out those choosing not to build better-quality housing or using the planning appeals process to force through schemes with the lowest design quality, but there is much more that the Government could do to drive up standards. The establishment of the new homes ombudsman is of course welcome, although the Minister will know the concerns that Opposition Members have about the scheme’s membership. Likewise, we welcome the publication of the new homes quality code. However, given its nature and the fact that it relies on compliance with national standards that currently, I argue, fall far short, we have little confidence that it will lead to the needed step change in developer behaviour. The fact is that until the Government act to ensure that we have a planning system fit for purpose and make greater progress on diversifying the housing industry and delivering a marked increase in output, including in terms of genuinely affordable homes, the numbers seeking redress for serious defects are unlikely to fall significantly.

I turn next to the question of how we ensure that the construction of new homes creates sustainable and thriving communities. As things stand, far too many new build developments are not being delivered with the necessary key amenities and social and physical infrastructure to provide for such communities, and we have heard a great many examples this morning. That is because the present housing and planning framework is simply not conducive to effective place making. Of course, that is not a new phenomenon—indeed, it was remarked upon as far back as the 2007 Callcutt review. But the problem has become more acute in recent years, as a direct result of this Government’s commitment to deregulating the planning system, with the relaxation of permitted development rights in particular preventing councils—the skills, morale and capacity of whose planning departments are at an all-time low after a decade of budget cuts—from co-ordinating development or planning vital infrastructure and services.

The situation is having a direct impact on the provision of environmentally sustainable development—for example, in terms of the relationship between relatively inaccessible development sites and rates of sustainable transport use, or buildings that are constructed on sites without due regard to climate resilience. Again, the fundamental problem is a development model that is geared primarily towards the wants of developers, as opposed to one whose primary purpose is securing what is in the public interest.

When it comes to enabling effective place making, the Government must, as a minimum, rescind the damaging relaxation of permitted development rights and return those powers to local government. Ministers should then turn their attention to what more the Government must do to encourage the creation of thriving communities that support the health and wellbeing of their residents, not least by implementing comprehensive national housing standards so that developers—particularly the volume housebuilders—have no choice but to deliver in core place making.

Lastly, turning to whether those people buying new homes are getting a fair deal, the answer in far too many cases is clearly no, particularly for leaseholders. That is most obvious in the topical issue of ground rents for new leasehold homes. The House will know that the Opposition welcome the Leasehold Reform (Ground Rent) Bill but remain of the view that onerous ground rents must be tackled for existing long residential leases, not just new homes, and we urge the Government once again to reconsider their position on the matter.

With regard to existing long residential leases, we welcome the commitment given by Taylor Wimpey to the Competition and Markets Authority to remove onerous ground rent terms from its existing contracts. The imposition of those terms was wholly unjustified, and it is obviously right that the relevant clauses will be removed. Other developers and freehold investors must also do the right thing and abandon escalation clauses in their leasehold contracts. When he responds, I would welcome the Minister making it clear, for the record, that that is what the Government now expect them to do.

However, the issue of ground rents is not the only way in which those buying new leasehold homes are getting a bad deal. There are a range of issues, from soaring service charges to the unregulated nature of managing agents, that all point to the need not only for measures to address specific problems, but for wider leasehold reform and reform of the current framework for resident control of estate management—issues that I have no doubt Ministers and I will return to on many future occasions.

On protecting the owners of new homes from abuse and poor service at the hands of disreputable management companies, I ask the Minister to tell the House whether the Government intend to implement the recommendations of the regulation of property agents working group, chaired by the noble Lord Best. What progress has been made on that, given that the final report was published back in July 2019?

To conclude, this has been a valuable debate and a welcome opportunity to hear the concerns of hon. Members from across the House regarding new homes. However, it is taking place after almost 12 years of Conservative-led Government, with numerous changes to housing and planning legislation in that time. Yet when it comes to new homes, the outcomes for people and communities, on the whole, have not only not improved but noticeably deteriorated in a number of key areas.

It is self-evident that more must be done to drive up quality and design standards across the industry, to enable and support more effective place making, and to ensure that those buying new homes get a fair deal. I look forward to hearing from the Minister, not least in relation to the planning legislation that we are told the Government remain committed to introducing and on what the Government will do differently to ensure that real progress is made on these objectives.

[Mr Clive Betts (in the Chair)]

I call the Minister. If he could allow a brief period at the end for the mover of the motion to wind up, that would be appreciated.

Affordable Housing: Planning Reform

Matthew Pennycook Excerpts

Tuesday 7th December 2021 Westminster Hall

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

It is a pleasure, as always, to serve under your chairmanship, Dr Huq, just as it is to respond to what has been an extremely thoughtful and well-informed discussion. I congratulate the hon. Member for St Ives (Derek Thomas) on securing this important debate, and on the considered way in which he opened it. He spoke with great clarity and persuasiveness about the severe housing pressures in his corner of England—pressures that, as he made clear, have been exacerbated by the pandemic—and he set out a number of interesting proposals to address them, many of which warrant further consideration.

When it comes to second and holiday home ownership in particular, we very much agree that more needs to be done to ensure that local first-time buyers get priority access to new homes for market sale, and that local people who are not in a position to buy or to secure social housing can access affordable private rentals, rather than those homes being used by landlords exclusively as short or holiday lets.

As an aside, I very much welcome the fact that there is an energetic all-party group on the short lets sector, because the regulatory balance in this area is delicate and needs to be approached sensibly, without party political controversy. If the Minister has time, I hope that he might outline whether the Government have any plans to better regulate the short-term platforms spoken about by many in this debate.

I strongly commend the detailed “First Homes not Second Homes” proposals set out today by my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard). I know the painstaking work he has been doing, as have Councillor Jayne Kirkham, Councillor Kate Ewert and others, to ensure that local people in Devon and Cornwall are not priced out of their local communities. I hope that the Minister will give those proposals serious consideration.

More generally, the hon. Member for St Ives was absolutely right to have used this debate to make the case, on behalf of his constituents, for focusing on delivering the right quantity of new housing in the right places at prices that local people can afford. It was implicit in his remarks that that should be done in a way that secures buy-in from existing local communities. I think those sentiments were shared widely by Members on both sides of the Chamber. Where he and I differ is in the belief that the means of achieving that vision are the flawed proposals outlined in the Government’s August 2020 White Paper for reform of the planning system—assuming that those proposals eventually emerge in some recognisable form from the review initiated by the Secretary of State following his appointment in September.

I will use what remains of my time to pick up on the two main themes of the debate—availability and affordability of housing—but also to draw out the third element, which is what the public’s role in the planning process should be. When it comes to the availability of housing, all Members who have spoken today have made it clear that there is widespread agreement on the need to accelerate the delivery of new housing across the country.

While the Opposition do not deny that the existing planning framework has its problems and there is an obvious case for reform, there is scant evidence that it is the primary cause of supply constraints. Even with all the caveats that must be considered, the statistics make it clear that the total number of units granted planning consent each year has consistently outstripped the rate of construction over the past decade, and the number of un-built permissions is highest in the regions with highest demand. Amazingly, London, of all places, where housing pressures are acute—I know this from my constituency caseload, which mirrors the situation set out by my hon. Friend the Member for Vauxhall (Florence Eshalomi)—has the largest volume of unused consents. A report by the consultancy BuiltPlace suggests that our capital has as much as 8.1 years of supply approved, and yet unused.

Instead of obsessing about supply side reform, the Government would do well to focus, in the first instance, on cracking down on land banking and speculative planning, and consider what might be done to incentivise or compel developers—a point made by my hon. Friend the Member for York Central (Rachael Maskell)—to build out the permissions they have acquired.

When it comes to housing affordability, we really must get away from the over-simplistic notion that ramping up the supply of new housing will fully resolve the affordability crisis affecting many parts of the country. That is a theme that has re-emerged time and time again. Even if the Government’s target of 300,000 new houses a year were to be met—that is a very big if, given that completions in 2020-21 stood at just over 216,000—the impact on prices would be relatively small, and it would be felt only in the medium term.

Prior to the pandemic, there were a million more houses in England than there were households; that surplus has increased over recent decades and continues to grow, at the same time as prices continue to rise. Put simply, increasing home ownership—and boosting home ownership rates among the young, in particular—is as much about the affordability criteria and who can buy any new housing that becomes available as it is about overall deficiencies in supply. Instead of obsessing about supply side reform, the Government should look at how lending can be better targeted towards first-time buyers, so that they, and not just those who already have large amounts of equity, can purchase new homes to live in. As my hon. Friends the Members for York Central, for Vauxhall, for Plymouth, Sutton and Devonport, and for Bolton South East (Yasmin Qureshi) have said, we need better support for those who simply cannot buy, such as greater protection for private renters and action to reverse the sharp decline in social housing provision over recent years.

A key point, which has been implicit in today’s contributions but not brought expressly to the surface, is the role of local people and their priorities in the planning process. It is not disputed that there is an issue that needs to be confronted in terms of England’s discretionary planning system, but the solution to the problems of housing availability and affordability is not to silence communities and hand control of planning to development boards appointed by Ministers in Whitehall. As much as some rather offensively like to brand them in this way, most people in England are not die-hard nimbys, and that is why nine in 10 planning applications are approved.

What local people want, and what they should retain, is a say over how their areas are developed and a right to challenge inappropriate or harmful proposals that they do not believe will help to sustain balanced communities or, as the hon. Member for Bolsover (Mark Fletcher) remarked, provide the necessary infrastructure and amenity to thrive. Instead of attempting to reduce the public’s involvement or remove them from the planning process entirely, the Government should concentrate on how the system can be reformed to ensure that more developers bring forward proposals that significantly enhance local areas for existing communities, as well as for newcomers. That will incentivise local people to say yes with greater frequency.

As things stand, we have no idea whether proposals to reform the planning system will re-emerge from the review that the Secretary of State commissioned and, if they do, what form they will take. If a Bill is introduced next year, we hope that it will be the product of genuine reflection on the criticisms levelled at the White Paper by Members from all parts of the House. We hope that rather than approaching the planning system as so much red tape that needs to be swept aside, the Government will seek to make the current system more reflective, rational, transparent and democratic, and better resourced, putting communities at the heart of good place making that delivers high-quality, zero-carbon affordable new homes in the places where they are so desperately needed. As the hon. Member for Strangford (Jim Shannon) said powerfully, the housing crisis is, at the end of the day, not about numbers or units; it is about how we build the homes that people and families need so that they can flourish.

Building Safety Bill

Matthew Pennycook Excerpts

2nd reading
Wednesday 21st July 2021 Commons Chamber

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

I very much welcome the fact that this House is acting to address the systemic problems identified in the Hackitt review. I also welcome a number of specific measures in the Bill—for example, the new standards proposed for product safety and for professionals involved in the design and construction of buildings.

What I cannot welcome and what I find particularly objectionable, given what so many have faced over recent years, is the financial cost this Bill will impose on leaseholders if left unamended. That imposition will be felt in part as a result of provisions set out on the face of the Bill. Whether it is the direct cost of the proposed building safety charge or the costs of duties imposed on principal accountable persons that will inevitably be passed on, this Bill will see leaseholders pay out billions of pounds over the coming years to finance the new regime it establishes. Imposing charges of that magnitude on already hard-pressed leaseholders cannot be right, and the Bill in my view needs to be amended to ensure a more equitable apportionment of the costs of the new regime.

This Bill will also impose costs on leaseholders as a result of what it does not contain. In his opening remarks, the Secretary of State cited the extension of the Defective Premises Act 1972, the limitation period changes and the provisions in the Bill that require landlords to take reasonable steps to recover remediation costs, but he knows as well as I do that these measures will only offer limited protection at best.

What the Bill singularly fails to do, despite, as others have said, the perfectly clear indications given by Ministers during the passage of the Fire Safety Bill that this was the legislative vehicle by which to do it, is to meaningfully protect all affected leaseholders from the costs of remediating historical cladding and non-cladding defects and associated secondary costs, irrespective of circumstance. It must be overhauled so that it does, because if not now, then when do we act to protect all those caught up in this crisis, and if not by this piece of legislation, then what other?

I have no intention of voting against the principle of the Bill today. We need a version of it on the statute book as soon as possible. But I say to the Secretary of State very plainly that without amendments to guarantee that all leaseholders are fully protected, he will not get this Bill through without a fight.

The very fact that we are legislating for a radical overhaul of building regulations and fire safety highlights just how flawed the present regime is. We cannot surely, in good conscience, ask any blameless leaseholder to pay to make good what is, after all, a failure of Government-designed regulation and of industry practice. So I urge the Government to work with Members from across the House to ensure that, come Third Reading, this Bill does right by each and every one of the victims of the building safety scandal.