Oral Answers to Questions

Matthew Pennycook Excerpts

Monday 14th June 2021 Commons Chamber

[Robert Jenrick]

My hon. Friend raises an important point. We want to see cities such as Nottingham have the investment they deserve to build more homes and to tackle the issues they face. We see having good-quality housing stock in cities such as Nottingham as a crucial part of levelling up and spreading prosperity. That is one of the reasons why we changed the local housing need formula to place a much greater emphasis on smaller cities such as Nottingham.

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

As a result of delays in processing applications to the building safety fund, increasing numbers of eligible developments in my constituency are finding themselves subject to soaring building insurance renewal costs. Will the Government finally accept that they need to step in and resolve this problem with the industry as a matter of urgency?

[Robert Jenrick]

As a matter of fact, for ACM buildings within Greenwich and Woolwich, of the 23 that have registered, 21 have completed remediation, one building has been removed and one building has started work. For buildings with applications to the building safety fund, of the 94 registrations made, 31 have been confirmed as eligible, 27 have been assessed and 12 have been withdrawn. So great progress is being made. I am working with the insurance industry, and we should ensure that it brings forward market proposals, not simply have the Exchequer step in and subsidise it.

Fire Safety Bill

Matthew Pennycook Excerpts

Consideration of Lords message
Tuesday 27th April 2021 Commons Chamber

[Stephen McPartland (Stevenage) (Con) [V]]

It is a pleasure to be able to speak in this debate.

It is unfortunate that this is the third time the House of Lords has felt it necessary to return this Bill to the House of Commons. That is because their lordships, like many MPs across the House, feel that the Bill cannot progress without some form of protection for leaseholders. It completely astonishes me that people in government cannot hear the screams of pain of leaseholders begging for help—people who are going bankrupt and people who are being hit with high insurance premiums. We were told only last week of an insurance premium for a building that was £11,963 last year but £242,400 this year. People are being hit with bills of £6,000 each with seven days to pay them and no recourse to help. With waking watches, there are interim bills that are going through the roof. Leaseholders cannot pay this; they cannot afford this. The reality is that these buildings will not be made safe by transferring the financial and legal liability on to leaseholders. Leaseholders do not have the funds to fix it. As my hon. Friend the Member for Southampton, Itchen (Royston Smith) said, we, leaseholders and leaseholders’ groups do not want the taxpayer to pay; we want the taxpayer to provide a safety net to help. We believe that those responsible should pay—nobody else.

Nobody wants this Bill to fail. We are nearly four years on from Grenfell. The Minister mentioned Grenfell in his opening remarks. I would like to read him a statement that has been issued by Grenfell United:

“The fire safety bill is back in the commons. Government is using the excuse that the amendment will delay Grenfell recommendations. The amendment is to protect leaseholders from charges. The FSB is separate & it is wrong to claim support of it damages recommendations. Using Grenfell Recommendations to justify government’s indifference is deeply upsetting for us and shows they’d rather protect the corporates responsible from paying for the mess they created. Our request is simple: implement Grenfell recommendations make homes safe & protect lease holders from financial ruin. Nearly 4 years since Grenfell and yet not a single piece of legislation has been passed. Homes have to be made safe this is a basic human right. We ask all MPs that committed to ensuring Grenfell 2 could not happen to do the right thing today by us and the thousands of leaseholders effected.”

Grenfell United and the people affected there have spoken. Leaseholders up and down the country are speaking. Our constituents are speaking and Members of Parliament are hearing them. The Bishop of St Albans has tabled an amendment to try to provide the Government with the opportunity of the time and space to come forward with a compromise. I urge the Government to compromise and bring forward an amendment in the House of Lords later today to help support leaseholders.

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

I am extremely grateful for the opportunity to speak so early in this important debate. It is a pleasure to follow the hon. Member for Stevenage (Stephen McPartland). I thank their lordships for the tenacity and perseverance they have shown over many months in standing up for all the blameless leaseholders affected by the cladding crisis, including the many thousands who live in one of the more than 70 affected buildings in my constituency.

In seeking last week to persuade their lordships to cease insisting on amendments designed to protect all leaseholders from remediation costs, the Minister for Building Safety argued once again that such provision is unnecessary and that to continue to seek to amend the Bill in such a way would risk its passage in this Session, could increase fire safety risks and might “ultimately cost lives”. Yet it is the very fact that this crisis is already ruining countless lives that led their lordships to insist once again that this place reconsider, and they were entirely right to do so.

[Stephen Timms]

I agree with what my hon. Friend says. I wonder whether he has visited claddingscandalmap.co.uk, which maps 450 buildings with 60,000 homes affected by this scandal. It also shows the Members of this House who are voting to force leaseholders to pay towards the costs.

[Matthew Pennycook]

I thank my right hon. Friend for that intervention. I have seen the site in question, and it brings home—I know he shares my feelings, as his constituency is so close to mine—the fact that certain parts of the country with high numbers of new build properties, including constituencies such as ours, are particularly badly affected. I have tens of thousands of constituents affected.

As welcome as they were, the five-point plan and the additional grant funding that the Government announced on 10 February are still only a partial solution to the cladding crisis, and they consciously and deliberately leave a significant proportion of leaseholders exposed to costs they cannot possibly hope to bear. For significant numbers of leaseholders, that exposure is not some theoretical future risk, but a reality that they are already confronting.

To take just one example, I had a lengthy exchange yesterday with the right-to- manage directors of a small 24-unit building in east Greenwich, Blenheim Court, which requires urgent remediation and is under 18 metres in height. As things stand, not only are the leaseholders in question living with the punishing uncertainty of not knowing if or when their building might be issued with a forced loan of the kind the Government propose, but because they do not have the funds to commence remediation works, they are struggling with myriad secondary costs, including a soaring building insurance premium, which has led their service charges to increase from about £2,500 a year per flat to more than £130,000—I have seen the invoice, and the figure is correct—and there is a very real risk of mass defaults as a result.

Every week that this House fails to act, more leaseholders are placed in similar situations and put at risk of negative equity and bankruptcy. I have absolutely no doubt that the Government will ultimately be forced to bring forward a more comprehensive solution that protects all affected leaseholders from the costs of fixing both cladding and non-cladding building safety defects. Seeking to pass the costs on to even a proportion of them will almost certainly mean that the works simply do not get done. Unless this House is content to follow that path and see many more lives needlessly destroyed in the interim, it must act today and take decisive steps towards resolving this crisis.

I urge Ministers, even at this late stage, to honour their commitments previously given from the Dispatch Box and come forward with a sensible concession. If they do not, I urge MPs from across the House to protect blameless leaseholders and support the amendment in the name of the Lord Bishop of St Albans in the Division Lobby shortly.

[Dr Liam Fox (North Somerset) (Con)]

I rise to speak to the amendments in my name. I am grateful for the support from all parties for them. I thank my hon. Friends the Members for Stevenage (Stephen McPartland) and for Southampton, Itchen (Royston Smith) for the work they have done on this issue.

We have to find a way forward. We cannot continue this sterile ping-pong between the two Houses of Parliament. We need an actual plan, and I believe that my amendments set out a workable way that the Government can take this issue forward.

There are three issues that need to be dealt with, the first of which is forfeiture. The idea that people’s properties can be repossessed because they have been unable to pay cladding costs, which are unjust in the first place, is abhorrent. We need to reform leasehold legislation to prevent that from happening.

Secondly, we need a proper plan for apportionment of costs, as I set out in the appropriate persons for fire safety order costs amendment. That means that taxpayers are not asked to write a blank cheque, and nor will those with responsibility have the ability to collapse a company so that they can avoid costs at a future date. We have got to ensure that the “polluter pays” principle is applied in this case.

Unsafe Cladding: Protecting Tenants and Leaseholders

Matthew Pennycook Excerpts

Monday 1st February 2021 Commons Chamber

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

Strip away all the technical complexity, and the cladding crisis has always been about two fundamental issues: how can we identify and quickly make safe dangerous buildings; and who is going to pay for them? Both issues haunt those affected by this crisis, but in the long term it is the issue of liability that is in many ways the more terrifying, because leaseholders fear that it is they who will ultimately be forced by the Government to pay the lion’s share of a bill that is projected to rise to over £16 billion. They have good reason to be alarmed, because although we may not know the detail, the broad contours of the proposals developed by Michael Wade that Ministers are considering ahead of the Budget are an open secret—minus an unknown, but almost certainly tokenistic, annual contribution from developers. He recommends that remediation is funded up front by long-term loans attached to individual sites, with the building owner or responsible person then recouping that loan from its leaseholders over a period of decades. In the brief time that I have, I want to draw the attention of the House to what that would mean in practice. First, unless leaseholders were deliberately to be protected from any form of repayment until the point of sale, they would be hit by significant service charge increases.

Even assuming an interest-only repayment model with modest interest rates—say 1% or 1.5%—on remedial works bills at the lower end of the scale, say £30,000, leaseholders would still be looking at an extra £60 to £100, or perhaps more, on their monthly bills, depending on the length of the loan period. What on earth makes Ministers think that leaseholders can manage such costs, and what do they think those additional charges will do to mortgage affordability calculations?

Secondly, the attachment of a loan to a site will immediately devalue the properties within it, instantly creating a two-tier property system and placing a significant proportion of affected leaseholders, particularly in areas of lower property values, at risk of negative equity and bankruptcy. Who is ever going to purchase—willingly—a flat with one of those loans attached, at least unless the leaseholder discounts their total liability from the asking price, with all the consequences that that implies for the housing market and mortgage lenders? The fact that Ministers are even contemplating a proposal of that kind is utterly reprehensible, given the commitments made by many Secretaries of State and Ministers of State at the Dispatch Box that blameless leaseholders in privately owned blocks would be fully protected from cladding costs in all circumstances. If the Government plough ahead with Mr Wade’s recommendation or any variant that punishes leaseholders they will make a colossal mistake.

There are other solutions that can provide up-front funding to accelerate the pace of remediation and that would protect the general taxpayer as well as leaseholders. All that is required is that Ministers give them serious consideration and, more importantly, that they steel themselves finally to confront the vested interests that created this problem in the first place.

Leaseholders and Cladding: Greenwich and Woolwich

Matthew Pennycook Excerpts

Monday 16th November 2020 Commons Chamber

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

May I begin by thanking you, Mr Deputy Speaker, for granting the debate, and the Minister for taking time from his schedule to respond?

The debate concerns a subject of the utmost important to thousands, if not tens of thousands, of leaseholders in my south-east London constituency, and to hundreds of thousands more people across the country. For those who have not followed the twists and turns of this scandal since 2017, it is easy to forget just how staggering the scale of the cladding and mortgage crisis truly is. Its impact on an urban constituency of the kind that I represent has been, and continues to be, enormous. Within Greenwich and Woolwich, the external wall systems of more than 20 privately owned buildings across seven developments have been found to have aluminium composite material cladding of the type found on Grenfell Tower. The external wall systems of a further 59 buildings have been found to contain some other kind of combustible material, and many of those also have significant building safety defects, ranging from non-existent fire stopping to defective compartmentalisation. Thousands of leaseholders in countless other buildings locally—many with no defects whatever—remain mortgage prisoners or have had to absorb the significant costs of intrusive inspections to gain an EWS1 form.

I would be the first to concede that there are no simple or straightforward answers to this crisis, but based on my involvement in scores of cases over recent years, of which there are far too many to cover individually, there are some obvious things that the Government can and should do immediately to better support leaseholders, as well as a pressing need to provide greater clarity on the fundamental issue of leaseholder liability. In my remarks, I intend to touch on three specific areas where I believe decisive Government action is required—namely, public funding, buildings insurance and mortgages—before addressing that more fundamental issue of leaseholder liability.

Turning first to Government funding, while leaseholders will not easily forget the fact that previous Ministers had to be cajoled over several years into making various funding commitments, the public funding that the Government have made available for both ACM and non-ACM remediation is welcome, but further changes will need to be made, and I will speak briefly to three.

It is obvious that the deadlines involved in the building safety fund will have to be revised. The latest statistics released by the Department make clear that only 139 applications have been processed since 31 July—an average of just 17 a week. Even if the process accelerates markedly in the weeks ahead, there is no chance that more than a tiny proportion of eligible projects will have contracts in place by the 31 December deadline, given that the average time taken from the release of funds to having one in place is between 25 and 30 weeks. In responding, can the Minister confirm that he accepts that all the deadlines in the fund will have to be pushed back, including the 31 December deadline and the March deadline for people being on the ground and in place? When can this House expect an update to that effect?

The size of the building safety fund will clearly have to increase. It is well known that the Government’s own estimate is that the total cost of remediating non-ACM buildings will be in the order of £3 billion to £3.5 billion. The current size of the fund is only large enough to cover around 600 buildings, so even if a significant proportion of the 2,784 applications made to date are deemed ineligible or are rejected, it is patently obvious that the £1 billion of funding that has been allocated will still not be enough.

I appreciate that there are good reasons for the Government not to rush to announce additional funding, and I also trust that the Department is trying to make the funds that do exist go further by doing everything possible to convince developers to contribute to remedial costs in ways that do not prejudice applications to it, but it surely cannot be the case, as it is at present, that some affected leaseholders in non-ACM buildings over 18 metres will receive support from the taxpayer while others will not. Again, I would be grateful if the Minister could assure me—I phrase this carefully in order that he might—that the Government have not ruled out additional public support for non-ACM remediation beyond the moneys already committed.

[Florence Eshalomi (Vauxhall) (Lab/Co-op)]

I thank my hon. Friend for securing this important debate on a big issue for my constituents in Vauxhall. On the funds that the Government have made available, does my hon. Friend think the Government should make provide funding for waking watch, for which, in some cases, constituents are being asked to pay in excess of £30,000 a month just to stay in their buildings? Without that, they would have to evacuate the building.

[Matthew Pennycook]

I thank my hon. Friend for that intervention. I agree that the costs of waking watch are absolutely staggering. Leaseholders are already paying those costs, as she makes clear, in a way that is financially unsustainable for many of them. I will pick up on that point later, not only in what I will say on the fund, but in talking about leaseholder liability and whether leaseholders are being protected in the way that has been suggested.

Finally, the scope of public funding more generally must also be revisited. It is Government guidance that is ultimately driving the need for remediation and it is simply not equitable that leaseholders in buildings over 18 metres in height, whether those buildings are covered in ACM or non-ACM cladding, are assisted by the state while those in buildings below that threshold are left to fend for themselves. The Minister must surely recognise that the Government cannot argue that height should not be the sole, or even the—

--- Later in debate ---

[Matthew Pennycook]

As I was saying, the Minister must surely recognise that the Government cannot argue that height should not be the sole, or even the main, determinant of investigations but then make height the main criterion for access to public funding. Nor is it equitable, as my hon. Friend the Member for Vauxhall (Florence Eshalomi) touched on, that leaseholders continue to bear the exorbitant costs, the median of which in London stands at £256 a month per household, of interim fire safety measures either through service charge increases or the draining of sinking funds.

[Elliot Colburn (Carshalton and Wallington) (Con)]

I congratulate the hon. Member on securing this important Adjournment debate. I have a building under 18 metres in Carshalton and Wallington that is similarly affected. Does he agree that it is not the leaseholder’s fault that they are living in a building that has this cladding on it, and therefore any remediation that we offer has to accept that, and we need to support them through the process?

[Matthew Pennycook]

The hon. Member makes an excellent point, which I will pick up on towards the end of my remarks. To my mind, either the Government are responsible, in terms of defective regulation over many years, or builders are responsible, in terms of defective buildings. I cannot accept that the leaseholder, who of all the parties involved bears the least responsibility, is potentially being landed with the costs. The leaseholders I represent cannot understand how that potential still hangs over their heads.

I believe that eligibility for the building safety fund should be overhauled to cover buildings between 11 and 18 metres in height. The Government should re-open the private sector remediation fund for ACM-clad buildings in the same height category, and secondary costs as they relate to any affected building should be covered. I would be grateful if the Minister could indicate whether the Government are at least willing to consider those changes.

Buildings insurance is a growing problem, and the Government must step in to help to find a solution. With the insurance industry moving to limit its exposure on buildings covered in combustible materials of any kind, leaseholders in my constituency are finding it increasingly difficult to keep their buildings insured or, if they are able to do so, they are having to absorb soaring premium costs.

The case of Blenheim Court, a 24-unit development in east Greenwich, is worth citing as it is a good example of what is happening on the ground. Having secured several extensions to its policy as the right to manage sought to progress plans for remedial works, the insurer in question made it clear that the risk involved no longer fell within its underwriting appetite and the leaseholders faced the prospect of seeing their building uninsured, with the heightened risk of repossession that that entailed. Thankfully, at the eleventh hour they secured a policy with a consortium, but at an eye-watering cost of £163,000 for just 12 months’ cover. With the cost of renewals on affected buildings increasing across the board, does the Minister accept that to protect leaseholders adequately the Government will ultimately have to support the insurance industry, in all likelihood by acting as an insurer of last resort, in bringing forward a temporary solution?

I could have had a whole Adjournment debate on the mortgage crisis alone, such is the scale of the problem it is causing across the country and for the housing market. For all the hopes originally invested in it—and let us be clear it was an initiative that the Government were involved in developing even if they decided to distance themselves prior to its announcement—it has been clear for some time that the external wall fire review process has not resolved the difficulties caused within the mortgage lending market through changes in Government building safety guidance.

The guidance is not sufficiently clear. Too many buildings have been brought within the scope of the process. The issues around professional indemnity insurance are too thorny to resolve, and the scale of the remediation challenge is far bigger than originally assumed. The problem cannot be resolved by industry alone—something that I hope the Government have also now accepted. I do not pretend to have the answer, but I would be grateful if the Minister could at least provide leaseholders with some reassurance that his Department is trying to devise a system that facilitates the valuation and sale of properties that have some fire risk or an unconfirmed external wall façade, and to ensure that all buildings can be surveyed within a reasonable timeframe.

There are many other issues I could cover—not least what more can be done to speed up the pace of remediation more generally—but decisive Government action in the three areas I have covered would go a long way to improving the situation for affected leaseholders in my constituency and around the country. However, even if each were to be resolved in short order, that would not entirely alleviate the concerns, because there remains an ambiguity on the fundamental issue of leaseholder liability.

Strip away all the complexity in this crisis and the fundamental questions have always been: how can we make buildings safe more quickly, and who is going to pay to clean up this mess? It has always been my firm view that it would be indefensible—I turn to the point made by the hon. Member for Carshalton and Wallington (Elliot Colburn)—to pass on to leaseholders even a fraction of the £15 billion that the Select Committee on Housing, Communities and Local Government estimates will be required to fully remediate all buildings over 18 metres and the unknown costs of remediating buildings between 11 and 18 metres. As I said earlier, of all the parties caught up in this scandal, leaseholders bear no responsibility whatsoever for it.

Leaving aside the fact that over the past three years countless leaseholders across the country have been hit with huge bills for interim fire safety costs and remediation, and that the Government have entirely failed to protect them, until a few months ago the Government’s stated position, repeated by successive Secretaries and Ministers of State from the Dispatch Box, had always been that leaseholders should be fully protected. The then Housing Minister, the hon. Member for North West Hampshire (Kit Malthouse), set out the position succinctly on 22 January last year, when he made it clear that the Government would

“ensure that leaseholders do not bear the cost of this situation in any circumstance.”—[Official Report, 22 January 2019; Vol. 653, c. 135.]

Fast-forward to 16 October this year, and, in response to a written question, the current Housing Minister stated only that the Government were looking to protect leaseholders from “unaffordable costs”, subsequently defined by one of his colleagues as anything short of bankruptcy. Likewise, in evidence to the Select Committee on 19 October, the Minister for Building Safety and Communities stated plainly that

“some costs would fall on leaseholders—they would not be protected from all costs”.

Hon. and right hon. Members, as well as leaseholders across the country, concluded that the Government’s position had changed, and they worried accordingly.

Today at departmental questions, in a response to a question from the Chair of the Select Committee, my hon. Friend the Member for Sheffield South East (Mr Betts), the Housing Minister argued that there had been no change of position and that the Government are “quite clear” that they “do not expect” and “do not want” leaseholders to bear the cost of remediation. If that is the case, why has Michael Wade been charged with

“rapidly identifying financing solutions that protect leaseholders”

not from costs entirely but from “unaffordable costs”, and why does the draft Building Safety Bill, a legislative vehicle that should have been used to properly protect leaseholders in the way Ministers promised repeatedly from the Dispatch Box, seek instead to render leaseholders liable for defects, irrespective of the terms of their individual leases?

As I stand here this evening, not only are leaseholders more confused than ever about the Government’s position on their liability, but even if it remains the case that—again, I quote the Minister’s words earlier—the Government “do not expect” and “do not want” leaseholders to bear the cost of remediation, the Government actually have to take steps to ensure that that is the case.

Perhaps I am being unduly cynical, but I and leaseholders in my constituency fear that, confronted with a situation where, in all likelihood, more than half the country’s stock of buildings over 18 metres have had or still have some kind of building safety defect that requires fixing, and unprepared on the one hand to openly admit that this crisis is the result of profound regulatory failure under successive Governments but on the other hand not willing to go after developers more assertively on the grounds of mass non-compliance with the regulations in place over many years, the Government have decided that the only way through this morass is for them to cover a small proportion of the costs, to encourage but not compel developers and building owners to bear some of the costs, and to allow the latter to pass on the remaining costs to leaseholders using the mechanisms that the Government will have afforded them to do so.

I truly hope that I am wrong, and if that is the case the Minister has a perfect opportunity this evening to make clear precisely why, but if leaseholders did ultimately end up picking up the lion’s share of the bill, not only would it be an outrage but it would force untold numbers of leaseholders—even if the blow was limited by some form of cap or a long-term payment system—into financial hardship and, in many cases, ruin. For many leaseholders, all but the most superficial costs are likely to be unaffordable.

I will finish by saying this: any Member who has spent any time listening to the testimonies of leaseholders affected by this scandal will know that it is hard to overstate the abject misery it has caused. There is, of course, plenty of anger, but the overriding feeling on the part of leaseholders I have spoken to over the years is one of utter desperation—a feeling driven by the belief not only that they are trapped in their homes physically, mentally and financially, but that they have been all but abandoned by their Government. I hope that in his response the Minister disproves that belief and makes it clear that the people at the centre of this crisis can expect not just comforting words in this Chamber, but action to remediate their buildings, and action that will afford them more protection financially than they look likely to receive at present.

[The Minister for Housing (Christopher Pincher)]

I congratulate the hon. Member for Greenwich and Woolwich (Matthew Pennycook) on securing this important debate on a matter of significant importance not only to him and his constituency but, as we have heard, to the hon. Member for Vauxhall (Florence Eshalomi) and my hon. Friend the Member for Carshalton and Wallington (Elliot Colburn), and to my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill) and many other Members across the House. It is a national concern, and I pay tribute to the hon. Member for Greenwich and Woolwich for his remarks and his doughty campaign on behalf of his constituents, and I will try to address the points he raised during the course of my remarks.

First, however, I will provide some context. We established the building safety programme within days of the Grenfell Tower fire, and its aim has always been to ensure that residents of high-rise blocks are safe now and in the future. Our intention has been clear from the outset: that unsafe aluminium composite material of the type found on Grenfell Tower and other dangerous cladding must be removed from high-rise residential buildings. It is therefore our priority to ensure unsafe ACM cladding is removed and replaced swiftly, protecting leaseholders from unaffordable costs.

We want to see the completion of remedial works by the end of 2021, as the Select Committee report recommends. While many responsible building owners and developers—including Pemberstone, Barratt Developments, Legal & General, Mace, Peabody and Aberdeen Standard Investments—have taken action to remediate and fund the remediation of their buildings, some have not. Too many building owners and managing agents in the private sector have been too slow in getting remediation work started, and that is why the Government have intervened with the funding and the specialist support that we have provided. We will not tolerate any further delays. Where building owners are failing to make acceptable progress, those responsible should expect local authorities and fire and rescue services to take tougher enforcement action.

At the end of October, of the 460 identified high-rise buildings with ACM cladding, 363 buildings—that is 79% —have either completed remediation or had their ACM cladding systems removed. If we include the social housing sector, that figure rises to 97%.

We recognise that in London there is a disproportionate number of unsafe cladded high-rise buildings, so we have convened two London summits since September, bringing together the Mayor, key local authorities—including Greenwich—and the London Fire Brigade, to agree an action plan for accelerating the remediation of buildings, and my right hon. Friend the Secretary of State and my noble friend Lord Greenhalgh have been instrumental in that process.

Overall, the Government have set aside, as the House will know, £1.6 billion in funding. That covers the remediation not only of ACM cladding but of other types of unsafe cladding from high-rise residential buildings in the private and social housing sectors, and we have been guided in our approach by the recommendations of the Hackitt report. We made this money available to support the remediation of unsafe cladding, and a large proportion of that support will protect leaseholders from those costs.

We recognise that wider remediation costs will need to be met to ensure the safety of existing blocks of flats. However, as I am sure the House will accept, public funding does not absolve the industry from taking responsibility for any failures that led to unsafe cladding materials being put on these buildings in the first place. That is why we expect developers, investors and building owners who have the means to pay to take responsibility and cover the costs of remediation themselves, without passing on costs to leaseholders. We have heard that some are doing that, and they are to be commended, and others must follow their lead. That is the case for more than 50% of privately owned high-rise residential buildings with unsafe ACM cladding, and we expect developers and owners to step up in similar ways for other kinds of unsafe cladding.

We have always acknowledged that materials other than ACM are of concern, and we have been providing advice on their removal to building owners since 2017. The highest priority has, as we have heard, been the removal of the type of ACM cladding used on Grenfell Tower, because it poses the most severe safety risk, but other unsafe cladding materials must also be removed. As such, and for those cases where costs present a financial barrier to the pace of remediation, we have taken action. In March, we announced that additional £1 billion of funding, through the building safety fund, for the remediation of unsafe non-ACM cladding in the social and private residential sectors. The building safety fund is available for high-rise buildings with unsafe non-ACM cladding, such as those types of high-pressure laminate. We are already working to advance eligible applications to the fund to the next stage so that we can begin the remediation process as quickly as possible. The hon. Member for Greenwich and Woolwich suggested that there were very few processed applications, but I can assure him that there are many more than just a few. I look forward to presenting a fuller report, so that by the end of March 2021 we will see that that funding has been allocated in full, as we promised.

Although this funding is a much-needed step to make homes safer, we still expect a significant proportion of the remediation of unsafe non-ACM cladding to be provided by those responsible for the original work.

[Matthew Pennycook]

I thank the Minister for the detail he has provided in his response. I should make it clear that the statistics are his Department’s own published statistics, so if he has different figures, I urge him to bring those forward in the monthly publication so that we can see them. I am putting figures to him that his own Department has published. On developer liability, the Minister has again said “we expect”. I have sat in this Chamber and heard successive Ministers say that they “expect” developers and building owners to come forward, that it is morally right that they do so and that nothing is being taken off the table, but here we are in the same position many months if not years later. What are the Government actually going to do to compel developers and building owners to contribute more?

[Christopher Pincher]

I assure the hon. Gentleman that we have made significant progress with the processing of the applications. I look forward in due course—I hope it will be soon—to giving him better news than he supposes may be out there.

We have been clear that it is unacceptable for leaseholders to have to worry about cladding remediation costs to fix safety defects in their buildings that they did not cause. That is why—I say it again—where developers or building owners have been unable or unwilling to pay we have introduced funding schemes, providing that £1.6 billion of remediation to accelerate the pace of work and meet the costs of remediating the highest-risk and most expensive defects. We recognise that there will be wider works. We are accelerating work with leaseholders and the financial sector on solutions to deal with those wider works, and we believe that there will be a combination of options to deliver a solution—there will not be a quick fix, as the hon. Gentleman put it. I want to update the House and leaseholders on that set of options as soon as I can.

The hon. Gentleman also mentioned waking watch, as did the hon. Member for Vauxhall. I know that leaseholders have very significant concerns about the costs of interim measures, which have been heightened due to the covid-19 emergency. Waking watch is a short-term tool; it is no substitute for remediation. It is by targeting remediation funding where it is needed most—by removing and replacing dangerous cladding—that we can help make those homes safer more quickly and dispense with waking watches.

However, I recognise residents’ concerns about the costs of waking watch measures and the lack of transparency about those costs. That is why we have collected and published information on waking watches. The data will enable those who have commissioned waking watches to make comparisons and challenge providers about unreasonable costs. We have also identified, as a result of that work, that it can be cheaper to install alarm mechanisms rather than use waking watches. We will, of course, keep the situation under review.

Leaseholders and Cladding

Matthew Pennycook Excerpts

Wednesday 12th February 2020 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate my right hon. Friend the Member for Leeds Central (Hilary Benn) on securing this important debate and on his comprehensive overview of the problem.

In my constituency alone, more than 20 privately owned buildings across seven developments were found to have ACM—aluminium composite material—cladding. Far from meeting the Government’s target of remediating them all by June this year, work has been completed on only one, Babbage Point. Although work is well under way at two other sites, New Capital Quay and Greenwich Square, it has not even begun on the remaining four, not least because of the difficulties with the application process for the private sector remediation fund.

When it comes to cost, in two cases—City Peninsula and the Greenwich Millennium Village—the developers have done the right thing and committed to covering the full cost of the remedial works and the required interim fire safety measures. In the case of New Capital Quay, leaseholders are being fully protected from those costs because the National House Building Council accepted a claim to pay the cost in full following an investigation.

Those in other blocks, however, have not been so fortunate. At Babbage Point, the original contractor and building owner, Durkan, has strenuously avoided committing to covering the cost of the completed remedial works should its application to the fund be unsuccessful. It has passed on the full cost of 23 months of waking watch, which has been in place for so long only because it dragged its feet.

As we have heard, the cladding crisis now extends far beyond ACM cladding. My local authority has identified at least 24 buildings, and counting, with a type of HPL—high pressure laminate—cladding where leaseholders are likely to find themselves in protracted legal disputes between building owners and the original contractor. There are an unknown number of buildings that have serious issues with defective fire stopping and compartmentalisation, as in the Barratt Homes-constructed Royal Artillery Quays development. Again, leaseholders there are at risk of being hit with significant costs.

There are also an untold number of leaseholders in scores of local developments unable to sell their homes or remortgage because of the unintended impact of the guidance from the Ministry of Housing, Communities and Local Government. The Minister should know that, although the EWS1 process has worked in some cases, in many others it has not. I have cases where large mortgage providers have rejected the form outright and others where forms cannot even be issued because of a lack of indemnity insurance coverage.

It is clear that the steps taken to date have not even begun to address that set of interconnected problems. It is perhaps understandable that Ministers and their officials might be overwhelmed by a crisis that continues to grow in scale and complexity, and baulk at the potentially colossal drain on the public purse, but this crisis is not going to disappear. As we have said time and again, the Government have a responsibility to act decisively to fix it. Ministers must start by going beyond moral suasion and compel developers to do the right thing. In cases where that does not work, they must step in to expand the scope and amount of funding to remediate where necessary, and oversee a nationally co-ordinated response, so that nearly three years after Grenfell, we can finally get a grip on the issue and protect leaseholders, as they were promised in the wake of that tragedy.

Building Safety

Matthew Pennycook Excerpts

Monday 20th January 2020 Commons Chamber

[Robert Jenrick]

I have laid out today a very significant series of reforms—not least creating immediately the first regulator for building safety—and I have said that we will continue to work with leaseholders, such as the ones she represents, to ensure that cost is not a barrier to remediation. However, this is a complex challenge that will clearly take this country a very long time to work through.

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

The Secretary of State referenced the new industry-wide valuation process that was announced in December. Will he tell the House whether the Government have formally endorsed the new EWS1—external wall system—process? Have he or his officials had any evidence that it is working to resolve the problems that leaseholders in high-rise buildings face in selling or re-mortgaging their properties? If not, and if he has found any evidence that it is lacking, will he tell us what further clarification the consolidated advice note will provide in that area?

[Robert Jenrick]

I am grateful to the hon. Gentleman. He raised these issues with me in the summer and has contributed to our work since then. My officials and I have worked closely with lenders, UK Finance and RICS to reach this agreement. It is too early to say whether it has been successful yet—it has only been in place for a matter of weeks—but I am hopeful that it will provide a much simpler system for valuing buildings and getting people’s mortgages flowing in the way we all hope.