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.

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.