Building Safety Bill (Thirteenth sitting)

Mike Amesbury Excerpts

Thursday 21st October 2021 Public Bill Committees

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

It is a pleasure to have you back in the Chair and to serve under you, Mr Dowd.

The Government are committed to ensuring that leases reflect the duties and obligations placed on landlords and tenants to keep buildings safe, and that the costs associated with the regime are fair and transparent. Clause 120 implies terms relating to building safety into leases, so that both landlord and tenant have obligations associated with the new regime clearly set out in their leases. This cements the duties set out in other parts of the Bill.

Clause 120 also ensures that the landlord passes costs associated with the new regulatory regime, via the building safety charge, to leaseholders with long leases of seven years or more. The overriding principle behind the building safety charge is to give leaseholders further information about what they are paying for to keep the building safe and assurance that the manager of the building is charging reasonably. Without the building safety charge, many of these costs would be charged via a service charge. We are introducing this separate mechanism to deliver greater protection to leaseholders, ensuring that costs are transparent and reasonable. By introducing the building safety charge, the Government are ensuring that costs are clearly set out to leaseholders and that certain costs, such as the cost of enforcement against an accountable person, can never be recovered from leaseholders. In well-run buildings, leaseholders will likely see costs partially offset by a corresponding reduction in service charge costs.

Schedule 7 will enable the Government to set out certain obligations for the landlord to fulfil, including providing details of the building safety charge together with a summary of their rights and obligations to leaseholders. Schedule 7 will also give leaseholders the right to request further information about the charge, and they will be able make a written request for a summary of the relevant building safety costs. Once a summary has been obtained, the leaseholder can request more detailed accounts.

We expect that the protections included around the building safety charge will provide the necessary transparency to drive competition to reduce costs for leaseholders. Leaseholders will be able to challenge the costs associated with keeping a building safe in the same way as they can challenge the costs of unreasonable service charges—that is, through the first-tier tribunal.

Clause 120 is key to ensuring the smooth implementation of the new regulatory regime. Setting out further requirements in respect of the building safety charge in secondary legislation—for example, on the obligations of landlords, consultation requirements and excluded costs—ensures that the provisions remain relevant and responsive to changes in the duties of the accountable person or broader leasehold reform. Leasehold law is a highly technical policy area, and it would be inappropriate and counterproductive to include it in the Bill.

We wish to make it clear that remedial costs are not included in the building safety charge. This clause does not make leaseholders liable for the costs of remedial works. Whether or not leaseholders are liable for works is governed by the terms of their existing leases. Clause 120 is vital to ensure transparency on the costs of the new regime, empowering leaseholders to interrogate bills and hold their building owner to account.

[Mike Amesbury (Weaver Vale) (Lab)]

It is a pleasure to serve once again under your chairmanship, Mr Dowd.

I have a number of questions. The building safety charge has proved to be somewhat controversial among leaseholders, residents, tenants and cladding campaigners—the UK Cladding Action Group, the Leasehold Knowledge Partnership, the National Leasehold Campaign and so on. The Minister has mentioned that charges will be fair and transparent. What is the definition of fair and transparent? What is the Department’s assessment of what will be fair and transparent? Given that on 17, if not 18, occasions a promise was made not to put charges for historical remediation costs, which we will get on to in a moment, on to the shoulders of leaseholders, there is a real fear that there could be considerable interplay between the building safety charge, historical remediation costs, service charges and so forth. I would like the Minister to expand on that. Of course, many leaseholders over the past two weeks have had massive invoices arrive through the door for remedial costs relating to historical building safety defects. Some are going bankrupt, as I know he and Department officials will know.

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

Does my hon. Friend agree that the existing service charge system for too many leaseholders is opaque and inconsistent? They never know what they will be charged for and, more important, how much they will be charged in future quarters. Leaseholders need not only an improvement to the current service charge system but to be confident that any new charging system will be far better than the current one.

[Mike Amesbury]

My hon. Friend makes a powerful and pertinent point, which I am sure the Minister will respond to. I know that it has been a particular issue in shared ownership properties, particularly in London and the south-east. I look forward to the Minister’s response to the points that I and other Members have raised.

--- Later in debate ---

[Mike Amesbury]

I want to address a couple of points, for clarity. I thank the Minister for the explanation. Her Majesty’s official Opposition support commonholds and have argued for them for a long time. I am pleased to see the emerging consensus as we listen to stakeholders, whether the Leasehold Knowledge Partnership, the national leaseholder campaign or others in the housing sector. I have one question in relation to the Minister’s opening narrative. In commonhold, are building safety expenses on top of the building safety service charge?

[Eddie Hughes]

I completely understand. No, that is not separate; it is one of the items that would typically be covered by the building safety charge in other buildings. Exactly the same principle applies.

Question put and agreed to.

Clause 122 accordingly ordered to stand part of the Bill.

Clause 123

Interpretation of part 4

Question proposed, That the clause stand part of the Bill.

--- Later in debate ---

[Rachel Hopkins (Luton South) (Lab)]

The Minister raises a pertinent point for many leaseholders in my constituency relating to cases in which builders, companies or developers have folded since they built a building. Those companies may have been originally responsible for remediation costs. I seek reassurance from the Minister that the need in the guidance and any regulations to explore every avenue will cover subsequent builders who took on folded companies or the relevant buildings. Just because the landlord cannot find the original company, or the company no longer exists and so that avenue does not exist, that is not an excuse for bundling the costs on to leaseholders. Those concerns have been raised with me and we need reassurance. I hope we will get that in any regulations and guidance.

[Mike Amesbury]

I thank the Minister, and my hon. Friend the Member for Luton South for her contribution.

In principle, the clause seems to be a step forward, but in reality, it will hardwire into the Bill the injustice that thousands—indeed, millions—of people are familiar with: they are trapped in their properties, and the Bill will ensure that historical remediation falls on the shoulders of leaseholders. The Ministers and the Department have been in a difficult position because it looks as though the Treasury’s door has been closed to any further financial progress.

[Ian Byrne (Liverpool, West Derby) (Lab)]

Let me read out something to put in context what my hon. Friend says about hardwiring and what the clause does. Darren Matthews says:

“I am ruined. Shared owner (50% for £63,000) and in May was billed £101,500 for remedial works. Block 13.5m tall so doesn’t qualify for BSF but possibly new loan scheme that’ll take 161 years to repay. Madness!”

That is a perfect example of what we are talking about. The clause hardwires unfairness into the Bill. As my hon. Friend the Member for Luton South has just mentioned, many leaseholders will be in the same position as Mr Matthews. How can that be fair?

[Mike Amesbury]

I thank my hon. Friend for his powerful and insightful intervention. He mentions the case study of somebody who is trapped in this nightmare, which the Ministers and the Department are very familiar with. I will give the Minister another example from social media; it is 47 minutes old. Lucy Brown is a leaseholder trapped in this nightmare that we are, hopefully, collectively trying to resolve. She wrote:

“15 months in the BSF”—

that is, the building safety fund—

“application process. Our managing agent/FH”—

that is, the freeholder—

“won’t agree to the BSF terms (likely those requiring the FH guarantee the works be done to an acceptable standard). The joys of the leasehold system—you own nothing, you control nothing + you pay everything.”

How will the clause solve the problem when that particular landlord—the freeholder in this case—has already decided that they have exhausted the process? The levy is thousands and thousands of pounds, and people are going bankrupt in the current climate. How will this move things forward?

[Christopher Pincher]

I am grateful for the questions that the hon. Gentleman and the hon. Member for Luton South asked. I will try to address them in toto.

The Government have already committed a significant amount of public money to the remediation of unsafe tall buildings—£5.1 billion—and I am sure we will discuss these matters further when we come to the new clauses tabled by various members of the Committee, so there will be several opportunities to come back to this point.

--- Later in debate ---

[Christopher Pincher]

I am obliged to the hon. Lady. It gives me the opportunity to remind the Committee that, by altering the 1972 Act, we are not simply specifying these changes to taller buildings. It applies to all premises. That is one of the reasons why a whole range of people might use this legislation. To be clear, it is for a court to decide the facts of a specific case—whether a dwelling is fit for habitation. The existing case law, which may be built up and amplified in future, suggests that, in order for a dwelling to be fit for habitation, it must be capable of occupation for a reasonable time without risk to the health or safety of the occupants and without undue inconvenience or discomfort to the occupants. That is the case law definition that the court would understand. Should an appellant bring action against a developer or provider of a building that is defective, that is the definition the court will look at to see whether they have a case. With that, I commend the clause to the Committee.

[Mike Amesbury]

I thank the Minister and all those who have intervened. Clause 125 is welcome on this side, but it does not go far enough. We welcome the extension to refurbished properties, which we have debated at considerable length with regard to permitted development and additional floors. I know that the Minister will clarify whether the clause captures that scenario in the new building safety regime.

The Minister referred to case law. Others have referred to the nightmare of litigation and the costs in a David and Goliath process. How many claims have been made under the existing regime? The Minister referred to the existing case law, so I am assuming that the Department has made an assessment.

--- Later in debate ---

[Christopher Pincher]

I am grateful to the hon. Gentleman for his support for the clause. He asks two questions. The first is on the volume of case law that has been built up. I will have to write to him or inform him at a later point about the specific number of cases. I remind him that the Defective Premises Act 1972 was passed some 49 years ago—many members of the Committee were not born when that Act was passed. The case law is presumably quite voluminous and therefore the courts will be well able to assess any new cases in the light of that established case law of 49 years.

The hon. Gentleman mentioned the evidence given eloquently by Justin Bates—I think that was his name; I apologise if I have got that wrong.

[Mike Amesbury]

Yes, Justin Bates and Giles Peaker.

[Christopher Pincher]

Yes. He gave us some eloquent testimony in one of the Committee’s witness sessions. The reason why our court processes work so very well and why there are court actions—sometimes rather voluminous actions such as there may have been under the 1972 Act—is that there is always more than one view. There will be another lawyer countering the arguments made by someone such as Mr Bates, who will say that there are in fact very good chances for an individual to seek redress using this mechanism. I invite those who wish to use the new powers we are giving them to so do, to test the courts and test Mr Bates. I commend the clause to the Committee.

Question put and agreed to.

Clause 125 accordingly ordered to stand part of the Bill.

Clause 126

Limitation periods

[Mike Amesbury]

I beg to move amendment 14, in clause 126, page 133, line 1, leave out “15 years” and insert “30 years”.

This amendment changes the period for claims under the Defective Premises Act 1972 and the Building Act 1984 to 30 years.

[The Chair]

With this it will be convenient to discuss clause stand part.

[Mike Amesbury]

The former Secretary of State, the right hon. Member for Newark (Robert Jenrick), admitted that most cladded buildings were built in the period between 2000 and 2017. Given that the Bill is likely to become law only in July 2022 or later, the limitation period is likely to capture only buildings completed up to and around July 2007, assuming that the Bill keeps making pace as quickly as it has. By the Government’s own admittance, then, extending the period for claims under the Defective Premises Act by only 15 years would miss a significant number of buildings, which is why our amendment proposes a change to 30 years. That is based on evidence, which I know other Members will bring to the debate today.

It is important that we do not mistake this change to the Defective Premises Act as giving more than some relief to a small number of leaseholders and residents in the current building safety crisis. Many of their building owners have become insolvent, as Ministers know. As has been mentioned, many leaseholders will simply not be able to tie themselves up in lengthy legal battles with wealthy developers. The Government must fund remediation up front. That does not require a Bill—it is a political decision. The polluter pays principle should be used to recoup the costs. That is the only way to address this.

Our time is certainly not wasted in this Committee Room. Over the last few weeks we have discussed some really good, solid, life-changing proposals and clauses, but the Bill does not address the fundamental principle of polluter pays. The amendment would certainly strengthen the clause. We might not believe it, but sometimes people listen to our debates, read Hansard and go through it line by line, so it is important that collectively we show this place at its best, give life to people’s voices and pass the amendment.

[Ruth Cadbury]

It is a pleasure to serve under you again, Mr Dowd. I reinforce what my hon. Friend the Member for Weaver Vale has said about the number of dwellings that will fall outside the 15-year catch. Obviously, we welcome its being extended from six to 15 years, but a case from my constituency illustrates why 30 years would be more appropriate.

I have had the honour and pleasure to represent Brentford for over 30 years, and a lot of new homes have been developed during that time. My office is keeping tabs on construction issues with blocks of flats, including those in Brentford ward. I can tell which blocks have required no casework during all my years of representation—it is those that were built more than 30 years ago under a regime of good quality construction and in a culture of safety. Those constructed after that were built at a time when standards were starting to fall. The culture of competition and the privatisation of building control meant that there was price competition and a reduction in inspections. There was the demise of the role of the clerk of works, corners were cut, and there was a skills shortage in the construction industry. Taken together, as we have said many times, that created this crisis. My casework shows that well over 25 separate estates in my constituency that were built in the last 20 years—since around 2000—have issues with cladding, lack of compartmentalisation, and shoddy workmanship.

I also picked up casework on damp and safety as a councillor. I will give two examples Even before Grenfell, leaseholders at Holland Gardens, which was built by Barratt, had forced Barratt to replace all the window fixings because they had not been done properly. It was subsequently found that the building had flammable cladding, so scaffolding was put up again. I have already mentioned the Paragon, which was built in about 2003. We do not know what its future is, but it is empty because it is too dangerous to occupy. I absolutely endorse the amendment’s aim of extending the timescale from 15 to 30 years. There is so much evidence. I can see it on my own patch, but we all have evidence.

--- Later in debate ---

Clause 126(2) is technical and reflects changes to limitation provisions since the 1972 Act was passed. Subsections(5) and (6) provide protection for the legal rights of those against whom legal action may be brought under the retrospectively extended limitation period. In very limited circumstances—this is another reason why the hon. Member for Weaver Vale might consider withdrawing his amendment—there is the potential for the defendant’s convention rights, human rights, to be breached by the retrospective extension of a limitation period. I suggest that the longer that period is, the more appetite there might be for a defendant in a case to bring forward action under human rights legislation. We have therefore included subsections (5) and (6), which are important safeguards to ensure that our changes to the Defective Premises Act do not conflict with human rights legislation. That does not mean to say that people may or may not choose to bring court action under human rights legislation.

[Mike Amesbury]

On counter-litigation under the Human Rights Act, will the Minister elaborate on that scenario and the right to private property?

[Christopher Pincher]

I am not a lawyer and I cannot second-guess why an individual might choose to go to court using one particular Act of Parliament to defend themselves against another. However, we know that the Human Rights Act is cross-cutting. In any legislation that we scrutinise, we see reference to the Human Rights Act in its annexes. All I suggest to the Committee is that the longer the retrospective limitation period, the greater the chance that individuals may choose to go to court and test the legislation under the Human Rights Act.

Finally, I draw the Committee’s attention to subsection (3), which provides that the clause will be commenced automatically two months after Royal Assent. That will be the date from which the extended limitation period is calculated, including the retrospective period for action under section 1 of the Defective Premises Act. With that, I commend the clause to the Committee.

[The Chair]

I apologise, Minister, for my inappropriate limitation on your intervention. As a pre-’69 person, my levels of concentration are not what they should be, I suspect.

[Mike Amesbury]

I suspect that we will probably come back to this subject on Report, perhaps in a different form of amendment. I thank the Minister for his detailed and considered response. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 126 ordered to stand part of the Bill.

Clause 127

Establishment of the new homes ombudsman scheme

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss the following:

Clause 128 stand part.

That schedule 8 be the Eighth schedule to the Bill.

Clause 129 stand part.

--- Later in debate ---

[Eddie Hughes]

The purpose of the ombudsman is not only to resolve complaints but to drive up standards of quality. Therefore, the scheme must include provision for the making of recommendations by the ombudsman to improve widespread or regular unacceptable standards of conduct or quality of work by the scheme’s members. Additionally, the scheme must include provision about the provision of information to the Secretary of State and reports on the operation of the scheme. The clause sets out a comprehensive framework for an effective ombudsman scheme that will afford homebuyers substantially more protection and redress than they currently receive.

The new homes ombudsman scheme will allow new build homebuyers to complain to the new homes ombudsman about a developer for up to two years following the purchase of a home from a developer. Clause 129 provides definitions which determine who may complain to the new homes ombudsman, and a definition of a developer, who the Government can require to belong to the ombudsman scheme. The definition of developer includes those constructing new homes and converting existing buildings into new homes, so that complaints about developers of converted homes under permitted development rights, or those creating additional homes from larger buildings with the intention to dispose, sell or grant them to someone else, can be required to become scheme members and subject to the scheme’s rules under clause 130. I hope that offers the hon. Lady some reassurance. Clause 129 also includes a power to include an additional description of a developer, which could include organisations connected to developers.

[Mike Amesbury]

I thank the Minister for the explanation, and his enthusiasm for the creation of the new homes ombudsman scheme, which by his admittance he has rightly argued for in principle since before coming to this place as a Member of Parliament. In principle, the new homes ombudsman is a good thing, though some Committee members have raised concerns and advocated for ensuring that it will be truly independent. I think new build homes have an average of 157 snags at the moment. We will all be familiar from our casework, regardless of where we represent in Britain, that this is a big and very live issue. I would hope that the ombudsman will change the landscape.

On the New Homes Quality Board, which is operating as a shadow board at the moment, sits Jennie Daly, a group director of Taylor Wimpey. The board has representatives of housebuilders and the finance sector, and the hon. Member for Dover (Mrs Elphicke) is the independent chair. I can think of examples in my constituency of Taylor Wimpey homes that have considerable snags and are what we call leaky homes. The 19 million leaky homes that are not properly insulated have been constructed with gas boilers, fossil fuels and the rest of it. All of them will need to be retrofitted and a number have snags. In fact, there is one such development that will probably go forward in the Sandymoor and Daresbury part of my constituency, on former farmers’ fields, despite all the rhetoric that we hear in this place. I would hope that they will not be leaky homes, full of snags. It is very important that those on the shadow board take things forward in future.

On the reassurance about independence, if someone is part of the club, whether they be Taylor Wimpey or another housebuilder, they are paying for that service. Then the complaint goes from our constituents—our residents—to the ombudsman. I have real concerns about the checks and balances, and the independence. The Minister mentioned that there are various models to take it forward. It could be done in-house or at arm’s length as a Government agency. That would certainly by the Opposition’s preference, via a principle, to ensure that checks and balances are hardwired into the process. In principle, we welcome the new homes ombudsman, which is very much needed, but we already have concerns about the evolution of the process, if we look at the shadow board.

[Eddie Hughes]

I thank the hon. Gentleman for bringing some of his casework for us to consider. The hon. Member for Brentford and Isleworth mentioned the demise of the role of the clerk of works. I started life as a civil engineer but then moved into building site management for housing projects. At that time, we would have had a clerk of works whose job it was solely to monitor the progress of the work and ensure that it complied with the relevant standards. With cost-cutting and other things, we no longer have that, but thanks to the clause and the prospect of the new homes ombudsman, the industry has bought into the concept that quality has to rise and that people will be held more accountable in future.

On the point that the hon. Member for Weaver Vale made regarding the number of snags in a property, we will all have seen that. A comparison that has been made previously is that someone has more rights if they buy a faulty kettle than if they buy a faulty home that has minor problems that do not qualify under the National House Building Council regulation. They do not have something such as subsidence; they just have niggly problems. The developer has taken the money and perhaps trades are no longer on site, and the buyer wants to see those things addressed.

I genuinely think that we will see the industry taking quality much more seriously than they might have previously, particularly with that line of accountability coming back to Parliament. I understand that the hon. Gentleman may have reservations about members of the shadow board. We need to draw the sector into the programme and get them bought into the idea that we will raise quality. I do not think that this Secretary of State or any future one would want to be associated with a product that was not delivering for the public, so they will ensure that that confidence remains.

--- Later in debate ---

[Mike Amesbury]

One of the roles that the ombudsman will be charged with will be dealing with rogue builders. What would happen if one of the members of the board seemed to be classed as a rogue builder? How would the checks and balances be assured going forward?

[Eddie Hughes]

Such a complex question may be outwith the coverage of the Bill; however, it would be beholden on the Secretary of State to ensure that the process was managed appropriately. Given that the scheme allows for builders who are not complying with the code to be ejected from the ability to develop, I am sure that the opportunity would be there for us to deal with members of the board appropriately. If we can chuck a builder out of the scheme, I am sure that we can deal with a member of the board.

Question put and agreed to.

Clause 127 accordingly ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned. —(Scott Mann.)