Building Safety Bill

Paul Blomfield Excerpts

2nd reading
Wednesday 21st July 2021 Commons Chamber

[Paul Blomfield (Sheffield Central) (Lab) [V]]

The debate on this Bill is framed by the Prime Minister’s promise that

“no leaseholder should have to pay for the unaffordable costs of fixing safety defects that they did not cause and are no fault of their own.”—[Official Report, 3 February 2021; Vol. 688, c. 945.]

Let me dissect that pledge. There were no conditions on the height of the property, none on when it was built and no limit to the nature of the defects.

The Prime Minister was right to make that pledge because, along with the developers who built them, those who live in these unsafe properties have been let down by comprehensive regulatory failure. The failure of successive Governments, as the Prime Minister said, is no fault of leaseholders. The Government are responsible for the problem and must take responsibility for resolving it, which this Bill does not do.

Throughout this crisis, I have regularly met affected leaseholders across my constituency. I pay tribute to Sheffield Cladding Action Group, which has done so much to raise their concerns. I met the group shortly after the Fire Safety Act 2021 was passed without amendment. They were understandably upset that it did not put an end to their misery, but they looked to the Building Safety Bill for a solution because the Building Safety Minister, Lord Greenhalgh, and other Ministers had said that this Bill would offer the “correct legislative approach” to fulfil the Prime Minister’s pledge. But clearly it does not.

Since the publication of the Bill, constituents have been in touch to point out how little it does to protect them from historic costs. They have said that making it a legal requirement for building owners to exhaust “all other avenues” before passing on costs fails them, too, as it gives building owners a free pass to avoid costs so long as they find an excuse. The problems they face include issues other than cladding. That was part of the Prime Minister’s promise, but it is not covered by the Bill.

Extending to 15 years the period within which people have the right to sue developers does not help many of my constituents whose homes were built earlier, such as the one who pointed out that he was 14 years old when his building was completed. Those who will get the opportunity to pursue developers say that the Government know it is not a real option for most leaseholders. How can they take on the legal costs and, with their resources already depleted by all the bills they have faced, tackle the corporate lawyers of the major developers? And what of the companies that have been wound up?

Let us remember the reason for this Bill. It is not just the lives that have been destroyed or the people who have been bankrupted, although they have been, but the thousands of buildings that have been found to be unsafe. By putting unaffordable costs on to thousands of leaseholders, those buildings will remain unsafe. The Government must face up to their responsibility, make buildings safe and then use the full resources of the state to recover the costs from those responsible. If they will not do so willingly, this Parliament needs to force them to do so by amending the Bill over the weeks ahead.

Building Safety Bill

Paul Blomfield Excerpts

Report stage
Wednesday 19th January 2022 Commons Chamber

[Paul Blomfield (Sheffield Central) (Lab)]

I am pleased to have the opportunity at this point, before the Bill progresses to the other place, to speak about some of the issues that will need to be addressed in the amendments that have been promised by the Secretary of State on protection for leaseholders—issues about which, today and for quite some time, there has been cross-party concern. I pay tribute to thehon. Member for Stevenage (Stephen McPartland) for the work that he has done in this regard, and to the Father of the House, the hon. Member for Worthing West (Sir Peter Bottomley), for his contribution over a long period.

On both sides of the House there is clearly a consensus on what needs to be done, which has been reflected in the debates this afternoon, and it is right that there should be, because we are seeking to address a glaring injustice facing leaseholders who are victims not just of developers but, as was pointed out by the Chair of the Select Committee, myhon. Friend the Member for Sheffield South East (Mr Betts), of regulatory failure, for which we are responsible and over which successive Government have presided.

It is unfortunate that we have been debating the Bill so soon after the Government’s announcement last week, before the Secretary of State had the opportunity to table his amendments so that they could receive the scrutiny they deserved. However, his statement did constitute a step forward. Some of my constituents who have been affected met him before the statement, and they shared my view that while the narrative was good and the direction of travel felt right, there remained too many unanswered questions. I want to set out briefly the concerns that they have, which must be addressed in the Government’s amendments in the other place.

Residents of Mandale House, for instance, made an application to the building safety fund for cladding work, 80% of which was rejected because—my right hon. Friend the Member for Leeds Central (Hilary Benn) mentioned this earlier—the juxtaposition of zinc and timber failed to meet the current criteria. That left them facing bills for tens of thousands of pounds. In the Metis Building there is a problem with wooden balconies, while in Wicker Riverside the problem is compartmentation. Those problems clearly affect many other buildings as well, in my constituency and across the country. We therefore need an absolute assurance that the statutory protection will cover all non-cladding remediation.

Residents of Mandale House face a further problem, in that their developer is no longer in business. We know that is a problem in hundreds of buildings. Companies have failed, or have been deliberately collapsed to enable them to avoid responsibility. It needs to be made clear that those leaseholders will not be overlooked, and that the Government will give them full support in respect of all safety remediation costs.

One of my constituents in the Millsands building asked for reassurance that support should be provided for leaseholders not in occupation of their flats. As my right hon. Friend the Member for Leeds Central pointed out, many have been forced to leave to raise the funds to try to pay the bills demanded of them. Others have left as their families have grown. They have done the sensible thing: they have moved on and used the rental income from their property to fund their new house. For some, the investment was the use of a lump sum to provide a retirement income in a solitary flat. As the right hon. Member for Hemel Hempstead (Sir Mike Penning) argued earlier, those people are victims too, and they need to be fully supported. We also need a statement sending a clear message to freeholders and developers that they must not rush to carry out work in order to avoid their responsibilities by imposing costs on leaseholders now, before the protection becomes part of legislation.

There is another issue, faced by my constituents in Wicker Riverside, a building from which residents were evacuated just before Christmas 2020 because of fire safety concerns. They have a problem with insurance—not that of rising costs, on which other Members commented earlier and for which there should be compensation, but the fact that no insurance company will provide cover for their building. They have been uninsurable for more than a year. That is an untenable position that the Government must, and could, act to address. I have discussed the issue with Ministers.

Finally, there is overriding concern about how long the process proposed by the Government will take, as legal action drags on and there is resistance from developers and others whom the developers may hold accountable and endless litigation. There is a risk that the problem, rather than being solved, will be prolonged for a very long time indeed. If the Government are confident that money can be recovered from developers, they could and should simply act to fix all the faults now and then use the full resources of the state to recover the money from those responsible. That way, as Members on the Opposition and Government Benches have said throughout today’s debate, no costs will fall on those who have no responsibility for the predicament they are in.

Building Safety Bill

Paul Blomfield Excerpts

Consideration of Lords amendments
Wednesday 20th April 2022 Commons Chamber

[Paul Blomfield (Sheffield Central) (Lab)]

I am grateful to the Minister for giving way. He has, to some degree, covered the concerns that I was going to raise about those people who have exercised the right to manage. Yesterday, in a letter to us, he and the Secretary of State acknowledged that Lords amendment 117 identified a real problem. Frankly, at this stage, a consultation will give very little comfort, but could he try to assure leaseholders in that position by saying how long that consultation will be undertaken and when they might expect some conclusion?

[Stuart Andrew]

I appreciate the hon. Gentleman’s point. I want to ensure that we get the consultation under way as quickly as possible. I accept that people have deeply held concerns, so we will do our best to get that done speedily, but we do need to consult. We need to get the evidence and know exactly what the picture is, in order to know how best to deal with that situation.

Lords amendment 184 inserts a new schedule 8, titled “Remediation costs under qualifying leases”. It sets out the circumstances in which costs cannot be passed on to leaseholders. The Government’s original proposals set out that where the building owner is, or is linked to, the developer or can afford to meet the costs in full, they would be prevented from passing costs on to leaseholders.

It is worth stressing just how wide these proposed protections are. If a building is still linked to the developer, that building owner and the landlord will be liable for the costs associated with non-cladding defects and their leaseholders will pay nothing. If the building owner or landlord is not linked to the developer, but has the wealth to meet the costs in full, their leaseholders will pay nothing. If a leaseholder property is valued at less than £175,000, or £325,000 in London, the leaseholder will pay nothing and, if the leaseholder has already met interim costs that exceed the contributions cap, they will pay nothing.

Based on that “waterfall”, the Government’s assessment is that the vast majority of leaseholders would pay less than the caps and many would pay nothing at all. However, it is important to remember that not all landlords are evil. Where the building owner or landlord is not at fault, where they have no link to the developer who created those defects and they do not have the wealth to meet the remediation costs in full, and only in that situation, we propose that leaseholder contributions towards non-cladding defects can be recovered, subject to the fixed caps.

--- Later in debate ---

[Royston Smith]

That is an excellent suggestion. The Government have been very successful in talking to developers and persuading them to sign up voluntarily, and there is no reason why they could not have similar conversations with insurers.

I do not want to make a case in defence of developers. I have made the case throughout that they should pay, but we need to be a bit careful about the possible unintended consequences of only going after them. I am pleased to note that they are taking responsibility for their own buildings, although they should have done that in the first place and they are a bit late to the party. Asking them then to remediate buildings that are not their responsibility will have all sorts of effects, not least in making them think about whether they will want to be in that particular market any more. I doubt that they will ever withdraw from the house building market, because it is their business, but if we want to ensure that we can build 300,000 homes a year—a proportion of which would, I am sure, be high-rise—we should bear in mind that some developers will now be saying, “This may not be for us in the future.”

I promised that I would not speak for too long, because we want to get through this business as quickly as possible, so I will end my comments by thanking the Minister again for what he has done and welcoming the changes that have been made. Given the Minister’s assurances today, I will be supporting the Government.

[Paul Blomfield]

It is a pleasure to follow the hon. Member for Southampton, Itchen (Royston Smith). I pay tribute to him and to the hon. Member for Stevenage (Stephen McPartland) for the work that they have done in this regard.

As others have said, we have made considerable progress, but it is a disgrace that, so long after the Grenfell tragedy exposed the scandal of cladding and fire safety issues, the Government have yet to provide the comprehensive response that would address all the issues faced by the thousands of leaseholders caught up in that scandal across the country. This evolving Bill—it was clearly still evolving yesterday, with a body of new amendments tabled by the Government—and, indeed, the Secretary of State’s announcement in January were significant steps, but they still fall short of the Prime Minister’s promise—and I think we all know how much that is worth—that no leaseholders should have to pay for the remediation of problems that are not their responsibility. Moreover, there is still too much uncertainty surrounding the Government’s proposals, which in itself is frustrating progress on making buildings safe.

Let me give just one example. Mandale House, in my constituency, faces a range of problems, and has secured £3.4 million from the building safety fund towards the necessary remediation. However, that falls short of what is needed, and Mandale House is left with £7.4 million to find in order to complete the work. The building’s original developer is one of many to have gone into liquidation, so the building management are on their own. The builders who had been scheduled to carry out the remediation works have now pulled out because of the uncertainty over whether they would be paid. That leaves no foreseeable prospect of the building’s being made safe. The building management are now worried that if the money they have been granted from the building safety fund is not used promptly, it may be withdrawn. I understand that that has happened in respect of other buildings, and I would welcome the Minister’s confirmation that it will not happen in this case—as well as his advice on how Mandale House leaseholders should now proceed to make their building safe.

The second point that I want to make concerns enfranchised buildings. I urge the Government to think again about Lords amendment 117, and I hope to persuade them to do so by citing the case of Wicker Riverside, another building in my constituency, whose residents were evacuated just before Christmas 2020 because of safety concerns.

It is not good enough for the Secretary of State to write to us, as he did yesterday, saying that the amendment highlights a real problem which must be addressed, but then to reject it without putting anything else in its place. I welcome his late announcement today of a consultation, but it should have been possible four years on, and after all the months of knowing that this remained a problem following the Government’s January announcement, to include an amendment that addressed the concerns and provided a solution that the Government felt was robust, along with the bundle of amendments that were added yesterday.

Let me illustrate the problem. In 2019, Wicker Riverside leaseholders took their freeholder to court after years in which building maintenance had been neglected, with the freeholder also failing to provide proof of whether the money collected through service charges had actually been spent on the building. The freeholder did not even turn up for the court case. The leaseholders then exercised their right to manage, and took over responsibility for the building. Now they are being penalised for doing so. By treating right to manage companies in the same way as institutional freeholders, the Government are excluding them from the protections that exist for other leaseholders, such as the remediation bill cap. I would like us to go further and provide zero liability for leaseholders, but the fact remains that the cap is there for some and is not there for those in Wicker Riverside. They should qualify for the same protection as others, because without it they will face unmanageable costs, and as a result the building will not be made safe.

The Government must set out their plans. If they will not accept Lords amendment 117, I respect their concerns, but the Minister needs to explain—and I hope that he will, in his closing remarks—exactly what they intend to consult on to ensure that right to manage leaseholders are protected. I hope the Minister will also give a clear guarantee that the outcome of the consultation will be that those leaseholders will have the protection that is being provided for all others.

[Rebecca Long Bailey (Salford and Eccles) (Lab)]

Like many Members on both sides of the House, I welcomed the Secretary of State’s assurances to Parliament earlier this year that leaseholders

“are blameless, and it is morally wrong that they should be the ones asked to pay the price.”—[Official Report, 10 January 2022; Vol. 706, c. 283.]

However, despite the progress that the Secretary of State and Members across the House have undoubtedly made on this issue, there are still inadequate legal protections in the Bill to ensure that residents and leaseholders do not bear the costs of a crisis that they did not cause. I therefore support Lords amendments that seek to widen the scope of the Bill, including the amendment to reduce leaseholder contributions to zero, tabled by Baroness Hayman, and the proposal for an extension of leaseholder protections to buildings of all heights, tabled by the Earl of Lytton and supported by Lord Blencathra and Lord Young. I thank Members of this House for their hard work, and I thank all the cladding campaign groups, many of whose members are present today. I want to mention in particular Manchester Cladiators, which has supported residents throughout Greater Manchester through rain and shine in their hour of need.

Those campaigners have to keep going, because the sad reality is that many residents in my constituency still fall through the gaps in the proposals that the Secretary of State has outlined so far. Indeed, a recent survey by End our Cladding Scandal of more than 2,200 properties and buildings over 11 metres tall shows that more than 64% of leaseholders outside London and more than 83% of leaseholders in London will not be protected from the costs of non-cladding fire safety defects. The recent pledges from developers to remediate the buildings that they have built over the last 30 years sadly do not go far enough, and there is continued ambiguity about the treatment of non-cladding fire safety defects. Leaseholders in buildings that are under 11 metres remain unprotected, and there is still no funding commitment from house builders for the £4 billion required for the remediation of buildings where the developer no longer exists. As we have heard today, there also remains a huge question mark over social housing.

Further to that, we still do not know what residents who have already received devastating demands for payment should do. There is no detail at all on how to recoup any sums of money already spent by residents, as sinking funds are depleted to catastrophic levels. For example, one development in my constituency has been unable to receive support from the waking watch relief fund simply because the residents acted proactively to try to reduce the cost of their waking watch by agreeing to fund the installation of a fire alarm system. Because they did this prior to the waking watch relief fund’s cut-off date of 17 December 2020, their application to the fund was rejected. Sadly, had they waited and incurred even more waking watch costs, their application probably would have been successful. The Minister must agree that that makes no sense at all, and this is just one case.

The Secretary of State informed Parliament in January that he would pursue statutory protection for leaseholders, and that nothing would be off the table. The Bill does not give that protection, and all I ask today is that the Government support the amendments that would protect leaseholders and go some way towards providing that statutory protection that they all deserve.