Social Housing and Building Safety

Robert Neill Excerpts

Thursday 9th June 2022 Commons Chamber

[Sir Robert Neill (Bromley and Chislehurst) (Con)]

It is a privilege to speak in this debate. I, too, pay tribute to the families and survivors of the Grenfell tragedy, and I think all of us who served in Government at any time before that tragedy would join both Front Benches in the apology that is offered to them; there was a systemic failure that let them and many others down.

As the shadow Secretary of State generously said, my right hon. Friend the Secretary of State has shown real energy in seeking to address these matters now, and I pay tribute to him for that. We have therefore seen marked progress, which I welcome, but I also want to put on record some areas in which I know the Minister currently on the Front Bench, my hon. Friend the Member for Walsall North (Eddie Hughes), will be keen to press for yet further progress.

The first of them relates to cladding. We have come a long way, and my constituents are very grateful for that. We have had campaigns, which I have raised in this House, for the residents of Northpoint in my constituency, and others are affected in other buildings, too: Iconia House and Azzura House in Homesdale Road; and William House and Henry House in Ringers Road. They happen all to be in the centre of Bromley, so this is not purely an inner-London issue; it affects town centres and suburban centres across the country. It is therefore all the more important that we get it right.

Eventually, after a very long campaign, the remediation work is starting at Northpoint, but it will take perhaps a year or so to complete. The landlord of the occupiers of Northpoint was a property company that was an offshoot of the Tchenguiz family trust, not an organisation noted for its generosity towards its tenants. It stood upon its legal rights and insisted upon the flat owners—the lease- holders—covering the costs, for example of a waking watch.

It is certainly to be welcomed that future costs of waking watches and remediation will be picked up, but these leaseholders are out of pocket to the tune of tens of thousands of pounds for the waking watch that they installed because the London Fire Brigade, in exercise of its duty, issued a notice saying that without it the property would not be habitable. They were caught between the devil and the deep blue sea: what else were they to do but acquire that waking watch? Otherwise their homes would have been unsafe, which would have been unfair on them. The mental and health pressures on some of these people was immense. Their landlord was remote and frankly not possible to go after. It was not signed up to the scheme that the Secretary of State has worked so hard on and responsible developers have joined. The occupiers of Northpoint therefore had to dip into their own pockets when most of them already had mortgages, especially as many of them were first-time buyers, and when the flats were unmortgageable—they could not increase the mortgage on them because nobody would lend on them—and until this work was done they were effectively uninsurable too.

So these people had been left in a hopeless situation, and while it is right that the Government seek to recover every penny they can from developers and builders who fail to come up to the standards, where there has ultimately been a failure of governance in the broadest sense over a period of many years it is legitimate for the state to stand behind those who have lost out. Where there is such a corporate failure, the state must pick up the ultimate responsibility. So I hope the Minister will look again at means of coming to the aid of such people for retrospective costs where it is clearly not realistic to pursue the builder or developer. There will be a number of such cases. In this instance the freehold had been sold on many times. There will also be cases where developers who may be at fault will no longer be in business; they may have wound up or amalgamated. In those circumstances, the moral and corporate responsibility must fall on the state.

There are also areas where there has been progress but there is more to do. Members have referred to building insurance. There has been a marked increase in premiums across the board. People have had major—threefold or fourfold—increases in their premiums. Again, these people are often in flats that are unmortgageable and unsellable, and now, on top of their service cost charges to pay for steps such as a waking watch, they are facing massive increases in their insurance premiums. The question has to be raised—many of my constituents have done so—whether the market is operating effectively. How genuinely competitive is the market in these areas? There is a real concern that at the very least there is an excessive risk-averseness now: having gone from having too lax an approach in the past perhaps, now the insurers’ approach is too risk-averse, resulting in unrealistically and unfairly high premiums for many flat owners. That, too, is an area where it is legitimate for the Government and regulators to step in.

[Mr Betts]

Will the hon. Gentleman give way?

[Sir Robert Neill]

Of course; I happily give way to the Chairman of the Levelling Up, Housing and Communities Committee.

[Mr Betts]

We raised the issue of insurers at the Select Committee. Premiums have gone up by ridiculous amounts, often for buildings that are now safer than before the premium increases. The Association of British Insurers could not tell us how much more the insurance companies have paid out in the last three or four years on high-rise blocks, so we have no idea how much has been paid out, but we do know there have been massive premiums increases. Does the hon. Gentleman agree that we should encourage Ministers to take further action with the ABI and others to start sorting out these unreasonable premiums increases?

[Sir Robert Neill]

The hon. Gentleman is right, and I hope Ministers will do that. Again, the Secretary of State—who I am delighted to see back in his place—and his colleagues have shown real energy on this, but we need to keep the pressure on; that is key.

I am grateful to Lord Greenhalgh, who has been in correspondence with me a good deal on these matters. He pointed out that back in January the Financial Conduct Authority and the Competition and Markets Authority had been called upon

“to conduct a review of the buildings insurance market for medium and high-rise blocks of flats to get to the bottom”

of this concern. That is good of course, and the wider issue was recognised by Lord Greenhalgh, who wrote:

“Where the risk has demonstrably decreased, so should the premium.”

But that is not happening at the moment. While we want that review to be thorough, it must also be implemented in a timely fashion. I was advised by Lord Greenhalgh that the Department expects the FCA and the CMA

“to provide advice and recommendations within the next six months.”

He wrote that in a letter sent last month. I hope we can keep the pressure on so that it happens well within six months, rather than at the far end of that period. The risk, of course, is that some of the stakeholders in the industry will not have the greatest of incentives to move swiftly on this matter, so the duty therefore falls on the Government to do that. I know the Secretary of State has been more than willing to flex muscle with the sector when necessary to get movement, and I hope he will do so on this. I also hope that the Minister will confirm in winding up the debate that once the advice and recommendations from the CMA and FCA have been received, there will be prompt and urgent action to implement them in whatever form is necessary to address this genuine problem.

There is a related matter on the operation of EWS1 forms. In my constituency there is a firm called the Frankham Group. Steve Frankham MBE, a constituent of mine, has done a great deal of work in this field and has been recognised for his service in the industry and charitable works around these matters. His firm is anxious to do the right thing but it, and many others in the sector who have contacted me, are concerned about the real difficulty they are finding, as responsible contractors employed by the registered social landlord sector or the private sector to carry out the EWS1 surveys, in getting both accreditation and professional indemnity insurance.

At the beginning of the year, the Royal Institution of Chartered Surveyors set up accreditation for technicians and surveyors who will be carrying out the scheme. Despite firms such as Frankham having participated in meetings and sent in assessment forms as required, nothing as yet has been forthcoming from RICS to set the scheme properly in place. At the same time, insurance premiums have increased exponentially, which is, in some cases, making large contracts less viable than would otherwise be the case.

The last thing we want is for rogue operators to come into the market and undercut the responsible contractors who carry out this essential work, so we need both a realistic and fair insurance market operating in the sphere and, in parallel, a proper accreditation scheme in place. Otherwise, the temptation for the cowboys to undercut responsible people will be the greater. We need urgent action on that. I will happily share with the Minister and the Secretary of State the correspondence that I have had from my constituents, with the technical detail that they set out on what they have been doing to try to get the scheme working. I had a look at an EWS1 form myself, and it is quite complicated. We could not expect a group of residents to deal with it—they need professional advice to do it properly—but we must ensure that the professionals are accredited and insured properly to be able to undertake the work. I hope that we can flag that up, because I am not sure that enough attention has been given to it.

The other matter that relates to specific building safety issues is the position of small landlords, who are sometimes referred to as portfolio landlords. I appreciate that there has been movement to improve the number of landlords included in the Government’s support schemes for remediation, but the current definition for those who can come into the scheme is those who have their own property but own only one other property, which they do not live in. Constituents have contacted me about that.

Let us say that a retired couple have bought four small flats, as many people may have done, all in their joint names. In retrospect, I suppose they could have put them in their sole names and had two each, but, perfectly straightforwardly, they chose to put them in joint names. Had they bought two larger flats, they might well have fallen within the scheme. As it is, because they happened to invest in that type of property, they fall outside the scheme’s scope. I wonder whether the Secretary of State could think again about the definition of a portfolio landlord. Most of us might think they are someone with 20, 30 or 40 flats for whom that is their principal business and think, “Well, they will have to take the commercial risk on that.” They are not the large-scale landlord chains that we see, either. They are generally small investors, often moving into semi-retirement, who are not in anything like the same position to bear the costs. The principle behind the scheme is admirable, and it would be a shame if the ship was spoiled for a ha’porth of tar, meaning that entirely straightforward people who were caught out are left bearing a cost when someone with a slightly different configuration of their retirement investment would be able to benefit.

Finally, I turn to a broad point that echoes one made by the hon. Member for Mitcham and Morden (Siobhain McDonagh). As well as dealing with the building safety situation, we need to look at the maintenance of much of our social housing estate. Constituents have been in touch with me repeatedly about the difficulty they have in particular with some of the large RSLs. They have also been in touch with the Secretary of State’s Department in relation to the largest RSL in my area, Clarion. I deal with Clarion, and I see that the shadow Minister, the hon. Member for Greenwich and Woolwich (Matthew Pennycook), has come across it as well. We have also recently seen it in the press. It is one of the largest social landlords in the country, but, I am sorry to say that, despite sometimes having had constructive dealings with it, many of my constituents who are its tenants do not find it constructive to deal with. There is a continual issue of poor maintenance, with contractors who simply do not do the job properly and have to revisit time and again. In one estate in Mottingham in my constituency, we have had problems getting things done, which have been running for about four years—they are only partially done, then revisited and more is done. Clarion is quick to send removal notices for pot plants and garden sheds that may have been put in place without permission. It is sharp in doing that. It is also quite quick to serve statutory notices for the costs of significant capital works such as renewing roofs and other matters, but I am sorry to say that it is remarkably slow to sort out basic repairs, never mind some of the more serious issues such as when damp gets in.

That makes me wonder whether some of our RSLs have not in fact become too big to be accountable. The stock in Bromley was originally transferred by Bromley Council to an RSL called Broomleigh. Actually, it was one of the first RSLs, and that was one of the first stock transfers to take place. The whole point of Broomleigh was that it was locally based, with local directors and local offices. What we have seen over a period of time is a series of RSL mergers, so they have become much larger.

[Siobhain McDonagh]

Does the hon. Member agree that the drive for merger is directly due to housing associations’ funding, their lack of capital funding, their greater reliance on the equity in their own stock and their ability to borrow? We have the housing associations that our legislation and funding deserve.

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[Sir Robert Neill]

I think that we must look at the funding model for RSLs. There is no doubt that the ability to leverage more capital is a significant driver in mergers, and we must be aware of that. The hon. Lady is quite right that it is a bit odd that organisations that started off as charities now operate, in effect, in the same way as large-scale commercial developers, but actually without some of the shareholder and other comeback that those in the commercial sector might have. We do need to look at that. The concept of RSLs can be excellent and they can do much good work, so the reverse can also be true. I have some very good, local, small RSLs in my constituency, much closer to the original intention, who do brilliant work. I therefore agree that it is time to look across the piece at the RSL market.

This is an important debate, and I am grateful to have taken part in it. The Secretary of State is an effective Minister and has shown real energy and determination throughout all of this, and my constituents have reason to be grateful to him for interventions in our area in the past. I am sure that he will take those points on board, because we have done a lot, but a few extra bits and an extra push could do so much more. We also need that bigger-picture look at our social housing market.

--- Later in debate ---

[Eddie Hughes]

Far be it from me to heap praise on my boss, the Secretary of State, but given that he has years of experience of sitting at the Cabinet table and is well known for making things happen where others before him could not, I think the Chair of the Select Committee should have faith and wait to see how the scheme develops. I am sure he and I, perhaps in the Tea Room or at the Select Committee, will discuss this further as we develop the proposal.

My hon. Friend the Member for Kensington (Felicity Buchan) has been a tremendous support to me as I have increased my engagement with the Grenfell community, and I have nothing but admiration for the great work she has done since her election. I look forward to continuing to work with her. She spoke about tenants’ voices being heard. Again, she is an active campaigner on behalf of those tenants, and she is determined to make sure they have the opportunity to have their voices heard in their own right.

I have tremendous respect for the hon. Member for Mitcham and Morden (Siobhain McDonagh). I am a housing enthusiast so, before I became a Minister, I crossed paths with many of the Members who have contributed to this debate because of our shared concerns. I respect and admire the hon. Lady’s work, and I have already met her all-party parliamentary group on temporary accommodation. I will continue to work with her.

The Secretary of State has signalled his intention to consider how we can build not just more social housing but more housing for social rent, which I particularly welcome as the Minister with responsibility for rough sleeping. I look forward to working with him on that.

It is good to hear that the hon. Member for Mitcham and Morden supports the right to buy, although I fully accept some of her reservations. Hopefully we will get to a point where she feels we are delivering an appropriate scheme with the expected level of replacement.

My hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill) is delighted that remediation has already started. We need to see more remediation work, and we need it to continue at pace. On waking watch, as I have mentioned previously, the Government are providing £62 million to install fire alarms in all buildings with a waking watch, regardless of their height. We are trying to remove the need for waking watches wherever possible.

On the EWS1 form, we are setting up a professional indemnity scheme, and I understand the Royal Institution of Chartered Surveyors is running an EWS1 training course. We need to make sure that as many people as possible are competent to operate that scheme.

[Sir Robert Neill]

Is my hon. Friend prepared to meet me and representatives of the industry to discuss some of the practical issues in operating and bringing forward the EWS1 form?

[Eddie Hughes]

I am delighted to make that commitment. My hon. Friend mentioned the complexity of the EWS1 form and, as a civil engineer and a member of the Chartered Institute of Building, I am a keen enthusiast for such technical detail. I look forward to that discussion.

It was good to hear the valuable observation from the hon. Member for Richmond Park (Sarah Olney) that Members in all parts of the House are committed to tackling these problems together. She is right that we often do not have consensus, so it is welcome that we have it here. I will continue to consult on and consider remediation costs, and I will make sure we have discussions with social housing providers to come to an appropriate conclusion on how those costs can be covered.

The hon. Lady referred to the work of Kwajo Tweneboa and ITV. To a degree it is sad that we need people outside the House to highlight these points to us, but I am grateful to them for doing so. A number of housing providers are ahead of our legislation and are already upping their game. Many housing providers provide excellent service and high-level accommodation in safe and secure properties for their tenants, but just one case such as we have seen highlighted by Kwajo Tweneboa or ITV is one too many. We need to address that so nobody feels it is appropriate to provide poor-quality accommodation.

The hon. Member for Brentford and Isleworth (Ruth Cadbury) mentioned PEEPs. The Government have now committed to undertake a new consultation. This will include a proposal called “emergency evacuation information sharing,” which would require persons responsible for high-risk buildings to assess the needs of their most vulnerable residents and to consider what might reasonably be done to mitigate any fire safety risks.

The right hon. Member for Leeds Central (Hilary Benn) mentioned problems experienced by residents in the Gateway building, which I understand has made a successful application to the building safety fund.