Building Safety Remediation: Leaseholders

Shabana Mahmood Excerpts

Wednesday 22nd June 2022 Westminster Hall

[Graham Stringer (in the Chair)]

I will call Shabana Mahmood to move the motion and I will then call the Minister to respond. There will not be an opportunity for the Member in charge to wind up. That is the convention for 30-minute debates.

[Shabana Mahmood (Birmingham, Ladywood) (Lab)]

I beg to move,

That this House has considered the financial effects of building safety remediation on leaseholders.

It is a pleasure to serve under your chairmanship, Mr Stringer. I am grateful to have the opportunity to directly address the Minister on some of the ongoing financial impacts of building safety remediation—what has come to be known as the cladding scandal—on behalf of leaseholders in Birmingham, Ladywood, and all over the country.

Last week, we saw the five-year anniversary of the Grenfell disaster. It was a truly horrific tragedy that claimed the lives of 72 people. No one who saw that building aflame or the images on the news will ever forget them. It has left a mark on not just those affected but the whole country. The inquiry into that disaster is ongoing. I have a real concern that it may prove to be one of those cases, which we have seen too many of in this country, of justice delayed being justice denied, and that, while the inquiry may result in new procedures, those responsible for the events that led to that disaster may not be held directly to account. We live in hope and I send my solidarity—I am sure everyone present will agree—to the loved ones of those who perished at Grenfell.

The impact of Grenfell has extended much further than most of us could have imagined. That tragedy has exposed a shocking litany of regulatory failures and, in my view, outright negligence, which has led, as I say, to what we now call the cladding scandal. We have gotten a little too used to calling it a scandal when we consider the huge impact it has had on my constituents and people all over our country. It has exposed huge issues in building safety. My experience has been that just as I get my head around one part of the problem, many more present themselves—I am sure that that has been the experience of the Minister and his predecessors.

The cladding scandal has cost many of my constituents their peace of mind. It has cost them financially and wiped out life savings. It has left people languishing in the stress of knowing that the building where they live, raise their family and go to sleep every night is unsafe and poses a real fire risk. It has brought many to the brink of a complete mental and physical breakdown. I have sought to support my constituents and have dealt with many of the issues they have raised with me over the many years since this scandal was revealed. We have been campaigning together ever since, along with other leaseholder action groups that have sprung up all over the country. I am particularly grateful to the UK Cladding Action Group and the Birmingham Leaseholder Action Group, as well as other groups across the country, which have relentlessly supported leaseholders. Of course, many of them are leaseholders themselves trying to press the Government to act.

The Government have passed new legislation, and I state at the outset that I recognise how much the Government have moved from their original position, and I welcome many of the changes. However, and it will not surprise the Minister to hear me say this, I do not consider the new cap, which means that some leaseholders will pay some money towards the cost of remediation, to be fair, because they have done nothing wrong. This is not, and should not be, on them—not any part of it, not even at a capped amount. They should be spared any financial contribution. I regret that there is no direct assistance in the Building Safety Act 2022 for leaseholders who have already paid towards remediation work. There is the possibility of redress through civil action but the Act does not offer any direct assistance.

Nevertheless, the main provisions of the Building Safety Act, which received Royal Assent on 28 April, come into effect next week and the landscape in respect of leaseholders will change. However, as the Minister has already heard from me and other hon. Members, getting to this point has taken far too long. The Government have resisted acting in respect of many of the issues that MPs have been raising from the outset, only to concede that space some years later.

I remember my first pieces of casework relating to the cladding scandal, when Government Ministers and officials were still distinguishing between aluminium composite material cladding and non-ACM cladding. All of us involved in trying to seek redress, including Members of Parliament from across the House and leaseholders all over the country, pointed out the unavoidable truth that non-ACM cladding was just as dangerous as ACM cladding and would have to be removed from all the buildings where it was present. Originally, the Government held their ground and maintained the distinction, but then gave ground and bowed to the inevitable acceptance that non-ACM cladding would have to be removed.

In fact, most of the topics on which the Government have had to give ground represent issues that have been campaigned on from the start by all the groups I have mentioned, and by the Levelling Up, Housing and Communities Committee as well. We have come a long way, but these five years have taken a very heavy toll.

[Mr Jonathan Lord (Woking) (Con)]

I congratulate the hon. Lady on securing this important debate. I speak on behalf of many of my constituents in Woking, Surrey. As well as the direct costs of remediation, many leaseholders have difficulties getting insurance or face huge premiums of three, four or five times more than they would have been historically. That also brings the possibility that people cannot sell their flat if they wish to move. Is the hon. Lady looking to the Minister and to the Government for further reassurances on those financial impacts as well?

[Shabana Mahmood]

The hon. Gentleman is absolutely right. I will be coming on to the issues in relation to insurance later in my remarks. May I take this opportunity to say how refreshing and positive it has been to be able to work with Members from across the House? That has been the House at its best and I am sure that is the reason why we have been able to make so much progress in the Building Safety Act. I hope we will continue to work together on the ongoing financial impacts, and I hope to persuade the Minister to give further necessary ground. I will come to the matters of insurance very shortly.

Many hundreds of people in my constituency have been affected and have been living with the consequences of the cladding scandal for five long years. With work having started on some of these buildings, if people are very lucky they may finally be able to live in safe buildings in about five years’ time. At best, we are looking at an entire decade of normal life being wiped out for people caught up in this scandal. Even that timescale, with people losing a decade of their life, will be out of reach for many thousands of people in our country.

I want to bring some of the ongoing issues to life for Members and the Minister by using an example in my constituency: the development at Islington Gates. There are 141 flats in the development, which is now described as an orphan block. The original developer, Midlands and City Developments, went into liquidation in 2007, and Miller Construction, which built the block, was bought out by Galliford Try in 2014. The remediation works at Islington Gates come in at a total of £9 million. Some 80% of that—£7.2 million—relates to the removal of the non-ACM cladding that covers the building. The remaining 20%—£1.8 million—relates to additional defects that were discovered and revealed as a result of the scandal, including deficiencies in fire compartmentation and other measures. As per the new rules in the Building Safety Act, the £1.8 million will need to come from the developer and, through the cascade effect that the legislation envisages, could be passed on to the owner and potentially to leaseholders, up to the value of the new cap.

Let us consider the issues relating to the ongoing work for cladding remediation. The bid that Islington Gates submitted to the building safety fund for cover was accepted, but the payments came in later than anticipated, creating huge cash-flow problems that have further exacerbated the crisis for many of my constituents.

[Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)]

I congratulate the hon. Lady on securing the debate. Many developers set up ground rent payment arrangements that will be very profitable in the long term, in view of the escalation of ground rent, and they set up service companies that sit underneath the main development company. Given the huge profits that developers make from those arrangements, does she agree that we need to do more to hold the developers to account, and that although the lifting of the current cap was welcomed, it should be lifted further?

[Shabana Mahmood]

I completely agree with the hon. Gentleman. I see no reason to maintain a cap. If we have conceded the principle that leaseholders are not to blame, that developers have made a lot of money out of these developments and that there is money available for the Government to go after on behalf of taxpayers all over the country, they should do so, and they should protect leaseholders from any additional costs.

I am concerned that the building safety fund still adopts a “computer says no” approach in cases such as those of Islington Gates, where eligibility for the fund has been accepted, the works are under way and the initial payment has been made. Administrative errors can lead to delays in further payments for the works, and that causes a huge amount of unnecessary stress. People are putting up with living in buildings that are completely covered and have no natural light. They are putting up with living inside a building site, so they have all the noise and dust of that, and the general loss of normal life and the amenities that we all have a right to expect. This work is unavoidable and necessary, but it is in everybody’s interest that it takes place as quickly as possible, so leaseholders have a chance of living a normal life soon.

Every time the BSF causes an additional delay—that is completely unacceptable— if it has accepted eligibility, works are under way and the initial payment has been made, there should be an expectation that money will be got out the door as quickly as possible for all additional payments. If administrative issues need resolution, they can be dealt with after the cheque has been paid. We have already established eligibility, and it is not as though my leaseholders are going to run off with that money. There is no risk to the taxpayer. Will the Minister say something about the BSF’s approach, and will he make sure it does not add to the stresses and strains that my constituents face?

In respect of non-cladding defects—£1.8 million is required to make Islington Gates safe—the Government have made it clear in statements about the legislation and in press releases on their website that they expect developers to take responsibility for any building developed by any company within their corporate group, including cases where they acquire the original developer of the building. That would mean that the £1.8 million liability for Islington Gates falls on Galliford Try, which bought Miller Construction, the original builders.

Unfortunately, Galliford Try insists that it has no obligation to pay, and none of us has been able to do anything to persuade it otherwise. My constituents have been campaigning, and I have written to Galliford Try. We have done everything that we can think of to try to persuade it that it must meet its liabilities, do the right thing and put up the money to remediate the non-cladding defects revealed at Islington Gates. I understand that in a meeting with some of my constituents, civil servants from the Minister’s Department confirmed that Galliford Try is the correct entity to pursue for the cost of those remediation works.

I want to press the Minister on just what we are supposed to do now that Galliford Try refuses to pay. It denies any and all liability for the £1.8 million. Will the Minister explain the role he envisages for the Department’s recovery unit, and whether the Department would front up that money and then go after Galliford Try itself? How does he see the new legislative landscape for remediation contribution orders working in respect of leaseholders such as those at Islington Gates? My view—I think it is shared by many Members across the House—is that innocent leaseholders should not have to stump up any more money and then wait for redress at some unknown point in the future. That money should be made available now from the correct company, which should hold the liability to begin with.

I turn to insurance costs, which the hon. Member for Woking (Mr Lord) mentioned. Much attention has been paid to the cost of remediation, waking watches, alarm systems, sprinklers and other measures, but it was clear to me from the start from my constituency casework that the cost of insurance was a major problem. In my constituency, premiums jumped in buildings affected by the cladding scandal. At the Jupiter 1 development, residents saw a 1025% increase in their insurance premium, from £40,000 to £450,000. King Edwards Wharf saw their premium jump from £50,000 to £450,000. Islington Gates used to pay £36,000 and saw that jump to £320,000.

Brindley House was in the terrible position of being the first building in the whole country without insurance when it was impossible to get cover for it for a period of time. The Minister will know that placed all leaseholders, and everybody else who was connected to the building, in default of their mortgage or rental agreements. That was a terrible stress. When insurance cover was eventually obtained, it jumped from £46,000 to £322,000.

Those are shocking increases in insurance premiums. It is clear to me that the calculation of the premiums did not take into account the risk in those buildings and, in particular, the measures that leaseholders have taken to reduce risk in their buildings. In each building, hundreds of thousands of pounds has been spent on state-of-the-art alarm systems and other measures, such as waking watches, to bring down the risk of a catastrophic fire. None of that was reflected in the insurance premium. The more residents have paid for risk mitigation, the more their insurance premium has gone up. It would have made no difference whether they had done those works or not. I think that that is a total con.

I first wrote to the Financial Conduct Authority and the Government at the beginning of 2020, and it has taken two years for a little bit of investigation to be done. I welcome the fact that the Secretary of State wrote to the FCA to ask it to look into the matter, but if that had been done in 2020, we would be much further into the investigation into the behaviour of the insurance sector. I dare say that if the insurance sector had known that there would be Government-level scrutiny of the premiums, two years-worth of unjustifiable insurance hikes might not have been visited upon my constituents and people all over the country.

This problem requires much more than a slow-paced inquiry. I would like the Government to take much stronger action much more quickly so that we are not still talking about the cost of insurance premiums some years hence. The reality is that insurance companies have made money twice over out of the cladding scandal, first from the policies they used to indemnify the so-called professionals and the building industry as a whole—let us be honest, they will not be called to pay out on those policies; nobody envisages that insurers will pick up at the tab for this scandal—and, secondly, because they have gone on to charge thousands of people eye-watering sums to insure those buildings. They have given people no credit for the money they have spent making their buildings safer to live in while they wait for the final works to be completed. It is unconscionable. The Government should intervene to seek financial redress for affected constituents. If the additional cost of insurance were included in the cap brought in by the Building Safety Act 2022, many people would be much closer to that £10,000 anyway, and they would be protected from additional costs. I wonder whether the Minister might address that point and see if there is any possibility of including insurance payments within that £10,000.

The Secretary of State’s letter to the Financial Conduct Authority asked for suggestions to achieve widely available and affordable cover for leaseholders. That letter should have included some additional asks, one being that the FCA should consider redress for the insurance hikes that are taking place. It is clear to anybody from the outside who is paying attention to the effect of the cladding scandal, and making a fair assessment about its financial impact, that the insurance companies have gained excessive profits from the building safety crisis. They should be required to contribute to the remediation costs, on the basis that they covered the actions of the developers that failed to comply with building safety and have since received increased premiums as a result thereof. Nothing less will do.

We should look to the insurance companies for further assistance in covering the overall costs of remediation, which will, in the end, fall on the taxpayer in some way, shape or form, especially if more and more developers do not live up to their responsibilities. It is high time the Government added insurance companies to the list of people that they need to go after in order to recover some of the costs of this scandal. I look forward to hearing what the Minister has to say about that.

[The Minister for Housing (Stuart Andrew)]

It is a pleasure to serve under your chairmanship, Mr Stringer. I thank the hon. Member for Birmingham, Ladywood (Shabana Mahmood) for organising this important debate and for noting the fifth anniversary of the Grenfell disaster.

The hon. Lady has been a powerful and effective advocate for leaseholders in her constituency who, like those all over the country, have been caught up in a mess not of their making, and one that they should not be held responsible for. She is right to highlight the very human cost that people have suffered from fear of the places they live in and call home, and from worrying about whether they are safe. I thank her for continuing to hold the Government to account for our role, particularly given that we promised to strengthen our support for leaseholders and restore confidence and proportionality to the market.

I will come on to the case she raised in a moment, but I first want to emphasise that the Government are on the side of leaseholders. We are making good on that sentiment with our sweeping set of reforms to building safety, the mortgage and lending market, and building insurance—reforms that will help to put things right, with far-reaching legal and financial protections for leaseholders who have been affected by this crisis. At the same time, we are forcing building owners to step up and fix the cladding issues that, in many cases, they helped to create.

I would like to say a bit more about each of those reforms and how we are addressing the issues that the hon. Lady has raised. I thank her for writing to the Secretary of State about the issues at Islington Gates. First, I recognise—we as a Government recognise—that the situation is unjust and unfair for leaseholders living in Islington Gates.

I want to be crystal clear on where the Government stand on this kind of situation. We expect—no ifs, no buts—developers to do the right thing and take responsibility for the buildings that they have developed. Most of the industry recognises this expectation and, equally, recognises the need to do the right thing by leaseholders. That is why more than 45 developers have signed a pledge to do exactly that. As I speak today, we are turning those pledges into legally binding contracts. We would expect such contracts to cover any building developed by any company within their corporate group, including complex cases where they acquired the original developer of the building.

As hon. Members would expect, my Department will work closely with pledge signatories to agree the list of buildings covered by their pledge, and we have pushed developers in the sector to take ownership of remediation work. We have always recognised that there will be complex situations, as is the case with Islington Gates, where the water has been muddied by acquisitions, corporate restructures and other changes. I commit to the hon. Lady that we will follow up at the earliest opportunity to see whether the development of the building can be attributed to one of the pledged signatories. I assure her that I will take a very personal interest in helping her with this case.

If it cannot be attributed to one of those companies, this case will inform our thinking on which further companies should be asked to sign this pledge. I assure her that even if the developer of Islington Gates is not in the initial scope, the remediation of the unsafe cladding will be fully grant-funded. The remediation of unsafe cladding on this building is being funded through the building safety fund—£6.8 million has been allocated for this work so that leaseholders are not paying for the works to the cladding. However, I take on board the point she has raised in this debate. We must listen to and learn from the experiences that she has highlighted. I want to ensure that we understand more about the issues that have been discovered here, and ensure that the building safety fund is run efficiently. I will raise those points with my noble Friend Lord Greenhalgh.

[Shabana Mahmood]

I welcome the Minister’s commitment, and I do appreciate it. I look forward to speaking to him in detail about the particular circumstances at Islington Gates. I am sure that my constituents will have heard and appreciated his recognition of the situation as unfair and unjust. Could I press him on how he sees the recovery unit working, in terms of the carrot-and-stick approaches that we might take with developers that still fail to live up to their responsibilities?

[Stuart Andrew]

The hon. Lady is right; this will probably be one of those early cases within the Act where we need to test this. That is why I am keen to work with her, so that we can ensure that officials in the Department fully understand the specific issues relating to the case, as it may well also apply to other cases, and we can roll that out further.

The hon. Lady will know that we have introduced many protections relating to non-cladding defects under the leaseholder protections within the Act. I assure her and residents of Islington Gates that no qualifying leaseholder in a building taller than 11 meters or five stories will face bills to remediate dangerous cladding, and that the bills for non-cladding remediation will, as she said, be capped at a maximum of £10,000. Those cost protections will come into force on 28 June, and costs already paid out in the last five years, including for interim measures such as waking watch, will count towards that cap. I reiterate that we are protecting leaseholders, in law, from that date. Leaseholders no longer have to worry about being landed with excessive bills that they cannot afford.

We will not stand by and allow developers and contractors who have created these defects to get away with it. Significant new powers in the Building Safety Act will allow those who created building safety defects to be held to account. We are retrospectively extending the limitation period under the Defective Premises Act 1972 to 30 years, giving new powers to courts to remove the protection afforded by shadowy shell companies and special-purpose vehicles, and creating new powers to hold construction product manufacturers to account.

Remediation orders and remediation contribution orders will allow the first-tier tribunal to force firms to fix—and pay to fix—their buildings. We have introduced those powers so that legal action can be pursued against developers, contractors, manufacturers and freeholders. The Department’s own recovery unit has been established to pursue firms who fail to do the right thing, including through the courts. Leaseholders deserve accountability from those who built the buildings and those who have owned and exploited them.

I am conscious of time, but I will quickly touch on the insurance issue, because I know that hon. Members have mentioned it. We are working tirelessly with industry to unlock that market. Where individual buildings have struggled to access cover, we have worked with industry to highlight the issues, and we have seen the British Insurance Brokers’ Association place those risks through its members. I offer my full support if such help would prove to be useful to the hon. Lady’s constituents.

To address the lack of affordable and adequate buildings insurance, we have been working closely with the Association of British Insurers to develop solutions, and my colleague Lord Greenhalgh met the association last month to discuss progress on an insurance pool. The Secretary of State received an initial report from the FCA on 10 May as part of its ongoing review, the findings of which will be critical to developing a full understanding of the issues in the market.

The FCA will consider all routes, whether enacted by the regulator, Government or industry, to ensure leaseholders get the value for money that they deserve. I understand the many concerns that the hon. Member for Birmingham, Ladywood has raised. We must bring proportionality back into the system, and I know that the Secretary of State takes this very seriously.

On the point that the hon. Lady made about including insurance payments in the cap, that is obviously something that I cannot commit to right now, but I will certainly take it back to the Department. However, I do take this very seriously, and we will take the recommendations very seriously. No solution is off the table when it comes to getting back to a competitive and fair insurance market for leaseholders. As I said at the beginning, I am happy to continue to work with the hon. Lady, and with other hon. Members who may have constituents affected by this, as we roll out the benefits of the Act.

Motion lapsed (Standing Order No. 10(6)).

Non-commissioned Exempt Accommodation

Shabana Mahmood Excerpts

Wednesday 23rd February 2022 Commons Chamber

[Eddie Hughes]

I appreciate that the hon. Gentleman is shaking his head, but I would just say that councils need to be encouraged to use the legislation already available to them to the max before we reach for a legislative answer to the problem.

[Shabana Mahmood (Birmingham, Ladywood) (Lab)]

The Minister is well aware that, if councils make a decision not to provide housing benefit and they are challenged in a court of law, they will lose such cases because the law itself is not sufficiently tight to prevent the abuse that is occurring. I would like to push the Minister: he has implied that he does not want to move quickly on tightening up the regulations because he is concerned about the impact that would have on the good providers, which we all agree are trying to do the best they can in difficult circumstances, but what is it about tightening up the regulations that would be so onerous for the good providers and take out the bad providers? The way I see it, the good providers are doing what they should be doing anyway, and it is only the bad providers that would be targeted by tightening up the regulations. I really do want to hear from him what he thinks would be onerous on the good providers if he tightens up the regulations.

[Eddie Hughes]

I agree largely with what the hon. Lady says, but on what other burdens we may place on people to meet the barriers to entry or the conditions we set, we are talking about providers that work on very low margins, and any further legislative burden placed on them may just push them out of the market. On my reservation to act quickly, I am very keen to deal with this problem as quickly as we can, and I strongly suspect that she and I will be having many conversations in the coming weeks and months. I am hoping that progress will be made—so we will talk again.

It is interesting that the hon. Lady intervened at that point, because I was about to refer to the Westminster Hall debate she held recently. One of the things that struck me about that debate was that very well-tempered, very well-informed and very passionate contributions were made across the Chamber, and it feels to me as though the spirit of that debate will be extended today in the way we discuss this problem and tackle it in the future. I think we should continue in that tone, because this is not a political issue. It is something we all care about passionately, and we can all see that rogue landlords are taking money and using it inappropriately when we are talking about some of the most vulnerable people in society.

Finally, there are some exceptional providers out there that provide great-quality accommodation. They have very passionate and dedicated staff, and I would hate to think that they were in any way tarred with the brush of these rogue providers. As well as dealing with the rogue landlords, we should celebrate the success and the great work that is done by others for some of the most vulnerable in society. I look forward to the rest of the debate.

--- Later in debate ---

[Shabana Mahmood (Birmingham, Ladywood) (Lab)]

I am pleased to contribute to such an important debate. The Under-Secretary of State for Levelling Up, Housing and Communities, the hon. Member for Walsall North (Eddie Hughes), is aware of my long-standing interest in this subject and I look forward to the further discussions he alluded to that will take place as the pilot reports are all completed and we think about the next steps, particularly in respect of the legislative framework.

We should be clear that we are talking about a situation unfolding throughout the country, as we all speak, in which rogue landlords, total cowboy operators and some with links to organised crime groups and established criminal enterprises, are getting their hands on taxpayers’ cash—our constituents’ money—and not using it for the purposes for which it was intended but simply lining their own pockets, and they are able to do so with absolute impunity. That situation is the subject matter of this debate: the fact that so many people can do such terrible abusive things, well within the rules, and totally get away with it. No criminal enterprise is going to get done for abusing taxpayers’ cash in this way, and that is a problem of the law.

I take issue with the Minister’s saying earlier in the debate that

“this is not a political issue”.

I agree with him in that I do not wish this to be a party political football with which we play knockabout in the Chamber, but this is a deeply political issue. It is full of political choices. We have talked a lot about local authorities, what local government can do or does not do and all this “he said, she said” about local government powers, but the fundamental problem and the failure in respect of the subject matter of this debate is one of the law itself, and only the Government have the power to change the law of this land. This is an arena of politics, but it is also the UK legislature. We are pushing the Government today not because of matters of party politics but because only they can act to prevent the abuses that we are all seeing unfold across our constituencies.

There is no point in my going to the chief constable of West Midlands police and saying, “I know that a drug dealer is basically setting up as a housing provider in my constituency, is going to get enhanced housing benefit payments, is going to line his own pockets and is probably going to abuse some of the poor, vulnerable constituents who end up in the property he manages,” because I know the chief constable can do nothing about it—not a single thing. That is the problem that I and all Members in this House with experience in this matter are desperate for the Government to fix. The problem is the law and only the Government can fix the law.

[Brendan Clarke-Smith]

I fully take the hon. Lady’s point about rogue landlords, whom we absolutely must tackle. Does she agree that the way to do so is through making sure that higher minimum standards are in place? For example, the national statement of expectations is there. Does the hon. Lady agree that is the best route to make sure that standards are adhered to?

[Shabana Mahmood]

I thank the hon. Member for that intervention. I accept that it is meant to be in the spirit of being helpful and adding to the debate, but the idea that criminal enterprises currently lining their pockets with our constituents’ money will be put off exploiting this business model because of a national statement of expectation is absolutely for the birds. I am sorry, but that will not work here. If it did, I would support it, because I want this problem fixed. I am desperate to see vulnerable people no longer being exploited and communities no longer being destroyed, but that measure will not cut it. These are proper operators and they have spotted a loophole in the law. They have calculated correctly that, instead of going further into the drugs business where they might have to do 20 years in prison, they can just get into the housing sector and no one will put them away for it—at all. In fact, they can do so in plain sight and nobody can do a thing about it. That is what I want the Government to take action on, because that is what I have seen in my own constituency of Birmingham, Ladywood. That is what my colleagues in Birmingham have seen in their constituencies, and some of them have truly horrific examples of abuse of vulnerable tenants.

We are seeing that problem all across the country. I was very grateful to the hon. Member for Hertford and Stortford (Julie Marson) for saying that this is national issue. It can become a little too easy for Members in this place to think that this is a problem for some cities—let us be honest, if we are to be party political about this, it is problem for some Labour-run cities. As my hon. Friend the Member for Westminster North (Ms Buck) said, piecemeal action—a pilot here and a little bit of a change there—just creates a whack-a-mole system. A problem that starts in Birmingham will soon spread to Sandwell, to Stoke and then to Dudley, and to other places too, unless we have a national change in the law of our land that stops the problem dead for everybody. Then, a Member whose constituency is currently not afflicted by it would not have to worry about a proliferation of exempt accommodation taking place in their patch. If they do have it in their constituency already, they could at least see that there was an end in sight to this absolute abuse of the system, which, as Mr Deputy Speaker can tell, leaves most of us utterly impotent with rage because, unless the Government change the law, we can simply not fix this problem.

The first area of the law that requires change is the “more than minimal” test, which has been discussed today. The Minister made the point that the “more than minimal” requirement for the access to enhanced housing benefit regulations has come about as a matter of case law. He is, of course, right; that was done by a housing benefit tribunal. In this country, though, we do not distinguish between case law and Acts of Parliament or statutory instruments. The law is the law and if a judicial authority—a judge or a tribunal—comes to a clarification or a statement of the law that is against what the Government expect to happen, all that creates is a system that is open to abuse. It is the job of this legislature, this House of Commons, to put it right, and only the Government have the power to introduce that legislation to make it so. That rule—the “more than minimal” requirement—must be changed. It must be tightened up.

I do not buy the argument that, somehow, tightening up the access to enhanced housing benefit will somehow drive the good providers out of the sector. That is also for the birds. Those providers are already doing the things that are required in order to help vulnerable people turn their lives around. In the end, that is the thing in which we should all be interested. These are people who have escaped abusive relationships, who have come out of the prison system and are desperate to turn their lives around, and who have had addiction issues and need help to turn their lives around. They need good quality housing in order to do that. The hon. Member for Bury North (James Daly) was right when he said that people should be sentenced to a house so that they can have stability—the stability that is required to help them turn their life around and become a citizen able to play their full part in society once more. That is not possible if the rogue operators get their hands on these people first. The good providers, who have a moral and a social mission when it comes to supported housing, will already be doing the right thing. I do not buy the idea that they will be pushed out of the system if the regulations for access to the cash in the first place are tightened up.

The Government and the Department for Levelling Up, Housing and Communities in particular, rather than the Department for Work and Pensions, need to tighten up the broader regulatory framework. It should not be possible to be providing housing to some of the most vulnerable people in our country and to not even have to pass some sort of character test. The idea that the good providers who are operating will fail fit and proper persons tests is a joke. They will pass it because they have a social, moral mission and they can prove their track record in helping people to turn their lives around. If they do not pass it, they should not have access to vulnerable people in the first place. We know what happens when vulnerable people get into bad accommodation: they are ripe for further abuse, ripe for further grooming into drug activity, and ripe for further grooming into sexual exploitation. We should not allow any provider who cannot pass a fit and proper person’s test to get anywhere near some of these people because they will exacerbate the problem rather than alleviate it. Frankly, I have no sympathy with anyone who we currently think of as a good provider but who ends up failing that test, because it proves they were not a good provider in the first place.

We also need more powers for local authorities—a point that was also raised earlier in the debate—to prevent the dumping of problem people from one part of a country to another. I accept that there are some classes of vulnerable individuals who need to break the link with their local area if they are going to turn their lives around, but that is not the case for the vast majority of people who have ended up in exempt supported accommodation.

[Matt Rodda (Reading East) (Lab)]

My hon. Friend is making an excellent speech. She speaks from deep experience and her legal background stands her in good stead on these important matters. Does she agree that this is part of a series of problems where the Government have got the emphasis quite wrong in their housing policy? They have not given enough powers to local government, they have not regulated the system enough and they have allowed exactly the wrong type of landlords to drive a coach and horses through what limited regulation there is. In many ways, that reflects a bigger picture, not only of the poor vulnerable people who are being mistreated, but of a lack of emphasis on council housing and a lack of regulation of private rented accommodation. The whole system needs a complete rethink and Ministers need to listen to what my hon. Friend is saying.

[Shabana Mahmood]

I agree wholeheartedly with my hon. Friend that we need a system-wide approach. Local authorities need the power to reject applications for exempt accommodation on the grounds of saturation or oversupply. We must break the habit of putting huge amounts of need into already stretched areas and then wondering why those areas can never recover. We wonder why people who have raised their families and committed themselves to stable communities in modest properties that they are proud of, whether they are socially renting or have managed to become owner-occupiers, are so desperate to leave the areas that they were committed to, when we have loaded all sorts of high need into those areas and provided none of the services to support them.

People dumping has to stop, over-saturation has to stop and local authorities need the power to prevent an over-saturation of supply. We need community impact assessments before we get large numbers of exempt supported accommodation across our different communities, to ensure we are not loading more need into already difficult areas.

As I said earlier, the vast majority of tenants in exempt accommodation should be able to demonstrate some sort of local link to the area. Unless it is a requirement because of a prison or domestic violence-related issue, most people need some such link in order to have the stability to turn their lives around.

Finally, we need an inspections regime. We need to keep providers on their toes so that it is not the case that once someone has accessed the system, nobody will ever ask them questions again. There should be at least an annual check to ensure that people who have access to vulnerable tenants and taxpayer cash are doing the thing they said they would do and fulfilling the promises they made.

Only with Government action can we turn the dial on a huge problem that affects not only my constituency, but people all across this country. Our communities deserve nothing less. When the Minister stands to close this debate, I hope he will not simply say, “We’re watching, and we’re waiting and seeing, and we’re going to think about what we’re going to do,” but give us a legislative timetable for making the changes that are needed.

[Mr Deputy Speaker (Mr Nigel Evans)]

If everybody takes 13 or 14 minutes, we will not get everybody in. If people could be mindful of their colleagues, we will try to squeeze everybody in.

Supported Exempt Accommodation

Shabana Mahmood Excerpts

Wednesday 9th February 2022 Westminster Hall

[Yvonne Fovargue (in the Chair)]

Before we begin, I remind hon. Members to observe social distancing and to wear masks. I will call Shabana Mahmood to move the motion, and will then call the Minister to respond. There will not be an opportunity for the Member in charge to wind up, as is the convention for 30-minute debates. Members who intend to speak should have asked for permission from the Minister and the Member who secured the debate. I call Shabana Mahmood to move the motion.

[Shabana Mahmood (Birmingham, Ladywood) (Lab)]

I beg to move,

That this House has considered regulation of supported exempt accommodation.

It is a pleasure to serve under your chairmanship, Ms Fovargue. I am pleased to have secured the debate today to discuss something that is a huge problem in my constituency, in my city, and in many other places across the country.

If someone had asked me a few years ago what supported exempt accommodation was, I would not have been able to tell them. I know it confuses people even now. Given my difficulties in dealing with the issue in my own constituency, I have become quite a world expert. I will set out for all exactly what we mean when we talk about supported exempt accommodation.

Supported accommodation is a broad term that describes a range of housing types: group homes, hostels, refuges, sheltered housing, and so on. An offshoot of supported accommodation is referred to as “exempt”. It is basically a resettlement place or accommodation provided by a council, housing association, charity or voluntary organisation, where a person or organisation provides the claimant with—in theory—care, support or supervision. I say “in theory” because too often that is not the case in reality, and that is what I will discuss in detail in my speech.

Exempt accommodation is supported housing that is exempt from housing benefit regulations. If we provide someone with that type of housing, we get access to enhanced housing benefit and can access more money to house this group of mainly vulnerable tenants who are in need of care, support or supervision. We can see why that has happened. The cost of housing vulnerable people—care leavers, women fleeing domestic violence, ex-offenders, people with addiction issues, and so on—is higher. The costs of helping those individuals are higher, so the exemption from housing benefit regulations—the ability to access higher payments to house such people—was designed to allow providers to access adequate sums of money to help individuals as they seek to turn their lives around. Too often, that is very much not what happens in practice.

I stress that there are some good, legitimate providers of this type of housing, who do important work with people in desperate need of housing and help. There are still those who are committed to a social and indeed moral mission to help people to get back on an even keel, recover from addiction, turn their lives around and play a full part in society once again. However, there are too many rogue—I describe them as cowboy—providers who have clocked that this is a lucrative money-spinning opportunity and who take full advantage. They get access to larger sums of money to house housing benefit claimants who need care, support or supervision, and then they do not provide it.

In law, it is the case that all a provider has to do is provide care, support and supervision that is, in legal terms, “more than minimal”. Those three words have plagued me as I have navigated the complex world of supported housing while trying to help my constituents—those who live in such properties and those in communities where there is a proliferation of those types of properties.

[John Spellar (Warley) (Lab)]

That is the nub of it, is it not? The hugely greater rents and support that landlords can get means that families are priced out of streets, and the problem spreads rapidly down these streets. The behaviour of many of those who get no support makes those streets places where people no longer wish to live. My hon. Friend talks about shady landlords, but is there not a real danger that there is so much money to be made now that organised crime is moving in, in a big way?

[Shabana Mahmood]

My right hon. Friend is exactly right. I will come to his point about the connection with organised crime, which is becoming a real problem. He is right that the distortion in the housing market in these communities means that working families are being priced out of good, viable family homes. Other social tenants cannot access them either; when a person cannot get enhanced housing benefits, they are subject to the local housing allowance

In fact, this lucrative loophole is causing huge problems not only for the tenants, who often get trapped in unsuitable properties, but for the communities living in those in those areas and those who might wish to live in them, too. It is exactly those nefarious operators moving into the sector who are causing problems in my constituency and across the country.

In practice, “more than minimal” means hardly anything at all. I have heard providers say that installing CCTV in communal areas or having a manager who might visit the property once in a blue moon counts as adequate supervision of vulnerable people. That sort of so-called supervision would certainly pass the “more the minimal” test, but the idea that that is what was meant by the regulations that determine access to larger pots of housing benefit is utterly outrageous.

Cowboy operators know that they can access more money per tenant, and they do not have to spend very much—or indeed anything at all—to demonstrate that they are providing care, support or supervision. So, what is the upshot? Lots of cash is available for those who know how to game the system.

[Kerry McCarthy (Bristol East) (Lab)]

As my hon. Friend knows, I introduced a ten-minute rule Bill on this matter a couple of years ago because of concerns about a property in my constituency where it took providers two days to discover someone’s body after he died. That is not supervision or support. Councils just do not have powers to deal with this issue. The Charity Commission got involved. Does my hon. Friend agree that we absolutely need better mechanisms by which to intervene when we are worried about a supported housing project?

--- Later in debate ---

[Shabana Mahmood]

I thank my hon. Friend for her intervention and her work in this area. I know of the shocking case in her constituency. It really speaks to the problems caused by providers in this sector not doing what they are supposed or intended to do. I will come on to the regulations that I think need to change later in my speech, and I very much hope the Minister will take those on board.

If someone knows how to game the system, the next stage is obtaining properties, which these providers do by leasing them from owners. With that lease-based model, providers do not have to shell out large sums of money to buy property of their own; they do not have to spend lots of money adapting it, either. They simply lease houses, turn them into houses in multiple occupation—or HMOs—and, frankly, watch the money roll in.

This is the other aspect of the exemption in relation to this type of housing: providers are exempt from not only housing benefit regulations but other regulations, such as planning and licensing laws that enable councils in other areas to limit the types and proliferation of HMOs. Those rules do not apply to supported exempt accommodation. Having a so-called article 4 direction in a city or area—as we do in Birmingham—does not stop the proliferation of this type of housing.

In theory, we can see what was being attempted with those rules: to provide more money to cover the additional cost of housing associated with vulnerable tenants, and to allow enough appropriate units to be set up to ensure that an adequate quantity of housing is available. Again, however, that is not how things have worked in practice. The exemption from licensing rules and regulations that applies to other types of HMO does not apply here. Whole streets and communities are becoming saturated with family homes converted into HMOs providing exempt accommodation, housing vulnerable tenants and creating problems for the whole community, while failing the tenants by placing them at risk of very real further harm. It is a system that is failing everyone.

[Preet Kaur Gill (Birmingham, Edgbaston) (Lab/Co-op)]

I thank my hon. Friend for securing this important debate and for the fantastic work she has done on this matter. As she said, I was alerted by constituents to the rise in crime because of some of these properties, with drug dealing, begging and sex work taking place. I undertook a spot check and saw first hand vulnerable people who were not getting the support they need and living in really substandard, filthy conditions—somewhere none of us would actually choose to live. It was only with West Midlands police, Birmingham City Council and our local residents that we got that place shut down last year. It is the first in the country that we have been able to shut down. Does my hon. Friend agree that the sector is fundamentally in need of reform and that we cannot put this task off any longer?

[Shabana Mahmood]

My hon. Friend has been doing huge amounts of work on this issue in her constituency. Many of my Birmingham colleagues are in this Chamber today. This is a big problem in our city, and I thank my colleagues for their interest in this debate and for the work they are doing in their own constituencies. My hon. Friend is absolutely right about regulation, and I will come to some of the regulations that will be needed.

Some might be thinking that there is surely someone regulating the system and carrying out the very checks to which my hon. Friend just alluded. There is a regulator for social housing, but it simply does not have the powers to deal with rogue operators, because those people know how to game the system. They have set themselves up as small operators, so they are outside of the direct purview of the regulator. They can make lots of money with little to no scrutiny, which is leaving too many people in my patch in utter despair. More than 150,000 households in the country are living in exempt accommodation—this represents a 62% increase in five years—and there are 1,600 such properties in my constituency alone. There has been a massive increase, and we are seeing these problems all over the country.

As I have said, the tenants are too often being let down. Many of my constituents come to me with their problems, and many of my colleagues have raised in the House, and with the city directly, the issues that their constituents face with their properties. It is not unusual to find properties that are in complete disrepair and that we would not consider fit for human habitation in any way. It is not unusual for vulnerable women to be housed with dangerous men in these properties—for them to be at risk of attack or, in fact, to have been attacked.

[Jess Phillips (Birmingham, Yardley) (Lab)]

I am becoming a broken record. I have brought a case to the Department of a 19-year-old rape victim who is waiting for trial and has been housed, without any regulation, with men who have been released from prison for the exact same crimes that she wishes to put people in prison for.

To respond to the point made by my hon. Friend the Member for Bristol East (Kerry McCarthy), two women in the last three years have been murdered in “exempt, supported” accommodation. In one case, the key worker did not notice that the woman had been murdered. After visiting the property, she said to the woman’s mother, “Oh, she’s absolutely fine”—but the person she had seen was the person who had murdered the woman. That is the level of support that vulnerable women are getting in this accommodation. It is dangerous, and it must stop.

[Shabana Mahmood]

My hon. Friend is absolutely right. She has raised those horror cases in her constituency at regular intervals, directly with the Department and in this House. Those cases of women left at real risk of harm, having truly suffered at the hands of dangerous men who they should have never been housed alongside, are not unique.

It is not unusual, when I have investigated cases in my constituency, to discover that the housing contract that was approved has forged signatures on it. There are multiple layers of subcontractors that get involved with the providers in this sector, and it is not unusual to see faked documents. I have had constituents come to me and say that they are being held to a contract that they have never seen before. It is also not unusual for people to be left without any hot water or electricity.

It is often the case that the tenants, who are desperately in need of care, support or supervision, are left to rot in disgusting properties and at real risk of physical danger. The residents who live alongside them are also being let down: over-concentration in particular areas just loads more need and deprivation into areas that are already struggling. Crime and antisocial behaviour has massively increased. I have had constituents break down, explaining that they are worried that their children are witnessing public drug taking, people collapsing in the street having drunk too much or urinating in their front gardens, all on what were once modest, quiet residential streets that were home to tight-knit communities. That is why so many people in my patch and my city are in utter despair.

[Mr Khalid Mahmood (Birmingham, Perry Barr) (Lab)]

I appreciate the point that my hon. Friend is trying to make. This weekend, a lady came to my constituency surgery to complain of exactly that issue: prisoners on release have been put next door to her and are making her life absolute hell, and she is not able to do anything. Not just that—the environment around the place is becoming filthy. It is creating a huge problem in the environment across the whole of the constituency, and our communities are breaking down because of the under-regulation that is taking place.

[Shabana Mahmood]

My hon. Friend is absolutely right. The example he describes is something I see too often in my own advice surgeries. People really are in despair. This situation is attacking the heart of the social spirit we need to help vulnerable people turn their lives around. People generally want to do the right thing by people who are in trouble. They want to have mixed communities where everybody can play a part in uplifting and supporting each other, but when there is an over-saturation of need, without the necessary supporting services, that breaks down the social fabric of our communities and the spirit of social solidarity.

So many times I meet people in complete despair at the change they have seen in their local areas as a result of the proliferation of exempt accommodation units. In many cases, they are desperate to move out and leave the places they have always loved, because they can tolerate the degradation of the living conditions of the whole community no longer.

This is all happening in plain sight. Only the Government have the power to act. I implore the Minister today to commit to taking the necessary action. No more pilots or evidence are needed. We have plenty of evidence; we have been shouting about the evidence for years. It is high time that we see some action.

As others have also said, I have been convinced for some time that some rogue operators in this sector have links to organised crime. I know that the police have raised concerns at a national level. The sector has the advantage of having zero chance of a jail term, so we can see why criminals, previously involved in drugs or whatever, are now concluding that this is a better business to get into. What do the Government need to do? They need to destroy the business model of the rogue operators. Good providers spend the additional money they receive in the ways in which it was always intended, so they will have no difficulty meeting higher legal tests or proving themselves, but that is not the case with rogue operators.

The Department for Work and Pensions needs to tighten up the welfare regulations. We need a proper legal test for access to enhanced housing benefit. The regulations have to be toughened up, and a proper test for what counts as care, support or supervision has to be set out in law. We have to cut off the ease with which this extra cash can be accessed.

From the Minister’s Department, we need tougher regulations and a regulator that has the full range of powers needed to deal with the problem. I want to see a tough “fit and proper persons” test that has to be passed before any provider is allowed anywhere near the sector, no matter how big or small the operator or how many units they have at their disposal. It need to be the law that they should all have to pass such a test.

Local authorities need the power to reject applications for exempt accommodation on grounds of saturation or over-supply in a specific area, and to insist on community impact assessments that have the power to prevent over-saturation. That is the only way we will be able to stop the overloading of high need into already difficult areas.

All tenants in exempt accommodation need to have some sort of local link to the area. Birmingham has become, in the words of some council officials I have spoken to, a dumping ground for people from elsewhere. A local link will not always be appropriate. I fully accept that in cases of domestic violence and occasionally in respect of ex-offenders, a local link needs to be broken to help somebody turn their life around, but we cannot simply allow a system where local authorities or national Government agencies are displacing huge amounts of vulnerability and need into other parts of the country, with no thought whatever for the people left to cope with the changes being made to their communities against their will.

Once a provider has shown that they are fit and proper, and we have prevented over-saturation, we need an inspections regime to keep providers on their toes and a regulator that has full powers of enforcement to clamp down on those who might still flout the system. We need a whole package of regulations to clamp down on the many abuses in the sector.

I know the Minister has been looking into the matter, and the Minister for Welfare Delivery has sent me written assurances that he is considering changes to benefits regulation. They must understand the desperation we are feeling as vast swathes of our communities are changing right before our very eyes, and we have no powers to do anything about it. I hope that in his response today he is able to give us some assurance that this Government will finally take decisive action to turn this absolute horror around.

--- Later in debate ---

[Eddie Hughes]

I fully accept the right hon. Gentleman’s point, but part of the purpose of the pilots is to understand not just the scale of the problem, but, more importantly, what type of interventions work most effectively. It is all very well saying, “We know what the problem is. Therefore, we know how to address it.” I am not sure that is completely the case, given that different interventions have had different successes in different pilot areas. It is important, having spent £5.5 million, that we get the full value from the pilots and understand the best-quality interventions to make.

[Shabana Mahmood]

Would the Minister agree that one of the fastest ways to get action in this area is to destroy the business model of the rogue operators? That will not impact on good operators doing the right thing, because they are using the extra cash to do the right thing. It is the rogue operators that need the scrutiny and the blunt instrument of tougher regulations and a proper test in law.

[Eddie Hughes]

I understand the hon. Lady’s frustration and the case she is making. Having worked for a good-quality provider, I understand the marginal prices that they work on. It is possible to put good-quality providers out of business through unintended consequences of applying tougher restrictions right across the sector. We need to be careful that we do not throw out the good with the bad when making the suggested changes.

Building Safety Bill

Shabana Mahmood Excerpts

Report stage
Wednesday 19th January 2022 Commons Chamber

[Kelly Tolhurst]

My right hon. Friend is quite right. I welcome many of the amendments, and I welcome a lot of what is in the Bill. I am pleased with the extension on limitations.

During covid, a fire ripped through a building on the Causeway in my constituency. Again, it is not a high-rise block and is under 18 metres. Other hon. Members have mentioned firebreaks and the lack of such work. Coincidentally, further structural defects have been found in the investigation work carried out after the fire. They would not have been found if the fire had not ripped through the building in 2020.

As my right hon. Friend the Member for Hemel Hempstead (Sir Mike Penning) and my hon. Friend the Member for Harrow East (Bob Blackman) said, these buildings have been signed off. I was a marine surveyor in a previous life, and if I had signed off the builds of boats that had major defects, my professional indemnity insurance would have had to pay out and I might not have got insurance next time around because of my poor performance. How is it acceptable that people can sign off such buildings and give certificates to the residents—our constituents—who buy them? That gives the residents confidence in the quality and safety of what they are buying. We need to look at the insurance argument; it is a valid point. To be frank, it is a scandal that those poor individuals have bought those buildings. The profession has a lot to answer for, as far as I am concerned.

Ultimately, I want to press the Minister on what assurances and comfort he can give my constituents who are watching the debate and who have been following the Bill with bated breath for many months, hoping that it will be their salvation.

[Shabana Mahmood (Birmingham, Ladywood) (Lab)]

I shall speak to Opposition new clause 3 and to the amendments that, although they will not be pressed to a vote this evening, would protect leaseholders from the costs of not only cladding removal, but the remediation of non-cladding defects.

I can hardly believe that it is four and a half years since the horrific fire at Grenfell, and still we are fighting for the robust legal protection that leaseholders in my constituency and across the country need and deserve. It is too easy to assume that removing cladding is the beginning and end of the scandal; the costs of remediating non-cladding fire safety defects are just as ruinous, and blameless leaseholders should not be picking up those costs. I have seen for myself the extent of fire safety defects at various buildings in my constituency, including the Brindley House development, where the scale of the missing firebreaks and other defects was truly shocking. The people who were responsible for putting up that building were grossly negligent and, in my opinion, complete cowboys.

The regulatory failure whereby buildings were declared fit for human habitation when they contained defective or inappropriate fire safety measures, or when those measures were wholly absent, is staggering. When there were negligent and dishonest practices, the costs of remediation should not fall at the feet of my constituents. A commitment to full legal protection for leaseholders from all costs—both for the removal of dangerous cladding and for the remediation of all other fire safety defects—should have been added to the Bill today, because those issues are not new and have been the subject of intense debate for years.

Ministers and their officials know full well the contours of the debate and the issues at stake, so it is not good enough that the Government did not make such amendments today. Instead, we will have to wait to see whether full legal protection is made available when the Bill goes to the other place. We may understand parliamentary procedure and the different staging posts of a Bill, but to my constituents watching from the outside, every single staging post feels like a slap in the face when they are not given the full protection that they need and deserve.

I associate myself with the comments that have been made about insurance, particularly professional indemnity insurance, but I want to mention the increased insurance premiums that many of our constituents have faced across the country. I have been writing to the Government, the FCA and others for more than two years to ask for action against the insurance industry for the huge increase—the hike—in premiums that our cladding-affected leaseholders have faced. That increase bears no resemblance to the mitigations that our constituents have paid for to decrease the risks in their buildings.

People have paid hundreds of thousands of pounds for new fire alarm systems and internal compartmentation to try to bring the risk down in their buildings, yet that is never reflected in the insurance premiums that they have to pay. That is unconscionable. There are big questions for the wider insurance sector to answer, in addition to the buildings industry. It seems to me that someone who has profited from, for example, charging a building in my constituency an insurance premium of £700,000 in total, which has never come down, has some big questions to answer.

I hope that when the Minister brings the Bill back to this place, we get the time for adequate debate and the further amendments that we need. I hope that we take action on insurance and perhaps even—God help us—implore the FCA to do its job and stand by our constituents, who deserve the regulator’s protection. When the Bill comes back, I hope that it addresses all those issues, as it is high time that the Government did right by leaseholders.

[Christopher Pincher]

I congratulate right hon. and hon. Members on their contributions to this important debate and to the amendments that we are debating. In the short time that I have, I will say that I entirely agree with my hon. Friend the Member for Stevenage (Stephen McPartland) and the hon. Member for Birmingham, Ladywood (Shabana Mahmood), who raised the terrible plight faced by her constituents at Brindley House, as did the Mayor of the West Midlands, Andy Street. Too many people, for far too long, have been far too worried. We have to end this scandal.

Several hon. Members asked whether we intend to bring forward legal protections in the House of Lords. I assure the House that we do. We certainly want to ensure that all leaseholders in medium and high-rise buildings, who live in them or who used to live in them but have had to move out and sub-let because of the situation in which they find themselves, will have put in place the robust legal protections to which my right hon. Friend the Secretary of State referred. We want to work cross-party and with interested parties to ensure that those robust protections are right.

We believe that leaseholders should not be asked to pay anything further until those legal protections are in place, as was raised by several hon. Members on both sides of the House. I encourage any hon. Member who is aware of demands from freeholders that their leaseholders pay to make me or my officials aware of that demand.

I am also grateful for the points raised by my right hon. Friend the Member for Hemel Hempstead (Sir Mike Penning) and my hon. Friend the Member for Rochester and Strood (Kelly Tolhurst) about the, shall we say, peculiarities of the insurance system. Some of those are wider issues that go beyond the Bill, but I am happy to discuss how we can resolve such issues with them.

I will certainly work collaboratively with the hon. Member for Reading East (Matt Rodda). I am conscious that my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill) is right that there are limitations through mitigation, but the law can change the culture. That is part of the point of bringing forward the Bill—to change the culture of the sector.

We will instigate a summit with the sector to ensure that it pays what it owes, and if it will not pay voluntarily, we will introduce appropriate mechanisms to ensure that it does. I am conscious that the Father of the House, my hon. Friend the Member for Worthing West (Sir Peter Bottomley), referred to the Defective Premises Act 1972. I may have misheard him, but I think he suggested that that Act is not available for use by leaseholders. That is not correct. Leaseholders are able to avail themselves of the Act, as may any freeholder.

I am conscious, Mr Deputy Speaker, that I have only 14 more seconds in which to speak. Let me reassure Members that we want to work across the House to bring forward sensible legal protections in amendments in the other place, and we will do that as soon as may be.

Fire Safety Bill

Shabana Mahmood Excerpts

Consideration of Lords message
Tuesday 27th April 2021 Commons Chamber

[Shabana Mahmood (Birmingham, Ladywood) (Lab) [V]]

Four years have passed since the Grenfell tragedy, and once again the House is debating whether or not to protect leaseholders from the costs of remedying fire safety defects caused by a failure of regulation and negligence, as well as by deceptive practices in the building industry. Meanwhile, the Government continue to dither and delay, and order their MPs to vote against amendments designed to protect leaseholders. Make no mistake, the funds that the Government have made available thus far have taken too much time to come on stream. The money will not ultimately be enough to meet the scale of the crisis and, crucially, interim costs are not covered.

On top of all those costs, today we have heard about the cost of insurance. I have lost count of the times that I have pleaded with the Government to do something about insurance costs. In my constituency there have been insurance increases of 1,000% in affected buildings. Those are shocking figures, and this shocking situation is falling on deaf ears as far as the Government are concerned. Long before any cladding is removed from these buildings, the people living in them will have been ruined by the costs of insurance and interim measures such as waking watches to keep their buildings open. There is simply nothing left to remedy the internal fire safety defects as well. Leaseholders need the protection that the Lords amendment would offer.

We should never forget that at any point, a further tragedy could—God forbid—occur. That is a terror that leaseholders in Brindley House in my constituency have had to face, because on 31 January this year there was a fire in a flat in their building. I have seen the burned-out husk of that flat for myself. The fire service said that the residents were only two minutes away from the fire engulfing the whole of their building. Two more minutes and the windows in that flat would have shattered, and the cladding wrapped around that building would have caught fire. When I heard that, my blood ran cold. Can the Minister imagine what it must be like for the people who live in Brindley House? That is the risk, that is the fear, and that is the scale of the financial ruination that people in my constituency and all over the country are trying to cope with.

One of my constituents recently said to me that he now thinks it will be less stressful to declare himself bankrupt and become homeless than to try to find a way to carry on as a leaseholder. At the very least, the Government could and should support the Lords amendment, or indicate a clear way through the crisis, so that we send a clear signal to all leaseholders that we will stand with them.

[Bob Blackman (Harrow East) (Con) [V]]

I start from the principle that successive Secretaries of State and Ministers have said from the Dispatch Box that the leaseholders are the innocent parties in this scandal and that they should not have to pay a penny piece towards the costs of remediation. I applaud the Government for coming forward with £5.1 billion of public money to support the remediation of unsafe cladding, but our problem is that it is not enough. The estimate now is that £15 billion will be required and that the extra £10 billion will have to come from leaseholders as the last resort, because building owners will naturally pass that on to leaseholders wherever they possibly can. They are the ones in situ; they are the ones facing these huge bills.

The Government say that further proposals will come forward on the forced loan scheme. We were promised in the earlier statement in February that the loan scheme would be announced at the Budget. Now, I did make the assumption that that was the Budget in 2021, not the Budget in 2022 or 2023. The reality is that the evidence given to the Housing, Communities and Local Government Committee and other bodies suggests that the forced loan scheme is nowhere near being available. We as Members of Parliament are not even able to scrutinise the proposal, so those who are living in blocks of flats of six floors or less do not even know how that scheme will work. My estimate is that many people will end up with a bill that will last for 100 years, therefore factoring in, almost inevitably, a dramatic reduction in the value of their properties. Equally, we know that the fire safety remediation required in addition to the remediation of unsafe cladding almost dwarfs the costs of remediating the cladding. All those costs will once again be passed on to the innocent leaseholders.

I understand that my right hon. Friend on the Front Bench has to defend this position and clearly wants to get the Fire Safety Bill on the statute book. Let us be clear. I do not think any MP wishes to prevent the progress of the Fire Safety Bill. What we do need, however, is surety and assuredness, because the draft Building Safety Bill will almost certainly take 18 months to two years to bring to fruition. The leaseholders do not have that time to wait. My right hon. Friend the Minister has made it clear on a number of occasions that he finds the amendments defective. Well, there is still time. I agree with my right hon. Friend the Member for North Somerset (Dr Fox) that there is a solution. If the Government reject that solution, let them come forward with their own solution in the House of Lords. Let us agree that the leaseholders do not have to pay a penny and the Fire Safety Bill can go on the statute book, as we would all like to see.

Fire Safety Bill

Shabana Mahmood Excerpts

Consideration of Lords amendments
Monday 22nd March 2021 Commons Chamber

[Shabana Mahmood (Birmingham, Ladywood) (Lab) [V]]

There is a simple question for the House to consider today: should leaseholders be forced to pay for essential remediation works that they are compelled to undertake to their properties that have come about through no fault of their own? The only possible answer is no.

We know that the cladding calamity that has befallen so many of our constituents did not come about because leaseholders have failed in any way. All the costs that are attributable to the cladding scandal are down to failures by developers and successive Governments, who have presided over shocking, scandalous regulatory failure, which has pushed thousands of wholly innocent people to the brink of financial ruin.

We all know that the costs of the regulatory failure that has created this crisis are in the many billions of pounds, but they must not fall on the ordinary people who are not responsible for this mess. There are other ways, I believe, that the Government can raise the necessary money. They should introduce a levy on developers and the construction industry to fund the cost of remediation —both cladding removal and remediating the many other fire risks that many of us in the House have been raising for quite some time.

The Government should also strengthen procurement regulations so that local authorities and metro Mayors can prevent developers and construction companies that are failing to live up to their moral obligations and put right the fire hazards that they are responsible for creating from bidding for any further publicly funded development contracts. In that way, we can reward those who are doing the right thing and putting right the cladding issues in the buildings that they were responsible for putting up and, hopefully, force a rethink on the part of those who are failing to live up to their responsibilities by preventing them from bidding for further taxpayer-funded contracts.

But what is clear is that the Government must not pin the spiralling costs of this crisis on the ordinary people who are currently facing financial ruination. I urge all Members to keep the amendment tabled by the Bishop of Saint Albans in the Bill, because to do anything else is a dereliction of our duty. This House must do the right thing by leaseholders this evening.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I draw the House’s attention to my entry in the Register of Members’ Financial Interests.

The first thing to say is that I agree with many of the comments that have been made. It simply cannot be right that leaseholders are faced with bills of tens of thousands of pounds. Nevertheless, I cannot support the amendment because I do not think it is effective, for a number of reasons. First, it seems to put somebody—an indeterminate person—on the hook for fire safety remediation forever. As I read it, it is not limited to historical defects.

Unsafe Cladding: Protecting Tenants and Leaseholders

Shabana Mahmood Excerpts

Monday 1st February 2021 Commons Chamber

[Shabana Mahmood (Birmingham, Ladywood) (Lab) [V]]

The cladding scandal has wrought emotional and financial devastation upon my constituents who live in affected buildings. The human impact of this crisis on leaseholders is horrendous. One constituent recently told me:

“It is pretty much all I talk and think about. I have thought about killing myself and have started counselling to try to manage the thoughts and my anxiety.”

The Government have not yet offered the scale and range of measures necessary to meet the full impact of this crisis. I hope this debate changes the dial on their approach. I wish in particular to address the issue of insurance costs, which I have raised in this House for the past year. The Islington Gates development in my constituency saw a hike in insurance prices from £36,000 to £321,000. The Brindley House development in my constituency has the horrible honour of being the first building—in May last year—to find itself uninsured as a result of the cladding scandal. It was eventually able to secure cover, but it was being quoted prices of half a million pounds.

I have been writing to Ministers and officials at MHCLG and the Treasury, as well as the Financial Conduct Authority, ever since these issues came to light in my constituency, but to no avail. It is clear to me that the Government need to step in to sort out the insurance costs issue, because there seems to be little relationship between the interim measures that leaseholders are paying for, such as very expensive, state-of-the-art alarm systems, and the cost of the insurance premiums that they are being quoted. That has to be called out, and it is clear to me that some form of guarantee eventually needs to be offered by the Government that reflects a balance of all the risks and affordability for our constituents.

In terms of the way forward, I associate myself with the remarks made from the Labour Front Bench, but I also believe that the businesses, developers and construction companies responsible for putting these buildings up should face some consequences if they do not step up to remedy the defects that they are responsible for. Such businesses should not be able to bid for and receive public sector contracts. I think of developers such as Galliford Try in my constituency, which is failing to engage with leaseholders over Islington Gates. It is eligible to bid for projects that are part of the West Midlands Combined Authority area framework. I do not believe that anyone who fails to live up to their responsibilities and does not pay their due liabilities to wider society should get our money. It is unconscionable that ordinary people who are wholly innocent and have done nothing wrong are losing everything that they have ever worked for, and that those responsible are getting off scot-free. This House should act as one tonight, call time on this behaviour and stand with leaseholders.

Council Tax: Government’s Proposed Increase

Shabana Mahmood Excerpts

Monday 25th January 2021 Commons Chamber

[Shabana Mahmood (Birmingham, Ladywood) (Lab) [V]]

When the Secretary of State said that the Government stood ready to do whatever is necessary to support councils in their response to the pandemic, council leaders at the sharp end of responding to the pandemic were entitled to take him at his word, and they were right to do so. It is an absolute betrayal that the Secretary of State has since gone back on his word and that councils face a total shortfall across all local authorities of £2.6 billion. We can compare that with the billions the Government have wasted during this crisis on contracts handed out to people with strong links to the Conservative party and people who have been donors to the Conservative party. Those contracts have failed to live up to what they were supposed to be delivering, all while local authorities face such a huge shortfall. It is unconscionable.

In Birmingham, we face a shortfall of £207 million, and the Government have not even pledged half of that amount. Over the next two years, our council is expecting an additional spend of £55 million on adult social care, £11.4 million on children’s social care, £9.5 million on education and £2.3 million on PPE. Which of those, I ask the Secretary of State, is superfluous to requirements? Which of those is an add-on or a waste of money? None of them—they are part of the statutory responsibilities of our local government. In Birmingham, we are expecting a total loss of £44 million in business rates and £20 million in our council tax receipts. Given the state of the economy, does anyone seriously think that business rates and council tax receipts will recover quickly, if at all? The changes that are occurring to the high street, as I speak, mean that the hight street is changing beyond all recognition and some of its revenue will never return to local government.

The expectation of a 5% increase in council tax implicit in the Government’s own numbers is morally wrong, given the promises that the Government made at the start of the pandemic, but it is also wrong that the Government continue to pass the buck on funding for local government. For a decade they have succeeded in devolving the blame for their cuts, but they know that the biggest factor that is driving up expenditure of local government is adult social care. We have an ageing population, and that brings with it increasing costs, much of which are currently picked up by council tax payers. This method of funding is simply not sustainable.

The pandemic has brought into clear focus the parlous, frighteningly fragile state of our adult social care. It is a dereliction of duty that the Government have for 10 long years failed to come up with a sustainable solution to the adult social care crisis, preferring to let councils and families muddle through. That cannot continue. I urge the Government to change course and come up with fairer, more sustainable funding for local government.

Leaseholders and Cladding

Shabana Mahmood Excerpts

Wednesday 12th February 2020 Westminster Hall

[Shabana Mahmood (Birmingham, Ladywood) (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 debate. I associate myself with all the powerful arguments that he has made on behalf of his and indeed all of our constituents this afternoon.

I represent hundreds of people affected by the cladding issues, including in the Islington Gates development in the Jewellery Quarter area of my constituency. The 144-unit development has already had remedial work carried out. Residents pay for a waking watch and lighting upgrades, and at the moment structural fire resilience work is being carried out, including around fire compartmentalisation. The work is estimated to come in at a total of £1.5 million—about £5,000 per leaseholder—and that is before they get to the cladding removal. They are trapped by the same problem that many of our constituents have. They have non-ACM cladding, but it is just as dangerous, if not more so, than the ACM cladding that qualifies for Government relief. The bill for the removal of ACM cladding looks as though it will come in at about £5 million to £6 million, so each leaseholder faces a bill of about £40,000 to £50,000.

On the point about insurance, the premium for the building in the previous year was £36,000, but when residents came to renew they found their insurer would not renew the building on its own, so the residents had to go through a broker and a huge amount of stress, trouble and difficulty to find a consortium of five insurers willing to share the risk of insuring the building, and the premium has now come in at £190,000, a fivefold increase. It seems residents have received no credit for the fact that they have carried out a huge amount of remedial work already. No matter what people trapped in such buildings do, the insurance companies are running scared.

The Government could take action, as they have in areas affected by flooding, for example. We already have the good example of the Flood Re scheme. The Government should stand behind our leasehold constituents and force the insurance companies to act. It is unconscionable that such buildings might in the end be uninsurable without Government action. Our constituents are hit with a multiple whammy, where tens of thousands of flat dwellers are uninsured, unable to sell or re-mortgage, and unable to find the money to put their unsafe buildings right, and that has a huge impact on people. I will quote from a constituent’s email:

“Estimates are very loose at the moment but it is likely I will have to pay in the region of...£80,000 to £100,000. I can’t sleep, function or work. I try to be normal with my son but I can’t. I have a constant gut wrenching dread coursing through my blood stream each and every second. I want to cry.”

Real people with real lives are affected by a national calamity. It is morally imperative that the Government finally step up to the plate and act.

Southend Hospital

Shabana Mahmood Excerpts

Wednesday 5th December 2018 Westminster Hall

[Shabana Mahmood (Birmingham, Ladywood) (Lab)]

I beg to move,

That this House has considered reforming the regulation of shisha lounges.

It is a pleasure to serve under your chairmanship, Mrs Main. I am delighted to have secured this debate. In a week in which Ministers have been held in contempt of Parliament for the first time ever, and we have had ongoing and various crises related to the handling of Brexit, talking about the regulation of shisha premises might seem a little niche. I have found myself educating many colleagues about what shisha is and about the problems relating to shisha premises in the affected communities.

Central to this debate is how we as citizens navigate community life together, balancing the social and entertainment needs of some against the needs of residents, and whether we can take effective action when things go wrong. Residents affected by issues relating to shisha lounges, such as those in my constituency and other areas including Westminster, Brent, Ealing, Preston, Manchester and many of our other core cities, can attest to the fact that, when things go wrong, they face the misery of noise nuisance, crime, antisocial behaviour and everything that goes with that. For them, this is definitely not a niche issue. It affects communities profoundly.

I should explain what shisha is and what form these premises take. Shisha, which is also known as a water pipe, hubble-bubble smoking or a hookah, is a way of smoking tobacco through a bowl and a pipe or a tube. The tobacco is often mixed with other flavours such as mint, coconut or pineapple—I have seen every variety going. The tobacco is burned, and then the vapour or smoke passes through a water basin before inhalation. It is a social activity; people do it in groups. It is not dissimilar to going out for a night at the cinema or any other kind of entertainment activity. People go out for a night of shisha smoking.

I am not exactly sure where shisha smoking originated, but it is common in parts of the middle east, Africa and Asia. In recent years it has become much more popular in the UK. I have been aware of shisha places in Birmingham for some years, but there has been a proliferation of establishments there over the past five years. It is a growing trend in our major cities. I have never smoked shisha or any kind of cigarette, and I cannot personally see the attraction of it, but many of my constituents, friends and acquaintances enjoy it as a night out and regularly go to a shisha lounge, bar or café.

These establishments are much more varied than might be assumed. One of the stereotypical assumptions about what shisha premises look like is that they are typically some sort of middle eastern café with a middle eastern food menu and décor that is indicative of some sort of middle eastern origin—almost tent-like. Certainly, some establishments fit that stereotype, but there are also many huge venues—swish, swanky establishments that are often spread out over a number of floors in buildings that may previously have been warehouses. They look and feel like any other major nightclub or similar attraction in a major city.

In my constituency and across Birmingham I have seen that the clientele of those establishments is much more cosmopolitan than might be assumed. It might be thought that this activity is primarily enjoyed by people from black and minority ethnic communities, but it is much wider. That is partly because some of those establishments do not sell alcohol—some do, but some do not—and make a virtue of offering an alcohol-free space for people who wish to enjoy it. That fills a gap in the market for young Muslims, in particular, who want to go out and have a good time just like anybody else, but want to be in an alcohol-free space. There has also been an increase in the number of 16 to 24-year-olds across all communities and social classes who do not drink alcohol. Entrepreneurial businessmen and women are trying to fill the demand in the market by opening up these types of venues, which do not serve alcohol but provide a night-time entertainment offer for different sections of the community.

Many shisha establishments serve food—food is a key part of their offer. Many double up as dessert places—another type of venue that has proliferated—where people can get milkshakes that contain three days’-worth of their recommended calorie intake and smoke shisha at the same time. Some are modest cafés and others are much more like nightclubs. Across Birmingham the number of establishments of various different forms has grown over the past few years.

As a Member of Parliament, a resident and a citizen of my city, I was aware that these venues were growing in popularity, but I had not come across the issues that affect local people when one opens up until I did a coffee morning in my constituency in the summer of 2016. I expected it to be a normal coffee morning, when the issues we would expect were raised, but every resident who came wanted to talk about the problems they were facing as a result of a shisha lounge opening directly opposite their small housing estate. It related to a shisha lounge called Arabian Nites, which has featured much in Birmingham news over the past few months.

The stories that my residents shared with me were horrendous. They said that a nightclub had opened directly opposite their houses, and they were powerless to do anything to stop the issues they faced as a result. Some residents had been attacked, and some had woken up to find patrons of the establishment urinating in their front gardens—in one case, as they were getting ready to take their children to school in the morning. The noise nuisance was so bad that they could never open their windows at night—not even in the peak heat of summer—and even with their windows shut the noise disturbance was pretty high. Parking became a total nightmare, and there was partying till the early hours.

People told me that their community had been ruined. One of the saddest things is that in that area there are lots of council housing tenants who have lived there for decades and are the absolute backbone of the local community. They have been there through thick and thin and have seen lots of changes to their community, but they love their community and the place where they live.

[Afzal Khan (Manchester, Gorton) (Lab)]

I congratulate my hon. Friend on securing the debate. Does she agree that public awareness campaigns, such as one that Manchester City Council launched recently, are crucial to raise awareness of the damaging health impacts of smoking shisha? In addition, we need effective licensing and enforcement to crack down on businesses that flout regulations on the sale of shisha. Just a week ago, Manchester Council seized 95 shisha pipes from one property—

--- Later in debate ---

[Mrs Anne Main (in the Chair)]

Order.

[Shabana Mahmood]

I am grateful to my hon. Friend the Member for Manchester, Gorton (Afzal Khan) for his intervention. I know that a lot of work has been done in Manchester. I will come on to some of the public health issues. He is right to raise public health concerns. There are, of course, public health duties on local authorities, and the public health risks relating to shisha are not well understood and publicised. He is absolutely right that much more awareness is needed. I congratulate Manchester for the good work it has done in this area.

The common life of those residents and the community they created, which they love and have thrived in for all these years, was being ruined. Some of those stalwart residents—the absolute backbone of the community—told me that they wanted to leave and were desperate to move out. In fact, they most wanted my help with council housing transfers. I thought that was one of the saddest things, because those people are the lifeblood of the area. If they move out, we will lose something much more profound in the community. It was all because they simply could not tolerate the daily misery they were facing because of the shisha venue.

As people became more vocal with their complaints—I took up the issues and worked with the council and the police, who were doing their best to manage the fallout from the venue opening near my residents, and there was more media coverage in the Birmingham Post and the Birmingham Mail—residents became worried about reprisals from patrons of the venue. Suddenly, it became much more of a hot topic. Things then took a more serious and frightening turn, because gun violence and other serious crime was taking place. People were up in arms but also terrified. I was shocked that almost overnight a community could be ruined by a shisha place opening.

As the local Member of Parliament, I initially treated this as a policing matter. It is interesting that other parliamentarians and council leaders have tended to raise it with Home Office Ministers as a policing issue. I, too, talked to the police. We thought about having more policing patrols and possible interventions, but eventually I had to conclude that the law itself makes things complicated in this area. My thought was, “Just take away the shisha licence,” because that is the business model on which the premises are based—take it away and they will not have a business and will soon move on—but of course there is no licence for shisha.

In the case of Arabian Nites, it took a couple of serious incidents involving gun discharges—one discharge ricocheted and hit a passer-by—before the police could apply for a closure order under antisocial behaviour rules. Such closure orders are temporary and the one for Arabian Nites was for only three months. The venue has not reopened, but it is free to do so once it has met the new conditions.

[Dr Roberta Blackman-Woods (City of Durham) (Lab)]

My hon. Friend is making a powerful speech. Does she agree that under the Licensing Act 2003 it should not be so difficult to get premises closed down for antisocial behaviour and other breaches of the legislation?

[Shabana Mahmood]

My hon. Friend, the shadow Minister, is absolutely right: the process is too difficult and onerous. I have a copy of the documentation put together at huge cost in time and resource by the police in support of the application for a closure order. It is more than 100 pages long—I was trying to print it before coming to the Chamber so that I could show it to everyone, but my printer broke—given the amount of work and number of witness statements required of police officers.

In the first case against Arabian Nites, the police did not get the closure order and had to apply a second time. Meanwhile, my residents who live with that place directly opposite their homes are terrified of gun violence, of stepping outside late at night and even of taking their kids to the school around the corner. The regime is too onerous, and to rely simply on existing police powers is not good enough. I have nothing but praise, by the way, for the way in which the police have tried to engage with the issue. They have done their best with the avenues open to them.

In Birmingham, a total of three such establishments have been subject to closure orders. All three happen to be in my constituency: Arabian Nites, which I have mentioned; Cloud Nine, which was closed after the suspected sale of laughing gas to children as young as nine, and following breaches of fire safety and venue capacity limits; and the Emperors Lounge, which was closed after a murder was linked to the premises, but which has since reopened after a three-month closure order.

As the law stands, shisha smoking is subject to the ban on smoking in public places, alongside all other smoking in the UK—it is subject to the same rules. Shisha is a tobacco product, so it is subject to the same rules that apply to regular tobacco, in particular the ban on sales to those under 18. When it comes to licensing legislation, however, the Licensing Act covers only the sale of alcohol and certain forms of regulated entertainment. Shisha bars or lounges do not require a licence under regulation unless they sell alcohol or have other regulated entertainment under the 2003 Act.

Some establishments sell alcohol. Arabian Nites was selling alcohol, which was one of the bases on which the police and the council were eventually able to take action, but Cloud Nine and the Emperors Lounge did not have licences for the sale of alcohol, instead falling within the other regulated activities under the Licensing Act. No single agency or piece of statutory legislation regulates shisha activities. If serious incidents occur—shootings or serious violence such as I have had in my constituency—the police may apply for the powers available to them under antisocial behaviour rules, such as a three-month closure order, as we have seen in Birmingham. However, that process takes a lot of time and effort.

Furthermore, many premises will fight their corner with what is available to them through the legal system. It is fair to say, too, that many will do whatever they can to frustrate the legal process, keeping the thing running for as long as possible in order to beat everyone down and evade the enforcement action being sought.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Jake Berry)]

I would be interested to hear the hon. Lady develop what are some good, well made points about the Licensing Act. Obviously she will be fully cognisant of the fact that many shisha lounges are smaller businesses. These are businesses on which people, their families and their mortgages all rely, so the bar on closing them is often set relatively high. The police have an obligation to show that the business should be closed. How does she think that should be balanced with the argument that she is making?

[Shabana Mahmood]

I will develop that point. I absolutely acknowledge that shisha lounges are often small businesses, but a lot of the troubled premises are not the average small business. They are big venues and very lucrative—I have learnt a lot more about shisha than I ever anticipated when I first became a Member of Parliament—and the biggest establishments can afford to have personal appearances by celebrities. It is not unusual to find boxers or Instagram stars visiting such places, putting in a personal appearance in the same way as they might for a new nightclub or members’ club opening in any city across the country. There is a distinction to be drawn between the much smaller operations, which are more similar to a café with the added ability to offer shisha smoking to its patrons, and the big ones that are much more like nightclubs.

The legal tests in existing legislation are onerous, and there is a balance to be struck in ensuring that people can have a viable business and not be shut down on spurious grounds or unfairly. Police and council officers are cognisant of their legal responsibilities and do not want to drive away good businesses, but I believe them when they tell me, in my conversations with them, that some of the most troubled establishments employ high-powered lawyers and do everything they can to frustrate the process. That happens right at the beginning of the process, at the planning stage—they set up as a café or restaurant, and add other things as they go along, developing the shisha business. There are many ways around the system, as well as many gaps, which some individuals are keen to exploit, because this is a lucrative business.

In London, Westminster City Council in particular—I am pretty sure it is Westminster, so I hope I have got that right—has led work looking at tobacco duty, which is often not paid on imported shisha, so there are tax implications as well. I do not want to make out that these are all bad businesses—they are not—but where people flout rules and regulations, they do so in a considered and planned way. They know what they are doing, so it is right to weight the law and to make the thresholds in the legal process that have to be crossed more favourable to residents, because when it goes wrong, as it did for the people of Highgate in my constituency, it is horrendous. It ruins lives and breaks communities, and that is too high a price for local residents to pay for the sake of the business needs of some of the shisha establishments.

In Birmingham, we have 37 premises, many of them concentrated in my constituency, but with some in other parts of the city. That is only the ones that we know about—37 premises known to Birmingham City Council. With no specific licence requirement for shisha, many places open without any recourse to any of the authorities whatever. As I said, the numbers have grown rapidly. The highest concentrations of shisha premises are found in the London boroughs of Westminster, Ealing and Brent, while Birmingham has the highest concentration outside of London.

The statutory provisions around fire risk, indoor smoking, the sale of tobacco to minors and the non-payment of tobacco duty, which I mentioned, are regularly frustrated. The sanctions available under tobacco-related laws are not acting as a deterrent. That is certainly our experience in Birmingham.

The fire risks are considerable. In Birmingham alone, we have had six major fires over the last five years. That is not surprising when one drills down into the situation, because within those premises there is a high number of ignition sources, combustible material and often low staff awareness of fire safety, and some of the venues are situated in hard to get to places, or are big and spread out over a number of floors, which poses a risk in and of itself. A business sector that is relatively small in number suffering six big fires in a five-year period is indicative of a much wider problem. Other local authorities are also greatly concerned about the fire risks.

Something that I thought about when drilling down into the issue—the Minister might raise this himself—was whether it was simply a case of the different agencies not working effectively together. Could it be that although the law, annoyingly, is not all neatly in one place and the powers are spread across different Acts of Parliament, it can be used creatively and effectively to bring the problem under control? After two years of dealing with these issues, I can say that it is not a case of the agencies not coming together. I have seen nothing but good practice at Birmingham City Council, and I pay tribute to Janet Bradley, who has taken the lead on shisha issues, and all of her team there. They have worked with all the other teams across the council, they have worked with partner agencies and they have worked very closely with the police, to whom I also pay tribute for all their work, particularly on getting closure orders.

That is the case not just in Birmingham. Westminster City Council, too, has published a strategy, held a symposium, and got everybody with any interest, whether public health, fire safety, or policing—the whole picture—into a room together to create a strategy for them to deal with the problem as far as the law currently allows. Brent Council either won an award or was shortlisted for one for its work in preparing its strategy. In the Commons debate pack produced by the Library, there was an article that I had not seen before, in which Brent Council’s leader, who wrote to the Home Secretary about the problem in 2017, called some of the shisha establishments in Brent “lawless” places that attracted drug-dealing and sex-trafficking. It is not for want of trying by different local authorities run by different political parties, where people have tried to grasp the issue and find a way to cut through and get enforcement action quickly and effectively, but no matter how much good work is done, in truth it takes a disproportionate amount of time to take action with the available powers and resources.

The time has come to enhance the legislative framework surrounding shisha premises and, I believe, institute a licensing regime specifically for shisha premises. That would allow local authorities to license shisha premises to operate in their area and make it illegal for a shisha premises to operate unless it was licensed. It is important to go after the shisha aspect of the entertainment offer of those premises, because that is the basis on which the business model operates. Those venues are not interested in being your average café or restaurant. The shisha is key. It is lucrative. It is absolutely essential to the business model. That activity, rather than anything else that might be included and covered by licensing regulations, needs to be licensed now.

The first aim of the licensing regime would be to reduce the detrimental impact on communities; that must be at the heart of any such regime’s objectives. It must ensure that premises do not cause a public nuisance, along with all the other crime and disorder issues that I have highlighted. There is also space for the raising of hygiene standards and for safeguarding policies to restrict the admission of under-18s. That is not something that I have focused on particularly in my work in Birmingham, but I often see college-age students—under-18s—going to those venues, and it is pointless to have age limits in law if they are openly flouted in that way. A licensing regime would give us the opportunity to put those policies in place.

We need to have sanctions for non-compliance that cannot be frustrated by the company changing name, which often happens. Even when we do have absolute clarity on the ownership and management of the business there are problems. For example, when the police obtained closure orders for the three venues in my constituency, it was normal, when they or council officers turned up, for people who clearly worked in those establishments to say that they did not work there and did not know who the owner was. Many of the venues do not even have a postal address because, like some other problem night-time economy venues, they evade postal contact. That sounds like a small issue, but it frustrates council officers’ or police officers’ ability to contact those responsible when trying to fulfil their legal duties, and from day one, that stops them taking effective action.

Following discussions with officers at Birmingham City Council and others, I conclude that there are three ways in which we could pursue a licensing regime for shisha premises. The best and most workable solution would be to make an amendment to the Local Government (Miscellaneous Provisions) Act 1982, which would simply state that we are going to control shisha premises. That amendment should provide for an adoptive licensing regime that gives flexibility to local authorities, so that they can set local controls to deal with the issues that they face in their areas. That is important because problems take different forms according to the locality in which the shisha lounge is located. On Edgware Road, for example, problems in connection with shisha premises are of the same order but play out slightly differently from those in Highgate, in my constituency. An adoptive regime that gives flexibility to local authorities is the best way forward, taking a similar approach to that which has been taken on sex entertainment venues. That gives local authorities powers to set local controls and, in doing so, puts local people back in the game and gives them a say on what happens in their local area. I believe that is the change that best lends itself to a licensing regime for shisha premises.

Many of the standard terms that apply in other licensing regimes would be easily transferable to a shisha regime, which would comprise all of the standard enforcement actions that flow from licensing regimes. The key ultimate power would be the ability to revoke a business’s licence and thereby put it out of business, rather than providing an opportunity for it to come back in some other shape or form.

If we do not go down the road of an amendment to the 1982 Act, there are two other ways in which I and others consider that a change might be made. Another way of trying to control shisha premises is to strengthen the current provisions of the Health Act 2006 and the Smoke-free (Premises and Enforcement) Regulations 2006. Current regulations stipulate how enclosed a space has to be in order to comply with the legislation. Obviously, there must be proper ventilation and so on. Some premises earning good money can install a retractable roof. When somebody goes to conduct a check, the roof is off so it looks like there is adequate ventilation, as required under the regulations. The roof, of course, goes straight back on as soon as the officer has left the building, because offering shisha outdoors, in the cold weather or in the rain, will massively affect the business model. It is not tenable to assume that the 2006 regulations are being regularly complied with in some of those establishments. We could try to find a way around that but, in the end, I concluded that trying to draft something that closes all the loopholes in the legislation and covers the ways some problematic shisha premises operate would not achieve the desired effect.

I also considered whether it would be possible to reach an agreement on an interpretation of the local government declaration on tobacco, for local authorities with public health duties. An interpretation could be added that councils cannot allow any kind of licence for businesses with a model that gains money from people smoking. The public health duty is to try to reduce the risk of harm from smoking. I am not an official draftswoman, but I did not think that would work. I played around with two other possibilities before deciding that the 1982 Act is the way forward.

Following advice from Janet Bradley and the officer team at Birmingham City Council, and having consulted other local authorities that face this issue, I concluded that the cleanest and most effective way of dealing with the problem is to adopt a licensing regime under the 1982 Act. I would be delighted if the Minister stood up and said, “Yes, you’re absolutely right. We will get on this straightaway.” If that does not happen, I would like him and his officials to have an open mind about the licensing regime and at least to commit to exploring what changes under the 1982 Act might look like. There is a wealth of experience across local government and from other parliamentarians in this House—some colleagues are waiting to speak in the Brexit debate in the main Chamber and could not be here—that the Minister could draw on, which hopefully will convince him that there is a problem that needs a solution, and that this is the best solution on offer.

Following the point made by my hon. Friend the Member for Manchester, Gorton about public health, shisha smoking is as harmful as normal tobacco smoking, if not more so. People still think that the smoke is much less harmful because it goes through the water filtration system before being inhaled. The World Health Organisation and other organisations that have researched this are clear: in one hour on a shisha pipe, a person can take in as much tobacco as if they had smoked 100 cigarettes. The health implications of large numbers of our population smoking shisha on a regular basis cannot be underestimated.

Local authorities have a public health duty. Places such as Manchester, Westminster and Birmingham are trying to do what they can to raise awareness of the public health implications of shisha, but piecemeal work by good people in good local authorities is not the way forward. The work should be led at ministerial level, at least to convene a roundtable to get the right people in the room, to think about how we might do more together through central Government and to raise awareness of the harm of shisha smoking.

We are storing up future public health problems for ourselves. I would be grateful if the Minister shared his thoughts on that. My absolute ask, as I have said throughout my speech, is for a licensing regime for shisha. The residents in my community have suffered greatly because of the gaps in the current system. It has taken us too long to get temporary action. That is not good enough. My residents deserve better. A licensing regime is the best way to deal with the problem once and for all.

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[Jake Berry]

I am extremely grateful for that intervention, which draws me on to my next point. When we acknowledge that something new may have problems attached to it, we should next ask ourselves whether a national or local response would be better. I want to consider what can be done through existing local authority powers, whether through entertainment licences or by engaging in collaborative working. As has been identified, at the moment shisha bars tend to be in concentrated areas across England, but perhaps a national response is not the best one. I shall certainly ask my officials to look at the best practice that has been adopted in Manchester and Westminster. Whatever the outcome of the debate, we can probably all learn from that. Where local authorities have identified shisha bars as an issue for their area, or even a benefit, it would be worth their talking to each other and working together. I am sure there is best practice to be shared.

[Shabana Mahmood]

From the work that I have done, and from engaging with Birmingham City Council, I know that council officers who deal with shisha issues in local authorities where it is a problem are already in contact with one another. They know each other well and get together regularly to share best practice, so it happens already. I appreciate what the Minister has said so far. I guess what I was explaining from my experience, which I hope has been noted a bit more than the Minister’s speech has signalled, is that the current rules have too many gaps. Unless there is alcohol, nothing can be done. It is too difficult to get action where there is a licence for alcohol, but if there is no alcohol licence it still takes too long. Of the three shisha bars in my constituency that were closed, two did not have licences for alcohol. I hope that he will reflect on that.

[Jake Berry]

I am not sure I accept that if a premises does not sell alcohol nothing can be done, and I referred earlier to a plethora of powers that are available to the multi-agencies, particularly local authorities. I accept that this is a new issue, and I applaud the collaborative work being undertaken by local authorities, because it is worth them exploring what they can do. The real challenge, however, is enforcement. The hon. Member for City of Durham mentioned the inability of council officers to go around with clipboards enforcing the rules, and the hon. Member for Birmingham, Ladywood identified the issue of protractible roofs, which are rolled open in mid-summer when environmental health officers visit, but closed as soon as they have left. There are certainly challenges regarding the enforcement of existing powers, which is something we should address.

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[Shabana Mahmood]

I thank all hon. Members who have contributed to the debate, as well as the Minister for not closing his mind to the idea of a national-level response and a new licensing regime for shisha bars. I take on board what he says about requiring a high threshold to be passed before somebody’s business can be closed. Members of my family, and my friends and constituents who go to well-run shisha places and have a nice time out, will not thank me for getting their lovely venue, which they enjoy, shut down. I am not a killjoy and I am not trying to get rid of good businesses and establishments; my concern is focused on where things go wrong, and at the moment I cannot accept that we have what is needed to head off such problems before they start affecting residents in the way that many in my community have been affected. I take on board what the Minister said about thresholds that must be crossed, and we must ensure that we have fully considered all the measures currently available. I hope that on further reflection, and given that he does not have a closed mind on the matter, I will be able to persuade him and his colleagues that a licensing regime is necessary.

Normal nightclubs can become troubled premises because they attract the attention of gangs or protection rackets—we know those things happen. I take on board the Minister’s point that there is no silver bullet, but there is a whole world of activity before we get to the serious end of the spectrum that a licensing regime could take into account. I will certainly take up the Minister’s offer of a roundtable, particularly by engaging with council officials from across the country who have a wealth of knowledge on these matters.

[Jake Berry]

I am sorry to intervene on the hon. Lady, but it is important that that roundtable includes representatives from the Scottish Government, because they need a separate legislative response for the solutions suggested.

[Mrs Anne Main (in the Chair)]

I thank the Minister for that clarity and hope that the hon. Lady is concluding her remarks.

[Shabana Mahmood]

I am, Mrs Main. I am not an expert on how these matters play out in devolved Administrations, but they obviously need a voice because they face different regimes. I will take up the Minister’s offer, and I hope we will get to have greater knowledge about shisha establishments, the impact they can have and how best they can be regulated.

Question put and agreed to.

Resolved,

That this House has considered reforming the regulation of shisha lounges.