Building Safety Bill (Fourth sitting)

Siobhan Baillie Excerpts

Tuesday 14th September 2021 Public Bill Committees

[Daisy Cooper]

Q Thank you for explaining why you support this principle. A small supplementary. To play devil’s advocate—I am perhaps inviting you to do the Government’s job for them—do you think there are any reasons the scheme would not work? Can you see any holes in it, or problems with it? Is there any reason why you think anybody might object to this particular proposal?

Martin Boyd: On the specific “polluter pays”, we have not seen the detail yet, so we do not know. The difficulty, as has been referenced in a number of witness statements to the Committee, is that a lot of the developers have used special purpose vehicles, so we do not know yet what proportion of the market would be able to recover from this anyway. The building in which I have a flat is 20 years old. I have to accept, in reality, that even if my developer had done something wrong it is rather stretching things to think that I could go back and take action against them.

Dr Glen: It is a very complex situation. If it wasn’t, we would have found the solution a long time ago. Is it perfect? No. Is it a good start? Yes, and I am very happy with good starts.

[Siobhan Baillie (Stroud) (Con)]

Q This is such a difficult area, and it has been very distressing for people who have been affected by the fire. We heard some really compelling evidence about the safety of high rises, and how to strike a balance of proportionality with the legislation, which is not easy. I think nobody expects the taxpayer to pay up front for everything. You have just said that, Mr Boyd, and that is completely right.

I was interested in your point about grants, Dr Glen, because ultimately we know that quite a lot of businesses have gone bust. Your proposal that we effectively get the taxpayer to foot the bills upfront, knowing that there will be a big gap potentially, is a problem. I am just playing devil’s advocate. On your point about grants, you are suggesting that the taxpayer pays. That is a point of concern for people who are not affected by this and are thinking about the overall financial purse.

Dr Glen: I understand that. The specific example that I was using for grants was that we strip a building down, take the cladding off, look at the building and say, “Oh my gosh. Something has happened to the concrete.” I completely understand why the Government should not be making every building as new. It is the practicality, because the way that service charges work means there is no profit margin in them. If there is any leftover at the end of the year, you give it back. If there is a deficit, you demand it.

This is the problem: let us say that you, Siobhan, are a leaseholder in a particular building, and I say, “Terrible news: we’ve found that there’s a bit of problem with the concrete, so we need to do some work on that. It’s not applicable for the building safety fund because it’s nothing to do with the cladding; it’s just Father Time.” If you then say, “I’d love to—I can understand where you’re coming from—but I just don’t have £2,000,” what do we do? If you do not pay, the others should not pay for you surely, so suddenly I am £2,000 short. That means that I cannot do anything as a managing agent, because I cannot place that contract. I am talking about short-term mechanisms to mean that we can get that building safe. That is why it is a complex situation with no absolute way forward.

On should the taxpayer pay—I am a taxpayer and would like not to pay—it is undeniable that, under successive Governments, there have been changes in regulation where, perhaps, a developer has said, “I would like to put this material up—it’s not cheap— can I?” and the local council has said, “Yeah, it’s fine”. That same local council and, in fact, sometimes the same person, is now saying, “Actually, you shouldn’t have done that”. Is it right that the developer or whoever in good conscience who did what they thought was right at the time should pay, or is that something where we should say, “Sadly, there are some things that taxpayers should front up for”? It is a very complex situation. I come back to it again: there is no single solution. The only one I can see is to let the Government pay now and then figure out how to get the money back later.

I would like to think a bit further than that. This will not be the last issue we have in housing over the next decades. Let us form this fund, so that when whatever it is that next comes up, whether it is something toxic that we did not know about or something else, money is in the bank so that we can start moving on these things straightaway. Let’s think forward as well.

Martin Boyd: I have a letter sitting here from officials in December 2017, after we had written to Ministers saying it is very urgent that Government intervene early on or we will end up with leaseholders going through a rather nasty experience that will drag on for years. I did not think at the time it would be so many years. The assumption was that, well, of course, the law will allow you to take your building owner, as we keep saying, to court and make them pay. It has not happened. The law was never ever going to make that happen.

The statements that we made have been made in Parliament too, and said that building owners should do the right thing. It is not what the law says they should do. They are under a fiduciary duty to represent the interests of their company. If you happen to own ground rent investment and therefore are deemed to be the building owner, which will only represent possibly 1% of the property value, or even less, how on earth are you expected to pay to remediate the cladding? It was never, ever going to happen. Grants have been the only way the system would work from the very beginning. I think it is still the only way that we have left.

[Mike Amesbury]

Q Various Ministers have promised 17 times. The language has slightly changed. Originally, it was

“to protect leaseholders from historical remediation costs”,

and then it was “unaffordable costs”. Does this Bill do that? What key things are missing from the Bill?

Dr Glen: No, I do not think it does, because the Bill says that historical costs can be levied on the leaseholders at 28 days’ notice et cetera. I heard in an earlier session about whether that would really help. It could increase costs, because we will have two separate charges now. We might want to touch on that later. No, it does not. There are some amendments around. As we said, the polluter pays is part of the amendments, because we need to try to figure out where the money is coming from. I go back to my earlier statement: the only way I can see it happening, unless we are going to be here in four years’ time still discussing this, is something big like Government—I think the Government are the only size that can do this—to make sure that we front-fund pay. Then, absolutely, Government should figure out how to get the money back to protect the taxpayer. So I do not think it does it, in short.

Martin Boyd: I agree. I have nothing to add to that, it is just not going to do it.

--- Later in debate ---

[Ms Rimmer]

Q This is a building safety Bill; it is not about redressing the cladding or the issues with that. If anything, on the Select Committee on Housing, Communities and Local Government it was said that the introduction of the building service charge brought about the highest level of anger and scepticism they had ever experienced. That is all that the people affected can see in this Bill, so it goes nowhere near addressing anything like that. If anything, it has caused a concern: would they—could they—use the building service charge to recover historical costs from the leaseholders? We have heard from witnesses that they think it is not clear that that is not the case.

It seems to me that polluter pays is the only suggestion that can go forward. We are not saying that the present Government are responsible for all this, but do you know of any other way than the polluter pays mechanism? Is it New Zealand that has the public safety emergency, where the Government have addressed that? It does not seem able to be addressed. Has anyone put forward to you any other schemes or other ways of addressing this? There are hundreds of thousands of family units in these properties—I do express my sympathy; I sincerely empathise and sympathise—but this simply must be addressed.

Alison Hills: Yes, thank you. It does have to be addressed. Obviously, there are the McPartland-Smith amendments, which protect leaseholders to some degree. There are some very helpful amendments—for example, the imposition of implied terms in residential building contracts to ensure that all buildings are adequately designed, comply with building safety regulations and use materials of satisfactory quality. New clause 5 also creates accountability for future builders by importing consumer rights protection into housing law. I fully support the amendments and new clauses, and I think they should be implemented in the Bill, but in terms of how to get the most amount of money from those responsible, the polluter pays Bill is the way forward, because it ensures that the right people are held to account and building safety regulations are adhered to in future. Obviously, Steve has worked very hard on this over the last nine months, so I will pass over to him at this point.

Steve Day: I think the building safety charge is another sign of not trusting building regulation compliance. The heart of polluter pays is not just to solve the crisis now; it is to restore trust in building regulation compliance. We have a set of functional regulations. B4 requires that

“the external walls of the building shall adequately resist the spread of fire”.

It should be very possible, then, with the approved documents, to show and to prove whether someone is liable for those defects.

We are getting very confused in this crisis. We need to bring it back to the two boxes of developments. We have one where the builders just did not keep to the regulations. We do not need to worry about the quality of the regulations—they just did not keep to them, not using the right fixings. Metal should be on firebreaks but they used plastic. Some are missing firebreaks. It is very simple stuff, which is very unappealable and very easy—low-hanging fruit. That is the box of not conforming to the regulations at the time—guilty. Not guilty, for the developers and the manufacturers, is the other box where the regulations were complied with at the time, but post Grenfell those regulations have changed. It is almost a retrospective liability, changing the goalposts. That is a failure of regulation, so that is where the public money would come in.

All we want is £5.1 billion of public money. We do not want to go to the Treasury unless we have to. We want to get that pot as big as possible for all those defective buildings—it is simple stuff, remember, such as fixings, adhesive pattern, firebreaks and so on—to make that £5.1 billion go further. That is what we are doing. I hope that our proposal shows that we have thought about how this might work with existing precedents. There is some discussion on whether the Environmental Protection Act 1990 and the apportionment process could be open to judicial review, because you might say, “If you’ve got a set of percentages and you’re just giving x per cent, y per cent, and so on, that could be open to challenge.” We have listened to that and we are working with Daniel Greenberg on a different, and much simpler, approach, which we will make you aware of, that will not be open so easily for judicial review.

We also heard Mr Pincher’s comments in the Chamber on how many determinations we have to do. Remember that we are proposing that it is a public body, potentially under Homes England, and we have a de minimis limit. We do not have the reports that MHCLG has but we have a mechanism. It can set what the de minimis limit is before we have those determinations, and then basically there is a control mechanism for how this works. We have created the scheme so that in the primary legislation the scheme requirements are set out. It has to be in place six months after Royal Assent, but we do not prescribe exactly all the parts of the legislation; that will be done in subordinate legislation. We are prepared to do that work as well, because that is how much we believe in this.

I cannot answer all your questions on this today, but Daniel Greenberg has said that when the conference season is over, we will book a meeting room in Parliament and invite MPs and peers to come and hear our proposal, with the depth required so that you can scrutinise it properly. Perhaps the Earl of Lytton might come and help as well.

[Siobhan Baillie]

Q Thank you both for coming. You are very compelling witnesses, and you have a great skill in being able to talk about something that is incredibly emotional to you, for understandable reasons, and give us a really clear account of what you are seeking to achieve and why.

I want to move you slightly off the redress issue. We have heard witness evidence today that, over two decades, multiple Governments of all colours have failed to address building safety issues. That is high rises and all sorts of things.

This Government are genuinely trying to do their best with the Bill, and we have had evidence that says that it is moving quite a few mountains and is proportionate. You are so expert in this area—although I am sure neither of you want to be such—what do you know about the accountable person part of the Bill? It is suggesting that for a block there would be somebody who would be in charge of things such as fire safety certificates and the gas certificate. They would be the point person. We have heard evidence today from the Fire Brigades Union that was really positive about such a role in terms of the person that they can contact, and similarly the management agent said it was really good to have a single person as a point of contact. We have also heard evidence that no one will take on that role—because it has so many duties and responsibilities that no one will be interested. What is your view? I fear that you two may be that role because you are so expert. Knowing your kind of neighbours, do you think somebody would take that role on if the Bill is enacted?

Alison Hills: First and foremost, there is a lot of information in the Bill about an accountable person, a responsible person, but there does not seem to be a clearly defined role for each of those roles and responsibilities. I think that needs to be done. Secondly, our management agents already have a certain amount of responsibility in terms of building safety. As leaseholders, we do not want to be in a position where we are potentially paying twice for the same service. The Bill needs to contain clear definitions of the responsible person, the accountable person, the management agent and the role of the leaseholder. In my view, each of those roles needs a clear definition.

[Siobhan Baillie]

That is really helpful.

Steve Day: I know that I am coming back to what I have said before, but for me it is about trust. If we are having a building safety charge, that is because we do not trust that our buildings are safe. It was fine before Grenfell, and maybe that is not a great thing to say, because the regulations and enforcement were not there. If the enforcement is there, I am really hoping that we can go back to paying a very reasonable service charge and getting a very reasonable service.

I think we really need to look at this Building Safety Bill from the point that if we put in for redress, if we had that big stick to whack all those responsible for not installing things right, can we restore trust in our building? This Building Safety Bill could then be made a little simpler and a little cheaper for those who are living in blocks, and maybe we can just reform everything. That is my view.

[Siobhan Baillie]

Q If the fire brigade felt it was useful to have a single point person, do you think in your block and other blocks that could be achieved, subject to the definition of roles and responsibilities that Alison talked about?

Steve Day: I think there is a role for having someone responsible. A lot of these blocks have a concierge. I would say first, “Is there an onsite concierge?” If there is, maybe something could be done there. If not, a lot of blocks have a small committee of four or five people who might take on that role collectively. It seems a lot to put on one person—that’s my initial thought. If we want leasehold to survive—I am not sure where I stand on leasehold and commonhold yet, but I do not think commonhold solves the bills, and I think they will still come. If I am going to try to get someone to cover, I don’t know, say fire door replacements and so on, I have got to go and negotiate that if I am in commonhold. Let us make sure that we make leasehold as economically viable and fair as possible, and I think you can only do that by coupling that with building regulation.

[Siobhan Baillie]

Q I asked a really basic question of our witnesses in the first panel on Thursday last week about living in a household in a high-rise building. There is so much fear now, understandably, because of Grenfell and because of what you have all been through. It is hard to be quite rational. You are getting into the detail. As part of getting to trust the buildings that you live in, do you think more needs to be done to put out communications about safety of buildings and resident responsibility? We heard some quite compelling evidence that high rises and normal houses are equally problematic if certain things happen. Do you think there should be communication to build faith and trust, and a sense of safety as well?

Alison Hills: Yes, I have to say that I think that would be helpful. When we found out about all the defects in our building, it was in the middle of lockdown, so we were stuck for 24 hours a day in a flat that was potentially unsafe. All these videos started coming out on Twitter about Grenfell, the fires and Kingspan. It was absolutely horrific, from a leaseholder’s perspective: people were genuinely frightened to send their children to sleep at night.

I cannot reiterate enough just how difficult that period was. That was one of the reasons that I made the decision to move out; I am lucky that I had that choice, but many others do not have it. Many are still putting their children to sleep at night in a building where they do not feel safe. Leaseholders absolutely need more support with that. They also need more mental health support, because we are just relying on each other at the moment. There is a very good cladding community, and the leaseholders have been a brilliant support—my MP Daisy, who is on the Committee, has been a brilliant support as well—but I think that the Government need to take more responsibility to support their constituents with the mental health impact. I cannot reiterate enough how difficult it has been.

Steve Day: I think that leaseholders supporting each other is one thing, but you have to remember that the building safety fund has asked us to create all these reports showing all the defects. Unless someone comes and fixes those defects, the horse has bolted. The building safety fund reports show all these missing fire barriers, cavity barriers and internal fire stopping. If you check approved document B, getting the fixings wrong has a material impact on the fire rating of the external wall system.

Unfortunately, you have turned millions of people into fire experts. We now know what ADB says, and we now know that a small difference in the render thickness of our external wall systems can have a material impact on the fire rating. We know, when we look at the safety certificate from the British Board of Agrément for 100 products across the UK, that not meeting the exact specifications contravenes the certificate; the head of the BBA confirmed that, and I am grateful to him.

We know all that and we have all that information, yet not only have we been left to pay for it all, potentially, but we have all the worry of it. You cannot put that back in the box unless this is remediated. Unfortunately, in the leasehold community, we have been exposed to an awful lot of fire safety evidence that would lead us to believe that we are not in safe homes. Until the remediation is done, I just do not think that we can put it back in the box.

Alison Hills: I have not specifically been asked a question about this, but another problem is that the building safety fund process has been very difficult. The fund only covers some defects in some buildings. We have been told that we are eligible, but we still cannot get any of the fund because there are a number of onerous contract terms. MHCLG and our managing agent have been at loggerheads over the contract terms for almost the past year, and we are in limbo with a huge potential bill of £200,000 hanging over our heads. That is just not an acceptable position to be in—we simply should not be in that position.

[Ruth Cadbury]

Q I think that you have started to answer my question, and thank you for your presentation on the polluter pays principle, but I want to go back to what is in the Bill for existing buildings. The new building safety regime applies to buildings of at least 11 metres in height or at least seven storeys. Do you think that it is right that in effect there is a height limitation defining the risk, or do you have an alternative suggestion? What else is not in the Bill’s scope that you think should be?

Alison Hills: First of all, I do not think that there should be any height restrictions to the building safety fund. We have seen videos in which the 18-metre figure came up because the people making the decision did not have time to come up with a better figure. There does not seem to be any reason behind the 18-metre rule. The materials are still flammable in buildings under 18 metres; they can still catch fire, as we have seen.

In my view, the building safety fund needs to cover all heights of building and all defects, not just cladding. I have spoken to a shared owner in the London Olympic park who does not have any cladding on his building, but who is facing an £80,000 bill just for missing fire breaks and insulation. That is just an unacceptable position to be in. There are a number of fire safety defects that do not relate to cladding, and they should absolutely be covered.

Steve Day: I would say, “Have a look at the materials.” We all accept that ACM cladding, linked to Grenfell of course, is dangerous, but you may not have realised that the Victorian Building Authority conducted a test last year and concluded that expanded polystyrene, because of very rapid vertical fire spread, ultimately creating fire pools that go down as well as up—not the pools, but the fire—was as dangerous as ACM. Why do we have this categorisation that ACM is the only dangerous cladding when EPS has been proved by the VBA to be as dangerous? That has implications on the 8414 tests because everyone knows that the grate is at the bottom of the rig. How do you test downward fire spread if the grate is there? It will just test upward, so there are issues there.

This is why I am always talking about trust. We need to get back to trusting our materials. We need to get back to having a large stick if the cladding manufacturers mis-sell products. In the aftermath of the Grenfell fire,181 samples failed combustibility tests. We need a big stick. The building industry and the construction industry are showing that they cannot be trusted, unfortunately. That is why we need full redress.