Consideration of Lords message
[Relevant documents: Second Report of the Housing, Communities and Local Government Committee, Cladding: progress of remediation, HCV 172, and Fifth Report of the Housing, Communities and Local Government Committee, Pre-legislative scrutiny of the Building Safety Bill, HC 466.]
After Clause 2
Prohibition on passing remediation costs on to leaseholders and tenants
I beg to move, That this House disagrees with the Lords in their amendments 4B, 4C, 4D and 4E.
I thank all right hon. and hon. Members for engaging in this very important debate, both now and throughout the passage of the Bill. I particularly thank my hon. Friends the Members for Kensington (Felicity Buchan), for Ipswich (Tom Hunt), for Rochester and Strood (Kelly Tolhurst) and for Wimbledon (Stephen Hammond), and Members across the House, for the keen interest they have shown in this matter. I will keep my opening remarks short, as I know that many Members are keen to contribute, and I shall wind up later on.
The Government remain steadfast in their commitment to delivering the Grenfell Tower inquiry phase 1 report’s recommendations. This Bill is an important first step in delivering those recommendations. The Government have always been clear that all residents should be safe and feel safe in their homes. That is why we will be providing an additional £3.5 billion to fund the removal and replacement of unsafe cladding on residential buildings.
Will the Minister give way?
I will give way to the hon. Gentleman later on; let me conclude my initial remarks.
This will be targeted on the highest-risk buildings—that is, those buildings over 18 metres tall that have unsafe cladding. The scale of this investment should not be underestimated, with over £5 billion of taxpayers’ money, and more when the developer levy and the developer tax are taken into account. We have an ambitious timescale to ensure that remediation of unsafe cladding is completed at pace. We are also now seeing tangible progress from the Royal Institution of Chartered Surveyors revising its guidance on EWS1 forms, lenders committing to adhering to RICS guidance, and more developers now allocating significant funds for remediation.
As parliamentarians, we have a duty to implement a clear framework and transparent legislation to support fire and building safety reform. I am afraid to say that, despite the best intentions of these Lords amendments—I absolutely accept the sincerity with which they have been posited—they are unworkable and impractical. They would make the legislation less clear, and they do not reflect the complexity involved in apportioning liability for remedial defects. I have had extensive conversations about the effects that the amendments might have with my hon. Friend the Member for Rochester and Strood, who has pressed me hard on this, as have others. These amendments would also require extensive redrafting of primary legislation, resulting in delays to the commencement of the Fire Safety Bill and to our overall programme. They could also have unintended and possibly perverse consequences for those that the amendments are intended to support, and we would still be no further forward in resolving these issues.
I shall give way to the hon. Member for Cardiff South and Penarth (Stephen Doughty) when I return to speak later, but let me say in concluding my opening remarks that we cannot accept these Lords amendments and we encourage the House to vote against them and for the Government amendments.
I am pleased that so many Members have put in to speak today. I will keep my remarks fairly brief, but I want to make three points. First, thank goodness I am not standing at this Dispatch Box again and pleading with the Government to agree at the very least a timetable to implement the vital fire safety measures from the first phase of the Grenfell inquiry. I am pleased that the Government have agreed in the other place to Labour’s suggestion of a timetable. Before the second anniversary of the Grenfell phase one recommendations, the Government have committed to regulations to implement them, and that will be by October this year. They said that this would delay the Bill, that it would be too complicated and that it would be too hard to do, but they have now agreed to a version of it. It is not quite what we wanted, but it is something close.
I have lost count of the number of times we have voted on the Grenfell recommendations and the number of times we have been pushed back, and it is quite extraordinary that the Government have taken so long to get us here. Labour’s previous amendment, which the Government have now agreed on a timetable to deliver, would do four things: the owners of buildings that contain two or more sets of domestic premises would share information with their local fire and rescue service about the design and make-up of the external walls; they would complete regular inspections of fire entrance doors; they would complete regular inspections of lifts; and they would share evacuation and fire safety instructions with residents and the fire service. These measures are straightforward and are supported by key stakeholders.
In the Minister’s letter that sets out details of the Government’s concession, he wrote that the Government would lay regulations to make responsible persons produce and regularly review evacuation plans for their building. The Grenfell recommendation, and our amendment, said more than that. They said that that information should also be shared with local fire and rescue services and residents. I would like the Minister to clarify in his closing remarks who these evacuation plans will be shared with and how this will be enforced, but I am grateful to him for seeing sense and heeding our calls to do the right thing, because it has been ages.
I come to the second point that I want to make. It has been nearly four years since 72 people so tragically lost their lives in the Grenfell Tower fire. In those four years, Grenfell United, the families, the survivors and the entire community have fought tirelessly for change. It is thanks to their hard work and dedication that the Government have finally agreed to implement the recommendations by October 2021. I pay tribute to them and their ongoing fight for justice. I pay tribute to our firefighters who keep us safe every day. We know that cuts to their service have hit hard—response times are inevitably affected, and morale is affected—and now they have a pay freeze, which is no way to thank them for going above and beyond during the covid pandemic.
I come to my third and final point. Leaseholders should not have to fund the cost of fire safety remediation works when they are not to blame and they are the least able to pay.
I wholeheartedly agree with my hon. Friend on that point, as she well knows, because of the leaseholders who are affected in my constituency. While the Welsh Government have put forward an additional £32 million in their new Budget for this very issue, leaseholders in Wales are still in the dark from the Government’s announcements about what moneys there will be for Wales and how the levy and tax will work. Does she agree that the Government should sit down with the Welsh Government Housing Minister and sort this out for the benefit of all leaseholders?
I thank my hon. Friend for that intervention. I have a sense of déjà vu, because we have been saying all this for some time, as have Members across the House. Of course the Government should sit down with the Welsh Government and work out whether any of this funding will go to Wales and how that will work.
My hon. Friend is making a powerful point about the needs of leaseholders. Does she agree that, as well as dealing with the gaps in the support so far announced, it is vital that there is much more clarity on what leaseholders should be entitled to—particularly those in shared ownership arrangements, where the quality of work done and the relationship with the social landlord can vary? This is causing them great confusion and anxiety and, indeed, great difficulty in selling their properties.
My hon. Friend makes a very good point. The plight of people in shared ownership properties is dire and needs to be looked at by the Government, as does the plight of the many thousands of people who are still trapped in unsafe buildings or buildings they cannot sell, who face extortionate bills for remediation work or who face huge increases in insurance and waking watch costs and other costs that they simply cannot afford. People are going bankrupt.
We cannot feel it in this place, but every time we have a debate or a vote on this issue, thousands of people write to all of us and say, “We are hoping against hope that you do the right thing this time.” We have people writing with heartfelt pleas. Their stories are stark, and every time we have this conversation, people’s hopes are raised, and there is a groundswell on social media and in our inboxes of people saying, “Maybe now the Government are going to do the right thing.” They are watching us now, hoping that we are going to do the right thing. It is very sad that the Government are indicating at the moment that they are not going to take this issue seriously.
This is taking a heavy toll on people’s mental health and putting millions of lives on hold. Leaseholders have been trapped in this impossible position for too long. Throughout the passage of the Bill, we have continually campaigned on this issue, and we welcome the latest amendment from the Bishop of St Albans. Like Labour’s previous amendments and those tabled by Members on both sides of the House, this amendment would prohibit the cost of replacing unsafe cladding being passed on to leaseholders or tenants.
In February, the Housing Secretary told thousands of people across the country that they will be locked into years of debt to fix fire safety problems that were not their fault, and we hear that the Government have decided to lay a motion to disagree with the Bishop of St Albans’s amendment. That is a direct and deliberate betrayal of the promise that Ministers have made over 17 times that leaseholders should not be left to foot the bill. Over the weekend, I wrote to Members of Parliament across the House who have constituents affected by this, urging them to back the amendment, and I sincerely hope that together we will stand up for the rights of leaseholders today and all Members will do the right thing. Given the risk of fire and looming bankruptcy, we cannot wait while the Government delay with inaction and failed proposals to keep leaseholders out of debt.
Today is another chance for the Government finally to put public safety first and to bring forward legislation to protect leaseholders from the deeply unfair situation of paying for fire safety repairs for which they are not responsible. Members across this House are united on this issue and are determined that innocent leaseholders should not foot the bill. Today should be the day when people across the country can go to sleep with a great sense of relief that the Government have listened and put into law protections for leaseholders, so I sincerely hope that the Minister will change his mind. It is not too late for the Government to do the right thing and protect innocent leaseholders across the country.
There is not the time to say what the Government have done for leaseholders. The Fire Safety Bill, in the form the Government want to return it to, if they get the House to reject the Lords amendments, would place an automatic, unchallengeable financial burden on residential leaseholders in building safety remediation costs, even in circumstances where a lease may have excluded such an obligation. I refer the Minister, if he has time, to the article by Martina Lees in The Sunday Times “Home” section about some of the building costs that are not justified.
The bishops’ amendments are intended to protect leaseholders from being solely responsible for the costs. The Bill strengthens the landlords’ and freeholders’ legal rights over leaseholders. The amendments provide for more balanced liability for costs. These Lords amendments should not be overturned. The alternative, which the Government are asking us to agree, wrongly and disproportionately disadvantages innocent leaseholders. Many are unable to pay, and they are frightened.
This is a Home Office Bill, and the Home Secretary gave this as her reason for rejecting previous Lords amendment 4:
“Because the issue of remediation costs is too complex to be dealt with in the manner proposed.”
I say, and I think people on both sides agree—and probably the Minister does so privately—that what is being proposed cannot be supported. It is too simple: it loads costs on leaseholders, who are the only people who cannot be responsible for putting right a building that they do not own and will never own, and of which in legal terms they are only the tenants.
I ask the Minister to ask his colleagues to let him agree to accepting these Lords amendments, and to let the leaseholders free.
I support the Lords in the message it has sent back. The Lords is proposing very important changes to the Government’s position. First, not just leaseholders but tenants should not have to pay. For example, in a block where the social housing provider is the freeholder, according to the Government’s proposals, leaseholders would not have to pay, but social housing tenants—if it is not ACM cladding that is being removed—would have to pay through their rents for the removal of cladding. That tenants have to pay and leaseholders do not simply cannot be right.
We are not quite sure what costs leaseholders in blocks under 18 metres will face, because there is still an awful lot of vagueness and lack of clarity about what the Government’s loan scheme will actually mean. When the Minister for Building Safety and Communities came to our Housing, Communities and Local Government Committee recently, he said that leaseholders would not be responsible for paying the loan, but neither would freeholders; the charge would be on the building. A building cannot be legally responsible for a charge on a loan placed on it. Some organisation or some individual has to be responsible. Is it the freeholder? Is it the leaseholder? There is an awful lot of unclarity about that, and about how we limit leaseholders’ charges to £50 a month. There is a great deal of confusion. The Government are still working that through, so as things stand there cannot be an absolute assurance that leaseholders will not have to pay on blocks of under 18 metres.
Finally, there are issues other than cladding. It is not just that cladding will have to be taken off; very often, the cost of doing other fire safety work on blocks of flats is greater. Again, we were told that if the other work is associated with the removal of cladding, it will be covered by the Government’s financial help. If insulation is a composite part of a building’s structure along with the cladding, presumably it can be removed, as it is associated with the cladding. However, if the insulation is completely separate and distinct from the cladding, the Government funding might pay for the cladding removal but not the insulation removal. Very often, leaseholders simply cannot afford to pay for that, but the Government will not allow any of their funding to go ahead unless the leaseholders can find the additional costs.
None of those positions is acceptable. I support a position where neither leaseholders nor tenants are asked to pay to make their buildings fire-safe.
I thank the Lord Bishop of St Albans and the Lord Bishop of London for ensuring that we have the opportunity to vote on the amendments today. It gives us the chance to divide the House on whether leaseholders should be responsible for paying for historical fire safety costs. I urge the Minister and the Government to accept the amendments or, if there is something wrong with them, to table their own. They should work with us and with leaseholders to try to resolve this issue.
It is unacceptable that people feel that we want taxpayers to pay. Leaseholders do not want taxpayers to pay and Members across the House do not want taxpayers to pay; we want those who are responsible to pay—the developers, the insurance companies and the building regulators who said that these properties were safe over the past 20 to 30 years, when many of the leaseholders who will be forced to pay these bills were in primary school or not even born. It is not acceptable, it is not fair and it is not right. What we are doing today is shameful.
The amendments would maintain the status quo with regard to the costs of remediation. I understand the Minister’s point that this is a small Bill and not the right place to deal with the costs of remediation. I agree with him, but it is he who is transferring the liability to leaseholders in this Bill. The status quo is that leaseholders are not responsible for the costs of anything to do with external walls or doors. It is this Bill that amends the legislation. It is this Bill that will make leaseholders responsible for paying for historical fire safety defects. Again, that is not fair.
I was at a building today and it became clear very quickly that the estimated costs of remediation are greater than the value of the properties within it. Can the Minister give me an answer? What will happen in cases where the costs of remediation are greater than the value of the building and the properties within it? Will the building be written off, like an insurance company would write off a car? Will those people be made homeless? We know that if the Bill goes through, even more leaseholders will face bankruptcy and huge issues of homelessness.
At the moment, the interim costs are bankrupting leaseholders up and down the country. Leaseholders are screaming for help; they are screaming in pain. And what are we doing? Today, we are saying to them, “Thanks for paying the interim costs. Once you’ve finished that, we’re going to load you up with the remediation costs on top.” That is tens of thousands of pounds that people just do not have.
We are nearly four years on from Grenfell, and it appears to me that the Government have given up on those who should be responsible for paying and are pushing the costs on to leaseholders. It is morally unacceptable.
I will be supporting the amendment moved by the Bishop of St Albans, because in circumstances where leaseholders are beset by worry, fear and uncertainty, it will provide them with the reassurance that they will not have to pay to fix a problem for which they are not responsible. It will also make the Government realise that they have to come forward with a different solution.
There are two problems here: the first is dangerous cladding and the second is other fire safety defects, which have been discovered in building after building. The Government appear to be in the position where the funding they have announced will pay for the remediation of missing fire cavity barriers where they are integral to the replacement of dangerous cladding, but not where they are not—in other words, where they are elsewhere in the building. I do not really understand that. Can the Minister say whether, if the works the Government are prepared to fund through the scheme are completed, the buildings in question will be declared safe so that the waking watch and insurance costs disappear even if the other fire safety defects have not been fixed?
Time, however, is not on our side, because we know how long making all of these homes safe is going to take, even if all the necessary funding had already been identified.
There are detailed inspections to be done, tenders have to be put together, firms found who are willing to do the work, and scaffolding and building materials have to be ordered before the work can even begin. So, given the scale of this, it is going to take a long time. But that is the one thing that leaseholders do not have, because, as we have heard, they are paying bills that they cannot afford.
Even worse, the bills are now starting to arrive on their doormats demanding payment to fix the cladding. One recent example was a demand for £71,000. It might as well be for £1 million, because there is no prospect of leaseholders being able to find that kind of money.
So the longer this goes on, the more likely we are to see leaseholders becoming bankrupt. What are the local authorities going to do when they turn up at their door and say, “I’m homeless; I need somewhere to stay”? And make no mistake: the anger that leaseholders are feeling at the moment will be something else again when they find themselves being made homeless through no fault of their own.
So, let us do the right thing today to protect leaseholders, and then the Government can turn their attention to finding an answer that will actually work. At a time when people are getting bills to the tune, as I have just said, of £71,000 through the letterbox, to stand up and say, “I’m really sorry, but this isn’t the right legislation” demonstrates a failure to understand the nightmare that so many of the people we represent are living through.
First, may I put on record my thanks to the Lord Bishop of St Albans and the Bishop of London, without whom this amendment would not be back here tonight?
Not to try to outdo the right hon. Member for Leeds Central (Hilary Benn), in my hand this evening I have an invoice. It is an invoice for service charges and remediation of fire safety defects; it is an invoice for nearly £79,000. Imagine for one moment you are trapped in a flat you have been told is unsafe. Night after night you go to bed with the fear of fire. You cannot sell your flat because it is worthless. Everyone knows that none of this is your fault, but then an envelope drops through your letterbox. When you open it, there is a bill for £78,000 to put defects right that are not of your making.
I am asking Members across the House to vote tonight to agree to the Bishop of St Albans amendment—better, or formerly, known as the McPartland-Smith amendment to the Fire Safety Bill. I am asking them to vote with us tonight because bills like this one have already started to arrive and they are not going to stop. Everyone knows what is happening, and if they do not they should open their emails and read the heartbreaking experiences of their constituents. This is not politics; it is not ideology—in fact I do not know what it is, but is it any wonder that some leaseholders feel that there is some sort of a conspiracy against them?
Are we going to let the innocent continue to pick up the tab for the guilty? What are we doing about the developers, the contractors and the manufacturers? What are we doing about the insurers and the National House Building Council? What are we doing about local authority development control and others that signed off these buildings as safe? Are they sleeping soundly in their beds tonight?
There is an economic reason for voting for the amendment, and there is a political reason for voting for it, but beyond that there is a moral reason. If this Bill becomes law, we will be abandoning hundreds of thousands of innocent people, and I am not going to have that on my conscience.
I am grateful for the opportunity to speak this evening. I have been contacted by and met hundreds of concerned constituents, many of whom are trapped in unsafe leasehold properties. I have also met Clad DAG, a group set up to ensure the voices of disabled leaseholders are heard, and I hope the Minister will also meet them. Many of those I have spoken to bought their first home through Government schemes that they believed would help, rather than hinder, them. They now wish to move on, but are instead facing bankruptcy due to astronomical bills. Understandably, they want to know why those who should be taking responsibility are not.
Let us look at the example of Berkeley Homes and its subsidiary St James. Unlike other developers and housing providers in the constituency, the chief executive officer of Berkeley Homes has refused three times to attend public meetings that I have organised, or to answer leaseholders’ reasonable questions about remediation costs. The company remains in dispute with the owners of Aragon Tower in Deptford about whether the fire breaks in the building are faulty. Meanwhile, more than 160 residents are fearful of what might happen while they are asleep.
The stress of paying for remedial works is particularly acute for leaseholders in shared ownership blocks, including Norfolk House in Deptford. Residents do not qualify for the Government’s new cladding grants, as their building is under 18 metres. They therefore face having to pay back costs at £50 per month. The estimated total for removing the cladding is £3 million, meaning that residents would have this debt hanging over their heads for many years to come. On top of that, they are facing additional fire safety charges, including for a waking watch. The cost of that, to be billed from September, is a staggering £74,000 a month. Many constituents are also finding that banks will not lend on properties without external wall survey certificates, despite Government advice that the document is not a legal requirement. Just as the country faces another financial crisis, leaseholders will be forced into higher mortgage rates for homes that in many cases are no longer suited to their needs. The Financial Conduct Authority merely suggests using mortgage intermediaries. Ministers promised on at least 15 occasions that cladding costs would not be passed on to leaseholders, yet for years they have failed to deliver. Tonight, I call on the Government to support those amendments that would absolve leaseholders from bearing the costs of a crisis not of their making.
Nearly four years after Grenfell, it is very disappointing that the Government still have not finalised support to make people’s homes safe, and that leaseholders are still waiting for the protection that Ministers promised multiple times, and that the Lords amendments could help deliver.
I am in touch with more than 3,000 households affected in my constituency, and hundreds of leaseholders have completed my online survey. These are people left in limbo by our Government, but already facing the cost of service charges or waking watches. There are also those facing costs where there is an uncertain timeline for the work. Seven out of 10 people who completed my survey said that works had been identified as necessary but they had yet to get the date for repairs. There are also people whom the Government deliberately excluded from help with compartmentalisation safety measures, and people living in buildings less than 18 metres tall. I am working with people living in 28 such buildings, and with people who have seen delays in Government action, despite the Government having failed to ensure that regulations meant that house building and renovations were safe. Of course, other people have seen Government guidance needlessly affect their insurance or mortgage.
Today, I am supporting the Lords amendments, but I am also asking the Government not to profiteer from this situation. I am seeking, with cross-party backing, including from the hon. Member for Southampton, Itchen (Royston Smith), who has already spoken, a VAT exemption on essential works required through fire safety surveys, in line with VAT changes made three years ago for some new builds. If that measure is adopted, the Government’s building safety fund will go 20% further, as money will not be lost to VAT. That fund goes on not luxury changes, but essential remedial works required by the Government to make people’s homes safe. Put simply, we cannot go from dishy Rishi eating out to help out last year, to rip-off Rishi profiteering from people’s misery today. I hope that this cross-party request will gain further support, and that Ministers will meet campaigners on this issue.
It is a pleasure to follow the hon. Member for Bermondsey and Old Southwark (Neil Coyle). The Government have moved swiftly to try to remediate the cladding on tall buildings. There has been slow progress, but progress is being made. In medium-rise buildings—those below six storeys—leaseholders will have to bear a cost, but we do not know what that cost will be, and we do not yet know the results of the proposals for the loan scheme. It is quite clear that the Government are trying to find a way forward, but we have yet to see the details.
There is also the issue of fire safety in buildings. The Bill is vital to preserving fire safety across the country in all buildings, whatever their structure. The Grenfell inquiry lifted the lid on the scandal of the tall buildings erected in this country without following proper fire safety regulations. Once a survey is carried out on a building, we know the extent to which work is required, whether regulations were followed, when the building was put up and whether the materials used in the building were correct. The people who provided substandard materials should be made to replace them free of charge. If builders put buildings up without following the proper regulations, we should go back to them and required them to carry out the remediation.
The one set of people who are completely and utterly innocent is the leaseholders. They did not build their building; they bought their lease in the belief that it was safe and secure. We should send out the strongest signal tonight that leaseholders should not have to pay a penny piece towards the cost of remedying things that were not their fault.
The Minister may say that the Bill is the wrong place to put that provision, but it will take at least 18 months—possibly two years—to bring the building safety Bill to fruition. Leaseholders do not have time to wait for us to deliberate, so let us join together and send the signal that leaseholders do not have to pay a penny. If the Government believe that Lords amendment 4B is somehow flawed, let them come forward with an amendment that is satisfactory and will result in the key outcome: not requiring leaseholders to pay.
I am pleased to see the Bill back before us, and proud that it was an amendment that I tabled last June in Committee—new clause 3—that first introduced the principle that leaseholders must be protected from the extortionate costs of fire safety remediation. I am very grateful to my noble Friend Baroness Pinnock for taking up the idea in the other place, and to the hon. Members for Stevenage (Stephen McPartland) and for Southampton, Itchen (Royston Smith) and the Lord Bishops of St Albans and London for improving it along the way.
The arguments for and against protecting leaseholders in the Bill are now well established. The Government continue to attempt to fob us off with the inadequate and flawed remediation fund, but fire safety experts have debunked the fund’s arbitrary 18-metre cut-off. Meanwhile, leaseholders keep trying in vain to tell the Government that it is not just about cladding; buildings of any height would still be left liable for non-cladding remediation of missing fire breaks, flammable balconies or dangerous insulation, as well as having to pay for waking watches and additional alarms.
I have listened with interest as Ministers continue to reject the amendment. We hear time and again that it is not sufficiently detailed, that it would require substantial drafting of primary legislation and that it could cause litigation, delay remediation work and have unintended consequences—that is a new one. The Government claim that it is Members who back the amendment who are apparently responsible for causing delays to the Bill, when it is the Government who have taken almost four years to bring forward a two-page Bill. Not once have the Government acknowledged the risks of the Bill passing without the amendment. Not once have the Government addressed the fact that financial costs will be incurred by leaseholders from day one if the Bill goes through without the amendment.
The Government have spent nine months finding fault with the amendment, but at no point have they brought forward their own. Leaseholders cannot rely on the flawed building safety fund, nor can they wait any longer for promises of hope in a building safety Bill that may or may not help in the future. Ministers can see the strength of feeling in this House, even among those on their own Benches, and they can hear the pleas from millions of desperate homeowners. This amendment may not be perfect, but it is the only proposal on the table to protect leaseholders from the financial repercussions of fire safety defects that are not of their making. I call on all Members to do the right thing and support it.
I understand why the Government will not accept the amendment, and I do not want to go there again, but what we need is urgency. Time is not just money; it is also worry, anxiety and uncertainty, and I echo the points made in one of the many excellent letters from my constituents in Portishead on this. It says: “It is not right that leaseholders have to worry about the costs of fixing safety defects that we did not cause.” We all agree with that; the question is who should pay. If the costs are a direct result of legislative change made by the Government, it is reasonable for taxpayers to contribute to that. If they are not, builders and insurers should pay, including for non-cladding related defects.
The second point that my constituent makes is this: “We recognise that the additional £3.5 billion announced by the Secretary of State is a step forward and we do welcome this funding. We are still awaiting the full detail of this funding announcement, as well as that of the proposed loans for medium-rise buildings.” In the last debate, we were told that more details would be forthcoming after the Budget. It is after the Budget, and we have still not had the details we are looking for, and these are real-time problems for which our constituents require real-time solutions.
My constituent goes on to say that “providing funding for buildings over 18 metres while forcing leaseholders in buildings under 18 metres to pay via a loan scheme is entirely unfair, because building height alone does not determine fire risk.” We understand that, and again it is about appreciating that there needs to be a cut-off to stop taxpayers having to sign a blank cheque, but the cost for remediation should be met by those who are actually responsible for the problems in the first place.
The final problem that my constituent raises—it has been raised so often in this debate and previous debates—is negative equity and the difficulty of resale, which is causing immense distress. It can be a major generational problem for people who are looking to sell or downsize. It can cause them a great deal of anxiety. We have heard that the market should sort it out, as we would normally expect, but we are still waiting for elements of that that the market would normally regard as being necessary.
I will not, because time is short and so many Members want to get in; I apologise to my hon. Friend.
Last time, I asked what direct contact Ministers had had with the Association of British Insurers, the building societies and the banks, because without their help, we are unable to deal with the negative equity and resale problems that are at the heart of so much of the distress we find. I know from talking to so many of my constituents about this issue that they appreciate that the Government have already come a long way. They are very grateful for taxpayer support. The problem is that we need more details, and for real-time issues, we need real-time solutions. Urgency is the key.
I am grateful to colleagues in the other place for the opportunity to reconsider amending this Bill. I also thank the hon. Members for Stevenage (Stephen McPartland), and for Southampton, Itchen (Royston Smith), for their perseverance in holding the Government to account over this cladding scandal.
Much has been said in this Chamber about why leaseholders should be protected from fire safety remediation costs, and I could repeat the long list of powerful arguments that colleagues from across the House and I have put to the Government, but instead I draw on the experiences of those whose voices are not often heard in this debate, and in particular want to mention the problems faced by disabled leaseholders. I pay tribute to the work of the Leaseholder Disability Action Group in highlighting them.
For many disabled constituents in Vauxhall, the difficulty finding accessible homes in London means that, where possible, they choose to invest in a property that they view as a potential property for life.
In many instances, shared ownership with a housing association is an affordable option for those who do not have enough for a large deposit or even a mortgage. Many disabled leaseholders will have spent thousands of pounds adapting their flats to suit their needs, including with bathroom and kitchen adaptations, which will often have been funded through local authority disabled grants. But like so many leaseholders caught up in this crisis, they are now facing the additional burden of remediation costs, on top of other fire safety measures, putting them at risk of bankruptcy and losing their home for life. What is more, we know that disabled people are less likely to have the savings or income to meet unforeseen bills, and these are all subject to means-testing. This cannot be right. The important amendment before us this evening would help to end this nightmare for all leaseholders, so I urge all colleagues across the House to join me in voting for it.
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.
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.
I am grateful to my hon. Friend. I want to ask him this simple question, which I am sure he will appreciate. We have been back here three or four times now to discuss this, over and over, and every time I have said that if the amendment is defective, the Government should make it work and have it as their own. Does he agree that that is the way to go?
After the previous debate, I offered my hon. Friend the opportunity to sit down and look at an amendment that might work, in concert with the Government.
The other difficulty with the amendment is that it would put the onus back on a building’s freeholders. Many people would say that that is fine—that it is better than the leaseholders having that responsibility—but I do not think it would put the leaseholders in a better situation, because the freeholder would simply close down the company and hand back the responsibility, which would fall back on to the leaseholders. I simply do not think the amendment works.
I have a couple of general comments. I was a member of the Housing, Communities and Local Government Committee at the time of the Grenfell tragedy, and the first thing for which we campaigned—straightaway, like many Members in this House—was a complete ban on combustible cladding. That is exactly what the Government stepped in to do. Of course, that ban is prospective, and it left a retrospective issue. The Government have clearly stepped in on the retrospective issue of cladding on high-risk buildings, which is exactly what the Select Committee campaigned for—those 1,700 high-risk buildings that were over 18 metres. That is what the £5 billion of funding remediates.
Many people in this debate have asked about the other elements, such as the missing fire breaks. It is of course absolutely right that we cannot expect leaseholders to take on a debt of tens of thousands of pounds; that is simply not right. We need to take a risk-based approach to the issue. Lots of buildings, particularly lower-rise buildings, can be safely remediated without necessarily replacing cladding: sprinklers, fire alarms and other systems can make those buildings just as safe.
We need to form a coalition of people right across the sector—be it building owners, contractors, managers or manufacturers—to find the best risk-based solution to the problem while minimising the cost for anybody, not least leaseholders. Of course developers should pay, and in many cases they have—Persimmon has just put £70 million to one side to remediate some of its buildings—but the difficulty is that we are often trying to deal with developers that are no longer there. The levy that the Government have introduced is absolutely the right solution, and I urge them to extend it to materials manufacturers and in particular insulation manufacturers, which I feel are principally responsible for the scandal of the situation in which we find ourselves.
On leaseholders, we of course do not want to see anybody go bankrupt as a result of these costs. There is a cap on costs for lower-rise buildings; it may well be that there should be a cap on the costs of remediating these issues for any leaseholder in any building. We should look into that, along with the possibility of the Government top-slicing the risk to make the insurance costs much lower. There are solutions and we all need to work together to provide them.
I have great respect for my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) and his expertise in this policy area. I accept that the amendment is not at all perfect, but it is the only thing that is currently available to keep the issue in play, which is why, unfortunately, I cannot support the Government tonight. I had hoped we would have a solution by now.
The simple point is that whoever is at fault—there may be a number of them as this has happened over a period of time—the people who are not at fault are the leaseholders who bought in good faith. They relied on surveys and regulations that appeared to suggest that their properties were in order and had no reason to think otherwise. It therefore cannot be right that they are out of pocket, regardless of the height of the building. I quite understand that there may be perfectly good reasons for using 18 metres as a threshold of risk for prioritising work, but it has no relevance to responsibility, moral or otherwise, so it is an arbitrary cut-off point.
I had hoped that Ministers would have taken the opportunity between the previous debate and this one to come up with a further scheme. I urge my right hon. Friend the Minister, who I know is trying to do the right thing and has put a great deal of money into the matter, to continue to think again and work urgently on this matter because, as my right hon. Friend the Member for North Somerset (Dr Fox) said, time is pressing. The only people who do not have the cash flow are the leaseholders. By all means go after those at fault, be they builders, developers or contractors, but in the meantime we cannot leave leaseholders, who have done nothing wrong, facing bankruptcy because they are effectively in negative equity and are having to fork out for a significant amount of costs, as are my constituents at Northpoint in Bromley.
This is destroying people’s lives. None of us wants to do that and I know that the Government do not want to do that. To find a solution, we have to cover the costs for those people who are not in a position to fund these costs over the length of time between this Bill imposing a liability on them and the Building Safety Bill coming along perhaps 18 months—12 months at best—down the track. It is covering that gap that needs to be done. That gap has to be covered in a way that treats and protects all leaseholders equitably regardless of the height of the building. I hope that the Government will use the opportunity of this going back to the other House to think again and urgently to crystallise a solution that we can all join around. The intentions are the same across the House, but we must have something that does not leave leaseholders—those who are not at fault—exposed. It is not a question of caveat emptor. They relied on professional advice and assurances. They are not the ones at fault. Be it loan or grant, either way they should not be picking up the tab for something that was not, ultimately, their responsibility.
I am grateful to all right hon. and hon. Members for their contributions to this debate. Members have spoken passionately and sincerely on behalf of their constituents. I think that everybody, from all parts of the House, wants to see the cladding scandal ended once and for all, and ended quickly, which is what the Government are about.
The Minister is being very generous. He kindly agreed the other day to speak to his ministerial colleagues about getting a sit-down meeting with Julie James, the Welsh Minister for Housing and Local Government, to resolve some of these unanswered issues. She did write on 10 February to the Secretary of State for Housing, Communities and Local Government. She has yet to receive a reply. Can we please get that meeting arranged and please get some answers to her very reasonable questions on behalf of leaseholders in Wales?
Not only did the hon. Gentleman speak to me in the Chamber, but, even more importantly, he spoke to me in the Tea Room. I shall certainly ensure that he gets a response as swiftly as possible.
In the time that I have, let me speak to the effectiveness of this amendment. As parliamentarians, no matter what the issue is before us, we have a duty, as I said earlier, to implement a clear framework and transparent legislation to support fire and building safety reform. Despite the best intentions of those who have tabled this amendment, I have to say that it is unworkable and impractical. There are three specific points that I should raise. First, the amendment does not take into account remedial works that arise outside of the fire risk assessment process—for example, costs identified as a result of a safety incident or building works taking place. In such cases, this will not prevent costs being passed on, so it does not deliver what Members want it to do. Furthermore, if these amendments were to be added to the Bill and become law without the necessary redrafting of the legislation, the Government, and thereby the taxpayer, would in all likelihood fall liable to protracted action by building owners in the courts. Building owners could use litigation to claim for costs that they feel are entitled to be pursued from leaseholders. While that litigation is ongoing, there could be further delays to construction work carried out on urgent remediation. It could be a waste of time and a waste of taxpayers’ money. Redrafting the Bill is not something that can be done at the stroke of a pen. It requires parliamentary counsel and parliamentary draftsmen to work at it to ensure that any changes are sound and that any secondary legislation is also prepared, so that the Government, and thereby the taxpayer, can avoid legal challenge. We would not be able to get it done in this Session.
Furthermore, the amendments do not reflect the complexity involved in apportioning liability for remedial defects. The Government have announced how they will distribute costs, including from developers and industry, through our upcoming levy and tax. A decision through this amendment to pass all these costs to the building owner would be overly simplistic and it could be counter-productive. It would be self-defeating if landlords, faced with remediation costs, simply walked away. Many could do that. They could activate an insolvency procedure and just walk away. That is not about protecting freeholders, but about protecting leaseholders. It is about their position, because if leaseholders are left behind as the owners walk away, they would be in the same position as they are now, with no certainty on how works would be paid for or when they will be done. There is a real risk that this amendment could make the problem worse for leaseholders. We would be left in a situation where there would be delays to the commencement of the Fire Safety Bill, delays to our wider building safety programme, greater uncertainty for leaseholders and, quite possibly, unintended and deleterious consequences for them. We would not be any further forward in resolving the issue.
We have been working hard to ensure that those with broader shoulders and those that should pay do pay. That is why my right hon. Friend the Chancellor announced at the Budget that there will be a levy on tall buildings and a tax on the sector. We do not want to absolve the industry of its responsibility. We are finalising how the levy will be calculated and the Treasury is leading on the development of the tax. Of course we want to ensure that it works effectively, and that small and medium-sized developers are not unfairly disadvantaged. We want to get it right and we want to get it done as quickly as we can.
I am also encouraged that we are now seeing developers step forward in this effort by putting aside significant funding: Taylor Wimpey has put aside £125 million of funds to de-clad the buildings for which it is responsible; and, as my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) mentioned, Persimmon has put aside £75 million, and has committed to pay all ACM and non-ACM remediation and inherent defects in the buildings for which it is responsible. The sector is now stepping forward, and we encourage more developers to do so. We will bring forward as soon as we possibly can the workings of the financial support scheme that we announced at the Budget that will ensure that leaseholders in buildings below 18 metres pay no more than £50 a month.
This has been a crucial debate.
One hour having elapsed since the commencement of proceedings on the Lords message, the debate was interrupted (Programme Order, 24 February).
The Deputy Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83G),
That this House disagrees with Lords amendments 4B, 4C, 4D and 4E.
The list of Members currently certified as eligible for a proxy vote, and of the Members nominated as their proxy, is published at the end of today’s debates.
Motion made, and Question put forthwith (Standing Order No. 83H), That a Committee be appointed to draw up Reasons to be assigned to the Lords for disagreeing to their amendments 4B, 4C, 4D and 4E.
That Christopher Pincher, Tom Pursglove, Mike Wood and Sarah Jones be members of the Committee.
That Christopher Pincher be the Chair of the Committee.
That three be the quorum of the Committee.
That the Committee do withdraw immediately.—(James Morris.)
Committee to withdraw immediately; reasons to be reported and communicated to the Lords.
Counter-Terrorism and Sentencing Bill (Programme) (No. 2)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Counter-Terrorism and Sentencing Bill for the purpose of supplementing the Order of 9 June 2020 (Counter-Terrorism and Sentencing Bill (Programme)):
Consideration of Lords Amendments
(1) Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.
(2) Any further Message from the Lords may be considered forthwith without any Question being put.
(3) The proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.—(James Morris.)
Question agreed to.