Relevant documents: 25th and 29th Reports from the Delegated Powers Committee
2A: Because the Government has announced that it intends to bring forward its own legislative proposals to address the issues mentioned in the amendment.
My Lords, I will speak also to the House’s Amendments 3 and 4, with which the other place has disagreed for its Commons Reasons 3A and 4A. Before I address the amendments agreed at the Lords Report stage, I would like to make a few comments about the overall importance of this piece of legislation. The Bill was introduced in the other place nearly a year ago today and we are moving closer to getting it on to the statute book. As there are a couple of issues to resolve, it is vital that we should remind ourselves of the fundamental purpose of the Bill. It is an important step in delivering fire and building legislative reforms. It is purposely short because it has been designed to provide much-needed legal clarification that the fire safety order applies to structure, external walls and flat entrance doors. What this will mean on the ground is that these critical elements will be covered in updated fire risk assessments and ensure that enforcement authorities can take action where necessary. In short, the current legal uncertainty will end.
I turn to Amendment 2 and Amendment 2B proposed in lieu by the noble Lord, Lord Kennedy. The Government remain steadfast in their commitment to delivering the Grenfell Tower inquiry recommendations, including those on the duties of an owner or manager. As such, the amendments are unnecessary. However, I thank him for his constructive engagement with me prior to this debate. I will be able to provide further reassurances to the House in respect of timing that he is seeking and look forward to outlining them in response to the debate.
I turn now to Amendment 3. I thank the noble Baroness, Lady Pinnock, for the constructive conversations that we have had regarding a public register of fire risk assessments, and I am grateful to her for not pressing her amendment again today.
I move on to Amendment 4, Amendments 4B, 4C, 4D and 4E proposed in lieu by the right reverend Prelate the Bishop of St Albans, and Amendment 4F proposed in lieu by the noble Baroness, Lady Pinnock. I recognise the concerns of your Lordships to ensure that swift action is taken to protect leaseholders from the significant remediation costs related to unsafe cladding and other historic building safety defects. We are all acutely aware of the full toll that this has taken on leaseholders and the pain and anguish that it has caused. I expect that we will hear a number of views during the debate on the important issue of remediation. However, this is a highly complex matter without a simple solution, and it cannot be resolved in this short Bill.
I make it clear now that we have a number of concerns about the alternative amendments, and I will set out my specific views on them at the end of the debate. I beg to move.
Motion A1 (as an amendment to Motion A)
2B: After Clause 2, insert the following new Clause—
“Legislative proposals relating to duties of owner or manager
(1) Within 90 days of the passing of this Act, the Secretary of State must publish draft legislation to require an owner or a manager of any building which contains two or more sets of domestic premises to—
(a) share information with their local Fire and Rescue Service in respect of each building for which an owner or manager is responsible about the design of its external walls and details of the materials of which those external walls are constructed,
(b) in respect of any building for which an owner or manager is responsible which contains separate flats, undertake annual inspections of individual flat entrance doors,
(c) in respect of any building for which an owner or manager is responsible which contains separate flats, undertake monthly inspections of lifts and report the results to their local Fire and Rescue Service if the results include a fault, and
(d) share evacuation and fire safety instructions with residents of the building.
(2) Within 90 days of the passing of this Act, the Secretary of State must publish a statement on a proposed timetable for the passage of the draft legislation mentioned in subsection (1).
(3) Within 120 days of the passing of this Act, the Secretary of State must publish a statement confirming whether the draft legislation mentioned in subsection (1) has progressed.””
My Lords, I draw the attention of the House to my relevant registered interest as a vice-president of the Local Government Association, the chair of the Heart of Medway Housing Association and a non-executive director of MHS Homes Ltd. In moving Motion A1, I will address all the Motions before the House today.
It is disappointing that the Government have over- turned the amendment passed by this House. The intent of our amendment was to make progress in implementing the recommendations made in the first phase of the Grenfell Tower inquiry. Our frustration, along with the frustration felt by many, has been that since the recommendations made in the first phase were published, progress has been extremely and annoyingly slow. Being told by the Government that in most cases we do not need legislation to make progress is in some ways even more frustrating because nothing has happened, which is again very odd. This is the first piece of legislation we have seen that will bring anything into force. Frankly, the victims and their families deserve better. People living in properties that are unsafe or blighted deserve better than that.
This led me to propose Motion A1, which proposes to insert a new clause into the Bill. What my amendment seeks to do is accept the Government intention to take action but to add some rigour and rigidity to the proposals with clear timescales for action. As I have said previously, this has all been too slow with no clarity about what the timescales are for action through primary legislation and through secondary legislation and guidance.
This morning I received a letter from the noble Lord, Lord Greenhalgh, which seeks to add some clarity to the timescales for action, and that is welcome. We also have the Government’s response to the consultation, which is helpful. It looks as if we are finally making some progress and I welcome that. It would be good to hear him, when he responds to the debate, set out the timescales for the actions the Government are proposing, and I look forward to that. That will be part of the official record of the House and the Government will be held accountable for the pledges that they make today.
In respect of Motion B, while I accept that the Commons can assert financial privilege and the need not to give any other reason, we must consider the subject of the amendment that was rejected and the circumstances that have led to this Bill, as well as the intention behind the amendment that the other place has rejected. We would have hoped to have got a little more than the assertion of financial privilege. This is about fire safety and reassurance for residents that the register is up to date, that it can be relied on and that it is publicly available and transparent so that sunlight on fire risk assessments will provide more reassurance. I hope that when the noble Lord responds to Motion A, he will provide a bit more clarity than just relying on financial privilege as expressed by the other place.
Motion C1, tabled by the right reverend Prelate the Bishop of St Albans, seeks to add to the Bill Amendments 4B, 4C, 4D and 4E. They would prohibit the owner of a building from passing on the costs of annual remedial works attributable to the requirements of the Act to leaseholders or tenants, except where the leaseholder is also the owner of the building. The amendments under the Motion tabled by the right reverend Prelate have my full support, and the Labour Benches will support him if he decides to divide the House. I hope very much that he will do so.
Leaseholders are victims and have done nothing wrong. They deserve to be treated much better than they have been by the Government. They have done everything right. They have bought their properties and are paying their mortgages. Now they are being penalised for the failure of others. Surely that cannot be right. The fact that their buildings have been covered in dangerous cladding has made their flats worthless. They cannot sell their properties, but they are still expected to pay their mortgages and other charges. They cannot get work done; they may be paying for a waking watch and in some cases the properties will have guarantees on them which need to be drawn down. There will be warranties for work done which need to be used. They have been paid for, otherwise they are literally not worth the paper they are written on.
We should all stand up to support leaseholders and tenants and get those who have done the work to accept their responsibility and put this right. The Government are failing leaseholders and tenants. Their actions are just not good enough and fall far short of what they promised.
I want to be clear. For the individual builder, contractor, company, warranty provider or insurance company, it cannot be right for people to wriggle out of their responsibilities. The Government need to take firm action. Supporting the Motions and amendments before the House today will be an opportunity to ask the Government to think again, and I hope we take it. I beg to move.
My Lords, I speak to Motion C1 and Amendments 4B to 4E. I give notice of my intention to seek the opinion of the House when the time comes. I declare my interest in the register in that I, too, am a vice-president of the Local Government Association.
I first thank the honourable Members for Stevenage and for Southampton, Itchen, who originally prepared these amendments, as well as the signatories from all parties when they were tabled in the Commons. I also thank the right reverend Prelate the Bishop of London, who joins me in supporting it, and pay tribute to one of our colleagues, the Bishop of Kensington, who has worked very closely on the ground with victims of Grenfell and leaseholders.
Grenfell was an unmitigated tragedy brought about, it would seem, by institutional failings on multiple levels. The recent revelation that the cladding provider knew that it could result in tragedy and death is nothing short of a disgrace. It has been a tragedy for many lives: ordinary families have been ripped apart by this terrible event.
The Bill will deal with the problem of dangerous cladding by creating a quick and easy mechanism to force freeholders to remove dangerous cladding and other fire safety defects. That is undoubtedly a good thing and will, hopefully, protect against future tragedies, but I share the disappointment of the noble Lord, Lord Kennedy, that Her Majesty’s Government have not sought to address the severe adverse financial consequences that the Bill will create for leaseholders. In the Bill’s current form, whenever the fire service serves notice to the freeholder requiring remedial work to be undertaken, the freeholder will be able to force leaseholders to reimburse all the costs incurred. These costs are staggering.
At this point, I say that our hearts go out—I am sure we all share this—to all the people who are struggling. I have been inundated with emails, tweets and people contacting me who are at their wit’s end looking at what is likely to unfold in the next few weeks. Far from the Government’s estimated remedial costs of around £9,000 per leaseholder, depending on the terms of the lease and the work involved, a leaseholder could very easily be handed a bill of £50,000, payable within weeks.
Inside Housing conducted its own private survey of 1,342 leaseholders. Its findings reveal a very different picture to that of Her Majesty’s Government. Among those surveyed, 63% of respondents faced a total bill above £30,000 for remedial costs and 15% faced a bill of more than £100,000. Of course, a few of these lease- holders may be well off, some will have disposable income, but most will not: 60% had a household income of less than £50,000, with only 8.7% reporting a household income of more than £100,000. In other words, this will primarily affect ordinary middle to working-class people.
In addition, 56.4% of those surveyed were first-time buyers. They have followed that life trajectory that many Conservative Governments have sought to promote by working hard, saving and purchasing a property. These are people with aspirations—something I totally support—yet nearly everything they have worked hard towards, over many years, could be taken away from them, as shown by the alarming 17.2% of respondents who say that they are already exploring bankruptcy options. I must remind the House that the costs mentioned above include only the remedial costs; they say nothing about the interim fire safety costs that leaseholders already incur.
Government figures show that the average monthly cost of a waking watch in England is estimated at nearly £18,000 per building and around £330 per dwelling, rising to nearly £20,000 and £500 respectively in London. This is not to mention the cost of new alarm systems, ranging from £50,000 to £150,000 per block. How can this be fair or just? It was not the leaseholders who sold or fitted defective cladding; leaseholders are the innocent party. They purchased their properties in good faith, believing them to be safe. If the Bill passes unamended, it is they who will pay—not the cladding providers or the developers but hard-working ordinary people, forced to pay for defects that were deemed safe when they purchased their apartments.
I do not have the technical knowledge about how the Motion fits with the Bill and so on, and whether it would be better placed in a later Bill. What I do know is that we are faced with some immediate challenges. Any solution cannot be deferred until the building safety Bill, which could be as far as two years in the future. We have to try to do something now. Supporters of this Motion and I have argued that because this legislation creates the problem for leaseholders, it should likewise solve the problem. I acknowledge that there are some weaknesses in this Motion; it does not solve every problem for leaseholders. Even if it is passed, leaseholders will still shoulder ongoing interim fire safety costs. However, by preventing remedial costs from being passed on to leaseholders, a significant proportion of the financial burden placed on them should be eased. As one leaseholder said, “We need a solution so we can finally move on with our lives, something denied to us now for several years. We just want this nightmare to end”.
I hope that by passing this Motion, we can begin to end that nightmare and the anxiety plaguing the lives of thousands of leaseholders, allowing them to move on. The Bill solves the fire safety defects that lay at the heart of the Grenfell tragedy. The Government are absolutely right to do that and I am grateful for what they have done, but I believe they are morally wrong in their treatment of leaseholders in this crisis. By not including sufficient provision to protect leaseholders, a conscious decision would be made to impose poverty, possibly bankruptcy and certainly misery on thousands of ordinary people whose only crime was being aspirational.
Those responsible should be the ones who pay. Only the Government can provide the capital up front to pay for these works; only the Government can introduce levies on those responsible to claw back that money over the next few years. A great injustice is currently being done to leaseholders and a fair solution is needed, which is why I bring this Motion to your Lordships’ House.
My Lords, I now call the noble Baroness, Lady Pinnock, to speak to but not, at this point, to move Motion C2.
My Lords, I draw the attention of the House to my relevant interests as a vice-president of the Local Government Association and a member of Kirklees Council.
Much has happened since the Bill was last debated in this House in November. It is already clear from the contributions to this debate today that this is an unresolved crisis of major proportions. I thank the Minister for the opportunities that he has provided to discuss the issues raised. The Government’s response has been to regard this as largely an issue for lease- holders and freeholders to resolve. Gradually, however, they have acceded to the principle that, without government intervention and funding, the problem will not be resolved.
The purpose of all the amendments in my name and that of the right reverend Prelate the Bishop of St Albans is to extend the principle already agreed by the Government. Amendment 4F in my name would extend the contribution that the Government make to cover not just the remediation but the extortionate service charges and higher insurance costs that are currently being levied on these leaseholders. This serious problem can be successfully fixed only with up-front funding from the Government, which can then be recouped from developers, construction firms and manufacturers.
The Government’s own estimate is that the total cost of remediation will be in the region of £16 billion. The buildings involved are not just in London but all across the country. Following the Grenfell tragedy, we now know that ACM cladding was affixed to blocks when it was known to be inflammable. As the cladding is peeled away, further serious building defects are revealed. The Government recognise this, as they have issued a directive to local authorities requiring an inspection of various features, including fire breaks, insulation and spandrel panels, as well as cladding. This is now much more than a cladding scandal; it has become a construction crisis.
Worse still is that some of the defects that are being exposed were in breach of building regulations even at the time of construction. The big question then is: who is going to pay? Currently, the Government are providing grants for the removal of cladding only and are restricting those grants to buildings of 18 metres or more in height. Yet cladding has to be removed from all blocks, irrespective of height. The Government have chosen 18 metres partly because they simply have no idea how many blocks there are that are lower than 18 metres. I have asked the ministry for the analysis of those risks to which the Minister will refer but have received no reply to date. Good decision-making is dependent on well-researched data, which is then shared for all decision-makers.
At the heart of this crisis are people who have done everything right and nothing wrong. They are innocent victims and have suffered enough. Imagine living in a flat with your family, knowing for three years or more that the home you saved hard to buy is a significant fire risk. That fact alone has left emotional scars on those leaseholders. Then imagine, having carefully budgeted, being faced with an additional service charge of several hundreds of pounds each month to cover the extras: waking watch, insurance and more. For some, the final straw is that you are then billed for the costs of total remediation. For individuals faced with these enormous bills, the choices are very limited.
Bankruptcy has already been the solution for too many. George is one such. He describes himself as a frightened leaseholder and says, “I have been informed that it will cost £2 million to replace the cladding and remedy the defects. That is £50,000 per flat. I’ll be bankrupt by the end of the year at the age of 28. The building has one grant, covering 10% of the costs.” Everything that he and others have worked and saved for is lost through no fault of theirs. It can lead to homelessness. Sarah lives in a flat in the Royal Quay in Liverpool. The normal year service charges for that block were £270,000; this year, the service charges are nearly £1 million. Sarah says that the defects are so numerous that the fire service may have to escalate from a compliance to a prohibition notice, which will shut down the complex. If that occurs, 400 residents will be made homeless.
Not surprisingly, given those examples, for some the stress is such that very serious mental illness, or worse, has followed. Hundreds of thousands of individuals and families are watching and waiting for the decision of this House today. They are willing us on to help to find a fair and just solution to a problem that is not in any way of their making, yet they are the ones who are being asked to pay the price. If the right reverend Prelate the Bishop of St Albans wishes to divide the House, as he has indicated, the Liberal Democrat Benches will support him. If, however, he chooses not to do so, then I will wish to test the opinion of the House.
My Lords, I declare my interests as a vice-president of the LGA and as a practising chartered surveyor. I have very considerable sympathy with all these amendments but, the matter having now been decided by this House, gone to the other place and now come back, it behoves us to consider all these matters with a degree of objectivity, despite the clear emotions that are involved.
With regard to Motion moved by the noble Lord, Lord Kennedy, I agree that it has taken far too long to deal with this matter, which has allowed the issue to grow in a way that should have been nipped in the bud at an earlier stage, but I realise the complexities of the issues, which I will address in a moment. On all these amendments, I must say at this juncture that I do not know which way I would vote; it will become apparent why as I proceed.
It goes without saying that I have the greatest possible respect for the right reverend Prelate the Bishop of St Albans and the powerful case that he makes for Motion C1 and, for that matter, the case made by the noble Baroness, Lady Pinnock, on the allied Motion C2. Indeed, every fibre of my being tells me that a great injustice has been visited on many innocent people as leaseholders and tenants in buildings affected by this Bill who have faced the burdens of past failings, delays and inaction, which they themselves may be powerless to deal with. It must be as if the whole system of property law and ownership has conspired against them. As a property professional, I feel that most acutely. It has been made worse, as I say, by the length of time that these problems have been gestating.
However, whatever my heart tells me on the grounds of ethics and justice, my professional experience tells me that these amendments would, almost inevitably, not achieve their aims or address the present or future fundamental issues. This Bill potentially affects a very wide category of property and tenure, not just high-rise blocks. The provisions of Clause 1 extend the regulations to any property comprising two or more separate units of accommodation. I ask noble Lords to contemplate just what that means in practice.
To some extent, the measures are retroactive. The Regulatory Reform (Fire Safety) Order 2005 will, at a stroke, be extended to a large number of properties previously exempted, with application of new responsibilities and duties to those deemed to be in control of them. Within its orbit will fall many factors, both known and as yet unknown, some with causes going back many years. This consideration is objectively a good thing in terms of safety, but it will certainly catch unawares many property owners, managers, tenants and long leaseholders, due to its retroactive nature.
All property ownership carries duties, responsibilities and risks. I have often commented to clients that one disbenefit of membership of the property-owning democracy is that, from time to time, one has to incur expense to defend one’s interests at net cost. That is different from the point made about the innocent and not well-funded person having to bear totally improbable levels of costs.
Although the ghastly trigger for all this is raw in our memories, identifying specific groups as special cases or categories of person who should be absolved from any liability for costs is not, to my mind, a solution. It does not take account of the general need for periodic repair, replacement and remediation common in the built environment. Crucially, it does not move us any closer to the relief of burdens on the innocent or the attachment of liability to those responsible, even less to the financial expenditure ultimately necessary to solve the problem. It might simply move things to another, equally blameless sector when, in fact, the need is to contain and address matters where they now arise and not allow this contagion to spread further.
I am far from sure that every potential measure to every property covered by this Bill is free from some latent previous work or alteration. In many ways, everybody here is pleading not guilty. I mentioned some of the players at Report, and I will not repeat that—the noble Baroness, Lady Pinnock, has reminded us of some. The Motion seeks to address a specific issue by altering the general operation of laws on liability for costs, and I am really not sure that that works, even less that it is without significant further consequences.
Left to my own devices, I might have proposed something far more radical than this Motion, such as the removal of the principle of caveat emptor so that property sellers might be liable for poor or dangerously sloppy workmanship during their period of stewardship; or preventing the use of corporate special purpose vehicles to protect large and wealthy development companies from the responsibility for poor construction standards on individual sites; or ensuring that, if the comfort of a construction warrantee forms part of what the purchaser or mortgagee might reasonably be expected to rely on, then it does in fact sit behind the same kind of quality standards reasonably to be expected under the sale of goods and services generally in this country.
I know that among all the moving parts of the laws of property, construction, contract regulation and insurance, civil and criminal liability, fraudulent misrepresentation and so on, even greater collateral damage could be caused to one of the slickest property markets in the world if we are not extremely careful. My recommendation would be to follow a route that is clearly within government competence in circumstances of systemic failure in order to provide relief where it is most needed and to stop the contagion; but that almost certainly does not lie within this Bill. I must recognise what the Minister can deliver, the degree to which HM Treasury will agree to fund, and what the Commons will agree to in this context. I try not to ask for the impossible but there are serious problems here, and beyond individual hardship, personal tragedy and dire effects on individual health and well-being, there are also powerful economic arguments for putting this right—there, I am entirely with the right reverend Prelate and the noble Baroness.
We need to think positively and creatively. The Government are right to stand guarantor and should go further in providing the bridging finance for much of what is clearly essential work to alleviate the worst of the problems, thus enabling swift rectification. However, rectification depends on available competent labour and capacity in this specialised field, plus there are new issues of liability and insurance for anyone now working on cladding. We must review the scope of what is genuinely high risk and perhaps find ways that, while not reducing to zero the risks to occupiers, allow for an incremental process of staged remediation and upgrading and take some of the stress out of the current situation. Surely there must be some cheaper alternative to the waking watch in a form that does not cost everyone their livelihoods.
I used to have to negotiate derogations on fire safety when dealing with old tinderbox listed buildings where the object was to get everyone out to safety via a defined and protected route, even if the building was a total loss as a result. Dirigiste and risk-averse absolutism is often the enemy of reasonable best practice, but I make this point knowing that at this very moment, part of a huge body of work is in progress in government among experts, in which I know the Minister has a direct hand.
We certainly cannot wait for the legal and judicial processes to establish liability before remedying this situation. There are far too many moving parts, as I have already observed, and things could simply grind on for years. Longer term, maybe we need another Law of Property Act, but it might have such far-reaching implications that I merely park the point at this juncture.
Whatever one does in the context of the Bill, it has consequences in several other areas, so while I am hugely sympathetic to these amendments, I am forced to conclude that they may not achieve what is necessary. They are not the fix that is required in a moving and evolving situation, with some crucial areas clouded in uncertainty. I will listen carefully to what the Minister has to say but the Government need to be on the front foot here. These amendments seek to address part of a huge problem that is not going away and which must be addressed.
The following members present in the Chamber have indicated that they wish to speak: the noble Lord, Lord Newby, the noble Baroness, Lady Warwick of Undercliffe, the right reverend Prelate the Bishop of London, and the noble Lord, Lord Adonis. I will call them in that order, so the first speaker is the noble Lord, Lord Newby.
My Lords, I begin by declaring an interest. I am a leaseholder in a block where I stay when I am in London during the week which has been found to have major safety defects and in which a waking watch is now in operation. I have therefore been able to see in my own bills but also by talking to people who live in the block what the consequences of the current situation really are. I strongly support the Motions in the name of the right reverend Prelate the Bishop of St Albans and of my noble friend Lady Pinnock.
This is a scandal of major proportions, and it is a modern one. Most of the buildings we are talking about have been built in recent years. We are not talking about a problem left over from the Victorians or the Edwardians; this is a recent problem of our own times. As we have heard, it is causing great distress, not minor worries, to a large number of people. The scale of the financial consequences of the problems they face affects not just their short-term economic position but every aspect of their lives. The immediate costs in themselves are pretty horrendous for people on modest incomes. In my block, as elsewhere, people in that position are having to take out loans at very high rates of interest to deal even with the ongoing waking watch costs, which are considerable. However, beyond that, people are stuck. They cannot sell their flat or move, even if there were compelling reasons for them to do so. In some cases they feel unable to start a family as they planned, because of the overwhelming financial uncertainties that they face. None of this, as is obviously the case, is their fault at all. The Motion in the name of the right reverend Prelate the Bishop of St Albans deals with the core of the problem and would remove from them the cloud of the future financial burdens they face. I strongly support it.
For reasons which I fully understand, his Motion does not deal with who should ultimately pay for all this. In my mind, that is pretty straightforward. The principal burden should fall on those who are culpable: the developers. They have made very significant profits over very many years from building substandard accommodation, and they should pay for it. In the case of Barratt Developments, which built the block in which I live, its profits over the past five years alone have been more than £3.5 billion. It can afford to clean up its own mess, and the same applies to other major housebuilders. Exactly how that is done is, I admit, complicated, but this is a challenge for the Government which they have not begun to meet.
During the lockdown, television channels are showing old series because it has been so difficult to make new ones. Last night, I watched an old episode of “Yes Minister”, which I strongly recommend. It is clear that the Minister here watched it as well because he has used exactly the arguments which Sir Humphrey used to persuade his Minister not to take action: “It’s highly complex. I’m really sorry. We’d love to do it but it’s really quite difficult, you know. Even if we could do it, which we can’t, it’s not appropriate to do it in this Bill. If we can do it—and I’m not sure we can—it may be possible to do it in a future Bill. I’m not sure which Bill; I don’t know when it’s going to come. But because it’s very complicated, you wouldn’t expect me to say further.” That is the Minister’s response to this.
In last night’s “Yes Minister”, what happened was that the Minister in it, completely frustrated by these usual arguments, put his foot down by announcing on national television that something was going to be done, which in effect bounced his Permanent Secretary into doing it. I suggest that the Minister, the noble Lord, Lord Greenhalgh, takes a leaf out of that Minister’s book and goes on television this very evening to say that he has been so impressed by the debate he has heard that the Government will now act speedily.
The truth is that the reason we are hanging about has everything to do with a lack of political will, and not to do with the technicalities. It is the job of government to deal with difficult things. Most bits of public policy are tricky and difficult. This is no exception but it does not mean that the Government have no policies on anything. It means that they choose what they want to devote time and effort to, and they have decided they are not prepared to put in the time, effort, commitment and funds to deal with this glaring injustice.
The right reverend Prelate’s Motion is a start because it removes the major part of the cloud facing people currently in difficulty and it should be supported. But even when it has been supported, it does not absolve the Government from grappling with this issue and sorting it out properly.
My Lords, I declare an interest as chair of the National Housing Federation, the representative body for housing associations in England. Our members house 6 million people in 2.6 million homes, including a significant number of flats in multi-storey, multi-occupied buildings that need remedial work on their external wall system.
Nothing is a greater priority for housing associations than their residents’ safety. Following the awful Grenfell tragedy, they have been leading the way in the past three years by identifying buildings that need urgent work and carrying it out as quickly as possible. In his Motion C1, the right reverend Prelate the Bishop of St Albans wants to protect leaseholders from huge bills to make their homes safe, and I support him. Leaseholders should not be facing such costs. Other noble Lords have given vivid examples of the impact on leaseholders.
Housing associations are doing what they can to ensure their leaseholders do not have to foot the bill for developers’ mistakes by pursuing the companies that built the buildings, as well as warranty and insurance providers. Sadly, these efforts are not always successful so I applaud a move by this House to provide extra assurance to leaseholders living in these homes.
However, housing associations face a huge dilemma. They exist predominantly to provide social homes to those on lower incomes. The buildings that housing associations need to remediate due to safety concerns will largely be made up of social housing. This welcome move to protect leaseholders must also be coupled with further government funding to pay for the necessary remedial works to all the buildings that need them. While the funding that the Government have made available for remediation costs so far is very welcome, the £1 billion building safety fund and the additional £3.5 billion announced last month are not available to remediate homes in which social tenants live.
Housing associations do not make profits to draw from, so any costs that they incur will generally be met using income from tenants’ rents, as well as money that could otherwise be spent on improvements to tenants’ homes and communities. This would mean that without additional funding, this amendment could result in charitable housing associations paying for works to both leaseholders’ and social tenants’ homes; effectively subsidising leaseholders’ share of remedial works costs with the money that social tenants pay for the upkeep of their homes and communities. Building remediation could cost the housing association sector upwards of £10 billion in total. Of course, I do not want to see leaseholders picking up large bills for this reason, but I do want to see government funding to pay for leaseholders’ share of all works in all buildings, to protect housing association renters from effectively picking up the bill.
Importantly, housing associations also use their funds to build affordable housing. Paying for urgent remedial works to people’s homes must be and is the sector’s top priority. But this essential work means that fewer affordable homes will be built in the future, at a time of desperate need. Research shows that we need 90,000 new social homes every year to meet demand in our country. The G15, a group of London’s largest housing associations, worked out that they have in aggregate spent in the last year, expect to spend next year or have included in their business plans up until 2031, a total of £2.9 billion. They estimate that, as a result of this spend, they will build 72,000 fewer affordable homes to rent, as they continue to prioritise these essential safety works. In addition to this, many of these housing associations will have to defer planned maintenance works and upgrades beyond those required to maintain decent homes compliance.
That group represents just 12 housing associations from a raft of hundreds of organisations that provide affordable homes. This is why legislating for building owners to cover remediation costs does not have the intended effect in all cases. In the case of social providers, they are facing astronomical costs for buildings that they did not construct in the first place.
We are right to seek protection for leaseholders, but that must sit alongside government funding to remediate all buildings in need, including social housing. Otherwise, tenants and people who need social housing will suffer needlessly now and for years to come. As the right reverend Prelate said, the Government are the only agency that can do this, and I hope that the Minister will confirm today that the Government will provide up-front funding for all remedial works and recoup the costs to the taxpayer by establishing liabilities later.
My Lords, I wish to support the Motions in the name of my friends the right reverend Prelate the Bishop of St Albans and the noble Baroness, Lady Pinnock, which provide a more comprehensive solution than is already in this Bill.
As the 133rd Bishop of London, it has been my privilege to serve this city for the last three years. Unfortunately, I have seen how inequality of outcome is built into our city. As I have followed this debate, it has moved me to speak today. It is almost four years since the Grenfell Tower disaster. Hundreds of thousands of citizens in London and other cities across this country still lie awake at night wondering whether their homes are safe and they can weather the financial hardship of the life-changing remediation bills that they face.
This is having a major impact on the health and well-being of our communities, the communities in this city. My work on the ground with the Bishop of Kensington has meant that I engage with people who are bearing the real cost of this: costs not just financially but to their health and mental well-being, with some facing suicidal thoughts. While they may bear the cost today, they will also do so in the future and there is no doubt that the NHS will bear the cost in the years to come.
We have heard from the Government and substantial sums of money have been cited, but I fear that they do not really go far enough. The amendments of my right reverend friend the Bishop of St Albans and the noble Baroness, Lady Pinnock, exist because each month, people edge closer to bankruptcy and struggle to sell their properties with debts attached from the exorbitant remediation and interim fire safety costs. Due to these financial pressures, some will pay almost 60% of their annual salary on those costs.
The Government’s current approach of a levy on developers has some weaknesses. If the scope of the levy was extended to cover other responsible parties, such as major contractors and suppliers of defective products, greater sums could be raised. The amendments attempt to distribute responsibility fairly, because it is a shared responsibility of the developers’ community, testing and regulatory guidance communities and major contractors to ensure that those who bought their homes in good faith and understood them to be safe, be they high or low-rise, do not face the burden of cost to refit their properties and make them safe. It is our responsibility as representatives of your Lordships’ House to make sure that we do right by the people of this country, even if it is complex. That is the role of government.
The Church of England is quite clear. In a recently published Archbishops’ housing commission report, we recommended that the Government should cover remediation costs and recoup their initial outlays from those responsible. We are looking to the Government to develop a simple, fair and comprehensive solution to the current crisis, but this solution must be clear and cost-effective. It also must be quick. Any solution should be based on “polluter pays” principles, with those responsible for unsafe buildings being required to put them right.
I therefore press the Minister, first, for assurances that the Government will implement a comprehensive solution, to ensure that leaseholders living in blocks more than 18 metres high and blocks between 11 and 18 metres do not pay for any remediation or interim fire safety costs through the building safety Bill, and that they will be compensated for their losses so far. Secondly, I press him to improve the Government’s current approach, which consists of a levy on developers, and distribute the responsibility for these costs as far as possible to all those responsible for the current crisis, and so protect leaseholders and taxpayers. Finally, I press him to create a legacy for the future of buildings and houses that are fit for purpose for those in our community and in a UK post Covid.
If these commitments cannot be given today, will the Minister meet me and representatives of the Archbishops’ housing commission to discuss how we can take forward these solutions in the coming building safety Bill? I support the amendments in the names of the right reverend Prelate the Bishop of St Albans and the noble Baroness, Lady Pinnock.
My Lords, the most important work this House does is to legislate and, within that work, to assert its view and opinion against the Government and the other House, because that is where we are acting independently, as opposed to acting simply either as a rubber stamp or a deliberative assembly. It always amazes me how little time and attention we spend on our most important function. Many noble Lords are in Committee until 11 pm or midnight, day after day. We discuss amendments a first time, refine them for Report the second time and may come round to them again at Third Reading.
However, when it comes to the most controversial issues in a Bill, which, by definition, are those which we send to the other place, we are expected to hurry them all through. Very inadequate notice is given of matters coming back to this House. There are no proper structured arrangements for discussion, in the way that there are for the ordinary consideration of legislation. We are faced with reasons on hugely weighty issues from the House of Commons as to why it will not accept our view, which usually consist of one or two lines of the utmost banality: statements like “Because the Government has announced it intends to bring forward its own legislative proposals”, full stop.
That is supposed to be a reason why we should set aside all the hours of deliberation by this House, as well as its votes, and simply accept a government assurance. We are always put under great time pressure, and then the Salisbury convention is brought in telling us why this House, having spent hours—and having had many votes—on these issues, should not even spend the proper time and consideration required, including using our undoubted powers to continue to ask the House of Commons to consider these matters again.
Other legislatures with two Chambers deal with these matters much better. They have arrangements for joint sittings on issues that are contested between the Houses, which I believe that we should have. Our arrangements are due only to historical reasons dating from the Middle Ages. One of the right reverend Prelate’s 133 predecessors probably devised these arrangements in the 13th century, even before “Yes Minister”. They are absolutely not fit for purpose in the 21st century. We inhabit the same building; we have electronic means of communication; we can consider these matters better. By definition, when we come to this stage of a Bill, these are always weighty and substantial matters. We would otherwise not be engaging, for the second or third time, in a conflict with the House of Commons.
These are hugely important issues. The noble Earl, Lord Lytton, said that we needed to be objective rather than emotional. But the objective thing to be on this issue is emotional because we are dealing with people who face, as the two right reverend Prelates and the noble Lord, Lord Newby, said, potential bills of £40,000, £50,000 or £60,000 apiece. This will drive them into bankruptcy and cause them huge mental anguish. In some cases—let us be frank; we have all heard of such stories—it can lead to suicide, since these are absolutely catastrophic impacts on individuals. We, as legislators, have a duty to take account of that and reach the best possible arrangement. I stress that we should not be railroaded on issues of this kind into either having to cave in or taking quick decisions before there has been proper consideration.
The right reverend Prelate the Bishop of London referred just now to the Archbishops’ Council. I know that the most reverend Primate the Archbishop of Canterbury has been leading work on this issue, with a number of extremely distinguished experts on housing, and would like to meet the Minister. The very least that the Minister should say in response to her, assuming that this amendment goes back, is that before it comes to this House again he and the Secretary of State will meet the right reverend Prelate, the most reverend Primate and their advisers—who I happen to know include a former Permanent Secretary and other very senior and expert people—to discuss these issues. These are matters of huge anguish and importance.
It is very important that we play fair by people who, as everyone has accepted, are not facing big charges which were expected. The noble Earl, Lord Lytton, said that in respect of property one has duties, responsibilities and risks, but these are not normal risks. People should be expected to bear normal and reasonably foreseeable risks but these were completely abnormal, of a scale they could not have been expected to foresee or budget for.
Their other consequences have not even been mentioned in the debate so far. This is leading to a substantial seizure of the entire property market at the moment. Large numbers of people with leasehold properties simply cannot sell them at the moment. Until these risks are properly quantified, and the allocation of the burdens is properly determined, people cannot sell. It is a huge problem in the property market, and this will continue until it is done.
When the Minister, for whom we have great respect and who knows these matters at first hand, as the former leader of a local authority with large numbers of leaseholders, said that the Government were seeking to crunch through these matters bit by bit and deal with them, that goes straight back to “Yes Minister”. The Grenfell Tower fire was on 14 June 2017. That is, by my calculation, three years and nine months ago. We are not exactly rushing with indecent haste to deal with these issues. It is perfectly reasonable to expect that the Government should do their job, which is to safeguard the community on matters of huge public importance, including putting schemes in place. It took 20 years to build the great wall of China, and we are saying that after four years, the Government still do not have a proper scheme in place to deal with these issues.
So I strongly urge the House to agree to both my noble friend’s amendment and those of the right reverend Prelate the Bishop of St Albans, partly because they are correct, but also because these are huge issues that will, of necessity, require further elucidation and debate. The right reverend Prelate the Bishop of St Albans did something that politicians in this House very rarely do, which was admit that his Motion is not perfect. He pointed to one or two defects, which is an unusual procedure in the House.
What is now needed is a further process of deliberation, because the costs involved and the impacts on individuals are huge. The figures are not even agreed. There is a big difference between what the Government say is the average cost estimate for remedial work, £9,000, and the £50,000 that the right reverend Prelate said. That £41,000 is about one and a half times the average yearly wage in this country. It would be good to agree some of those matters and to have a proper scheme. Certainly we should not be railroaded into closing this matter down today. We should send these amendments back to the House of Commons, because it would give us a reasonable length of time—we do not want another ping- pong taking place later this week or next week—to consider these issues and for a scheme to be brought back.
I will make a few comments on the substantive points at stake. The Minister circulated a letter this morning. Again, it came at the last minute; I read it literally just before coming into the Chamber. It said three things in response to my noble friend Lord Kennedy’s amendment. First, it said that the Government would publish responses to the fire safety consultation. It said that they had done it today, but I could not find them in the printed papers. It also said that they would publish regulations to deliver on the Grenfell Tower inquiry’s recommendations and would indicate where further legislation would be forthcoming. To those of us who are not encyclopaedic experts on what is going on with the Grenfell Tower inquiry and the matters at stake, what the Government are saying is not clear.
Perhaps I could press the Minister on my noble friend Lord Kennedy’s Amendment 2B, which proposes in new subsection (1):
“Within 90 days … the Secretary of State must publish draft legislation to require an owner or a manager of any building … to … share information with their local Fire and Rescue Service in respect of each building … undertake annual inspections … undertake monthly inspections of lifts … and share evacuation and fire safety instructions with residents of the building.”
I would think that all noble Lords would consider these proposals reasonable and essential, so can the Minister tell us whether my noble friend’s four points are met in the responses to the fire safety consultation and regulations to deliver on the inquiry’s recommendations, which they are publishing today? This is crucial to how we decide to proceed with my noble friend Lord Kennedy’s amendment.
On remediation costs, it seems the crucial point is the proposed new subsection (1) in Amendment 4F of the noble Baroness, Lady Pinnock, which states:
“The Secretary of State must design and implement a scheme”
to deal with costs,
“including but not limited to the building owner, freeholder or developer.”
So the question for the Minister to answer at the end, which is crucial to how we decide to proceed, both in the vote at the end of this debate and afterwards, is what the Government’s intentions are in respect of designing and implementing a scheme.
I take up the point of the noble Lord, Lord Newby, both about the scale of the costs and the absolutely correct liability to which developers should be held. Developers such as Barratt have armies of lawyers and the capacity to see off little people—which is most people when it comes to the likes of Barratt. If they have to deal with Her Majesty’s Government in respect of their liabilities, and a Minister of the calibre of the noble Lord, Lord Greenhalgh, turns up on their doorstep and says that they are expected to shoulder these costs —as per a scheme that has been designed and is being pushed by the Government—I assure your Lordships that it will lead to a much bigger result than if it were all left to individual leaseholders and freeholders.
So can the Minister say what the Government are intending to do? Is their intention to stand by and leave hundreds of thousands of leaseholders at the mercy of individual negotiations and freeholders? Or will they move with a Government-led and nationally driven scheme to recover these costs, wherever possible, from developers who have made an absolute killing—sorry, that is not an appropriate word in this context—a fortune on developments, as the noble Lord, Lord Newby, rightly said? They often expect returns of the order of 20%, 25% or 30% when taking forward these developments. As has been shown, with substandard cladding fire safety regulations have not been properly enforced, so it is reasonable that they should be held accountable, and it is the Government, on behalf of the people at large, who should be holding them accountable. Before we pass this legislation into law, we should be assured that the Government have a proper, viable and effective plan to bring that about.
My Lords, is there anyone present in the Chamber, who has been here since the beginning of the debate, who wishes to contribute? No? In which case, I revert to the Minister, the noble Lord, Lord Greenhalgh.
My Lords, I have listened carefully to the debate and will take this opportunity to address noble Lords’ comments and concerns in more detail. I start by addressing Amendment 2B. I again thank the noble Lord, Lord Kennedy of Southwark, for his constructive engagement with me on this. I reiterate again that the Government remain steadfast in their commitment to deliver the Grenfell Tower inquiry phase 1 report’s recommendations in full. It is understandable that the House wants to see visible progress on this and to have a better understanding of the timing of next steps and of the proposals that we will bring forward.
Today, the Government published their response to the fire safety consultation. This is an important and clear demonstration of our progression towards implementing the inquiry’s recommendations. I am clear that, subject to the Fire Safety Bill gaining Royal Assent, the Government intend to lay regulations before the second anniversary of the Grenfell Tower inquiry phase 1 report that will deliver on the inquiry’s recommendations. These will include measures around checking fire doors and lifts.
I am also committed to seeking further views, as soon as practicable, through a further public consultation on the complex issue of personal emergency evacuation plans. We already know that some of our proposals from the consultation will require primary legislation. They include strengthening the guidance relating to the discharge of duties under the fire safety order and the requirement for responsible persons in all regulated premises to record who they are and provide a UK-based address. We intend to include these measures, and possibly others that come out of the consultation, to strengthen fire safety in the building safety Bill, which will be introduced after the Government have considered the recommendations made by the Housing, Communities and Local Government Select Committee, and when parliamentary time allows.
I thank the noble Lord for, I hope, not pressing this matter to a vote. He is right in his role to hold the Government to account for delivering on the Grenfell recommendations, and I am pleased to have provided the reassurance that he sought.
I also thank the noble Baroness, Lady Pinnock, for not pressing her amendment. I understand her interest in this area. More generally, we are looking at specific information-sharing provisions in the regulations and later in the building safety Bill, which we see as a first step to meeting the Grenfell recommendations on this issue.
In response to the noble Lord, Lord Kennedy, the other reason for resisting the public register amendment is that anyone from the general public would be able to access fire safety information about a building, which poses a security risk in the event that the information were accessed by someone with malicious or criminal intent. But the Government do agree with the principle that residents should be able to access critical fire safety information for the building that they live in, and we include proposals for this in the fire safety consultation.
I will now address Amendments 4B to 4F. First, I reiterate the intention conveyed in the other place that we share the concerns around the costs of remediation and the need to give leaseholders peace of mind and financial certainty. I have always been clear that all residents deserve to be and to feel safe in their homes. My right honourable friend the Secretary of State for Housing, Communities and Local Government has committed to taking decisive action to deal with the cladding crisis, and, through the Government’s five-point plan, to provide reassurance to home owners and build confidence in the housing market.
First, as has been commented on, the Government will provide an additional £3.5 billion to fund the removal and replacement of unsafe cladding on residential buildings. This will be targeted at the highest-risk buildings—those over six storeys or above 18 metres—that have unsafe cladding. This is in line with long-standing expert advice on which buildings are at the highest risk. This brings the Government’s investment in building safety to an unprecedented £5 billion or more.
Secondly, we have been clear that leaseholders in lower-rise buildings, with a lower risk to safety, will gain new protection from the costs of cladding removal through a long-term, low-interest, government-backed financing scheme. Leaseholders in a residential building that is 11 to 18 metres in height with unsafe cladding will never pay more than £50 per month towards this remediation.
It is important that this government funding does not excuse building owners of their responsibility to ensure that buildings are safe. We have been clear that building owners and industry should make buildings safe without passing on costs to leaseholders. They should consider all routes to meet cost—for example, through warranties and recovering costs from contractors for incorrect or poor work.
As the Minister for Building Safety and Fire Safety, I will ensure that we drive forward to ensure that remediation of unsafe cladding is completed. I am clear that we have an ambitious timescale to do so. In response to the noble Lord, Lord Kennedy, progress has not been as fast as we would have liked, but we are making great progress, particularly given the constraints of the pandemic this year. Around 95% of high-rise buildings with Grenfell-type ACM cladding identified at the start of 2020 have completed remediation or have works on site to do so by the end of the year.
I want to be clear that, while this issue is vital, it would be impractical and confusing to include remediation measures in the Bill. This is because the fire safety orders are a regulatory framework that sets out the duties of a responsible person in relation to fire risk assessments. It does not cover the relationship, including potential financial obligations or prohibitions, between freeholder and leaseholder. The Bill is so important because it allows for effective enforcement where responsible persons are not abiding by their responsibilities. It addresses the situation where responsible persons refuse to remediate, which is an issue that I am sure the whole House wants resolved as soon as possible.
In contrast, the draft building safety Bill is the appropriate legislative mechanism for addressing the issue of who pays for mediation. Through the building safety Bill, the Government will strengthen the whole regulatory system for building safety, and ensure that there is greater accountability and responsibility for fire and structural safety issues throughout the life cycle of buildings within the scope of a more stringent regime. That Bill’s provisions will put the management of risk front and centre. It is important that remediation is addressed using its proactive mechanisms for managing fire and structural safety issues, such as the safety case. Remediation and costs to leaseholders should be dealt in the context of the Fire Safety Bill to ensure that legislation is coherent with the aims and scope of the new regime.
In response to the right reverend Prelate the Bishop of St Albans, I point specifically to Clauses 88 and 89 in the building safety Bill, which relate to charges. These clauses facilitate regulations that would amend the building safety Act and the Landlord and Tenant Act. We will add to what is already in the draft Bill, including additional duties on the accountable person to seek alternative funding before they pass costs on to leaseholders.
While I appreciate the desire that many noble Lords have for a quick legislative solution to the “who pays” issue, we also have a duty as parliamentarians to implement a clear framework and transparent legislation to support fire and building safety reforms. Even more than this, it is important to ensure that the practical implications of any legislation are properly worked through, rather than being rushed on to the statute book in this Bill. In this vein, I am clear that these alternative amendments do not work.
I thank the right reverend Prelate the Bishop of St Albans for his amendment in lieu. However, it does not take into account remedial works that arise outside the fire risk assessment process—for example, costs identified as a result of a fire or building works taking place. Such cases would not prevent costs being passed on. Further, the amendment is insufficiently detailed and would require extensive drafting of primary legislation, thereby delaying the implementation of the Fire Safety Bill and the crucial measures it puts forward to improve the fire safety regulatory system.
If the amendment were to be added to the Bill and became law without the necessary redrafting, the Government and taxpayers might be exposed to protracted action by building owners and the courts. Building owners could use litigation to claim for costs that they feel they are entitled to pursue from leaseholders under the terms of a lease agreement. While litigation is ongoing alongside disputes over where costs should be, there would also be delays to construction work to carry out urgent remediation and, possibly, interim safety measures.
I also thank the noble Baroness, Lady Pinnock, for her amendment in lieu. However, as with the amendment from the right reverend Prelate the Bishop of St Albans, there are concerns that it would fail to achieve the intention of prohibiting costs being passed on. There are significant legal risks in trying to prohibit the passing of remediation costs through service charges, including an increased risk of facing legal action from landlords without the sufficiently robust legislative detail to override possible conflicts with the terms of existing lease agreements. This, and the need for extensive drafting of all primary legislation, is likely to result in delays, and defects identified outside a fire risk assessment will continue to be passed on to leaseholders.
Moreover, the amendment may be too narrow in its scope by focusing on service charges as the primary site to prohibit landlords passing on remediation costs. They might find other ways to pass remediation costs on to leaseholders, for instance, through additional or exceptional fees and charges, which they might be allowed to pass on to leaseholders under the terms of existing lease arrangements. As such, the amendment has laudable intentions. However, it is unlikely to generate beneficial outcomes for leaseholders.
I have touched on the legal problems that could arise from both the alternative amendments on remediation. I reiterate the complexity around remediation costs, which I believe supports the case that this is not the right Bill to consider these concerns. As I mentioned in my specific points concerning the amendments from the right reverend Prelate the Bishop of St Albans, there are concerns about contractual disputes and potential litigation impacting the Government, the taxpayer and leaseholders. Stating in legislation what the landlord can and cannot recover from leaseholders could contradict the provisions set out in the contractual terms of a lease. As a result, it would be unclear where the costs should lie, rather than being determined by the terms of the lease.
Furthermore, the amendments do not reflect the complexity involved in apportioning liability for remedial defects. There are a range of views as to how costs should be distributed among leaseholders, freeholders, developers, construction industry contractors and other parties. It would be remiss to introduce legislation that places liability firmly on the landlord without adequate discussion about where the costs should lie or how they should be disbursed.
In response to the right reverend Prelates the Bishop of St Albans and the Bishop of London, the noble Baroness, Lady Pinnock, and the noble Lord, Lord Newby, we have announced measures with greater nuance concerning the distribution of costs. This approach combines government funding, repayments from leaseholders, and contributions from developers and industry through an upcoming tax and levy. While the merits of this approach can be discussed separately, one thing that we can agree on is that the simplistic approach of passing these orphan liabilities entirely to landlords despite the terms of existing lease agreements is not the right manner in which to proceed. Not only would the decision to pass all these costs to building owners be overly simplistic, it would also be counterproductive. It would be self-defeating if landlords who have paid a small amount to collect ground rents from flats decide simply to walk away when faced with remediation bills of this size.
Many freeholds are held in special-purpose vehicles to limit the liability held for the individuals involved, and in these cases they could simply activate an insolvency procedure to avoid the debt. This also highlights the lack of robust detail in this amendment, as it contains no due consideration of what would happen to the liabilities at this point. If these owners walked away, leaseholders would be left in the same position, continuing to live in unsafe properties and with no further clarity as to where these costs should lie or who is responsible for payment.
Working through these types of issues in a proper way will require much more extensive drafting of primary legislation. We must avoid encouraging an escalating quantity of contractual disputes and litigation from landlords who feel that the legislation runs counter to their rights and liabilities, as laid out in existing lease agreements.
However, I agree with the noble Earl, Lord Lytton, that we must look at radical ways of improving the recourse to redress mechanisms, and I thank him for his contribution to this debate. I invite the noble Baroness, Lady Pinnock, to find out more about the building occupied by George to see whether we can help that building access the available funds, such as the waking watch relief fund and the building safety fund, to help support the funding of remediation costs. I also note the problems highlighted by the noble Baroness about Sarah, the resident of Royal Quays. We are aware of this development and the difficulties that it faces. I sympathise greatly with the problems raised. We are working alongside Liverpool City Council to do what we can to support the building. This includes considering eligibility for public funding.
I also point out to the noble Baroness, Lady Warwick of Undercliffe, that if housing authorities have to pass costs on to leaseholders, they can apply to the building safety fund, so the leaseholders in housing associations have the same access to funding and will be protected in the same way as those in private housing. I am happy to meet with the right reverend Prelate the Bishop of London and any members of the Archbishops’ Commission on Housing who want to discuss these issues in greater detail.
Let me be clear: it is unacceptable for leaseholders to have to worry about the cost of fixing historic building safety defects. These are recent issues, but not just of the last 10 years, but the last 20 to 25 years. This is not something that has cropped up in the last couple of years; it is a generational problem, in many ways. However, I ask noble Lords to recognise that while these amendments are based on good intentions, they are not the appropriate means of solving these complex problems. On invoking “Yes, Minister”, yes, we need political will, but we also need a political brain to recognise that these problems will not be solved by a simplistic intervention, by orphaning liability or by assigning liability to a freeholder who can subsequently walk away from playing any part in remediating the costs of making the building safe.
For practical reasons, these amendments are likely to be ineffective and may even make the situation worse for some leaseholders. Litigation arising from disputes over what landlords can and cannot recover from leaseholders, where legislation runs contrary to the provisions in existing lease agreements, and where there are disagreements over who should pay costs based on the source of a particular safety defect, is likely to be substantive and problematic. This might result in crucial remediation and even interim measures to protect residents from being delayed. I therefore hope that these amendments will not go to a vote.
I have received a single request to speak after the Minister. I called the noble Lord, Lord Adonis.
The Minister did not comment on the figures given by the right reverend Prelate the Bishop of St Albans, which struck the House as of great concern. He said that average remediation costs could be in the order of £50,000 to £60,000 per leaseholder. Can the Minister comment on those figures?
I have seen figures in the order of £50,000, but that is an aggregate figure that covers cladding costs and more historic building safety defects. Clearly, as we bring forward the legislation to deal with these issues, which will be in the building safety Bill, we must conduct a further impact assessment, but I am aware of the figures that the right reverend Prelate the Bishop of St Albans presented.
My Lords, I will not speak for long. I do not want to detain the House with a long debate. I thank everyone who has spoken. We have heard many very powerful speeches, and very important points were well made. I thank the Minister for his response to my Motion A1, for the time he has taken to speak to me outside the Chamber, and for the letter I received today in addition to the all-Peers letter. It sets out some clear commitments from the Government, a plan and, most importantly, a timetable for action. I welcome this very much.
I listened carefully to the contributions of all noble Lords and agreed with almost every one. I hear the points made by the noble Earl, Lord Lytton. He may be right, but it is our job to press the Government to do the right thing by the people of this country, as the right reverend Prelate the Lord Bishop of London said. I also thank my noble friend Lord Adonis for his support. He made some very valid general points about how we deal with matters from the other place, and points specific to this Bill. I also listened carefully to the Minister’s response to Motion B. I had said that all they rely on in the other place is privilege, and his response was very fair. I can see his point—it is a shame that the other place could not—and I had not thought of it beforehand, so I accept it. We are trying to ensure, in respect of that Motion particularly, that residents, tenants, the fire authorities and the fire brigade have transparency. That is what we want to shine the light on. Perhaps the Minister will not be able to address those issues; it is a shame that the other place did not.
Sometimes the Government say, “We have an ambitious programme” or “We are striving to make progress”, but they have been very slow on this and everyone is frustrated with them. As my noble friend Lord Adonis said, it is three years and nine months since the fire, and this is the first piece of legislation. It is frustratingly slow. Can the Minister talk to the Prime Minister? These issues will not go away, and we will keep raising them until we get some proper action. He has made some commitments today, which is good, but it is only a start. This House will hold him to account on them, because so far this has been frustratingly slow.
Having said that, I am pleased that we got so far today. I have enough to withdraw my Motion A1. I hope that the right reverend Prelate moves his Motion for debate. I beg leave to withdraw the Motion.
Motion A1 withdrawn.
Motion A agreed.
3A: Because it would involve a charge on public funds and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.
Motion B agreed.
4A: Because the issue of remediation costs is too complex to be dealt with in the manner proposed.
Motion C1 (as an amendment to Motion C)
4B: After Clause 2, insert the following new Clause—
“Prohibition on passing remediation costs on to leaseholders and tenants
(1) The owner of a building may not pass the costs of any remedial work attributable to the provisions of this Act on to leaseholders or tenants of that building.
(2) Subsection (1) does not apply to a leaseholder who is also the owner or part owner of the freehold of the building.”
4C: After Clause 2, insert the following new Clause—
“Costs arising from relevant notices or risk based guidance under the Fire Safety Order
(1) This section applies to a long lease of a dwelling in a relevant building.
(2) This section applies—
(a) where a notice has been served by an enforcing authority under article 28, article 29 or article 30 of the Fire Safety Order; or
(b) where a responsible person carries out works on the basis that they are required or said to be required by the risk based guidance issued by the Secretary of State under article 50 of the Fire Safety Order.
(3) In the lease there is an implied covenant by the lessor, or any third party to the lease, that the lessor or third party shall not recover from the lessee any amount in respect of the costs of works under subsection (2) where the works are to remedy any defect, risk or issue that predated the first grant of a long lease of the dwelling.
(4) Subsection (3) does not apply where the works are to repair a deterioration in original condition.
(5) Subsection (3) does not apply to any interest or shareholding the lessee may have in any superior lessor or freeholder.
(6) This section does not apply to commonhold land.
(7) “Dwelling” has the meaning given by section 112 of the Commonhold and Leasehold Reform Act 2002 and “long lease” has the meaning given by sections 76 and 77 of that Act, save that, in the case of a shared ownership lease, it is irrelevant whether or not the tenant’s total share is 100%.”
4D: After Clause 2, insert the following new Clause—
“Restriction on contracting out of section (Costs arising from relevant notices or risk based guidance under the Fire Safety Order)
A covenant or agreement, whether contained in a long lease to which section (Costs arising from relevant notices or risk based guidance under the Fire Safety Order) applies or in an agreement collateral to such a long lease, is void in so far as it purports—
(a) to exclude or limit the obligations of the lessor or the immunities of the lessee under that section, or
(b) to authorise any forfeiture or impose on the lessee any penalty, disability or obligation in the event of the lessee enforcing or relying upon those obligations or immunities.”
4E: Clause 3, page 2, line 28, at end insert—
“( ) Sections (Costs arising from relevant notices or risk based guidance under the Fire Safety Order) and (Restriction on contracting out of section (Costs arising from relevant notices or risk based guidance under the Fire Safety Order)) shall each come into force on the same day as section 1 comes fully or partially into force in respect of any premises in England.”
Motion C2 not moved.