4F: Because the issue of remediation costs is too complex to be dealt with in the manner proposed.
My Lords, I thank noble Lords for engaging in this important debate throughout the passage of the Bill. We all share the same concerns about the impact that the cost of remediation is having on many leaseholders and tenants. We all agree that we have to protect leaseholders as far as practicable. All in this House agree that residents deserve to be and feel safe in their homes.
I will go on to explain why we consider the proposed amendments in lieu to be both inappropriate and unworkable but first, I want to outline in the strongest way possible the importance of the Bill and the risk that these remediation amendments are creating. Let us be in no doubt about what is at stake here.
Throughout the passage of the Bill, we have all agreed with the fundamental purpose of what we seek to achieve. We all want to ensure that there is no legal doubt that, under the fire safety order, the responsible person must assess and, as appropriate, identify any fire safety risks relating to the external walls and entrance doors in multi-occupied residential buildings.
We also agree that the current legal ambiguity under the fire safety order is unhelpful. If we do not rectify this now with this Bill, there will be significant ramifications. If we do not clarify this legal ambiguity, responsible persons can continue to argue that they can lawfully and deliberately ignore the external walls and flat entrance doors in their fire risk assessments. This inaction will mean that important defects will not be identified and be left unremedied, potentially increasing fire safety risks for anyone living in such buildings.
Given the repeated agreement, across both Houses, that we need to act, I think we would all also agree that this Bill should go on to the statue book in the next few days. The Commons has already voted against two different remediation amendments put forward by your Lordships’ House, and by substantial majorities of 115 and 69. Prior to that, the issue of remediation costs was discussed at both Commons Committee and Report stages, so the Commons has considered the issue of who pays at four different stages and voted on it twice—each time supporting the Government’s view that provision of this kind is unnecessary. This House has done what is right and proper as a revising Chamber, namely, to ask the Commons to think again—not once, but twice. It is time for your Lordships’ House to respect the will of the elected Chamber. To continue to deny the wishes of the democratically elected Chamber, particularly where the result is an increase in fire safety risks, could ultimately cost lives.
I underline that this Government are committed to protecting leaseholders and tenants from the costs of remediation. Hundreds of thousands of leaseholders will be protected from the costs of replacing unsafe cladding on their homes, as part of the Government’s five-point plan to provide reassurance to home owners and build confidence in the housing market. The £5.1 billion grant funding made available to leaseholders is unprecedented. We take these issues seriously and we are acting. To say otherwise is misrepresentative and simply not correct.
The Government are also taking forward a comprehensive programme of reform to end unfair practices in the leasehold market, from the abolition of ground rents to revising the use of forfeiture. Our plan to alleviate the burden of paying for remediation costs is, and should be, considered as part of this comprehensive programme.
We recognise that the implementation of the Fire Safety Bill will lead to more remediation issues being identified, but there will be occasions when other measures to mitigate the risk are required, rather than extensive remedial works. To suggest that this Bill will unleash hundreds of thousands of costs is incorrect; we have always argued that building owners must take a proportionate, risk based-approach that takes into account the possibility of risk to life in properties, which for most leaseholders is mercifully low. This Bill applies to all buildings with two or more dwellings; the number of buildings that require substantive remedial works is relatively small, as the vast majority of lower-rise buildings will not require the type of remedial work discussed in the House today.
If noble Lords cast their minds back to the previous stages of the Bill, they will find widespread support for clarifying the fire safety order and legislating to implement the Grenfell inquiry recommendations. In fact, the criticism was that we should have introduced sooner and gone faster. It is therefore getting increasingly difficult to square the sentiment of noble Lords at the beginning of the passage of the Bill with the actions of some Peers now.
Let me point to two examples. I am grateful to the noble Lord, Lord Kennedy of Southwark, for his candid engagement with me during the passage of the Bill. He tabled amendments in Committee and on Report to, in his words,
“make progress in respect of the recommendations of the first phase of the Grenfell Tower Inquiry.”—[Official Report, 17/11/20; col. 1367.]
The noble Baroness, Lady Pinnock, urged the Government at Second Reading to get on with the process of legislating. She said that she supported the direction of travel the Government are taking on the Bill but, in her words,
“the route being taken is too slow.”—[Official Report, 1/10/20; col. 350.]
Tabling and voting for these amendments is inconsistent with pressing the Government to act quicker. Pushing the Fire Safety Bill back to the other place jeopardises it completing its passage before the end of this Session. When I last spoke on the Bill in this House, I said that this Government intend to bring forward regulations to deliver the Grenfell Tower inquiry phase one recommendations before the second anniversary of the inquiry publishing its report, but this is subject to the Bill first gaining Royal Assent. If the Bill is not finalised in this Session, there will be a delay of potentially a year or more in delivering the inquiry’s recommendations.
I will comment in detail on the amendments in lieu in my closing address but, for now, I leave everyone across this House with two key points. First, the Government are unreservedly committed to protecting leaseholders from the costs of remediation. We have announced an unprecedented level of funding in this regard and will publish more details on how it can be accessed.
Secondly, do not let this issue prevent the Fire Safety Bill getting on to the statute book. Pushing the Bill back to the other place this close to the end of the Session risks that, and risks not implementing an important legal clarification that will improve fire safety and help to protect lives. I beg to move.
Motion A1 (as an amendment to Motion A)
4J: After Clause 2, insert the following new Clause—
“Prohibition on passing remediation costs on to leaseholders and tenants pending operation of a statutory scheme
(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) This section has effect only until a statutory scheme is in operation which ensures that leaseholders and tenants of dwellings do not have to pay for remedial work attributable to the provisions of this Act.
(3) Subsections (1) and (2) do not apply to a leaseholder who is also the owner or part owner of the freehold of the building.””
My Lords, I give notice of my intention to seek the opinion of the House when the time comes, and declare my interest as a vice-president of the LGA.
When there is a crisis, we look to Her Majesty’s Government for radical and rapid action. Ministers are good at calling stakeholders to gather around the table. Just yesterday, in the other place, Minister Oliver Dowden said he was appalled by a situation. He promised Members that they should
“be no doubt that if they cannot act, we will … We will put everything on the table to prevent this from happening … Put simply, we will review everything the Government do to support”
this. He went on:
“We will do whatever it takes.”—[Official Report, Commons, 19/4/21; col. 676.]
Indeed, this situation is so important that it is said that the Prime Minister has decided to rearrange his busy diary and intervene personally to hold a round table to resolve the problem. The trouble is that the radical action being talked about concerns the European Super League, not the hundreds of thousands of people who, at this very moment, are facing desperate dilemmas.
I deeply regret having to come back; I know that it is a nuisance and that people are fed up. But this is the first time in my ministry that I have been stopped on the street in St Albans three times in a week by people saying, “Thank you for what you are doing”. So, I come back hugely reluctantly. I want to see this Bill get on to the statute book, I really do. I hope that we will do all we can, if necessary sitting late, to make sure that when it comes back, if it has to do so, it will get on to the statute book; I do not want to hold it up. This is a good Bill, which seeks to implement a recommendation from the Grenfell inquiry. It is of the utmost importance that our dwellings are safe and people can sleep at night.
However, the consequences of this legislation have a huge impact on leaseholders. The Government, whom I thank very much, have committed £5 billion. I accept that this is unprecedented and a wonderful thing; I want to affirm what the Government have done. However, as things stand, the promised grant and loan schemes are not even operational. I am grateful to the Minister—we have had two meetings in the last week—and I know that they are working as hard and as fast as they can, but the schemes are not operational, there are no dates and no assurance has been given on, for example, whether it will be possible to apply retrospectively.
The moment that the Bill passes, those who would ordinarily be excluded from paying for replacement cladding under the government scheme could, within months, be handed very large bills. Likewise, these bills will be handed to those who should have replacement cladding costs capped at £50 per month under the government scheme. The result, I fear, will be bankruptcies, enormous mental health strains, and possibly worse. Part—though only part—of the problem is that there have been no assurances to prevent the remediation costs being passed on to leaseholders until the Government’s own scheme is operational. This shows the complexity of what we are facing. I do not pretend that this is easy, or that my proposal will solve everything but, for example, other historical fire safety defects not covered by this scheme still have the potential to bankrupt leaseholders. I remind the House again of the additional financial issues crippling leaseholders: interim fire safety costs and high insurance policy premiums. Just today I received an email about a building where the insurance last year was £11,963 but, in one year, has gone up to £242,400 because the insurers believe that the building is not safe.
Leaseholders face bills of around £6,000 each, to pay within days. This leaves them with a dilemma: sell their lease and take on the debts resulting from negative equity or stay in these leases and face huge debts in the form of remediation bills; or possibly, in some cases, declare bankruptcy. Surely these leaseholders, who went into this as people of aspiration—trying to get their place to live, saving for their deposits—could have had no indication that this was coming. It is one of those dreadful tragedies. Nobody is pointing the finger at the Government or anything like that; it is a dreadful tragedy that could not have been foreseen.
I agree with the Minister that the Fire Safety Bill is not the ideal place to deal with the issue of remediation costs. However, in the absence of an adequate plan or scheme to deal properly and fairly with the issues of remediation and the consequences of the Bill, I simply feel that I have no other option. I believe it is my duty as a Member of this House to stand up when I see this train coming down the track at such huge speed. Without proper protections on leaseholds, the Bill will have far-reaching consequences, negatively affecting thousands of innocent and aspirational individuals. I want to do what I can to prevent that happening. Whether my amendment is the best way to deal with this issue remains an open question; I totally admit that. I have tried in this amendment to the Motion to put the onus on Her Majesty’s Government to bring forward their own scheme rather than find a solely legislative solution to the matter.
One area on which I am unwavering is the principle underlying this amendment of the need to find an alternative way to approach remediation costs, as well as all the other costs now hitting leaseholders. The Government could have extended the current scheme to cover all historical defects and delay remediation costs being passed on to leaseholders until the new scheme is operational. Leaseholders would still be in an unenviable situation if this happened, but it would be a vast improvement on the current offer—which, in my opinion is not acceptable given the costs these individuals face. However, in the time since the Bill was last in the House, nothing has changed. This is why we are left to present broad-stroke solutions to very complex issues. I have argued that the onus in this case has always been on the Government to show leadership in the face of what is so evidently a market failure. I believe this is an occasion where the Government have not to pick up the bill but somehow to act as a backstop, to enable a solution so that these costs can be shared out and solutions found.
In conclusion, I hope that the Government will seriously take on board what we have said and try to present a way forward on this very real problem. I beg to move.
My Lords, if Motions A1 and A3 were both agreed to, A3 would replace A1.
My Lords, it is a privilege to follow the right reverend Prelate the Bishop of St Albans and to speak to Motion A2 in my name. I refer to my vice-presidency of the LGA and my professional involvement with property and construction over many years. I thank the Minister for keeping his door open for discussion; that has been enormously helpful. This amendment is an attempt to find a way out of what I see as an impasse, which, if not dealt with, may cause unquantifiable financial loss, bankruptcy and hardship—as referred to by the right reverend Prelate.
I am indebted to my local fire and rescue service in West Sussex and to the National Fire Chiefs Council, for briefing me on the task ahead of them. I am sure we all agree that they do a fantastic job in keeping us all safe and dealing with risks in a fair and proportionate manner. I am also indebted to Members in another place who have convinced me that the issues I seek to address cannot simply be brushed aside. This is not a challenge to the essential principles of the Bill, which I entirely agree are critical in the light of the Grenfell Tower tragedy.
The problem arises because although the Bill is short and apparently inoffensive, and from a fire safety standpoint is the necessary reaction of any Government to a post-Grenfell inquiry, its means of implementation have much broader and effectively retroactive results. In amending the existing fire safety order’s scope, it extends to any building comprising two or more residential units. It relates not just to cladding but, ultimately, to a much wider range of fire safety issues and to buildings not previously subject to that safety regime.
Noble Lords should bear in mind that there are two lead organisations here: the local authority through its housing functions in respect of houses in multiple occupation and student blocks, and the fire and rescue services, particularly for higher-risk and taller buildings.
Every time there is a fire in a flatted building, it adds to the malaise. When, in the wake of the Grenfell fire, a four-storey block in Worcester Park was destroyed in September 2019, it became clear to me that no Government can risk specifying a cut-off point of safe versus unsafe buildings, and I acknowledge that. So as matters stand, many relatively low-rise buildings, where risks are considered fewer and without a clear threshold, will, for a time, be caught by this long enough to cause serious problems for a significant number of tenants and leaseholders. It is this unconstrained exposure to uncertainty and risk, and the reaction of the markets to it, that has created the problems that we now encounter.
Crucially, there is a significant gap between now and the time when the first 12,000 over-18-metre buildings in England will have been checked, a process which is estimated to be completed by December this year. Then there will be a further period, lasting until some 68,000 further buildings in the 11 to 18 metre height range have been dealt with. During this period, the issue of proportionality and risk will be left to the febrile mortgage and insurance market. I have no doubt that fire safety inspectors will take a fairly strict approach, and indeed would expect them to, at any rate until further guidance is available—which guidance itself might be an outcome of the analysis of the first tranche of inspections of the highest-risk buildings. That delay occurs before one gets to the design and specification of the remediation works by those who might have to satisfy their own professional indemnity conditions, followed then by tendering and ultimately remediation.
The right reverend Prelate and the noble Baroness, Lady Pinnock, in her amendment, endeavour to protect the tenant and leaseholder from the effects of the Bill by saying that they shall not bear the financial burden. I am compelled to express the view that this needs to be taken further: if, as a result, the building owner as freeholder is made liable for something that they in turn cannot afford or cannot be made responsible for, beyond the assets of whatever corporate ownership vehicle holds the freehold or other superior interest, then the liquidation of the holding company and the vesting of the negative-value asset in the hands of insolvency practitioners will do little to get the building remediated. To that extent, the responsible person under the Bill might be a man of straw, and that I see as a weakness in what the Government propose.
To deal with this, one needs a scheme, and the Government have commendably said that they will introduce one to fund remediation, but this suffers from several limitations. First, it applies only to cladding. Secondly, it does not cover all buildings with claddings—even less the other fire safety issues that the Bill might also trigger. Thirdly, I very much doubt that the sum allocated is enough. That said, I am extremely grateful for the government commitment to making £5 billion in funding available, as the Minister has explained.
Apart from properties becoming unsalable, uninsurable and unsuitable for mortgage lending, in some cases they might well be so risky as to be declared unsafe for occupation, pending remediation works. Displaced occupiers will be wondering what it is in the principle of safety and proportionality in relation to their own home, given the nightmare imposition of unimaginable costs and liabilities, that justifies rendering them homeless in addition. Of course, it might well not come to that, and it is my purpose to encourage the Government to ensure that there is a scheme to make certain that it does not. The full extent of the problems may still be yet to come, but I strongly suspect that many of the responsible persons are holding on until this Bill receives Royal Assent before proceeding further.
No Government can simply look on and say that it is not an issue of a very serious kind when people have been seriously threatened in their own homes by negative equity, bankruptcy and worse. With an entire market section being blighted, action is essential. By the same token, no agency apart from government has the power to procure a change, which ultimately must be by some form of consensus, but which requires regulatory and other powers—or the threat of them—and a degree of arm-twisting involving some very powerful players. There are too many interests and moving parts here, and neither constructors, owners, leaseholders, tenants, insurers or mortgagees can procure effective solutions on their own. It is a systemic failure, in which it is right for the Government to intervene. Indeed, taking these hard decisions is why we have government intervention at all.
By the same token, if there is to be a government safety net of a type that is effective, no leaseholder can simply expect the taxpayer to foot the Bill for all and every fire-safety shortcoming. This is where, particularly in relation to the amendment in the name of the noble Baroness, Lady Pinnock, I differ from that approach. I do not suggest that any of this gets construction warrantee providers, approved inspectors, designers, constructors, housebuilders or building managers off the hook. It will take time to establish liabilities; it is time that those finding themselves in financial fetters do not have at their disposal. That is the problem. Absolutism by government on the one hand and by leaseholders alike will not get the necessary work done or erase the terrible personal tragedies that I fear will result.
The deal is this: for a monthly sum which should be affordable, even if most unwelcome, the capital cost of remediation could be amortised via a loan, funds for early inspection and remediation raised, and works put in hand as soon as possible. This might also fund short-term interim safety measures. The long-term bond so created would, I believe, be saleable. The important thing for affected flat owners is that they could not be charged until a scheme was in place, but the scheme has to be driven initially by government, and that is what this amendment is about.
The current government scheme seems to be based on rolling things out in due course. I appreciate the Minister’s point that he does not wish the Government to be unduly pressurised or under the cosh on this, but the need to get this safety net into place right now is overwhelming. By the end of this coming summer, impossibly large bills are most certainly likely to have dropped onto doormats, prohibition notices and evacuation orders may be in place, and bankruptcies may have grown to a national scandal. I hope that we avoid this, but I for one cannot simply stand by and let that happen unchallenged or by default. I realise that it goes against what some have been asking for, but what is better: to know that you are innocent but that your home remains unsalable and you risk being put in an impossible financial position or rendered homeless, or to know that there is at least some means of funding the remediation so that, in any event, at least some benefit is salvaged out of this debacle?
I know that it also goes against the grain of government to interfere with private legal arrangements and liabilities, but the circumstances are truly exceptional, and the scope of the works is relatively specific. The alternative is a high level of sector-wide economic damage and individual financial destruction.
I know that the Minister is not minded to accept any of the arguments that I have put forward, or my solutions. I make it clear that I do not intend to press this Motion. It is my wish to get further explanations from the Minister. My questions are these. If not this amendment and scheme, then what? If not in this Bill, which triggers it, or even in the building safety Bill, then how? If not now, with the ill-effects so apparent and very likely worse to come, when? Further, if not by government, by whom and by which agency?
If, as I suggest, the objection to broadening things comes from HM Treasury, I ask whether the Government have considered the political and economic enormity of the outcomes if this problem is not addressed now. To that end, could the House be advised what impact assessment has been made of the wholesale value of write-offs and the risk of sectoral market collapse? Lastly, if the Minister feels my concerns are misplaced and things are not as bad as I have suggested they might be, surely then the risk of exposure for the taxpayer is of itself a stopgap, a confidence-building measure, rather than a serious run on the Exchequer.
All areas of activity carry some risks that are considered acceptable, and there is no zero-risk existence to be had anywhere. We allow vintage bangers on our roads and service conduits that are more than 100 years old, permit antique furniture containing horsehair possibly from anthrax-infected animals, cherish Tudor box-frame houses with no foundations to speak of, accept asbestos in buildings according to practical risk, and occupy a Parliament building that is a known hazard in waiting. Total risk aversion is not a viable way forward.
However, the Bill, having raised the bar, now needs to be accompanied by safety nets, back-stops and proportionality in what follows. They must be put in place forthwith or parliamentarians will be faced with questions as to how the danger from fire has become a factor that puts families at serious peril, if not actually out of their homes. These are hard decisions that cannot be avoided, and they are ones that any Government must address.
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.
This has so far been a very good debate, with the noble Earl, Lord Lytton, using his expertise to detail the problems and suggest solutions to them since, as he says, they have yet to be resolved and need to be resolved, and the right reverend Prelate the Bishop of St Albans with his passionate exposé of the real difficulties facing individuals in this position.
We know that a property purchase is the largest single financial commitment that the majority of us ever make, yet the guarantees, the warranties and even buildings insurance for leaseholders fail to provide anything approaching adequate provision for those who find themselves living in a home where building regulations have been openly and plainly breached. Those living through this construction crisis and cladding scandal exposed by the awful tragedy of Grenfell are left with nowhere to find redress for the inexcusable failings of the construction companies.
That is in stark contrast to manufacturers of, for example, cars and white goods; where faults are discovered, even where the goods are out of warranty, the manufacturers call them in and make the repairs at their expense. What a difference with the construction industry, where only some of those involved have made any provision for remediation works—the bare minimum that they feel they can get away with. The total estimated cost of remediation so far is £16 billion. The Government are expecting construction companies to pay £200 million a year towards the remediation costs. With the government-funded scheme, that leaves a full £9 billion to fall on those who, throughout, are the innocent victims.
The purpose of 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: that this serious problem can be successfully fixed only with up-front funding from the Government that can then be recouped from developers, construction firms and manufacturers.
Throughout this debate I have sought to draw the attention of the House to the real and serious consequences for the individual leaseholders and tenants. Take Alison, who has recently had a bill for £28,000. That is just her share of the costs of putting right the construction errors in her block. It is not for cladding removal; the other construction failings are not covered by the scheme that the Government have introduced, but they still have to be remedied. How is that bill to be paid? She carefully budgeted for the costs of her mortgage and the service charges but has no means of raising the finance needed. Where on earth can she turn to save her home?
Another flat owner has written to me, as they apparently have to the right reverend Prelate the Bishop of St Albans, about the further consequences of the scandal. They told me about their buildings insurance premium, and it is so shocking that it is worth sharing again. The insurance premium for their block was just £11,963 last year but that has rocketed to £242,400. How on earth can people living in that block of flats have budgeted for that sort of exponential rise in their insurance premiums? Further, how on earth can they have budgeted or indeed find any finance to pay the bill, which they expect within a week, of £6,000 for each and every one of them without the Government doing what Governments can and should do, which is to protect individuals from situations where they are the innocent victims?
As a consequence of the complete lack of effective government action, bankruptcy has been the only route out of this scandal for many already, while others are on the brink of choosing that as the only option left. Yet these are the very people who have done everything right and nothing wrong. Some are even those who have been supported by the Government through the Help to Buy offer. What are the options after bankruptcy, when everything that you have worked for has been taken away? For those without dependants, the situation is very difficult. They become homeless through no fault of their own. It cannot be right that the Government are allowing this to happen.
I do not envy the Minister his task today as he seeks to defend the indefensible. I feel sure that he will point to the building safety Bill as the cure-all for the failings of the construction sector, but that Bill has yet to start its deliberations so its potential remedies will come far too late for those caught up in this crisis.
The Minister has argued that the Fire Safety Bill will fall if agreement is not reached. He argues for the need to act, but he fails to say at what cost and indeed at whose cost. I thank him for reminding me of my words at Second Reading but he has been a bit selective. I have always said throughout the passage of the Bill that leaseholders must not be asked to pay. Yes, across the House we support the Bill, but equally its consequences need to be thought through as well. The Government constantly state that they are helping leaseholders; indeed the Minister has repeated that today, but he failed then to say that that is unfortunately at a minimal level and the extent of the help is not adequate.
I have asked the cladding groups whether they would suffer if the Bill fell. Their view was unanimous. They concluded that they would be no worse off if it fell and they say that if it does not pass, to some extent it provides them with precious time to get the issue properly addressed.
Yesterday, the Government announced that they would change the law to refund investors in the London Capital & Finance mini-bond scheme. The Government have accepted that the FCA failed to regulate the firm properly. The similarities with this construction scandal are many. Innocent victims are set to lose out due to the failure of regulatory control. However, in the case of the cladding scandal, innocent victims are set to lose everything they own and have worked hard for. That is not right.
The amendment in my name seeks to put right this awful wrong and to establish the rollcall of statistics of bankruptcy, homelessness, mental ill-health and worse, of relationships broken and careers lost. Hundreds of thousands of individuals and families are watching and waiting for the decision of this House. They are willing us on to help 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, the Liberal Democrat Benches will fully support him. If, however, he chooses not to do so, then I will wish to test the opinion of the House.
My Lords, the following Members in the Chamber have indicated that they wish to speak: the noble Baroness, Lady Fox of Buckley, the noble Lord, Lord Newby, the noble Baroness, Lady Warwick of Undercliffe, and the noble Lords, Lord Adonis and Lord Cormack. I will call them in that order. First, I call the noble Baroness, Lady Fox of Buckley.
My Lords, it is with some reluctance, especially at this late stage of the Bill, that I have decided to speak in support of these amendments. I do not want unnecessarily to delay legislation that aims to make homes safer and I am very sensitive about the dangers of undemocratic overreach and defying an elected Chamber. However, I speak because there is an urgent risk that rather than this well-intentioned, important Bill being remembered as a law that will save lives by tackling the fire safety defects at the heart of the Grenfell tragedy, instead, if passed unamended, it will become known as the Bill that ruins lives and makes tens of thousands bankrupt and homeless, their homes transformed from places of safety to sites of anxiety, stress and penury.
I have not spoken on the Bill previously but have followed the debates carefully. I have heard eloquent, passionate, evidence-based and constructive interventions from noble Lords on all sides of the House patiently explaining to the Government how the Bill, unintentionally no doubt, has weaponised fire safety measures and targeted not developers, freeholders, cladding manufacturers or builders but the most blameless constituents in all this—leaseholding home owners. They will pay horrendous, mind-boggling amounts of money to foot remediation costs to cover defects in order to make their homes safe when they have purchased those flats in good faith.
I assumed that the Government were listening and that they understood, after all this—Ministers here and elsewhere have given lots of public assurances—that leaseholders would not become the fall guys. I believed them. I was pleased to welcome the £5 billion long-term loan scheme and the £50-a-month cap on repayments. That reassured me. But I am speaking today in desperation because I am utterly shocked to discover that this government scheme is not yet operational and that no date is available for when it will be. Yet, at the very moment that the Bill comes into force, if unamended, leaseholders will be landed with even more astronomical bills and demands to pay within days or weeks. That is on top of the immiseration already occurring, caused by ensuing costs.
The Government will not even clarify if they will allow retrospective acquisition to the scheme for those already handed extortionate bills, or the debts being accrued for historic health and safety defects. This feels particularly mean-spirited and, if I may say so, tone deaf. We are being urged to fast-track the Bill, but the Government could fast-track the scheme. Actually, this discussion is about more than money; it is about moral leadership. If the Grenfell tragedy has revealed institutional failures at multiple levels and the failure of those in authority to listen to the warnings of tenants—those on-the-ground concerns were contemptuously dismissed, as we know—this leaseholder tragedy feels similarly related to institutional intransigence. It is box-ticking safety without nuance. It is, or seems to be, an example of a refusal to listen to the voices of leaseholders and their advocates here and in the other place, who are pleading with the Government to hear their warnings of the disastrous consequences for home owners if this legislation is passed unamended.
I should declare an interest as a leaseholder of a local authority maisonette in Haringey. My block of flats had a serious fire in the middle of the first lockdown. Thank God, no one was hurt but 22 families were evacuated. The fire ripped through the roof. Our possessions and homes were ruined by extensive water damage and smoke. One year on, we leaseholders are still effectively homeless. We have been told that we will not be returning home until spring 2022—two years after the fire. To be honest, it has been heartbreaking but I am not here for noble Lords’ sympathy but to tell them that one of the worst aspects of the whole experience has been that, despite lots of emails and phone calls, queries to the leaseholders’ team at the council go unanswered. The main communications that we have received from it have been demands for council tax and service charges, even though my temporary accommodation is not in Haringey. While I am not an expert in fire safety, I have some insider knowledge of how it feels to be ignored and treated shoddily as a leaseholder.
However, I know that I am privileged and it is lucky that I am not facing the problems my fellow leaseholders now have with the cladding issue. Can we just remember who those leaseholders are? They are friends and colleagues of mine who are predominantly not wealthy and often can get on the housing ladder only by becoming a leaseholder, as I did 20 years ago. Some 56% of them are first-time buyers—the very people the Government are so keen to encourage, and who are commended for doing so.
The stories of leaseholders who are trapped and crippled by building-safety debt are devastating. For example, there are those in Waterside Park who are now paying £650 a month for waking-watch patrols alone. Who lives in Waterside Park? Many are key workers, pandemic front-line workers in east London earning less than £2,000 a month. They now face additional remediation costs estimated at £75,000. Or can one imagine being those hard-working householders in Brindley House, Birmingham whose service charges have risen from £1,300 a year in 2017 to £4,550 today, and whose remediation costs are £45,000 for a one-bedroomed flat and £78,729 for a two-bedroomed property?
I was particularly moved by a letter from a vicar and his wife about the plight of their 30 year-old son, his wife and two year-old disabled grandchild. The son earns less than £25,000 a year, so he signed up for the Government’s Help to Buy scheme and his parents drew significantly on their pension to help him. The young man and his family now face homelessness and hopelessness through no fault of their own. His desperate parents wrote, asking who will take moral responsibility for what they call
“life-changing financial and emotional catastrophe”?
The Minister might be interested to hear that they say:
“We, as previously Conservative voters, feel betrayed by this Government who have, after all, promoted home ownership”.
Indeed, the Government have, and I commend them for it. Only yesterday the Conservative Party put out this advert:
“Today we launch our scheme to back 95% mortgages, helping first-time buyers and homeowners, turning generation rent into generation buy.”
So why then today would we pass this piece of legislation unamended which is going to turn generation leaseholder into generation bankrupt?
I commend the right reverend Prelate the Bishop of St Albans, the noble Earl, Lord Lytton, and the noble Baroness, Lady Pinnock, for their perseverance in pushing this issue. I do not think that they are well-known trouble-makers or going out of their way to be sectarian—it is because this matters. The amendments would not solve every problem and leaseholders would still shoulder ongoing safety costs, but at least it would ease some of the financial burden. It would also give the Government some breathing space to resolve the myriad other challenges without ruining people.
No one here pretends that these issues are easy to solve. Costs are spiralling; even the Government’s estimated remedial costs of £9,000 per leaseholder looks naive when the real figures of tens of thousands are the reality. Sadly, any new regulation creates new layers of bureaucracy; there are consultants all over this. Then there is the risk aversion, leading to sky-high insurance premiums, a reluctance to sign off EWS1 forms and lenders’ reluctance to accept them.
I know that there is a lot to tackle, but I want to say to the Government, “You aren’t alone”. This is not a blame game or a party-political issue; it is a case maybe of unintended market failure, and it requires the sort of collective state-backed intervention that we have seen from this Government with issues such as furlough. It needs a bailout or safety net, and the Government are more than capable of doing that. The Government have allies here to come up with creative solutions; here and in the other place, they have heard some fantastic ideas and ways of solving this. If you talk to the rank and file leaseholder groups, they are full of innovative policies that can solve this. But to access those ideas, the Government have to talk to people and to listen. I hope that the Minister listens today and accepts this amendment. I know that the Government mean well, but they are not doing well.
My Lords, I begin by declaring my interest as a leaseholder in a block of flats that faces major fire and remediation works.
When we last debated this Bill, I teased the Minister by suggesting that he was behaving like Sir Humphrey in the TV series “Yes, Minister”, by coming up with a series of bureaucratic reasons for not taking any action. After the debate, I was a bit worried that I might have been a bit unfair to him, so I reread his speech just to make sure. I fear that, if anything, I had underestimated the extent to which the Government were hiding behind stock bureaucratic arguments for not doing what they know is required to clear up the scandal. He has repeated some of those arguments today.
Last time around, the Minister, as he has today, accepted that something more was needed. Last time he said that it was
“unacceptable for leaseholders to have to worry about the cost of fixing historic building safety defects.”
He also acknowledged that the Government believed that
“building owners and industry should make buildings safe without passing on costs to leaseholders.”
So far, so good. But when it came to actually dealing with removing that worry, in his response to the amendments from the right reverend Prelate the Bishop of St Albans and my noble friend Lady Pinnock, at great length and somewhat repetitiously he explained why the Government had no plans to fix the problem.
The reasons were as follows. First, the Minister said,
“it would be impractical and confusing to include remediation measures in the Bill.”
Well, it would not be confusing if they were clear. Secondly, he said that it was too soon to include comprehensive measures in the Bill. He said that it was
“important to ensure that the practical implications of any legislation are properly worked through, rather than being rushed”.
Well, we would not want the Government to rush to solve the problems of people who are being forced into bankruptcy today, would we?
Thirdly, the Minister said that the amendment was “too narrow” and did not
“take into account remedial works that arise outside the fire risk assessment process”.
He said that the amendment would go beyond “focusing on service charges”.
Fourthly, the Minister said that the amendment was not detailed enough
“and would require extensive drafting of primary legislation”.
It is not that this Government or any other Government fail to know how to draft extensively—look at the length of the statute book. Fifthly, he said that it would delay the implementation of the Bill, which would be highly regrettable. The Minister has spoken at great length about the costs of delay today but, as my noble friend Lady Pinnock pointed out, it would be highly regrettable to the Government but not to people who are going bankrupt, because this Bill does nothing for them.
Sixthly, the Minister said that loose drafting would lead to litigation. How terrible. Seventhly, he said
“the amendments do not reflect the complexity involved in apportioning liability for remedial defects.”—[Official Report, 17/3/21; cols. 323-26.]
Perhaps the amendments did not but, in my experience, owners of blocks of flats are pretty good when it comes to apportioning liability for costs, because we somehow seem to get that job done every year when we get our service charges. Finally, he said that it would be “self-defeating” as landlords could decide simply to walk away.
Sir Humphrey would have been very proud of the Minister’s performance, but leaseholders listening to his arguments would have realised that they amounted to one depressing fact: the Government were not prepared to fashion a legislative response which dealt with their legitimate concerns. In effect, they were simply saying that they would like to resolve the matter but it was too difficult. There was no willingness on the part of the Minister to commission civil servants to do the work necessary to find a workable solution. Some three and three-quarter years after Grenfell, the Government are completely failing to relieve leaseholders of their concerns and failing to find a way in which to require building owners and contractors to make buildings safe without passing on the costs.
The amendments before us today are a further attempt to move the Government towards meeting what they say are their desired outcomes. They have shown no will to do so of their own volition and it therefore falls to your Lordships’ House to insist again that they do the right and decent thing.
My Lords, I declare an interest as chair of the National Housing Federation, the representative body of housing associations in England. The fact that these issues are before the House again demonstrates the enormous concern that blameless leaseholders should be protected from suffering the costs of those building safety remediation works that have come to light since the tragic fire at Grenfell Tower almost four years ago. Like others, I pay tribute to the commitment and tenacity of the right reverend Prelate the Bishop of St Albans, the noble Earl, Lord Lytton, and the noble Baroness, Lady Pinnock, for keeping the Government’s feet to the fire.
Housing associations have worked tirelessly since 2017 to uncover and put right the urgent building safety issues with which since the Grenfell tragedy we are now all too familiar. The safety of their residents is an absolute and immovable priority for the housing association sector. They are also acutely aware of the stress and heartache that leaseholders have experienced and have pursued every avenue available to them to ensure that those responsible, the developers of these buildings, pay for their mistakes. The funds that the Government have already made available for building safety works have a very important part to play in tackling this crisis, but they are by no means a complete solution. It is just not acceptable that under the established scheme some costs will still fall to leaseholders.
I have said before, in early discussions on the Bill, and I stress again today, that social housing providers cannot access this funding for remedial works on properties where tenants live. The funding applies only to leaseholders. That means quite simply that these charitable organisations, which do not make a profit and are set up with the primary purpose of housing people on lower incomes, are facing an enormous bill to set right errors not of their own making—a bill that, at a modest estimate, will exceed £10 billion.
I hope the Minister will agree that, over the past year, housing associations have played a vital role in communities up and down the country. They have been at the forefront of both the local and the national response to the coronavirus pandemic. Not only have they provided safe and secure homes for their residents, at a time when home has never been more important to us, but they have delivered services that have helped to keep people’s heads above water over these most harrowing months. Their role as community anchors will be ever more important in the months and years to come, because many of their residents are likely to suffer the social and economic fallout from the pandemic.
On top of this, the housing association sector is central to our efforts to beat the country’s housing crisis, and to meeting our net zero ambitions. It is the driving force behind building thousands of new sustainable homes each year, as well as making existing properties greener. Bluntly, this work will be far harder to deliver if there is not the funding to cover building safety costs. Safety must be a top priority, so resources will have to be diverted away from improving residents’ properties, providing community services, building new homes and tackling the climate crisis. So can the Minister please tell the House what assessment his department has made of the impact that the remediation costs for tenanted properties will have on the wider work of the housing association sector?
Manufacturers, developers and those responsible for building these properties created this crisis, and they should pick up the bill. It is clear that there is a huge amount of support among Members of the other place for this to happen, but that will take work, and some time, to achieve. The only logical immediate answer to this intractable problem is for the Government to provide up-front funding for all remedial works, and to recoup the cost to the taxpayer later by establishing developers’ liabilities.
I urge the Minister to confirm today that the Government will move to protect leaseholders, social housing tenants and social housing providers by making funding available up front for this essential work to be done.
My Lords, the right reverend Prelate the Bishop of St Albans will have heard the strong support across the House for his amendment. He said at the beginning of his remarks that he intended to press the matter, and I would strongly encourage him to do so. It looks to me as if he will have a commanding majority across the House.
The Minister’s speech was very odd. Indeed, it was so odd that I cannot think that he actually wrote his own speech. It must have been written by some political adviser in his department, who just put together a set of remarks that he thought would basically tell the House of Lords to get lost. That was the gravamen of his argument, presumably hoping that, the third time around, we would not press this—indeed, that we would not even get into the arguments.
The Minister said—I noted it down carefully—that the proposal in the amendment in the name of the right reverend Prelate the Bishop of St Albans was “inappropriate and unworkable”. I was waiting for him to describe to the House why it was inappropriate and unworkable, but he did not. He said that he would not comment in detail at the beginning, but would do so at the end. That is not much use to us, because the debate takes place before his closing remarks, not afterwards, and we have no means of replying to them. That argument is clearly of no account, unless the Minister has such compelling arguments against the right reverend Prelate that, on hearing them, we will be completely silenced.
When we read the amendment, it is impossible to see how it could be described as inappropriate and unworkable. The right reverend Prelate proposes, first, that the costs may not be passed on to leaseholders or tenants—an argument in its absolute state, which the Minister has objected to, and I understand his arguments. However, the crucial part of the amendment is subsection (2) of the proposed new clause:
“This section has effect only until a statutory scheme is in operation which ensures that leaseholders and tenants of dwellings do not have to pay for remedial work attributable to the provisions of this Act.”
What is inappropriate and unworkable about that? The right reverend Prelate proposes simply that the Government’s own scheme, which one assumes will not be inappropriate or unworkable, must be before Parliament and subject to consideration before people are faced with costs—unless I have missed something in the arguments. The right reverend Prelate is nodding in agreement, and the Minister has not said anything to the contrary.
By definition, that cannot be inappropriate and unworkable, because we are talking about the Government’s own scheme. All that the right reverend Prelate seeks to do, which it is absolutely within the role of a revising Chamber to insist on, is that leaseholders should not be subject to these costs, which could bankrupt them and cause them enormous distress, being simply unmanageable, until there is a scheme. The scheme must have been presented and agreed before they face these costs.
We have heard harrowing stories from people with individual and personal cases at stake, but also, as the right reverend Prelate so rightly says, there are potentially—we are not quite sure what the numbers are—hundreds of thousands of people affected. What impact will that have? It is not unreasonable for this House to insist that before leaseholders are faced with those costs, we must know what the scheme is and it has been subject to proper consideration.
What makes it all even odder is that the Government themselves say that that is their intention. When the matter last came before the House of Commons, the Minister responsible, Christopher Pincher, said:
“We have been working hard to ensure that those with broader shoulders and those that should pay do pay.”
That is precisely the principle we are all seeking to establish. He continued:
“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 … 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.”—[Official Report, Commons, 22/3/21; col. 707.]
Those commitments and statements by the Minister are completely consistent with the proposal of the right reverend Prelate the Bishop of St Albans, which simply says that the scheme must be ready, approved and operable before leaseholders pay any costs. The Minister’s substantive argument—that the right reverend Prelate’s proposal is inappropriate and unworkable—is clearly nonsensical and wrong.
The Minister’s other argument was that we were somehow delaying matters. The House of Commons last debated this issue on Monday 22 March. The date today is 20 April, a month later. The reason for the delay in considering this Bill has nothing to do with your Lordships, nothing to do with the leaseholders, nothing to do with the right reverend Prelate, and everything to do with the Government.
Indeed, on the same day as the House of Commons considered our amendments to the Fire Safety Bill, they also considered our amendments to the Trade Bill. Those of your Lordships who multitask—some of us do more than one Bill at a time—will know that the amendments to the Trade Bill were dealt with in your Lordships’ House within a matter of days. It was, I think, three or four days later, because it was still the twenty-something of March when we dealt with them. The reason why we have not considered this matter until 20 April, very close to the end of the Session, has nothing whatever to do with your Lordships, and everything to do with the Government.
We still have time between now and the end of the Session. As the right reverend Prelate so rightly said, if the Prime Minister can spring into such dramatic action in response to developments in the Football League, he and the Government can certainly get their act together to consider and put forward proper proposals in respect of a scheme. Much more pertinently, if they say that the full resources of the Government, drafting and all that, are not available, because the parliamentary draftsmen are on holiday or whatever and so cannot do it—the noble Lord, Lord Newby, could read out more “Yes Minister” excerpts on this—all he needs to do is to accept the amendment in the name of the right reverend Prelate the Bishop of St Albans. That is what we are urging him to do. It would give him the time to do it, because its key provision is that leaseholders will not be faced with these charges until the statutory scheme is in operation, so he will have the time that he needs.
However, it is not just that the reason for the delay is the Government and not this House; we are dealing with a situation that is nearly four years old. It is not as if Grenfell happened a few months ago, we are still trying to estimate what the impacts were, and we are being rushed into legislation and the design of a scheme. It has been four years, and there is a whole public inquiry, the first stage of which has already reported. Again, the reason for the delay in this respect has nothing to do with the leaseholders, nothing to do with this House and everything to do with the Government.
What was the special adviser who wrote the Minister’s speech actually seeking to do? I think it is pretty clear, because most of us here are seasoned politicians. They were seeking to see that the Fire Safety Bill becomes law before the impact on the leaseholders is fully known. We need to get to the heart of what is happening here. Obviously, in response to the urgent and compelling safety crisis that we face, there had to be changes in the safety regulations. More precisely, we had to see that the existing safety regulations were actually enforced. That is what we are really talking about as the fundamental point of principle here.
The Government do not want leaseholders, who may face large bills of potentially tens of thousands of pounds and who in many cases may not be covered by the schemes, which are only in outline at the moment in their descriptions, to be faced with those costs or any knowledge of what they might be before the Bill becomes law. However, that is all the more reason why Parliament should not be prepared to play the Government’s game, because this is not a political game or a script of “Yes Minister”; these are the lives of hundreds of thousands of people who face bills of tens of thousands of pounds. It is perfectly reasonable that this House and the House of Commons should at least know what the schemes are, in respect of which people are going to have to pay these sums, and should have given their assent to them before they become law.
The Minister said that the right reverend Prelate’s proposal was inappropriate and unworkable. There is nothing inappropriate and unworkable whatever about ensuring that a statutory scheme must be in operation before leaseholders face bills that could, as I say, run into tens of thousands of pounds. The only reason for the delay in the past and now is because of the Government. This could all be sorted out in the next few days, before the end of this Session, if there is a will to move.
For that reason, I strongly urge the right reverend Prelate the Bishop of St Albans, on behalf of hundreds of thousands of our fellow citizens who have a right to expect fair play from Parliament, to press this amendment to a vote.
My Lords, first, I draw the attention of the House to my relevant interests as a vice-president of the Local Government Association, a non-executive director of MHS Homes Ltd and chair of the Heart of Medway Housing Association.
It is most disappointing that we are back here again, because the Government have neither listened to nor recognised the plight of the people trapped in their homes. For me, that is extremely disappointing. I have spoken to a number of the innocent victims over recent weeks. Think of the stress, worry, concern, costs and lives on hold. For many, there is no end in sight. It is not good enough, and we must ask the other place to think again on this issue. We must stand with the innocent victims, the leaseholders and the tenants. It is a disgraceful, monumental scandal, and the Government cannot be let off the hook today. We hear lots from the Government about levelling up; it is one of their new phrases that we have heard over the last year. What about some levelling up for the victims of the cladding scandal? That is what we need to hear today.
You buy your home—often your first home—you pay your mortgage, you pay your taxes, you play by the rules, you do the right thing, and you are a good citizen. What you want is your Government to stand with you, to be by your side, to stand up for you and to make those responsible for this scandal put it right. That is what they want today: for those who are responsible, not the innocent victims, to put this right—be that the companies who built these defective properties, the people who signed the buildings off as safe when they were not, or those who provided the insurance guarantees that they would put right anything that went wrong. That is why we on these Benches very much support Amendment A1 in the name of the right reverend Prelate, and we will be in the Lobbies with him when he, I hope, divides the House.
For me, it is clear, simple, effective and time limited. If the Government’s word means anything, they should support the amendment too. The Motion would prevent the owner of a building from passing on any costs of remedial work and, as my noble friend Lord Adonis said, remains in force only until we have the statutory scheme in place, which of course will then deal with the issue of costs and the scandal. It would provide welcome relief and respite. It would show that there is a way out of this nightmare. It would show that the Government are with the victims of this scandal, who are the innocent people here.
The Government highlighted the weakness of their own utterly ridiculous position. The Government control the other place. They have a majority of 80. We have heard that they have held this up for a month; they could have discussed it weeks ago. We could have discussed it in this House. Now they tell us that the Bill is at risk if we carry on. That is just not acceptable; it is just not good enough. The only way the Bill will fall is if the Government choose to let it fall and do nothing about that. The hold-up is purely caused by the Prime Minister and the Government deciding that they just do not want to go here. That is what the problem is.
Like the right reverend Prelate, I was also pleased to hear about the urgent action that the Government were taking: the summit at No. 10, the calls that it will not happen and the demands for urgent action. But, of course, as the right reverend Prelate said, that was about the European Super League. If we can have a summit for the Super League, why can we not have a summit for the insurance companies in No. 10 this week to ask what they are doing? Why can there not be a summit for the building companies this week in No. 10? Why can there not be a summit for the victims in No. 10 this week? Apparently, if it is the Super League, everybody can come in straightaway. It is just not good enough.
We need these summits. We need the Government to actually act and stand by victims. If the fate of Arsenal, Chelsea, Liverpool, Manchester City, Manchester United and Tottenham Hotspur are a matter of the gravest concern for No. 10, surely the victims should be as well. It is just not good enough. I hope that the noble Lord will go back to the Prime Minister and tell him how angry this House is with where we find ourselves today.
I thought that the noble Lord, Lord Newby, powerfully set out the Government’s failure to do this and how wrong they are. There is no good reason at all for not acting today. The Government should support this amendment, because it is really well drafted and takes us forward. The Government have made pledges and promises to the victims, and they will have to honour them.
I had not read the words of Chris Pincher, but when my noble friend Lord Adonis read them out, I thought, “That is the Motion that we have here”. He wants to have a statutory scheme set up, for no one to pay anything, to make sure that the scheme is in place and to protect the victims. That is what the Motion before the House today would do, so I just do not understand why the Government are not supporting it.
I very much hope that the right reverend Prelate will divide the House when we get to that point if the noble Lord will not accept the Motion, because it really is just not good enough. The Government will have to act and protect the victims.
My Lords, it has been an interesting debate, to put it mildly. I did not think we would be invoking the spirit of the European Super League quite so much, but I have to say I stand with noble Lords in being utterly opposed to the proposals, including from the club that I support.
The idea that we are unleashing a torrent of issues for leaseholders as a result of the Fire Safety Bill—one of the points the noble Baroness, Lady Fox of Buckley, made—is overstated. That is not going to happen. We recognise that building owners will have to take a proportionate, risk-based approach that takes into account the true possibility of risk to life in properties. Life risk is mercifully low, as I said in my opening remarks.
I say to the noble Lord, Lord Newby, that the solution has been outlined by the Government. Noble Lords can query the scope, but the solution will always involve three basic elements: a level of grant funding—we have had the ACM fund of some £600 million and the building safety fund of £1 billion; some kind of financing scheme that provides a loan facility to pay for these works; and taxation or levies. The Government are introducing all three elements, and that is ultimately the only solution that can be offered. I point out to the noble Lord, Lord Adonis, that the solution in all those areas does not need to be statutory—in fact, in order to be timely, it cannot be statutory. The grant funding exists, and we will be publishing further details of the financing scheme very shortly. The Treasury’s lead is needed on taxation and levies, as the noble Lord will know.
In response to the noble Baroness, Lady Warwick of Undercliffe, it would be nice to put more money on the table, but over £5 billion, as I am sure she recognises, is a considerable sum. Leasehold properties in those buildings are protected. We know that a number of housing associations are applying to the building safety fund. I recognise that we could go further and protect the full remediation costs of those buildings, but it is nevertheless the case that many housing associations are applying for funds for the removal of unsafe cladding. In addition, a very generous affordable housing programme of some £12.5 billion has been announced, which housing associations can access.
By way of clarification to the right reverend Prelate the Bishop of St Albans, the building safety fund does exist and the money is being accessed. It is clear that the additional money the Government have announced will be added to that fund. We are in danger of running out of money, frankly, in a matter of months, without the additional amounts committed by the Government. The other things I mentioned will happen, but none of them requires statute to implement, so it is simply not the case that a statutory solution is the only way forward.
I want to reiterate why these amendments, which I believe are unworkable and impractical, should be rejected.. I do not have the benefit of political advisers as a Lords Minister. I am always happy with extra help in drafting my speeches, but I do not have a special adviser helping me in this regard. I do not think the amendments deliver the solution; all they do is put the legislation at risk. We have had the Easter Recess, which is one of the reasons we are now short of time.
As noble Lords have heard before now, it is impractical and confusing to amend the fire safety order to include this issue. The main aim of the fire safety order is to ensure public safety by reducing the risk to life from fire. This is done through responsible persons complying with their duties and regularly reviewing their fire risk assessment to identify and put in place appropriate fire precautions. These amendments do not include measures that provide public safety or set out how the responsible person should reduce the risk to harm from fire. Instead, they cover the relationship, including financial obligations and liabilities, between freeholder and leaseholder. These matters do not sit naturally with the fire safety order, as some noble Lords have admitted.
In his amendment, the noble Earl, Lord Lytton, wants to add further protections to leaseholders by insisting that building owners seek government support through our grant or financing schemes before passing costs on to leaseholders. Noble Lords will note that a similar provision already exists in our draft Building Safety Bill in Clause 89(17P), which places obligations on the landlord to deduct from leaseholder charges any funding received. We are adding to this clause with the purpose of ensuring that building owners must explore other cost-recovery mechanisms before passing costs on to leaseholders.
In addition to this proposed legislative protection, the existing building safety fund application process already requires building owners to demonstrate that they have already explored other cost-recovery avenues as a condition of government funding. Including this sort of provision in the Building Safety Bill removes a clear practical difficulty in this clause. By extending the requirement to explore alternative funding sources before approaching leaseholders to all building safety risks, leaseholders will now have to work out which costs are directly attributable to the provisions of the fire safety order and which are not. In the interim, building owners should already be accessing all the government support available to remediate unsafe cladding, and we are supporting them through this process.
I thank the right reverend Prelate the Bishop of St Albans for his engagement over the last few weeks, but I am afraid that his amendment will not work either. It would orphan liability. We have looking to assign liability to freeholders or orphan liability of works until such times as a statutory scheme is in place that pays for the work directly attributable to this Bill. I have already talked about the difficulties of defining which works might be directly attributable to the Fire Safety Bill provisions and which might not.
Some of the works that may be required will be low cost, where anyone would reasonably expect leaseholders to pay. Does the right reverend Prelate really want to stop the passing on of relatively minor costs, such as for a new smoke alarm? The amendment does not differentiate between the costs of the work which could lead to delays in important minor works. He is talking about stopping something even as minor as putting in a smoke alarm as a consequence of the amendment. No taxpayer scheme for such minor works would be forthcoming, and we would reach an entirely avoidable impasse.
The amendment does not take into account safety defects that are identified outside the fire safety risk process—for example, necessary works brought into scope as a result of another incident. In such cases, this will not prevent costs being passed on, and the amendment will not, therefore, achieve what the right reverend Prelate intends. Since this amendment is not sufficiently detailed and will require extensive drafting of primary legislation, it would continue to delay the implementation of the Fire Safety Bill and the important reforms that it intends to carry out.
We also recognise that there could be protracted legal action from building owners to claim for costs they feel they are entitled to pursue from leaseholders. Stating in legislation what the landlord can and cannot recover from the leaseholders, and when, could contradict the provisions set out in the contractual terms of a lease. This would affect the Government and, to that extent, taxpayers. The amendment should ultimately be self-defeating as the pace and progress of all fire safety works would be stalled, leaving leaseholders still in an invidious position.
I must admit that I had a strong sense of déjà vu when reading the amendment of the noble Baroness, Lady Pinnock. The House will remember that an almost identical amendment was laid during the previous stage of this Bill and rejected by the Commons. As with the previous amendment, it would orphan liability and leave leaseholders no better off, with no clear route for buildings to be remediated, without a clear cost recovery mechanism. Noble Lords will also remember that the scope of this amendment is extremely broad; it is applicable to not just external walls but all and every defect regardless of whether it has been caused by wear and tear. This is neither proportionate nor appropriate. It is certainly not the best use of taxpayers’ money.
The Government are focused on supporting the Grenfell Tower public inquiry to uncover the full truth that led to the fire and ensure that lessons are learned from this national tragedy. This is in parallel with ongoing work to make homes safer, thoroughly reform the entire regulatory system and provide redress to the community and to leaseholders. The Government are also providing a globally unprecedented package, in excess of £5 billion—this is not a minimal sum; £5.1 billion is a substantial amount—to pay to make homes safer from unsafe cladding. It is unclear what a further independent inquiry would deliver.
I ask that noble Lords exercise sound judgment, listen to the will of the democratically elected other place and recognise that, while this amendment and others may be based on good intentions, it is not appropriate or a means to solve very complex problems. This is the wrong place for this kind of legislation, and in any case the amendment is likely to be ineffective and possibly risky. It is a big risk; in answer to the noble Lord, Lord Newby, I say that the risk of litigation is not something to pooh-pooh, because the risk is not only that is it an additional cost that leaseholders potentially face paying but that the remediation will not be carried out. I must emphasise once again that all the solutions put forward will in no way solve this problem. The Government certainly cannot support them.
I finish by reminding noble Lords that the Government have provided an unprecedented level of support for leaseholders, in excess of £5 billion. Noble Lords have a choice; it involves supporting getting this highly important Bill on to the statute book and not delaying its implementation any further, which will allow the Grenfell recommendations to be implemented and help make homes safer.
I have received a single request to speak after the Minister. I call the noble Lord, Lord Adonis.
My Lords, we are talking about three different amendments; I am focusing on that from the right reverend Prelate the Bishop of St Albans. In so far as I could tell, the detail of the Minister’s objection to the right reverend Prelate’s amendment was that further delay could be caused by uncertainty over the attribution of costs and that he objected to the amendment’s requirement that the scheme be statutory. Further delay depends on how long it takes the Government to come forward with their scheme; they are in complete control of the timescale. On the statutory scheme, to foster peace and good will between the right reverend Prelate and the Government, I suggest that “statutory” be replaced by “government” scheme—which need not necessarily be statutory, for the reasons the Minister gave. Would he be prepared to entertain this?
I am very new to this place but, as I have tried to highlight, I do not believe that the solution in large part involves statute. The noble Lord is asking for a further commitment that is really about putting more government money up front to pay for the significant costs faced by leaseholders. It would not be helpful to amend the amendment by removing that word, because I do not think we could accept the amendment in any way whatever. We have set out that we want to focus on the remediation of unsafe cladding because cladding on the outside of buildings is the major fire accelerant. That is what we will focus on and we are putting forward over £5 billion to do precisely that—a significant, globally unprecedented amount. I do not think amending that one word moves us any further forward.
My Lords, I am hugely grateful for the extraordinary range of speeches made today. I acknowledge what Her Majesty’s Government have done; I take the point that this is unprecedented and a major contribution towards trying to sort out this very difficult problem. The Minister knows that I have said on many occasions that I am terribly naive about all this. I was hoping Her Majesty’s Government would help solve it because I am just an amateur paddling around in the shallows. I am hugely grateful to people such as the noble Earl, Lord Lytton, who is a real expert in this area.
I still believe that my amendment is a practical, helpful and just way forward which is in the spirit of what Her Majesty’s Government want and have committed to. I was hugely grateful to the noble Lord, Lord Adonis, for quoting the Minister in the other place. I am still sufficiently positive—noble Lords will probably say naive—about our political system to believe that this amendment could well commend itself to people in the other place when they see that it is within the spirit of what the Government want to do. I hope that it will be taken back to the other place and considered there, or that the Government will wish to introduce something like it, to help us move this forward. I would like us to get this on to the statute book as quickly as possible but, in the light of what I have heard, with reluctance I feel I have no other choice but to divide the House on this Motion.
Motions A2 (as an amendment to Motion A) and A3 (as an amendment to Motion A) not moved.
4G: Because it is supplemental to Lords Amendment 4C to which the Commons disagree.
4H: Because it is consequential on Lords Amendments 4C and 4D to which the Commons disagree.