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Buildings: Cladding

Volume 815: debated on Thursday 28 October 2021


Asked by

To ask Her Majesty’s Government what steps they are taking to ensure the removal of dangerous cladding from buildings identified as high-risk.

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I draw attention to my relevant interests in the register.

We have provided £5.1 billion to remediate cladding in high-rise residential buildings, targeting funding at buildings we know to be at greatest risk of fire spread.

Despite the Minister trying to blind us again with statistics, the hard fact is that thousands of leaseholders are living in limbo, suffering anxiety and in despair. Some are even being held to ransom; they are being asked to sign a commitment to pay many tens of thousands of pounds for the remediation of building safety defects that are exposed when cladding is removed. No cladding work is done until they sign that bit of paper. Leaseholders are being held to ransom; they cannot move and they cannot get anything done. Surely the Minister will agree with me that this cannot be right. What is he going to do about it?

My Lords, I mentioned only one statistic; I do not think that one statistic or one figure—£5.1 billion—is blinding anybody. I point to the progress: despite a pandemic, the ACM funding of some £600 million has seen around 16,500 homes being fully remediated. That is an increase of 4,700 since the end of last year. The new building safety fund, topped up so that the total remediation amounts to £5 billion, is estimated to cover around 65,000 homes in high-rise blocks. So there are many tens of thousands of leaseholders who are benefiting from government funding.

Can the Minister update the House on the progress of the capped low-interest scheme for buildings with defective cladding under 18 metres? Can he clarify whether a pilot scheme will, as previously hoped, be functional by the end of the year?

My Lords, we have not made any further announcements about the details of the way we want to support leaseholders in medium-rise blocks. The new Secretary of State is looking very closely at how we can best protect leaseholders in these buildings from unaffordable costs. In the vast number of buildings, there is no need for wholesale, expensive remediation, as the recent expert committee, led by Dame Judith Hackitt, pointed out.

My Lords, last week the Minister said that details of the residential property developer tax would be announced yesterday, and that the figure he had given—the receipt of £2 billion over 10 years—was the absolute minimum. Yesterday, the Chancellor announced a rate of tax, but I am unaware that he gave an estimate of how much money would be raised. Could the Minister say what the Government’s current estimate is of the amount that that tax will raise? Secondly, the Chancellor said yesterday that the tax will be used to fund the £5.1 billion of which the Minister is so proud. Is it really the case that this tax will not benefit a single additional leaseholder?

My Lords, we recognise the need to get those who contributed greatly to the crisis that we find ourselves in to make a contribution. This is just one of the ways we are doing this. It was announced that the residential property developer tax would be levied on developers with profits over £25 million, at a rate of 4%. The estimates from the Treasury are that that will bring in at least £2 billion. That is the commitment over 10 years. We also have the gateway 2 levy, which will raise funding as well. This will also contribute towards the situation that leaseholders find themselves in.

The principal difficulty with this cladding issue is cost. Why do the Government not take the most obvious step, and pursue the French company that manufactured the faulty cladding in the first place? It is a company that seems to be burying its head in the sands of Paris.

My Lords, there is no doubt that a number of groups, beyond developers, have contributed to the cladding crisis, not least the construction product manufacturers—the noble Lord mentioned the French manufacturer—and many other professionals who did not build these building to the standard of building regulations at the time. We are looking, with fresh eyes, at how we can hold them to account.

My Lords, I refer to my interest as laid down in the register. We have, on a daily basis, yet more distressing personal experience from the fallout of the cladding scandal—I am sure all of us would agree. We have heard quite a lot about numbers today but, if I could go back, the Government’s announcement of £5.1 billion in yesterday’s Budget to deal with the cladding scandal was simply a re-announcing of policy, as the Minister suggested. An additional £2 billion is estimated to come from the developer tax, but would the Minister agree that this is only a drop in the ocean, given the estimates I have heard that this could cost up to £50 billion? Why are the Government not doing more to insist that innocent leaseholders should not be left with the bill?

The Government are looking carefully at the prevalence of buildings that require substantial remediation of cladding which causes the spread of fire, but the £5.1 billion is not the only measure that the Government are taking. It should be noted that the Building Safety Bill introduces new measures that will legally require building owners to prove that they have tried all routes to cover costs. If this does not happen, leaseholders will be able to challenge these costs in the courts. We are also extending the Defective Premises Act from six years to 15 years retrospectively. These are all measures designed to help protect leaseholders.

Minister, the £5 billion is welcome, to rectify this terrible problem, but the actual bill is £15 billion. I think that, when Ministers announce money, they should announce the full picture. The Minister states that the Building Safety Bill will address the protection of leaseholders from paying costs to make their buildings safe, but the Bill fails to do that—it does not say that that will happen. In the light of the Budget yesterday, is the Minister in favour of another museum in Liverpool for The Beatles, is he in favour of cheaper champagne for all, or is he in favour of safer homes for everybody? I think I know which side of the argument this side of the House sits on.

I thank the noble Lord for his colourful question. Of course we want to do all we can to support leaseholders. That is why we are taking the measures that I have already outlined.