Committee (3rd Day)
Relevant document: 20th Report from the Delegated Powers Committee
My Lords, welcome to the Grand Committee on the Building Safety Bill. I remind Members that they are encouraged to leave some distance between themselves and others and to wear a face covering when not speaking. If there is a Division in the Chamber while we are sitting, this Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes, or earlier if that is convenient for the Committee.
45: After Clause 72, insert the following new Clause—
“Appointment of third parties
(1) This section applies where—(a) a RTM company within the meaning of section 113, Commonhold and Leasehold Reform Act 2002,(b) a body corporate of whatever description where the majority of the shares are held by leaseholders of dwellings, or(c) a body corporate of whatever description which is limited by guarantee and the members of that company are also leaseholders of dwellings,is either the accountable person or principal accountable person.(2) Where this section applies, notwithstanding any provisions of the Memorandum or Articles of Association or any rule of law to the contrary, the company may appoint a third party to discharge all the functions of the accountable person or the principal accountable person who will assume all duties, powers, liabilities and penalties under this Act in place of the company, and this Act is to have effect as though references to the accountable person or principal accountable person were references to the third party appointed under this section.(3) If such a person is appointed then the company is empowered to re-charge and apportion the costs charged by such a person as if they were a service charge under the leases of the dwellings.(4) Such charges will, for all purposes, be deemed to be service charges within the meaning of section 18 of the Landlord and Tenant Act 1985, save that the provisions of sections 20 and 20ZA of the Landlord and Tenant Act 1985 do not apply.(5) The Secretary of State may by regulations impose conditions which must be satisfied before an appointment can be made under subsection (2).(6) Without prejudice to the generality of subsection (5), those regulations may include—(a) provision for a minimum level of professional qualification to be held by the third party,(b) provision for minimum levels of professional indemnity provision.”Member’s explanatory statement
This provision would enable leaseholder-owned or controlled companies to appoint an external professional to discharge the functions of the Accountable Person or Principal Accountable Person and for the costs of the same to be recoverable (and regulated) as if they were a service charge under the lease.
My Lords, this group should not detain us too long, for three reasons. First, the group has only one amendment, this one. Secondly, the issue here is not of the same complexity or magnitude as the all-important matters that the Committee discussed last Thursday. Thirdly, I think that the Minister will not take too long to accept it. Amendment 45, in my name and the name of the noble Baroness, Lady Neville-Rolfe, concerns the impact of the Bill on the management of leasehold property, in particular the management by the leaseholders who live there.
The amendment has the backing of leaseholders and of bodies representing those managing leasehold flats, the Institute of Residential Property Managers and the Association of Residential Managing Agents. I declare an interest as chair of the Government’s regulation of property agents—RoPA—working group, whose 2019 report provides insights into the arrangements for managing blocks of residential apartments. Amendment 45 seeks to prevent the Bill from creating a major problem where residents of blocks of flats have responsibility themselves for the collective management of their homes. It covers the residents management companies, where the developer has handed over ongoing management to the leaseholders, and the right to manage companies, where residents have exercised their right to take control under the Commonhold and Leasehold Reform Act 2002, on which, incidentally, I gave my maiden speech 20 years ago.
These resident-controlled companies will have a board of unpaid volunteer directors. The directors will sometimes decide to employ managing agents to carry out the usual management and maintenance tasks, but the legal responsibilities for their company’s actions will remain with the directors. The Bill as it stands places a new layer of responsibility on these resident directors: they must, together, assume the role of the accountable person or principal accountable person responsible for building safety. This makes each individual director personally liable if things go wrong. They may engage expert help, but they cannot shed their accountable person status and the full liability remains with them.
The directors will now have to identify safety hazards, decide on the remedies and procure the necessary works. There are plenty of opportunities for mistakes and the new building safety regulator could discipline them, fire them or fine them, ruining their personal reputations. Fellow residents could sue them for mismanagement or misjudgment. Indeed, under Clause 131, if residents do not feel that the residents management company has done enough to recover money from third parties, they can take them to court.
The entirely predictable but unintended consequence of placing this serious new burden on resident directors is surely that no one will volunteer for the role. Already it is often a hard job to recruit and retain willing volunteers, who must not only give up their time but risk falling out with neighbours when taking decisions that cannot please everyone. It is commonplace for directors looking for a new volunteer to be economical with the truth: “It won’t be very time-consuming or onerous”, they say. How much more difficult will the recruitment of new and the retention of existing directors become if this Bill adds considerably to the obligations placed on anyone who dares to volunteer?
Amendment 45 seeks to resolve the problem. It has two parts. First, it would allow the residents management companies and right to manage company directors, if they wish, to pass on the functions and liabilities of the accountable person or principal accountable person to an external, competent, qualified third party with proper professional indemnity insurance, which the directors could never obtain. Secondly, it would enable the directors to pass on the costs of so doing to the residents via the service charges. With this amendment in place, a significant barrier to leaseholders managing their own affairs will be avoided.
Successive Governments have consistently encouraged residents to assume mutual responsibility for managing their blocks of flats. Indeed, moves are in the pipeline to relaunch the so far unsuccessful commonhold arrangements, whereby the occupiers own the freehold as well as handling the management. So I am sure that there is no intention to impose a huge disincentive for leaseholders to participate in residents management companies and right to manage companies. By enabling the duties imposed by this Bill to be transferred from the volunteer residents to professional experts, a potential exodus of volunteers can be avoided and the encouragement for more resident control can be sustained. I hope, therefore, that the amendment is helpful in correcting an unintended oversight and that it will appeal to the Minister. I look forward to the contribution of the noble Baroness, Lady Neville-Rolfe, and I beg to move.
I support the noble Lord in his Amendment 45. He has described the issue very well—and given his huge contribution to the House, I shall look up his maiden speech.
I worry that unless we can find a way out for leaseholders who are also owners, no leaseholder in their right mind would contribute to the management of a building jointly owned by leaseholders. This has been a direction of travel in recent years, which I support. I believe it to be particularly valuable for smaller housing developments, of which we need more. As my noble friend Lord Young of Cookham said in Committee on 24 February, successive Governments have encouraged leaseholders to buy their freeholds. Indeed, he himself played an important part in that process. As I understand it, the leaseholders who have enfranchised and bought their freeholds are excluded from support under the Bill. That seems very unfair.
I know from direct experience in my own family that it is already very difficult to secure volunteers to run leaseholder-owned buildings, given the onerous duties involved and the time requirement. The Bill, with its additional duties and tensions, will, I fear, make it impossible. Here we have yet another perverse effect. I agree with the noble Lord, Lord Best, that a solution must be found by Report, either by accepting his amendment or, if need be, in some other way. This is an unintended consequence that nobody wants.
My Lords, this is such an eminently sensible amendment, in the names of the noble Lord, Lord Best, and the noble Baroness, Lady Neville-Rolfe, that I think that the Minister will struggle to counter the arguments that have been made. What we are asking in this amendment is to avoid a situation involving resident management groups, or leaseholder-controlled companies, where the stringent expectations required to fulfil the duties under the Bill are put on the volunteers.
I already have concerns about the accountable person and how that role will fit in with those of the managing agent and building safety manager. We are beginning to create a fairly bureaucratic approach to safeguarding leaseholders and tenants, which has the risk of not fulfilling the simplicity and clarity that the Hackitt report required of new building safety measures.
I just think that the arguments cannot be countered. I look forward to what the Minister has to say, but this is such an eminently sensible proposal that I hope that the Government will find ways of bringing forward their own amendment on Report to fulfil the aims of this amendment.
My Lords, I rise briefly to speak to Amendment 45, in the name of the noble Lord, Lord Best, and well supported by the noble Baroness, Lady Neville-Rolfe. I reiterate that this amendment is about looking at leaseholder-owned or leaseholder-controlled companies appointing an external professional to discharge the functions of the accountable person or principal accountable person. The amendment also talks about costs and maybe looking at service charges.
I want to ask this of the Minister. On these Benches we have a big concern about the actual level of service charges at the moment. These charges are already quite high and they are passed on to leaseholders and tenants. Have the Government looked at the aspect of service-charge pricing and whether leaseholders will be able to bear the cost of having this expertise, as detailed in the amendment? We absolutely recognise the importance of the amendment and we are supportive of it. We are equally concerned about using service charges in order to fund these kinds of important, necessary steps. The impact on leaseholders and tenants is a big concern.
On what was discussed previously in Committee, I will add something in relation to professional expertise and skills, and having the opportunity to pass on these responsibilities to somebody who can take care of this important role, focusing on the function of the accountable person or principal accountable person. I will not talk about this at length, but it calls for a debate about the current situation and whether the Government are fulfilling the needs of leaseholders and tenants. I will finish by saying that there is a big concern about service charges overall, about pricing and about how this will have an impact subsequently on leaseholders.
My Lords, first, I will answer the noble Lord, Lord Khan. He brings up an important issue and I heard his concerns on the level of service charges to leaseholders. I do not think that that is particularly relevant to this amendment, but I hear his concerns and I will take them back to the department and we will get a letter to him saying what we are doing about that.
I am sorry, but I am going to disappoint the noble Lord, Lord Best, on this amendment—but perhaps not as much as I could have done. I thank him and my noble friend Lady Neville-Rolfe for raising this important matter. The Bill provides that an accountable person is the entity responsible for the repair of the exterior, structure and common parts of a building. This may well include leaseholders who have set up resident-led organisations exercising their statutory right to take control of their building away from the freeholder. These statutory rights are very important. They act as a device to ensure that the imbalance of power between freehold and leasehold tenure is redressed and that leaseholders are empowered to make decisions about the safety management of their buildings. With this empowerment come responsibilities and accountability. The amendment would allow such resident-led organisations to appoint a third party to be responsible for their building’s safety management, passing culpability to that third party if anything went wrong.
We have thought carefully about the definition of the accountable person, making sure that we deliver the recommendations of Dame Judith Hackitt. She recommended that there should be a duty holder with clear lines of responsibility for managing building safety risks. I am afraid that we think that this amendment would confuse the line of responsibility.
However, I sympathise with resident-led organisations where the lay person puts themselves forward to manage their building. With the new building safety regime, that may be more than they had initially anticipated. We will produce guidance to help resident-led organisations, ensuring that the regulator provides the necessary support so that they can effectively register their building and manage fire and structural safety risks.
I must also point out that this amendment would have the effect of increasing costs on leaseholders, as noble Lords have said. A resident-led organisation may have taken back control because of excessive service charges imposed by the freeholder. Surely appointing a third party would increase these costs yet again, which is contrary to our objective of ensuring that the new regime is proportionate.
I thank noble Lords for suggesting this amendment but, for the reasons that I have set out, we are unable to accept it. However, I think that there is a wider question around residents leaning in and taking responsibility for buildings within our leaseholder reform policy and we will give this further thought within government. I offer those noble Lords who are interested a meeting before Report to discuss it further.
A meeting would certainly be helpful. We also need to see this famous guidance. We know from other experience on buildings that there is an assumption that everything will be fine and dandy, but this is a very serious problem. We will lose those volunteers who are running buildings right across the country while waiting for Godot and a bit of guidance. If we are able to see the guidance and see that it works, we will be very happy. If it does not work, there will be time to do something. I am sorry to raise this point, but it is a practical matter for lots of people across the country, some of them in very inexpensive flats that they cannot even sell.
We absolutely understand the issue We are working on it. As I said, if we have a meeting, maybe we would have some ideas. I do not know about guidance yet, but we will make sure that we can have that discussion. I hope that we will get something better in place before Report.
Those final comments were the ones that I hoped to hear: that, with a bit of discussion, we may be able to find a way around this. The test for me is a real one. My son in a block of flats says, “Dad, should I think about being one of these directors?” My answer at the moment is, “Steer well clear. It is not a good idea to volunteer for this at the moment.” I look forward to those discussions and hope that we can come to an agreement. I beg leave to withdraw the amendment.
Amendment 45 withdrawn.
Clauses 73 to 79 agreed.
Clause 80: Duty to appoint building safety manager
Debate on whether Clause 80 should stand part of the Bill.
Member’s explanatory statement
This removes the need for a mandated building safety manager and in turn the associated service charges for that post and the potential disproportionate safety charges that tenants and leaseholders would or could incur.
My Lords, this series of stand part amendments relates to Clauses 80 to 84 and would delete the building safety manager from the Bill. This is my first attempt at tabling amendments so I am nervous about the procedural aspects, but I hope to explain why I have come in on, as it were, this issue in particular. How I came about it is telling in relation to some general concerns that I have about the Bill, specifically Part 4.
Like some of us here, I came to this whole issue based on being a leaseholder and being part of a group of noble Lords who were horrified at the awful impending tragedy of leaseholders being forced to pay crippling remediation costs on the back of the response to the Grenfell tragedy. Many of those egregious injustices are now being addressed—some of them in this Committee.
However, in my speech at Second Reading, I raised a different set of concerns about adopting a zero-risk approach, including that risk aversion is in danger of creating zealotry beyond the bounds of what is reasonable, practical or desirable. If the Bill’s aim becomes to eliminate all risks, that itself has its own risks and creates a new set of victims. For example, if safety is turned into panic, it can lead to an ever-spiralling demand for safety outside the bounds of common sense. This could dangerously destroy confidence in both the construction sector and the high-rise housing market, and could create new layers of bureaucracy that hinder rather than help.
Rather to my surprise, my speech at Second Reading led to a group of leaseholders contacting me to say that they shared some of my concerns. Campaigners from the Tower Hamlets Justice for Leaseholders group and Friends in High Places explained that they understood because they felt that, as Covid has proved, it can be difficult in situations involving safety to agree that less should be done—but sometimes less should be done. This proposal for building safety managers for every block is just one of the concerns that the group has about some of the Bill’s unintended consequences. As the campaigners say, it imposes costly layers of bureaucracy on them while giving sweeping powers to managing agents and freeholders and inflicting yet more pain on leaseholders, with provisions such as building safety managers threatening to turn this into what they call “another EWS1 fiasco”.
All the provisions in Part 4 seem to assume that the problem of residential fire safety is a lack of appropriate people and processes checking for fire risks in every possible instance. However, perhaps the real problem is the competence of the people who are already in place and the enforcement of rules and regulations that already exist, rather than making up lots more or creating new roles. As the leaseholder group notes, writing into law that every building will have to appoint a building safety manager is a duplication of the role of the existing managing agents and building managers, and proceeds from the false assumption that these housing blocks are “like barrels of oil needing almost daily surveillance and supervision to ensure that they don’t burst into flames at any moment.”
The truth is that fires are relatively rare, but they cannot be prevented altogether. The priority of this Bill should be to build in adequate safety systems and then maintain those properly so that residents can evacuate as quickly and easily as possible should fire occur. Instead, these clauses create an unnecessary duplicate role that will—guess what?—yet once more, financially cripple leaseholders.
The Government themselves estimate that the cost of a building safety manager will be £60,000 a year per block. For Lucy, in a block of 33 flats, this will add £1,818 to her annual service charge. For Ruth, in a block of 19 flats, the building safety manager costs would add £3,157 a year to her service charges. It is not clear, either, whether that £60,000 estimate that was on the Government’s website has factored in employers’ national insurance and pension, plus the 20% VAT that an employing company would have to add to the charge. That would bring the cost to £85,000, in which case Lucy’s annual service charges would rise by £2,575 and Ruth’s by £4,473.
It is not clear exactly whether that £60,000 figure still stands, because the fact sheet explaining the building safety manager’s average pay of £60,000 a year was rather quietly removed from the Government’s own website after 5 pm last Wednesday. Luckily, the leaseholders have screenshots, which I have here if anybody would like to look at them. I am hoping that this is a positive sign that the Government are going to scrap the policy—delete the policy just like the web page—or at least water it down by turning it into a function that can be met by existing managing agents and property managers, and not treating it as a separate job.
With the words of the Secretary of State, Michael Gove, ringing in our ears, he has warned that
“too many buildings are declared unsafe”,
and that many of the problems associated with the cladding scandal have been caused not by unsafe buildings but over-zealous inspectors and nefarious players
“seeking to profit from the current crisis”.
We should have those words in the back of our minds when we ask key questions.
Sitting suspended for a Division in the House.
My Lords, I think we are all reassembled. We were listening to the noble Baroness, Lady Fox of Buckley.
I know that noble Lords have been waiting with bated breath.
The key question is why building safety managers are needed at all, when the vast majority of leasehold developments have managing agents in place and leaseholders have to pay a management fee for their services. Surely splitting the function would risk disputes between property managers and building safety managers about what is and is not a safety issue and who is in control when remediation works have a safety element. These buildings, which people live in, already have fire risk assessments carried out by specialist firms—even if one problem is that they are not shared with leaseholders, which can mean that defects can be kept hidden and necessary repairs delayed. But still, what will the building safety manager actually do?
To find out—I do not know whether the Minister has seen this—I watched a recording of a closed-door meeting of sector professionals trying to pin down the role. It was full of flip charts, pie charts and Venn diagrams, and I was utterly confused by the end. It seemed to me to be a jack of all trades and master of none, but it needed the authority of a professional expert. It was reminiscent of a scene from David Brent’s “The Office”.
These are compulsory jobs but they are not mandated to a minimum standard. Qualifications for the role have not been established, no training programmes are in place and, as I say, even the professionals themselves do not seem to know what that training would consist of. If this post is made mandatory, as proposed by these clauses, the qualified few will surely be able to write their own salary cheques. No wonder that leaseholder campaigning groups are talking about “jobs for the boys”. Even if that is a bit cynical, we must ask who will judge their performance or hold them to account. Leaseholders—who will pay for them and who are best placed to judge those overseeing the block they live in, due to day-to-day interactions—now say that, as always, they will have no say at all.
Safer homes will come not from employing someone to march around a block of flats, trying to find issues to justify their existence and quite a hefty salary. This is a version of the waking watch debacle, replacing hi-vis jacket patrols walking around buildings looking for sparks with a suited and booted manager with an iPad finding risks, faults and unnecessary fire safety work. If they do not find any problems, what is the point of their job?
I finish with that question. What is the point of the job? I hope the Minister agrees that there is no point.
I support the very interesting comments of the noble Baroness, Lady Fox—most interestingly, it is immensely refreshing to listen to an amendment that is driven not only by cost savings for leaseholders but by common sense. In many cases, the sub-contracting of services on multi-let buildings is appointed through external managing agents, who apply a levy; they will charge, let us say, 10% on the fee for the work being done. In the £60,000 example, another £6,000 goes on to the tenants’ bills at the end of the year.
I simply support this proposal. It will be a difficult one for the Minister, but common sense is short in the Bill because of the layers of bureaucracy. This will save money for tenants.
My Lords, I am very grateful to the noble Baroness, Lady Fox, for raising this issue about the necessity for a building safety manager in every block—this is of course in relation only to higher-risk buildings. However, residents in higher-risk blocks will have a managing agent, to whom they pay a fee—a service charge—who appoints an accountable person, for whom there will be an additional cost, and possibly a principal accountable person, if that is necessary. On top of that, each block will have to have a building safety manager. As the noble Baroness, Lady Fox, pointed out, adding on those roles considerably adds to the costs for each of the leaseholders; their service charge will rise considerably as a consequence.
I too have had discussions with some of the cladding campaign groups about the potential £60,000 role and the costs which will pass inevitably to them. They are very anxious that their lease will suddenly become unaffordable due to the piling on of costs from these roles.
The further issue in my mind is, as I think the noble Baroness, Lady Fox, said, that there is a duplication of roles. Equally, when there is a confusion about roles—each block might have three people who potentially have conflicting roles—building safety risks will fall between the three. I can find nothing in the Bill that says how each will be accountable. In the end, we come back to this: quis custodiet ipsos custodes—to whom are they accountable?
The Explanatory Notes gives us this as an example:
“The Building Safety Manager may be carrying out day to day functions, as set out in the agreement with the Principal Accountable Person, to assist the Accountable Persons in discharging their statutory obligations. However, the Building Safety Manager could choose to resign of its own volition, and conversely the Principal Accountable Person may find that the service provided by the Building Safety Manager is below standard and choose to dismiss that person. In both circumstances the Principal Accountable Person would need to replace the Building Safety Manager as soon as reasonably practicable.”
I hope everybody understood that. That is my argument: it becomes confused.
One of the issues with building safety and fire safety is that it needs clarity and simplicity. This is not clear and simple. I believe I raised at Second Reading the issue of too many rules causing confusion. When nobody really knows who will do what, it is always a recipe for a potential disaster.
Those are the two points: costs and duplication leading to confusion. The question is this: to whom are they finally accountable—the accountable person or the managing agent? It is not very clear.
The other point is about the competencies—a horrible word—of potential building safety managers. I could not find anywhere in any of the clauses which set out what those should be. The Bill talks about standards but it does not say what they will be. What should be expected of these folk?
We already know there is a shortage of competent fire risk assessors; that was explored on the previous day in Committee. Clearly, these people will not be fire risk assessors. What building safety skills and standards will be required—and who will judge them? The building safety regulator? That would be a good starting point—but, so far as I can see, it is not in the Bill. There are a huge number of issues in relation to the building safety manager, and we want the Minister to be able to answer all those questions. We all want to find a way of making buildings safer, and we have to be convinced that creating this role will achieve that. I am not convinced. We will see what answers we get, and we may have to pursue this further on Report.
I hope that the noble Lord, Lord Khan of Burnley, will not mind if I ask for clarification on a related point. First, I will say how much I agreed with the speech of the noble Baroness, Lady Fox, on the worry one might have about a shortage of experts for this purpose, leading to an escalation of costs that will end up with the ultimate consumer: the leaseholder. Clearly, given the history, we do not want confusion in the Bill.
My question is about how the safety manager will operate in practice. How often will he or she be expected to visit the building? Obviously, I know a lot more about shops, and in shops the safety manager is often a treasured member of staff who may not be an expert in safety but is an expert in making sure that other members of the team behave appropriately. You do not need much expertise on safety if you have a very good system—one that includes sprinklers, for example, which will work well because all you have to do is make sure that the sprinklers and the water that supplies them are checked from time to time. My question, which it would be good to have clarified, is: what is the vision of what this person is going to do, and will they be doing it once every five years, once a day, or whatever? That will affect both the cost and the risk that there will not be enough people to do the important job of ensuring that we have safe buildings. Even in high-rise buildings, there will still be quite a bit of demand.
My Lords, I want to say how much we agree with what the noble Baroness, Lady Fox, said about the importance of having adequate safety measures. That has to run through everything we discuss in connection with the Bill. The noble Baroness also raised the important issue of cost. My noble friend Lord Khan talked about high service charges, and the Minister said she would write about that. This debate has put a focus on ever-increasing service costs, and the fact that in many cases they are starting to become unreasonable. It is very difficult when they go up by 190%, as they have in some areas.
The noble Baroness, Lady Neville-Rolfe, asked one of the key questions that I was going to ask, about the operation of the managers. What exactly are they going to do, and how are they going to do it? Will they be paid, and if so, how much? There is not a lot of detail in the Bill. This comes back to the point made by the noble Baroness, Lady Pinnock, about accountability, and whether there will be confusion over the role. It is important that we all understand exactly what building safety managers are expected to do, how they will do it and how they will be rewarded for their work. Without that clarification, there are bound to be concerns that the cost of their work will be passed on through increased service charges, or possibly increased rent. None of that is clear. We would like more clarification about the role and the expectations.
My Lords, I start by going back to where the Bill came from, the tragedy of Grenfell Tower. The point of the Bill is to ensure the safety of residents, particularly, in this case, in high-risk buildings, and the building safety manager is the day-to-day eyes and ears. I do not know whether people realise, but I did two or three years’ work after the tragedy in Kensington and Chelsea. Before I did that, I spent a lot of time in high-rise buildings, not in London but elsewhere in the country, and it was quite interesting, on a day-to-day basis, when I went round with fire brigades and dealt with issues such as safety doors. People took them off and put B&Q doors on. Those things cannot be done every five years, or every year; they need somebody going in and out of that building, checking up.
There will be stairwells with stuff stuck in them that is stopping people going up and down. There will be holes between the sealed containment of flat against flat. All those sorts of things need somebody who is not at arm’s-length but is working day to day. Yes, they will need new competences, but those competences are out there, I would argue, within the community already, and we will have to work on those competences. As for cost, obviously, that depends on the building. Some of these managers will be able to do multiple buildings if it is felt, by their accountable person, that they will be able to do a good job on that. One building is not the same size or requires the same amount of work as another building.
I shall now go through the amendments of the noble Baroness, Lady Fox, and I thank noble Lords for their contributions. The crux of Clause 80 is the duty to appoint a building safety manager. The creation of the building safety manager role was recommended made by Dame Judith Hackitt in the independent review to ensure, I say again, that the day-to-day management of buildings is undertaken by suitably competent people. That is what she said and that is what we are delivering in the Bill. Clause 80 establishes the role and creates a duty for principal accountable persons to appoint a building safety manager and provide them with support and assistance to manage building safety risks, except where they have the capability to meet the duties without needing such support. So there will be times when principal accountable persons have the time and the competences to do it without appointing somebody else. The skills, knowledge and experience offered by building safety managers will help drive up safety standards and, we believe, deliver positive outcomes for residents.
While the building safety manager will hold responsibility for certain tasks, to be agreed in their contract, accountability for meeting the duties set out by the Bill cannot be transferred by accountable persons to the building safety manager or anybody else. I think that answers the question of the noble Baroness, Lady Pinnock, about who is ultimately responsible. Whether the building safety manager is an organisation or an individual, they must possess the necessary competence to deliver the role. If an organisation is appointed, it must have a nominated individual named and in place to oversee delivery, providing reassurance to residents that their safety is being maintained. The noble Baroness, Lady Pinnock, brought up the competence issue. Work is ongoing with the British Standards Institute to establish a competency framework for the role, which will be supported by further guidance.
Moving on, Clause 81 deals with the appointment of the building safety manager where there is more than one accountable person for the building. Despite the often complex ownership structures of many high-rise residential buildings, we are committed to delivering a system that ensures a whole-building approach. This was a central tenet of the findings and recommendations of the independent review.
Where there are multiple accountable persons, the principal accountable person will be responsible for appointing the building safety manager. The building safety manager should play a key role in delivering a whole-building approach, drawing on the duty placed on all accountable persons to co-ordinate and co-operate with each other.
Before the appointment is made, the principal accountable person must consult on the proposed terms and costs with their fellow accountable persons. We expect agreements to be reached so that the scope of the building safety manager’s functions and the method of delivery of the whole-building approach are agreed by all. If an agreement cannot be reached, we are providing a process for resolution through applications to the First-tier Tribunal. This approach protects the rights of accountable persons and holds them to account for ensuring residents’ safety.
Clause 82 ensures that building safety managers hold their position through the contractual arrangements agreed with the principal accountable person. If either party wishes to end the contract, they may do so by giving notice to the other party in writing. When the contract ends, a new building safety manager must be appointed by the principal accountable person as soon as is reasonably possible. If a building is not being managed appropriately and is placed into special measures, which is the last resort for taking control of buildings with significant failings, the building safety manager’s contract will end.
I mentioned earlier that there is an exception to the principal accountable person’s duty to appoint a building safety manager. Dame Judith’s review was right to point out that many building owners already operate and successfully manage their buildings through competent in-house teams. Where the principal accountable person’s existing management arrangements deliver safe outcomes for residents and this can be demonstrated to the building safety regulator, their mode of delivery will not need to change. The competency requirements for qualifying for this exception are of course the same as those expected of any other building safety manager.
This approach is likely to be favoured by organisations such as housing associations or local authorities, which potentially have many buildings that fall under the scope of the new regime. Residents of these buildings will rightly expect to be able to identify individuals who play an important role in maintaining their safety, and the clause requires the identification of the individual responsible for overseeing delivery. This person will not be expected to carry out every task alone, but they will be required to provide oversight such that a holistic and systemic approach to managing safety is achieved.
The exception to the duty to appoint a building safety manager also applies where there are two or more accountable persons for the building. The competency requirements remain consistent. As in the case where they would appoint a building safety manager, the principal accountable person must, as I said, consult their fellow accountable persons and seek to reach agreement on the proposed arrangements. We expect the consultation process to follow the same route as already explained for appointing a building safety manager where there are two or more accountable persons.
Safety has to be our main priority and the building safety manager plays an important role in delivering this. The Government will reflect further on all the points raised today. However, at this point we maintain that Clauses 80, 81, 82, 83 and 84 should stand part of the Bill.
I thank the Minister for responding. I wonder whether she could explain something. I am still confused about what appear to be the conflicting roles of the accountable person and the building safety manager. I am looking at page 106 of the Explanatory Notes, where the accountable person is defined. It states:
“The Independent Review”—
the Hackitt report—
“identified that there should be a clear dutyholder during occupation who will have statutory obligations”—
this is the definition of “accountable person”—
“to maintain the fire and structural safety of the building.”
So we already have somebody who is being appointed to have those responsibilities. That is why I cannot see why there has to be a further role to undertake those duties. The duties are very important, but why should there be two people?
Perhaps I should combine my question so that the Minister will not have to stand up twice. Saying that safety comes first and calling somebody a building safety manager does not mean that a building safety manager is going to make a building any safer. I do not think that it is entirely fair to suggest that those of us who are querying some of these things do not care about safety. We would not be sitting in this Committee, I assume, if we did not.
I want it clarified because I liked the Minister’s points about a common-sense approach to safety day by day and about eyes and ears. That all sounds sensible and in some ways I understand that point, but I am confused because it is not clear how many days someone will be there being the eyes and ears. The Minister read out that the competent person will have skills, knowledge and experience, but skills, knowledge and experience of what? It is still not clear. The idea of a volunteer, as described by the noble Baroness, Lady Neville-Rolfe, keeping an eye on things—items being broken or the fire door being replaced by B&Q—is slightly different from how it was discussed by the professionals when they were talking about what kind of person would be a building safety manager. They kept saying that they must be competent and experienced with some skills in fire engineering and personnel management because they will have to go around to tell people off. I think that in the end this is a job creation scheme that will not add to the safety of the building, as do many leaseholders, and they are on the receiving end of it.
I find it quite simple really, but then I am a simple person. The accountable officer is the accountable officer responsible for that building or many other buildings in the case of organisations that might have more than one building. They then ask a building safety manager to be there on a much more daily basis and to report back to them on issues within the building that might reflect on its fire or structural safety. Therefore, the skills, knowledge and experience required by such an officer are experience of fire and structural safety in high-rise buildings. We cannot expect the top level to be there day in, day out going around those buildings. How much will be required by each building will depend on that building, I suggest.
Clause 80 agreed.
Clauses 81 to 92 agreed.
Clause 93: Residents’ engagement strategy
46: Clause 93, page 102, line 8, at end insert “after consulting the residents”
My Lords, I declare my interest as a leaseholder in a block of flats near here that has some remedial work not currently covered by the latest government proposals. I rise to move Amendment 46. In the customary spirit of this Committee, let us begin with my favourite building quote, which I learned in school and then used inappropriately all the time, as one does. Horace boasted that his Odes would be remembered like this; I commend the quote to my noble friend the Minister, since this is how this Bill will be remembered if he accepts the amendments of my noble friend Lord Young of Cookham, the noble Earl, Lord Lytton, and my humble self. Horace wrote:
“exegi monumentum aere perennius
regalique situ pyramidum altius,
quod non imber edax, non Aquilo inpotens
“I have built a monument more lasting than bronze,
higher than the Pyramids’ regal structures,
that no consuming rain, nor wild north wind
That is the legacy my noble friend can have with this Bill, if he does the right thing. Let us crack on with proper work now.
Amendments 46 to 55 relate to Clauses 93 to 99. Of course, we have the excellent proposed new clause set out in Amendment 50A, which was tabled by the right reverend Prelate the Bishop of St Albans and which has also been signed by my noble friend Lord Young of Cookham and me. I look forward to hearing their speeches on it and will not trespass there except to say that the right reverend Prelate’s amendment may be a lot better than mine. I was moved to table my amendments in this group because, when I read Clauses 93 to 99, I was struck by how weighted against leaseholders they were. Since then, we have had the amendments tabled by the noble Baroness, Lady Fox of Buckley, which seem to come from the same assumption that the odds are stacked against residents. I look forward to hearing what she has to say on this as well.
In Clause 97, there seems to be an assumption that leaseholders are going to smash up and remove safety equipment from our buildings. Why in the name of God would we do that? Where has this crazy notion come from? We all paid good money for our properties. We bought them and it is in our vested interest to maintain and add value to them. Why on earth would we, in a million years, want to diminish that? It just does not make sense. Perhaps at Report noble Lords might be tempted to move that these clauses do not stand part of the Bill. Under them, we can be served contravention notices, access to our flats can be demanded and the accountable person can be given rights to take us to court, yet there is not a single balancing right for leaseholders to take action against the accountable person, who is more likely to be at fault, if our experience of managing agents is anything to go by.
Amendment 46 says that the accountable person can draw up the strategy “after consulting the residents”. Do we not believe in prior consultation before foisting a strategy on the people who have to comply with it? If a Minister did this, he would be up for judicial review for not doing proper consultation first. Amendment 46A says that, where there is a residents association, the accountable person must draw up the strategy in conjunction with its members and it must be agreed by them. Quite simply, they have the right to be involved and their buy-in is essential if the leaseholders are to happily sign up to the strategy.
Getting that buy-in is vital because we all know that the accountable person, who is likely to be the managing agent, will gold-plate every aspect of this strategy to increase the value of the landlord’s holdings. This morning, just for fun, I checked the price of a 6-kilogram standard dry powder fire extinguisher—a simple bit of safety equipment we would all expect to see. The most expensive came in at £171.75, while the cheapest was £31. They had exactly the same contents, were the same weight, had the same ingredients and would have the same firefighting ability, but we all know which one the landlord, freeholder and managing agent would buy and charge us for the privilege. It would be the gold-plated one—literally, in this case, I think. If accountable persons have a free hand to draw up these strategies, I am afraid that leaseholders will get ripped off.
Amendment 47 deletes Clause 93(5), which proposes that Clause 93(4)(a) does not apply where the accountable person is not aware of the resident or has taken reasonable steps to be aware of the residents. That is not good enough, in my opinion. This cop-out provision is not acceptable; managing agents or accountable persons could devise a strategy and claim that they could not find the residents to whom it applies and therefore could not consult them. “Accountable” means being accountable, knowing your residents and tracking them down, with no excuses—it is as simple as that.
Amendment 48 adds additional potential powers for the Secretary of State to make regulations. Again, I am not suggesting that he has to make them or building into the law that this has to happen, but this would give him a permissive power to act if he found a problem. It allows him to make further provision about the content of an engagement strategy and the way it is issued. That is small beer and pretty innocuous stuff which I am sure my noble friend can accept. I will be disappointed if he says he cannot.
Amendment 49 attempts to apply the same sanctions that are imposed on residents in Clauses 97 and 98. Clause 94 permits residents to request information from an accountable person but there is no sanction whatever if the accountable person fails or refuses to provide it. That is simply wrong; it is not a quid pro quo because, the other way round, residents are compelled to co-operate with the accountable person. I believe that the resident has as much right to demand compliance as the accountable person, who can demand compliance from residents and issue contravention notices under Clause 98.
Clause 95 states that the accountable person must set up a complaints procedure, but there is no sanction if he fails to do so. My Amendment 50 would give the Secretary of State an additional regulation-making power to create penalties for the failure of a principal accountable person to create such a complaints procedure. Again, I am not saying that the Secretary of State must do it and I am not setting out the penalties; I am just asking the Secretary of State to take the power of a regulation in case they need to use it in future because an accountable person has failed to set up a complaints procedure.
My Amendment 51 seeks to widen the potential definition of “relevant safety item”. At the moment, it is tied to “common parts” as defined in Section 69. That may or may not be good enough—I am not expert enough to know—but my amendment would change it to anything that may be defined in regulations. This would give more flexibility because, of course, regulations can be changed at any time, at the stroke of a ministerial pen, whereas an amendment to Section 69 would require primary legislation.
My Amendments 52 to 55 seek to delete “county court” and substitute it with “regulator”. I accept that the regulator may not be the right person but I think that it is heavy-handed to give the accountable person the right to go to the county court and threaten leaseholders that way. If we have a new regulator and First-tier Tribunals and an ombudsman, why drag the county court into it? Surely one of those bodies could be designated as the person to whom the accountable person goes to demand action from residents. I get the feeling that these clauses were designed to scare residents with the threat of court—for example, the accountable person saying, “Do this or we’ll take you to the county court”. That is heavy-handed; I believe that the regulator, the ombudsman or someone else should have that power instead.
My Amendment 85 would introduce a new clause to provide that, if a person with an interest in a property conducts a survey on it, they must share that information with everyone else who also has an interest in the property. Again, it is a power for the Secretary of State to introduce regulations if he is so minded; he is not forced to do so. My reasoning behind this is that we will get some landlords, freeholders and managing agents undertaking surveys of safety risks then saddling leaseholders with huge remedial costs while not sharing the safety report. Leaseholders would have to do their own at extra cost; that may not happen. There can be no justification for a safety survey undertaken by anyone in the building not being shared with everyone else in the property.
Finally, Amendment 87 would permit the Secretary of State, if he were so minded, to introduce regulations to permit the regulator, ombudsman or anyone else designated by the Secretary of State
“to act on behalf of a leaseholder or group of leaseholders in taking action against a developer, contractor, landlord or freeholder in relation to complaints about fire hazard remediation.”
We all know that a leaseholder challenging managing agents, freeholders and landlords is a real David and Goliath battle. In this case, David would not have a sling, or even a single pebble to fire at them. Leaseholders need a champion to fight their corner. My proposed new clause would permit the Government to appoint a champion and recover the costs so that the taxpayer does not have to pay a penny.
As I said, surely my noble friend the Minister cannot reject all these amendments as not technically correct or necessary because almost all of them would simply grant the Secretary of State permissive regulatory powers. He would not have to implement a single one of them but I would grant him the powers to make regulations if, at some time in the future, some of these problems arose and the Government had to act. Let us build a permissive regulation-making power into the Bill now so that the Secretary of State can use it in future if need be. I beg to move.
My Lords, I rise to speak to Amendment 50A in my name and those of the noble Lords, Lord Blencathra and Lord Young of Cookham. Let me say how much I support the sentiments and intentions of the noble Lord, Lord Blencathra, who has done us a real service.
I, too, do not want to die over the details of this amendment. I hope that this will stimulate a really vigorous debate so that we can all work together on how we get these sorts of commitments in the Bill. I and others on my Benches want to work with the Government and others to achieve this. If someone else can turn up with much better solutions, that is great.
Throughout the cladding and fire safety crisis, we have heard many stories of landlords imposing outrageous and sometimes astronomical building safety charges on leaseholders and tenants. Often this has been done by managing agents acting on behalf of the freeholder. Leaseholders and tenants have reported a complete lack of accountability and transparency throughout this process and have been unable to challenge or even scrutinise the charges imposed on them.
Of course, this is only one aspect of the fire safety crisis, but one that has been somewhat overlooked when the primary focus has rightly been on ensuring a fair remediation settlement. However, the fire safety crisis has exposed the utterly powerless position that many leaseholders find themselves in, sometimes subject to the whims of freeholders with very few avenues of recourse, unless they raise considerable amounts of money and try to challenge things in the courts, which is very often way beyond the financial ability of many leaseholders, even if they wish to do it.
Amendment 50A would strengthen the right of leaseholders and tenants to consult with, and scrutinise decisions made by, the landlord on matters relating to building safety and would require the landlord to set up a recognised tenants’ association for the purpose of consultation.
The leasehold system in tall buildings has been placed under serious stress in the post-Grenfell years. Future home owners may have looked at the existing crisis and been turned off the prospect of owning a leasehold property. Others, facing far fewer choices, have simply—fatefully—walked into purchasing a leaseholder property unaware of the realities of the leasehold system, only to be later consumed with regret and extortionate charges. We need to make the leasehold system fairer and more attractive, not just for those who are thinking about buying a leasehold now, but for those existing leaseholders who feel powerless in the face of their managing agent and freeholder.
Ideally, leaseholder associations would also be able to scrutinise and consult on insurance commissions, along with other service charges not related to building safety. The amendment would begin to reorientate the relationship between the freeholder and leaseholder, which, as it currently stands, is skewed too far in favour of the freeholder. This is not an anti-freeholder amendment. Many freeholders will manage their property in a responsible manner. There are, however, just too many instances—and quite high-profile ones—of freeholders acting in an appalling manner. For example, the Yianis Group, the freeholder of the West India Quay development, spent over £74,000 in a legal action to block the residents from forming a recognised residents’ association. This was after leaseholders issued proceedings against the freeholder over expensive energy bills—something not covered by this amendment, of course, but worth mentioning—in which they were vindicated after the court revealed that they had been overcharged by 26% on their utility bills.
This is the same freeholder which, when challenged by the residents at a different development at Canary Riverside, lost a ruling brought forward by the residents and was forced to replace the managing agent. The court ruled that the freeholder failed to maintain the estate and did not adequately prove expenses and service charges. As the Times reported, it even charged a 100% mark-up on repairs to leaky windows to a repair company. At the time of reporting, the freeholder then attempted to chip away at the court-imposed manager’s power, costing the leaseholders £1 million in legal fees over 22 proceedings. The freeholder’s intentions here speak for themselves.
Stronger provisions than those listed in Amendment 50A would be welcome, as these powers would relate only to building safety matters. However, the amendment would go some way to breaking the power of any unscrupulous freeholders who view their leaseholders as cash cows. The amendment is not for those honest, conscientious freeholders who retain good relations with their leaseholders and managing agents, but for those such as the Yianis Group, in respect of whom one leaseholder said they were made to feel at the mercy of their landlord.
I hope the Minister will look seriously at measures to strengthen leaseholder representation when dealing with freeholders. The scope of the Bill limits what we can do at the moment, but a verbal assurance that the Government are committed to reforming this imbalance of power would be most welcome.
In the meantime, I hope that the Government will consider these proposals carefully—limited though they may be—as a stopgap to help end some of the egregious abuses that leaseholders and tenants may face from their freeholder. I hope that this will be a contribution. I look forward to hearing what the Minister says in his summing up.
My Lords, I shall speak to Amendments 52A to 52C, 54A, 54B, 55B and 55C, which relate to Clauses 97 to 99. I also support the amendments in the name of the noble Lord, Lord Blencathra, and his comments, as well as those of the right reverend Prelate the Bishop of St Albans. It is in that spirit that I make these observations.
One issue that the building safety and cladding crisis has shone a light on is just how iniquitous residential leasehold tenure really is. The system of leasehold may dress itself up as home ownership. When I bought my flat 25 years ago, which was the first time I had ever bought anything or got a mortgage, I thought of myself, very proudly, as a home owner—it was part of my growing up—but I now think that it was a bit of a mis-sell, as I am nothing of the sort. As Rabina Khan, a Liberal Democrat councillor in Tower Hamlets, puts it—she has been very insightful on all these issues—in effect:
“Leaseholders are tenants when it comes to rights, but owners when it comes to paying any bills. Yet they have no control over the contractor, costs or scope of any works. They must pay up pretty much whatever is demanded by the freeholder landlord and their agent.”
Under Part 4 of the Bill and the clauses that I am referring to, building owners are given sweeping new rights in relation to entry to and surveillance of leaseholders’ homes in the name of safety and fire prevention, even being able to force entry if the leaseholder does not admit entry to their own homes by a set time. Leaseholders who I have spoken to are concerned that these Part 4 provisions could be used to threaten and harass leaseholders, are overly intrusive without affecting fire safety in any real way, and, more broadly, feed into a dangerous atmosphere —which we are familiar with from the Covid period and lockdowns—of dispensing with civil liberties and privacy too easily under the auspices of safety.
My amendments to Clauses 97 to 99 come as package. They seek to tighten up the drafting to ensure proportionate actions that do not leave leaseholders open to either false accusations or blame for safety issues, so that it does not become yet another vehicle for forcing leaseholders to pay ever more money, and they would respect the rights of leaseholders as home owners.
Clause 97 places a duty on every occupant of a high-risk building not to interfere with safety features. The focus here is making it clear that residents have a duty not to affect the safety of the building. My amendment to Clause 97 makes it clear that this duty is breached only where there is material interference. This change would, for example, avoid someone being found in breach of the duty if they accidentally broke the glass in a dry-riser door or accidentally broke a hinge on a fire door because the current drafting would treat them not as accidents but as breaches of duty in the same way as someone deliberately disabling a fire alarm.
Clause 98 allows an accountable person to send a notice, possibly demanding money, if the accountable person knows or, importantly, just suspects that there has been a breach of this new residents’ duty. Again, this section has no materiality threshold, so it can be triggered by any breach that the accountable person feels like enforcing. As it stands, it is far too subjective. It is blatantly open to malicious misuse or just a promiscuous and ever-growing risk-averse blame culture targeting leaseholders as culprits. The amendment I have put forward tightens the clause up to focus on material breaches that the accountable person can evidence—a key point.
Clause 99 is on the power of entry. The current drafting allows the accountable person to demand access for any reason, including mere suspicion of a breach of duty. This demand for access can be given with as little as 48 hours’ notice. If access is not given in that timeframe, the accountable person can then obtain a court order, possibly without a notice to the person affected. This makes what should be a last resort possibly a new normal, and, I argue, a new draconian normal.
The amendment I have proposed to Clause 99 would require that the new building safety regulator issues a code of practice on how exactly this power is to be used after consulting a tenants panel. That is not a perfect solution, but at least the onus would be on the accountable person to comply with the code of practice when making requests for access to people’s homes.
As has already been mentioned by a number of speakers, I am not trying to paint a picture of dastardly freeholders, building owners or managing agents gleefully harassing leaseholders or threatening to kick their doors down, but for me one of the inevitable consequences of a disproportionate zero-risk attitude to building safety with an ever-growing proliferation of demands and duties placed on the accountable person, requiring that they check, check and check again, means that we end up where the Secretary of State, Michael Gove. warns us not to end up. In another context he has warned of the dangerous overzealousness of inspections, unnecessary surveys and precautionary, just-in-case assessments.
All this fuels the notion that not only is every flat a fire hazard but that every owner of a flat is a fire hazard too. As soon as safety measures become a disproportionate fear, they can lead to perverse outcomes. In June 2020, before the Public Bill Committee, L&Q, one of the biggest social landlords, responsible for 95,000 homes, including leaseholders and shared ownership properties, complained about the difficulties of accessing the front doors of leaseholders, implying that leaseholders who refuse to go along with its neverending fire safety upgrades might be putting lives at risk. Its spokesperson said:
“With tenants, we might be able to go to court and get injunctions and get injunctions to gain access to a home, but with leases, that challenge becomes even more difficult.”
That was said as a matter of regret.
This attitude means that these provisions presume that leaseholders cannot be trusted. I think they imply a certain contempt that treats leaseholders as ignorant or stupid or both, as though, if left alone, away from the wise and sensible landlord or his or her appointed overseer, they might set up a barbeque in the living room, rewire their own flats even though they are not electricians, be like children irresponsibly playing with matches or wilfully destroy safety equipment, as the noble Lord, Lord Blencathra, mentioned.
The inference is that the building owner or freeholder needs to be able to keep an eye on what goes on behind the door of our homes and to have easy access regardless of leaseholders’ rights. I do not exaggerate; the trend is to treat flat owners as though they have no more rights than renters—who should, by the way, have more rights. To quote the complaint from the L&Q spokesperson to that committee:
“It is their private space and we cannot touch it.”
He went on to suggest that leaseholders’ property rights ought to be curtailed in the name of safety:
“Ultimately, if there was a way of transferring ownership of a leaseholder’s property through legislation so that it is no longer theirs but the building owner’s, that could solve the problem”.—[Official Report, Commons, Fire Safety Bill Committee, 25/6/20; cols. 12-13.]
It certainly would, but I think we can see the direction of travel here, and it is not in the direction of leaseholders’ rights.
Because of the devastating death toll of the Grenfell tragedy, the emotional weight of these clauses seems to overcome any squeamishness about leaseholders’ rights and civil liberties. Even in pragmatic terms, these clauses will not enhance safety, although I think that leaseholders’ rights and civil liberties should not be dismissed so easily in the name of safety.
On the safety question, entering people’s homes would not have spotted the cause of the fire at Lakanal House in south London in July 2009, when six died and 20 were injured, as the fire started because a TV developed an electrical fault. Entering people’s homes would not have prevented fire at New Providence Wharf last May, where a faulty circuit breaker ignited. Nor would it have prevented the fire at Grenfell, where the cause was a faulty fridge freezer, or in my own block of flats in Haringey, where the block catching ablaze in the first lockdown—I have still not returned—started because of a fridge fire in another flat.
No one could have known that these appliances would fail. There will be similar issues in future, no doubt, but the shocking thing about those fires is not that each of them happened but that the damage and death was worse than it should have been, partly because of a failure to maintain fire safety systems, not because of a lack of surveillance of leaseholders’ activities in their own homes. We need to row back from potentially blaming leaseholders.
My Lords, I can see that my noble friend is about to rise, but there is a crescendo in this group of amendments and I realise that it is very important to hold in reserve the speeches from my noble friend Lord Young—as well as the crescendo of the amendments to be introduced by the noble Lord, Lord Stunell, and by my noble friend Lady Neville-Rolfe. This is a veritable feast of amendments, so I will introduce the government amendments at this point, if I may, before I summarise the group.
As this is a feast of amendments, I have looked up my old grace, which I used to say when I was 18, 19, 20 years of age. It is very long—I hope I will not get it wrong, as I know the right reverend Prelate will know if I do. It goes as follows:
“Oculi omnium in te sperant Domine:
Et tu das escam illis in tempore.
Aperis tu manum tuam,
Et imples omne animal benedictione.
Benedic, Domine, nos et dona tua …
et concede, ut illis salubriter nutriti
tibi debitum obsequium praestare valeamus,
per Christum Dominum nostrum.”
That is roughly right. It is what we used to say before we could eat. This is a feast, and I appreciate that every amendment is laid with the interests of improving this Bill. If we cannot accept them, I want to say that I appreciate the intentions behind every one of them. I will summarise our position at the end.
I have tried to summarise each group in three words. This is the “residents and redress” group, and I have always been clear that residents should be at the heart of the new regime. Today’s debate demonstrates the continued importance of that commitment. I am pleased to start by speaking to a group of amendments that is focused on ensuring that residents and others have more access to redress.
Amendments 76 and 77 create a new power for the High Court to impose building liability orders in appropriate cases. These orders will allow civil claims to be made against the associated companies of a company involved in the development or refurbishment of a building in certain circumstances, including when the original company no longer exists. In this House and in the other place, we have discussed the lack of ongoing liability that large developers have due to their use of special purpose vehicles. These amendments directly address this issue and support the changes we have proposed to the Defective Premises Act. They rebalance the level of exposure that small and medium-sized businesses in the construction industry currently have compared with the larger players—and, most importantly, they unlock potential funding for those who have remediated or who need to remediate, if they bring a successful claim. I consider that these orders will be an important tool in holding “polluters” to account and making them pay for their past misdeeds—so I hope that noble Lords will join me in supporting these amendments.
Moving on, I have also tabled a series of amendments that will help to make sure that construction product companies pay to put right building safety issues that they have contributed to causing. I do not intend to move these amendments today but have laid them to invite the scrutiny of noble Lords. I will listen carefully to the debate and bring these measures back at a future stage. Briefly, they target construction product manufacturers and ensure that they take responsibility for their part in the creation of building safety defects. The new clauses in Amendments 107 to 109 and 144 introduce two new causes of action against construction product manufacturers. There are currently almost no routes which allow leaseholders to hold construction product manufacturers accountable for their role in the creation of serious building safety defects. The Government are clear that those who have been responsible and continue to be responsible for building safety defects have a responsibility to put them right.
These causes of action will enable claims to be brought against construction product manufacturers and sellers for their role in the creation of building safety defects. They will apply if a product has been mis-sold or is found to be inherently defective, or if there has been a breach of construction product regulations. If this contributes to or causes a dwelling to become “unfit for habitation”, a civil claim will be able to be brought through the courts under these causes of action.
The cause of action relating to cladding products in Amendment 107 will be subject to a 30-year retrospective limitation period. The broader cause of action relating to all construction products in Amendment 108 will be subject to a 15-year prospective limitation period. These limitation periods reflect the changes we are making to the limitation period under Section 1 of the Defective Premises Act. These causes of action will ensure that construction product manufacturers can be held responsible for the costs of rectifying their mistakes.
Amendments 110, 113, 114, 141 and 145 will create a power to make regulations to require construction products manufacturers and their authorised representatives, importers and distributors to contribute towards the cost of remediation works where they have caused or contributed to dwellings being unfit for habitation. Amendment 110 will enable the Secretary of State to serve a costs contribution notice on companies that have been successfully prosecuted under construction products regulations, where the relevant product has contributed to identified dwellings being unfit for habitation.
Amendment 114 introduces a new schedule that will give the Secretary of State the power to appoint an independent person to inspect buildings where the relevant product has been used. This assessment will consider whether the conditions for serving a costs contribution notice are met, and the remediation works required. Amendment 114 will enable the Secretary of State to make regulations setting out a process for establishing costs that a company should be required to pay, which will take account of its ability to pay, and to whom payment should be made. This amendment will also enable the Secretary of State to require a company to contribute towards the cost of building assessments carried out as part of this process. Setting out this scheme in secondary legislation will enable the necessary interaction between costs contribution notices and construction products regulations, including those that will be made using the powers in this Bill.
I will listen carefully to the remainder of the debate today, as I have to every speech given so far introducing various amendments, and I look forward to hearing from noble Lords. As I said earlier, I will be moving only Amendments 76 and 77 today. I will carefully consider what I have heard in relation to the other amendments, and I will bring these measures back at a future stage.
My Lords, the instructions on the sheet of paper in front of me are not “crescendo” but “diminuendo”—some gentle accompaniment on the bass to the forte soprano that we heard from the noble Baroness, Lady Fox. But seriously, I want to add a brief footnote to the excellent speeches made by the noble Baroness, my noble friend and the right reverend Prelate.
I make the point that they all underline the need for the next stage of leasehold reform which the Government have promised, which does away with this feudal system of leasehold which exists nowhere else in the world. Once we have done that, all these problems that we have been talking about this afternoon will disappear: there will be an identity of interest between the freeholder and the leaseholder because they will be the same person. At some point, perhaps the Minister can shed some light on the next stage, confirming that that is indeed the Government’s objective and that they want to move in that direction as fast as possible.
I add a brief footnote to the excellent speech the right reverend Prelate made on Amendment 50A. In particular, I draw attention to the radical proposal in subsection (3)(a) of the new clause proposed in his amendment, which places an obligation on the landlord for
“where there is no recognised tenants’ association in existence before the coming into force of this section, creating a recognised tenants’ association and consulting with it about building safety”.
Because of the Long Title of the Bill, the right reverend Prelate had to confine it to building safety. However, it is a radical proposal. It places the obligation for establishing a tenants’ association not on the tenants, which is the position at the moment, but on the landlord, evening up the terms of trade. As I said, it is a very radical proposal indeed. An indifferent landlord does not want a residents’ association or a tenants’ association with whom he has a statutory obligation to consult, although I happen to believe that it is in his best interests to have such a dialogue. So the terms of trade are dramatically altered by the right reverend Prelate’s amendment.
In an earlier incarnation, I recall helping establish an organisation called Tpas—the Tenant Participation Advisory Service—I see the noble Lord, Lord Best, nodding sagely; he has a similar vintage to myself when it comes to housing legislation. That was focused primarily on tenants of social landlords, but I believe it has subsequently expanded into the private sector. It would be very well placed to advise landlords and tenants on how to set about establishing such an association, were the right reverend Prelate’s amendment to be accepted.
Finally, on this group of amendments, I reread chapter 4 of the Hackitt report last night, entitled “Residents’ voice”, and it has a whole series of recommendations about enfranchising the resident and the tenant in exactly the way that we have underlined. So, as I said at the beginning, I add a small a complement on the double bass to the excellent speeches that have been made on this group of amendments—or perhaps I am a tenor.
My Lords, I will try to be brief here. This is an extremely valuable group of amendments, and I entirely relate to the point made by the noble Baroness, Lady Fox, and the noble Lord, Lord Blencathra.
I will comment on something that the noble Lord, Lord Young of Cookham, said. He introduced the question of, if I paraphrase him right, the undesirability of the long-term continuation of conventional long leasehold, and I understand that. For some years I chaired the Leasehold Advisory Service when it was first set up, which was in response to a ministerial commitment that it should be put in place and that there should be advice to leaseholders.
I am a bit of an agnostic, because I understand the whole principle that in English law, the way in which you enforce covenants relies, in a sense, on a leasehold. The problem that has been faced with commonhold is nothing inherent about commonhold that should make it less satisfactory, but that it appears not to be liked by the lenders. That seems to be the main block: it is a novel form of tenure.
However, I counsel against bringing in the question of transferring things from what I call traditional leasehold to commonhold as a driver in this Bill because, while building safety matters have been exacerbated by this inherent friction between landlord and tenant, that has not changed the existential fact that home owners in leasehold property have been the victims, if I may put it this way, of poor construction processes. Commonhold does not change that fundamental fact and, if we are not careful, there will be another agenda produced in here about getting rid of long leasehold. Whatever we may feel about long leasehold, it is not something for this Bill because even commonholders would face the same principles that are affecting unsaleable property. I recall in all my years in the property profession that arguments, while they were very often between landlord and tenant, were often between different factions of tenant-owned or tenant-managed property. That is what I would say about that.
I shall make no comment on the amendment of the noble Lord, Lord Blencathra, because he, the noble Lord, Lord Young, and I are ad idem that there is a whole body of stuff here. He has simply reflected things that I spoke to a previous time round, and I think it would take up the Grand Committee’s time unreasonably to comment further on that, because there is clearly a dialogue going on here.
I will comment, if I may, on the Minister’s comments on Amendments 107 to 110. My concern is about this interface between building product on the one hand and workmanship on the other. My abiding sense is that these have to run in tandem, both as to the extent of a liability limitation process and looking backwards and looking forwards. These need to be tied together. Noble Lords will be well aware of the many arguments, on and off the building site, over whether it was the product that was not suitable, whether it was its application, per the designer, that was incorrect or whether the workman who put it all together did not do the right job or did it under unsuitable conditions. We need to make sure that that is not an argument that will gain traction here as a follow-up.
Secondly, on the scope of the construction products provisions, I appreciate that that comes in under Amendment 110 in regulations yet to be made, but I wonder about the life expectancy of certain construction products. To give an example, intumescent seals on cladding systems typically have a guaranteed life of 15 years. Not many people who are in buildings that have cladding have that drawn to their attention, but that, I am advised, is the situation. Noble Lords may well speculate as to the ease or difficulty of replacing intumescent strips in buildings that may be substantially above 18 metres in height. There are other building components—I will not labour the point—that do not have a 30-year life and may not even have a 15-year life. I ask that that be borne in mind when these regulations are made. I go back to the point that all these matters are dependent on the duty life, the maintenance, the installation and, to some extent, the design and suitability for purpose, and workmanship is very important there.
There is a subtle change, which was pointed out by the Construction Industry Council in a communication it copied to me a few days ago. It is worth bearing this in mind because what appears to be happening by dint of this Bill is the altering of the process of reasonable endeavours to get things rights to a principle of strict liability in terms of fitness for purpose. Going forward, you can foresee that and factor it into the equation, but, going back, if you have constructed and done your work on a reasonable endeavours basis, you may now, by virtue of this Bill, be held to some other test to which you cannot possibly revert, for which there may be no insurance and which may technically mean that you have invalidated some purpose or condition of engagement or professional obligation.
Perhaps I can encourage the Minister to think about that carefully before we start upsetting people. This Bill upsets quite of lot of people, I know—probably quite rightly—but the real people for whom it needs to meet these standards are those who are in their own homes, have purchased property and need to be protected because they are vulnerable. I do not want any wriggling out to be able to occur here, which is why I make these technical points, not as a criticism but as an observation of how the Bill might need to look at these issues before the next stage.
The noble Earl, Lord Lytton, is a great expert on landlord/tenant matters. I agree with him that changes to the leasehold system are not for this Bill; indeed, I do not think that my noble friend Lord Young was suggesting that they should be in it. We have quite enough to do in this Bill. I am grateful to my noble friend the Minister for his description of the new clauses and his willingness to listen, as I think that the new clauses may need some more work.
Like the right reverend Prelate the Bishop of St Albans, I am passionate about consultation, as my record elsewhere shows. Obviously, I am very concerned about bad practice. However, we cannot have a system where an unco-operative resident or two could prevent appropriate safety arrangements being agreed—that is a concern of mine—or encourage the use of too many expensive lawyers, with the cost ending up with the leaseholder.
We also need to think about the enforced requirements for a residents association, as suggested by my noble friend Lord Young in one of the amendments. It may be worth considering in high-risk cases, but it could complicate matters needlessly in some areas.
I shall speak to my Amendment 147 in this group. It would delay the commencement—that is, the coming into force—of the new provisions on the remediation of certain defects and building liability orders until an impact assessment has been published. Noble Lords will know of my passion for impact assessments; I thank my noble friend the Minister for the original assessment on the Bill. I emphasise, with my experience as a civil servant, a business executive and a Minister, that this is not simply a bureaucratic exercise. The discipline of drafting forces the executive authorities to reflect more deeply on the consequences, including the second, third and even fourth-order effects. It encourages good administration and identifies perverse effects and problems. All this matters more—not less—when the measures are ones of great complexity, especially if they are being rushed through.
I have reflected on this further in the light of our important debate on Amendment 24 in Committee last Thursday, 24 February. I have reread it carefully in Hansard, and I thank the noble Baroness, Lady Pinnock, for mentioning that an impact assessment, as well as an Explanatory Memorandum, before Report would be helpful to our debate. As she said,
“blocking developers, even when they have planning consent … is a really radical proposal”,—[Official Report, 24/2/22; col. GC 184.]
and we need to know how it might work and have an impact assessment. We need to understand all those who would or could be affected, including cladding suppliers and manufacturers, architects and surveyors—and, indeed, the planning and building control authorities, which may need to change their practices.
I was struck by the complexity of what is proposed, and the certainty that there will be hidden and unnoticed effects. The right reverend Prelate the Bishop of St Albans, in an excellent speech, was right to point out that any levy paid would inevitably be passed on to consumers and tenants in large part. He was also right to remind us of the chronic shortage of supply of homes in the UK. Indeed, in our report Meeting Housing Demand, the Built Environment Committee found a shortage of homes of all tenures, including social housing. We need to ensure that that does not go backwards, and that the whole building industry, already short of skills and resources, is not needlessly diverted—while, of course, doing the right thing on safety. A decent home is so important to all and we now need to cater for yet more arrivals as a result of the desperate situation in Ukraine.
I was therefore disappointed by the approach of my noble friend Lord Blencathra, who until recently chaired—very well, if I may say so—the Delegated Powers Committee. I believe it is irresponsible to give yet wider powers for bringing in and punishing, or penalising—effectively fining—new groups, when we have not thought through how they might be involved during our scrutiny of the Bill. I am afraid I have the same hesitation about engagement with residents, which is the subject of today’s group of amendments, which include a widening of powers. I regret to say that I think those amendments go too far.
More importantly, all this discussion has reinforced my view of the need for my amendment. I hope the Government will consider it carefully, as it might go some way to assuaging the fears that there may be about the proposals before us, and any decision by the House to widen their application. Wide powers are being taken in the Bill, which will set a precedent for the future. I would like to support the Government in finding a way through, but I would also like to understand the impact.
My Lords, this group covers three big issues—residents’ engagement strategy, access to properties, and the third part, relating to government amendments, some of which have not been moved today, on construction products and liabilities. My noble friend Lord Stunell will wind up this debate, using his expert knowledge of many of these issues, so I shall restrict my comments to the amendments about residents’ engagement, access and a little bit about construction products.
I completely agree that there has to be a residents’ engagement strategy. One of the learning points from the terrible Grenfell Tower fire was that residents wanted a voice and tried to make their voice heard, but it was not listened to. Their voice may have been heard, but it was certainly not listened to—and it was certainly not acted on.
As the noble Lord, Lord Young of Cookham, has pointed out, there is a big part of the Hackitt report which references the importance of the residents’ voice, and of listening to and acting on what they say. They are the folk who live there. They are the people who daily see what goes on. Their voice must be heard so, whatever else we do, I hope that we will strengthen those clauses about resident engagement. Picking up on the point made by the right reverend Prelate the Bishop of St Albans, we need residents’ associations to do that. We cannot force them to exist, but we can put the onus on the freeholder or the accountable person to ensure that there is some method for the residents’ voice to be heard.
The noble Baroness, Lady Fox, referred to a friend of mine, Councillor Rabina Khan, with whom I have had a meeting about these very issues. She is absolutely right: leaseholders are tenants when it comes to rights but owners when it comes to the bills that are passed over.
Obviously, I support Amendment 50A. I think this issue will come back on Report. We should seek any way we can to strengthen the power of the residents’ voice, because that is vital to the safety of buildings.
The amendments from the noble Baroness, Lady Fox, are about access to dwellings. It is an important issue. It is about where we put the balance between rights and responsibilities. There are additional responsibilities when one lives in a building shared with many others. Those who try to restrict access for gas safety checks, for instance, are potentially putting everybody else in that building at additional risk.
My understanding is that there is already requirement of landlords—I do not know about freeholders or managing agents—to write to obtain permission for access for a stated reason, be it gas safety checks, electrical safety checks, boiler safety checks or whatever. It would be good to know—perhaps the Minister can respond on that—whether that is an essential duty also of a managing agent or a freeholder as the organising company for a higher-risk building. Will they have to do that? If so, that might allay some of the fears that the noble Baroness, Lady Fox, laid out before us. Those points were well made; we have to balance those rights and responsibilities. The question is where it finally ends up. Maybe that is one way forward.
Finally, I turn to Clause 128 and construction products—which I have raised before, and I shall do so again. I believe that the Government have tabled an amendment to the clause which I do not think will be moved today. What I am concerned about is not necessarily the ins and outs of construction products—the details of it—but who does the testing and who does the certification. Who is responsible? This is the theme that I have come back to again and again: who will be accountable for these products? The Bill documents make reference to the Office for Product Safety and Standards. They talk additionally about the responsibility being passed to trading standards at some time in the future.
Currently we have a Building Research Establishment, which was put into a charitable trust in 1997, I think. It has a duty to—indeed, its whole purpose is to—test building products, particularly for flammability, as it happens. I want to understand where this now fits into the testing of products. Then there is the British Board of Agrément, which is supposed not only to do testing and certification but to see how products work when they are put together in a building and whether they retain the features that have been certified individually and separately. Again, Grenfell exposed that—the cladding was there but the insulation was awful. It is about how the products fit together. That is what those bodies currently do, so where does that fit into this office of product safety and standards? Will it use the research expertise of both those bodies to come to a conclusion about product safety? How will that work?
Then there is the business of trading standards. It was not clear to me whether this meant local government trading standards and how they would be involved. They certainly do not have that expertise currently. Funding cuts have resulted in a contraction of their scientific laboratories, which did a lot of high-level testing of products; I am not sure whether they have that expertise currently for construction testing of products. This is not clear. I know that they will have responsibility for enforcement, but if you enforce you need to have a bit of expertise as well. I would love to understand from the Minister how those fit together.
I raise this because it was at the heart of what happened at Grenfell. Were products used that were flammable? If I remember rightly—I will check the British Board of Agrément’s report—the certificate issued said that the cladding was flammable. Somebody ignored that or put it away somewhere. We need to understand this, because it is critical to future building safety that any new builds have construction materials that are safe for the purpose for which they are to be used—and safe in conjunction with other materials in the building. I need to understand how that will be done and who will finally be accountable. Who will put their name at the bottom saying, “I take responsibility”? Otherwise, those buildings will not be safe.
My Lords, I am pleased to contribute to this debate. We certainly have many important issues bound up in one group. I will focus particularly on government Amendments 76 and 107 and my Amendment 107A. I will use this as an opportunity to open up more widely some of the issues that have already been raised in the debate so far, particularly by my noble friend Lady Pinnock and the noble Baroness, Lady Neville-Rolfe—who I suppose I can call a noble friend on the other side—who is the chair of the Built Environment Select Committee on which we both serve. I thank her in particular for her Amendment 147. There was no agreement, discussion or co-ordination between us, but I hope that she will think that my Amendment 107A and my words in support of it strengthen the case for the Minister agreeing to her amendment.
I am not going to get into the Latin stuff. My top result was 26% and I was referred back to the previous set. Incidentally, the Latin teacher at the time was a Conservative alderman—but I have not held that against him too much since.
On a serious note, this group brings into focus the really big picture on this. It is a set of proposals from the Government that, taken overall, completely tears up the normal rulebook about what Governments do to private sectors. The Bill gives a power to deliberately stop a business from functioning, and that is pretty rare. Sometimes legislation prevents businesses from functioning, but it is usually an accidental by-product of something else. This is, quite clearly, the power to stop a business from functioning if it fails to behave in a certain way.
That is robust and unprecedented and, given the scale and depth of the problem, it is certainly proportionate and necessary for building work in the future. It is also certainly right for products that go into buildings in the future to be treated in the same way. They must be safe and there must be compellingly strong reasons for those who make and install them to do so correctly, in the knowledge that they may face draconian penalties if they do not.
Even for that forward-looking case, Amendment 147 from the noble Baroness, Lady Neville-Rolfe, is certainly right: there must be an impact assessment published before any regulations are tabled for the implementation of that regime. Certainly, we on this side strongly support robust action being taken, but we also want to understand the consequences of doing it, and we want an opportunity for your Lordships to see that the consequences have been examined properly and to judge proposals in the light of that.
My Amendment 107A looks forward but looks backward to the last 30 years as well. It is a probing amendment—or, I might say, a “tip of the iceberg” amendment. It is about product liability rather than construction liability. I also think that everything I say in aid of my amendment applies just as much to construction liability as it does to product liability.
In a previous life, I spent part of my 20 years in the construction industry inspecting work prior to handover to assess whether it had been completed to specification. Most building contracts then had—and still have—a defects liability period, which means that six months after the handover somebody walks around for a second time to see whether any outstanding defects have been remedied properly so that the final moneys can be released. During my time, I did some of both those kinds of inspections, in each case on behalf of the client.
My job when I made those inspections was therefore to reveal and not to conceal. I see that the noble Earl, Lord Lytton, is nodding his head; he has the same experience. That was back in the 1970s and 1980s, and I would say that anyone who believes that standards back then were higher than they are now is mistaken. Actually, they were no higher in the 1870s or 1880s either, despite what the Minister told us in our first sitting. You only have to remember what slum clearance was all about to realise that poor building standards have always been with us.
In my professional experience, disputes were common and hugely pivoted around various benchmarks when the inspections took place. Was something done exactly as designed or not? Was it in strict compliance with the regulations or not? Was it better or worse than industry standard practice? And, as the noble Earl, Lord Lytton, said a moment ago, had they made reasonable endeavours or not?
I never let through anything that was not fit for habitation, as referenced in Amendment 107, nor a building safety risk, as set out in subsection (4) of Amendment 66 in the next group. However, there was always a lot of scope for argument over definitions, which is highly relevant to this legislation. I once attended a fire door test that was put in place because I had objected to a fire door which blew to bits in a wind. That is when I learned two important things, one of which is that to pass a one-hour fire door test a fire door has to resist fire for only 40 minutes. The one hour is when the frame drops out. The second lesson was never to go to a fire test in your best suit.
My first question is to the Minister is, can he point to a definition of what “unfit for habitation” in the Bill means? I cannot see it in the Bill or the amendments, but I may not be looking in the right place. Is it the same as the definition used in the Defective Premises Act or the one in the Public Health Act or is it something else?
My second question is, can he spell out the difference between “unfit for habitation” in government Amendment 107 and “building safety risk” in subsection (4) of government Amendment 66, which we are coming to in the next group? I need to ask that because I have no impact assessment or explanatory note to help me on any of those points and the interweaving of the various clauses and amendments is far from transparent.
Government Amendment 76 in this group introduces a building liability order to be handed down by the High Court, no less. I am pretty sure that the High Court will want answers to the same questions before it hands out any building liability orders. What is the basis on which those judgments are going to be made? I think a building liability order is somewhat analogous to an unexplained wealth order: it is intended that however hard you try to disguise it, this problem is yours and you will pay for it. As we know, unexplained wealth orders have mostly been a disappointment, except for defendants.
It is no surprise that the current edition of the trade magazine Building reports that the CEO of Persimmon, the housebuilder, has already written to the department claiming that all of this would be unlawful and that the CEO of Redrow is reported in the same article as saying that these threats are unrealistic. They are evidently not planning to come quietly, it seems. That article has more of the same in it. I want to hear from the Minister that, contrary to their views, these proposals are lawful, realistic and in compliance with the Human Rights Act, which is also prayed in aid by one of them in that article. I want to hear that the Government are prepared and ready, if necessary, to use the provisions in Amendment 76. I have heard the Minister say that he is discussing this, that it is open and that he wants to hear what we all have to say, and no doubt he will want to hear what Persimmon and Redrow have to say as well, but I look forward to what he has to say about that.
That brings me to government Amendment 107 and my Amendment 107A. They relate to product liability and, in particular, to how wide the scope of that liability will be. On the best reading I can make of the Government’s amendments as a whole, that liability will certainly exist for any higher-risk building constructed in the past 30 years where there is a building safety risk and where defective products are the cause or a contributing cause to that building being unfit for habitation. Do other government amendments that widen the net of the building safety levy to all buildings, not just to higher-risk buildings, mean that a producer or supplier may be on the hook not just for 40,000 higher-risk buildings, but for 24 million other buildings? It seems uncertain in the Bill. My amendment would limit their risk simply to higher-risk buildings. Can the Minister tell us whether there is or is not a clear connection between levy liability and product liability? If the 30-year product liability is to come in for the higher-risk buildings, there are some significant practical problems that I will come to in a moment. If, on the other hand, it applies to all 24 million buildings, then not only are the practical problems multiplied but a wide door opens for what the Construction Products Association has described to me as “ambulance chasers”.
The call to the house owner goes something like this: “Has your home had an extension in the last 30 years? You may be entitled to a refund. Press one to learn more.” In neither case—whether higher-risk buildings or all buildings—is it at all likely that the records of who specified the defective product 30 years ago will exist. That will be the test, of course, because making a product is not the offence; the offence is having it in the wrong place or fixed in the wrong way.
In a discussion she asked to have with me, Kim Motruk, the chief executive officer of the Office for Product Safety and Standards, or OPSS, talked about the scope of that agency in running and organising this scheme. She raised a number of issues that are not relevant to this amendment but she did talk about how in parallel legislation, as it applies in health and safety legislation, there is a capacity to impose unlimited fines with civil action or up to two years in prison with criminal action.
What will happen in future is specified—at present, anyway—in paragraph 7(1)(i) of Schedule 11 on page 215, which makes it clear that that liability will exist in future. However, if it is to exist in the past, there will be an uninsurable risk on the hands of all those who have produced, and may have installed, these products in the preceding 30 years. Of course, that is an uninsurable risk not just for the bad and the guilty but for every supplier of products to the construction industry in the past 30 years, as well as for every builder who put those products into use.
The Construction Products Association is keen to understand what the Government believe a construction product is, because that is by no means a simple single list. There is reference in the legislation to things being “safety-critical”; it turns up in Schedule 11 and elsewhere. The definition of that may include or exclude certain products, or perhaps it is not relevant at all, but the Construction Products Association and I certainly do not know the answer to that. Again, this needs to be sorted out.
As I am sure noble Lords will understand, there is talk of this driving SMEs in particular out of business—or, as an alternative, driving a need for the Government to establish a reinsurance or bond mechanism, perhaps analogous to the business reinsurance available in Northern Ireland in respect of terrorism. In commenting on the Bill, the Delegated Powers and Regulatory Reform Committee noted in paragraph 14 of its report that, although initially subject to the affirmative procedure, Schedule 11 will subsequently not be so. In view of what I think is going to turn out to be its central importance in answering some of the questions I have asked, I suggest that the Minister might want to give assurance on that point.
When responding to this group and my Amendment 107A, I hope that the Minister will be able to throw some light on each of these points. I also hope that he will be able to tell me that he intends to engage with the organisations that supplied me with the information I have put in front of the Committee; they include Build UK, the Construction Products Association, the Association for Project Safety and the Construction Industry Council.
I make it clear that these Benches very much want this legislation to succeed in its primary objective of delivering safe buildings at no additional cost to their existing occupants. However, we also want to see mechanisms and provisions in place that are realistic and deliverable, where any unintended consequences are clearly identified and then mitigated—or, better still, avoided altogether.
Does the noble Lord think this construction product schedule includes such things as wood? The thing about fire safety is that it is not just to do with whether it is a plastic tile of some sort but with where construction products are used. In a case that I am aware of, there is an argument that things made of wood—as they have been for a thousand years—are not safe and should be replaced by something else. I am not quite clear how the construction products link into that. This may be a question for the Minister, but I ask the noble Lord, Lord Stunell, because he has obviously been studying this.
The noble Baroness is certainly right that there are materials that have been used in one way, safely and successfully, for thousands of years, and others that are intrinsically safe, such as bricks—presuming they are made of clay rather than straw. I will not try to give the full range, because I think the Committee would get bored quite quickly and my pool of knowledge is quite shallow, but she has raised an important point: it is not just about having a product but about what you do with it. I am sure the High Court would want to put both components together before issuing any building liability orders, which seem to be the nuclear weapon that the Government believe they have in their hands.
My Lords, I will speak to a number of amendments in this group. It has been a fascinating and exhaustive debate, even though there has been a mix of amendments.
I will start with Amendments 46 to 48, which are technical amendments in the name of the noble Lord, Lord Blencathra, who simplified and explained them in a very eloquent and clear manner—even using Latin at the start of his introduction. I hope the Minister got the gist of that message in Latin; I cannot repeat it, but I think it purported to say that, if he listens to the message and applies it, he will leave a wonderful legacy through this Bill.
At the heart of the argument from the noble Lord, Lord Blencathra, was consultation. Many noble Lords in this Committee have, at different stages of our lives, undertaken consultation; its value is essential to what we are doing today. I am really concerned that, if there is a lack of consultation or an element of tokenism—if we do not get residents, tenants’ groups and leaseholders on board—it could lead to what we often refer to as post hoc rationalisation of predetermined decisions. We need to take people with us on that journey, as I have said previously, and ensure that they feel as close as possible to the decision-making we are undertaking in this Committee and in subsequent debates in this Bill’s journey.
Amendment 49 in the name of the noble Lord, Lord Blencathra, makes provision regarding the contravention of requests for further information. Similarly, Amendment 50 would allow regulations to make provision for penalties where a principal accountable person fails to set up a proper complaints procedure or fails to do so in reasonable time.
The noble Lord referenced Clauses 93 to 99, which are seen as unfavourable for leaseholders and residents. The noble Baroness, Lady Fox—who has, by the way, introduced amendments for the first time; I congratulate her on completing that process successfully—raised concerns about Clauses 97 and 99. She said that last resort access should not be the new normal and that we must be careful about entrance on minor issues in particular.
I found the speech of the right reverend Prelate the Bishop of St Albans inspiring. It was an excellent speech which raised a lot of issues. Amendment 50A talks specifically about the rights of tenants’ associations. How have the Government consulted tenants’ associations and leaseholders as part of this Bill so far? What was the method of consultation? Has the consultation already happened? The noble Baroness, Lady Pinnock, said that at the heart of Dame Judith Hackitt’s review is engagement. What have the Government done in relation to that in particular?
The right reverend Prelate also mentioned some companies which were, unfortunately, exploiting the situation. An example referenced was the West India Quay development, where £74,000 was spent on stopping and weakening leaseholders’ and residents’ groups. He said that there were too many instances where freeholders were ripping off leaseholders, and that leaseholders’ and residents’ groups were at the mercy of their landlord. That is unacceptable, and I hope that the Minister will reflect on those points and rectify the situation.
The Minister often describes noble Lords as the awkward squad.
Sometimes they are wise men and women. I hope that the Minister can take forward their wise suggestions on this group of amendments in particular.
We welcome many of the government amendments, tabled in good spirit to make sure that life gets better for residents of buildings across the country and that they are free from unsafe situations. Government Amendment 141 makes provision for regulations under the new clause relating to costs contribution notices to be subject to the draft affirmative procedure. I want to ask the Minister about the power given to government to make new legislation. What scrutiny will these new powers be subject to?
The noble Lord, Lord Young of Cookham, and the noble Earl, Lord Lytton, talked about the important issue of long leases. It is a fascinating debate, but perhaps it is not for now, because this Bill is about building safety. When the noble Lord, Lord Young, was a Minister in 1984, I was five—in fact, I was a safety hazard in my parents’ building at the time. His point about the future of long leases is important, and I am sure it will be discussed and debated in a future Bill. I also appreciate the experience brought by the noble Earl in discussing his points.
The noble Lord, Lord Stunell, made an interesting and very important point about product safety. It is difficult to digest. Even the Construction Products Association is confused about this area. There is a lack of clarity which I hope the Minister and the Government will address.
Finally, I will single out Amendment 147, in the name of the noble Baroness, Lady Neville-Rolfe, which looks at publishing assessments of the impacts on businesses, in particular, of remediation changes. It is an important amendment because there is a shortage of homes and we want to make sure that we look at how this impacts on everybody in the whole chain and that we do not move to a situation where we are building fewer homes. That is an important point, but today has to be about impact assessments on citizens of this country and every person living in an unsafe building.
The Minister in debate on a previous day mentioned that this is a landmark Bill and an opportunity. Unfortunately, at this moment it is not being taken forward with the really strong, meaningful, well-intentioned and well-purposed amendments that have been presented, so I hope that the Government will reflect, listen and make that impact.
Before the Minister stands up, perhaps I can make two points. This is a large group of quite diverse amendments. My concern is over the accountable person role. Judging by the discussion today—I will not go through the list of different contributions—I think it is going to be a very difficult job indeed. That person is going to need help in creating a co-operative working relationship with tenant groups, and the situation could be exacerbated by bad and difficult freeholders or managing agents, often in league, and if the accountable person finds himself or herself in their pocket it will not be made any easier.
I do not overlook difficult leaseholders. There are some tenants who will not let anybody into their building. That is also a problem to be dealt with, but I have two suggestions. The accountable person should be prepared to prove reasonableness in all their behaviours and should also be prepared to prove value for money. An autocratic manager refusing to engage with a leaseholder makes life even more difficult. In the second case, concerning value for money, whether it is the fire extinguisher example given by the noble Lord, Lord Blencathra, or some captive insurance company or an arrangement with a very high commission-bearing insurer offering kickbacks to freeholders, that would be avoided.
My maths is not that bad, but that is impressive.
I will start with the noble Lord, Lord Stunell, who focused on the government amendments. It is fair to say—he will know this as someone who played my role in the coalition Government—that we cannot possibly move amendments without considering A1P1 rights and the impact of the amendments. We would never get them through the legal system. Obviously, we are tabling the amendments but not moving them, but we have done all the checks, as you would expect, and taken legal opinion and so forth to make sure that they are all workable, and indeed lawful. Otherwise, we would just not be allowed to do it.
I also say that there has been considerable engagement with the organisations that the noble Lord mentioned, but we need to continue that engagement and that is something we can do. I reassure him that we have had representations from Build UK, the Association for Project Safety and the Construction Products Association, but we should continue to engage. My view is that there is never too much engagement with these organisations. However, I also said to him, and I put this now into Hansard—it was raised in a previous debate by the noble Baroness, Lady Hayman—that if you breach building regulations implemented in 1984 by the then young whippersnapper, my noble friend Lord Young, it is a criminal act.
The noble Lord will also know that if you commit a crime in this country, there is no statute of limitations for most crimes. In this case, we are saying that we have seen appalling practices over the previous 30 years, and there should not be a statute of limitations period that does not allow us to rectify that. That is why we are looking backwards 30 years and forwards 15 years. Of course, we have taken considerable legal advice about taking that position, but it is to ensure that there is no legal reason why someone who has broken building regulations is not open to face redress. I accept all the points he makes around the practicalities of doing that, but there should not be a small, narrow limitations period when we tackle this historically difficult problem that has crept up on us over not one decade, but three decades.
I turn to the noble Baroness, Lady Pinnock, who wanted to understand how we are regulating construction products. It is not straightforward, but it is pretty straightforward, so I will not take too long over this. We have created a national regulator. In the same way as we have a building safety regulator in shadow form until the Bill gets Royal Assent, the Bill will put into statute a national regulator for construction products in the Office for Product Safety and Standards. The CEO is a phenomenal chap called Graham Russell. He is there and it has already started to flex its muscles with a prohibition notice to Kingspan. This Bill formalises the national regulator for construction products and there are at the same time local regulators of products, as the noble Baroness will know, with her local government background within trading standards, that provide that local role. It is the national and local regulation of construction products that provides the regulatory environment for construction products.
The noble Baroness also raised construction products testing. This is something that the inquiry showed as an area of concern. The Building Research Establishment was a nationalised entity that it was privatised in the 1980s, I think—my noble friend Lord Young will know the exact date, I do not—but we also have the British Board of Agrément, which has always been in the private sector. Neither of those have come out as great, robust testing houses, which is why my predecessor as Secretary of State asked for a construction products testing review. I believe that report is nearly finalised. I will ask for a copy. There will be recommendations on how we improve the robustness of construction products testing. I hope that addresses the questions raised by the noble Baroness, Lady Pinnock.
One of the three wise men, the noble Earl, Lord Lytton, raised a very important point, but it is fair to say that, when we are talking about construction product manufacturers, we are talking not about all construction product manufacturers but about those that contributed to this crisis. Three of them have been raised, front and centre, as being responsible for the Grenfell Tower tragedy: Celotex, Arconic and Kingspan. These were all products that should never, frankly, have been able to have been put in that position. We can argue about why, but you cannot put flammable material that spreads like petrol up the side of a building and say that that adequately resists the spread of fire, which is what the regulations stated in Approved Document B. You cannot put flammable insulation behind it, et cetera. There are a number of product companies that contributed to this. Whether they were installed incorrectly or not is irrelevant: these products should never have been put on our buildings. We can look at the responsibility for that, but the responsibility also lies with the manufacturer, in large part, and in those cases, the polluter must pay. However, it is not all construction product manufacturers by any means, and I make that point absolutely clear.
Secondly, the way in which those products are installed is a matter for the construction company. The construction company, not the manufacturer, is responsible for following the instructions and installing the product correctly. We can see examples of perfectly good cladding systems that are installed incorrectly. In such cases, that falls on the developer in the first instance, or on whoever the developer got to install the system. We must be absolutely clear about that. If we start creating confusion around it, we avoid accountability and we do not move forward. It is pretty clear in my mind where culpability falls. I hope that that addresses some of the concerns raised by the noble Earl, Lord Lytton. This has been a fantastic debate. I have enjoyed every second of every minute of every hour. We have had one hour and 40 minutes on this group, and it has been absolutely tremendous. Thank you all for your contributions.
I shall start with the amendments to Clause 93 tabled by my noble friend Lord Blencathra. Although resident consultation is an important part of the Bill, we do not consider it appropriate to require that residents be consulted on the draft residents’ engagement strategy and any amendments that may be made to it. This could prove time consuming and costly to residents. Multiple consultations on minor changes might even annoy residents, which is the opposite of what the strategy aims to achieve.
I would highlight to my noble friend the fact that the Bill already includes an obligation on the principal accountable person to measure the appropriateness of promoting participation under the strategy and an obligation to update the strategy where appropriate. This should mean that strategies are successful in achieving effective resident consultation.
The proposed deletion of Clause 93(5) could impose unreasonable and disproportionate obligations on the accountable person. The accountable person would have to provide copies of the strategy to residents who they have no reasonable way of knowing live in the building: this is impractical. It could lead to accountable persons having to take extreme steps to investigate all residents in the building in detail, which could prove time consuming for the accountable person, as well as intrusive and costly to residents. I assure my noble friend that his concerns are met in the Bill. Any resident may request a copy of the strategy from the accountable person. I can also assure him that the intention of his insertion of a new paragraph (c) into Clause 93(6) is already achieved. Residents may raise complaints regarding breach of the accountable person’s statutory obligations in respect of the residents’ engagement strategy, and such complaints may be escalated to the building safety regulator where not dealt with satisfactorily by the accountable person.
In respect of Amendment 46A, I assure my noble friend that his intention has already been met in the Bill, which includes an obligation on the principal accountable person to consider how to encourage resident participation, and to review the effectiveness of the strategy. This duty goes beyond engagement with official residents associations and applies to all residents in a building, covering both those in a residents association and those outside it.
Requiring an accountable person to engage with a residents association rather than considering how best to promote participation by all residents in a building would undermine our intended goal of considering engagement across all residents—both those actively engaged in the management of their building and those who are not. I want to reassure my noble friend that under the provisions in the Bill, if a residents association felt that its participation had not been properly considered in the preparation of a resident engagement strategy, it would be able to challenge this under the complaints procedure.
My noble friend has tabled amendments to allow for penalties to be imposed on accountable persons who fail to consult residents properly, or to set up a proper complaints process in a reasonable time. I can assure him that these aims are accounted for in the Bill already. The building safety regulator has the ability to impose sanctions on accountable persons who fail to comply with their duties under the Bill. These include compliance notices, criminal prosecutions and, in extreme cases, on application to the First-tier Tribunal, putting the building into special measures.
I can assure my noble friend that the aim of his new clause proposed after Clause 94 is also already accounted for in the Bill. If the accountable person fails to supply prescribed building safety information to a resident within a reasonable timeframe, that is a breach of the accountable person’s duties. As I have already set out, residents can raise complaints, and escalate these to the regulator where appropriate, in respect of breaches of accountable person duties, and the regulator has the ability to impose a range of sanctions on accountable persons. Amendment 49 might also impose an undue burden on residents to enforce accountable person duties. Enforcement properly sits with the regulator, which has appropriate sanctions at its disposal.
Moving on to Amendments 51 to 55, one of the duties the Bill imposes on residents is the duty not to interfere with relevant safety items. My noble friend’s Amendment 51 would delete the definition of “relevant safety item” and proposes that this definition is set out in regulations. However, we believe that this definition is helpful to have in primary legislation. I can assure my noble friend that the Bill already allows flexibility for the definition of relevant safety items to be added to through secondary legislation in the drafting of the definition of “relevant safety item”. If he has concerns about the interpretation of the definition, we can consider publishing guidance on how this duty and definition are intended to operate in practice.
Amendments 52 to 55, which amend Clauses 98 and 99, would change the body enforcing contravention notices and access to premises requests served on residents from the county court to the building safety regulator. Contravention notices are served by accountable persons in respect of alleged contraventions of residents’ duties under the Bill. Access requests to residents’ premises are served by accountable persons with the purpose of establishing whether a resident duty has been contravened or to allow the accountable person to carry out their building safety duties.
These are similar to issues that arise between landlords and tenants and there may well be areas of crossover with rights of access under leases and breaches of terms of leases. We would expect accountable persons to seek to resolve such issues directly with residents in the first instance and where necessary escalate to the courts rather than handing over to the regulator to arbitrate.
The courts are already well set up to deal with these types of disputes. They have established rules and procedures to achieve fairness and are familiar with the issues and considerations that arise. The building safety regulator is not equipped for arbitrating over matters relating to resident behaviour, as its principal enforcement role under the Bill is in respect of breach of accountable person duties. Contravention notices may also include a requirement on the resident to pay a specified sum. The county courts are well equipped to deal with this given their powers to hand out judgments for debts against individuals.
On Amendments 85 and 87, again tabled by my noble friend Lord Blencathra, I have to say that he has intellectual agility. One week he is chair of the DPRRC—the Delegated Powers and Regulatory Reform Committee —and wanting to avoid all kinds of Henry VIII powers, and the next minute he is saying, “I want to give the Secretary of State permissive powers.” I am sure that my noble friend the Secretary of State will look carefully at these amendments.
Today, however, in Committee, on my noble friend’s Amendment 85, it is vital that residents of high-rise buildings have access to relevant building safety information, and this is a key tenet of the Bill. The Bill divides building safety information provided to residents into two categories. The first is key information that all residents receive when they move into the building. The second is information that residents may request—we expect this to be more detailed and technical information. Building safety information under the Bill is available to all residents over the age of 16 and owners of flats in the building, regardless of tenure. Again, I assure my noble friend that his intention has been met. The Bill contains powers to prescribe in regulations what information will fall within each category. The Government intend to consult on these regulations later this year.
Amendment 87 seeks to improve redress for leaseholders by allowing the regulator, the ombudsman or another organisation to act on behalf of leaseholders in taking action against a developer, contractor, landlord or freeholder in relation to complaints about fire hazard remediation. I recognise and support the intention behind this amendment, but I am pleased to say that there is no longer any need for it. Noble Lords will have seen the amendments tabled in my name on Monday 14 February providing protections for leaseholders and relieving them of much of the costs of remediation. We will debate those shortly.
In developing the leaseholder protection amendments, we considered options around supporting leaseholders in taking action against those responsible for fire hazards. I am pleased to say that we have gone further. Rather than setting an expectation that government will step in, we have put responsibility back on the freeholder and landlords. It is not for government to intervene in individual cases which should be resolved by private landlords. I thank my noble friend for raising this important matter but respectfully ask him not to press his amendment.
On Amendment 50A, my noble friends Lord Young and Lord Blencathra—a fearsome grouping—are acting in tandem with the right reverend Prelate the Bishop of St Albans.
I want first to respond to the noble Lord, Lord Khan, on resident engagement. I reassure him that there has been considerable resident engagement as part of drawing together these proposals within the Bill. I have been party to a number of those as the Minister, as this is my prime ministerial area. In fact, we were able to bring together the resident engagement that is forming part of the work of the new building safety regulator within the HSE and the people who are putting together the Bill, so that resident engagement happened as part of a more joined-up programme. That has been considerable, and I assure him that that will continue as we move to creating the building safety regulator in law.
Turning to my noble friends’ amendment—I do not think I will call them a “terrible trio” as that is probably not the right way of winning them over, but they are a fearsome trio—Amendment 50A relates to where a landlord has more than two tenants. This amendment places a duty on the landlord to consult recognised tenants’ associations on the residents’ engagement strategy and on planned long-term maintenance or improvements to common parts. Where there is no recognised tenants’ association, the amendment would require the landlord to create one. Effectively, it is calling for mandation as opposed to empowerment.
This is a point where I want to depart from just simply giving the Committee these words to say that I understand that noble Lords are trying to bring forward an amendment designed to deal with the problem landlord. The right reverend Prelate the Bishop of St Albans mentioned that the problem landlord is not the norm but the exception. I suggest that we continue to work together to understand that in more detail and recognise the points that have been highlighted. If we are going to look at mandation, we must understand why it is required and why empowerment simply does not work. I am keen to engage to understand instances where we feel that mandation has to be the way forward. Mandating anything on a landlord is quite a thing to do. That is what I propose we do with regard to this amendment so that we as a Government understand the particular concerns, because we would prefer to use empowerment as a route to achieve those ends.
I always love a speech by the noble Baroness, Lady Fox of Buckley, because the way she delivers the argument always makes me feel that I should agree with it, but unfortunately, reading my response, Amendments 50B, 50C, 50D, 50E, 51A, 51B, 52A, 52B, 52C and 53 seek to prevent landlords using minor or suspected breaches as a tool to interfere in people’s homes. Turning to those amendments to residents’ duties and the inclusion of materiality as the required threshold for a resident breaching a duty, I assure the noble Baroness that her intention has already been met. An action is a breach only if it creates a significant risk of a building safety risk materialising. The current definition protects against the duty being misused by an accountable person for non-material issues as the risk must be significant. A relevant safety item is one that is intended to improve people’s safety, therefore any damage or interference with its intended function could cause a significant safety risk. We would expect accountable persons to apply common sense when enforcing any resident duties, and we will work with the regulator regarding issuing guidance to accountable persons in this respect.
The noble Baroness suggests we require detailed requirements on contravention notices—
Sitting suspended for a Division in the House.
My Lords, I was caught mid-sentence so I will go back to the beginning of that particular sentence. The noble Baroness suggests that we require detailed requirements on contravention notices to ensure the proper use of these powers, but that is better suited to regulations. Indeed, the balance between what is reasonable to expect of an accountable person, the urgency of building safety risks and protecting residents from potential misuse of powers is crucial. That is why we believe that this detail should be set out in regulations, developed in consultation with residents and accountable persons and subject to public consultation.
Amendment 52B would allow residents a reasonable time to remedy any alleged contravention before an application to the court; indeed, the Bill provides that the accountable person must specify the steps that the resident should take and a reasonable time for taking them. The court is very unlikely to issue an order before that time has expired.
Amendment 55C would require the building safety regulator to consult on and issue a statutory code of practice regarding powers of entry. Subsequently, Amendments 53B, 53C, 53D, 54B, 55A and 55B would require the accountable person to comply with a statutory code of practice and ensure that the right of entry into homes applies only in urgent cases or emergencies. In respect of Amendments 52A and 54A, the Government are closely listening to these points; however, the noble Baroness’s intention is already being achieved, as the resident would be notified of the application from the accountable person as part of the court process.
I would like to reassure the noble Baroness that there are already safeguards against misuse in this Bill. Under Clause 86, we will prescribe principles under which the accountable person must operate. These have been published in draft and include the requirement to consider the impacts on residents within the building.
In addition, the clause provides that accountable persons have a right of entry to a resident’s home with an order awarded by the court. The courts will apply established principles when considering any such application for entry and will grant access only when they consider it just to do so. This provides an effective safeguard against misuse. As noted in response to the points raised by my noble friend Lord Blencathra, we would expect the accountable person to seek to resolve issues directly with residents in the first instance to gain entry where it is needed.
The building safety regulator will issue guidance to accountable persons, which will set out the expectations for their system for handling residents’ duties and enforcing them. It is important to note that these powers are necessary for the accountable person to be able to discharge the legal duties we are placing on them. Although their use covers emergency cases, access may be needed where a resident refuses to allow the accountable person to discharge their duties. Indeed, the provision is designed for the discharge of day-to-day duties and not for emergency situations, which would require calling the emergency services.
As such, we must again strike a balance between protecting residents and affording the accountable person the tools needed to keep their building and residents safe. We believe that this balance is correctly achieved in the Bill. I understand the noble Baroness’s intentions with these amendments but, for the reasons I have given, I ask her not to press them.
I now turn to Amendment 107A in the name of the noble Lord, Lord Stunell, which seeks to probe whether the retrospective liability provisions in Amendment 107 apply only to higher-risk buildings. I reiterate the points I made earlier when outlining the intent of the Government’s amendments. This course of action will apply to all dwellings and all buildings containing dwellings. The Government’s position is that the ability to recover cost contributions from product manufacturers should not be restricted to those who live in multi-occupied high-rise buildings. While it is true to say that the amount of cladding on lower-rise buildings is likely to be lower, we do not think it appropriate to exclude these just because the building is not as tall. The crucial factor must be the safety risk.
We are not restricting this course of action to buildings over 18 metres because we intend to enable all individuals who have suffered a loss as a result of a dwelling being made unfit for habitation due to the mis-selling of a product, a product being inherently defective or a breach of existing building regulations to seek cost contributions for the losses they have incurred. This course of action protects leaseholders and home owners by ensuring that all construction product manufacturers are held liable for their part in the creation of building safety defects. The broad application of this course of action to include all dwellings reinforces this principle and delivers a proportionate approach. The scope of this course of action to apply to all dwellings will mirror the Defective Premises Act.
Finally, I turn to my noble friend Lady Neville-Rolfe’s Amendment 147. I assure her that the Government have considered the impact on business of the measures I tabled on 14 February. We are clear that the principle of protecting leaseholders is paramount. It is fundamentally unfair that innocent leaseholders should be landed with bills that they cannot afford to fix problems that they did not cause. These amendments will right this wrong, and the Government consider it critical that the provisions take effect as soon as possible. I must therefore ask my noble friend to withdraw her amendment.
Are the Government planning to produce an impact assessment on the new measures? My amendment was drafted the way it was on the advice of the Bill clerks, but obviously my main concern is to understand the detail of this promising package.
I am sorry; with the sheer length of the debate, we are now approaching the two-hour mark, so I hope that my noble friend will forgive me if I did not address that specific point. However, I did address the point that the Valentine’s Day amendments, tabled on 14 February, were made in haste. The work around impact assessment was therefore not carried out at that time, but obviously we intend to update our impact assessment to reflect all the amendments that the Government have brought forward; that is the good practice my noble friend seeks, I think.
I thank noble Lords for this debate, which has been an important and necessary part of the scrutiny of this legislation. I hope that, with the reassurances given, noble Lords will be happy to withdraw or not press their amendments. This has been a feast of a debate so let us conclude it with the two words that we used to say in our formal hall: benedicto benedicatur.
My Lords, we have spent two hours on this group of amendments. It is probably the second-most important group in the Bill, after the one we dealt with last week. There were more than 45 amendments down, so I make no apology that we have spent considerable time discussing them.
I particularly like the right reverend Prelate’s amendment and his comment that he was attempting to skew the balance slightly further in favour of leaseholders. He made a compelling case. I am delighted to hear my noble friend the Minister say that we should work together to get something drawn up; I assume that means ASAP over the next two weeks so that we have it for Report.
I thought there was considerable merit in the introduction from the noble Baroness, Lady Fox of Buckley, of the concept of “material breach”. She made a very strong case that leaseholders have been treated as second-class citizens in comparison with freeholders. My noble friend Lord Young of Cookham is absolutely right that we need proper leasehold reform; this is not the Bill to do it in but, before we conclude on the fourth day, I hope we will have a statement from the Minister on when we can expect a proper leasehold reform Bill. I know he will use the standard formula, “I cannot presage what may be in the Queen’s Speech”, but we need that Bill. My noble friend was also right to draw attention to the right reverend Prelate’s amendment, putting the obligation on landlords to create tenant associations.
While I agree with my noble friend Lady Neville-Rolfe that impact assessments have their place, how long would they take and who would do them? Would it be civil servants, who might not have the detailed knowledge, or industry experts, who have the detailed knowledge but might not be as impartial as we want? No one is unbiased in this. Excessive powers have been granted to people who have a considerable say over how residents live their lives and what they will have to pay. Residents and residents’ associations must be consulted.
As for the noble Lord, Lord Stunell, I cannot comment on his speech in detail since I did not understand most of the technical details of it, but he seemed to make some very good points. The noble Lord, Lord Khan of Burnley, summed it up well: more consultation is needed. I think he was giving support to the right reverend Prelate the Bishop of St Albans; I hope Labour will give that support on Report. If my noble friend the Minister cannot come up with a workable solution and the right reverend Prelate puts down his amendment, I look forward to the noble Lord, the Labour Party and the Lib Dems supporting it, along with some rebels on this side.
The Minister said he was almost tempted to vote for the amendments from the noble Baroness, Lady Fox of Buckley. As Whips, we always used to say to our people, “For God’s sake don’t listen to the Opposition—you might end up voting with them”. I never thought I would hear a Minister say the same thing.
On my amendments, the Minister rightly pointed out that, if all my regulatory suggestions were put in the Bill to begin with, as chair of the Delegated Powers Committee I would have condemned them for all their excessive powers. However, if you want to be a politician, you have to learn the art of doing a U-turn as quickly as you can. I accept that many of my amendments are apparently unnecessary, as they were already somewhere in the Bill but I could not find them. That is partly my responsibility, but I have said that this Bill is a bit of a dog’s breakfast in the way it is all mixed up; if it were a bit more simply laid out, I might have been able to find them.
Nevertheless, I am glad the Minister has reassured me that they are not needed and they are all being done in any case. The only one he is not doing is the engagement strategy. He said that there will be an engagement strategy, but no engagement with people before it is published. That seems a little cock-eyed to me.
I am very grateful to all noble Lords who have participated today. I am grateful for the Minister’s responses and I beg leave to withdraw my amendment.
Amendment 46 withdrawn.
Amendments 46A to 48 not moved.
Clause 93 agreed.
Clause 94 agreed.
Amendment 49 not moved.
Clause 95: Complaints procedure operated by principal accountable person
Amendment 50 not moved.
Clause 95 agreed.
Clause 96 agreed.
Amendment 50A not moved.
Clause 97: Duties on residents and owners
Amendments 50B to 51 not moved.
Clause 97 agreed.
Clause 98: Contravention notices
Amendments 51A to 53A not moved.
Clause 98 agreed.
Clause 99: Access to premises
Amendments 53B to 55B not moved.
Clause 99 agreed.
Amendment 55C not moved.
Clauses 100 to 104 agreed.
Schedule 7 agreed.
Clauses 105 to 113 agreed.
Schedule 8: Building safety charges
56: Schedule 8, page 197, line 7, at end insert—
“(1A) Such a charge is for all purposes to be treated as a service charge within the meaning of section 18 of the Landlord and Tenant Act 1985.”Member’s explanatory statement
This amendment, along with others to Schedule 8, preserves the existing Building Safety Charge but treats it as a service charge due under the lease to be demanded and regulated in the same manner as existing service charges. This is to ensure that there are not two parallel sets of demands, accounts etc, one for the normal service charge and one for the building safety charge.
My Lords, I recognise that the government amendments in this group may be of greater significance than mine. I think it would be in the interests of the Committee if I sat down and allowed the Minister to explain them, and perhaps responded later. I beg to move.
My Lords, I rise to introduce the government amendments in this group. This is an important group—equally as important as the previous group—and is about leaseholder protections.
We have been clear that it is fundamentally unfair that innocent leaseholders, most of whom have worked hard and made sacrifices to get a foot on the property ladder, should be landed with bills they cannot afford for problems they did not cause. That is why I have laid a series of amendments to the Bill to right this wrong. I want to outline these important government amendments and highlight how they will provide much-needed protections to leaseholders from exorbitant costs for remediation of their buildings.
These leaseholder protection provisions will make landlords liable, partially or in full, for the costs of remediating historical building safety defects. Amendments 62 to 64 and Amendment 66 are definition clauses setting out the types of defects, buildings and leases that are in scope of the protections. The new clauses state that leaseholders living in their own home or subletting in a building over 11 metres will be entitled to protections from unjust and unaffordable remediation costs. It will not apply to buildings that have exercised the right to collective enfranchisement or are on commonhold land, as in those buildings the leaseholders together effectively are the freeholders.
Amendment 68 would insert a new schedule into the Bill before Schedule 9, which sets out the circumstances in which service charges relating to historical building safety issues cannot be passed on to leaseholders, and the circumstances where service charges can be passed on to leaseholders are limited. Paragraph 2 of the new schedule provides that, where the landlord is responsible or has links with the developer that is responsible for the defect, they will be required to pay in full for the historical building safety issues. This will ensure that, as far as possible, those who are responsible for creating the defects take on the burden of costs and remove all liabilities for the historical defects from innocent leaseholders.
A definition of an “associated person”, for the purpose of determining which building owners have links to the developers of the building, is set out in Amendment 67. Similarly, where building owners are not linked to the developer but can afford to pay, they will be required to put the money up to do so and pay in full. We intend to table further amendments to provide details of the affordability test on Report. I welcome any suggestions from noble Lords on how this could work.
Paragraphs 5 to 7 of the new schedule provide that, where building owners are not linked to the developer and are not able to afford the remediation, some costs can be passed on to leaseholders. This will be subject in most cases to caps of £10,000, or £15,000 for leases in Greater London. These caps will limit how much leaseholders can be asked to pay for non-cladding costs, after—I repeat, after—building owners and landlords have exhausted all other cost recovery options, such as litigation under the Defective Premises Act or the new construction products causes of action we have just debated.
The amendments also provide that any costs paid out by leaseholders over the past five years will count towards the cap, meaning some leaseholders will pay nothing more. They also provide that cladding costs cannot be passed on at all. Paragraph 6 sets out caps to be applied to very high-value properties. It provides that, for properties with a value of over £1 million but under £2 million, the maximum permitted charge is £50,000 and, for properties with a value of over £2 million, the permitted maximum is £100,000.
Building owners and landlords must comply with the law as set out by Parliament. However, there may be some who attempt to avoid their liabilities. These landlords may be associated with a company with substantial assets. Given the extent of the building safety crisis, it is morally right that these associated companies are asked to shoulder their fair share of the costs. Amendment 69 would give the First-tier Tribunal powers to make a remediation order on the application of an interested person, meaning the regulator, local authority, fire and rescue authority or another person specified in regulations by the Secretary of State. A remediation order will require a landlord to remedy defects in their building, as specified in the order.
Amendment 70 would give the First-tier Tribunal powers to make a remediation contribution order on the application of an interested person if it considers it just and equitable to do so. For the purposes of Amendment 70, interested persons include the new regulator, the local authority and the fire and rescue service, as well as leaseholders and other persons who have a legal or equitable interest in the building. A remediation contribution order will require an associated company to make specified payments, at a specified time or event, to the landlord to remedy relevant fire safety defects in the building.
Where a company needs to be wound up, our provisions enable the liquidator to apply to the court to access the assets of associated companies to contribute to the remediation of building safety defects. All too often, companies let subsidiaries go into liquidation to cut their losses. It is morally wrong that they can just fold a company up and leave leaseholders in unsafe buildings with outstanding building safety defects and the corresponding liabilities. The court’s decision will be based on whether it is just and equitable to do so—in other words, whether it is right for that associated company to help to meet the building safety remediation liability of the failing landlord.
Some unscrupulous companies may try and wind up subsidiaries before these provisions come into force, which is why we have included provisions to enable liquidators to pursue associated companies of those landlords who are currently going through insolvency proceedings. It is unfair that innocent leaseholders have had to pay for remediation of building safety defects while those who caused the fire safety issues are able to exploit company law to escape liabilities that are morally theirs. I ask your Lordships to support this significant and important set of amendments.
My Lords, I am grateful to my noble friend. It was bit like listening to one of the advertisements on the radio when, right at the end, all the terms and conditions are read out very quickly and one has to listen to them very carefully. I welcome the assurances that my noble friend gave right at the beginning; I will come back in a moment to some of the things he said.
In the meantime, I will speak to Amendment 56 in my name and also to Amendment 131 in the name of two of the three wise men. This group of amendments focuses on Schedule 8 to the Bill, which defines building safety charges. It takes up no less than 12 and a half pages of rules and regulations. My Amendments 58 and 60 would eliminate eight of them, but any benefit so gained would be wiped out by the 13 government amendments tabled since the Bill left the other place.
The Explanatory Notes helpfully explain the background to the schedule, which was covered in part in our earlier debate. It is
“to facilitate transparency and accountability in relation to building safety measures and the associated costs. The charge will form part of a clear audit trail flowing from the statutory duties through the measures taken, the associated costs incurred, the apportionment of those costs, demands for payment of the building safety charge and the holding on trust of sums received.”
I do not have any issues with that but my amendments are designed to ensure that all this can be incorporated with full transparency within the existing service charge that leaseholders get, rather than requiring a separate invoice headed “Building service charge”, which is what is implied by the schedule. Although I am not a leaseholder in a higher-risk building, to which the schedule applies, I declare a potential interest as a leaseholder of a flat in London.
A standard service charge will already include some health and safety compliance costs. I looked up a recent service charge on my flat; indeed, there is a line headed “Health and safety”. However, under Schedule 8, either that will have to be removed and located under the new building safety charge or it will appear twice with an appropriate credit, and leaseholders will have the bear the cost of, in effect, paying another set of service charges.
There is a Division in the House. We will have up to 10 minutes to cast our votes but, if noble Lords return earlier, we will proceed because we are taking quite a long time this afternoon.
Sitting suspended for a Division in the House.
I was explaining to the Committee that an existing service charge has a line headed “Health and safety”. Under Schedule 8, that line will have to be removed and relocated under the new building safety charge—or it will appear again under the building service charge with an appropriate credit because you have already paid it in your safety charge. Crucially, leaseholders will have to bear the costs of running, in effect, another set of service charges. The noble Baroness, Lady Fox, touched on some of these issues in an earlier debate.
I have read Schedule 8 and the Explanatory Memorandum. While, as far as I can see, it does not expressly forbid the incorporation of the building safety charge with the normal service charge, the whole structure of Schedule 8 certainly gives that impression, because the Secretary of State is able to apply different dates for the building safety charge and the service charge; and he can specify different deadlines for paying the two charges and for landlords to respond to requests from leaseholders. The whole impression given by these pages is of unnecessary, bureaucratic parallel invoicing processes, with all the business of reconciling accounts and all the costs to be borne by the leaseholders. I hope that the Minister will be able to assure me that this is not the intention and that it will be possible to incorporate the building safety charge into the service charge—and that the necessary amendments will be made if that is not the case.
On a related point, if you develop a building safety charge that is separate from the service charge, the entire body of case law that we have that relates to the service charge will not apply to the new building safety charge and we will have to start from scratch. So I very much hope that we can streamline the whole process and, with all the transparency that is necessary, incorporate the building safety charge into the existing service charge.
My other amendment is Amendment 131, which is very much a probing one. It is a continuing injustice that leaseholders are paying the costs of others’ mistakes. Some leaseholders have paid the full cost of remediating their buildings. For example, at Skyline in Manchester, they have had to pay the whole amount and have had to borrow substantial sums for remediation. Others continue to pay for waking watches and increased insurance costs. Ideally, there should be some means of compensating these leaseholders, who are, in the words of the Secretary of State, “innocent”. But I recognise the problems of retrospection, even though there are precedents.
This amendment requires the Secretary of State to commence a public inquiry to inquire into the costs of remediation and mitigating measures incurred by leaseholders after 10 January 2022 that are not otherwise recoverable through the Bill. The date of 10 January has been chosen because it is the date of the announcement in the other place about statutory protection for leaseholders.
The proposed inquiry’s aim would be to come up with methods of compensating affected leaseholders for the sums they paid after that date—which, as I said, are not covered by the Bill. Perhaps my noble friend can shed some light on exactly what protection is intended. There may be measures to stop freeholders pressing ahead now, before the Bill comes into effect, and passing costs on to leaseholders who would otherwise be protected. There are certainly leaseholders who think they have statutory protection now—but what about invoices received but not paid for work that is in progress? What about service charges payable when the next quarter begins on 1 April, possibly before the Bill has become an Act? There is a grey area here, on which some light should be shone, and I hope that in his reply my noble friend will be able to shed some illumination.
I shall touch very briefly on two other amendments. My noble friend Lord Leigh of Hurley has tabled Amendment 94ZA to government Amendment 92. That would simply avoid the double payment of remediation costs, from which the freeholder would benefit. If that protection is not applied elsewhere in the Bill, I hope that my noble friend the Minister will smile sympathetically on that amendment. My noble friend Lord Naseby has tabled Amendment 65, which excludes buy to let investors; I touched on that subject in an earlier debate.
Finally, I very much welcome the assurances that the Minister has just given in introducing his government amendments, especially the fact that he will go after associated companies. However, if I understood what my noble friend said, there is nothing for buildings under 11 metres. That exception seems difficult to reconcile with the principle that the polluter, not the leaseholder, should pay, and that leaseholders are innocent—and also with some of the statements made by the Secretary of State, which I read out on Amendment 24.
New subsection (3)(a) proposed by government Amendment 63 excludes freeholders who have enfranchised. I simply do not understand that. Those people are exactly as innocent as leaseholders who have not enfranchised. As my noble friend said in response to an earlier debate, the whole thrust of government policy has been to encourage enfranchisement. Yet here is the biggest disincentive to enfranchisement that we could possibly have: if people have enfranchised, they do not get protection from the Bill. I find that perverse, and difficult to defend. New subsection (2)(d) in government Amendment 64 excludes buy to let; I shall let my noble friend Lord Naseby deal with that.
Throughout his speech the Minister referred to cladding and non-cladding costs. But in government Amendment 66—which introduces a new clause entitled “Meaning of ‘relevant defect’”—subsection (2) says:
“‘Relevant defect’ means a defect as regards a building that … causes a building safety risk”.
There is nothing there about cladding and non-cladding, but I distinctively heard my noble friend, when he rattled through his opening speech, use the words “non-cladding”. I just wonder where in the amendments that distinction appears. I am sure it is there somewhere, but for the life of me I have not been able to find it. As I said, there was a lot in my noble friend the Minister’s speech that I want to look at and digest. In the meantime, I beg to move Amendment 56.
My Lords, I shall speak to my Amendment 65, which would modify the major statement in government Amendment 64. I was greatly encouraged when my noble friend the Minister sent the letter on 14 February. I thought, “Ah, here’s a good letter”, because it says clearly:
“The key principles that I outlined were a more proportionate approach to building safety risk”,
“the need to protect leaseholders”.
That is in the first paragraph. The second paragraph even starts:
“I committed to protect leaseholders”.
So I thought, “Oh, good, we’ve got there now”. But then, of course, I looked at the letter in more detail—and what is proposed in new subsection (2)(d) proposed by government Amendment 64 will have a major adverse effect on buy to let.
I remind my noble friend, who has been in housing for many years, as I have—I first got elected to the London Borough of Islington in 1968—that it was in 1993, under the Major Government, that the whole concept of buy to let was produced. That was at a time when, as all of us who were involved in housing would have known, there was a terrible situation for private tenants. They were basically exploited. We remember Rachman, De Lusignan and the others at that time. Here, it was not launched with trumpets or anything; nevertheless, it started in 1993 and it built up, because it offered good-quality housing for people to rent in the private sector. We now have a situation today, which I find really amazing, having done a bit of donkey work on this, where there are more than 2 million buy-to-let properties that are mortgaged and successful.
I will not take much of the Committee’s time, but I will just highlight that over the past 25 years, landlords have made a tangible improvement to the whole rented sector, so now we have a situation where millions of tenants today are proud of their home, although they have it on a buy-to-let basis. That is all fine and dandy, except that when you look at what is actually proposed at the moment, the net result is that, basically, buy-to-let landlords, or some of them, will not qualify for the remit of the cladding scheme that was announced in January. If they rent out no more than one flat in a block, they are okay, but if they have any more, they are in trouble. I have had strong representations, of course, from the National Residential Landlords Association, which states:
“We still fail to see why the Government is making it so difficult for buy-to-let landlords who are leaseholders to access the same level of support as all other types of leaseholders.”
The reality is, if you are a buy-to-let landlord renting out however many flats, or an owner-occupier leaseholder, you have been treated unfairly by the developers that installed dangerous cladding on blocks of flats. What Her Majesty’s Government are doing, as matters stand in Amendment 64, is introducing a very dangerous principle, basically stating that there are worthy and unworthy victims of the cladding crisis. I ask my noble friend to reflect that the Government should make it clear that any and all leaseholders should be treated the same. That is why I have tabled this amendment. I have not sought any publicity on this at all, but people have read the Bill, thankfully, and I have just brought a small sample of the huge number of emails I have received. Each is an indication of a case. The first is from a retired solicitor—so this is a perfect gentleman—who had a flat on buy to let. His wife bought one as well, and they now have two flats and are facing a problem. He says it is vital that all leaseholders are treated equally, and I do not think I can disagree with that.
Another one comes from a lady who was affected. She had a one-bedroom flat, which she bought in St Albans when her mother died, and then they bought one more, yet they are caught again. Then there is one from a lady called Katherine Wilde in Croydon. A single-parent family, two sisters, bought a flat jointly, then another flat jointly, then another flat jointly. They are caught. I could go on, although I have not brought many. It is clear. This is from a gentleman called Paul Bullock. It is clear that all these people are victims of this national scandal. As further evidence from the Grenfell inquiry comes to light, it is obvious that many parties have played a role in creating this crisis, the only innocent party being the leaseholders who purchased the flats after being guaranteed that everything was in order, only to find out that this was not true. There are moving words at the end of this email:
“Personally, I am caught up in this mess. I can’t even start to explain the toll of the past two years on my physical and mental health”.
I will not read the rest, but I will say to my noble friend that there is a problem here and I hope that he will have another look at it. I think that when he was introducing the letter of 14 February, he said that some of it had been done in a bit of a rush—so I think there ought to be an opportunity to have another look at this issue.
My Lords, my Amendment 59 is concerned with the first two lines of paragraph 5 of Schedule 8, which begins:
“Building safety costs may be taken into account in determining the … building safety charge payable by a relevant tenant”.
You can bet your life they will be. Leaseholders know that every other week a notice comes from the managing agents to say that the freeholder or landlord has decided that the corridor lighting needs updating, new lines need to be painted in the car park, the entry phone system needs replacing and so on, ad nauseam. This schedule gives them another excuse for possibly unnecessary, gold-plated, so-called safety improvements and contracts let to their favourite contractors. That is why my amendment seeks to add these words at the end of the sentence I have just quoted:
“only if they are below a maximum as specified in regulations made by the Secretary of State”.
It is another plea for the Government to take a permissive power so that, if it proves to be the case that service or safety charges have been jacked up, they can use a regulation to put a control on it.
These regulations may not be necessary—I hope they are not—but the power should be there just in case it is needed. If your Lordships just google “leasehold scandals”, up will pop names such as McCarthy & Stone and Peverel, now calling itself FirstPort—I can assure your Lordships that Mr Tchenguiz has not made his millions by being nice to leaseholders.
My Amendment 66A adds to the definition of “relevant defect” in new subsection (2) in Amendment 66. At the moment it says:
“‘Relevant defect’ means a defect as regards a building that … arises as a result of anything done (or not done), including anything used (or not used), in connection with relevant works, and … causes a building safety risk.”
I propose to add at the end:
“which may relate to but is not limited to … external cladding … internal walls and the materials contained inside any walls … fire doors … balconies … a lack of sprinklers, fire detection and control systems … inadequate escape routes.”
Quite simply, I believe that builders should pay for all fire safety remedial work and not just external cladding. But I also hope that common sense can prevail and the Government can lay down the law that wooden decking on a steel balcony is not a fire risk, and that potentially flammable materials sandwiched inside non-combustible inner and outer walls do not need to be removed. There are a lot of excessive suggestions on fire risk materials going round at the moment, and that needs to be stamped on.
My Amendment 86 seeks to insert a new clause to prevent managing agents charging excessive amounts for undertaking fire risk assessments or preparing applications for assistance. In particular, I suggest that the regulations may include—again I stress “may”:
“setting limits on the charges managing agents may impose for fire risk assessments … setting limits on the charges managing agents may impose for making applications to the Building Safety Fund or any other source of funding for fire risk remedial works … setting limits on the charges managing agents may impose for inviting tenders for fire risk remedial works … preventing service charges being inflated by fire risk remedial works.”
I suggest that these are all reasonable. My noble friend the Minister knows what managing agents are like. If we are not careful, this Bill will be a licence for them to print money: charging for the work of the accountable person and for drawing up the strategy, coming into all our homes to look for safety dangers, and a host of other things they will be able, quite legitimately, to charge leaseholders for. While they can do so, I suspect that the charges will be excessively high. Thus, the backstop of a regulatory power is essential.
I commend Amendment 131 from my noble friend Lord Young of Cookham. He made a compelling case for a short, sharp inquiry into the charges for fire safety work which leaseholders have had to pay and which are not covered by this Bill. That is eminently sensible stuff.
Noble Lords will be pleased to hear that the three amendments I have tabled are probably the last ones I shall table in Committee. It therefore behoves me to say to my noble friend the Minister that great line from “Twelfth Night”:
“Some are born great, some achieve greatness, and some have greatness thrust upon them.”
My noble friend has a chance to achieve two of these aspirations. If he accepts our great amendments, which we are thrusting on him, then he will himself achieve greatness; when this Bill is an Act, he too can have the epitaph, although not too soon of course, of that great British builder Sir Christopher Wren at St Paul’s Cathedral: “Si monumentum requiris circumspice”—if you seek his monument, look around you. This Bill could be a great monument: safe housing for all our citizens.
My Lords, with some trepidation after that, I rise to speak to my Amendment 94ZA, as advertised by my noble friend Lord Young of Cookham. I welcome the Government’s clear commitment that no leaseholder in a medium or high-rise building will have to pay to remove dangerous cladding, so I therefore support the significant legislative changes being introduced in this Bill. I am also pleased to see that legislation is coming forward to identify the beneficial owners of freehold and leasehold properties, because without that I am not sure how this Bill would work in its entirety. We need to know who owns property in the UK.
However, there is a small group of leaseholders who have fallen through the Government’s net of protections. They are leaseholders who have already paid for the removal of ACM Grenfell-type cladding from their buildings through an exceptional service charge imposed by their landlords, but whose landlords have unilaterally decided not to pursue available government remediation funding because they have no incentive to do so, given that the leaseholders have already borne all the costs. No encouragement by or pressure from their leaseholders or the Government has resulted in any change in their position, particularly in one specific case of which the Minister is aware.
This was not the intent of the well-meaning government cladding remediation scheme, as it assumed that landlords would behave appropriately. The scheme required applications to be made by landlords. Leaseholders had no right to do so directly, nor could they force landlords to seek funding. As a result, these leaseholders remain without reimbursement for the considerable sums that, in some instances, they have expended on removing dangerous cladding to live safely.
This behaviour has been described in the other place as outrageous; my noble friend the Minister described it as unacceptable in his Written Answer to me on 26 January. However, the Government’s proposed legislation does not expressly address this inequitable situation. My O-level Latin was even worse than that of most Members of the Committee, so to provide some balance I will quote from my coat of arms the Hebrew “Im low achshav aymarthie”, which, as the right reverend Prelate the Bishop of St Albans, who is not in his place, would explain, means “If not now, when?”
Paragraph 8 of new Schedule 9 prohibits a service charge being payable under a qualifying lease in respect of cladding remediation if the tenant was resident at the qualifying time, as we have heard. This does not help resident tenants who have already paid up by way of service charge before the Bill becomes law. My proposed amendment extends paragraph 8 of Schedule 9 to include situations where resident tenants have paid for cladding remediation at any time during the five years before the commencement of the Bill. This will leave the landlord with the choice of applying for available qualifying remediation funding or having to reimburse relevant resident tenants out of their own funds.
I appreciate that this will be relevant in only a small number of situations but that is not a reason not to have legislation. There is a glaring hole in the legislation, and we have the opportunity here to correct it. I can see that some might argue that this is retrospective, but it is not because the amendment covers only situations where the lessees have paid and the freeholders will not act as they should. It is up to the Minister, inspired by the call to arms, to widen this amendment—on Report if not here—to cover future situations where lessees pay for recladding as they are fed up with waiting for landlords, knowing that, if this amendment passes, the freeholders will be forced to apply for reimbursement.
My Lords, I will speak to my Amendments 93 and 94. I thank the Minister for explaining the many amendments relating to the costs of remediating cladding and other fire safety and building defects, including who will pay and how.
However, my amendments are to his Amendment 92 and are about my favourite issue, which is that leaseholders should not pay a penny. It is not their fault. The Government and everybody else accept that, and therefore, they should not pay anything. The easiest way of ensuring this is to amend the government amendment to change the maximum amount—that is, the cap—to £15,000 or £10,000, be it in London or outside London, to a peppercorn; in other words, to zero, zilch, nothing. This would achieve the aim I started with two years ago.
There are reasons for this. The Minister may not want to do it, but I certainly do. He said, “Of course”, so I assume he will now accept my amendment. However, if it helps the Minister, I am willing to exclude paragraphs 6(4) and 6(5) of the new schedule proposed by Amendment 92. They relate to properties with a value of £1,000,000 or £2,000,000 or more.
I appreciate that the Minister and others in the Government have laboured long and hard to reach a more just outcome for leaseholders. However, as we have heard from the noble Lord, Lord Naseby, the letter we received said that the Secretary of State had stated on behalf of the Government that leaseholders must not be required to pay anything. That is what my amendment would achieve. The building failures were not theirs. As we have all agreed, those who made the failures, who put up flammable cladding and failed to put in firebreaks, are the ones who have to pay.
In his introduction to his amendments, the Minister said that cap will be offset by costs already being paid for waking watch, fire alarms and other such things, which will reduce the final liability. In that case, why on earth are we pursuing it? Let us say that the amount liable is £7,000. If it is paid over a period of five years, that is less than £1,500 a year. What bureaucracy will be set up to collect that? The cost of collecting it will almost certainly outweigh the benefits. So there is a practical reason as well as a reason of justice, and I guess that the Minister will therefore accept my amendment. We will have a whole new bureaucracy for nothing very much. It is not a practical proposal at all, and it is not a just one.
The amendment is straightforward, but there are one or two things I want to ask the Minister to explain and to give some very straightforward answers to some very easy questions. Some things are not clear from all this. There are good intentions in all these clauses to try to solve who pays for remediation, but what happens if nobody pays up? Who takes on the liability? Secondly, if they all go to litigation—which is my guess about what is going to happen, and we heard earlier that there are already moves in that direction—that could take a long time. So what happens then when buildings are not safe? Who will pay for the removal of the cladding and putting right the fire safety defects? Are we expecting leaseholders, shareholders and tenants to remain in those unsafe buildings for all that period of time? So who will pay, and what about the timing? If we do not get the cash, what happens and, with that timing, what happens—peppercorn rents excepted? My noble friend Lord Stunell will wind up for us on these Benches.
My Lords, I will try to be brief. I will just pick up on the last point made by the noble Baroness, Lady Pinnock, who has been a doughty campaigner on all this. We have the problem that this Bill creates a bureaucratic and quite complex situation. That can only weigh in favour of those who hold the real money here, which are the developers. We must try to focus on rebalancing that so that the leaseholders are on some sort of even playing field.
I noted very carefully what the noble Lord, Lord Young of Cookham, said on the detail of the accounting process. I very much support what he said. There is an element of discrimination, which was brought out by the noble Lord, Lord Naseby. Why do we discriminate between different categories of person and what does anybody think that will result in in terms of some class action further down the road? This whole thing has to be robust against applications to some international court, to the High Court or for judicial review. There absolutely has to be proof against serial activity. I know into whose hands that will play, and it will not be to the leaseholders’ benefit. There are an awful lot of exclusions here. The noble Lord, Leigh of Hurley, made a potent point about those who have already paid up. What about them? A point has also been made about proportionality and risk.
I will cut my other comments really quite short and just pose a few questions. As I see it—I was in dialogue with the British Property Federation about this—only in the case where you have a non-cladding effect, where the developer does not exist or cannot be found, does that trigger the freeholder responsibility to make a contribution for remediation, and only after the cap liability of the leaseholder. The Minister does not need to reply to me now, but I would like to be absolutely clear that that is the scenario—one of several—that applies here.
Moving on to Amendment 67, I would like to make a comment. As drafted, does the amendment cover limited partnerships? They are not corporate entities and are different from limited liability partnerships, which are covered by the amendment. For instance, the effective owner of Waterside Park, where a lot of issues have arisen, is just such a limited partnership. Is it the Government’s intention that limited partnerships should be included in the definition of “associated persons”? If not, why not? Because that would create a gaping hole.
On Amendment 69 and the remediation orders, I do wonder why leaseholders cannot themselves apply if their landlord is not undertaking remediation work. Why are we painting out of the picture their ability to have collective action in that respect? It does not seem to me to be proper or fair.
With regard to the remediation contribution organisers, there are obviously some very wealthy investors who sit behind some of these things. On the other hand, there are an awful lot of occasions when the freeholders, the landlords, simply do not have the value let alone any other private resources—and what about the pension funds that may own these things? So I would like to know what assessment the Government have undertaken of the resources available to landlords to cover these remediation costs. Are we simply creating another cadre of men of straw of one sort or another?
On the question of the provision for the courts and their jurisdiction here, do the Government really envisage that the courts will find it “just and equitable”, to use the term, to require landlords who themselves played no part in the construction of the buildings to fund the remediation costs? It seems to me a matter of basic equity. How will the courts operate that in practice? I suggest that there is a great lack of certainty on that.
Amendment 71 is on meeting remediation costs where there is an insolvent landlord, but would it give the courts discretion to override the hierarchy of creditors and provide remediation funding out of funds that would otherwise have gone to secured creditors, such as HMRC and mortgage lenders? If so, I think we ought to know. Also, what about the potential for disclaimer of negative-value assets in the hands of both liquidators and on behalf of the Crown and the taxpayer by an outfit called the Bona Vacantia department, which I believe is part of HMRC, and the resultant uncertainty and potential for litigation that that creates? There are many questions here.
Another query came to me from the British Property Federation, on Amendment 72. Can we be clear whether it is intended to catch commercial developers? If not, it would be helpful if that were made absolutely clear because the federation is not clear, and I am not clear, about that provision.
On Amendment 92, relating to remediation costs under qualifying leases, do the Government accept that, given the criteria proposed, many leaseholders will end up paying amounts, even though they are capped, for defects for which they were not responsible, and that this runs counter to the previous comments of Ministers in both Houses? What is their assessment of the overall quantum of this? I should just explain that the cap applies
“in respect of a relevant measure relating to any relevant defect”.
That “defect” is singular, so is this per defect or per agglomeration of defects—in other words, does the cap relate to the sum of all remediation works or do different caps apply to individual works? It is this whole process of clarity that needs to be sorted out. I would certainly be happy to sit down with the Minister and other noble Lords to try to work out some of these things and get them straight.
My Lords, some very good questions have been asked in this debate. I am grateful to the Minister for setting out his proposals. I rise briefly, as it is late, to say that I very much support two practical amendments; as noble Lords know, I am essentially a practical person. They are Amendment 56 in the name of my noble friend Lord Young of Cookham, on aligning building safety charges and service charges, and Amendment 94ZA in the name of my noble friend Lord Leigh, on the dilemma facing leaseholders who have already paid service charges.
My Lords, I have two amendments in this group. Before I introduce them and talk about the things that we are perhaps not so content with in the group, I just want to say that we recognise that the Government have introduced some very important amendments here. We welcome the work they are trying to do to improve the Bill from its previous incarnation.
The first amendment in my name is Amendment 88. The reason we introduced it is that, looking at all aspects of the crisis that this Bill is trying to address, these Benches are concerned that the Government’s approach does not appear to have a central plan. This amendment was also tabled in the other place by my colleagues, so we are repeating their call for the Government to act across the piece to solve the crisis. We ask that the Minister considers accepting our proposals for a building works agency, which would provide a more hands-on approach.
As we have heard, home owners, many of them first-time buyers, have become trapped in a perfect storm in unsafe buildings because they cannot sell their homes, and are forced to pay thousands in remediation works through no fault of their own. We propose that a team of experts does what the Government have not done so far with this Bill: go from building to building to assess real risk, deciding what needs to be fixed and in what order, using the building safety fund to get those buildings fixed and overseeing the work. Crucially, the Government could then sign off the buildings as safe and sellable, bringing certainty back into the market.
To make it clear, we see the building safety works agency as a separate body to the building safety regulator, with no duplication or crossover; in the debate in the other place, the Minister felt that there was crossover. We see the building safety works agency overseeing the remediation works and the other body regulating. One regulates and one does the work. This would mean that the Government could really take on those who are responsible for creating the crisis and who need to pay. This approach was put in place by a cross-party group of politicians and experts in Victoria, Australia, after there was a serious fire there. That is why we think it would work here: it is not just an idea off the top of our heads but something that has been done and worked before. It would enable the Government really to lead from the front on this matter.
Briefly, my Amendment 125 was tabled before the most recent government amendments. It replicates the McPartland-Smith new Clause 5 from the Commons, amending Part XVI of the Housing Act 1985. Now that the Government have tabled their amendments, it has been superseded, but I will still speak to it to remind the Committee that there have been previous attempts to address the fire safety question during the passage of the Bill. This amendment illustrates that there are different approaches to how the issue can be solved in legislation. It was previously tabled with a range of other amendments addressed to Part 5 of the Bill with the aim of allowing the Government and local authorities to enable grants for remediation work—specifically, by allowing the Government and local authorities to designate dwellings with cladding and fire safety defects as defective.
Having now seen the government amendments, I ask the Minister why the Government could not back the original amendment, which was after all tabled by Conservative Members of Parliament. How did the Government then arrive at the decision to table what they have come up with?
I want now to look at some of the other amendments in the group, and in particular at the implications of government Amendment 92. We do not think that any of the announcements benefit leaseholders who have already paid for remediation work—this has been mentioned by other noble Lords today. The fact that there is no retrospective coverage means that even if the proposed amendments become law and are effectively implemented, many leaseholders will continue to suffer the financial impact of the building safety crisis.
I therefore indicate our strong support for Amendment 131, in the name of the noble Lord, Lord Young of Cookham, which proposes that the Secretary of State set up a statutory public inquiry. It is really important for us to understand exactly what the situation is. Otherwise, there will be no recovery of these costs to leaseholders. Any steps which will lead to full retrospective protection for leaseholders who have already paid remediation costs should be taken seriously by the Government.
If the Government choose to introduce a cap on non-cladding remediation works—the noble Baroness, Lady Pinnock, talked about this extensively in relation to her amendments, and we fully support what she is trying to achieve—it would mean that the maximum amount payable would be a peppercorn amount, which is effectively nothing and is where we need to be. Leaseholders should not be liable to pay for any costs that have resulted from a faulty regulatory system, whether these are related to cladding or non-cladding remediation, or interim safety measures. As the noble Lord, Lord Naseby, said, all leaseholders should be treated exactly the same.
Further, it is unclear who will be liable to pay for remediation costs or the provision of interim safety measures such as waking watch in cases where the £10,000 or £15,000 cap has been met. Many buildings with fire safety issues can be occupied thanks to waking watches and other interim measures. If these are removed, there is a risk that the building receives a prohibition or decant notice and/or a withdrawal of building insurance cover. I hope that the Minister has his thinking cap on, because I have quite a lot of questions and requests for clarification. There have been a great number of amendments to consider and fully understand, so I hope that he will bear with me.
The combined effect of the various amendments is pretty complex. They seem to create what I can describe only as a system of cascading statutory protection, each stage of which is triggered only if the prior one is exhausted. I shall go through my understanding of it. Can the Minister confirm that I am correct or clarify where I have got it wrong? I know that the noble Earl, Lord Lytton, also asked for clarification in a number of areas.
My understanding is that the system would work as follows. First, developers who are still the freeholders of a given building or are linked to it by a subsidiary, as well as cladding manufacturers, are expected to pay first. Secondly, freeholders of buildings who are not the original developers or linked to the original developers are expected to pay second, subject to an affordability test to be set out in the future via regulations. Thirdly, if those freeholders cannot pay, leaseholders will be expected to pay only a capped amount based on Florrie’s law towards non-cladding costs only. Anything they have paid to date counts towards the capped amount. Assuming that I have understood this correctly, I ask the Minister for more clarity on how this cascade system is expected to work in practice and what estimates, if any, the Government have made.
For example, how do the Government expect to define the affordability test at stage 2 of the cascade in regulations, given that this will make a huge difference to the number of cases that then get to stage 3? Why is there no protection for social landlords at stage 2, given the impact on affordable housing supply? What happens if freeholders of buildings who are not the original developers or linked to the original developer cannot pay and the costs exceed the leaseholder cap by a substantial amount? Who makes up the difference? Would it be from the department’s affordable housing budget, for example?
Can I also ask for some clarification regarding Florrie’s law? In reality, how robust a safeguard is this for leaseholders? How will individual leaseholders be able to prove that they have spent, for example, £8,000 over the past five years on non-cladding building safety costs via their service charges, so they can then be charged only an extra £1,500? What happens if a significant proportion of leaseholders cannot even pay the capped maximum amount? What estimate have the Government made of the number of buy-to-let landlords who own more than one rental property in an affected building? Buy-to-let landlords with their own rental property in addition to their principal home are covered if that is in an affected building, but how does it work for others? Even if this number is a relatively small proportion of the total share, it could still have a significant impact on the works getting done.
The Government talk about taking a more proportionate and common-sensical approach, but what does that actually mean in practice? What estimate have the Government made of the number of buildings removed from scope as a result of the withdrawal of the consolidated advice note? Can the Minister provide information about expected implementation dates and what will happen to leaseholders who have already been issued with invoices? What protection is there to ensure that freeholders cannot attempt to pass on costs over the proposed Florrie’s law cap before the legislation comes into force? There also appears to be no redress for leaseholders who have already paid non-cladding associated costs above the Florrie’s law capped amount; the noble Lord, Lord Leigh, mentioned them and asked what would happen to them. If that is the case, does the Minister agree that it is simply not fair that, as currently drafted, the Bill gives them no redress whatever?
At the end of his very good speech, the noble Lord, Lord Naseby, gave some examples of leaseholders who have been victims of this scandal. I want to finish by sharing with the noble Lord and the Committee a brief overview of the situation faced by leaseholders living at Vista Tower in Stevenage, to highlight the concerns around full remediation of all fire safety defects. Vista Tower has been plagued with many costly defects due to poor workmanship by the developer and its contractors. The building is now in a sorry state, with little being done to ensure even general maintenance as all reserve funds have been spent. I understand from the person who spoke to me that the current service charge is £6,000 a year; that is what they are paying.
The developer transferred assets and is now dissolved. Leaseholders were advised during recent litigation that associated parent companies essentially have very little by way of assets. The contractor used has also ceased trading. The freeholder has taken a hands-off approach to maintaining their asset. The lack of transparency and willingness to engage with leaseholders has left many of them very frustrated and constantly trying to get answers. When a building is purchased by a shell or investment company to spin a profit, there seems to be no responsibility taken when things go wrong. The building control sign-off was outsourced to the Stroma Group. Leaseholders were advised that litigation cases against building control rarely succeed, so they decided not to incur further costs chasing this route. The structural building warranty provider went bust a few years ago.
Unsurprisingly, the majority of leaseholders in this building are disheartened, anxious and very concerned about their future. They face one of the largest remediation bills in the country. They should not be expected to carry the can for the appalling behaviour of the developers and others who were involved, and they should certainly not have to pay thousands of pounds to put this right, on top of all the stress and worry that it has caused.
I do hope that the Minister has listened carefully to the concerns raised in this debate and that the Government will finally plug the gaps and loopholes that remain so that, as the noble Lord, Lord Naseby, said, all leaseholders are treated equally.
My Lords, first, I am very sorry if taking a long time last time irritated the Minister. It was an important set of amendments and I think these amendments are also important, although I will try not to irritate him. It is a pity that he did not feel able to accept the amendment in the name of the noble Baroness, Lady Neville-Rolfe, about openness and transparency and impact assessments. I remind him that he dealt with my argument by assuring me that I would know that the Government clearly would not have brought forward proposals unless they had been cleared at the highest level and that lawyers had looked at them and he wanted to assure me that they all worked. That sounded to me very much like an impact assessment or, at the very least, an explanatory note, so I am hoping that he can publish the documents that were used inside the department to decide that this is indeed a viable system to place before your Lordships.
With that preliminary, I enthusiastically support my noble friend Lady Pinnock’s Amendments 93 and 94 proposing a peppercorn figure for the cap. The Minister indicated at an earlier stage that the figures in the Bill are, to an extent, arbitrary. A number has been decided, perhaps based on some total amount of money that the Treasury thinks it is prepared to pay which has been divided by an assumed number of residents to produce a cap figure. It may be neat arithmetic for the Treasury, but it is not neat arithmetic for leaseholders facing their payment.
Some very pertinent questions have been asked by the noble Baroness, Lady Hayman, and other participants in this debate. I hope that the Minister will at least be able to commit to writing a letter, having carefully read Hansard, about this group of amendments and the previous group to make sure that he has ticked off all the queries that have been raised. They have all been advanced by noble Lords who very strongly want to see effective legislation but have various levels of severe concern about whether this legislation will be effective. I am sorry that it may be a little painful for him, but we need to understand the correct answers to this and, if not, to try again on Report.
This is a sensational policy development by the Government in interfering with the market. We believe it is justified in principle, but we want to see that it has not just been waived through without serious thought and consideration. It is easy to have popular legislation, although it would be more popular if the cap were a peppercorn, as my noble friend Lady Pinnock has proposed, but that does not mean that it will work. Plenty of popular legislation turned out not to work. The Dangerous Dogs Act occurs to me, and we must not turn this into a dangerous buildings Act full of good intentions but unable to deliver.
In relation to the other amendments, in Amendments 56 and 57, the noble Lord, Lord Young of Cookham, has produced, as he always does, extremely reasonable amendments and it is hard to see how the Minister can dismiss them. When we look at this, and bearing in mind that the Minister said in relation to the whole of this debate that the Government are still in listening and learning mode, it might be important to listen to them and to bring them forward again.
There was a theme too about excluded groups. It starts with a bold statement that no leaseholder will have to pay and then, as the noble Lords, Lord Leigh and Lord Naseby, and others have pointed out, there are little nooks and crannies in this which means that there are groups of leaseholders who will not benefit from the pledge, apart from the fact that there is a cap, which there certainly should not be.
In the debate on the last group, I commented on government amendments in some detail. I am sorry that it was a bit too hard for some people—it was a bit hard for me and I probably got some of it wrong—but I want to pick out from this current group some points that arise from government Amendment 70, which puts in place remediation contribution orders. I have a feeling that when it comes to assessing what the sum should be, the quantum that appears in a remediation order, all the issues I raised on the last group will raise themselves again. I hope the Minister is not persuaded by an argument that says, “The facts will speak for themselves. It is easy with a building, you can just go and look at it and tell whether it is compliant or not, and then you can decide how much it cost, and then they have to pay.” It is all a question of who decided that that would be used, who put it up in that particular way and what kind of regulation was carried out. We are talking about events that may have taken place 20, 25 or 30 years ago; the current opportunities to retrieve that information are very small and the chance of delivering it is very small as well.
The noble Earl, Lord Lytton, raised the point about the interaction of this process with the courts, which will be required to decide what a building safety order and a remediation contribution order should actually be. What should it be when it gets signed off by the courts? They will want to know the answers to this and I think the Minister will have heard that a number of noble Lords have a sneaking feeling that that will prove a very difficult hurdle to get over with the provisions in the form that they are.
My Lords, this has been a fascinating debate, it really has. I shall start with the noble Lord, Lord Stunell, because he served as Minister from 2010 to 2012 and we are graced by his presence. I think that in the coalition he was succeeded by the noble Lord, Lord Foster, from 2012 to 2014, and then there was a chap called Stephen Williams, who never made it to this place. If the noble Lord talks to his colleague Stephen Williams of the Liberal Democrats, who was in the coalition Government, he will know about Florrie’s Law, because that came into existence in 2014. The protection we are talking about today is based on Florrie’s Law that came into effect in public housing. This is about applying that principle of a liability cap across all types of tenure. In fact, I had a meeting in this place with the noble Lord, Lord Pickles, who introduced that amendment in response to a leaseholder who received an enormous bill which was so great that, through the shame of receiving it, she subsequently died. That is why we came up with the cap, as a coalition Government, through Florrie’s Law, and it is that principle we are looking to apply.
I turn to the noble Baroness, Lady Hayman. My admiration for her has increased, with her detailed grip of policy. She read it out with such aplomb, I have to be honest. I think it is important for me to take the high level and I will respond to her in writing, but I want to give her the outline. She is absolutely right in her assessment; what she read out was absolutely correct and the phrases “cascade” and “waterfall” have been applied to the approach we are taking. The waterfall or cascade is in five parts. We start with the developers. Then we move to the freeholders, via an affordability test, and other interim landlords; that is the second wave of the cascade. The third is freehold and interim landlords seeking redress from third parties that have contributed to pollution. The fourth is leaseholders who pay a capped amount—that is for non-cladding costs, to be clear, and is where Florrie’s Law kicks in. Of course, the fifth is freeholders and interim landlords who pay the remainder. That is the cascade approach, but I will write to the noble Baroness, because it was so eloquently put that I believe her questions of me deserve full and detailed answers.
My noble friend Lord Young always finishes off every interaction with me by saying, “I’m here to help.” I have to be honest with him: his description of me in his opening remarks made it sound as though I was some kind of snake oil salesman. I am sure that is not what my noble friend intended. I am not a snake oil salesman. What I say is what I believe. I may be a soap salesman; in fact, that was my first job after university with Procter & Gamble. Like the noble Lord, Lord Shipley, I started off at that great institution, learning the principles of business, and it has stood me in good stead ever since, as indeed it has the noble Lord. Apparently, that was in the 1970s in his case, not the 1960s, as I once implied. However, I have been clear that I am a former soap salesman, not a snake oil salesman. I point that out to my noble friend.
These are important matters. We saw today that there are interests in property law. The interests and concerns of the British Property Federation were outlined by the noble Earl, Lord Lytton, then the concerns of leaseholders were expanded on by the noble Baroness, Lady Pinnock. In drawing up a response with regard to who pays, we need to take all those matters into consideration. I will respond to some specific points that were raised.
My noble friend Lord Young asked the very important question of whether enfranchised properties will have to pay all the costs for remediation. I want to be absolutely clear—read my lips—no, they are not. This will not apply to buildings which have exercised a right to collective enfranchisement, or to commonhold land, which in this case, admittedly, is very few buildings. New subsection (3) in government Amendment 63 is very clear on that point. I am happy to speak to my noble friend afterwards, but I am very clear that they are not expected to shoulder the burden. They are effectively leaseholders that have enfranchised as opposed to freeholders. I hope that helps.
My noble friend also wanted to know about the drafting for cladding and non-cladding costs. All remediation for building safety risks is in Amendment 66. Protections for the cost of cladding remediation are in new paragraph 8 of Amendment 92. I hope that signposting those points will help.
The noble Earl, Lord Lytton, wanted to know what we are doing to make sure that we get moneys ahead of secured creditors. We acknowledge that that is an incredibly important point, and we are looking into it, so I thank the noble Earl for raising that. He also spoke to Amendment 72, which asks whether it is designed to catch commercial developers. The answer is—read my lips—yes, it is. It is important that we address these points in Committee, and of course we will return to that on Report.
Amendments 65 and 66A would amend the Government’s leaseholder protection amendments that I outlined earlier in the debate. Amendment 65, in the name of my noble friend Lord Naseby, would amend our new clause introduced in Amendment 64 defining a qualifying lease for the purpose of the protections. The amendment would extend the protections to cover landlords with more than two properties. At this stage, I am afraid that we will not be able to accept this amendment.
All buy-to-let landlords benefit from our £5.1 billion building safety fund to fix cladding on high-rise buildings, irrespective of how many properties they own. In January we committed to additional protections on non-cladding costs for residential landlords who have had to move out of their flat. This week’s amendments deliver on that and go even further by protecting landlords who own two properties.
We are clear that developers must pay to fix cladding on medium-rise buildings; the principle of protecting leaseholders living in unsafe buildings is paramount. The policy is fundamentally designed to ensure that those living in their own home—including those who have moved out and sublet—do not face unaffordable remediation bills.
My noble friend Lord Blencathra has also put forward Amendment 66A. I assure my noble friend that his intention has been met in the original amendment. The meaning of “relevant defect” in Amendment 66 covers defects which have caused a building safety risk because of work, or a lack of work, carried out on the building.
Committee suspended for a Division in the House.
Therefore, the scope of “relevant defect” is sufficiently broad and will take account of many of the defects listed by my noble friend Lord Blencathra.
In relation to cladding, the Government have already put in place separate provisions, whereby leaseholders of properties in buildings over 11 metres will be protected from all costs associated with cladding remediation. I know that my noble friend has raised very real examples of leaseholders with narrow, not broad, shoulders who may have a certain amount of property in their retirement portfolio and have chosen to invest in property as a way of guaranteeing their income in old age. I would like to sit down with my noble friend and policy officials to see that we have got the policy intention right. He raises an important point that, sometimes, there are landlords with pretty narrow shoulders, and I do not think it is the intention of the Secretary of State and the Government to be unduly unfair on those people. We will sit down to understand the concerns. At this stage, there are a number of protections in place, but we recognise where my noble friend is coming from.
I forgot in the desire to get going that I should have declared my residential and commercial property interests as set out in the register. They are all properly laid out.
I also forgot to mention something in response to the noble Baroness, Lady Hayman, who raised the important point about retrospection. I got through the waterfall and the cascade but forgot about retrospection. It has been raised by a number of noble Lords; even the noble Baroness, Lady Pinnock, probably mentioned it as well.
The important thing is that day zero for the building safety reset is 14 February 2022. Once we have got this Bill through, that is the date we will start from. However, retrospection does kick in, in the sense that leaseholders who have spent money to date will not pay more than the cap. We will take into account the money they have already spent. Admittedly, we are not going back to refund those who have already spent money, but there is a cap in terms of liability. I shall also deal with the specific issue raised by my noble friend Lord Leigh of Hurley.
I shall now address the building safety charge amendments tabled by my noble friend Lord Young of Cookham. I shall race through these, because, basically, my noble friend is right to recognise that there may be other ways of skinning a cat, and looking at service charges as opposed to the building safety charge. Let us just see how we evolve that as time goes on—so I shall leave that, if I may. I thank him for raising those points. The Government’s intention was not as it has been painted by some people, but we recognise the points that he has raised.
Turning to Amendment 131, I thank my noble friends for raising this interesting matter, but I am afraid that the Government will not be able to accept the amendment. It would require the Secretary of State to establish a statutory inquiry into costs leaseholders have paid since 10 January 2022 which are not recoverable by those leaseholders. As I have already described, the Government have tabled a series of amendments either to remove or to greatly restrict the costs that the vast majority of leaseholders living in blocks over 11 metres will have to pay. Given these significant protections, the Government do not consider that the costs and bureaucracy involved in setting up another statutory public inquiry would be appropriate or justified. On that basis, I ask my noble friends not to press their amendment.
Turning to Amendment 86, I thank the noble Lord for raising this important matter, but I am afraid that the Government will not be able to accept the amendment. Managing agents play an important role in managing and maintaining buildings on behalf of their clients, and it is fair that they should be paid for the services they provide. I agree with my noble friend that it is important that managing agents do not charge excessive fees for those services, and that such charges must be reasonable. Managing agents also need to be clear about the charges they pass on. This Government strongly believe that service charges should show this. They should be transparent and communicated effectively, and there should be a clear route to challenge or redress if things go wrong.
The law is already clear that service charges must be reasonable and, where costs relate to work or services, the work or services must be of a reasonable standard. Leaseholders may challenge the reasonableness of the service charge through the appropriate tribunal, whether that is the First-tier Tribunal in England, or the leasehold valuation tribunals in Wales.
It is also important to recognise that there may be practical challenges in setting a fee. The cost of carrying out a fire risk assessment specific to the safe occupation of an individual building will range considerably, owing to the significant variations between buildings and their individual risk profiles.
It may have unintended consequences to impose a cap on a charge for work carried out by managing agents solely on fire risk assessments. Capping one cost, without considering whether charges for other activities they carry out should also be capped, might simply allow managing agents to recoup costs from other services they provide. Any such cap would need to ensure that the intended outcomes were achieved.
The Government are already considering in what circumstances fees or charges are justified and whether they should be capped or banned. We established a working group, chaired by the noble Lord, Lord Best, who looked at this alongside the regulation of property agents and reported back to government in 2019. We are currently considering those recommendations.
I thank the noble Baroness, Lady Hayter, for her work in preparing the codes of practice. As the Minister, I can say that we take on board the need to ensure that managing agents are professionalised and properly regulated. The Government will respond on that, and we take it extremely seriously. It is all about getting the right legislative vehicle, with some forward planning. Noble Lords will hear more about that—“in due course” is, I think, the phrase we use.
With regard to legal costs, not all leases allow landlords to recover their legal costs incurred through the service charge. Even where the lease permits this, there are already statutory protections in existence. Where a landlord has incurred, or has intended to incur, legal costs in connection with proceedings before a court or an appropriate tribunal involving a leaseholder, leaseholders can apply under Section 20C of the Landlord and Tenant Act 1985 for some or all of those costs not to be regarded as “relevant costs” in determining the amount of any service charge payable by the leaseholder. I thank the noble Lord for raising this important matter and assure him that the Government are actively considering the issues raised. With that assurance, I ask him to not move his amendment.
Now we turn to the amendment from the noble Baroness, Lady Hayman of Ullock, the Workington Warrior. She highlighted an amendment raised in the other place on the proposed building works agency, which would undertake the work the department is already doing on the auditing and monitoring of buildings over 18 metres with unsafe cladding. This represents poor value for money and would have the effect of increasing costs and burdens. Furthermore, the proposed works agency would oversee an audit of cladding, insulation and other building safety issues in all buildings over two storeys. This would result in hundreds of thousands of buildings being audited and would be very expensive and take numerous years. We do not consider this proportionate and therefore we oppose it.
The Building Safety Bill also includes measures to establish a building safety regulator and there are major overlaps between the regulator’s role for residential buildings over 18 metres and the proposed role of the building works agency. I therefore invite the noble Baroness not to press her amendment.
I turn to Amendments 93 and 94, tabled by the noble Baroness, Lady Pinnock—the “peppercorn” amendments. I say in response to the noble Baroness that not all leaseholders are equal, just as it is fair to say that not all freeholders are equal, and that some have broader shoulders than others. That will be reflected in how the Government approach regulations. We recognise that and it is important that we have the discussion so that she understands how we provide appropriate protections.
I feel particularly strongly about shared owners, who have very small shoulders and yet in some cases are being asked to shoulder major historical building safety remediation costs. So I thank the noble Baroness for tabling the peppercorn amendments but, as I have outlined today, our government amendments will require that historical safety defects in any building above 11 metres or five storeys owned by the developer who built or refurbished it, or by a landlord associated with that developer, must be fixed by them, and that building owners who can afford to pay must not pass on any costs relating to historical safety defects to leaseholders. I understand where the noble Baroness is coming from, but that is what we have set out: they are, as I pointed out, the last cascade in the waterfall or cascade approach that this Government outlined with our Valentine’s Day amendments.
My noble friend Lord Leigh of Hurley raised the issue of Collier House in Knightsbridge. I will be meeting Felicity Buchan, the relevant MP, and officials to discuss this building, and I believe that we can fix this at the building level, rather than requiring an amendment to the Bill. So I ask my noble friend to bear with me. Let us return to this on Report if necessary, based on some of the discussions we are having in the department. I thank my noble friend for raising something that is inherently unfair: people are not getting the money reimbursed to them that they deserve because of the actions of, in this case, the freeholder, and I thank my noble friend for raising the matter in their interests.
I turn to Amendment 125 and thank the noble Baroness Lady Hayman, as I always do, for raising this important matter. I am really sorry that the Government will not be able to accept this amendment. Our assessment is that the amendment does not strike the right balance in proportionately funding remediation and is unnecessary, given the Government’s commitment to protecting leaseholders in buildings over 11 metres from all costs of addressing unsafe cladding and from most costs of remediating non-cladding defects. As I have already outlined, this will be achieved by making the industry pay for faults of its own making and capping contributions from leaseholders to remediation work.
In contrast to making those at fault pay, if the amendment proposed by the noble Baroness were to be passed, it would impact on private and social buildings possessing faulty external walls, or any element that poses a building safety risk or a risk to the ability of anybody to evacuate the building. Those buildings could be designated defective and be eligible for grant funding of 90% of the cost of works, or repurchased by the local authority.
The infrastructure required within local authorities to run such a scheme in today’s context would be complex and expensive—yet more expense. It would divert energy away from fixing buildings and prove hugely costly to the taxpayer. As well as lacking detail on the types of dwelling covered, the clause lacks clarity, and so could result in disproportionate decisions on funding. This could risk taxpayer funds and is unnecessary, given the Government’s commitments to protecting leaseholders from unreasonable costs. So, with this full explanation, I ask the noble Baroness not to press her amendment.
We are approaching 90 minutes on this group. I thank noble Lords for our spirited debate on this matter, which I know is close to the hearts of many on all sides of this Committee. I hope that I have provided the information and reassurance needed, and ask noble Lords to withdraw or not press their amendments.
The Minister answered a query I raised in connection with Amendment 72; I apologise for jumping a group. It was to do with commercial developers. I think I used the term “commercial developers”, but I intended to say “developers of commercial property”—that is, as opposed to commercial developers of residential property.
My Lords, as the Committee enters its sixth hour of sitting, this is not the time for a comprehensive wind-up. However, I thank all those who have taken part in this debate.
My noble friend Lord Naseby made a valuable point about buy-to-let investors. Over the past 10 or 20 years, buy to let has become an alternative to a conventional pension for many people. I am grateful that my noble friend the Minister said that he is open to discussion on this; we count that as a win.
My noble friend Lord Blencathra had a series of amendments on the theme of protecting leaseholders. I am grateful for them.
My noble friend Lord Leigh of Hurley made a legitimate point about the freeholder who had not claimed the money he could have. I wrote down the solution that my noble friend the Minister arrived at. He said, “We will fix it at the political level.” The mind boggles as to what exactly that involves but I am sure that, with his robust physique and experience of government, he will come up with a satisfactory outcome on that.
The amendment in the name of the noble Baroness, Lady Pinnock, would remove the cap for leaseholders. I have a lot of sympathy with that. New paragraph 2(1), proposed by government Amendment 92, states:
“No service charge is payable under a qualifying lease in respect of a relevant measure relating to a relevant defect if a relevant landlord … is responsible for the relevant defect.”
That is fine, but then there is a whole series of exclusions, of which this is one. I find it difficult to reconcile the cap with the principle that the leaseholder is innocent and should not pay; I think we will have to come to back to that.
The noble Earl, Lord Lytton, made the same point as my noble friend Lord Leigh of Hurley: that the leaseholder should be able to apply. If the leaseholder could have applied in my noble friend’s case, there would not have been a problem and the freeholder would not have been in the loop, as it were.
I am grateful to my noble friend Lady Neville-Rolfe for supporting a number of the amendments. The noble Baroness, Lady Hayman, had her own, thoughtful approach to protecting leaseholders. She referred to the cascade. I hope that her many questions will be answered; perhaps we can all share in the letter that goes round. She also supported the request for an inquiry into compensation, for which I am grateful.
On the waterfall, the Government did not seem to appear in it. I thought that they were right at the end, but they have somehow been left out. I think that the Government are at the end of the waterfall if all else fails; my noble friend the Minister is indicating that this may not be the case, but what are the levy and fund for if not to help where the costs are not otherwise met by the freeholder, the leaseholder or the developer?
The noble Lord, Lord Stunell, asked how the cap was arrived at. It may well have been through a reverse process involving the Treasury.
Finally, my noble friend the Minister said that I thought he was a snake oil salesman. I believe that he believed what he said; my comment was about the pace at which he said it, which was like an advertisement where the terms and conditions are spelled out at an accelerated pace and one does not really have time to hear them. I think my noble friend said that enfranchised leaseholders are now within the scheme; I think he said that because I read his lips. I find that difficult to reconcile with what is in government Amendment 63:
“‘Relevant building’ does not include a self-contained building or self-contained part of a building … in relation to which the right to collective enfranchisement … has been exercised.”
If that should not be there, that is fine, but that is how I read it; I also made that point in an earlier contribution.
If I am wrong, the Bill may be wrong, because I have just read out what is in it, but I think this is something we can sort out at the political level.
I am grateful to all noble Lords who have taken part in this debate. I beg leave to withdraw my amendment.
Amendment 56 withdrawn.
Amendments 57 to 60 not moved.
Schedule 8 agreed.
Clauses 114 and 115 agreed.
Clause 116: Interpretation of Part 4
61: Clause 116, page 123, line 39, leave out subsection (2)
Member’s explanatory statement
This amendment removes the provision providing that Part 4 does not apply in relation to the Palace of Westminster.
Amendment 61 agreed.
Clause 116, as amended, agreed.
Amendments 62 and 63
62: Before Clause 117, insert the following new Clause—
“Remediation of certain defects
(1) Sections (Meaning of “relevant building”) to (Meeting remediation costs of insolvent landlord) and Schedule (Remediation costs under qualifying leases) make provision in connection with the remediation of relevant defects in relevant buildings.(2) In those sections—(a) sections (Meaning of “relevant building”) to (Associated persons) define “relevant building”, “qualifying lease”, “the qualifying time”, “relevant defect” and “associate”;(b) section (Remediation costs under qualifying leases) and Schedule (Remediation costs under qualifying leases) contain protections for tenants under qualifying leases in respect of costs connected with relevant defects, and impose liabilities on certain landlords;(c) section (Remediation orders) makes provision about remediation orders, under which a landlord in a relevant building is required to remedy certain relevant defects;(d) section (Remediation contribution orders) makes provision about remediation contribution orders, under which an associate of a landlord in a relevant building is required to contribute towards the costs of remedying certain relevant defects;(e) section (Meeting remediation costs of insolvent landlord) makes provision about cases where a company that is a landlord in a relevant building is being wound up, and confers on the court a power to require an associate of the company to contribute to its assets.”Member’s explanatory statement
This new Clause introduces provisions about the remediation of certain defects arising out of works carried out before commencement.
63: Before Clause 117, insert the following new Clause—
“Meaning of “relevant building”
(1) This section applies for the purposes of sections (Meaning of “qualifying lease”) to (Meeting remediation costs of insolvent landlord) and Schedule (Remediation costs under qualifying leases).(2) “Relevant building” means a self-contained building, or self-contained part of a building, in England that contains at least two dwellings and—(a) is at least 11 metres in height,(b) has at least 5 storeys, or(c) is of a description prescribed by regulations made by the Secretary of State. This is subject to subsection (3).(3) “Relevant building” does not include a self-contained building or self- contained part of a building—(a) in relation to which the right to collective enfranchisement (within the meaning of Chapter 1 of Part 1 of the Leasehold Reform, Housing and Urban Development Act 1993) has been exercised, or(b) which is on commonhold land.(4) For the purposes of this section a building is “self-contained” if it is structurally detached.(5) For the purposes of this section a part of a building is “self-contained” if—(a) the part constitutes a vertical division of the building,(b) the structure of the building is such that the part could be redeveloped independently of the remainder of the building, and(c) the relevant services provided for occupiers of that part—(i) are provided independently of the relevant services provided for occupiers of the remainder of the building, or(ii) could be so provided without involving the carrying out of any works likely to result in a significant interruption in the provision of any such services for occupiers of the remainder of the building.(6) In subsection (5) “relevant services” means services provided by means of pipes, cables or other fixed installations.(7) The Secretary of State may by regulations make provision supplementing this section, including in particular—(a) provision defining “storey” for the purposes of this section;(b) provision about how the height of a building is to be determined for those purposes.”Member’s explanatory statement
This new Clause defines “relevant building” for the purposes of the provisions relating to the remediation of defects arising out of works carried out before commencement.
Amendments 62 and 63 agreed.
64: Before Clause 117, insert the following new Clause—
“Meaning of “qualifying lease”
(1) This section applies for the purposes of sections (Remediation costs under qualifying leases) to (Meeting remediation costs of insolvent landlord) and Schedule (Remediation costs under qualifying leases).(2) A lease is a “qualifying lease” if—(a) it is a long lease of a single dwelling in a relevant building,(b) the tenant under the lease is liable to pay a service charge,(c) the lease was granted before 14 February 2022, and(d) at the beginning of 14 February 2022 (“the qualifying time”)—(i) the dwelling was a relevant tenant’s only or principal home,(ii) a relevant tenant did not own any other dwelling in the United Kingdom, or(iii) a relevant tenant owned only one dwelling in the United Kingdom apart from their interest under the lease.(3) Where a dwelling was at the qualifying time let under two or more leases to which subsection (2)(a) and (b) apply, any of those leases which is superior to any of the other leases is not a “qualifying lease”. (4) For the purposes of this section—(a) “long lease” means a lease granted for a term of years certain exceeding 21 years, whether or not it is (or may become) terminable before the end of that term by notice given by or to the tenant or by re-entry, forfeiture or otherwise;(b) a person “owns” a dwelling if the person has a freehold interest in it or is a tenant under a long lease of it;(c) “relevant tenant” means a person who, at the qualifying time, is the tenant, or any of the tenants, under the lease mentioned in subsection (2);(d) “service charge” has the meaning given by section 18 of the Landlord and Tenant Act 1985.”Member’s explanatory statement
This new Clause defines “qualifying lease” for the purposes of the provisions relating to the remediation of defects arising out of works carried out before commencement.
Amendment 65 (to Amendment 64) not moved.
Amendment 64 agreed.
66: Before Clause 117, insert the following new Clause—
“Meaning of “relevant defect”
(1) This section applies for the purposes of sections (Remediation costs under qualifying leases) to (Meeting remediation costs of insolvent landlord) and Schedule (Remediation costs under qualifying leases).(2) “Relevant defect” means a defect as regards a building that—(a) arises as a result of anything done (or not done), including anything used (or not used), in connection with relevant works, and(b) causes a building safety risk.(3) In subsection (2) “relevant works” means works relating to the building (including its initial construction) that were carried out—(a) before completion, if completion occurred in the period of 30 years ending with the coming into force of this section, or(b) by or on behalf of a relevant landlord or management company, after completion and within that period.(4) For the purposes of this section—“building safety risk”, in relation to a building, means a risk to the safety of people in or about the building arising from—(a) the spread of fire, or(b) the collapse of the building or any part of it;“completion” and “management company” are defined by regulations made by the Secretary of State;“relevant landlord” means a landlord under a lease of the building or any part of it.”Member’s explanatory statement
This new Clause defines “relevant defect” for the purposes of the provisions relating to the remediation of defects arising out of works carried out before commencement.
Amendment 66A (to Amendment 66) not moved.
Amendment 66 agreed.
Amendments 67 to 77
67: Before Clause 117, insert the following new Clause—
(1) For the purposes of sections (Remediation costs under qualifying leases) to (Meeting remediation costs of insolvent landlord) and Schedule (Remediation costs under qualifying leases), a person (A) is associated with another person (B) in the circumstances mentioned in subsections (2) and (3).(2) If A is an individual, A is associated with any body corporate of which A was a director at any time in the period of 5 years ending at the qualifying time.(3) If A is a body corporate, it is associated with another body corporate (B) if—(a) at any time in the period of 5 years ending at the qualifying time, a person who was a director of A was also a director of B, or(b) at the qualifying time, one of them controlled the other or a third body corporate controlled both of them.Subsections (4) to (6) set out the cases in which a body corporate is regarded as controlling another body corporate.(4) A body corporate (X) controls a company (Y) if X possesses or is entitled to acquire—(a) at least half of the issued share capital of Y,(b) such rights as would entitle X to exercise at least half of the votes exercisable in general meetings of Y,(c) such part of the issued share capital of Y as would entitle X to at least half of the amount distributed, if the whole of the income of Y were in fact distributed among the shareholders, or(d) such rights as would, in the event of the winding up of Y or in any other circumstances, entitle it to receive at least half of the assets of Y which would then be available for distribution among the shareholders.(5) A body corporate (X) controls a limited liability partnership (Y) if X—(a) holds a majority of the voting rights in Y,(b) is a member of Y and has a right to appoint or remove a majority of other members, or(c) is a member of Y and controls alone, or pursuant to an agreement with other members, a majority of the voting rights in Y.(6) A body corporate (X) controls another body corporate (Y) if X has the power, directly or indirectly, to secure that the affairs of Y are conducted in accordance with X’s wishes.(7) In subsection (5) a reference to “voting rights” is to the rights conferred on members in respect of their interest in a limited liability partnership to vote on those matters which are to be decided on by a vote of the members of the limited liability partnership.(8) In determining whether one body corporate (X) controls another, X is treated as possessing—(a) any rights and powers possessed by a person as nominee for it, and(b) any rights and powers possessed by a body corporate which it controls (including rights and powers which such a body corporate would be taken to possess by virtue of this paragraph).”Member’s explanatory statement
This new Clause defines “associated person” for the purposes of the provisions relating to the remediation of defects arising out of works carried out before commencement.
68: Before Clause 117, insert the following new Clause—
“Remediation costs under qualifying leases
Schedule (Remediation costs under qualifying leases)—(a) provides that certain service charge amounts relating to relevant defects in a relevant building are not payable, and(b) makes provision for the recovery of those amounts from persons who are landlords under leases of the building (or any part of it).”Member’s explanatory statement
This new Clause introduces a new Schedule, containing protections for certain leaseholders and others, relating to certain remediation costs, and imposing corresponding liabilities on certain landlords.
69: Before Clause 117, insert the following new Clause—
(1) The Secretary of State may by regulations make provision for and in connection with remediation orders.(2) A “remediation order” is an order, made by the First-tier Tribunal, requiring a relevant landlord to remedy specified relevant defects in a specified relevant building by a specified time.(3) In this section “relevant landlord”, in relation to a relevant defect in a relevant building, means a landlord under a lease of the building or any part of it who is required, under the lease or by virtue of an enactment, to repair or maintain anything relating to the relevant defect.(4) The following persons may apply for a remediation order—(a) the regulator (as defined by section 2);(b) a local authority (as defined by section 29) for the area in which the relevant building is situated;(c) a fire and rescue authority (as defined by section 29) for the area in which the relevant building is situated;(d) any other person prescribed by the regulations.(5) In this section “specified” means specified in the order.”Member’s explanatory statement
This new Clause confers a power to make provision about remediation orders, which are orders requiring a landlord to remedy relevant defects.
70: Before Clause 117, insert the following new Clause—
“Remediation contribution orders
(1) The First-tier Tribunal may, on the application of an interested person, make a remediation contribution order in relation to a relevant building if it considers it just and equitable to do so.(2) “Remediation contribution order”, in relation to a relevant building, means an order requiring a specified body corporate to make payments to a specified person, for the purpose of meeting costs incurred or to be incurred in remedying relevant defects (or specified relevant defects) relating to the relevant building.(3) A body corporate may be specified only if it is associated with a landlord under a lease of the relevant building or any part of it.(4) An order may—(a) require the making of payments of a specified amount, or payments of a reasonable amount in respect of the remediation of specified relevant defects (or in respect of specified things done or to be done for the purpose of remedying relevant defects);(b) require a payment to be made at a specified time, or to be made on demand following the occurrence of a specified event.(5) In this section—“associated”: see section (Associated persons);“interested person”, in relation to a relevant building, means— (a) the regulator (as defined by section 2),(b) a local authority (as defined by section 29) for the area in which the relevant building is situated,(c) a fire and rescue authority (as defined by section 29) for the area in which the relevant building is situated, or(d) a person with a legal or equitable interest in the relevant building or any part of it;“relevant building”: see section (Meaning of “relevant building”);“relevant defect”: see section (Meaning of “relevant defect”);“specified” means specified in the order.”Member’s explanatory statement
This new Clause confers power on the First-tier Tribunal to make an order requiring a person associated with certain landlords to contribute towards the costs of remedying certain defects in relevant buildings.
71: Before Clause 117, insert the following new Clause—
“Meeting remediation costs of insolvent landlord
(1) This section applies if, in the course of the winding up of a company which is a landlord under a lease of a relevant building or any part of it, it appears—(a) that there are relevant defects relating to the building, and(b) that the company is under an obligation (howsoever imposed) to remedy any of the relevant defects or is liable to make a payment relating to any costs incurred or to be incurred in remedying any of the relevant defects.(2) The court may, on the application of the liquidator, by order require a body corporate associated with the company to make such contributions to the company’s assets as the court considers to be just and equitable.(3) An order may be made where proceedings for the winding up of the company were commenced before (as well as after) the coming into force of this section.(4) In this section—“associated”: see section (Associated persons);“the court” means a court having jurisdiction to wind up the company;“relevant building”: see section (Meaning of “relevant building”);“relevant defect”: see section (Meaning of “relevant defect”).”Member’s explanatory statement
This new Clause confers power on a court winding up a company to require a body corporate associated with the company to contribute to the assets of the company.
72: Before Clause 117, insert the following new Clause—
“Building industry schemes
(1) The Secretary of State may by regulations—(a) establish a scheme, and(b) make provision about the scheme.(2) Regulations that establish a scheme must prescribe the descriptions of persons in the building industry who may be members of the scheme (“eligible persons”).(3) Where a scheme is established, the Secretary of State must set and publish the criteria that an eligible person must meet in order to become, and remain, a member of the scheme (“membership criteria”).(4) Membership criteria may be set for any purpose connected with—(a) securing the safety of people in or about buildings in relation to risks arising from buildings, or(b) improving the standard of buildings. (5) The Secretary of State must ensure that a list of members of a scheme is kept and published (and may publish a list of persons who are eligible persons but are not members of a scheme).”Member’s explanatory statement
This new Clause confers power on the Secretary of State to establish one or more building industry schemes.
73: Before Clause 117, insert the following new Clause—
“Building industry schemes: supplementary
(1) This section supplements section (Building industry schemes).(2) Regulations may provide that a scheme is to be maintained by—(a) the Secretary of State, or(b) a person designated by the Secretary of State (a “designated person”), acting on behalf of the Secretary of State.(3) Regulations may provide for the charging of fees, in connection with—(a) an application for membership;(b) renewal of membership;(c) a review;(d) any other prescribed matter.(4) The Secretary of State may publish a document setting out the procedure relating to any of the following—(a) applications for membership of a scheme;(b) the periodic renewal of membership;(c) termination of a person’s membership;(d) the review of any decision relating to a person’s membership;(e) the suspension of a person from membership.(5) Membership criteria may be framed by reference to—(a) standards, or a document, from time to time published by any person;(b) the opinion of the Secretary of State, or a designated person, in relation to any matter.(6) Different membership criteria may be set for different purposes.(7) In section (Building industry schemes) and this section—“building” means a building in England;“building industry”: a reference to persons in the building industry is to persons carrying on, for business purposes, activities connected with the design, construction, management or maintenance of buildings, including persons carrying on activities in relation to construction products (within the meaning of paragraph 24 of Schedule 11) in England;“prescribed” means prescribed by the regulations;“regulations” means regulations under section (Building industry schemes);“scheme” means a scheme established under section (Building industry schemes);“standard”(except in subsection (5) of this section) is to be read in accordance with section 29.”Member’s explanatory statement
This new Clause makes supplementary provision about building industry schemes.
74: Before Clause 117, insert the following new Clause—
“Prohibition on development for prescribed persons
(1) The Secretary of State may by regulations prohibit a person of a prescribed description from carrying out development of land in England (or a prescribed description of such development). (2) A prohibition may be imposed for any purpose connected with—(a) securing the safety of people in or about buildings in relation to risks arising from buildings, or(b) improving the standard of buildings.(3) A prohibition under the regulations applies despite planning permission (or any prescribed description of planning permission) having been granted.(4) The regulations may provide that, in prescribed cases, no prescribed certificate under the 1990 Act may be granted (and any purported grant is of no effect).(5) The regulations may require a person of a prescribed description to give a notification relating to the proposed beginning of development (and may make provision about the content and form of a notification and the way in which it is to be given).(6) The regulations may contain exceptions.(7) The regulations may make provision about enforcement, including in particular provision applying (with or without modifications), in relation to a breach of the regulations, any provision of Part 7 of the 1990 Act (enforcement).(8) For the purposes of this section—(a) “the 1990 Act” means the Town and Country Planning Act 1990;(b) a reference to the “beginning” of development is to be read in accordance with section 56(2) of the 1990 Act;(c) “building” means a building in England;(d) “development” has the meaning given by section 55 of the 1990 Act;(e) “planning permission” has the meaning given by section 336 of the 1990 Act;(f) “prescribed” means prescribed by regulations under this section;(g) “standard” is to be read in accordance with section 29.”Member’s explanatory statement
This new Clause confers power on the Secretary of State to prohibit a prescribed person from carrying out development (or certain development).
75: Before Clause 117, insert the following new Clause—
“Building control prohibitions
(1) The Secretary of State may by regulations impose a building control prohibition, as regards buildings or proposed buildings, in relation to persons of a prescribed description.(2) A prohibition may be imposed for any purpose connected with—(a) securing the safety of people in or about buildings in relation to risks arising from buildings, or(b) improving the standard of buildings.(3) A “building control prohibition”, in relation to a person, prohibits—(a) the person from applying for building control approval or from depositing plans,(b) the person from giving an initial notice (whether or not jointly with anyone else) or a public body’s notice, public body’s plans certificate or public body’s final certificate,(c) the granting of building control approval to the person,(d) the passing of plans deposited by the person,(e) the acceptance of an initial notice given by the person (whether or not jointly with anyone else) or a public body’s notice, public body’s plans certificate or public body’s final certificate given by the person, (f) the giving of a final certificate in relation to works carried out by the person,(g) the person from giving a prescribed document,(h) the giving of a prescribed document to the person or in respect of works carried out by the person, or(i) the acceptance of any prescribed document given by the person or in respect of works carried out by the person.(4) A building control prohibition applies despite any provision made by or under the Building Act 1984.(5) The regulations may contain exceptions.(6) The regulations may provide that anything done in contravention of the regulations is of no effect.(7) Any reference in this section to a building or proposed building is to a building or proposed building in England.(8) In this section—“building” and “building control approval”, and references to the deposit and passing of plans, are to be read in accordance with Part 1 of the Building Act 1984;“initial notice”, “final certificate”, “public body’s notice”, “public body’s plans certificate” and “public body’s final certificate” have the same meaning as in Part 2 of that Act;“prescribed” means prescribed by regulations under this section;“standard” is to be read in accordance with section 29.”Member’s explanatory statement
This new Clause confers power on the Secretary of State to impose building control prohibitions on prescribed persons.
76: Before Clause 117, insert the following new Clause—
“Building liability orders
(1) The High Court may make a building liability order if it considers it just and equitable to do so.(2) A “building liability order” is an order providing that any relevant liability (or any relevant liability of a specified description) of a body corporate (“the original body”) relating to a specified building is also—(a) a liability of a specified body corporate, or(b) a joint and several liability of two or more specified bodies corporate.(3) In this section “relevant liability” means a liability (whether arising before or after commencement) that relates to a building in England and is incurred—(a) under the Defective Premises Act 1972 or section 38 of the Building Act 1984, or(b) as a result of a building safety risk.(4) A body corporate may be specified only if it is, or has at any time in the relevant period been, an associate of the original body.(5) A building liability order—(a) may be made in respect of a liability of a body corporate that has been dissolved (including where dissolution occurred before commencement);(b) continues to have effect even if the body corporate is dissolved after the making of the order.(6) In this section—“associate”: see section (Building liability orders: associates);“building safety risk”, in relation to a building, means a risk to the safety of people in or about the building arising from the spread of fire or structural failure;“commencement” means the time this section comes into force;“the relevant period” means the period— (a) beginning with the beginning of the carrying out of the works in relation to which the relevant liability was incurred, and(b) ending with the making of the order;“specified” means specified in the building liability order.”Member’s explanatory statement
This new Clause confers power on the court to make an order under which certain liabilities relating to buildings in England are imposed on a person associated with the person who is primarily liable.
77: Before Clause 117, insert the following new Clause—
“Building liability orders: associates
(1) For the purposes of section (Building liability orders), a body corporate (A) is associated with another body corporate (B) if—(a) one of them controls the other, or(b) a third body corporate controls both of them.Subsections (2) to (4) set out the cases in which a body corporate is regarded as controlling another body corporate.(2) A body corporate (X) controls a company (Y) if X possesses or is entitled to acquire—(a) at least half of the issued share capital of Y,(b) such rights as would entitle X to exercise at least half of the votes exercisable in general meetings of Y,(c) such part of the issued share capital of Y as would entitle X to at least half of the amount distributed, if the whole of the income of Y were in fact distributed among the shareholders, or(d) such rights as would, in the event of the winding up of Y or in any other circumstances, entitle it to receive at least half of the assets of Y which would then be available for distribution among the shareholders.(3) A body corporate (X) controls a limited liability partnership (Y) if X—(a) holds a majority of the voting rights in Y,(b) is a member of Y and has a right to appoint or remove a majority of other members, or(c) is a member of Y and controls alone, or pursuant to an agreement with other members, a majority of the voting rights in Y.(4) A body corporate (X) controls another body corporate (Y) if X has the power, directly or indirectly, to secure that the affairs of Y are conducted in accordance with X’s wishes.(5) In subsection (3) a reference to “voting rights” is to the rights conferred on members in respect of their interest in a limited liability partnership to vote on those matters which are to be decided on by a vote of the members of the limited liability partnership.(6) In determining under any of subsections (2) to (4) whether one body corporate (X) controls another, X is treated as possessing—(a) any rights and powers possessed by a person as nominee for it, and(b) any rights and powers possessed by a body corporate which it controls (including rights and powers which such a body corporate would be taken to possess by virtue of this paragraph).”Member’s explanatory statement
This new Clause sets out who is an associated person for the purposes of the preceding new Clause.
Amendments 67 to 77 agreed.
The question is that Amendments 79 to 81 be agreed to.
Do not worry. They will not because Hansard will cover your back and my back. I have been told that this is the most complicated thing that has been done in Grand Committee for years, so I think we have to accept it if I have made a mistake. I thought they were government amendments.
Amendments 78 to 87 not moved.
Clause 117 agreed.
Amendment 88 not moved.
Clauses 118 and 119 agreed.
Amendment 89 not moved.
Clause 120: Establishment of the new homes ombudsman scheme
Amendments 90 and 91
90: Clause 120, page 129, line 4, at end insert—
“(c) the relevant Northern Ireland department.”Member’s explanatory statement
This amendment places the Secretary of State under a duty to consult the relevant department in Northern Ireland before making arrangements to establish the new homes ombudsman scheme.
91: Clause 120, page 129, line 4, at end insert—
“(5) In this section, “the relevant Northern Ireland department” means—(a) the Northern Ireland department designated for the purposes of this section by the First Minister and deputy First Minister acting jointly, or(b) failing such a designation, the Executive Office in Northern Ireland.”Member’s explanatory statement
This amendment explains which department in Northern Ireland is the relevant Northern Ireland department.
Amendments 90 and 91 agreed.
Clause 120, as amended, agreed.
Clause 121 agreed.
92: Before Schedule 9, insert the following new Schedule—
“SCHEDULE REMEDIATION COSTS UNDER QUALIFYING LEASESInterpretation
1_ In this Schedule—“associated”: see section (Associated persons);“building safety risk” has the meaning given by section (Meaning of “relevant defect”);“qualifying lease”: see section (Meaning of “qualifying lease”);“the qualifying time” has the same meaning as in section (Meaning of “qualifying lease”); “relevant building”: see section (Meaning of “relevant building”);“relevant defect”: see section (Meaning of “relevant defect”);“relevant measure”, in relation to a relevant defect, means a measure taken—(a) to remedy the relevant defect, or(b) for the purpose of—(i) preventing a relevant risk from materialising, or(ii) reducing the severity of any incident resulting from a relevant risk materialising;“relevant risk” here means a building safety risk that arises as a result of the relevant defect;“service charge” has the meaning given by section 18 of the Landlord and Tenant Act 1985.No service charge payable for defect for which landlord or associate responsible
2_(1) No service charge is payable under a qualifying lease in respect of a relevant measure relating to a relevant defect if a relevant landlord—(a) is responsible for the relevant defect, or(b) is or has at any time been associated with a person responsible for a relevant defect.(2) For the purposes of this paragraph a person is “responsible for” a relevant defect if—(a) in the case of an initial defect, the person was the developer or carried out works relating to the defect;(b) in any other case, the person carried out works relating to the defect.(3) In this paragraph—“developer” means a person who undertakes or commissions the construction or conversion of a building (or part of a building) with a view to granting or disposing of interests in the building or parts of it;“initial defect” means a relevant defect arising in connection with works carried out before completion (within the meaning of section (Meaning of “relevant defect”));“relevant landlord”, in relation to a qualifying lease, means the landlord under the lease or any superior landlord.Paragraph 2: extension of protection to superior leases
3_(1) This paragraph applies if, as a result of paragraph 2, an amount of service charge (an “unrecoverable amount”) that would otherwise be payable under a qualifying lease in respect of a relevant measure is not payable.(2) Any superior lease has effect as if any liability of the tenant under the superior lease to pay an amount in respect of the relevant measure (“the relevant amount”) were a liability to pay an amount equal to—(a) the relevant amount, minus(b) the unrecoverable amount.(3) In this paragraph “superior lease” means any lease which is superior to the qualifying lease.No service charge payable if prescribed conditions are met
4_(1) No service charge is payable under a qualifying lease in respect of a relevant measure relating to any relevant defect if any prescribed conditions, relating to a relevant landlord or the value of the qualifying lease, are met.(2) In this paragraph—“prescribed” means prescribed by regulations made by the Secretary of State;“relevant landlord” has the same meaning as in paragraph 2. Limit on service charge in other cases
5_(1) A service charge which would otherwise be payable under a qualifying lease in respect of a relevant measure relating to any relevant defect is payable only if (and so far as) the sum of—(a) the amount of the service charge, and(b) the total amount of relevant service charges which fell due before the service charge fell due,does not exceed the permitted maximum.(2) In this paragraph “relevant service charge” means a service charge under the lease in respect of a relevant measure relating to any relevant defect that—(a) fell due in the pre-commencement period, or(b) falls due after commencement.(3) In sub-paragraph (2) “the pre-commencement period” means the period—(a) beginning 5 years before commencement or, if later, on the day the relevant person became the tenant under the qualifying lease, and(b) ending with commencement.“The relevant person” means the person who was the tenant under the qualifying lease at commencement.(4) In this paragraph—“commencement” means the time this paragraph comes into force;“the permitted maximum”: see paragraph 6.Paragraph 5: the permitted maximum
6_(1) In paragraph 5 “the permitted maximum”, in relation to a qualifying lease, has the following meaning.(2) The permitted maximum is (subject to sub-paragraphs (3) to (5))—(a) if the premises demised by the qualifying lease are in Greater London, £15,000;(b) otherwise, £10,000.(3) Where the qualifying lease is a shared ownership lease and the tenant’s total share was less than 100% at the qualifying time, the permitted maximum is the tenant’s total share (as at that time) of what would otherwise be the permitted maximum.(4) Where the value of the qualifying lease at the qualifying time is at least £1,000,000 but does not exceed £2,000,000, the permitted maximum is £50,000.(5) Where the value of the qualifying lease at the qualifying time exceeds £2,000,000, the permitted maximum is £100,000.(6) The Secretary of State may by regulations make provision about the determination of the value of a qualifying lease for the purposes of paragraph 4 and this paragraph.(7) In this paragraph “shared ownership lease” and “total share” have the meaning given by section 7 of the Leasehold Reform, Housing and Urban Development Act 1993.Annual limit on service charges
7_(1) The Secretary of State may by regulations make provision limiting the total amount of service charges payable in any period of 12 months under a qualifying lease in respect of relevant measures relating to any relevant defect to one fifth of the permitted maximum.(2) In this paragraph “the permitted maximum” means the permitted maximum as defined by paragraph 6 in relation to the lease.No service charge payable for cladding remediation where tenant was resident
8_(1) No service charge is payable under a qualifying lease in respect of cladding remediation if the condition in section (Meaning of “qualifying lease”)(2)(d)(i) (resident tenant) was met at the qualifying time. (2) In this paragraph “cladding remediation” has the meaning given by regulations made by the Secretary of State.No service charge payable for legal expenses relating to relevant defects
9_(1) No service charge is payable under a qualifying lease in respect of legal expenses relating to the liability (or potential liability) of any person incurred as a result of a relevant defect.(2) In this paragraph “legal expenses” means any costs incurred, or to be incurred, in connection with—(a) obtaining legal advice,(b) any proceedings before a court or tribunal,(c) arbitration, or(d) mediation.Paragraphs 2 to 9: supplementary
10_(1) This paragraph supplements paragraphs 2 to 9 (the “relevant paragraphs”).(2) Where a relevant paragraph provides that no service charge is payable under a lease in respect of a thing—(a) no costs incurred or to be incurred in respect of that thing (or in respect of that thing and anything else)—(i) are to be regarded for the purposes of the relevant provisions as relevant costs to be taken into account in determining the amount of a service charge payable under the lease, or(ii) are to be met from a relevant reserve fund;(b) any amount payable under the lease, or met from a relevant reserve fund, is limited accordingly (and any necessary adjustment must be made by repayment, reduction of subsequent charges or otherwise).(3) In this paragraph—“the relevant provisions” means sections 18 to 30 of the Landlord and Tenant Act 1985 (service charges) and section 42 of the Landlord and Tenant Act 1987 (service charge contributions to be held on trust);“relevant reserve fund” means—(a) a trust fund within the meaning of section 42 of the Landlord and Tenant Act 1987,(b) an express trust of a kind mentioned in subsection (9) of that section, comprising payments made by the tenant under the qualifying lease and others, or(c) any other fund comprising payments made by the tenant under the qualifying lease and others, and held for the purposes of meeting costs incurred or to be incurred in respect of the relevant building in question or any part of it (or in respect of that building or part and anything else).No increase in service charge for other tenants
11_ Where—(a) an amount (“the original amount”) would, apart from this Schedule, be payable by a tenant under a lease of premises in a relevant building, and(b) a greater amount would (apart from this paragraph) be payable under the lease as a result of this Schedule,the lease has effect as if the amount payable were the original amount.Recovery of service charge amounts from landlords
12_(1) The Secretary of State may by regulations make provision for and in connection with the recovery, from a prescribed relevant landlord, of any amount that is not recoverable under a lease as a result of this Schedule.(2) In this paragraph—“prescribed” means prescribed by regulations under this paragraph;“relevant landlord”, in relation to a lease, means the landlord under the lease or any superior landlord. Information
13_(1) The Secretary of State may by regulations make provision requiring a tenant under a qualifying lease to give prescribed information or documents to the landlord under the lease or any superior landlord.(2) The regulations may provide that the information or documents are to be given in a prescribed way.(3) In this paragraph “prescribed” means prescribed by the regulations.Anti-avoidance
14_ A covenant or agreement (whenever made) is void insofar as it purports to exclude or limit any provision made under this Schedule.”Member’s explanatory statement
This new Schedule contains protections for certain leaseholders and others, relating to certain remediation costs, and imposes corresponding liabilities on certain landlords.
Amendments 93 to 94ZA (to Amendment 92) not moved.
Amendment 92 agreed.
Schedule 9: The new homes ombudsman scheme
Amendments 94A and 94B not moved.
Amendments 95 and 96
95: Schedule 9, page 211, line 38, leave out “and the Scottish Ministers” and insert “, the Scottish Ministers and the relevant Northern Ireland department”
Member’s explanatory statement
This amendment is to ensure that the new homes ombudsman scheme includes provision about provision of information to the relevant department in Northern Ireland.
96: Schedule 9, page 211, line 38, at end insert—
“(2) In this paragraph, “the relevant Northern Ireland department” means the Northern Ireland department designated for the purposes of this paragraph by the First Minister and deputy First Minister acting jointly.”Member’s explanatory statement
This amendment explains which department in Northern Ireland is the relevant Northern Ireland department.
Amendments 95 and 96 agreed.
Schedule 9, as amended, agreed.
Schedule 10 agreed.
Clause 122: “Relevant owner”, “new build home” and “developer”
97: Clause 122, page 130, line 4, after “Scotland” insert “or Northern Ireland”
Member’s explanatory statement
This amendment glosses the meaning of “occupation condition” for homes in Northern Ireland.
Amendment 97 agreed.
Amendment 97A not moved.
Amendments 98 to 100
98: Clause 122, page 130, line 23, at end insert—
“(c) in relation to land in Northern Ireland, a legal estate which is—(i) an estate in fee simple absolute in possession,(ii) an estate in fee simple in possession subject to a rent payable under a fee farm grant, or(iii) a term of years absolute granted for a term of more than 21 years from the date of the grant.”Member’s explanatory statement
This amendment provides the meaning of “relevant interest” for land in Northern Ireland.
99: Clause 122, page 130, line 43, at end insert—
“(d) in relation to homes in Northern Ireland, the Northern Ireland department designated for the purposes of this section by the First Minister and deputy First Minister acting jointly.”Member’s explanatory statement
This amendment confers power on a Northern Ireland department to make regulations about who is a “developer”.
100: Clause 122, page 131, line 3, at end insert—
“(10A) If no Northern Ireland department has been designated for the purposes of this section then, for the purposes of subsection (10), “the relevant national authority” in relation to homes in Northern Ireland is the Executive Office in Northern Ireland.”Member’s explanatory statement
This amendment is to ensure that the Secretary of State, Welsh Ministers and Scottish Ministers will still be able to make regulations for their own jurisdictions even if there is no Northern Ireland department designated for the purposes of making regulations for homes in Northern Ireland.
Amendments 98 to 100 agreed.
Clause 122, as amended, agreed.
Clause 123: Regulations under section 122
Amendments 101 and 102
101: Clause 123, page 131, line 8, leave out from “exercisable” to end of line 10 and insert “—
(a) in the case of regulations made by the Secretary of State or the Welsh Ministers, by statutory instrument, and(b) in the case of regulations made by a Northern Ireland department, by statutory rule for the purposes of the Statutory Rules (Northern Ireland) Order 1979 (S.I. 1979/1573 (N.I. 12)).”Member’s explanatory statement
This amendment provides for procedural matters connected to the power conferred on a Northern Ireland department to make regulations.
102: Clause 123, page 131, line 27, at end insert—
“(d) if made by a Northern Ireland department, may not be made unless a draft of the regulations has been laid before, and approved by a resolution of, the Northern Ireland Assembly.”Member’s explanatory statement
This amendment provides for the parliamentary procedure for regulations made by a Northern Ireland department.
Amendments 101 and 102 agreed.
Clause 123, as amended, agreed.
Clause 124: Power to require persons to join scheme and to provide information
Amendments 103 and 104
103: Clause 124, page 132, line 8, at end insert—
“(c) the relevant Northern Ireland department.”Member’s explanatory statement
This amendment places the Secretary of State under a duty to consult the relevant department in Northern Ireland before making regulations about the new homes ombudsman scheme.
104: Clause 124, page 132, line 31, at end insert—
“(8) In this section, “the relevant Northern Ireland department” means—(a) the Northern Ireland department designated for the purposes of this section by the First Minister and deputy First Minister acting jointly, or(b) failing such a designation, the Executive Office in Northern Ireland.”Member’s explanatory statement
This amendment explains which department in Northern Ireland is the relevant Northern Ireland department.
Amendments 103 and 104 agreed.
Clause 124, as amended, agreed.
Clause 125 agreed.
Clause 126: Developers’ code of practice
Amendments 105 and 106
105: Clause 126, page 133, line 5, leave out “and the Scottish Ministers” and insert “, the Scottish Ministers and the relevant Northern Ireland department”
Member’s explanatory statement
This amendment places the Secretary of State under a duty to consult the relevant department in Northern Ireland about the code of practice.
106: Clause 126, page 133, line 8, at end insert—
“(5) In this section, “the relevant Northern Ireland department” means—(a) the Northern Ireland department designated for the purposes of this section by the First Minister and deputy First Minister acting jointly, or(b) failing such a designation, the Executive Office in Northern Ireland.”Member’s explanatory statement
Amendments 105 and 106 agreed.
Clause 126, as amended, agreed.
Clauses 127 and 128 agreed.
Amendment 107 not moved.
I cannot call Amendment 107A, as it is an amendment to Amendment 107.
Amendments 108 to 110 not moved.
Committee adjourned at 9.09 pm.