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Building Safety

Volume 689: debated on Wednesday 10 February 2021

With permission, Mr Speaker, I want to make a statement on housing and building safety. Beyond the covid-19 pandemic, the Government want to build back better—better homes, better infrastructure and better communities. The foundation of those ambitions, and the mission of my Department, is safety and fairness. We have all been moved by the stories we have heard and the people we have met—homeowners placed in difficult and sometimes impossible situations through no fault of their own. I appreciate the frustration, the worry and the despair that at times they feel. I share their anger at the errors, the omissions, the false promises and even the outright dishonesty, which were built up over many decades but which this Government are determined to tackle.

That is why today I am announcing an unprecedented intervention—a clear plan to remove unsafe cladding, to provide certainty to leaseholders, to make the industry pay for its faults of the past, to create a world-class building safety regime and to inject confidence and certainty back into this part of the housing market. First, we will finish the job we have started on remediating unsafe cladding. After the tragedy of Grenfell Tower, the expert advice that this Government received identified aluminium composite cladding, or ACM—the material on the tower—as by far the most unsafe form of cladding. It should never have been used, and our independent expert advisory panel recommended that it should be the focus of our remediation work.

Thanks to a considerable effort, including during the pandemic, almost 95% of all high-rise buildings with unsafe ACM cladding identified by the beginning of last year have been remediated, or workers are on site now doing the job. That rises to 100% in social housing. Guided by expert advice, the work to remove other types of cladding that are also unsafe—albeit less so than ACM—where they pose a genuine risk to life is also under way.

It has always been our expectation—our demand—that building owners and developers should step up to meet the cost of this work. Where they have not, or where they no longer exist, the Government have stepped in, providing £1.6 billion to remediate unsafe cladding. However, it is clear that without further Government intervention many building owners will simply seek to pass these potentially very significant costs on to leaseholders, as this is often the legal position in the leases that they signed. That would risk punishing those who have worked hard and bought their own home, but who have, through no fault of their own, found themselves caught in an invidious situation. Importantly, it would also risk slowing down the critical works to make these homes safer.

I am therefore making an exceptional intervention today on behalf of the Government and providing certainty that leaseholders in high-rise residential buildings will face no cost for cladding remediation works. We will make further funding available to pay for the removal and replacement of unsafe cladding for all leaseholders in high-rise residential buildings of 18 metres and above, or above six storeys, in England. We continue to take a safety-led approach, and this funding will focus on the higher-rise buildings, where the independent expert advisory panel tells us time and again the overwhelming majority of the safety risk lies, in line with the existing building safety fund and the anticipated scope of the new building safety regulator that we are establishing and will shortly be legislating for. This will ensure that we end the cladding scandal in a way that is fair and generous to leaseholders.

Secondly, for lower and medium-rise blocks of flats, the risks are significantly lower and the remediation of cladding is less likely to be needed; in many cases, it will not be needed at all, but where it is, costs can still be significant for leaseholders. That is why I am announcing today that the Government will develop a long-term scheme to protect leaseholders in this situation with financial support for cladding remediation on buildings of between four and six storeys. Under a long-term low-interest scheme, no leaseholder will ever pay more than £50 a month towards the removal of unsafe cladding, many far less.

Taken together, this means the Government are providing more than £5 billion, including a further £3.5 billion announced today, plus the significant cost of the very generous financing scheme, which will run for many years to come, to ensure that all leaseholders in medium and high-rise blocks face no costs or very low costs if cladding remediation is needed. Where it is needed, costs can still be significant for leaseholders, which is why we want to take these important steps. We want to ensure that the Government develop this long-term scheme, which will protect leaseholders with financial support. Taken together, this means that the Government are helping leaseholders to move forwards with greater certainty and more confidence about the future.

Thirdly, while the problem is not one of leaseholders’ making, it also cannot be right that the costs of addressing these issues fall solely on taxpayers, many of whom are not themselves homeowners and can only dream of getting on the housing ladder. The Government have always expected the industry to contribute towards these costs, and some have done so. Today, I am announcing that we will introduce a gateway 2 developer levy, which will be implemented through the forthcoming Building Safety Bill. The proposed levy will be targeted and will apply only when developers seek permission to develop certain high-rise buildings in England, helping to ensure that the industry takes collective responsibility for historical building safety defects. In introducing the levy, we will continue to ensure that the homes our country needs get built and that our small and medium-sized builders are protected.

In addition, a new tax will be introduced for the UK residential property development sector in 2022. This will raise at least £2 billion over a decade to help to pay for cladding remediation costs. The tax will ensure that the largest property developers make a fair contribution to the remediation programme in relation to the money they make from residential property, reflecting the benefit that they will derive from restoring confidence to the UK housing market. The Government will consult on the policy design in due course.

Fourthly, I know there are many people across the country who are concerned about the safety of their home. In the actions we have taken and those we take today, we have already very clearly prioritised public safety. However, it is also important that we put the risk of a fire, and in particular the risk of a fatal fire, in context—it is low. Last year, the number of people who died in fires in blocks of flats over 11 metres was 10—an all-time low—and fire-related fatalities in dwellings in England have fallen by 29% over the past decade. By way of comparison, more than 1,700 fatalities were reported on our roads in 2019.

Of course, any death is one too many, and the tragedy of Grenfell Tower lingers with us and demands action. That is why it is right that we address safety issues where they exist and are a threat to life, but we must do so proportionately, guided at all times by expert advice. That is the approach that we are taking through the Building Safety Bill, the new building safety regulator, the Fire Safety Bill and the new national regulator for construction products, which I announced in January. I am determined that we will have a world-class building safety regime.

We need everyone to follow this sensible, proportionate approach so that this part of the housing market can move forward and homeowners are not disproportionately impacted. The Royal Institution of Chartered Surveyors has consulted on new guidance for valuers on when an EWS1 form should be required. The Government endorse its work to ensure that assessors have a stronger basis on which to make good, proportionate judgments about valuation risk. Lenders have welcomed the progress on that guidance, which will help to ensure that more than half a million leaseholders in blocks of flats over 11 metres will not need a separate EWS1 assessment to get a mortgage. That builds on the interventions we have already made to create and train many more assessors, and we are doing more so that they can access professional indemnity insurance to get on with the job.

Today, in addition to providing certainty to leaseholders, we are providing confidence to lenders. Following discussions that my right hon. Friend the Chancellor and I have had with lenders, we expect all the major banks and building societies to strongly support today’s intervention, which will provide greater certainty to the market and help to restore the effective lending, purchasing and selling of properties as soon as possible.

Taken together, this exceptional intervention amounts to the largest-ever Government investment in building safety. We believe in homeownership, and today we firmly support the hundreds of thousands of homeowners who need our help now. I commend this statement to the House.

I thank the Secretary of State for advance sight of his statement. Buying a first home should be a dream come true, but for many it has been a nightmare for years. As a result of Government choices, three and a half years on from the Grenfell tragedy, in which 72 people lost their lives, hundreds of thousands of people are still trapped in unsafe homes and many more are unable to move. Today’s announcement is too late for too many. It is a repeat of undelivered promises and backtracks on the key one—that leaseholders should have no costs to pay.

The Chancellor said last March that

“all unsafe combustible cladding will be removed from every private and social residential building above 18 metres high.”—[Official Report, 11 March 2020; Vol. 673, c. 291.]

But that has not happened. Buildings have not been able to access the fund, and £9 out of £10 is still sitting where it was. At every stage, the Government under- estimated the problem, and delays caused it to grow. They still do not know how many buildings are unsafe, where they are and what danger they pose. Until we have answers to those basic questions, the Government will continue to make mistakes, offering piecemeal solutions that have to be updated when they do not deliver.

Can the Secretary of State guarantee that the funding will cover all buildings over 18 metres? What will the consequential be for the devolved Administrations, including Wales? We cannot have a repeat of the first come, first served free-for-all, whereby the most dangerous blocks risk being fixed last. Will the Government set up an independent taskforce, as Labour has asked for, to prioritise buildings according to risk, with powers to get the funds out the door and the ability to go after building owners who fail to get on with the work?

Ministers have now promised 17 times that leaseholders will not bear the cost of fixing a problem that they did not cause. Many will be listening to the Housing Secretary’s remarks today, and the Government have betrayed their promise that leaseholders would not pay for the building safety crisis. As I said, three and a half years on from Grenfell, hundreds of thousands of people cannot sleep at night because their homes are unsafe. The Government have today chosen to pile financial misery on them—this is an injustice.

What does the Housing Secretary say to Julie in Runcorn, who lives in a flat with dangerous high-pressure laminate cladding? Her block is under 18 metres, so she is unable to access the funding promised so far. She lives in the same development as buildings that have the exact same cladding but are over 18 metres, so they will be able to access the fund. Why should this arbitrary 18-metre height limit mean the difference between a safe home and financial ruin? What are the terms of the loans? What will the interest rate be? Will leaseholders be required to pay the interest as well as the main cost? The right hon. Gentleman says that leaseholders will not pay more than £50 a month, but does that stay with the current owners when they move, or with the home so the new owner is forced to pay? How long does this run for? Will it go up by inflation each year? What will the Government do if those homes remain unsellable? How will they ensure that freeholders take up the loans? How will the Government speed up remediation, because the current stalemate cannot continue?

Other properties do not have dangerous cladding but people have been charged thousands of pounds per flat to fix other fire safety issues. What does the Housing Secretary say to them? The Government should focus on securing our economy and rebuilding from covid, not saddling homeowners with further debt. When they have further debt, that means less money for our economic recovery, taking money away from local shops. It reinforces regional imbalances, and it makes young first-time buyers and pensioners pay money they cannot afford. The Government should pursue those responsible fully, to prevent leaseholders and taxpayers from carrying the can.

The Government have announced a levy and a tax, which I welcome, because those responsible should bear the cost, but how much do the Government anticipate the levy will raise? Will they pursue others, such as cladding manufacturers, who are also responsible for putting in the dangerous cladding? The Government have missed every target for removing ACM cladding, and 50,000 people are still living in flats wrapped in it—this is the same cladding as was found on Grenfell Tower—and thousands more have other dangerous cladding. Will the Secretary of State commit today to removing all dangerous cladding by 2022?

As the right hon. Gentleman will know, at least one first-time homeowner, Hayley, has already been made bankrupt before she was even asked to pay for remediation, just from the extra costs. She asked the Government to think about her former neighbours, so when will leaseholders start receiving funding to pay for the round-the-clock fire patrols they are being charged hundreds of pounds each month for? What about the skyrocketing insurance? How will the Government get the market moving? Their last announcement fell to pieces, and the housing market in affected homes is grinding to a halt. I have a simple question: what, on average, does he expect the leaseholder to be paying?

Government inaction and delay has caused the building safety crisis to spiral. People cannot continue to live in unsafe, unsellable homes. Homeowners should not face bankruptcy to fix a problem they did not cause. Unfortunately, these proposals will still leave too many people struggling and facing loans, instead of being given justice.

I am pleased that the hon. Lady welcomes many of the proposals we have set out today. This is an unprecedented intervention, and it is one of the most generous, if not the most generous, of its kind anywhere in the world. She asks, importantly, why we have focused on high-rise buildings. We have done so because that is time and again where all the independent expert advice leads us. We must make these judgments on the basis of expert advice. With the greatest respect to the hon. Lady, I think we need to follow the expert advisers, not her instincts. We are focusing on the buildings over 18 metres, where the work needs to get done, and in those buildings we are ensuring that the leaseholder never pays. We want the building owners to step up and meet the cost, but where that is not possible—in many cases, I am afraid it is not, because the building owners are no longer around—the taxpayer will step in and meet the cost, with the advantage of the levy and the tax to help recoup the costs. That must be the right approach.

The hon. Lady asks whether enough progress has been made. Actually, we have ended 2020 with 95% of buildings over 18 metres with the most dangerous form of cladding—ACM cladding—either having been remediated or with workers on site doing the job. That is 100% of the buildings in the social sector, which is a huge step forward. I pay tribute to everyone who has been part of that over the course of the year, including those keeping the works going during the pandemic, which many politicians, including Labour politicians, asked us not to do. That was the wrong judgment, but we kept those works going.

For lower rise buildings—those of four to six storeys—we are bringing into play this important new financing scheme. That means that those leaseholders who at the moment have impossible costs, causing great worry and strain, will now be able to have the reassurance that those costs will be turned into manageable ones. They will never need to pay more than £50 a month—many will pay far less—and only where the cladding really does need to come off to ensure that the building is safe. That will provide peace of mind to hundreds of thousands of leaseholders, and I think it can be seen as a generous, affordable way forward for the taxpayer.

We have to remember that, when the Prime Minister and I came to office 18 months ago, there was only £200 million of Government money available to support leaseholders in this situation, and that that in itself was the result of incredibly hard work by my predecessor, my right hon. Friend the Member for Old Bexley and Sidcup (James Brokenshire). Today, 18 months later, there are many billions of pounds of support in direct Government grant and then billions more, no doubt, in financing scheme funding available to support those leaseholders and to get the situation under control.

Meanwhile, what is happening in other parts of the country? We know that, in Scotland, according to a recent freedom of information request, the Scottish Government have done absolutely nothing. The funding they received from the building safety fund is sat in a bank account in Edinburgh, and they have done nothing with it. I would be interested to know from the hon. Member for Bristol West (Thangam Debbonaire) what the Welsh Government are doing. I do not know. Perhaps she can inform us. The hon. Lady herself came to this late. It was only a week or so ago that she convened the first debate on this in her tenure. She did not offer a plan. She did not show an appreciation of the scale and complexity of the issue. She offered a taskforce, a committee. Empty words, I am afraid, and gestures. That is not good enough.

While the hon. Lady was doing that, the Prime Minister, my right hon. Friend the Chancellor and I were working with the lenders, the insurers, the Royal Institution of Chartered Surveyors and the leaseholder groups to bring forward what we have announced today, which I hope all fair-minded Members across the House will see as a significant intervention. It does get unsafe cladding off buildings and end the cladding scandal. It does provide reassurance and confidence to leaseholders. It does ensure that the developers and the industry pay their fair share. It does build a world-class building safety regime, and it does enable us now to move forward to reopen and restore confidence in the housing market so that the country can move forward again.

May I first say that I am a leaseholder who is neither affected by the problem nor gaining by the solution?

We recognise that this is another set of major steps along the way. During the last three years, the problems have been spelled out by the all-party parliamentary group on leasehold and commonhold reform, and I pay tribute to the hon. Member for Ellesmere Port and Neston (Justin Madders) for working together in a cross- party way. There will be more to do, and the Select Committee will no doubt have hearings.

Will my right hon. Friend thank the Chancellor and the Prime Minister for helping to make the funding available? I do not claim that it is going to be enough, but it is a major step forward and I recognise that.

There is a problem about low-rise accommodation in low-income areas looking at high-rises in high-income areas getting more direct help. Will my right hon. Friend talk about that?

Can he also confirm that no leaseholder who does not actually own anything will have to sign away any of their rights to eventual compensation, as and when the inquiry finishes and any civil claims of liability against developers, cladding manufacturers, local building control or national regulators come to be finalised?

I praise my hon. Friend for his determined campaigning on the issue over many years, which I think everybody in the House has recognised and for which many leaseholders will no doubt be grateful. I have been pleased to work with him and to take his advice when it has been needed. I assure him that the funding that we have made available today will provide leaseholders with the certainty and confidence that they need. Any leaseholder in a building of over 18 metres will now know that they will not have to pay for the removal of cladding, and leaseholders in the buildings that are lower rise—11 to 18 metres—can take great comfort from the fact that this new financing arrangement will be in place. It does not preclude any actions by the building or the leaseholders against insurers, those holding warranties or the developers, and those actions should take place. We want to see those who made these mistakes brought to book. We do not want this all to fall on the taxpayer; that is absolutely essential. This is a very difficult judgment. We have to ensure that we are striking the right balance between the interests of leaseholders who are homeowners and those of the broader taxpayer. I think we have done that today, and I hope that this is a major step forward in the battle against this issue.

The announcement today of an additional £3.5 billion is encouraging as far as it goes, and I am sure that the Scottish Government look forward to the consequentials arising from it. What the Secretary of State has said will offer some relief to homeowners affected by cladding issues, many of whom are already struggling with bills and simply do not feel able to take on more debt as their dream homes have become a nightmare, with mortgage valuations of zero due to unsafe cladding. As he knows, the consequences have been far reaching for those caught up in this scandal, with homes currently worth nothing that cannot be sold and in which residents feel unsafe. I very much welcome the responsibility for cladding being borne—in part, at least—by the larger players in the industry, but more details as to how that works are needed.

Despite the Secretary of State saying that no leaseholder will ever pay back more than £50 a month in loans to remove this cladding, I am sure that he will understand that that will still be disappointing for many, since, through no fault of their own, they are still facing additional costs after buying their homes in good faith; they face debt that they do not want and which will impact on household incomes during these difficult times. Much more detail on exactly how these low interest loans will work is needed. Can the Secretary of State confirm that there will be an upper limit to these additional costs for leaseholders, or is the £50 cap only a monthly cap? He will appreciate that this matters because building work so often overruns. Will he also tell me within what timeframe he expects this remediation work to be completed?

I am grateful to the hon. Lady for welcoming much of the substance of today’s announcement. I draw her back to my earlier remarks: to the best of my knowledge, the Scottish Government have made no use at all of the funding that they have been provided with through the existing building safety fund. Important questions now need to be answered by her Government in Scotland as to what is actually happening there. What are they doing to support leaseholders? How are they making those buildings safe?

With respect to the financing scheme that we are bringing forward in England, it will be a matter for the Scottish Government—or, indeed, the Welsh or Northern Irish Administrations—to decide whether they wish to create a similar scheme. We have set an upper limit of £50 a month, which provides a great deal of comfort to leaseholders that they will never need to pay more than that per month. That is about the equivalent of the average service charge for a purpose-built block of flats. I appreciate that it is a cost that no one would wish to bear, but it is a reasonable one in balancing the interests of the taxpayer with providing support and protection to the leaseholder. We will bring forward further details on how that scheme works as quickly as we can.

It is important also to say that the arrangement that we will be creating is not a loan to an individual; it is a financing scheme with buildings. The loans do not sit with the individual and will not affect their credit rating. These are loans on a long tenure that will remain with the building, ensuring that the leaseholders themselves can move on with their lives.

I thank the Secretary of State for working so closely with me on cladding issues over the past 15 months. I have been calling for a substantial and comprehensive package for cladding remediation, so I warmly welcome this announcement, which, importantly, allows funds to be deployed very quickly and does not require taskforces or legislation. I have called for a package of £5 billion to £10 billion; I quickly tried to tot up all the numbers as the Secretary of State went through the details, and I think this funding could be approaching certainly the middle if not the upper end of that range. Will he confirm that and assure me that money will be deployed as quickly as possible?

I praise my hon. Friend, who has been a fantastic Member of Parliament for Kensington since she was elected and has raised with me this and other issues arising out of the Grenfell tragedy almost every week—in fact, we meet every week to discuss these issues.

My hon. Friend is right to say that this is a very substantial intervention. We have already made £1.6 billion available, and we estimate that it will require another £3.5 billion to complete the remediation of unsafe cladding on buildings over 18 metres and to make good on the promise we have made today to leaseholders. In addition to that, we will bring forward the financing scheme, the details of which, as I said, will be published shortly, but it is a very generous scheme and there is a significant cost to the taxpayer in ensuring that the £50 cap gives that added level of protection and reassurance to leaseholders.

The total intervention that we are making today is, as my hon. Friend says, one of many, many billions of pounds. That is a difficult judgment, which the Prime Minister and the Chancellor have made with me, but we believe this is a fair and generous settlement to help everybody to move forwards.

On behalf of the Housing, Communities and Local Government Committee, I thank the Secretary for his statement and welcome it—as far as it goes, because in terms of the Select Committee recommendations, it only goes so far. I invite him to come back to the Select Committee to discuss the issues in more detail shortly after the recess. First, immediately, will he confirm that as a result of the loan scheme, no leaseholder will be placed in negative equity? Secondly, has he done any assessment of the total amount of additional non-cladding costs to deal with building safety that will fall on leaseholders? Finally, will he confirm that there is no help in his statement for councils and housing associations, and that as a result, to carry out essential safety work, they are going to have to put up rents, cut maintenance or cut the number of affordable homes that they can build?

I thank the hon. Gentleman and the members of the Select Committee for their expert advice on this issue over a number of years, and to me personally as Secretary of State. I would of course be delighted to come before the Committee to discuss this issue further in the near future.

The hon. Gentleman says that this announcement does not go as far as he would have liked. I appreciate that sentiment, and no doubt there will be leaseholders watching today who would wish to go even further, but this is a very significant intervention—we do have to keep coming back to that fact. Broadly speaking, English property rights are based on caveat emptor—buyer beware—and the contents of the leases, contracts, warranties and insurance policies that we as homeowners sign. What we are doing today is stepping in in a way that Governments have not done in the past—that they have not done when people’s homes have been flooded or subject to subsidence or other unforeseen and incredibly difficult and challenging issues. We have chosen to do this because we have immense sympathy for the leaseholders affected and, as a matter of basic public safety, we have to get these unsafe materials off buildings as quickly as possible. I think this is the right judgment and the right balance to strike between the interests of the leaseholder and those of the broader taxpayer, but I would be delighted to come before the hon. Gentleman’s Committee to discuss this issue in more detail soon.

I welcome the measures that my right hon. Friend has set out, but may I urge him to review the long-term issues here? Profitability should not come before safety. Will he look into the issue that I hear about regularly of new build properties not being built to high enough standards, leaving homeowners spending months chasing developers to come back and fix problems with their homes?

I entirely agree with my hon. Friend. We all believe in home ownership. We want to get more people on to the housing ladder, and we know that owning a home of your own is one of the most special achievements in life. But we also know that, in recent years, some of our developers—and some of our most prominent ones, too—have built homes that are to a poor standard; they have admitted it in some cases. We need to make sure that that is corrected, so that the quality of homes in this country is high and members of the public can have confidence when making that life-changing investment.

It cannot be right that buying a home affords someone less protection than buying a mobile phone or many other things we do in our daily lives. We want to see a major change in the culture of the industry, so that homeowners get the product—the brilliant, beautiful, high-quality home—that they deserve. We have set up a new homes ombudsman, which will be passed into law as part of the building safety regulator. The new regulatory regime, which is already in existence in shadow form, will be put into permanent form through the passing of the Building Safety Bill. For higher-rise buildings—those over 18 metres—that will create a very strict, world-class regulatory regime.

I agree with everything my hon. Friend the Member for Bristol West (Thangam Debbonaire) said, with knobs on. My constituents will not be reassured by what they have heard. Loans for leaseholders still are not off the table. The Secretary of State has avoided talking about non-cladding costs, and there is still no guarantee that my constituents will not be left with large associated bills for problems they did not create. A number of institutions are profiteering from this crisis, including parts of the insurance industry and others, with eye-watering premiums. Why are we still waiting for the Secretary of State to get a grip on this crisis?

I am disappointed by the tone of the hon. Lady’s remarks. She has followed this issue closely and has fought for her constituents, and I praise her and recognise her for that hard work, but this Government have done a huge amount, and I entirely reject her accusations. We have brought forward the public inquiry. We have planned and are now legislating for a new building safety regulator—a world-class regulatory regime. We have brought in people to ensure that the unsafe cladding on ACM-clad high-rise buildings is remediated, and that work has progressed a great deal over the course of the year. As I said earlier, many Labour politicians, including the Mayor of London, opposed that initially, at the height of the pandemic. We have done a great deal, but there is more to be done.

I do not know what the hon. Lady’s proposition is with respect to other materials beyond cladding. All the expert opinion says, “Focus on cladding. That is the primary risk here—that is the focus that Government should have.” I will keep following expert advice. If the Labour party’s position is that we should not follow that, and that in fact the Chancellor should write a blank cheque and say that absolutely any building safety defect on any building of any height should be paid for by the taxpayer, that is a very substantial cost, and I would be interested to know how she intends to fund that. With respect to the insurance companies, I do now expect them to step up and ensure that their premiums are proportionate and risk-based, because I think some of them have been exploiting leaseholders in a very difficult position.

I welcome my right hon. Friend’s statement; it was clearly the right one. What leaseholders will ultimately care about is making sure that this remediation is done. What work is he undertaking with small and medium-sized enterprises, such as S Bayliss Roofing and Cladding in Tipton, to make sure that they can get this work done, so that leaseholders can finally be free of this dangerous cladding and the impact that it has on their status as homeowners?

The approach that I took when I became Secretary of State was to set a target for us that we would either remediate all buildings or get the workers on site by the end of last year. As I say, with a few exceptions —largely because of the covid-19 pandemic—we achieved that. We have used project managers and consultants to ensure that every single building in that cohort is being individually managed. My Ministers and I have been meeting with the contractors, the leaders of local councils, the chief executives and the residents’ management associations of those buildings regularly to ensure that progress is happening. That work needs to continue and to broaden out to all those buildings that will benefit from today’s announcement.

My hon. Friend is also right to say that today’s announcement will create certainty and confidence for the broader construction sector to come forward and enter the market to do this work. That will create thousands of jobs, and I encourage businesses large and small to take part in this major initiative.

I am pleased that the Secretary of State wants to tackle rising insurance premiums, but I have spoken to many leaseholders in my constituency of Luton South who have faced the additional costs of interim safety measures, such as waking watch, and of fixing other fire safety issues, which the Secretary of State seemed to push back on. These joined-up financial pressures are pushing many leaseholders near to bankruptcy, so what are the Government doing to help bring down these costs?

We are working with the insurance sector, which I think now needs to take a more proportionate, risk-based approach. These might be outliers, but some of the examples I have heard of insurance premiums rising by 1,000% are completely out of kilter with the statistics I gave earlier, that last year only 10 people tragically died in buildings over 11 metres, and only 41 people died in any house fire at all in this country. With respect to waking watch, I think that is a very challenging issue, but we have brought forward our £30 million fund to replace waking watches with high-quality, effective fire alarm systems. That fund is now open, and I encourage any building—perhaps including the one in the hon. Lady’s constituency—to apply for it, get the fire alarm installed and then hopefully reduce those costs quickly.

I welcome my right hon. Friend’s statement and know that many people in my constituency and across the country will be relieved that the Government are taking further action on the issue of unsafe cladding. Does he agree that speed is of the essence, and will he confirm that the additional financial remediation will help relieve the worry and remove unfair and unfounded costs on leaseholders to deal with the removal of unsafe cladding?

I certainly can, and I thank my right hon. Friend for the work he has done on behalf of his constituents. We have corresponded many times on this subject. Today’s announcement will provide comfort and reassurance to hundreds of thousands of leaseholders. I also draw his attention and that of the House to the work we are doing with RICS, which will ensure that about 50% of those individuals who might have required and EWS1 form will now no longer need to go through that laborious and often expensive process.

When there was a failure of regulation in the City, the Government bailed out the banks in a matter of days, to the tune of £500 billion. In the face of a failure of fire safety regulation, when people are terrified of burning to death in their homes, the Government have taken three and a half years and offered only £6 billion. My constituents are still facing the costs of non-cladding fire safety problems, waking watches and more, so when will the Government accept the basic principle that cladding victims should not have to pay a penny to fix fire safety problems that are not of their making?

Actually, the Government acted decisively in the immediate aftermath of Grenfell Tower. Expert opinion has evolved over time. The first expert advice that the Government received was, as I said earlier, to focus on ACM cladding—the type of cladding on Grenfell Tower—and on those buildings over 18 metres. We put in place the funding to do that where the building owners and the industry were not able to, or would not, pay themselves. The expert advice then said that there were other materials that were somewhat less unsafe but which, none the less, still could be unsafe. That work is under way, and the Chancellor gave an extra £1 billion to do that at the Budget a year ago. Now, we have brought forward this very substantial intervention today. We are working intensively and extensively to tackle the issue, and I hope that today’s intervention will be a permanent and lasting settlement.

I thank the Secretary of State for his statement on building safety. Warrington does not have any apartments over 18 metres, which would require remediation, but I have heard from a number of parents concerned that their sons and daughters are paying additional charges, levied by landlords, to cover the cost of insurance and waking watches in apartments that they have purchased. What steps are the Government taking to cover these costs, so that the burden does not fall on families in my constituency?

The announcement that we have made today and the work that the Chancellor and I have done with each of the major retail banks, which strongly support the intervention, give much greater confidence to lenders, surveyors and insurers to re-enter the market, to bring down those premiums, to lend against these buildings and to enable the market to move forward again. This will take time and there is more to be done, but I think we will see the market moving forward now in a way that it has not done in recent months.

The Secretary of State has referred to fairness and the need for building companies to step up and I understand that he is introducing a levy on those companies, but what more is he doing to pursue those responsible for building unsafe homes, leaving the taxpayers and leaseholders to meet the clean-up costs?

The hon. Lady raises an extremely important matter. Let me be absolutely clear: the first thing that the Government have done is establish the independent Grenfell inquiry. That has already heard some absolutely shocking allegations of malpractice and, in fact, outright dishonesty among some of the construction products manufacturers. It will be a matter for the police whether they choose to take forward criminal prosecutions against individuals or companies involved. On remediation, we want the building owners to pay. Some have, and I am grateful to them for that. In fact, some of the large volume house builders, even today, have come forward saying that they will pay more. That needs to continue, and nothing that I have said today should take away from that. They should still come forward, as well as paying their fair share through the levy and the tax that I have announced today.

I thank my right hon. Friend for making this significant intervention, but will he assure me that the industry responsible, which includes some of the wealthiest individuals and organisations in the land, will be paying its fair share, as taxpayers, many of whom are not homeowners, are already being hit hard enough?

The levy and the tax that I have announced today and that my right hon Friend the Chancellor and I will be setting out more details on ensure that the industry pays its fair share, in addition to it stepping up and paying for the remediation of buildings for which it has responsibility. It has to be said that there is no simple solution to this. Many of the builders and developers who constructed these buildings are long gone—they have gone into administration or they are shell companies offshore. This is not a simple challenge to fix, as some have suggested, but I hope the measures that we have taken today will go a long way.

A number of Members have said that getting any money out of Government has proved painfully slow, so leaseholders today are facing extra costs for insurance while their buildings remain unsafe. Building insurance at the Ropeworks in Barking rocketed from £70,000 to £650,000 —a 900% hike in just two years. The Association of British Insurers has told me that Ministers have refused to engage to find an urgent, practical way forward now. Will the Minister assure us today that the Government will immediately engage with all insurers, take on some of that short-term risk, so that leaseholders can buy affordable cover until their buildings are made safe?

I pay tribute to the right hon. Lady for the work that she has done. She and I have worked together since the terrible fire that her constituents suffered in Barking. She is right to raise the issue of insurance, as other Members of the House have done already. There is a challenge here, because, as with the lenders, the insurers are faced with assessing a new and heightened level of risk. None the less the Association of British Insurers now needs to step up and take a proportionate risk-based approach. As I have said repeatedly, the risk to life in buildings is, mercifully, very low, with the tragic exception of the events of 2017. Insurers should be pricing that risk correctly and not passing on those costs or even profiteering on the backs of the leaseholders. Both myself and my hon. Friend Lord Greenhalgh who leads on building safety have engaged repeatedly with insurers and we will do so again.

I welcome this very significant intervention and the relief that it will bring to so many people. Does the Secretary of State agree that we have established a very important principle today—that if developers ever behave in this manner again, the Government will come after them, and not the hard-pressed taxpayer, to put these issues right?

My hon. Friend is absolutely right. We all feel immense sympathy for the leaseholders, who are innocent parties in this situation, but it also is not right that the taxpayer—the broader taxpayer, many of whom are not home owners at all—has to step in and foot the bill. We have tried to strike a balance today in terms of ensuring that the developers, the builders and the industry behind this pay a fair share. The draft Building Safety Bill that we will introduce later this year will bring forward a very tight regulatory regime so that buildings over 18 metres—the high-rise buildings—are built to a very high standard and these issues should not happen again.

Leaseholders in Hornsey and Wood Green have been trapped for the third lockdown in a terrible situation with building defects, unsure when they can get a mortgage to move on from their property. One said,

“I’m at my wit’s end with a small new-born baby”,

so I hope that today will bring her some succour. What about housing associations, which, after 10 years of austerity, simply do not have the money to be able to give much relief to desperate leaseholders? Does the Secretary of State have any good news for those lease- holders?

The hon. Lady raises an important point. We have been working very closely with local authorities since the start of this issue in the immediate aftermath of the Grenfell tragedy. I have engaged repeatedly with the National Housing Federation, which has done excellent work in this regard. We did provide funding to help support them. We are focusing the funding that we have provided on those housing associations or local councils that cannot fund this themselves, either through their own reserves or their ability to borrow. Most housing associations can do that, but there will be a small number that cannot. Of course there are choices at every turn, and that, in itself, will have consequences and make it harder for those housing associations to invest in more affordable and social housing, or other important aims that they and I share, like making buildings more energy-efficient to meet our climate obligations. That is the difficult situation that we find ourselves in. I am also acutely aware of the challenges faced by shared owners, and we will make particular provision to protect them so that they do not have to meet disproportionate costs with regard to cladding remediation.

In my constituency I have a number of buildings that are below 18 metres. Today’s announcement means that leaseholders of these buildings will still need to foot the bill, and the offer of loans is small comfort to my constituents, many of whom are already struggling. What does the Secretary of State say to my constituents who were promised that leaseholders would not have to pay for a crisis they did not cause?

Let me be clear on this point once again. The expert advice is very clear. It says that we should focus our attention on the buildings where there is a higher risk—buildings over 18 metres—so it is right that the Government choose to do that when they are using such large sums of taxpayer money. For buildings between 11 and 18 metres—between approximately four and six storeys—we are bringing forward this financing scheme, which will enable leaseholders to move forward with confidence and certainty in the knowledge that they will never need to pay more than £50 a month to meet the cladding remediation, where that absolutely needs to be done. I go back to the point that I have tried to make repeatedly: in many, many cases it will not need to be done because we want surveyors and the industry to take a proportionate, risk-based approach that takes true account of the risk to life in those properties, which for most leaseholders, mercifully, is very low.

Too many people in Eastbourne have suffered the stress and the strain of looming costs, and today there will be some relief at the announcement that my right hon. Friend has made. It is a significant intervention and I look forward to seeing the details. It recognises fairness and balance, and I welcome that also. Although we are focusing today on cladding, what further work will be done to help those leaseholders facing costs in relation to other fire safety defects—fire breaks, fire doors and those necessary works that can be very costly too—which were also exposed in the wake of the Grenfell tragedy?

My hon. Friend has championed her constituents in this regard, and she and I have discussed the issue in the past. I hope the announcement will provide comfort to some of the constituents I am aware of in Eastbourne. One building in particular that we have corresponded on is above 18 metres, so will certainly be a beneficiary of the scheme, if it has not been a beneficiary of previous ones.

My hon. Friend is right to raise the fact that other building safety defects, which we have spoken about in the past, have also come to light, whether that is fire blocks, insulation or fire doors. Some of those works will need to be done, taking a proportionate, risk-based approach, where there is a true risk to life, so that the bill for the leaseholders is not disproportionate. We also, of course, want to see the building owners step up and pay for those works. Where there has been poor workmanship, the building owner needs to take responsibility, and we will continue to do everything we can to support lease- holders to pursue those claims.

I welcome the intervention this afternoon and the Secretary of State’s acknowledgment of the despair and sheer anger that people and families have experienced while they have been living in unsafe homes due to unsafe cladding. However, I put it to him that what my constituents want to hear is clear timescales for this remedial work, as it has now been nearly four years since so many lives were lost in the Grenfell fire. Leaseholders need reassurance that they will not need to wait another four years. Will the Secretary of State please also explain why leaseholders should be made to pay hidden or other costs for a problem they did not cause? Is this the best the Government can do? Is this what they consider to be fair?

I do think this is a fair intervention. It is the largest of its type I think any Government in this country have ever made. It is a balance between the interests of the leaseholders and those of the broader taxpayer, as I have already said.

In terms of wider building safety defects, as I said in answer to my hon. Friend the Member for Eastbourne (Caroline Ansell), we will do everything we can to support leaseholders to pursue action against those who made those errors and omissions in the past. I share the anger of leaseholders at the mistakes that have been made—both by industry and by regulators who came before us. What we must do now as a Government is move forward, make sure this never happens again and support leaseholders as much as we practically can, and that is exactly what we intend to do.

May I once again say a word on behalf of a group of people who hardly ever get a mention in this Chamber, namely, the poor, benighted general taxpayers? Barely a single one of my 75,000 constituents lives in a house or block of flats over four storeys high, and although they live in poor rural areas they are once again being asked to bail others out—in this case, greedy developers in wealthy areas. Can we have a balance?

Before I finish, may I also ask my right hon. Friend about Lincoln University, which has been forced to reclad one of its residences? What discussions has he had with the universities and with his Education colleague on this issue?

On the important second point that my right hon. Friend raises, we have worked with the Department for Education and the Department of Health on buildings in the wider public sector—universities, student halls of residence and, in a small number of cases, buildings in the NHS—to ensure that the works there proceed at pace. I will happily update him with respect to Lincoln University.

The first point that my right hon. Friend made is actually extremely important. We have had to strike a careful balance because millions of our fellow citizens are not homeowners, and we have to protect their interests, just as we want to provide safety and fairness for the leaseholder. That is the balance that we have tried to strike today, and I hope that fair-minded people on both sides of the House and in the country will appreciate that and understand the choices that we have made.

I welcome today’s announcement, which is a testament to the campaigning of leaseholders across the country. I am sure that the Secretary of State believes that the deal he has negotiated with the Treasury is a great success, but for many of my constituents it will make no or little material difference. A number of leaseholders continue to pay thousands of pounds for interim safety measures. The issue at hand today is one of principle and fairness, and the upshot for many constituents is that they are still paying, despite the Government’s assurances. If the Government subscribe to the principle that no leaseholder should have to pay for fire safety problems, will the Secretary of State please explain why this package clearly shows that not all leaseholders are treated equally?

The hon. Lady is wrong. Thousands of her constituents will directly benefit from today’s announcement. We have chosen rightly, on the basis of expert advice, to prioritise buildings of over 18 metres. That is where the greatest risk is. It would be quite wrong for us to direct public money—taxpayers’ money—to buildings where the risk is low or extremely remote, so we are targeting that money on the buildings that need it most. In those buildings, leaseholders can have certainty that they will not be paying for the remediation of unsafe cladding. It will be paid for either by the building owner—the developer—which is quite right, or by the taxpayer. We will use the levy and the new tax to recoup as much of that as we possibly can.

In other buildings where the risk is significantly lower, the new financing arrangement will give people real comfort that they never need to pay more than £50 a month. My expectation is that many of them will pay significantly less. I think most reasonable people would see that sum of money as truly affordable and manageable within the budget of most homeowners.

I thank my right hon. Friend the Secretary of State for all his hard work on this, and I welcome what he has announced today. May I ask him what the Scottish and Welsh Governments are doing to improve building safety?

I honestly do not know. The Scottish Government have, as far as I am aware, done nothing with the very significant sum of money that the Chancellor has given them through the Barnett consequentials process. I am not aware of what the Welsh Government are doing. I think those questions are better directed to the Scottish Government and the Welsh Labour Administration.

The Secretary of State has said that his mission is safety and fairness for leaseholders. How do today’s proposals protect a leaseholder who has been paying £50 a month but still has a large loan outstanding on their home at the point of sale, because of the cost of removing unsafe cladding? Is the truth not that the Secretary of State has failed to deliver on his promises of fairness, and that he is choosing to leave thousands of leaseholders facing massive costs?

The hon. Gentleman, for whom I have great respect, misunderstands the scheme that we have just announced. For buildings of between four and six storeys, where the risk is much lower, leaseholders will have the opportunity, if they wish—there will be no compulsion—to take advantage of the financing scheme. That loan scheme financing arrangement will sit with the building, not with the individual. It will not affect the individual’s personal credit rating, and it should not have a material impact on the value of their property. It will be akin to paying somewhat more on their service charge every month. As I say, it will be capped at £50 a month, which is similar to the average service charge. Of course, in many buildings the service charge is already far in excess of that.

In drawing the House’s attention to my entry in the Register of Members’ Financial Interests, may I say to my right hon. Friend that I think this is one of the most generous and innovative schemes anywhere? In buildings to which the finance loan scheme is applicable, will it apply to non-cladding costs that nevertheless contain a material health and safety element—for example, fire doors and asbestos?

We have chosen to focus both the grant scheme and the financing arrangements on cladding. That is for good reason, because the expert advice that we have received from the independent panel has consistently been that cladding is the greatest danger that needs to be combated. There may be other defects in buildings, and they will vary widely from building to building. They will have to be a matter for the building owner and for the homeowner. We, as a Government, are going to tackle the big issue here, which is cladding. We are going to end the cladding scandal that began with the Grenfell Tower tragedy.

I welcome the funding that has been announced as a step in the right direction, but unfortunately it is likely to cover only around half the anticipated cost, and the innocent leaseholder will be picking up the bill for the other half. The Secretary of State has said that he has sympathy for leaseholders, but that sympathy does not appear to extend below 18 metres. That directly contradicts the promise, which has been repeatedly made, that no leaseholder would have to pay anything. I deeply regret the Government’s decision to break that promise and create another injustice. Can the Secretary of State say how many leaseholders he estimates will be subject to the loan scheme that he has announced today?

We do not want any leaseholders to be paying for fire safety defects; we want that to be paid for by the building owners, the developers and the builders—the people who did this in the first place. As I said, there are circumstances where that is not possible, because there are building owners who no longer exist, who have gone bankrupt or who are shell companies overseas. That is the world we are dealing with. This is complex and multifaceted; it is not simple. In those situations where that is not possible, buildings above 18 metres, where the greatest risk lies, will take advantage of the new scheme and no leaseholder in that situation will have to pay for the remediation of unsafe cladding. Below 18 metres, where the risk is significantly lower, guided by our expert opinion, the financing arrangements will be in place. This is a comprehensive plan to provide comfort, reassurance, certainty and confidence to as many leaseholders as possible.

Yesterday, it was revealed that the company that made the Grenfell Tower cladding shamefully and knowingly sold flammable materials to construction projects because it was about £4 cheaper than fire-retardant cladding. It has taken the Government all these years to propose measures that will stop companies prioritising savings over life, yet they still have not bothered to identify all the buildings, including care homes and hospitals, that may have unsafe cladding. Why is that?

The hon. Lady is wrong; as a matter of fact, we moved swiftly. We set up the Grenfell inquiry, which has heard those shocking allegations. We brought forward the Judith Hackitt review of building safety, which concluded that the regulatory regime needed to change. We have drafted and are now bringing forward the legislation to do that. I hope that the hon. Lady and Opposition Members will vote for the Fire Safety Bill and the Building Safety Bill when they come before this House soon, because that is the best way of creating the new regime, holding developers to account and making sure that local fire and rescue services and councils have the powers they need to take action against unsafe buildings.

I, too have been shocked by the allegations I have heard at the inquiry, which is why, as an interim step, before we hear the judge’s recommendations, I have announced that we are going to create a new national regulator of construction products and that I am going to review the testing procedures for construction products, which seem to be woefully inadequate.

I thank my right hon. Friend for listening to the representations our Select Committee, the Housing, Communities and Local Government Committee, has made, and to other colleagues. People who live in high-rise buildings will be breathing a sigh of relief after his announcements today, and I thank him for those. For the people who live in medium-rise blocks, we need to reserve judgment, in order to make sure we examine the details of his announcements. May I ask him specifically about the applications for the fund he has previously been running? There are some 1,100 incomplete applications, many of which require survey work to be undertaken. There is an issue as to whether the industry has the capacity to do that and whether that work will actually demonstrate what is needed. More importantly, the cost of those surveys has to be borne by someone. So what is he doing to ensure that those surveys are carried out and the applications to the fund are then made complete, so that work can continue on the buildings that are currently unsafe?

I thank my hon. Friend for his support and advice in recent months, and that of all members of the Select Committee. We have received a large number of applications to the fund that, as he says, are incomplete. That reflects the fact that many building owners do not know as much as they should about the materials on their buildings, so a great deal of work needs to be done to assess them so that they can be funded, the work can be contracted and we can get workers on site to do the important building safety work as quickly as possible.

There is a particular problem, which my hon. Friend alights on, with respect to the number of fully trained, competent assessors who can go out and do that important first step. We are working with the Royal Institution of Chartered Surveyors to dramatically increase the number of fully trained assessors. That work has started and the numbers are already increasing. We are also working with the Treasury so that those individuals are not merely trained but can get the professional indemnity insurance that they need to do the job. If we can bring those two things together—that is happening quickly—we will be able to have a very significant increase in the number of individuals going out, doing the assessments, helping to give certainty to individuals and getting the works started.

Sitting suspended.