New Clause 20 - Regulations under section 131

Building Safety Bill – in the House of Commons at 2:02 pm on 19th January 2022.

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“(1) The power to make regulations under section 131(6)(b) is exercisable by statutory instrument, in the case of regulations made by the Secretary of State or the Welsh Ministers.

(For regulations under section 131(6)(b) made by the Scottish Ministers, see section 27 of the Interpretation and Legislative Reform (Scotland) Act 2010 (asp 10)).

(2) Regulations under section 131(6)(b)—

(a) may make different provision for different purposes;

(b) may contain consequential, supplementary, incidental, transitional or saving provision.

(3) Regulations under section 131(6)(b)—

(a) if made by the Secretary of State, may not be made unless a draft of the statutory instrument containing them has been laid before, and approved by a resolution of, each House of Parliament;

(b) if made by the Welsh Ministers, may not be made unless a draft of the statutory instrument containing them has been laid before, and approved by a resolution of, Senedd Cymru;

(c) if made by the Scottish Ministers, are subject to the affirmative procedure (see section 29 of the Interpretation and Legislative Reform (Scotland) Act 2010 (asp 10)).”—(Christopher Pincher.)

This new clause provides for the parliamentary procedure and other matters connected to the power to make regulations under section 131(6)(b) and is needed as a consequence of conferring powers on the Welsh Ministers and the Scottish Ministers (see Amendments 54 and 55).

Brought up, and read the First time.

Photo of Eleanor Laing Eleanor Laing Deputy Speaker and Chairman of Ways and Means, Chair, Standing Orders (Private Bills) Committee (Commons), Chair, Standing Orders (Private Bills) Committee (Commons)

With this it will be convenient to discuss the following:

Government new clause 21—Amendment of the Government of Wales Act 2006.

Government new clause 22—Architects: Appeals Committee.

New clause 3—Remediation costs and Building Works Agency—

“(1) The remediation costs condition applies where a landlord has carried out any fire safety works to an applicable building in consequence of any provision, duty or guidance arising from—

(a) the Housing Act 2004;

(b) the Regulatory Reform (Fire Safety Order) 2005;

(c) the Building Safety Act 2021;

(d) any direction, recommendation or suggestion of any public authority or regulatory body;

(e) such other circumstances or enactment as the Secretary of State may prescribe by regulations or in accordance with subsection (9), below.

(2) If the remediation costs condition is met, then the costs incurred by the landlord in connection with those matters may not be the subject of a demand for payment of service charges, administration charges or any other charge permitted or authorised by any provision of any long lease.

(3) Any demand for payment which contravenes this section shall be of no force or effect and will have no validity in law.

(4) Any covenant or agreement, whether contained in a lease or in an agreement collateral to such a lease, is void in so far as it purports to authorise any forfeiture or impose on the tenant any penalty, disability or obligation in the event of the tenant refusing, failing or declining to make a payment to which this section applies.

(5) The remediation costs condition applies to demands for payment before the landlord incurs the costs in the same way as it applies to demands for payment made after the costs have been incurred.

(6) The remediation costs condition does not apply where the landlord is a company in which the majority of the shares are held by leaseholders or where the landlord is an RTM company.

(7) Within six months of the day on which this section comes into force, the Secretary of State must create an agency referred to as the Building Works Agency.

(8) The purpose of the Building Works Agency shall be to administer a programme of cladding remediation and other building safety works, including—

(a) overseeing an audit of cladding, insulation and other building safety issues in buildings over two storeys;

(b) prioritising audited buildings for remediation based on risk;

(c) determining the granting or refusal of grant funding for cladding remediation work;

(d) monitoring progress of remediation work and enforce remediation work where appropriate;

(e) determining buildings to be safe once remediation work has been completed;

(f) seeking to recover costs of remediation where appropriate from responsible parties; and

(g) providing support, information and advice for owners of buildings during the remediation process.

(9) The Building Works Agency shall also have power to recommend that the Secretary of State exercises his power under clause (1)(e) in such terms and to such extent that it sees fit. If such a recommendation is made, the Secretary of State must, within 28 days, either—

(a) accept it and exercise the power under clause 1(e) within 28 days of acceptance; or

(b) reject it and, within 28 days of rejection, lay before Parliament a report setting out the reasons for rejection.

(10) In this section—

(a) ‘fire safety works’ means any work or service carried out for the purpose of eradicating or mitigating (whether permanently or temporarily) any risk associated with the spread of fire, the structural integrity of the building or the ability of people to evacuate the building;

(b) ‘applicable building’ means a building subject to one or more long leases on the day on which section comes into force;

(c) ‘service charge’ has the meaning given by s.18, Landlord and Tenant Act 1985;

(d) ‘administration charge’ has the meaning given by Schedule 11, Commonhold and Leasehold Reform Act 2002;

(e) ‘long lease’ has the meaning given by sections 76 and 77 of the Commonhold and Leasehold Reform Act 2002;

(f) ‘RTM company’ has the meaning given by section 113 of the Commonhold and Leasehold Reform Act 2002.

(11) This section comes into force on the day on which this Act is passed.”

New clause 4—Building Safety remediation and works: zero-rating for Value Added Tax purposes—

“(1) The Value Added Tax Act 1994 is amended as follows.

(2) In section 35(1A)(b) at the end leave out ‘and’.

(3) In subsection 35(1A)(c) leave out the final full stop and insert ‘, and’.

(4) After subsection 35(1A)(c) insert—

‘(d) building safety remediation or building safety works of the type described in item 4A of the table in paragraph 1 of Group 5 of Schedule 8 to this Act.’

(5) After subsection 35(2) insert—

‘(2A) For the purposes of subsection (2), the Commissioners shall make regulations providing for a period of not less than 6 months to be open for claims for repayment of VAT in relation to supplies under subsection 35(1A)(d) where the date of supply is between 14 June 2017 and 31 July 2022.’

(6) In the table at paragraph 1 of Group 5 of Schedule 8, after existing item 4 insert new item 4A—

‘The supply in the course of—

(a) remediation of any defect in any external wall of any building containing two or more residential dwellings; or

(b) remediation of any defect in any attachment to any external wall of any building containing two or more residential dwellings; or

(c) the installation of a new or upgraded communal fire alarm system, other than to replace a communal system which has reached the end of its working life, or a communal system which has broken down as a result of failure to make reasonable repairs over time; or

(d) remediation of any internal or external defect other than a defect described in paragraphs (a), (b) or (c); or

(e) any building safety works carried out by an accountable person under section 86 of the Building Safety Act 2021 of any services related to the remediation.’

(7) In the table at paragraph 1 of Group 5 of Schedule 8, in item 4 replace ‘item 2 or 3’ with ‘item 2, 3 or 4A’.

(8) After note 24 insert a new note as follows—

‘(25) For the purposes of item 4A in the table above—

“defect” means anything posing any risk to the spread of fire, the structural integrity of the building or the ability of people to evacuate the building, including but not limited to any risk identified in guidance issued under Article 50 of the Regulatory Reform (Fire Safety) Order 2005 (S.I. 2005/1541) or any risk identified in regulations made under section 59 of the Building Safety Act 2021;

“external wall” has the same meaning as in Article 6 of the Regulatory Reform (Fire Safety) Order 2005 (S.I. 2005/1541);

“remediation” means any step taken to eradicate or to mitigate a defect, including employment of any person temporarily or permanently to assist in evacuation of any part of a building, and whether or not the defect in question existed at the date any dwelling in the building was first occupied. Remediation does not include anything required in consequence of omitting to effect reasonable repairs or maintenance to all or any part of the building over time, or anything which is the responsibility of the occupant of a dwelling in the building.’

(9) This section comes into force on 1 August 2022.”

This new clause allows recovery of VAT on building safety remedial works paid since 14 June 2017 and makes future supplies of materials, goods and services for building safety remediation projects zero-rated for Value Added Tax.

New clause 5—Fire safety defects and defective dwellings—

“(1) The Housing Act 1985 is amended as follows.

(2) In section 528(1)(a) leave out the final ‘, and’ and insert ‘, or’.

(3) After section 528(1)(a) insert—

‘(aa) buildings in the proposed class are defective as a result of their external walls or any attachment to the external walls, whether as a result of the design or construction of the external walls or the attachment in question; or

(ab) buildings in the proposed class are defective as a result of anything which in the opinion of the Secretary of State poses a building safety risk or the ability of anyone to evacuate the building, whether or not the building is a higher-risk building, and’

(4) In section 528(1)(b) for ‘paragraph (a)’ substitute ‘paragraphs (a), (aa) or (ab)’.

(5) In section 528(1)(b) at the end insert ‘, or in the opinion of the Secretary of State is materially difficult to mortgage, insure or sell compared to non-defective dwellings.’

(6) After section 528(4) insert—

‘(4A) A designation may identify any part of a building or class of buildings, any design feature, any material used in the construction of that building, any error in workmanship or installation or anything missing from that building, whether or not it should have been included when the building was constructed.

(4B) A designation may be made if the defect requires the employment of any person, whether on a permanent or temporary basis, specifically to assist with the evacuation of that building or part of that building.’

(7) After section 528(6) insert—

‘(7) In this section—

“building safety risk” has the same meaning as in section 59 of the Building Safety Act 2021.

“external wall” has the same meaning as in Article 6 of the Regulatory Reform (Fire Safety) Order 2005 (S.I. 2005/1541).

“higher-risk building” has the same meaning as in section 62 of the Building Safety Act 2021.’

(8) In section 559(1)(a) omit the final ‘, and’ and replace it with ‘, or’.

(9) After section 559(1)(a) insert—

‘(aa) buildings in the proposed class are defective as a result of their external walls or any attachment to the external walls, whether as a result of the design or construction of the external walls or the attachment in question; or

(ab) buildings in the proposed class are defective as a result of anything which in the opinion of the local housing authority poses a building safety risk or the ability of anyone to evacuate the building, whether or not the building is a higher-risk building, and’

(10) In section 559(1)(b) for ‘paragraph (a)’ substitute ‘paragraphs (a), (aa) or (ab)’.

(11) In section 559(1)(b) at end insert—

‘or in the opinion of the local housing authority materially difficult to mortgage, insure or sell compared to non-defective dwellings.’

(12) After section 559(4) insert—

‘(4A) A designation may identify any part of a building or class of buildings, any design feature, any material used in the construction of that building, any error in workmanship or installation or anything missing from that building, whether or not it should have been included when the building was constructed.

(4B) A designation may be made if the defect requires the employment of any person, whether on a permanent or temporary basis, specifically to assist with the evacuation of that building or part of that building.’

(13) After section 559(6) insert—

‘(7) In this section—

“building safety risk” has the same meaning as in section 59 of the Building Safety Act 2021;

“external wall” has the same meaning as in Article 6 of the Regulatory Reform (Fire Safety) Order 2005 (S.I. 2005/1541);

“higher-risk building” has the same meaning as in section 62 of the Building Safety Act 2021.’

(14) This section comes into force on the day this Act is passed.”

This new clause is suggested before clause 126. This new clause amends Part XVI of the Housing Act 1985 (originally enacted as the Housing Defects Act 1984) to empower the government and local authorities to designate dwellings with cladding and fire safety defects as defective and to provide grant support for remediation.

New clause 6—Duty on the Secretary of State to report on designations under Part XVI of the Housing Act 1985—

“(1) Within the period of six months beginning with the day on which this section comes into force, the Secretary of State must—

(a) consider the financial impact on leaseholders in England and Wales of building safety advice given by his department since 14 June 2017; and

(b) in conjunction with the Treasury and the Prudential Regulation Authority, consider the impact of building safety advice given by his department since 14 June 2017 on the supply of mortgage finance for leasehold flats in England and Wales; and

(c) publish a report setting out his determination, in light of the factors identified in paragraphs (a) and (b), as to whether designations under section 528 or section 559 of the Housing Act 1985 would improve conditions for leaseholders, or would improve the supply of mortgage finance for leasehold flats in England and Wales.

(2) If the Secretary of State’s report under subsection (1) concludes that designations under section 528 or section 559 of the Housing Act 1985 would improve financial conditions for leaseholders in England and Wales, or would improve the supply of mortgage finance for leasehold flats in England and Wales, then at the same time as publishing his report he must—

(a) make arrangements to provide all necessary funding;

(b) make the appropriate designations under section 528 of the Housing Act 1985; and

(c) advise local housing authorities to make appropriate designations under section 559 of the Housing Act 1985.

(3) Before making any regulations bringing into force any section in Part 4 of this Act, the Secretary of State must make arrangements for—

(a) a motion to the effect that the House of Commons has approved the report prepared under subsection (1), to be moved in the House of Commons by a minister of the Crown; and

(b) a motion to the effect that the House of Lords to take note of the report prepared under subsection (1), to be moved in the House of Lords by a minister of the Crown.

(4) The motions required under subsections (3)(a) and (3)(b) must be moved in the relevant House by a Minister of the Crown within the period of five calendar days beginning with the end of the day on which the report under subsection (1) is published.

(5) If the motion tabled in the House of Commons is rejected or amended, the Secretary of State must, within 30 calendar days, publish a further report under subsection (1) and make arrangements for further approval equivalent to those under subsection (2).

(6) The Secretary of State shall make a further report under subsection (1) at least every 90 calendar days beginning with the day of any rejection or amendment by the House of Commons under subsection (5) until otherwise indicated by a resolution of the House of Commons.

(7) In this section—

‘leaseholder’ means the registered legal owner of a long lease; and

‘leasehold flat’ means a flat owned by a leaseholder; and

‘long lease’ has the same meaning as in section 76 of the Commonhold and Leasehold Reform Act 2002.

(8) This section comes into force on the day this Act is passed.”

This new clause is suggested before clause 126. It places a time-limited duty on the Secretary of State to consider making designations under Part XVI of the Housing Act 1985 to provide funding for cladding and fire safety remediation and for Parliament to approve the plans for doing so.

New clause 7—Building Safety Indemnity Scheme—

“(1) There shall be a body called the ‘Building Safety Indemnity Scheme’ (referred to in this Act as ‘the Scheme’).

(2) The purpose of the Scheme shall be to collect money from levies and to disburse the money raised from those levies in the form of grants to leaseholders to pay all or any part of the following types of costs—

(a) remediation of any defect in any external wall of any building containing two or more residential units; or

(b) remediation of any defect in any attachment to any external wall of any building containing two or more residential units; or

(c) remediation of any internal or external defect other than a defect described in paragraphs (a) or (b); or

(d) any building safety works carried out by an accountable person under section 86; or

(e) any other cost of a type specified by the Secretary of State in regulations made under this section.

(3) The Scheme may disburse money for the benefit of leaseholders in any type of building, whether or not a higher-risk building and whether or not the building was first occupied before the coming into force of this Act.

(4) The levy imposed by the Scheme shall be determined by reference to each of the following—

(a) the Scheme’s best estimate of the reasonably likely total cost of grants to cover any type of cost described in subsection (2);

(b) the Scheme’s best estimate of the costs of raising and administering the levy; and

(c) the Scheme’s best estimate of the costs of processing applications for grants to leaseholders and disbursing funds to leaseholders from monies raised by the levy.

(5) Members of the Scheme subject to levies shall include the following—

(a) any person seeking building control approval;

(b) any prescribed insurer providing buildings insurance to buildings containing two or more residential units, whether or not the buildings are higher-risk buildings;

(c) any prescribed supplier of construction products subject to regulations made under Schedule 9 to this Act;

(d) any prescribed lender providing mortgage finance in the United Kingdom, whether or not secured over residential units in higher-risk buildings; and

(e) any other person whom the Secretary of State considers appropriate.

(6) The Scheme is to consult with levy paying members before determining the amount and duration of any levy.

(7) The Scheme must provide a process by which leaseholders, or persons acting on behalf of leaseholders, can apply for grants for the types of costs specified in subsection (2).

(8) The Scheme must provide an appeals process for the Scheme’s decisions regarding—

(a) the determination of the amount of any levy; or

(b) the determination of any grant application.

(9) A building control authority may not give building control approval to anyone unless—

(a) the person seeking building control approval is a registered member of the Scheme, or that person becomes a registered member of the Scheme before the building control approval is given; and

(b) the person seeking building control approval pays all levies made on that person by the Scheme before the building control approval is given.

(10) The Secretary of State must provide that any regulations made under Schedule 9 to this Act provide, as a condition of approval of any regulated construction product, that any prescribed supplier of such a product—

(a) is a registered member of the Scheme, or that prescribed supplier becomes a registered member of the Scheme; and

(b) that the prescribed supplier pays all levies made on that person by the Scheme.

(11) Any liability to pay a levy under this section does not affect the liability of the same person to pay an additional levy under section 57 of this Act.

(12) Within a period of 12 months beginning with the coming into force of this section, the Secretary of State must make regulations providing for—

(a) the appointment of a board to oversee the Scheme;

(b) the staffing of the Scheme;

(c) the creation and maintenance of a public register of members of the Scheme;

(d) the preparation of the best estimates described in subsection (4);

(e) the amount, manner and timing of payment of the levies on members of the Scheme under this section;

(f) the process of joining the Scheme;

(g) the process of leaseholders applying to the Scheme for grants towards any of the types of costs specified in subsection (2);

(h) the process for handling any appeals against decisions of the Scheme on any levy or any grant;

(i) the Scheme to make an annual report to Parliament; and

(j) any other matters consequential to the Scheme’s operation.

(13) Regulations made under this section are to be made by statutory instrument.

(14) A statutory instrument under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.

(15) In this section—

‘building’ has the same meaning as in section 29;

‘building control approval’ has the same meaning as in paragraph (1B)(2) of Schedule 1 to the Building Act 1984;

‘building control authority’ has the same meaning as in section 121A of the Building Act 1984;

‘defect’ means anything posing any risk to the spread of fire, the structural integrity of the building or the ability of people to evacuate the building, including but not limited to any risk identified in guidance issued under Article 50 of the Regulatory Reform (Fire Safety) Order 2005 (S.I. 2005/1541) or any risk identified in regulations made under section 59;

‘external wall’ has the same meaning as in Article 6 of the Regulatory Reform (Fire Safety) Order 2005 (S.I. 2005/1541);

‘higher-risk building’ has the same meaning as in section 59;

‘prescribed’ means prescribed by regulations made by the Secretary of State;

‘remediation’ means any step taken to eradicate or to mitigate a defect, including employment of any person to temporarily assist in evacuation of any part of a building, and whether or not the defect in question existed at the date any residential unit in the building was first occupied. Remediation does not include anything required in consequence of omitting to effect reasonable repairs or maintenance to all or any part of the building over time, or anything which is the responsibility of an occupant of a residential unit within the building;

‘residential unit’ has the same meaning as in section 29.

(16) This section shall come into force on the day this Act is passed.”

This new clause is suggested after clause 126, requiring the government to establish a comprehensive fund, equivalent to the Motor Insurers’ Bureau, to provide grants to remediate cladding and fire safety defects of all descriptions, paid for by levies on developers, building insurers and mortgage lenders.

New clause 8—Implied terms in residential building and residential renovation contracts—

“(1) Every residential building contract is to be taken to contain terms that—

(a) the residential unit is fit for the purpose of ordinary residential occupation and is likely to remain so for a reasonable period if kept in appropriate repair;

(b) the residential unit in question is constructed in all material respects as described or stated on the approved plans;

(c) the residential unit is not subject to any building safety risk;

(d) the materials incorporated in the residential unit are as described in any approved plans;

(e) the materials incorporated in the residential unit are of satisfactory quality;

(f) the design of the residential unit is of a reasonable standard;

(g) the design of the residential unit is prepared with reasonable care and skill;

(h) all works in connection with the construction of the residential unit are executed with reasonable care and skill; and

(i) the residential unit complies in all material respects with all applicable statutory requirements and with all applicable building regulations in force as at the date of completion.

(2) Every residential renovation contract is to be taken to contain terms that any renovation works—

(a) do not render the unit unfit for the purpose of ordinary residential occupation;

(b) do not create any building safety risk;

(c) do not involve the incorporation of materials in the residential unit which are not as described in any approved plans;

(d) do not involve the incorporation of materials in the residential unit which are not of satisfactory quality;

(e) are executed with reasonable care and skill; and

(f) do not render the residential unit materially non-compliant with any applicable statutory requirement or with any applicable requirement of building regulations in force as at the date of completion.

(3) For the purposes of subsections (1) and (2), where the residential unit forms part of a building consisting of two or more residential units, the internal and external common parts of that building necessary for the reasonable occupation of any of the residential units are also to be taken to be subject to the same terms.

(4) A residential unit is fit for the ordinary purpose of residential occupation if it would be regarded as such by a reasonable person and taking into account—

(a) the ordinary costs of repair and maintenance of that residential unit by reference to that unit’s location and specific characteristics;

(b) any marketing materials provided before the sale of the residential unit in question; and

(c) whether that unit was marketed, designed or intended to be occupied by any particular class of persons, whether by age, by gender or by physical or mental disability.

(5) For the purposes of this section—

(a) a matter is material if it would be considered material if known or discovered by a reasonable purchaser of that residential unit before completing a purchase of that residential unit on ordinary commercial terms;

(b) a design is of a reasonable standard if a designer of average competence would have produced the same or a similar design;

(c) a material is of satisfactory quality if it would meet the requirements for satisfactory quality of goods under section 9 of the Consumer Rights Act 2015; and

(d) a material is as described if it would meet the requirements for description of goods under section 11 of the Consumer Rights Act 2015.

(6) The terms taken to be included in any residential building contract or residential renovation contract are enforceable by any owner of the residential unit provided or renovated under the contract in question.

(7) A term of a residential building contract or a residential renovation contract is not binding on the owner of a residential unit provided or renovated pursuant to that contract if it would exclude or restrict any liability in relation to the terms implied by this section.

(8) The reference in subsection (7) to excluding or restricting a liability also includes preventing an obligation or duty arising or limiting its extent.

(9) An agreement in writing to submit present or future differences to arbitration is not to be regarded as excluding or restricting any liability for the purposes of this section.

(10) In this section—

‘approved plans’ means any document submitted as part of obtaining building control approval;

‘building control approval’ has the same meaning as in paragraph (1B) of Schedule 1 to the Building Act 1984;

‘building safety risk’ has the same meaning as in section 59, whether or not the residential unit is in a higher-risk building;

‘higher-risk building’ has the same meaning as in section 62;

‘owner’ means the registered legal owner of the residential unit from time to time, including any trustee holding a beneficial interest on behalf of a third party and any transferee or assignee of the original owner;

‘residential unit’ has the same meaning as in section 29;

‘residential building contract’ means a contract made in the course of business involving work on or in connection with the construction of a residential unit (whether the dwelling is provided by the erection or by the conversion or enlargement of an existing building);

‘residential renovation contract’ means a contract made in the course of business involving work on an existing residential unit, except where it is expected that, on completion of the work, it will have ceased to be a residential unit or will otherwise have ceased to exist.”

This new clause, proposed to be inserted after clause 128 strengthens consumer rights for future buyers by implying terms that houses and flats are built, and are renovated, to reasonable standards of quality and compliant in all material respects with the law and with building regulations.

New clause 9—Implied terms: limitation—

“(1) The Limitation Act 1980 is amended as follows.

(2) After section 5 insert—

‘5A Time limit for actions related to breach of implied terms in residential building contracts and residential renovation contracts

An action in respect of the breach of the term implied into a residential building contract or a residential renovation contract by section (Implied terms in residential building and residential renovation contracts) of the Building Safety Act 2021 may not be brought after the expiration of 25 years from the date on which the cause of action accrued.’”

This new clause provides for a 25 year limitation period for breaches of the terms implied by the amendment proposed above.

New clause 10—Implied terms: mandatory insurance—

“(1) No member of the new homes ombudsman scheme created by this Act may offer for sale or sell any residential unit unless —

(a) every potential purchaser is provided on request with an accurate written summary of the terms of a prescribed policy applying to the residential unit when completed; and

(b) in accordance with any relevant regulation made under this section, or under section 131, or under section 132, the person offering for sale or the seller of the residential unit arranges a valid prescribed policy and provides a copy of a valid prescribed policy given to the purchaser of the residential unit on the day of the transfer to the purchaser of legal title in the residential unit.

(2) Any person in the course of business providing a residential unit under a residential building contract or renovations to a residential unit under a residential renovation contract must obtain a valid prescribed policy.

(3) No term of any residential building contract or residential renovation contract is enforceable unless a valid prescribed policy is in force in respect of such a contract.

(4) Within a period of six months beginning on the day this section comes into force, the Secretary of State must make regulations prescribing insurance terms for the purposes for this section, including—

(a) the creditworthiness of any insurer or warranty scheme under this section;

(b) the name of any warranty scheme which in the opinion of the Secretary of State achieves the purposes of this section;

(c) the minimum terms of any insurance or warranty under this section;

(d) that any policy or warranty scheme also provides reasonably adequate cover for any claim under sections 1 and 2A of the Defective Premises Act 1972 and section 38 of the Building Act 1984;

(e) a policy term or a warranty term of not less than the limitation period for making claims under any term implied into a residential building contract or residential renovation contract by this Act; and

(f) to bring into force section [Implied terms in residential building and residential renovation contracts] and section [Implied terms: limitation].

(5) Regulations made under this section are to be made by statutory instrument.

(6) A statutory instrument under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.

(7) In this section—

‘new homes ombudsman scheme’ means the scheme established under section 129;

‘prescribed’ means prescribed in regulations made by the Secretary of State, whether under this section, or under section 131, or under section 132;

‘residential building contract’ has the same meaning as in section [Implied terms in residential building and residential renovation contracts];

‘residential renovation contract’ has the same meaning as in section [Implied terms in residential building and residential renovation contracts]; and

‘residential unit’ has the same meaning as in section 29.

(8) This section shall come into force on the day this Act is passed.”

This new clause provides that members of the New Homes Ombudsman Scheme may not sell any new flat or house unless they provide insurance for 25-years to cover breach of implied terms as to quality.

New clause 11—Limitation Period for claims under section 38 of the Building Act 1984—

“(1) Section 38 of the Building Act 1984 is amended as follows.

(2) In section 38(4) after ‘includes’ insert ‘economic loss,’.

(3) After section 38(4) insert—

‘(5) No right of action for damages for economic loss under this section shall accrue until any person to whom the duty is owed has actual knowledge of breach that duty.

(6) Notwithstanding anything in subsection (5) or any regulations made under this section, an action for damages for economic loss under this section shall not be brought after the expiration of twenty-five years from the date the breach of duty occurred.

(7) For the purposes of subsection (6), where there is more than one actionable breach of duty causing economic loss and the breaches in question occurred on different dates, then time runs only from the date of the last such breach.

(8) Any right of action under this section other than a right of action for damages for economic loss shall be subject to section 11 and section 14A of the Limitation Act 1980.’

(4) This section shall come into force at the end of the period of two months beginning on the day on which this Act is passed.”

This new clause proposed for the Building Act 1984 enables claims for recovery of monetary damages (economic loss) and provides that the time limit for claims start when a resident becomes aware of a breach, subject to a 25-year longstop date.

New clause 12—Abolition of the rule preventing recovery of economic loss in certain actions relating to damage or defects in buildings—

“(1) In any prescribed statutory action for damages, there is no bar to recovering economic loss.

(2) In any action for damages for negligence in relation to the construction or renovation of any residential unit, other than an action for damages to which section 11 or section 14A of the Limitation Act 1980 applies, there is no bar to recovering economic loss.

(3) This section shall apply to any right of action accruing on or after the day this section comes into force.

(4) For the purposes of this section —

‘prescribed statutory action for damages’ means any action for damages for breach of section 1 or section 2A of the Defective Premises Act 1972.

‘residential unit’ means any dwelling or other unit of residential accommodation, including any internal or external common parts of any building necessary for the occupation of that residential unit.

(5) This section shall come into force at the end of the period of two months beginning on the day on which this Act is passed.”

This new clause abolishes the rule preventing the recovery of economic loss from developers and other professionals in claims for negligence and in claims under the Defective Premises Act 1972.

New clause 13—Leaseholder Costs Protection—

“(1) This section applies to a relevant building where a landlord has carried out any fire safety works to a building in consequence of any provision, duty or guidance arising from—

(a) the Housing Act 2004;

(b) the Regulatory Reform (Fire Safety Order) 2005;

(c) this Act;

(d) any direction, recommendation or suggestion of any public authority or regulatory body; and

(e) such other circumstances or enactment as the Secretary of State may prescribe by regulations.

(2) If any of the conditions in subsection (1) are met, then the costs incurred by the landlord in connection with those matters may not be the subject of a demand for payment of service charges, administration charges or any other charge permitted or authorised by any provision of any long lease.

(3) Any demand for payment which contravenes this section shall be of no force or effect and will have no validity in law.

(4) Any covenant or agreement, whether contained in a lease or in an agreement collateral to such a lease, is void insofar as it purports to authorise any forfeiture or impose on the tenant any penalty, disability or obligation in the event of the tenant refusing, failing or declining to make a payment to which this section applies.

(5) This section applies to demands for payment before the landlord incurs the costs in the same way as it applies to demands for payment made after the costs have been incurred.

(6) This section does not apply where the landlord is a company in which the majority of the shares are held by leaseholders or where the landlord is an RTM company.

(7) For the purposes of this section, a relevant building is any building containing one or more residential dwellings let on a long lease.

(8) In this section—

‘administration charge’ has the meaning given by Schedule 11 to the Commonhold and Leasehold Reform Act 2002; ‘fire safety works’ means any work or service carried out for the purpose of eradicating or mitigating (whether permanently or temporarily) any risk associated with the spread of fire, the structural integrity of the building or the ability of people to evacuate the building;

‘long lease’ has the meaning given by sections 76 and 77 of the Commonhold and Leasehold Reform Act 2002;

‘residential dwelling’ means any dwelling or other unit of residential accommodation, including any internal or external common parts of any building necessary for the occupation of that residential unit;

‘service charge’ has the meaning given by section 18 of the Landlord and Tenant Act 1985;

‘RTM company’ has the meaning given by section 113 of the Commonhold and Leasehold Reform Act 2002.

(9) This section comes into force on the day on which this Act is passed.”

This new clause prevents the costs of any fire safety or building safety remedial works being passed on to leaseholders.

Amendment 2, in clause 126, page 133, line 17, at end insert—

“(d) In respect of remediation works completed before the coming into force of this section, apply for any refund of VAT due under section 35(1A)(d) of the Value Added Tax Act 1994 and credit the whole amount of any such refund received to leaseholders pro-rata in accordance with the terms of the lease.”

This amendment is consequential on NC4. Where works have already been carried out, this new subclause requires the landlord to obtain any retrospective VAT refund and to credit the whole amount of that VAT refund to leaseholders.

Amendment 5, in clause 127, page 135, line 29, leave out

“at the time the work is completed” and insert

“when any person to whom the duty under this section is owed has actual knowledge of breach of that duty.”

This amendment provides that time to make a claim in respect of building renovations under section 2A of the Defective Premises Act 1972 only runs from the date a resident has knowledge of the breach, subject to a 25-year longstop.

Amendment 6, in clause 127, page 135, line 33, at end insert—

“(9) Notwithstanding anything in subsection (8), an action for damages for breach of the duty in this section, insofar as that action relates only to the original work in question, shall not be brought after the expiration of twenty-five years from the date the work in question is completed.”

This amendment provides that time to make a claim in respect of building renovations under section 2A of the Defective Premises Act 1972 only runs from the date a resident has knowledge of the breach, subject to a 25-year longstop.

Amendment 4, in clause 128, page 136, line 1, leave out “15 years” insert “25 years”.

This amendment proposes a longer period for claims under the Defective Premises Act 1972 and the Building Act 1984 considering the recent history of cladding and fire safety related defects and retrospective guidance issued by the government.

Government amendment 41.

Amendment 7, in clause 128, page 136, line 11, at end insert—

“(2A) In section 1(5) of the Defective Premises Act 1972 for ‘time when the dwelling was completed’ substitute ‘time when any person to whom the duty under this section is owed has actual knowledge of breach of that duty’.

(2B) After section 1(5) of the Defective Premises Act 1972 insert—

(6) Notwithstanding anything in subsection (5), an action for damages for breach of the duty in this section, insofar as that action relates only to the original construction of the building in question, shall not be brought after the expiration of twenty-five years from the time the dwelling is completed.’”

This amendment provides that time to bring a claim for damages under section 1 of the Defective Premises Act 1972 only runs from the date a resident has knowledge of a breach, subject to a 25-year longstop in relation to claims related to failures during the original construction.

Government amendment 42.

Amendment 8, in clause 128, page 136, line 19, leave out subsection (5).

The Human Rights Act 1998 already protects defendants’ rights in relation to retrospectively extended limitation periods. Removing subsection (5) removes the material risk a court may construe clause 128 in a way that means it has no practical benefit and will lead to years of costly litigation for leaseholders.

Amendment 9, in clause 128, page 136, leave out line 27 and line 28.

This amendment is consequential to Amendment 8 because the defined term “Convention Rights” is no longer required.

Government amendment 43.

Amendment 10, in clause 128, page 136, line 29, leave out “90 days” and insert “2 years”.

This amendment allows a period of up to 2 years, instead of 90 days, to obtain the necessary expert evidence required to issue viable claims under the Defective Premises Act 1972.

Government amendments 44 to 55.

Amendment 3, in clause 132, page 139, line 17, at end insert—

“(f) require members of the scheme under paragraph (a) to obtain policies of insurance that meet the requirements of section (Implied terms: mandatory insurance).”

Government amendments 56 to 58.

Government new schedule 2—Amendments in connection with the new homes ombudsman scheme.

Government amendment 71 and 72.

Government amendment 59.

Government amendment 62.

Government amendments 65 to 69.

Photo of Christopher Pincher Christopher Pincher Minister of State (Department for Levelling Up, Housing and Communities)

It is a great pleasure to report to the House, to move the Government’s new clauses and to be able listen to the important debate that we will have on the Bill’s remaining stages. Over the past few months, the Bill has been subject to scrutiny and debate not only in Committee but through ongoing debate in this House, in the other place and, indeed, throughout the country.

Only last week, my right hon. Friend the Secretary of State for Levelling Up, Housing and Communities updated the House on our progress in addressing the ongoing issues and protecting leaseholders. We have brought the Bill forward on Report because we are clear that it needs to move forward, but we are conscious that further work needs to be done to it and look forward to working with parties from across the House and with interested parties to ensure that it is further improved in the other place.

Photo of Stephen Timms Stephen Timms Chair, Work and Pensions Committee, Chair, Work and Pensions Committee

Will the Minister confirm that the Government intend to table amendments in the other place to implement the statutory protection for leaseholders announced last week by the Secretary of State? By the time that the Bill is debated there, can we expect amendments to have been published so that we can consider them?

Photo of Christopher Pincher Christopher Pincher Minister of State (Department for Levelling Up, Housing and Communities) 2:15 pm, 19th January 2022

I am grateful to the right hon. Gentleman for his question. As I said, we are introducing the Bill at this stage because we are conscious that it is very important, and we need to get it through both Houses. However, as my right hon. Friend the Secretary of State said in his statemen on 10 January, we want to ensure that we look closely to improve the appropriate legislative and statutory protections for leaseholders, and we will have to do that in a parliamentary way, which will of course include the other place.

Several hon. Members:

rose—

Photo of Bob Neill Bob Neill Chair, Justice Committee, Chair, Justice Committee

I am grateful to my right hon. Friend for the undertaking to bring forward such matters in the other place and for listening to colleagues’ representations on a number of important issues. Given the pressures on business in the other House, will he assure us that there will be time properly to debate the amendments and that they will include important issues such as clarifying the position on internal developer fire safety defects—where there has been a defect that is the fault of the developer and/or regulatory failure and not anything else—just as much as external defects, and consequential costs that stem from those failures such as waking watch? Those are important issues, so I hope he will ensure that we have a proper debate and clarification on them in the other place.

Photo of Christopher Pincher Christopher Pincher Minister of State (Department for Levelling Up, Housing and Communities)

I am grateful to my hon. Friend. Of course, the time made available for debate in the other place is for the other place to determine, but I am sure that the business managers in both Houses have heard his points. I certainly want to ensure that there is adequate time to debate properly what are somewhat technical and detailed matters so that, working across party and with members of the Select Committee on Levelling Up, Housing and Communities, we can properly get the Bill right.

Photo of Hilary Benn Hilary Benn Labour, Leeds Central

Further to the answer given to my right hon. Friend Stephen Timms, will the Minister explain why the statutory protection that the Government are considering will apparently not extend to leaseholders not living in their flats? I know of at least one constituent of mine who was forced to leave his flat and rent it out as that was the only way he could raise the money to pay for the waking watches and insurance bills. Given that he is just as much a victim as those still living in their flats, why should protection against unreasonable costs not be extended to people such as him?

Photo of Christopher Pincher Christopher Pincher Minister of State (Department for Levelling Up, Housing and Communities)

I am grateful to the right hon. Gentleman. He will know, as the House does, that building safety and the challenges that leaseholders face are very complicated. The House will also know that we have committed to help those in shared ownership, for example, by making it easier for them to rent out their properties if that is a means of ensuring that they can pay their mortgages. I assure him that we will look closely and work collegiately and collectively across parties, and with other interested parties, to ensure that such issues are effectively and appropriately debated and addressed.

Photo of Bob Blackman Bob Blackman Conservative, Harrow East

My right hon. Friend has done a stoic job in taking the Bill through its various stages. The other place is under incredible pressure in dealing with Government legislation, as my hon. Friend Sir Robert Neill mentioned. It is clearly up to business managers there how much time they allocate to amendments and so forth, but will he commit that when the Bill comes back to us with the Lords amendments, we will get a chance to debate them—and, if necessary, correct them and improve them—rather than just a 60-minute debate where hardly anyone gets an opportunity to debate the issues?

Photo of Christopher Pincher Christopher Pincher Minister of State (Department for Levelling Up, Housing and Communities)

I am grateful to my hon. Friend. The business managers in this House, if not the other House, will have heard his points—he has got a pretty loud voice—and will want to ensure that appropriate, adequate debating time is made available to deal with these technical and detailed issues. As I said, I believe that business managers will have heard what has been said by him and by right hon. and hon. Members and will react accordingly.

Several hon. Members:

rose—

Photo of Christopher Pincher Christopher Pincher Minister of State (Department for Levelling Up, Housing and Communities)

I will give way to the Chairman of the Select Committee on Levelling Up, Housing and Communities, and then I probably ought to make a little more progress, having thus far read out only one paragraph of my opening remarks.

Photo of Clive Betts Clive Betts Chair, Levelling Up, Housing and Communities Committee, Chair, Levelling Up, Housing and Communities Committee

It was very well read, though.

I re-emphasise the point raised by Bob Blackman. The Select Committee will have a very short but very thorough inquiry into the issues that the Secretary of State rightly raised in his statement to the House last week and the follow-up, but debating time in this place is an issue. The Minister’s answer is very helpful because the Lords will have lots of time, and then it is normal for us to have one hour to consider their amendments. The Bill needs a full-day debate because the amendments that the Government intend to make, following consultation with industry, are key to resolving the issue. I appreciate what the Minister said, and I hope the business managers are as supportive when they come to allocate time.

Photo of Christopher Pincher Christopher Pincher Minister of State (Department for Levelling Up, Housing and Communities)

The hon. Gentleman and others remind me of what is often said of politics: even though everything that can be said has been said, not everybody who could say it has said it. He has just spoken for the entire House, and it is of course for the usual channels to determine the time allocated for debating and disposing of business, but the point of view of both sides of the House has thus far, very early in the debate, been heard.

Several hon. Members:

rose—

Photo of Christopher Pincher Christopher Pincher Minister of State (Department for Levelling Up, Housing and Communities)

I will make a little progress before giving way, if I may.

I have been delighted to talk to colleagues on both sides of the House, following the statement by my right hon. Friend the Secretary of State. I draw the House’s attention to the comments of my hon. Friends the Members for Southampton, Itchen (Royston Smith) and for Ipswich (Tom Hunt), who cannot be with us today because they are on parliamentary business elsewhere. They commissioned me to tell the House that they are very pleased with the direction of travel set out by my right hon. Friend the Secretary of State. They are pleased with the Government’s commitment to continue working with parliamentarians to protect leaseholders and to hold to account those responsible for building defects. If they were here, they would support the Government in the Lobby this afternoon.

I am sure we will address some difficult and challenging questions in this debate. Before we do, I am keen to introduce a group of Government amendments that I trust will be welcomed.

Photo of Catherine West Catherine West Shadow Minister (Foreign and Commonwealth Affairs)

The Minister is generous in giving way. Could he reassure leaseholders in the Roundway in Wood Green that, after several years of lobbying both me and the Government, not only will the whole of the cladding costs be covered under this arrangement but their mortgage issues will be resolved?

Photo of Christopher Pincher Christopher Pincher Minister of State (Department for Levelling Up, Housing and Communities)

The hon. Lady is a doughty campaigner on behalf of her constituents in the Roundway and elsewhere. I do not want to speak about specific buildings, which probably would not be appropriate because I do not know the detail, but we certainly want to make sure that we agree proper leaseholder protections across political parties and with interested parties. We will make amendments to that effect, as well as a suite of non-statutory interventions to make sure the people who ought to pay do pay.

Several hon. Members:

rose—

Photo of Christopher Pincher Christopher Pincher Minister of State (Department for Levelling Up, Housing and Communities)

I will give way a little more later. I am conscious that I have already spoken for a little while, and there are a number of new clauses and amendments that the House will want to debate and on which Members will want to make their views plain.

The Government are committed to improving redress and consumer protection for home buyers in new buildings. I am therefore pleased that we have introduced access to the new homes ombudsman scheme. Amendments 49, 50 and 72 introduce several changes to the new homes ombudsman provisions to enable them to work practically in Wales and Scotland, and to ensure that the scheme includes provision of information to Ministers in the devolved Administrations.

In addition, amendments 47, 48 and 71 and new schedule 2 remove barriers to enable the new homes ombudsman to work jointly with existing ombudsman schemes and clarify provision of co-operation between the ombudsman and other redress schemes. To ensure that the provisions work for home buyers across our nations, any differences in law and custom and practice will be respected.

Amendments 45, 56 and 57 include requirements for the Secretary of State to consult the devolved Administrations before making arrangements for the scheme. We want that consultation to be meaningful and our intention is to make sure that consideration is given to the views of the devolved Administrations at an appropriate time and before key decisions are taken about the ombudsman regime.

Amendments 54 and 55 confer a power on the relevant national authority for England, Scotland and Wales to add the meaning of the term “developer” in the new homes ombudsman provisions, through regulations as appropriate and following a discussion with other relevant national authorities.

New clause 20 makes provision for how Welsh and Scottish Ministers may exercise that power. New clause 21 makes sure that the devolved Administrations are not restricted from bringing forward legislation to alter the ombudsman’s statutory functions in relation to that territory’s future by disapplying a restriction in the Government of Wales Act 2006.

Finally, our intention is for the new homes ombudsman to work jointly with the other redress schemes and ombudsmen, and the amendments clarify that intention, removing barriers in existing legislation.

Photo of Janet Daby Janet Daby Labour, Lewisham East

Will the Minister say how he will keep his promises to leaseholders to ensure that they will not bear the cost of the building safety crisis?

Photo of Christopher Pincher Christopher Pincher Minister of State (Department for Levelling Up, Housing and Communities)

As I have already said, we want to work across the parties to make sure that leaseholders are properly protected and that those who should properly pay the costs of defective fire safety work bear that cost. I have said it from the Dispatch Box, and, on 10 January, the Secretary of State made the same commitment. We will work through the passage of the Bill to make sure that those protections are in place.

Photo of Christopher Pincher Christopher Pincher Minister of State (Department for Levelling Up, Housing and Communities)

I give way to the hon. Gentleman and then I shall make some further progress.

Photo of Jonathan Edwards Jonathan Edwards Independent, Carmarthen East and Dinefwr

I am extremely grateful to the Minister for giving way. I welcome the ombudsman. Uncompleted estates have been a big issue in my constituency, and I welcome the consultation with the Welsh Government. May I take him back to the intervention from Hilary Benn about people who are landlords and leaseholders in one property and the need to include them in the scheme. In the spirit of that consultation—whatever compensation scheme comes forward will be administered in Wales by the Welsh Government—can he tell me what discussions he is having with the Welsh Government about that specific group of people who are very worried about the situation at the moment?

Photo of Christopher Pincher Christopher Pincher Minister of State (Department for Levelling Up, Housing and Communities)

I am grateful to the hon. Gentleman for his support for the proposals in general. I can assure him that my officials work closely with officials in the devolved Administrations and we will continue to do so, again, as an example of working with interested parties to make sure that issues are properly addressed.

New clause 22 relates to appeals against registration decisions made by the Architects Registration Board. The new clause gives applicants for registration the opportunity to appeal a decision made by the board or the registrar to remove or refuse to enter or re-enter a person’s name onto the register. Without that, registrants removed under the new competence regime, to be introduced with clause 137, and first-time registrants will only have recourse to the High Court. The costs of an appeal made to the High Court could be prohibitive.

Amendment 58 will allow the board to delegate its prescription responsibilities to the prescription committee, giving it greater flexibility while maintaining oversight of the prescription of qualifications. Amendments 65 and 69 are consequential to that change.

I now turn to our proposed amendments on redress. The Bill Committee debated section 1 of the Defective Premises Act 1972 in significant detail; I recall that Mike Amesbury made several concise and incisive interventions. Section 1 allows a claim for compensation to be brought through the civil courts when a dwelling was “not fit for habitation” on completion. The limitation period in that Act currently stands at six years, which means that a claim must be brought within that period following the completion of the defective works.

As introduced, the Bill proposed to retrospectively and prospectively extend the limitation period to 15 years, meaning that it would not only apply going forward, but that it would be possible to bring a claim with respect to buildings completed from mid-2007 onwards, should the building have been constructed in such a way as to make it unfit for habitation.

Photo of Matt Rodda Matt Rodda Shadow Minister (Work and Pensions) (Pensions) 2:30 pm, 19th January 2022

I ask for the Minister’s further reassurance on some points of detail that relate to these amendments. First, around half of the buildings in my constituency that have difficulties associated with them have non-cladding-related problems. Those include internal compartmentalisation that has been improperly finished. Indeed, in Queens Wharf in Reading town centre, the building owners estimate that nearly £1 million of work needs to be carried out. These are often very large sums. In other cases, the problem is wooden cladding, wooden balconies or a range of other things. Do the amendments relate to these problems, or to flammable cladding only?

Photo of Christopher Pincher Christopher Pincher Minister of State (Department for Levelling Up, Housing and Communities)

The Defective Premises Act has been in effect since 1972, so there is a significant body of case law that those wishing to bring an action, and indeed the courts, will be able to refer to, to determine whether a premises is defective and therefore whether an action should be successful. I am happy to write to the hon. Gentleman with further detail, but I can assure him that the Act is of long standing and has been well used, and there is a body of case law that can be applied.

Photo of John Redwood John Redwood Conservative, Wokingham

Is there any right of redress to the regulatory authorities in local government, such as building inspectors and others, who were responsible for signing off on these schemes?

Photo of Christopher Pincher Christopher Pincher Minister of State (Department for Levelling Up, Housing and Communities)

We certainly want to ensure though the Bill, that the building control mechanism and the industry are improved. I think that a suite of measures, including the introduction of better building control measures, the retrospection of the Defective Premises Act and further work that we may choose to do, working across parties, will help ensure that a very complicated and detailed set of challenges, which have emerged recently but have been developing over many years, are properly addressed.

Photo of Mike Penning Mike Penning Conservative, Hemel Hempstead

I want to clarify, should I be lucky enough to catch Madam Deputy Speaker’s eye later, where my speech might be going. This is retrospective legislation, and that is fantastic—if we can track down the freeholder, the developer and the insurer. If they cannot be tracked down, where does that burden come? Surely we can find a way—I may suggest this in my speech, but I wonder whether the Minister has thought of a way—by which the unfairness of the impact of what we are now prescribing in the Minister’s legislation on those in cases where we cannot find them, as opposed to where we can, can be resolved.

Photo of Christopher Pincher Christopher Pincher Minister of State (Department for Levelling Up, Housing and Communities)

I am grateful to my right hon. Friend for the forewarning of what his speech may contain. I would say to him that quite apart from the body of case law that exists with respect to the 1972 Act, and quite apart from the fact that even if a company has become defunct directors can still be held liable for the decisions made, as it were, “on their watch”, the challenges that he has described are the sorts of things that we will want to discuss in this place and in the other place, across parties, to ensure that such challenges are addressed.

Photo of Christopher Pincher Christopher Pincher Minister of State (Department for Levelling Up, Housing and Communities)

I will give way to the hon. Gentleman in a moment, but I am conscious that I have been speaking for 22 minutes and that there are one or two other remarks that I ought to make before the House has an opportunity to debate the new clauses and amendments.

Since the introduction of the Bill, it has become clear that a number of buildings affected by cladding and other serious fire safety defects were completed prior to 2007. We have listened to hon. Members from across the House who wanted a route to redress for those buildings. I pay tribute to my hon. Friends the Members for Stevenage (Stephen McPartland), for Kensington (Felicity Buchan), for Bromley and Chislehurst (Sir Robert Neill) and for Wimbledon (Stephen Hammond) and my right hon. Friend Sir Mike Penning, as well as a great many Opposition Members.

That is why we tabled Government amendment 41, which will retrospectively extend the limitation period for section 1 of the 1972 Act to 30 years, meaning that there will be access to this route of redress for buildings completed from mid-1992 onwards. That represents a substantial extension beyond the current six years. I recognise that changing the law in this way is unusual and that 30 years represents a long limitation period. However, I consider that the exceptionality of the current circumstances in respect of cladding and other serious fire safety defects warrants the longer retrospective limitation period of 30 years.

Several hon. Members:

rose—

Photo of Graham Stringer Graham Stringer Labour, Blackley and Broughton

The Minister is being extraordinarily generous with his time. The Government have moved a good distance to get all-party support for what they are doing and to take the burden away from leaseholders. However, I suspect that in many cases, the people responsible for the defects will have liquidated themselves and will no longer be there. Is not one possible solution that a charge be put against the land, so that neither the leaseholder nor the taxpayer has to pay? Has he considered that?

Photo of Christopher Pincher Christopher Pincher Minister of State (Department for Levelling Up, Housing and Communities)

We will consider all proposals that are put to us to see whether they work and to ensure that leaseholders are protected. As the Secretary of State said in his statement, we will conduct a series of summits with the sector to put people on notice that they must pay for the problems they have caused. If they will not do it voluntarily, we will find a means of requiring them to do so.

The hon. Gentleman was wrong to say that I am being generous with my time. In fact, I am being generous with the House’s time. I propose to be less generous in future, but not before I have allowed my hon. Friend the Member for Stevenage to intervene.

Photo of Stephen McPartland Stephen McPartland Conservative, Stevenage

I would like to thank the Minister on behalf of a number of leaseholders around the country, because our amendments asked for only 25 years and the Government have gone further with 30 years. I put on the record my thanks to the Government for that.

Photo of Christopher Pincher Christopher Pincher Minister of State (Department for Levelling Up, Housing and Communities)

I am grateful to my hon. Friend. I assure him that the 30-year retrospection is what we decided on; it is not a typo and it should not read 25 years.

The prospective limitation period will remain at 15 years, as is currently proposed, which still represents a substantial extension beyond the existing six years. In a small number of cases, the retrospectively extended limitation period will expire very soon following the commencement of the provision. We believe that it is important that the extended limitation period is of practical benefit in the case of all buildings that fall within scope. That is why we have proposed adding section 4B(4) to the Limitation Act 1980 through clause 128, which will ensure that there is always a minimum amount of time to lodge a claim under section 1 of the Defective Premises Act for buildings whose limitation periods will be revived for a very short period of time.

As introduced, the Bill provided for an initial period of 90 days in which action relating to defective premises could be taken when the extension was about to run out. I agree with several of my hon. Friends that 90 days is an insufficient amount of time to take the necessary advice and lodge a claim, which is why we are bringing forward amendments 42 and 43 to extend the initial period to one year. That means that those in any buildings completed between mid-1992 and mid-1993 will always have one full year in which to lodge their claim, once this Bill and its provisions apply. These amendments will ensure that the retrospectively extended limitation period can be of practical benefit in the case of all buildings in scope, and I trust that the House will support them.

Clause 127 expands the scope of the Defective Premises Act to include refurbishment works, and a technical amendment in the next group will ensure that this commences two months after Royal Assent, ensuring that this important new safeguard against shoddy workmanship is taken up as soon as possible. This was a debate that we had, and agreed about, in Committee. I am grateful to my right hon. and hon. Friends, and indeed to colleagues across the House, for debating these matters and for tabling amendments in this area, but I hope that in the light of what I have said from the Dispatch Box they will feel able to withdraw their amendments.

Photo of Caroline Lucas Caroline Lucas Green, Brighton, Pavilion

I want the Minister to clarify one last thing before he sits down, because although other hon. Members have raised it, I am still not entirely clear what reassurance there is for our constituents who are leaseholders experiencing problems that are not related to cladding. Others have raised the issues of internal partitions, roof spaces and so forth, and the Minister has referred to other legal channels that may be available, but can he tell me clearly now what reassurance there is for leaseholders who are not facing cladding problems but are facing other fire defects? Will the legal protections that he is offering extend to them?

Photo of Christopher Pincher Christopher Pincher Minister of State (Department for Levelling Up, Housing and Communities)

We will work with parties across this House—across both Houses—and with interested parties to ensure that these issues are properly understood and debated.

Photo of Christopher Pincher Christopher Pincher Minister of State (Department for Levelling Up, Housing and Communities)

No, I will not.

We want to ensure that these matters are properly debated and properly agreed. We also want to ensure, through a suite of mechanisms such as the extension of the Defective Premises Act and working with the sector to ensure that it pays for the defects it has caused, that this issue for leaseholders, which has gone on for far too long, is finally put to bed. This group of Government new clauses and amendments make key improvements to the Bill and extend its benefits to include the whole of Great Britain. I hope therefore that Members across the House will feel able to support the new clauses and the new schedule and allow them to stand part of the Bill.

Photo of Matthew Pennycook Matthew Pennycook Shadow Minister (Levelling Up, Housing, Communities and Local Government)

It will not have escaped your notice, Madam Deputy Speaker, that I have taken on this Bill in its final stages, so I must begin by thanking my hon. Friends the Members for Manchester Central (Lucy Powell) and for Weaver Vale (Mike Amesbury) for their prodigious efforts during its earlier stages. I also want to thank my hon. Friends the Members for Liverpool, West Derby (Ian Byrne), for Brentford and Isleworth (Ruth Cadbury), for Luton South (Rachel Hopkins), for Jarrow (Kate Osborne) and for St Helens South and Whiston (Ms Rimmer) for so ably scrutinising it in Committee.

The issues covered by the Bill have been extensively set out in debates on Second Reading and in Committee. I have no intention of seeking to reprise them this afternoon, but before I turn to part 5 of the Bill and the consideration of the amendments related to it, I feel it is incumbent on me briefly to restate why we believe this legislation is so important. As the House knows, on 14 June 2017, 72 men, women and children lost their lives in an inferno fuelled by the highly combustible cladding system installed on the outside of their 24-storey tower block in north Kensington. That tower block was also compromised by a range of other fire safety defects. I put on record once again our admiration for the survivors and the bereaved of the Grenfell Tower fire and for the wider Grenfell Tower community, who continue to seek not only justice for their families and neighbours but wider change to ensure that everyone is safe in their home.

Photo of Catherine West Catherine West Shadow Minister (Foreign and Commonwealth Affairs)

Does my hon. Friend agree that it is extremely important that we give the debate the time needed to remember the loss of life and the community that survived that terrible moment in our shared history?

Photo of Matthew Pennycook Matthew Pennycook Shadow Minister (Levelling Up, Housing, Communities and Local Government) 2:45 pm, 19th January 2022

My hon. Friend is absolutely right. I hope that, as Members consider the Bill and amendments, they have the chance to reflect and to remember why it is going through.

One does not pre-empt the Grenfell Tower inquiry’s conclusions in stating that the horror of that dreadful June night was the product not only of pernicious industry practice, but of state failure—the failure of successive Governments in presiding over a deficient regulatory regime, and the failure to act on repeated warnings about the potential lethal consequences of that fact. The Hackitt review detailed a deeply flawed system of regulation and argued for a radical overhaul of it. To the extent that the Bill delivers on the recommendations of Dame Judith’s report, we remain supportive of it and want to see a version of it on the statute book as soon as possible, given that four and a half years have elapsed since the Grenfell tragedy; however, the House knows we have serious concerns about what is missing from the Bill, and particularly its failure as drafted to provide robust legal protection for leaseholders facing ruinous costs—a point already made by several hon. Members on both sides of the House—for remediating historic cladding and non-cladding defects. In the absence of such protection, the Opposition are clear that the Bill will fail to meet what Dame Judith described as

“The ultimate test of this new framework”,

namely,

“the rebuilding of public confidence in the system.”

As we have heard, part 5 deals with remediation and redress, as well as assorted provisions relating to safety and standards. In Committee, my hon. Friends raised concerns about the limitations of clause 126, which seeks to ensure that landlords take “reasonable steps” to pursue other potential means of recovering the costs before passing them on to leaseholders. We of course believe it is right that landlords be forced to exhaust all means of funding remediation works other than passing on costs to leaseholders, whether that be seeking redress from the original developer in cases where the two are not the same, exploring a claim against a warranty, or applying for grant funding; however, we remain of the view that this provision gives leaseholders extremely limited protection in practice and we want that to be supplemented with additional provisions for maximum legal protection against the costs of remediating all historical defects—an objective that I know is widely shared across the House, as evidenced by the numerous amendments on the amendment paper today relating in one way or another to leaseholder protection. I will speak on that issue in more detail later in my remarks.

Clause 128 relates to limitation periods and makes changes to the operation of the Defective Premises Act. We supported the proposed expansion of the Act but remain of the view that there are considerable practical obstacles to leaseholders’ successfully securing redress via that mechanism—a point made by Sir Mike Penning and my hon. Friend Graham Stringer—not least given the prevalent use of special purpose vehicles precisely to avoid liabilities of this kind. We believe that the Government are in general overplaying the significance of litigation as a solution of the building safety crisis.

Photo of Hilary Benn Hilary Benn Labour, Leeds Central

While of course we all welcome the extension, in practical terms, our constituents who have, staring at them from the table, bills for sums of money that they cannot afford, will not be in a position to start a legal action that may take several years, at enormous cost and risk and with no guarantee that it will reach a satisfactory conclusion, as my hon. Friend is so ably pointing out. It is not an answer to the problems that so many of our constituents are facing now.

Photo of Matthew Pennycook Matthew Pennycook Shadow Minister (Levelling Up, Housing, Communities and Local Government)

My right hon. Friend, as so often, is absolutely right that it is an uphill struggle for leaseholders to get together to begin legal action of this kind. He also raises the highly pertinent point that there is nothing in the Bill that prevents freeholders today from passing on costs to those blameless victims of the crisis.

Photo of Kate Green Kate Green Labour, Stretford and Urmston

Does my hon. Friend agree that there is a real opportunity here for the Department to link up with the companies registrar and companies law, and to use the options that exist there to take action early against directors who repeatedly set up these special purpose vehicles, repeatedly carry out substandard developments, and repeatedly liquidate those companies, leaving no assets for leaseholders to act against, and who it appears are in no way acted against, either proactively or reactively, under companies law or by Companies House?

Photo of Matthew Pennycook Matthew Pennycook Shadow Minister (Levelling Up, Housing, Communities and Local Government)

My hon. Friend makes a very good point, which she has made in other debates in this place with regard to unscrupulous developers operating in her constituency. Changes to company law certainly warrant further consideration in that respect.

Photo of Peter Bottomley Peter Bottomley Father of the House of Commons

May I add the problem that leaseholders do not have an interest in a brick of their building and that a claim would need to be made on their behalf by the freeholders to the landlord, who would require indemnity costs from the leaseholders who cannot pay?

May I, through the hon. Gentleman, suggest to the Government that between now and the House of Lords they consider taking a right to take the potential claims by the landlords on behalf of leaseholders into a public agency which can make a public claim against the developers, builders, architects, surveyors, building specification and building controllers, so that money can be brought back from those who were responsible, not the innocent leaseholders who are not?

Photo of Matthew Pennycook Matthew Pennycook Shadow Minister (Levelling Up, Housing, Communities and Local Government)

I thank the Father of the House for that intervention. That is a very good suggestion, which I hope the Minister will take on board and give some considered thought to.

Notwithstanding our concerns with regard to the limitations of the Defective Premises Act, we argued forcefully in Committee for the Bill to be revised so that the period for claims under the 1972 Act be extended from six to 30 years, rather than from six to the 15 years the Government proposed. In response, the Minister urged my hon. Friends to withdraw our amendment on the grounds that a 15-year limitation period was appropriate and indeed that any further retrospective extension beyond 15 years would increase the chances of the legislation being tested against the Human Rights Act and found wanting. Because that argument was never convincing, we are extremely pleased that the Government have reconsidered their position on this matter in the light of the case made by my hon. Friends in Committee, and have brought forward amendments 41 and 42, which provide for that 30-year limitation period, as well as changes to the initial period. We fully support both amendments.

We also believe that new clauses 11 and 12, proposed by the hon. Members for Stevenage (Stephen McPartland) and for Southampton, Itchen (Royston Smith), warrant support. If the Government genuinely believe that litigation has a significant part to play in helping to fix the building safety crisis, they need to give serious consideration to permitting a limited class of claims relating to pure economic loss, rather than just actual physical damage.

Clauses 129 to 134 concern the new homes ombudsman scheme, the creation of which we support, albeit, as the Minister will know, with some concerns about its operational independence and the composition of the new homes quality board. While we remain unconvinced that the new ombudsman and the new code will lead to a step change in developer behaviour and thus a marked increase in the quality of new homes, we see no issue with the scheme being expanded to cover Wales and Scotland, so we support the various Government amendments to that effect under consideration today.

Finally, I want to turn to amendments relating to the fundamental and contentious issue of leaseholder liability. I know I need not detain the House for any great length of time on why it is essential that greater legal protection for leaseholders be put on the face of the Bill.

Photo of Janet Daby Janet Daby Labour, Lewisham East

My hon. Friend is making excellent progress. My constituents living in unsafe homes due to unsafe cladding feel trapped and isolated in their homes. Does he agree that the Government need to work with lenders to see if properties caught up in the cladding scandal can be sold and re-mortgaged?

Photo of Matthew Pennycook Matthew Pennycook Shadow Minister (Levelling Up, Housing, Communities and Local Government)

My constituency neighbour, who shares many of the same case load issues relating to the building safety crisis as I do, is absolutely right. A lot that flows from the Secretary of State’s statement last week depends on lenders, insurers and other stakeholders agreeing with the Government’s approach. We wait to see whether that bears any fruit. We know there have been occasions when the Government have made announcements and the industries in question have not responded as the Government expected.

For many leaseholders across the country, lots of whom are first-time buyers who diligently saved to purchase their homes, all but the most superficial remediation and secondary costs will simply be unaffordable. The reason the building safety crisis has caused and continues to cause such abject misery is because so many blameless leaseholders not only feel trapped in their homes physically, mentally and financially, but because they feel let down by the Government. Despite allocating significant public funds to cover the costs of remediation for some buildings and repeatedly promising that all leaseholders should be fully protected, the Government nevertheless, until very recently, had only committed to shielding a proportion of leaseholders from unaffordable costs, which were defined by one Minister a few years ago, if memory serves, as “anything short of bankruptcy.” I must make it clear to this Minister that it has come as a bitter blow to the countless blameless leaseholders across the country who have already been hit with huge bills, both for remediation works and for interim fire safety measures, that the Secretary of State made clear in his statement last Monday that the Government have no plans to secure retrospective financial redress for them. We think that Ministers need to think again about that issue. However, he did commit in that statement, repeatedly and clearly, to bringing forward amendments to the Bill to provide leaseholders with the “most robust legal protection”, extending to

“all the work required to make buildings safe.”—[Official Report, 10 January 2022; Vol. 706, c. 291.]

Given that he rarely misspeaks, that clearly suggests historic non-cladding and historic external wall-related defects. I hope that the Minister can confirm as much today when he responds on this group of amendments.

That robust legal protection for leaseholders is what this legislation must contain, and it is disappointing that no Government amendments providing for it have been tabled for consideration today.

Photo of Matthew Pennycook Matthew Pennycook Shadow Minister (Levelling Up, Housing, Communities and Local Government)

I am going to make some progress, if the hon. Member will forgive me. That legal protection must be delivered as a matter of urgency and in a way that brings immediate protection for leaseholders, because, as I have said, there is currently nothing, aside from the limited clauses in the Bill requiring them to take reasonable steps before they do, to prevent even more freeholders from passing on costs, as we know many are in the process of doing, even now, including several in my constituency, such as the Comer Group in the case of Mast Quay in Woolwich. As well as providing for the establishment of a building works agency, which we believe remains necessary if the Government are to ensure that the pace of remediation across the country is accelerated and that works are properly carried out and certified, our new clause 3 seeks to provide the maximum legal protection possible for leaseholders facing potential costs to fix historic cladding and non-cladding defects, irrespective of circumstance.

Photo of Jonathan Edwards Jonathan Edwards Independent, Carmarthen East and Dinefwr

I fully support Labour’s new clause 3 and if there is a vote on it, I will be supporting it, particularly as subsection (6) would protect the small buy-to-let landlords Hilary Benn has referred to and I referred to in an intervention. As the hon. Gentleman knows, the scheme in Wales will be administered by the Welsh Government, so may I take it and inform my constituents that new clause 3 will be the basis of the scheme that we see apply to Wales, where Labour is in government?

Photo of Matthew Pennycook Matthew Pennycook Shadow Minister (Levelling Up, Housing, Communities and Local Government)

It does apply to England and Wales, and I think that as a general point the Government need to co-operate much more closely with the Welsh Government on action on the building safety crisis.

As I was saying, new clause 13, proposed by the hon. Members for Stevenage and for Southampton, Itchen, does the same and we fully support it, as well as their new clauses 5 and 6. We will seek to divide on new clause 3 today, simply to reinforce to the other place the importance we attach to the issue of leaseholder protection, but we do want to work constructively with the Government on this matter in the period ahead, in the light of the change of tone and approach signalled by the Secretary of State last week. We hope that the absence of Government amendments providing for robust leaseholder protection today simply reflects the fact that they are not yet finalised and that we can expect them to be tabled, perhaps along with an amendment implementing a version of the polluter pays proposal, in the other place in due course. The Minister has had a couple of chances to answer this point and obfuscated to a certain extent, so I would appreciate it if he would clarify whether that is indeed the case in his closing remarks on this group, because many leaseholders across the country are seeking certainty on that point.

Photo of Clive Betts Clive Betts Chair, Levelling Up, Housing and Communities Committee, Chair, Levelling Up, Housing and Communities Committee

Does my hon. Friend agree that there is a fundamental point here: if for individual blocks of flats we cannot track down the developer or whoever else was involved in the construction and get them to pay through the legal process, and if the Secretary of State’s charm offensive does not persuade the industry as a whole voluntarily to cover these costs, would it not be absolutely wrong if the costs were, effectively, passed on to the social housing sector through cuts in the Department’s budget? Is the alternative, therefore, to look at an extension of the levy or taxation scheme to make the industry pay if it will not voluntarily agree to do so?

Photo of Matthew Pennycook Matthew Pennycook Shadow Minister (Levelling Up, Housing, Communities and Local Government)

The Chair of the Select Committee is absolutely right; it would be a travesty if the Government or this Department were forced to raid the affordable homes programme to cover the costs of fixing the building safety crisis. In those circumstances, they would have to look at other options, such as those he has set out.

I will finish by using this brief opportunity to put to the Minister four issues relating to those expected Government amendments on leaseholder protection that arise directly from the commitments made by the Secretary of State last week. The first issue relates to the point mentioned by my right hon. Friend Hilary Benn in his intervention: which leaseholders will any such robust legal protections cover? The Secretary of State’s statement last week caused a great deal of confusion in that area, so can the Minister clear up the matter today by making it clear that any such protections will apply to all leaseholders, not just leaseholder-occupiers and certainly not just the leaseholders that the Government deem, based on some unknown or unworkable criteria, to be deserving?

The second issue concerns the operational date of any forthcoming provisions. An entirely foreseeable consequence of last Monday’s statement is that any freeholder committed to passing on costs has a powerful incentive to do so before any potential changes to the law. We therefore urge the Government to consider making a retrospective operational date for any forthcoming amendments, linked to the date of last week’s announcement, for which, as the Minister will know, there is recent precedent in relation to the sale of new leasehold houses and onerous ground rents.

The third issue is the obvious need for protection in the interim period, which would be needed even if the Government were minded to legislate for a retrospective operational date. We therefore urge them to consider a new clause to specify that no charges can be levied for defined matters for, say, a period of 12 months. The Minister should note that, with some minor tweaks, our new clause 3 would achieve that.

The fourth issue is that, even if the Bill is ultimately amended to provide robust legal protection for leaseholders from remediation costs, onerous secondary costs remain. I fully accept that the Government have provided funding via the waking watch relief fund to mitigate the impact of associated costs, but that funding has not fully resolved the problems faced by leaseholders in this regard. We therefore urge them to think further about how protection might extend to secondary costs such as surveys, assessments and interim fire safety measures.

In conclusion, we remain supportive of this important piece of legislation and we welcome various Government amendments that will improve part 5 of the Bill, but we wish to see it strengthened further with regard to robust legal protection for leaseholders. I hope that the Minister will give serious consideration to some of the points that I have raised in relation to that fundamental issue, so that we can not only soon introduce a new regulatory framework that is fit for purpose but finally do right by all the blameless victims of the building safety scandal who can still be protected from financial ruin.

Several hon. Members:

rose—

Photo of Eleanor Laing Eleanor Laing Deputy Speaker and Chairman of Ways and Means, Chair, Standing Orders (Private Bills) Committee (Commons), Chair, Standing Orders (Private Bills) Committee (Commons)

Order. I remind the House that today’s proceedings are divided into three. This is the first group of amendments, new clauses and new schedules that relates to part 5 of the Bill. There will then be another stage on Report that will allow Members to speak to amendments on the other parts of the Bill. After that, there will be Third Reading. Members should not make general speeches about how they feel about the Bill at this point; this part of the proceedings very specifically relates to part 5.

As all the Back-Bench amendments to part 5 have been tabled by Mr Stephen McPartland, I will call him to speak first. At this point, I am not putting on a time limit, because I hope that we will manage without one, but we have less than an hour left for this part of the Bill, so I hope that Members will bear that in mind.

Photo of Stephen McPartland Stephen McPartland Conservative, Stevenage

In the interest of helping with time, I assure you, Madam Deputy Speaker, that after what the Minister said and the conversations that we have had in the past few days and overnight, we will not be pressing any of our amendments, which are probing amendments, to a vote at the end of the debate. That will hopefully help the next debate.

Like you, Madam Deputy Speaker, I saw many hon. Members on both sides of the House stand to signal that they wish to speak. I will try to keep my remarks as brief as possible so that some of them get more than their normal three minutes on this issue. They are all watching eagerly, so I will do my best.

I start by recording my thanks to the Minister, the Secretary of State and the Prime Minister. The Prime Minister’s intervention has been key in getting us to where we are on leaseholders. He has personally got involved and tried to ensure that we can support them. It is a subject that is close to his heart. To be frank, without his personal intervention and support, we would not have got to where we are, which is a good place for leaseholders.

Millions of leaseholders up and down the country are watching this debate and they are terrified about what is happening to them. They have had the fear of bankruptcy hanging over them for several years. We have been running this campaign for the past 18 months. In fairness to the Government and the Minister, we now have over £9 billion of Government support put forward with other funds on top, so it would be churlish of us, with the very technical amendments I am going to speak to shortly, to try to hold the Government to these specific issues. The Minister, the Secretary of State and the Prime Minister himself have made it clear that they are very keen to work with us and cross-party to improve the Bill in the Lords and when it comes back to this House, and for that I put on record my thanks.

Photo of Jonathan Edwards Jonathan Edwards Independent, Carmarthen East and Dinefwr

I congratulate the hon. Member on his amendments and his work on this issue. Does he agree that there is a requirement to move with haste? A constituent of mine who has contacted me is facing a bill of £25,000, with a demand for £5,000 by the end of this month, so the Government really need to move very quickly.

Photo of Stephen McPartland Stephen McPartland Conservative, Stevenage

I completely accept that point, and the hon. Member will know that we are all in the same position. Every single community is affected up and down the country; there are millions of leaseholders.

The new approach that the Government are taking mirrors a lot of what we want in our amendments on these issues. For example, a number of the amendments I am going to speak to refer to redress. We asked for a period of 25 years, and the Government have come forward with 30 years. We asked for the time in which someone can make a claim to be extended from 90 days to two years, and the Government have come forward with one year. That demonstrates the communication going on behind the scenes and what we are trying to do to deliver success for leaseholders. In some ways, it does not really matter what our opinions are in this place; what matters is what we deliver for those millions of leaseholders up and down the country, so that they do not face bankrupting bills and huge mental health issues.

Photo of Peter Bottomley Peter Bottomley Father of the House of Commons

Without the calm persistence of my hon. Friend and our hon. Friend Royston Smith in this parliamentary year and the one before, we would not have got this far and, on behalf of 1 million leaseholders in all parts of England and Wales, may I say that we are grateful for their efforts? Will they please keep going?

Photo of Stephen McPartland Stephen McPartland Conservative, Stevenage

I am very grateful to the Father of the House, and I would like to thank the cladding groups up and down the country, such as End Our Cladding Scandal UK, the UK Cladding Action Group and the Leasehold Knowledge Partnership. I record my thanks to the Father of the House and all my colleagues on both sides of the House who have done everything they can to get us to a position where we are working together to secure something that is in the best interests of leaseholders. The way in which the tone has changed, as all of us who have been working on this Bill have seen, and the way in which we now feel we can give the Government room to try to improve the Bill, give us great hope.

A number of the amendments—new clauses 4 to 13 —are specific technical amendments to give the Government examples of how we could fix the problem. The Government have tabled 70 amendments, but of course they still have to come forward with the amendments that we want in the Lords, otherwise the Bill will come back to this House and we will be in the same position, so I think it is important that we continue our efforts.

One of the issues facing leaseholders was the real frustration that VAT is levied on some of the costs. We are asking for the VAT to be scrapped, because when the Treasury puts forward £5 billion, £1 billion of it will be going back to the Treasury automatically; the frustration is understandable. Another example we give is how a previous defects Act—the Defective Premises Act 1972—could be used, as it was for properties with prefabricated concrete. The legislation exists, and these leasehold properties could be incorporated in it. There are a variety of other amendments on technical points, and they are the means of giving the Government examples of how we can support leaseholders.

There is a huge opportunity with new clauses 4 to 13 for the Government to think a little further outside the box. For example, I have a property in my constituency, Vista Tower—one of the famous properties—where the remediation costs are £15 million for 73 flats. The leaseholders paid £200,000 for their flats, and their remediation costs are £212,000, so hon. Members can understand what we are doing and why we originally got involved in this debate. Those people are beyond bankrupt. The mortgage companies are losing money, and that was before the leaseholders got into paying over £300,000 for waking watch and all the other interim costs that have added to the bills.

The Government have come with us and are working in a place where we can try to fix the problem, but there is still a lot more to do. Collectively across the House, we have to find a way forward. For that particular property, with the announcement that the Secretary of State made, leaseholders’ costs went from £200,000 down to £60,000. If we can get commitments from Ministers to include internal developer-responsible fire safety defects such as missing firebreaks, where the developers illegally constructed the building, leaseholders’ costs will collapse again.

I keep asking the Minister every time he looks at me, speaks to me or walks past me whether he will commit to protecting leaseholders in law with his amendments in the Lords. Obviously we all want that, and it is what leaseholders want, because we want to be in a position legally where we can say to a management company or freeholder, “You can’t charge them for this, and you can’t tell them”—as Jonathan Edwards has referred to—“that they’ve got 28 days to make this payment.” That is ridiculous, and it is not fair. The Government are working with us and listening to us, but there is a lot more work to do. I would like to continue working with the Government to ensure that we get out there and protect leaseholders.

Madam Deputy Speaker is now staring at me, so I shall bring my remarks to a swift conclusion. I would like to thank everybody who supported us throughout the campaign. We are not there yet, but we are very close to getting there and supporting millions of constituents up and down the country. I will not be pressing my amendments.

Photo of Clive Betts Clive Betts Chair, Levelling Up, Housing and Communities Committee, Chair, Levelling Up, Housing and Communities Committee

The principle that leaseholders should not have to pay for issues that are not their responsibility, as they bought properties in good faith, was first established in the Select Committee report in July 2018. I congratulate Stephen McPartland on the excellent work he has done in pursuing this issue from the Conservative Benches. The Select Committee, on a cross-party basis, has pursued it as well. I checked today, and we have done five separate reports, all of which have said that leaseholders should not have to pay. Bob Blackman, who is in his place, has been party to all those discussions and reports. We have worked on an absolutely cross-party basis, as is correct. It is welcome that the Secretary of State made his statement the other day and effectively confirmed that as well. We have made it clear that this problem does not just apply to cladding; it applies to other defects as well. That has been an important issue, which the Government did not accept to begin with but have now got to the point of accepting.

The Government have responded with the initial money to deal with the aluminium composite material cladding that was on Grenfell, and then with the £1 billion—extended to £5 billion—building safety fund. That has been a step forward, but it will not cover the totality of the cost. We on the Select Committee have said right from the beginning that those who are responsible for defects on individual buildings should have to pay, but we recognise the impossibility of leaseholders taking on legal actions and being successful with them. Certainly, the Government are stepping in and adding some weight to try to involve the developers of buildings—the building firms that did the construction work—and the product suppliers. Of course, an awful lot of responsibility lies with them; Dame Judith Hackett’s report identified how many of the suppliers of products and materials were hawking their wares from one testing station to another until they found one that approved them. That is completely unacceptable, and they should be held to account as well. In the end, there will be many buildings for which even the owners, and certainly the initial developers, cannot be properly traced, and there may have to be a responsibility placed on the whole industry.

I come back to the point that I just raised with my hon. Friend Matthew Pennycook: what happens if the industry does not volunteer the money that is necessary? Let us make it clear that social housing providers are already having to pay some of the costs. On the initial scheme for ACM cladding, social housing providers were treated equally with private owners. That has not been the case since with the building safety fund. A social housing provider has to show almost extreme distress to get any money.

What is happening now? An interesting article in Inside Housing says that social housing providers, particularly housing associations, are passing on 500% increases in service costs—not just to leaseholders, but to tenants. It is absolutely wrong that among people living side by side in a flat, the leaseholder should eventually be protected through the legislation that we hope eventually to see from the Government, which is to be welcomed, while the tenant next door has to pay extra costs—not merely for their own flat, but possibly to take up the costs on the flat next door, which is now owned by a leaseholder. That cannot be right, that cannot be fair, and that cannot be just. The challenge is to treat social housing tenants the same. We are hearing evidence all the time—from housing associations, the National Housing Federation, the Local Government Association and councils—that the costs that are being incurred by social housing providers are not merely adding to the costs of their tenants but mean that they are cutting back on future house building programmes. That is what is happening and it has to be addressed.

Photo of Andrew Slaughter Andrew Slaughter Shadow Solicitor General 3:15 pm, 19th January 2022

It is happening now on a very large scale. This is what one of my major social landlords said about remedial works:

“The cost of this…is in the tens of millions of pounds and has led to us having to significantly reduce our development plans and slow down some of the investment work that we had planned to complete in our existing homes. If we were to try and fund the costs of this work for our leaseholders…this would effectively mean that social housing rents were being used to subsidise costs for leaseholders.”

It is robbing Peter to pay Paul.

Photo of Clive Betts Clive Betts Chair, Levelling Up, Housing and Communities Committee, Chair, Levelling Up, Housing and Communities Committee

Absolutely. We have those immediate problems with the costs that are being borne by social housing providers.

If, in the end, the Government cannot get the money from the industry on a voluntary basis, and the Treasury is saying that there will be no extra money from the central pot and no extra taxation or levy, then there will be a cut to the Department’s own programmes, which effectively means the social housing programmes for the future. That will be another cutback to the badly needed homes that should otherwise be built. I say to the Minister and to my own Front-Bench colleagues that, in the end, these are the principles that we have to achieve: no costs on leaseholders, no costs on tenants, and no cuts to the future social house building programme either.

Several hon. Members:

rose—

Photo of Eleanor Laing Eleanor Laing Deputy Speaker and Chairman of Ways and Means, Chair, Standing Orders (Private Bills) Committee (Commons), Chair, Standing Orders (Private Bills) Committee (Commons)

We have less than three quarters of an hour left, so I will have to impose an initial time limit of four minutes on Back-Bench speeches.

Photo of Bob Blackman Bob Blackman Conservative, Harrow East

It is a pleasure to follow Mr Betts, the Chairman of the Select Committee. He and I have spent many happy hours poring over this draft Bill, in the first place, and, going forward, different reports.

Essentially, there are four separate categories on remediation that fit within the Building Safety Bill. The first, as everyone agrees without question, is, for tall buildings of seven storeys and above, removing the cladding and making the building safe. The second is the buildings of six storeys and below for which the Government came up with the forced loan scheme. I am delighted to see the death of that scheme. I could never see how it was going to work, so that is good news. The other two categories are the tall buildings with fire safety defects and the buildings of six storeys and below with fire safety defects. We can all agree that the one set of people who should not have to pay for remedying this are the leaseholders, because they never designed them and they never knew anything about them before they moved in. However, this scandal still goes on. Only last week, a planning application was presented to the planning committee at Tower Hamlets for a building of 52 storeys with only one staircase as a route to escape. The building industry does not show any signs of correcting what has been done, so we have to correct it.

I take my right hon. Friend the Minister’s remarks seriously. I look forward to the amendments that are going to be moved in the other place that I hope we can then debate here. However, these are very complex areas and there are immense questions to be answered. I well remember that when we debated the Bill that became the Fire Safety Act 2021, we were told that protecting leaseholders should not be done then but we should wait for the Building Safety Bill—and here we are, right now. The crunch issue is that leaseholders up and down the country have received enormous bills. Some have made arrangements to pay; some have even paid them. They are told, “Tough—you’ve paid and you won’t be compensated as a result.” If we had moved the amendments to the Fire Safety Act, we would have protected those leaseholders, but we failed to do so.

As I have said to the Secretary of State, I welcome his commitment to resolve this issue, but I trust that when we come to the amendments on remediation, we will do two things. The first is that we will retrospectively put a date on what happens. It will not be acceptable to wait until this Bill becomes law and facilitate the unscrupulous individuals who may bill the leaseholders between now and then, which would be outrageous.

The other issue that is terribly important in this whole process is that at some stage, with regard to all the buildings that we are talking about, someone signed off on their being in accordance with regulations. Insurance covers that particular aspect, so here is an alternative solution. Given that insurance companies insured the people who signed these buildings off, and they were clearly not in accordance with the regulations at the time, let us make claims against the insurance companies that still exist and could be made to pay for this remediation. That would be a much better solution than either the taxpayer paying or robbing the leaseholders. It would at least give us some protection.

I welcome the Government amendments, and I welcome the conversion that has taken place in the Department to what the Select Committee said in the first place. We are making progress. We are almost there. We have only a little a little way to go before every single one of our recommendations has been endorsed. We look forward to that happening, and indeed to having a Bill of which we can all be proud, which protects leaseholders and protects the industry for the future.

Photo of Patricia Gibson Patricia Gibson Shadow SNP Spokesperson (Housing, Communities and Local Government)

Let me begin by echoing the sentiments expressed earlier. We must be mindful of all those who died tragically in the Grenfell fire, which prompted much of the work that we are debating today.

The majority of the Bill relates only to England or to England and Wales, so I will necessarily keep my remarks on behalf to the Scottish National party short. I am sure that that will be music to many ears in the Chamber.

We can all agree on the necessity and the importance of raising the standards of conduct of developers. House buyers need to have confidence in the safety and quality of their homes, which is why the Scottish Government support the principle of the new homes ombudsman scheme proposed in part 5 of the Bill. Housing is devolved to the Scottish Parliament, who could devise their own provisions for a Scottish system, but the benefits of having a single system to operate on a UK-wide basis are self-evident. However, it is also true to say that the scheme must fully meet the needs of Scotland, so this Bill ought to confer greater powers to Scottish Ministers, similar to those of the Secretary of State. It is essential for part 5 to acknowledge and respect the devolution settlement. The Secretary of State and, I am sure, the Minister will understand that SNP co-operation in relation to the new homes ombudsman scheme in no way diminishes our opposition to the form and intention of the United Kingdom Internal Market Act 2020.

It is fully expected that meaningful consultation will minimise the risk that the ombudsman scheme is contrary to the wishes and aspirations of the Scottish Government, so that homeowners in Scotland can benefit from it. If that turns out not to be the case, the Scottish Government have the option to withdraw from the scheme without contractual penalties and other repercussions. No one would wish to see that happen, and we need to be assured that the Minister and the Department will work, and continue to work, in a collaborative, consultative and collegiate way with the Scottish Government to deliver the scheme for Scotland.

In that spirit, I say to the Minister that given the confusion and delay over issues of cladding, nearly five years since the tragedy of Grenfell, we need a clear commitment that he will work constructively with the Scottish Government to provide clarity about consequential funding, so that the Scottish Government can plan their response appropriately. Will he tell us how much funding there will be, and when it will be delivered to Scotland?

I understand that the Secretary of State has committed himself to working with the Scottish Government on these matters—and no doubt the Minister has done so as well—but certainty is important. I am sure the Minister will understand that, so I am keen to hear what he has to say about the timing, levels and delivery of the funds that Scotland can expect.

Photo of Felicity Buchan Felicity Buchan Conservative, Kensington

Let me begin by paying tribute to my constituents and the community of north Kensington.

I welcome the Bill, and I welcomed last week’s announcements that leaseholders in intermediate buildings would not have to pay for the remediation of cladding and other fire safety defects. I understand from the Minister that this will be incorporated in legislation in the other place. I want to stress how crucial it is that we get that right: it is critically important that we have robust legal protection for leaseholders. I welcome the statement that those on the Front Bench will listen to all good ideas, but it is important for us to be able to put this into practice quickly and effectively. I ask the Minister, as did my hon. Friend Bob Blackman and the Chair of the Levelling Up, Housing and Communities Committee, Mr Betts, to ensure that when the Bill comes back to this place, there is the opportunity for full debate and full scrutiny.

A number of Members said that some developers and freeholders have been behaving very badly, and I have such a situation in my constituency. Leaseholders in Collier House have paid for the remediation and the building is eligible for an existing fund, yet the building owner, outrageously, will not apply for those moneys. He does not want to get involved because the leaseholders have already paid. Such situations are clearly wrong in terms of how people should behave. I ask the Minister, as colleagues have, to ensure that we look to remedy situations where leaseholders have paid and take that into consideration. We need to find solutions, because they paid thinking that they were doing the right thing, and they may now be out of pocket as a result.

In conclusion, I very much welcome the direction of travel. However, it will be critically important to get the proposals right in the other place, and I ask that we have the opportunity for full scrutiny of what the other place decides.

Photo of Matt Rodda Matt Rodda Shadow Minister (Work and Pensions) (Pensions)

I offer my support to Felicity Buchan. My thoughts are still with her community five years after the disaster. I am sure that the whole House would echo that support for her community.

I also thank the Minister for allowing me to intervene and for partially addressing my points. However, I want to expand on them, because they are very relevant to our discussions. The challenges for many people in my community will come from the sheer complexity of the situation. It is extremely stressful for many leaseholders and tenants, as Members across the House have said. It is very difficult for them to live in buildings with enormous problems. In many cases, they have suffered from these problems for some years, living in a period of prolonged stress and difficulty—both emotional and financial stress—and I look forward to working with the Minister and the Government to try to deal with this very serious problem.

I will highlight some of the practical difficulties that we need to tackle, as the shadow Minister, my hon. Friend Matthew Pennycook, mentioned. The great difficulty for many residents in my constituency and others is that the routes to redress are limited. In many cases, the legal route that the Minister outlined will be extremely difficult.

Perhaps I can describe the type of blocks that I am referring to. Many of the cases in Reading and in Woodley—a town next to the main town of Reading—involve low-rise blocks, so there has been a delay because they are lower- rise. There are problems from issues other than cladding, and many tenants and leaseholders live in these blocks. In one of the biggest neighbourhoods in Reading, there is a large area called Chatham Place, with a series of blocks and a series of different problems, including wooden cladding, balconies and a range of other things. There is also a combination of leaseholders and social housing tenants in the same block. There are multiple problems, and the Minister is right to explore the legal route to redress, but there are very serious challenges because of the difficulty of getting a group of people together to take action and of tracing the legal entities, companies, developers—in some cases, the developers are overseas—architects and the range of others involved. I ask the Minister to work with Opposition Members to look at the issue again and explore other avenues for toughening up the Bill. I look forward to the Lords amendments and I ask him to come back and look at this Bill again in more detail.

I wish to make two other points, also on behalf of local authorities and housing associations. The first point, which was raised with me by a local council that represents a town centre ward in Reading, was the difficulty, even now, for local authority officers to understand the exact guidance on different types of cladding. The issue of flammable insulation in walls was raised with me and there does not seem to be a clear answer on that. Secondly, in my area, housing associations were some of the first building owners to take action. However, as was rightly mentioned, these housing associations and their tenants could inadvertently be penalised. Please will the Minister look into that and provide reassurance?

Photo of Bob Neill Bob Neill Chair, Justice Committee, Chair, Justice Committee 3:30 pm, 19th January 2022

I restate my welcome for the Minister’s tone and approach to the Bill, as well as that of the Secretary of State, and I pay tribute to my hon. Friend Stephen McPartland. The Minister’s approach does enable some of us to support the Government in the Lobby tonight when we might have been tempted to do otherwise, given their clear undertaking to look at the substance—at any rate—of the significant number of amendments in my hon. Friend’s name, which I and many other Conservative Members have signed. We look forward to taking that forward.

I stress again in particular that leaseholder protection is critical. Hilary Benn made an important point on that, and as someone who has spent all his working life involved in litigation of one kind or another, I can tell my right hon. Friend the Minister that the legal route is always a risky one and always an expensive one.

The real problem that we need to deal with is the position of residents such as mine in Northpoint in Bromley. Their flats are unmortgageable, they have exhausted their funds on a waking watch and other remedial measures, and they cannot realistically rent out their flats—perhaps some can—so it is not realistic to suggest that collectively or individually they could fund legal action against their landlord, which is an offshore property trust. I have nothing against giving leaseholders the ability to litigate—where that can be done, that is fine—but that will not be the answer for many people, so we need a fail-safe system to protect them. The best route is a form of liability clearly falling on the developer. That is supported by the Law Society, which recognises the value of litigation in its right place but also its limitations, and I hope that the Government will work with the Law Society, which has real expertise in such matters, to strengthen the provisions.

I turn to finding a means of capturing the consequential defects, which I have previously raised with the Minister. We have done a lot on that already—I welcome what was done with the waking watch relief fund and so on—but there are still a number of areas not yet explicitly covered by the Bill’s provisions where the fault, and therefore the cost on the leaseholder, flows clearly and demonstrably from the regulatory failure or the failure by the developer to build in accordance with the regulations then in place. My right hon. Friend and I have talked about the protection required for that—I am glad that the loan scheme has gone, because that was not fair—which could be some form of insurance arrangement, or the Government by some means funding the cash flow to enable works to be done and recouping that through a levy system from those in the industry who are at fault in some way. I think that would be perfectly workable. He has moved a good way towards that, and I ask him to continue talking to those involved about taking that one stage further to deal with that important issue.

Finally, I specifically commend to the Minister new clause 10, which stands in my name and that of a number of hon. Friends, which is about the 25-year post-sale insurance cover. That is really important. Again, the Law Society supports the measure, and I think that there is a lot of recognition of the good sense of that from the insurance sector, too. If he could take that on board, that would remove a great deal of risk of future litigation, should—heaven forbid—things go wrong in the future.

We have had a constructive set of proposals from the Government, but there is still more to do. I thank the Minister, but I hope that, in the spirit in which he started, he will take away the means to work constructively across the House to deal with people who are in an appalling situation through absolutely no fault of their own. That is what we need to stress time and again.

Photo of Daisy Cooper Daisy Cooper Liberal Democrat Spokesperson (Health and Social Care)

When we started on the Fire Safety Bill, I tabled the first amendment to the Bill to try to protect leaseholders from these unimaginable, eye-watering costs. The Government said repeatedly that that Bill was not the place for it. Eighteen months on, we have had a huge cross-party effort, and while we are considering this second piece of legislation there is still no guarantee to protect leaseholders from those costs in law. The Government’s tone has changed, and I welcome that, but their position has not. I welcome talk about working cross-party and collaboratively, but I urge the Minister and the Government to make clear assurances on the record today, because I do not believe that the good will displayed in the House will last much longer if we do not get better answers.

The Secretary of State announced last week that the loan scheme will be scrapped and that cladding costs will be covered for buildings over 11 metres. Where is that statutory protection? It should be on the amendment paper today, and we should be discussing it in this House, not kicking it into the long grass.

On non-cladding problems and fire safety defects, the Minister must be aware that since the Secretary of State made his announcement last week there has been a huge rush of bills and enforcement notices because freeholders think they can get away with suddenly asking leaseholders to pay for these first safety defects. Will the Minister make a strong statement at the Dispatch Box today that he intends to issue a moratorium on freeholders issuing such enforcement notices, as that is what is needed?

I welcome that action under the Defective Premises Act will be extended to 30 years, but the Minister knows as well as I do that, as we showed in Committee, the current legislation is condemning leaseholders to years and years of litigation, litigation, litigation. In some cases, they may have to take their freeholders to court twice before they can take those responsible to court. That is not a satisfactory situation.

The Government keep saying that they want to work with freeholders and developers to find a voluntary solution, but cladding victims and fire safety victims have given the Government the answer time and again. They are asking the Government to stump up the cash to make homes safe and to use their power to go after those responsible.

I listened very carefully to the Minister’s carefully crafted answers on when we might see some of these legal protections. I note that the Bill’s Second Reading in the House of Lords is scheduled for the start of February, yet the Secretary of State has indicated that he wishes to continue his discussions with those responsible until March. When questioned by other hon. Members on whether the House of Lords will see these amendments, the Minister said it “may include” in the other place, not that it “would include”. Will he make a clear commitment from the Dispatch Box today that the statutory protections announced last week will, in fact, be amendments to this Bill, that those amendments will be introduced in the other place, and that sufficient time will be provided in this House for us to discuss them? If the Government make any attempt to railroad this Bill through without those protections in place, he will have a very significant cross-party fight on his hands.

Photo of Mike Penning Mike Penning Conservative, Hemel Hempstead

I do not think there is a conflict, but I refer to my entry in the Register of Members’ Financial Interests. As an ex-fireman, although my concerns and thoughts are with the victims of the Grenfell fire and their families and loved ones, I say that we must put on the record our thanks to the emergency services, and particularly the firefighters, who have to live with what they saw—most of them will never have seen such an incident in their life. They went in one direction while, quite understandably, the public went in the other.

I do not disagree with anything I have heard in the House today. My constituency neighbour, Daisy Cooper, and I are as one. If this is not sorted in the other House, as promised, we in this House will sort it. That is not a threat but a promise. The Minister, the Secretary of State and the Prime Minister, as we heard, have been brilliant in changing direction. They realised the risk that no thought at all had been given to leaseholders.

I declare an interest because my daughter has a leasehold property. When she bought it, why would she have dreamed that this situation would occur and she would face such penalties?

When I intervened on the Minister, I said I would mention a way out. Those hon. Members who have been here long enough will remember that I took the Mesothelioma Act 2014 through this House. The Act compensated people whose lives, through no fault of their own, had been devastated by asbestos. We could not fine the insurers, the companies, the directors or the shareholders, so they had suffered and they had not got compensation. This Bill is an opportunity to resolve the problem for leaseholders where we cannot impose fines.

There is no reason why leaseholders should drag themselves through the courts. We are trying to sort the matter out in this House. We should put a levy on the insurers. Without any doubt, the insurers got the premium from these companies, because otherwise they would not have been allowed to build the properties, so liability insurance was in place. The fact that we cannot find the developers—some have gone offshore in parts of my constituency—is irrelevant now. If we can find them, fine, but if not, we will levy the insurers.

We do not need to reinvent the wheel. We have already done it with the mesothelioma Bill. Originally, we gave the victims 80% of the compensation that they would have got through the courts. Eventually, we gave them 100%. This House was unanimous in its support of the Bill as it went through its stages. It was probably one of the easiest Bills that I have taken through the House—apart from having to pronounce mesothelioma, which, to this day, still troubles me, as Members may have notice.

This is an option that I have mentioned to the Minister before. I have said that his civil servants can come and talk to me, or to anybody at the Department for Work and Pensions who took that legislation through. I am more than happy for that to happen. Sadly, though, no one has talked to me about this—I am gently looking towards the civil servants in the Box, which I am not meant to do. This is a great opportunity to right a wrong that we can see coming down the line here.

Photo of Peter Bottomley Peter Bottomley Father of the House of Commons

Were claims to go through the courts, they would be aimed at the developers, the builders, the architects, the surveyors, the component suppliers, the building controllers and the building regulations specifiers, all of whom were insured or operating under Government. We need to get them altogether around the table and say, “What will be the total liability?” We would save the lawyers’ costs and get the money in very fast. Leaseholders will be protected. Their homes will be safe and they will be saleable.

Photo of Mike Penning Mike Penning Conservative, Hemel Hempstead

The Father of the House is absolutely right. When we put to the insurers this idea that they should compensate those people whose lives and loved ones had been affected by the asbestos, did they like it? No, they hated it. They fought tooth and nail not to do it, but we did it, and we did the right thing. When we come to part 5, Mr Deputy Speaker, I hope to catch your eye again.

May I just touch on a point that many colleagues have raised today? If people, in fear of threatening letters from lawyers and bailiffs, paid the remedial costs on their lease in good faith, how can it be right for us in this House to say that they did the wrong thing, while the people who held off paying those costs did the right thing? That sticks in my throat. It cannot be right that we penalise people who feel that they did the right thing. I said this to the Secretary of State during his statement. I am not saying that he dismissed it; he probably just thinks it is very difficult. Yes, it is very difficult, but that is what this place is for—when things become difficult, we resolve the problem. We have an opportunity with the insurers.

As we have heard from Members across the House, these bills are dropping on people’s doorsteps now, and it is happening in my constituency. They are innocent people who have done nothing wrong other than wanting to get on the housing ladder. Today we have an opportunity to address this. I agree with my hon. Friend Stephen McPartland that we do not need to move these amendments now. We will wait to see what happens when the Bill goes to the Lords, but by golly we will move them if it comes back.

Photo of Hilary Benn Hilary Benn Labour, Leeds Central

The one thing that has united the House today has been support for the principle embodied in new clause 13. There is a huge burden of expectation now on the shoulders of the Minister and the Secretary of State because of the commitment that was given in the recent statement, and we are all anxious to see how the Government intend to fulfil it.

Sir Mike Penning, whom it is a great pleasure to follow, asked earlier what happens if the funds are not forthcoming from those who are still in existence who were responsible. The answer is that there is a mechanism already in place, which is the levy that the Government previously announced. I have no objection to adding insurers to those who are levied, because it is a collective failure on the part of the industry. That is the point. Even if we put on one side debates about cladding, for every one of the buildings that have been discovered to have missing fire breaks, I can guarantee that the plans specified that the fire breaks should be installed, but they were not. As a result, we have a generation of shoddy, unsafe buildings and it is our constituents who are feeling the pain.

Secondly, once we have sorted out who is paying, we really have to find a way of getting the work done. I must say to the Minister that having observed, as we all have, the back-and-forth between managing agents, freeholders, developers and the building safety fund, we can see that that is not a very efficient way to solve the problem. That is why the buildings works agency approach that my hon. Friend Matthew Pennycook spoke about earlier is such a good idea. It is a good idea for two reasons. First, we would have a body whose job was to find, fix, fund and then recoup through the levy that we have discussed, which would be quicker. Secondly, it would avoid the stand-offs that are taking place. I have seen one case where the expert advisers to the building owners have said that the zinc cladding on wooden battens is not safe, but the building safety fund has said that it is.

Another reason that the Government should adopt our proposal for a buildings works agency is that it would be the perfect vehicle to review the safety assessment of all of the buildings, which the Secretary of State spoke about last week, and in the end be the referee—the judge and the jury—that says what is safe, what works and what work needs to be done.

The last point I want to make is about the need for speed. We are four and a half years on from Grenfell, and every single day that passes without the situation being resolved puts enormous strain on our constituents. They also have to shell out for the waking watches and insurance premiums that are the consequence of a problem for which they bear no responsibility whatsoever. Until the work is done, people’s flats continue to be worthless and they cannot get on with their lives. Some people have had to move out of their flat, get a new job in another part of the country and rent their flat out, and that is why it would be totally unfair to punish them for not being resident leaseholders. The sooner there is absolute clarity about what the statutory protection will look like, the sooner the work can be done and the day can eventually arrive when leaseholders can put behind them this groundhog day series of mornings when they have woken up thinking, “Oh my God, I am still stuck in this nightmare”, and instead wake up looking forward with some confidence to getting on with the rest of their lives.

Photo of Kelly Tolhurst Kelly Tolhurst Conservative, Rochester and Strood 3:45 pm, 19th January 2022

I want to thank hon. Members across the House for the work they have put in. I also pay tribute to the Minister, whom I have spoken to on a number of occasions about the issues facing my constituency. I know that the Government have been listening and working really hard with colleagues to get to a place where people can be satisfied. As has been mentioned, the landscape is really complicated and the Government are trying to right some wrongs of the past.

I very much welcomed the Secretary of State’s statement last week, but I want to echo what has been said by colleagues across the House about what comes next and the protection that we will give to leaseholders. For example, at the Wharf in my constituency there has been a lack of clarity and transparency from the management company about the cladding and fire safety works that need to be carried out. The management company, Y&Y, is in the process of taking the leaseholders to a first-tier tribunal to award costs, adding a 5% commission. Since the statement last week, I have asked the management company if it could please pause this activity until the Government have moved further, but it has said that it will continue to go to the first-tier tribunal for costs. That will put some of the leaseholders in a really difficult position. Some of the people occupying those properties will not be able to pay those bills if the management company goes ahead with its actions before they have been given any security by the Minister, so I want to labour that point. We are also talking about historical payments that have been made, but this is happening as we speak.

Photo of Mike Penning Mike Penning Conservative, Hemel Hempstead

One option for someone with a freehold property is normally to claim on their buildings insurance’s legal protection. A leaseholder has to pay the premium to the freeholder but does not have any protection. This is another area of the law that could be changed.

Photo of Kelly Tolhurst Kelly Tolhurst Conservative, Rochester and Strood

My right hon. Friend is quite right. I welcome many of the amendments, and I welcome a lot of what is in the Bill. I am pleased with the extension on limitations.

During covid, a fire ripped through a building on the Causeway in my constituency. Again, it is not a high-rise block and is under 18 metres. Other hon. Members have mentioned firebreaks and the lack of such work. Coincidentally, further structural defects have been found in the investigation work carried out after the fire. They would not have been found if the fire had not ripped through the building in 2020.

As my right hon. Friend Sir Mike Penning and my hon. Friend Bob Blackman said, these buildings have been signed off. I was a marine surveyor in a previous life, and if I had signed off the builds of boats that had major defects, my professional indemnity insurance would have had to pay out and I might not have got insurance next time around because of my poor performance. How is it acceptable that people can sign off such buildings and give certificates to the residents—our constituents—who buy them? That gives the residents confidence in the quality and safety of what they are buying. We need to look at the insurance argument; it is a valid point. To be frank, it is a scandal that those poor individuals have bought those buildings. The profession has a lot to answer for, as far as I am concerned.

Ultimately, I want to press the Minister on what assurances and comfort he can give my constituents who are watching the debate and who have been following the Bill with bated breath for many months, hoping that it will be their salvation.

Photo of Shabana Mahmood Shabana Mahmood National campaign co-ordinator

I shall speak to Opposition new clause 3 and to the amendments that, although they will not be pressed to a vote this evening, would protect leaseholders from the costs of not only cladding removal, but the remediation of non-cladding defects.

I can hardly believe that it is four and a half years since the horrific fire at Grenfell, and still we are fighting for the robust legal protection that leaseholders in my constituency and across the country need and deserve. It is too easy to assume that removing cladding is the beginning and end of the scandal; the costs of remediating non-cladding fire safety defects are just as ruinous, and blameless leaseholders should not be picking up those costs. I have seen for myself the extent of fire safety defects at various buildings in my constituency, including the Brindley House development, where the scale of the missing firebreaks and other defects was truly shocking. The people who were responsible for putting up that building were grossly negligent and, in my opinion, complete cowboys.

The regulatory failure whereby buildings were declared fit for human habitation when they contained defective or inappropriate fire safety measures, or when those measures were wholly absent, is staggering. When there were negligent and dishonest practices, the costs of remediation should not fall at the feet of my constituents. A commitment to full legal protection for leaseholders from all costs—both for the removal of dangerous cladding and for the remediation of all other fire safety defects—should have been added to the Bill today, because those issues are not new and have been the subject of intense debate for years.

Ministers and their officials know full well the contours of the debate and the issues at stake, so it is not good enough that the Government did not make such amendments today. Instead, we will have to wait to see whether full legal protection is made available when the Bill goes to the other place. We may understand parliamentary procedure and the different staging posts of a Bill, but to my constituents watching from the outside, every single staging post feels like a slap in the face when they are not given the full protection that they need and deserve.

I associate myself with the comments that have been made about insurance, particularly professional indemnity insurance, but I want to mention the increased insurance premiums that many of our constituents have faced across the country. I have been writing to the Government, the FCA and others for more than two years to ask for action against the insurance industry for the huge increase—the hike—in premiums that our cladding-affected leaseholders have faced. That increase bears no resemblance to the mitigations that our constituents have paid for to decrease the risks in their buildings.

People have paid hundreds of thousands of pounds for new fire alarm systems and internal compartmentation to try to bring the risk down in their buildings, yet that is never reflected in the insurance premiums that they have to pay. That is unconscionable. There are big questions for the wider insurance sector to answer, in addition to the buildings industry. It seems to me that someone who has profited from, for example, charging a building in my constituency an insurance premium of £700,000 in total, which has never come down, has some big questions to answer.

I hope that when the Minister brings the Bill back to this place, we get the time for adequate debate and the further amendments that we need. I hope that we take action on insurance and perhaps even—God help us—implore the FCA to do its job and stand by our constituents, who deserve the regulator’s protection. When the Bill comes back, I hope that it addresses all those issues, as it is high time that the Government did right by leaseholders.

Photo of Christopher Pincher Christopher Pincher Minister of State (Department for Levelling Up, Housing and Communities)

I congratulate right hon. and hon. Members on their contributions to this important debate and to the amendments that we are debating. In the short time that I have, I will say that I entirely agree with my hon. Friend Stephen McPartland and Shabana Mahmood, who raised the terrible plight faced by her constituents at Brindley House, as did the Mayor of the West Midlands, Andy Street. Too many people, for far too long, have been far too worried. We have to end this scandal.

Several hon. Members asked whether we intend to bring forward legal protections in the House of Lords. I assure the House that we do. We certainly want to ensure that all leaseholders in medium and high-rise buildings, who live in them or who used to live in them but have had to move out and sub-let because of the situation in which they find themselves, will have put in place the robust legal protections to which my right hon. Friend the Secretary of State referred. We want to work cross-party and with interested parties to ensure that those robust protections are right.

We believe that leaseholders should not be asked to pay anything further until those legal protections are in place, as was raised by several hon. Members on both sides of the House. I encourage any hon. Member who is aware of demands from freeholders that their leaseholders pay to make me or my officials aware of that demand.

I am also grateful for the points raised by my right hon. Friend Sir Mike Penning and my hon. Friend Kelly Tolhurst about the, shall we say, peculiarities of the insurance system. Some of those are wider issues that go beyond the Bill, but I am happy to discuss how we can resolve such issues with them.

I will certainly work collaboratively with Matt Rodda. I am conscious that my hon. Friend Sir Robert Neill is right that there are limitations through mitigation, but the law can change the culture. That is part of the point of bringing forward the Bill—to change the culture of the sector.

We will instigate a summit with the sector to ensure that it pays what it owes, and if it will not pay voluntarily, we will introduce appropriate mechanisms to ensure that it does. I am conscious that the Father of the House, my hon. Friend Sir Peter Bottomley, referred to the Defective Premises Act 1972. I may have misheard him, but I think he suggested that that Act is not available for use by leaseholders. That is not correct. Leaseholders are able to avail themselves of the Act, as may any freeholder.

I am conscious, Mr Deputy Speaker, that I have only 14 more seconds in which to speak. Let me reassure Members that we want to work across the House to bring forward sensible legal protections in amendments in the other place, and we will do that as soon as may be.

Debate interrupted (Programme Orders, 21 July 2021 and this day).

The Deputy Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83E), That the clause be read a Second time.

Question agreed to.

New clause 20 accordingly read a Second time, and added to the Bill.

The Deputy Speaker then put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83E).