Motion A1 (as an amendment to Motion A)

Fire Safety Bill - Commons Reason – in the House of Lords at 7:15 pm on 27th April 2021.

Alert me about debates like this

Votes in this debate

Lord Kennedy of Southwark:

Moved by Lord Kennedy of Southwark

At end insert “but do propose Amendment 4L in lieu—

4L: After Clause 2, insert the following new Clause—“Legislative proposals relating to prohibition on passing remediation costs on to leaseholders and tenants(1) The owner of a building may not pass the costs of any remedial work attributable to the provisions of this Act on to leaseholders or tenants of that building.(2) Subsection (1) has effect only until a statutory scheme is in operation which ensures that leaseholders and tenants of dwellings do not have to pay for remedial work attributable to the provisions of this Act.(3) Within 90 days of the passing of this Act, the Secretary of State must publish draft legislation to ensure that leaseholders and tenants of dwellings do not have to pay the costs of any remedial work attributable to the provisions of this Act, and must also publish a statement on a proposed timetable for the passage of the draft legislation.(4) Within 120 days of the passing of this Act, the Secretary of State must publish a statement confirming whether the draft legislation mentioned in subsection (3) has progressed.””

Photo of Lord Kennedy of Southwark Lord Kennedy of Southwark Opposition Whip (Lords), Shadow Spokesperson (Home Affairs), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Housing)

My Lords, I join noble Lord in paying tribute to the fire and rescue services, and the bravery they have shown recently and every day. But these heroes—they are heroes—are FBU members. They have not always been shown the respect they deserve from many people, particularly the Prime Minister when he was Mayor of London. He did not always show the FBU members the respect they deserved, and these are the same people. I make that one point.

I draw the House’s attention to my relevant interest as a vice-president of the Local Government Association, a non-executive director of MHS Homes Ltd and chair of the Heart of Medway Housing Association. It is most disappointing that we are back here again, and I accept that it is very unusual for us to push this again, but I will test the opinion of the House.

My amendment is based on the amendment from the right reverend Prelate the Bishop of St Albans, and it would ensure that no costs are passed on to the leaseholders or tenants. That the subsection would remain in force until such time that we get the Government’s statutory scheme. Further, it would place a requirement on the Secretary of State to come back within 90 days to publish draft legislation to ensure that leaseholders and tenants do not have to pay, and to publish a timetable for the implementation of that legislation. Finally, we would also require a progress report from the Secretary of State within 120 days of the passing of this amendment.

Now, why are we back here again? It is because the Government have been quick to promise and slow to act. We are here because they are not listening to the innocent victims of the cladding scandal, who should be at the forefront of the levelling-up agenda, if it is anything but a slogan that the Government have no intention of delivering. These people are families whose homes are blighted. They need their Government to come to their aid but, instead, the Government made promises that they have spectacularly failed to deliver. That is no way for a Government to behave. As I said, I intend to divide the House when the time comes.

“We will do whatever it takes” is a statement that the Government regularly put about, whether from the Chancellor announcing new measures or the Culture Secretary regarding the European Super League. Sadly, it is never said by the Government when it comes to dealing with the innocent victims of the cladding scandal. Perhaps, in replying to the debate, the noble Lord, Lord Greenhalgh, the Minister for Fire Safety, can explain that failure to the House, because we have never heard from the Government what the plan is, which is part of the problem. If we are informed of a clear, well thought-out pathway and route map to help the victims we could make progress, but for some reason the Government will not do that. Perhaps the noble Lord can tell the House about this road map when he responds to the debate.

I want to see this Bill on the statute book, but I do not accept for one minute that this puts it at risk. We still have days before the end of the Session. I do not want to hold the Bill up. It is good in what it does, which is to implement the first recommendation of the Grenfell Tower inquiry—the first bit of legislation since the fire, now nearly four years ago. No one can accuse the Government of acting in haste. On a separate matter, we still have six families in temporary accommodation following the fire at Grenfell Tower.

It is vital that our dwellings are safe and that people can sleep safely at night, without fear. The Government have committed £5 billion—I accept that that is a significant amount of money—but the situation is far from satisfactory and it is in the Government’s gift to do something about it. Only the Government can do something about it, but they are not willing to at present. As the right reverend Prelate the Bishop of St Albans told us when we last debated this—I pay tribute to him for his leadership and for seeking a solution to this scandal—the result can be bankruptcies, enormous mental health strains and possibly worse. Part of the problem is that there have been no assurances to prevent the remediation costs being passed on to leaseholders until the Government’s scheme is operational. This is what my amendment seeks: to prevent the costs of this scandal being passed on to tenants and leaseholders, the innocent victims.

We have all seen in the media the heartbreaking reports of the crippling costs that leaseholders are having to bear, such as interim fire safety costs and high insurance premiums. Surely the developers that built these defective flats, the insurance companies that provided the guarantees but no longer want to honour their commitments and the professionals who signed off the buildings as safe should be paying through their professional indemnity insurance. Instead, innocent victims are left bearing the costs of this scandal, despite the promises made to them.

This leaves them with a dilemma: sell their lease and take on the debt resulting from negative equity, or stay in their leases and face huge debts in the form of remediation bills. They might possibly declare bankruptcy. Surely that is wrong. The leaseholders are playing by the rules and paying their taxes. They are buying a home and doing the right thing, but are not being supported. They had no indication that this was coming. This is a dreadful tragedy. In the absence of an adequate plan and scheme to deal with these issues properly and fairly, there is no other way forward. I hope that the House will support me. We need to find a solution to pay these costs. I beg to move.

Photo of Baroness Pinnock Baroness Pinnock Liberal Democrat Lords Spokesperson (Communities and Local Government)

My Lords, I start by drawing the attention of the House to my interests, as recorded in the register, as a vice-president of the Local Government Association and a member of Kirklees Council.

On three separate occasions, this House has confirmed its view that the Government should urgently address the plight of leaseholders and tenants who will be significantly and adversely affected by the consequences of the Fire Safety Bill. The provisions in the Bill are not the issue; they are a welcome small step to address the failings exposed by the dreadful Grenfell tragedy. The Government and, no doubt, the Minister will state how important it is that this Bill is passed, as we heard the Minister say a few moments ago. Both omit to say that the Government have been tardy in regard to the passage of the Bill; the Report stage in this House took place in November 2019. If the Government had made the Bill a priority, we would not be here, in the final throes of this Session, seeking to find a just solution for those directly impacted by it.

The amendment in my name reiterates the principle moved by the right reverend Prelate the Bishop of St Albans in the last debate on this matter, which this House has supported on three separate occasions, that the leaseholders and tenants must not pay the exorbitant costs of remediation. We have listened to the Government’s criticisms of the previous amendments, and today’s amendment in my name takes into account the reasonable expectation that leaseholders will be required to pay for minor fire safety works up to a value of £500 in any one year.

What is so disturbing is that the Government have consistently failed to propose just how leaseholders will be safeguarded from the costs of remediation. The Building Safety Bill will come far too late to prevent untold harm to individuals and their families. Leaseholders have done everything right and nothing wrong, and must not be expected to pay for those who have profited from construction failures. The Minister will no doubt repeat that the Government have a grant fund available for the removal of cladding from high-rise blocks. But he fails to say that it will not cover the costs of putting right the construction failures that are then exposed, and that it will not include many—perhaps a majority of—blocks affected.

Individuals have shared with me the precise costs they are being asked to pay. For example, the total bill for remediation at Connect House in Manchester is £5.2 million. The average bill per flat is £78,000, to be paid in quarterly instalments by the end of this year. Then there is M&M Buildings in Paddington, where ACM cladding has been removed following a government grant, but non-cladding defects, which the building safety fund does not cover, are costing each leaseholder £40,000. Imagine living in a modern flat and discovering that, as a leaseholder, you are faced with a bill for £20,000 to put right internal steelwork and wooden balconies that the developers had failed to make fire-resistant, even though that was part of building regulations at the time. These are just three leaseholders out of thousands who are facing potential bankruptcy as a direct consequence of this Bill. No one could possibly have budgeted for additional costs on that scale. And that is not the only extra bill suddenly landing on doormats; there are demands for waking watch, insurance hikes and a fire alarm system. For Zoe, in London, that has resulted in service charges rising from £194 a month to a totally unaffordable £700 every month. For some, those service charge hikes alone are forcing them into bankruptcy.

The direct personal impacts are not the only unconsidered consequences of the Bill. In last Sunday’s edition, the Sunday Times reported that the Bank of England is concerned about

“the scandal’s effect on property” prices. The report states that up to 1.3 million flats are now “unmortgageable” and

“three million people face a wait of up to a decade to sell or get a new mortgage”.

The Leasehold Knowledge Partnership has found that 80% of auctioned fire-risk flats failed to sell or were discounted by as much as two-thirds. For social housing landlords, the total cost is estimated to be as much as £10 billion, as they are unsupported by the government scheme. The knock-on effect of that will be a dramatic reduction in the number of new builds for people who desperately need a home to rent. It is not, therefore, the Bill itself that is the problem but the consequences, which are very grave indeed for individuals and their families, as well as for the wider housing market.

In the end, it comes down to a simple question of justice. Those who have done everything right and nothing wrong must not be asked to pay the price for those developers who, in some instances, knowingly failed and profited by that safety failure. I really cannot understand the Government’s obduracy in the face of a calamity that is about to fall on lease- holders. I find it hard to imagine taking a decision that knowingly forces thousands into potential bankruptcy and homelessness.

I urge the Government, even at this late stage, to listen to those who are on the brink of losing their home and everything they have worked and saved for. They have done everything right and nothing wrong. I give notice that if the noble Lord, Lord Kennedy, seeks to divide the House, he has the support of these Benches. If, however, he chooses not to do so, I will move my amendment and seek the opinion of the House.

Photo of The Bishop of St Albans The Bishop of St Albans Bishop 7:30 pm, 27th April 2021

Well, my Lords, here we are again. I do not want to detain your Lordships’ House for too long, because everything has been said several times already, but I want to make a few comments, if I may.

I, too, want the Bill to pass. I pay tribute to Her Majesty’s Government and the money they have already found and put on the table, which is very significant. But since we last gathered here, the sheer scale of the crisis, which is in its very early stages, is slowly beginning to unfold before us and become ever clearer. I believe that is why the majority in the other place declines each time an amendment goes back, because those long-serving, seasoned campaigners in the other place realise what is going on. The stories are coming out absolutely relentlessly, and new research is being published.

At a few minutes to four this afternoon, I received an email from someone who works in Parliament. I will call her Claire; that is not her real name, but she will know who she is, because she emailed me at 3.56 pm and asked if I will speak up. She said, “Will you speak up for the leaseholders again and table an amendment? I bought a flat under the shared ownership scheme. I own a 25% share, yet I am liable for 100% of the costs. I am already paying an additional amount each month, and I know this amount will soon increase as further remediation work takes place. I simply cannot afford to pay for the remediation works, nor should I have to. The stress of this situation is becoming intolerable. My mental and physical health are approaching a state of collapse”. “Will you speak up?”, she said. I have not met her yet—I hope she will say hello to me one day, perhaps when she guesses who I am or sees me around the place. This is someone who we bump into, who works in this place and who serves us.

It is not just the many individuals. Since we last came to this provision, research by the Prudential Regulation Authority, which is assessing the building scandal, has said that it poses a systemic risk to the UK financial sector. Some of the work done since then is finding a huge number of flats and homes which are simply unsellable. For example, it has been reported that

“a one-bedroom flat at Leftbank, in Manchester, failed to sell despite being listed for half the £330,000 its owner had paid in 2017”.

What Members in the other place are realising is that, slowly, this will roll out, and it will mean that many people on whom this Bill relies to be able somehow to stump up the money to repair the buildings will not have that money. The buildings will not be repaired, because some of these people will have to walk away, probably very unwillingly.

We have not only those individual stories but some really worrying assessments coming out of the housing and financial market in our country. Some 3 million people, as we heard from the noble Baroness, Lady Pinnock, are affected. As we are paying tribute to fire and rescue officers, I have three emails from fire and rescue officers who were personally affected by this cladding. These are the people involved, along with nurses, police, teachers, care workers and many others—the House knows the sort of people we are talking about.

I believe that the intent of these amendments is the same: to accept that we have a very difficult problem and really want to see some sort of brokered agreement, whereby developers, cladding manufacturers, freeholders and leaseholders make their fair contribution. We realise that everybody will have to do that, but feel that there need to be protections for leaseholders and tenants over these coming months, before the government scheme comes in. I am minded to support this Motion if the noble Lord, Lord Kennedy, brings it to a Division, but I continue to hope and plead that Her Majesty’s Government will be able either to come up with a compromise or make some sort of formal undertaking on what the building safety Bill will offer, so that we can all get behind it and get this really important Bill through.

Photo of The Earl of Lytton The Earl of Lytton Crossbench

My Lords, I declare my professional involvement with construction and property matters and that I am a vice-president of the LGA. We should be in no doubt that the Government have triggered an issue that is destined to cause significant damage, loss and distress to many leaseholders and tenants. My comments will be aimed at Motions A1 and A2 in the names, respectively, of the noble Lord, Lord Kennedy, and the noble Baroness, Lady Pinnock. I commend them on their persistence and diligence.

I also commend the Government on committing their £5.1 billion to this matter, but the reality is that money alone is not the answer. It requires a plan that is co-ordinated, structured and comprehensive; to be honest, it was needed the day before yesterday and certainly not at some unspecified time in the future. The Government cannot, in all conscience, have been unaware that a situation would likely arise where a significant sector of property might be affected by the expansion of the fire safety regime, nor deaf to the observations of just about every informed observer, from, I believe, the Bank of England downwards, warning of the need for action.

The ill effects triggered by this Bill are already plain in evidence, with insolvencies and repossessions, and bills for safety works of such improbably mind-numbing sums as to make every speaker in the time-limited debate in the other place this afternoon—everyone, that is, save the Minister—voice support for the amendment we passed last time around. These problems are only just unfolding, as the right reverend Prelate has identified. The horror story is therefore far from over. I do not accept the Government’s claim that it is a small number of properties that are affected, and I do not believe the Government have demonstrated that there is any statistical backing to that claim.

The Government’s own partial scheme, under the yet to be introduced building safety Bill, will neither offer relief to anything more than a modest proportion of those affected nor arrive in time to assist many of those in its intended target group, as matters stand at the present. I do not blame the Minister—I believe he is a person of great integrity—but I do blame the government machine he appears to be obliged to defend. I have to say that the stance of the Government here is not the coherent or considered response of any responsible Government, given the scale of the issues at stake and the market and financial perils that are the probable and natural outcome of the changes created by the Bill.

The Government appear to have resorted to arm-twisting, pitting the need to respond to the circumstances and death toll of the Grenfell fire against the financial and psychological terror to be inflicted on maybe a million more households. They accuse us of holding up the Bill, perhaps causing it to fall. They conflate the regular maintenance obligation of, say, changing a back-up battery in an alarm system with the fresh requirement to complete a whole new safety installation. They suggest that the matter is less than what those who have commented to me have made clear. I rather take exception to such tactics.

The Government could introduce their own scheme, and could have done so long ago. They could commit to do doing so now, and tell us that they will use the Queen’s Speech at the forthcoming State Opening of Parliament to announce a forfeiture protection measure in appropriate circumstances. They could take up the suggestion in the Fox amendment in the other place that a regime akin to the “polluter pays” principle for contaminated land be introduced. They could follow up the McPartland amendment route to redress, which I tried to persuade the Government of last time we debated this.

I ask the Minister: are the Government willing to take up any of these initiatives, as opposed to indicating that they accept the principle, or will they continue to stall with arguments that all the amendments are unworkable, have unforeseen consequences or are otherwise impractical—rather like, I should say, the effects of the Bill that has got us into this pretty pass in the first place? I agree that the issues are complex, which is exactly why government-level intervention and leadership are required to corral those responsible. That is a government duty.

A few days ago, I circulated to the Minister and other noble Lords the professional indemnity insurance consequences that are unfolding. This is just another issue that is befalling the sector. I cannot conceal a sense of outrage here about inaction and, worse than inaction, about what for hundreds of people will be an absolute catastrophe. There is inaction not over money but over the need for good governance and necessary executive process.

So painfully absent is any sense of mission, purpose or acceptance of the role of government in dealing with hard cases that I find myself having run beyond empty my natural inclination to give the benefit of the doubt to the Government of the day, much as it is my normal inclination to do so. I have tried to bring my technical knowledge to bear, without success. There is not the slightest doubt in my mind that the Minister understands, and through him the Government understand, yet they choose not to act to avert terrible outcomes for innocent home owners.

I have to say, with much regret, that if it is the only way to persuade the Government to take the responsibility seriously—to oblige them to take the sort of action that any Government ought to and that only government really can take—I am left with no choice that satisfies my conscience and the directions of my moral compass other than to support Motion A1 in the name of the noble Lord, Lord Kennedy, preferably with Motion A2 in the name of the noble Baroness, Lady Pinnock

Photo of Baroness Garden of Frognal Baroness Garden of Frognal Deputy Chairman of Committees, Deputy Speaker (Lords) 7:45 pm, 27th April 2021

The following Members in the Chamber have indicated that they wish to speak: the noble Baroness, Lady Fox of Buckley, and the noble Lords, Lord Stoneham of Droxford and Lord Adonis. I call the noble Baroness, Lady Fox of Buckley.

Photo of Baroness Fox of Buckley Baroness Fox of Buckley Non-affiliated

My Lords, while the headlines are all focusing on the scandal of who paid for the internal refurbishment work on a flat in No. 10, for me this is a far greater scandal about who is being forced to pay for the external remediation works on more than a million flats caught up in this fire safety cladding debacle. As things stand, innocent leaseholders—the only party with no hint of blame for negligence or mistakes—are the sole group to shoulder the burden. We have heard some passionate speeches about that.

Why am I back here? I just need some reassurances from the Government. They say that this is not a legislative matter and that this is not the legislation, so what are they going to do? Many of us united here usually disagree. My goodness, the noble Lord, Lord Adonis, and I are on the same side. Whatever is the matter? But we are here in good faith. This is not Tory-bashing or a cheap dig at rich developers or landowners—it is a warning to the Government.

This reminds me of the convictions of the 39 post- masters, now cleared, but after the tragedy of what befell them because no one would listen. It also feels to me like a betrayal of all those promises made to the red wall voters that this Government care about the aspirations of ordinary people. It seems to make a mockery of parliamentary priorities, and I genuinely do not understand the point of us being here and debating levelling up when many leaseholders concerned bought their flats or houses as part of affordable housing schemes. They are front-line workers who have been thrown to the wolves.

Similarly, what is the point of legislating on the welfare of veterans and supporting the police when one veteran and serving police officer writes to me explaining that he has worked every day since he was 16 and has never needed to rely on state benefit or accrued debts in any way, yet now faces bankruptcy and could even, as a bankrupt, lose his job. He describes it as a living nightmare. He says: “I am a leaseholder, and that is the biggest mistake of my life.” What a terrible thing to say. He says he is disillusioned, angry and frustrated, and powerfully notes that he feels defeated and that all his attempts to be heard are ignored.

These leaseholders feel ignored. Whatever happens here today, I ask the Government to listen and not to ignore them. At the very least, I ask the Minister to listen to the Bank of England. As the noble Baroness, Lady Pinnock, noted, last week the Bank of England said it is seriously assessing whether the building safety scandal could cause a new financial crisis—hardly an encouraging sign for building back better or economic growth.

Even from a pragmatic basis, I do not understand why the Government will not note that if more than a million properties become unmortgageable, if we create a negative equity problem, if leaseholders become bankrupt and cannot pay for remediation costs, if there is a knock-on effect on property values, if there is an effect on labour market mobility because people are unable to sell their homes, are trapped and have to stay where they are, surely this is a matter that the Government, even the Treasury, might look at. We look to the Government here because only they can provide the capital up front to pay for the works now.

The Commons reason for rejecting the amendment is that

“the issue of remediation costs is too complex to be dealt with in the manner proposed.”

I just want to know what manner is actually proposed. The plan from the noble Earl, Lord Lytton, seems sensible to me. I would like to hear the Government’s.

I do agree that there are no easy solutions. That is why it is too easy for the Government to boast of generous loan funds and grant schemes when people are ineligible to apply for them and are facing huge bills now. Although it is tempting, it would be too easy to blame developers or whatever, and that is not my intention—I just do not want the blameless to pay.

It is also too easy to use the Grenfell tragedy to imply that those of us supporting the leaseholders or backing these amendments are cavalier in any way about fire safety standards. As a leaseholder, I assure noble Lords that I am not cavalier about my own safety. But I do note that today the Grenfell United campaign has issued a statement saying:

“Using Grenfell Recommendations to justify government’s indifference is deeply upsetting for us”.

As victims of the Grenfell fire, they say that they stand in solidarity with innocent leaseholders.

I know that the Bill is good and full of good intentions, but it creates liabilities for leaseholders without giving them any means of redress and, more broadly, it betrays any commitment to a meritocratic society. I appeal to the Government to listen.

Photo of Lord Stoneham of Droxford Lord Stoneham of Droxford Liberal Democrat Lords Chief Whip, Deputy Speaker (Lords)

We have had some very good speeches and some very good points have been made, so I will speak quite briefly. First, I declare my own interests in property and as someone with 15 years’ experience of housing association work. I am speaking tonight largely on behalf of my noble friend Lord Newby, who has been tied up in commission work for most of the afternoon.

Looking back at last week’s debate, at the Minister’s speech and at the debate in the Commons this afternoon, I thought there was far too much emphasis on fear of the Bill not going through rather than on trying to set out and address the concerns not only of both Houses but of leaseholders, who have the uncertainty and the fear of liability. Simple fear is prevailing, and that is what we need to address. It is why the Government are in some difficulty in getting final decisions on the Bill.

Let us not forget that a lot of the leaseholders affected by these problems are first-time buyers. Developers made a lot of money out of government deals. The Government have been very keen on first-time buyer schemes and stamp duty relief. Why is it that they are so reticent to spell out more detail and give more assurance to leaseholders in the problems that they are facing? The noble Earl, Lord Lytton, was absolutely right: the Government are very keen on plans in all sorts of areas, but they really need a plan to deal with this problem.

In just one area, pooled insurance, there is great fear of the costs for leaseholders from their insurance going up because of the problems that they are facing and the extra risk that the insurance companies assess. The Government responded very quickly when there were pictures of people with their homes flooded and residents trying to deal with their problems in specific geographical areas, and they very quickly came up with pooled insurance schemes. Why are they not doing that more in this area? These leaseholders are a very specific group and they need help.

All evidence and experience suggest that the problem will grow. We have evidence in our own ranks of a Peer whose block of flats had a cladding problem: when the cladding was taken down, the block was found to be unsafe structurally. This is a growing problem. What lies behind the cladding, I suspect, is what is scaring the Treasury rigid. However, the problem has to be dealt with.

I am afraid that a lot of these properties were designed and built for first-time buyers. The developers knew they had to keep the price down when prices were escalating, but they also kept the costs down because they wanted to make their profit. They made a lot of money, so there will be all sorts of problems in these buildings.

The leaseholders will have seen the situation last week of the sub-postmasters and will be thinking that, as time goes on, they will be left behind and hung out to dry by the bureaucracy and the government machine failing to address their problems. They need protection from eviction, and they need to know exactly how they are going to be able to access grants.

They need to see the Government putting pressure on the developers. In some respects, the Government are a bit too close to some of those developers, but they need to be seen to be taking on the developers, the companies and the contractors involved in these buildings to make sure that it never happens again.

The industry is in fact dysfunctional. It is going to demand government intervention to address skills, regulation and the whole quality of development in this country. The Government need a plan and a timescale. They need to address the uncertainty and fear among very vulnerable people, and they need to start now as the problem will grow. That is why we support these amendments.

Photo of Lord Adonis Lord Adonis Labour 8:00 pm, 27th April 2021

My Lords, the cladding scandal is turning into the next Hillsborough scandal, in terms of not only the terrible and avoidable loss of life but the failure of the public authorities to react in a timely, just and effective manner afterwards. As event after event unfolds and failure succeeds failure in terms of government inaction, I am afraid the scandal grows. Those of us who have seen these events over many years know that there will come a point where the Government will have to concede on these issues.

Anyone who watched the debate in the House of Commons this afternoon and saw impassioned speeches from a string of Conservative MPs—many of whom had encouraged first-time buyers to buy their properties in their political lives, including many of them to buy council properties as leaseholders that are now unsaleable and submerged in negative equity without even a proper schedule of works that can be agreed—will know that this position is becoming unsustainable politically. Not only that, it is becoming a moral quagmire on the part of the public authorities at large: local authorities, regulatory authorities and the Government themselves.

The Minister is in an unenviable position, and we all know why he is in that position. It is because giving the kind of commitment that has been talked about would mean that the £5 billion scheme the Government have announced so far, could, on the basis of estimates I have seen and were being quoted in the House of Commons, be £10 billion or £15 billion. But in this situation we have to work to the just solution, and the just solution is clearly that innocent leaseholders should not be held accountable for costs which had nothing to do with them, were beyond their control and purely in the authority of shoddy developers or inadequate public authorities.

Those developers should be held accountable in due course and the role of the Government is to see that, in the interim—and that interim could be many years; it could be decades before these issues are resolved—innocent leaseholders are not held to ransom. I mean that genuinely; they are held to ransom because they cannot sell their flats and properties until the cladding is sorted out, and in many cases they will be completely unable to meet the costs.

The most powerful speeches in the House of Commons this afternoon were made by Iain Duncan Smith and Liam Fox. The noble Baroness, Lady Fox, thinks that she and I are not always on the same wavelength, but I can assure the House that Iain Duncan Smith, Liam Fox and I hardly ever find ourselves in the same company. But everything that they said today was utterly compelling.

They read from accounts given to them by their constituents of estimates for works of £30,000, £40,000 and £50,000, negative equity, inadequate access to the fire safety fund, insurance increases of 1,000%, large charges faced by leaseholders for interim measures and charges not covered by the scheme. The Government said a forced loan scheme would be announced in the Budget, but one MP—I think it was the Conservative MP for Southampton—said “Which Budget is the Chancellor talking about because it hasn’t come in this Budget? Is it going to be the one next year or the one in 2030?”

These are the elected representatives of the people seeking to hold the Government to account. Our role as a revising Chamber in a matter of such huge importance as this is to see that their voices can be properly expressed and heard. The Minister said that there was a decisive majority in the House of Commons, but between today’s vote in the Commons and the previous vote, the Government’s majority fell by half—I repeat, by half—as a result of one further debate where these issues were properly aired. We have a duty to send this issue back and I am absolutely sure that if the Government succeed in railroading this through—they probably have the votes to do so—it is right that we see whether, with a further opportunity for discussion, more progress can be made.

It is only a matter of time before the Government will have to make significant further concessions. I say to the Minister with all due respect that they will drag the reputation of the Government and the state to a much lower level by not conceding in a timely fashion—as they should have done at some point over the last four years, but certainly must in this endgame where the issues have been raised as matters of acute concern.

With respect to the arguments, the Minister says that it is not correct or appropriate to use the Bill to legislate on this issue. My noble friend Lord Kennedy’s Motion does not use the Bill to legislate for a solution; it requires the Government to come forward in due course with their own legislation. All it does in its various provisions is to set down timescales by which the Government must do this. The Government may say that they are not prepared to come forward with legislation but the arguments keep moving. Last time, the Minister said that legislation might not be required, as he might be able to take all these actions to protect leaseholders without it. If he is not prepared to accept my noble friend’s amendment because of the legislative components, it is incumbent on him to give a commitment and say when the Government will come forward with a scheme.

Christopher Pincher, the Minister in the House of Commons, made a lot of spurious suggestions in his reply there just a few hours ago. He said that the proposal by the right reverend Prelate the Bishop of St Albans was ineffective because it would prevent “very minor” costs, such as replacing smoke alarms, being passed on. That is a ludicrous suggestion; the Government could come forward immediately with a scheme to deal with minor costs if they were so minded, and I see that the amendment from the noble Baroness, Lady Pinnock, specifically exempts minor costs. He also said that it would absolve leaseholders from responsibility for works that might be their responsibility. There will be cases where leaseholders have responsibilities, and they should be held accountable for them, but the much bigger issue here, which we as a Parliament have a responsibility to deal with, is where the state has failed in its responsibilities, as well as developers failing in theirs.

We are absolutely right to send this matter back to the House of Commons if there is a majority to do so. Irrespective of whether the Government resolve this matter over the next few days before the end of the Session, they will be forced by public opinion and the weight of natural justice—as with the Hillsborough disaster and the Horizon disaster—to move on this issue. It is simply deplorable that this will happen at the very end of a long period of pressure, which will bring the reputation of the state for fair play to a very low ebb indeed.

Photo of Lord Greenhalgh Lord Greenhalgh Minister of State (Housing, Communities and Local Government), The Minister of State, Home Department

My Lords, we all feel the plight of leaseholders. I spend most of my time as Building Safety Minister and Fire Minister in meetings at the building level, trying to accelerate the pace of remediation. Despite the fact that we have had a global pandemic over the last year, we have also had over 150 starts on site and 95% of buildings have now either had cladding of the very same type that was on Grenfell Tower removed or fully remediated, or have workers on site who are within months are making the buildings safe.

These are hard yards. I have worked with colleagues at all levels of government, with the GLA and the deputy mayor, with the appropriate lead in London Councils and with Mayor Burnham in Greater Manchester. There is a huge effort. Very often it involves difficult, brutal conversations, telling building owners and developers to get a move on. In over half the cases of buildings that had aluminium composite material, we saw the building owners step up and either fund the remediation or carry the works ahead, covering this with warranty schemes without passing the costs on to leaseholders.

These are very difficult times for leaseholders, but that is why, in answer to the noble Lord, Lord Kennedy, the Housing Secretary announced a very comprehensive five-point plan in February. Essentially, we have increased the building safety fund by some £3.5 billion to £5.1 billion. Details of how the revised fund will be spent will be announced very shortly. In addition, we have announced a high-rise levy, which will form part of the building safety Bill, and a tax on developers, because it is important that the polluter pays. There needs to be a financing scheme for medium-rise buildings of between four and six storeys. That is the plan that we have put on the table.

I also point out in answer to the noble Earl, Lord Lytton, and the noble Baroness, Lady Fox of Buckley, that the Bill does not create liability. This is a simple Bill clarifying the fire safety order to let our fire and rescue services do the job they do in keeping us safe. The Bill clarifies an existing regime. I want to be absolutely clear that it does not create a new liability.

I agree with the noble Earl, Lord Lytton, that we need to strengthen redress to stop this all falling on the taxpayer. I have been very clear that we will bring forward measures that will do that as part of the building safety Bill. They will make directors as well as companies liable for prosecution in some instances. The reality is that it is absolutely ludicrous that the statute of limitations under the Defective Premises Act is only six years. That is the statutory period of redress. We will bring forward measures to deal with that point. When I buy a pair of tweezers I get a lifetime guarantee, but when a poor leaseholder invests their life savings and makes the most significant payment in their lives to own their own home the period for statutory redress is simply not acceptable.

I come back to Amendments 4L and 4M. I am afraid that they are unworkable, impractical and do not deliver the solutions for leaseholders. As noble Lords have heard before, it is impractical and confusing to amend the fire safety order to try to resolve the issue of who pays. These amendments seek to cover the very complicated relationship under landlord and tenant law, including financial obligations and liabilities between freeholders and leaseholders. Frankly, these matters do not sit naturally with the fire safety order.

The right reverend Prelate the Bishop of St Albans spoke very eloquently to his amendment and to the two amendments that have been proposed. None of these amendments works because, once again, they orphan the liability of works until such time that a statutory scheme is in place that pays for the work directly attributable to the Act. In answer to the noble Lord, Lord Adonis, both his amendments reference the provisions of the Act in so doing. I have talked about the difficulties of defining which works might be directly attributable to the Fire Safety Bill’s provisions. I have gone over that ground several times. Orphaning liability simply delays essential fire safety works.

In addition, the proposed scope of the works remains too broad, even with the £500 threshold proposed by the noble Baroness, Lady Pinnock. It simply does not resolve the issue. Some of the works that may be required will be very low cost and anyone would reasonably expect the leaseholders to pay. That, frankly, could be more than £500 a year. As no taxpayer scheme for such minor works will be forthcoming, we then reach deadlock.

There is an additional issue which has not been raised by noble Lords: subsidy control. It is a small but important point. Depending on the specific details, it is possible that such a statutory scheme would not be permissible under subsidy control rules. Some leaseholders have undertakings—for instance in buy to let—and subsidy control rules limit how much benefit can be conferred on undertakings. In effect, it may not be possible to relieve leaseholders and tenants from all costs of remedial works attributable to the Bill without breaching subsidy control. As the noble Lord, Lord Kennedy, knows, further detailed consideration is needed.

Since these amendments are not sufficiently detailed and would require extensive drafting of primary legislation, they would continue to delay the implementation of the Fire Safety Bill and the important reforms it intends to carry out. These amendments would ultimately be self-defeating, as the pace and progress of all fire safety works would be stalled, leaving leaseholders still in an invidious position.

Once again, I ask noble Lords to exercise sound judgment. These amendments are well intentioned. However, the Fire Safety Bill is not the silver bullet to resolve the issue of remediation costs being passed on to leaseholders. This is the wrong place for this kind of legislation. In any case, the amendments are likely to be ineffective and possibly risky for some leaseholders, and even for the taxpayer. I emphasise once again that this is not the solution for leaseholders, nor what the taxpayer deserves.

This House has a choice. On the one hand, we face more dither and more delay, and the very real risk that the Fire Safety Bill will fall. On the other, we support this vital clarification of the fire safety order and a Bill that ensures that the Grenfell Tower recommendations are delivered and homes are made safer.

Photo of Lord Kennedy of Southwark Lord Kennedy of Southwark Opposition Whip (Lords), Shadow Spokesperson (Home Affairs), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Housing) 8:15 pm, 27th April 2021

My Lords, I thank all noble Lords who have spoken in this debate. I must say that I am disappointed by the response of the noble Lord, Lord Greenhalgh. I noted that not one speech from the Government Benches—other than the Minister’s—supported the Government’s position. If I were over there, I would not support the Government either, and so I understand why Members on the Government Benches are sitting very quietly. I do not wish to defend them, but I think they are being very sensible. Frankly, the Government’s position is indefensible, particularly when you look at the promises that they have made. That is part of the problem: the Government think that they can get away with making promises and that, because no one will think anything else of it, they can then mess about a bit. I am sorry, but this issue is not going away.

There is a disappointing lack of understanding of the plight of the innocent victims—I repeat “innocent” —of the cladding scandal. People are really in trouble here. We have heard it tonight and we have heard it before. They need their Government to help them. The right reverend Prelate the Bishop of St Albans highlighted another case—that of Claire, who works somewhere in the Palace of Westminster. She bought a 25% share in what was probably her first property, and she is now trapped. These are innocent victims.

Why have we not had a summit at No. 10 to sort this out? I asked that last time, but I did not get an answer. We were going to have a summit about the football problems, so why not about this? If the right reverend Prelate is right, we need a meeting of COBRA to talk about the financial crisis that is on its way on the back of this. But no, there has been nothing from the Government. Why are the Government not standing up for innocent victims? Why can they not set out a route map—a pathway to say how the levelling-up agenda would help these first-time buyers, these innocent victims? We hear nothing.

I want to ask the Government to think again. There is no risk to the Bill. This is the House of Lords doing its job—asking the other place, on a matter of the utmost importance, to think again. That is really important. If the Government would spend a bit more time addressing the seriousness of the issue, we could move forward. My noble friend Lord Adonis made the point that the Government had these amendments weeks ago. They brought the Trade Bill back, but this Bill just sat there. It now turns up this week and they have said that we have to be careful because we are going to run out of time. They sat there for weeks, doing nothing with it, when they could have brought it back here.

These may not be the cleverest amendments. I am not a lawyer or a parliamentary draftsperson, nor are other noble Lords. But the Government know what we are trying to achieve. There are a lot of really clever people working for the Government; they could sort it out if they wanted to. I wish to test the opinion of the House.

Ayes 329, Noes 247.

Division number 1 Fire Safety Bill - Commons Reason — Motion A1 (as an amendment to Motion A)

Aye: 329 Members of the House of Lords

No: 247 Members of the House of Lords

Ayes: A-Z by last name

Nos: A-Z by last name

Division conducted remotely on Motion A1 (as an amendment to Motion A)

Motion A1 (as an amendment to Motion A) agreed.

Motion A2 (as an amendment to Motion A) not moved.