Motion X1 (as an amendment to Motion X)

Levelling-up and Regeneration Bill - Commons Amendments and Reasons – in the House of Lords at 7:45 pm on 23 October 2023.

Alert me about debates like this

Lord Stunell:

Moved by Lord Stunell

Leave out from “House” to end and insert “do disagree with the Commons in their Amendment 231A and do propose Amendment 231B to Lords Amendment 231—

231B: In subsection (5)(a), at end insert “except as necessary to permit their transfer and incorporation into any body established under subsection (2)(a) or (2)(b) of this section””

Photo of Lord Stunell Lord Stunell Liberal Democrat

My Lords, I thank the noble Earl, Lord Howe, for his kind words and for the time that he devoted to this particular aspect of a very long and complex Bill. Nevertheless, it is regrettable that he has not yet seen his way to accept the sensible and reasonable amendment that noble Lords sent back to the Commons on Report. Its purpose was to safeguard the rigorous safeguards built into the Building Safety Act 2022, which this House was united in supporting and which was designed to establish a robust regulatory regime that would ensure there was never another Grenfell Tower disaster. Less than 12 months later, and before the new regulatory regime even comes fully into force, the Government are giving themselves and their successors sweeping powers to rip it up—save only for a very flimsy affirmative Motion on a statutory instrument as a defence.

The modest amendment your Lordships sent to the Commons simply required the Government to accept that, if they wanted to change the fundamental structure and mechanics of delivery of the building safety regime, that must be justified to and approved by Parliament. The Government’s response, which the noble Earl has just repeated, is that they do not want to change the fundamental structure and delivery of the building safety regime. All they want to do is take it away from the Health and Safety Executive, lock, stock and barrel, with no changes at all, except in the nameplate and the branding. If that is true, the amendment before your Lordships today is exactly in line with their intentions.

Motion X1 picks up the point the noble Earl made about the original amendment to the Commons—that it was flawed because the wording would obstruct the transfer of the statutory committees from the HSE to the new, completely unspecified and unknown safety regulator. The revised wording in Motion X1 therefore makes it clear on the face of the Bill that it will be lawful to make that transfer. This amendment is designed simply to avoid changes in how the new regulator is structured and organised and to prevent changes to the tasks that are entrusted to it and the statutory committees that underpin its work. The amendment, if agreed, would ensure that the Government’s replacement regulator retains those duties and timescales: for instance, to review the regulations relating to electrical fire safety, the safety of staircases and ramps, safe escape routes for people with mobility issues and fire suppression systems such as sprinklers.

There is other detail, but in the interests of time I will simply say that the original arrangement in the Building Safety Act was that those committees and tasks could be changed only by the Secretary of State if he or she received a proposal from the regulator to put into place. That was because it was seen as very important that the regulatory regime should never again be captured, as it had been in the past, by departments and Ministers taking short-term political decisions, and that the regulator would always be able to independently assess needs to improve safety and then make recommendations in public to Ministers for them to decide on action.

The noble Earl has offered us a sincere undertaking that, at least for the time being, nothing will change; that Ministers will not be tempted to steer away from making essential safety improvements that they deem politically difficult or a bit too costly; and that they will faithfully press ahead without delay when those fire safety reports come in, however revealing and unwelcome they prove to be. Of course the noble Earl is absolutely sincere, but I say to him that Ministers and Secretaries of State come and go, and the sincerest of undertakings can be withdrawn when the facts are said to have changed. The accountability given by an affirmative resolution is tenuous.

I urge the Minister to retain the progress made during the enactment of the Building Safety Act by safeguarding those statutory committees, reinforcing the obligation for those long-awaited safety studies and making sure that the three-year timescale is retained. The way to do that is for him to say that, on mature consideration, he will accept Motion X1. I beg to move.

Photo of Lord Young of Cookham Lord Young of Cookham Deputy Chairman of Committees

My Lords, I will speak to Motion ZC1 in my name. I pay a heartfelt tribute to my noble friend for the real progress that has been made since we last discussed this matter in helping qualifying leaseholders who extended their lease after the Building Safety Act came into effect. In a nutshell, the Act extended protection to qualifying leaseholders against the costs of remediation. However, inadvertently, it said that, if you renewed your lease after it came into effect, you lost that protection.

The Government recognised that there had indeed been a mistake and, on Report, I moved what is now Amendment 243, which would retrospectively have put the leaseholders who extended their lease back within the protection of the BSA. At the time, before the Bill went back to the other place, my noble friend resisted my amendments and said that the issues require

“very careful legal dissection and working through, and that is what we are doing”.

When I summed up, I said:

“In a nutshell, the Government made a mistake when they drafted the Building Safety Act. Unwittingly, they have removed the protection that some leaseholders were entitled to. They have known for months that there has been this defect, and I do not accept that the defect is so complex that it cannot now be put right. That is what my amendment does. I seek leave to test the opinion of the House”.—[Official Report, 18/9/23; cols. 1248-95.]

I do not know what my noble friend said to the department when he got back, but what had previously been impossible to do within the context of the Bill suddenly became possible. I am grateful to my noble friend for tabling Amendments 288A, 288B, 288C and 288D, which, in effect, do what I asked the Government to do last time. As I said, I am grateful to my noble friend for the pressure that he put on the parliamentary draftsmen to correct an injustice that had unwittingly been perpetrated.

Against that background, it might seem churlish of me to have tabled Motion ZC1, but there remains a problem: leaseholders who extended their leases, and therefore lost the protection of the BSA, will have received invoices and bills for payment, and some may have made payments. As drafted, the government amendments do not entitle those qualifying leaseholders to a refund. I am grateful for the Public Bill Office’s help in drafting my Motion ZC1—I hope that will inject a note of caution into any remarks that the amendments are imperfectly drafted. The Motion seeks to say that, in those circumstances where a qualifying leaseholder has already paid the remediation costs, but need not have, they are entitled to a refund.

Under the Government’s amendment, there is a provision whereby the Government have powers, under regulations, to make certain provisions. I want my noble friend to answer a question that was put twice in the other place. The Opposition spokesman on housing, Mr Pennycook, said:

“we welcome the concession that has been made, albeit with one proviso: Ministers must take steps to ensure that leaseholders who paid service charges over the past 15 months in the belief that they were not eligible for the leaseholder protections under the Act, because of the Government’s mistake, are reimbursed. Those individuals should not suffer financially as a result of a drafting error that should not have been allowed to occur in the first place. If the Minister—I hope she is listening to this point—can provide us with some reassurance on that point, we will happily accept the Government’s amendment in lieu”.—[Official Report, Commons, 17/10/23; col. 199.]

My honourable friend the Father of the House, Sir Peter Bottomley, made the same point.

In winding up, Rachel Maclean was under tremendous time pressure because of the timetable Motion in the other place, and she was not able to answer either of those two questions. So if my noble friend is unable to accept my amendment, as he implied, I ask him for an assurance on the provisions of his amendment, which enable certain regulations to be made in proposed new subsection (11):

“The provision that may be made in regulations under this section includes … provision which amends this section; … provision which has retrospective effect”.

Can he assure me that, if a leaseholder has paid a bill and need not have, my noble friend will use the powers under his own amendment retrospectively to entitle that leaseholder to a refund? That is the import of my amendment, which I do not wish to press to a Division—but I hope that, in return, my noble friend will be able to give me that reassurance.

My noble friend’s Motion ZC knocks out a whole range of amendments that were passed without a Division in this House and that extended protection to non-qualifying leaseholders. These are basically leaseholders living in buildings under 11 metres; enfranchised leaseholders, who are counted as freeholders for the Act; and those who own more than three properties in buy-to-let investments. There are real problems: people in buildings under 11 metres get no protection at all, cannot get a mortgage and cannot sell. They have to pay the cost of remediation, because that is the only way that the building can get insured. They face exactly the same problems as people in buildings over 11 metres, but they get no protection at all. There are also leaseholders who, following government advice, enfranchised and became freeholders. Despite assurances I was given by the then Minister that they would be treated as leaseholders, the Bill treats them as freeholders and denies them the protection extended to leaseholders.

There is also the problem of those who have buy-to-let properties. A person who owns a £1 million property and other properties overseas is protected, but someone who owns three properties worth £100,000 each gets no protection at all. People who jointly own a property with their husband are counted as wholly owning. There is a whole range of outstanding issues from the Building Safety Act that I understand cannot be addressed in the Bill, but, again, I hope that my noble friend is able to say that, in the proposed leasehold reform Act, it will be open to the Government to reopen these unresolved problems in the BSA and that legislation will be proposed to address at least some of the issues arising from the BSA that I have outlined and that I believe remain unsolved.

In conclusion, I thank my noble friend again for his efforts in response to my original Amendment 243, but I hope he can give me the assurances I seek for leaseholders who have paid bills that they need not have.

Photo of The Earl of Lytton The Earl of Lytton Crossbench 8:00, 23 October 2023

My Lords, I have an interest in both the items that we are considering in this group. For the avoidance of doubt, I declare my involvement as a practising but nearly completely retired chartered surveyor with a knowledge of the leasehold and construction sectors.

The noble Lord, Lord Stunell, deserves the full appreciation of the House for what I can only describe as a progressive defenestration of the fuzzy edges that have surrounded the question of the building safety regulator. He has whittled it down to the last elements, as to whether this is a proposal for a like-for-like transfer from one jurisdiction, if I can term departments in that sense, to another—or whether, as he had previously identified, some other morphing process was going on behind the scenes. I supported him previously in this, and I support him again in his endeavours here. This really boils down to the last element, as to whether there is a change.

One could be forgiven for suspending a certain amount of belief here. If there is going to be the process of transferring a body from the Health and Safety Executive to some other framework, known or unknown, why would one run the risk of the delays, disruption and everything else that would be involved with that if it were not for the fact that some other factor was involved? Motion X1 as proposed by the noble Lord, Lord Stunell, is a significant litmus test of what is involved. I encourage the Minister to consider very carefully whether the Government mean what they say in saying that it is a like-for-like transfer from one authority to another, or whether in reality it conceals some other paradigm shift. That is very important.

I turn to the amendment proposed by the noble Lord, Lord Young of Cookham. I apologise for the fact that his colleague has had to use my comments from a previous stage in this debate to tell him that his approach is no good. Of course, my comments were made in the context of saying that it has a technical deficiency. I was not in any way intending to suggest that the direction of travel in which he was engaged was faulty or in any other way imbued with anything other than the highest principles. He and I share a great deal of what has happened here.

Again, the noble Lord is absolutely right in proposing Motion ZC1—and I was pleased that he referred, obiter as it were, to the problem with the exceptions. What has happened here is a sort of drawbridge approach to the liability and scope of the Building Safety Act, and it is that which creates these cliff-edge approaches to who is qualified, whether their funding qualifies or excludes them, and so on and so forth. That is what has been dogging everybody all the way along the line. In reality, that delineation of the protections under the Building Safety Act is pernicious, because they are protections that any Government should apply in response to a serious and systemic failure in the home building industry to deliver adequate quality in building safety terms—and, may I say, presided over by nearly 40 years of ineffective regulatory control of building standards.

To expand a little, the Government’s resistance to anything beyond the straitjacket of parameters relating to the scope of leasehold protections seems to be governed by an entirely arbitrary approach and unwillingness even to collect data, understand implications or assess risk—I refer specially to those non-qualified leaseholders to which the noble Lord referred. My aim in all this has been to approach the matter on a much broader spectrum. The noble Lord and I shared an amendment to the Building Safety Act 18 months ago, and I think he has felt obliged to whittle it down evermore to try to get to something that he can achieve here. I absolutely applaud his persistence—but I am forced to suggest that, in the absence of any risk assessment, any government response to what may come down the road will be blindsided and ineffective. Hearing or speaking no evil does not prevent evils occurring—in this case, to hundreds of thousands of innocent lease payers, to market sectors, to valuation, to lending, to regeneration of urban areas and to new homes targets generally. I have said all this before, and I apologise for repeating it.

The noble Lord has been assiduous in his campaigning. With regard to Motion ZC1, I do not know how many leaseholders might be affected by this, but I suspect that it is actually quite a small cohort, and the Government should accept it and not allow this exclusion process or drawbridge approach to cut them off. Of course, I tried to address the whole thing on a much wider scope, but to no avail, which is why, when my words are used as a reason for denying the noble Lord the fruits of his endeavours, I have to bear in mind that I seem to have been assiduously ignored throughout this, up until today, when my words are used by the Minister against his own Back-Bencher. There is something faintly quizzical about that whole arrangement.

I hope that the Minister will at least indicate that the Government are cognisant of the serious, ongoing and growing problems arising here—to finance, to a whole sector, to hundreds of thousands, a very large number, of excluded leaseholders, and much more besides. If the Government do not recognise that, we are in for very serious problems indeed.

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

My Lords, the very fact that these two issues remain for this Bill demonstrates that the Building Safety Act is, sadly, unfinished business. Although the matters will not be concluded today, I can be sure that they will be raised in future legislation in this House, because they need to be resolved. Having said that, I support what the noble Lord, Lord Young of Cookham, said about non-qualifying leaseholders. It is a large group which deserves not to be neglected, and I support my noble friend’s valiant efforts in getting the regulation appropriate to the need.

Photo of Baroness Taylor of Stevenage Baroness Taylor of Stevenage Opposition Whip (Lords), Shadow Spokesperson (Levelling Up, Housing, Communities and Local Government), Shadow Spokesperson (Transport)

My Lords, first, I thank all noble Lords who have contributed to the building safety parts of this Bill, which have been complex, but it was all done in the interests of the leaseholders who are at the end of this process. The noble Lords, Lord Stunell and Lord Young, have outlined the reasons for their amendments. I hope that the Minister will carefully consider these outstanding matters. We are all mindful in your Lordships’ House that behind all the technicalities and complexities of the Building Safety Act and attempts to right its deficiencies in this Bill is a group of leaseholders, many of whom were or are first-time buyers, who have had the start of their home-owning journey blighted by the worry and concern of remediation and uncertainty over service charges. They have been let down by errors in the original Bill, which meant that the status of their leasehold determined what charges they would have to pay.

The Minister reassures us that further review of these matters will be undertaken. I hope that will be the case, and that further thought will be given by the Government, if there is to be no compensation to those who have already had significant costs, to how that might be dealt with in future.

Photo of Earl Howe Earl Howe Deputy Leader of the House of Lords

I am grateful to noble Lords for their comments on this group. I thank my noble friend Lord Young for his kind words on government Amendments 288A, 288B, 288C and 288D. He asked about his Motion in relation to leaseholders who have paid remediation costs since losing the protections. Like my noble friend, the Government are concerned about leaseholders who have paid a significant service charge where they have lost the protections upon extending their leases. Those who have paid out remediation costs while outside the protections may be able to bring a claim for unjust enrichment.

I should point out to your Lordships that we are not aware of this issue being raised with us by any affected leaseholders, so it may well be theoretical in nature—my noble friend may contradict me on that. That said, if we do come across any cases where remediation charges have been paid and are not returned, the Building Safety Act contains a power to make secondary legislation that we believe enables us to provide a bespoke remedy to this issue. If cases do come to light, we will consider carefully whether that is the right thing to do.

Photo of Lord Young of Cookham Lord Young of Cookham Deputy Chairman of Committees

I am very grateful for what my noble friend has just said. However, will leaseholders first have to go through the process of claiming unlawful enrichment before the Government introduce the provisions he has outlined—which I welcome—or will the Government use the provisions under subsection (11) of new Section 119A to give them the protection without first obliging them to go through a complex process of claiming unlawful enrichment?

Photo of Earl Howe Earl Howe Deputy Leader of the House of Lords

As I said, we will carefully consider what is the right thing to do. I have no briefing on whether it will be necessary for leaseholders to make a claim either directly or through the courts. We will make a decision as to what is right in all the prevailing circumstances. I am afraid I cannot go further than that.

I can assure my noble friend that we completely appreciate the point that he has raised, and the Government are looking into what we can do for leaseholders who have had to pay excessive service charges where they have lost the protections. For the reasons I have set out, including the potential for unintended consequences which I described in relation to Amendment 242, I ask my noble friend not to press his Motion on Amendment 288E.

On the other issues he raised, I cannot, as my noble friend will understand, pre-empt the forthcoming gracious Speech or what may be contained in it; it would be quite improper for me to do so. However, I can tell him that the issues he has drawn our attention to will be carefully considered in the department I am representing.

On Motion X1, in the name of the noble Lord, Lord Stunell, I recognise his continued concern and repeat my earlier assurances that the Government do not intend to interfere with these important committees. Section 12 of the Building Safety Act contains appropriate provision to change the statutory committees of the building safety regulator as needed in the future. This gives the Government and regulator the flexibility needed to adapt the role of the regulator and its statutory committees.

We do not agree that it is appropriate or necessary to impose restrictions on the use of that section. We are concerned that, as drafted, this restriction would cause confusion while potentially preventing the use of the powers in Section 12 of the Building Safety Act to make changes to the statutory committees of the regulator in the future.

The Government do not intend to use the power in any way imminently. We consider it necessary to create the ability to move the building safety regulator to an existing or a new body in the future, but we would look at any options very carefully and consider the recommendations from the Grenfell Tower inquiry before confirming the best way forward.

This does not affect the timeline for the building safety regulator’s important work. We expect the regime to be fully operational by April 2024, and we are determined to support delivery of the programme to that timetable. The changes will make sure that we are ready and have the flexibility in place to respond quickly to the Grenfell Tower inquiry report when it is published and that we can be radical and long-term in our thinking.

However, as the noble Lord will know, the evidence heard through the Grenfell Tower inquiry has made it clear that government must develop an effective role as system steward for the built environment, and we have committed to doing so. Our approach to regulatory institutions is central to this. It may require longer-term reform, which could include consideration of building-related regulatory functions, or the simple relocation of the existing building safety regulator functions as created by the Building Safety Act to another existing or stand-alone body. I therefore ask the noble Lord not to press his Motion X1.

Photo of Lord Stunell Lord Stunell Liberal Democrat 8:15, 23 October 2023

My Lords, I thank the Minister for his response. I heard his reassurances and I understand his good intentions. I believe that this is a fundamental mistake, but I understand that it is necessary to make progress this evening. I hope that we will not live to regret this. I have to say that there will be some bad actors in the construction industry who will be only too grateful for the moves that the Government are making. I hope that the Government and the regulator will stay alert to the activities of such bad actors and ensure they do not exploit the gaps which are now opening up. With that said, I beg leave to withdraw my Motion.

Motion X1 withdrawn.

Motion X agreed.