Clause 57 - Levy on applications for building control approval in respect of higher-risk buildings

Part of Building Safety Bill – in a Public Bill Committee at 3:15 pm on 23 September 2021.

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Photo of Christopher Pincher Christopher Pincher Minister of State (Department for Levelling Up, Housing and Communities) 3:15, 23 September 2021

Then I shall do so.

Clause 57 introduces powers to create a levy on developers who seek regulatory permission to build certain high-rise residential buildings at the gateway 2 stage of the new building safety regime. This building safety levy will be used for the purposes of meeting the Government’s building safety expenditure, such as providing assistance for the purpose of removing unsafe cladding. Residential developers who construct new high-rise buildings will gain from the restoration of confidence in the housing market, so it is right that they should help fund the significant costs associated with fixing buildings when they are unsafe.

The Government have already set up a £1 billion safety fund, with grants to help leaseholders pay for the removal and replacement of unsafe non-ACM cladding on their high-rise buildings. That is in addition to the £600 million for replacement of ACM cladding, bringing the total remediation funding to £1.6 billion. An additional £3.5 billion was announced in February 2021, so we are now providing over £5 billion, plus a waking watch fund, to support in-scope high-rise buildings to be remediated.

Our funding will protect leaseholders from the costs of the highest risks. However, the levy funding does not absolve building owners of their responsibility to ensure that their buildings are safe. They should consider all routes to meet costs, protecting leaseholders wherever they can—for example, through warranties and recovering costs from contractors for incorrect or poor work. Some developers are already taking steps to remediate historical building safety defects. Of course, some are not, and we say that they should do so.

Taylor Wimpey has set aside £165 million for remediation purposes, Barratts has set aside £82 million, and Persimmon £75 million. Bellway is reported to have provided over £130 million for remediation of historical building defects. We continue to encourage developers to step up and ensure that the costs of remediation do not fall on leaseholders, because they did not cause the problems. As I mentioned to the hon. Member for Luton South earlier, we have launched a consultation on the design of the levy, which will help shape secondary legislation on the rate and how the levy is calculated.

I will not speak to the developer tax, because that is not part of the Bill. It is a Treasury matter and is presently being consulted on, but we reckon that it will raise £2 billion over 10 years. With that, I commend the clause to the Committee.